Earlier this week, Charlotte Rutherford (\u201cRutherford\u201d) filed her responsive brief in the appeal filed by her former employer Schlumberger.\u00a0 The case is considered to be high profile in the legal community because Rutherford succeeded in having the majority of Schlumberger\u2019s claims against her dismissed based on her reliance upon the Texas Citizens\u2019 Participation Act (\u201cTCPA\u201d).<\/p>\n
Rutherford was formerly an in-house lawyer working for Schlumberger.\u00a0 Schlumberger filed a lawsuit alleging that Rutherford misappropriated Schlumberger\u2019s trade secrets and breached fiduciary duties to Schlumberger by taking copies of Schlumberger computer files and hard copy documents to her new employer, Acacia Research Group (\u201cAcacia\u201d).\u00a0 Schlumberger refers to Acacia as a \u201cpatent troll.\u201d\u00a0 Schlumberger alleged that Rutherford used the stolen Schlumberger records to help Acacia identify a patent to acquire that could be used to file a patent infringement lawsuit against Schlumberger.<\/p>\n
Rutherford filed a motion to dismiss the case pursuant to the TCPA \u2013 arguing that Schlumberger filed the lawsuit in response to her exercise of the right to petition the courts for relief and her freedom of association with her co-workers at Acacia. \u00a0\u00a0\u00a0The trial court dismissed all of Schlumberger\u2019s claims against Rutherford accept for a breach of contract claim based upon a written confidentiality agreement.\u00a0 The trial court also awarded $350,000 in attorney\u2019s fees to Rutherford and entered $250,000 in sanctions against Schlumberger.<\/p>\n
Some of the reports covering this case resonated with Chicken Little\u2019s cry that the sky is falling.\u00a0 There is a fear that this case will be cited in future lawsuits as precedent for dismissing a broad array of otherwise valid claims.\u00a0 Regardless of whether the Houston Court of Appeals ultimately affirms the trial court\u2019s ruling, I do not see widespread dismissal of lawsuits based upon the Schlumberger ruling.\u00a0 This is because Schlumberger\u2019s case against Rutherford arose out of an unusual fact pattern.\u00a0 How often will an employee (allegedly) steal trade secrets then use the trade secrets to file a lawsuit against her former employer?<\/p>\n
There is a different issue though that I do find troubling.\u00a0 Rutherford is Schlumberger\u2019s former lawyer.\u00a0 Lawyers have a duty not to use against their clients confidential information that they learn about the client during the course of providing legal representation to the client.\u00a0 I do not see a public policy reason for why the TCPA should be interpreted to shield a lawyer from a client\u2019s claim that the lawyer breached this duty to advance a lawsuit.<\/p>\n
It will be interesting to see how this appeal is ultimately resolved.\u00a0 For now, you can see Schlumberger\u2019s and Rutherford\u2019s legal briefs that lay out their arguments here<\/a>.<\/p>\n