The case of Recif Res., LLC v. Juniper Capital Advisors, L.P., No. CV H-19-2953, 2020 WL 6748049 (S.D. Tex. Nov. 17, 2020), arose out of failed discussions between potential investors in an oil and gas development project. Ultimately, the Court concluded that the plaintiff Recif Resources, LLC (Recif) failed to present evidence showing that its alleged trade secrets had economic value or that the defendants, collectively called Juniper, used those trade secrets.
In October 2017, an investment banker introduced Recif to Juniper as part of Recif’s search for private equity investment for an oil and gas development project in Recif’s Area of Interest (AOI) in the Louisiana Austin Chalk. As part of their discussions, Recif made Juniper sign a confidentiality agreement obligating Juniper to keep all proprietary information confidential. In May 2018, Juniper ended discussions with Recif. At the same time, Juniper created a separate entity to obtain oil and gas leases for properties outside the Recif AOI.
Recif filed suit for breach of contract and misappropriation of trade secrets, alleging that Juniper used is proprietary information in violation of the confidentiality agreement when it sought out the leases outside of the Recif AOI. At issue were four well logs and a map of the Recif AOI. Both parties filed motions for summary judgment.
Regarding the misappropriation claim, the Court focused on two issues: whether the alleged trade secrets derived independent economic value as required by the Texas Uniform Trade Secrets Act (TUTSA), and whether Juniper used the alleged trades secrets. First, the Court determined that Recif’s information had no independent economic value because Recif failed to present any evidence to the contrary. Juniper proved that the well logs were publicly available and that the Recif AOI had no application outside of the AOI. Second, the Court, largely through its discussion on the breach of contract claim, found that Juniper did not use any of Recif’s alleged trade secrets. In fact, Juniper showed that it had engaged in its own independent analysis of the Louisiana Austin Chalk prior to meeting with Recif and that its decision to operate outside of the Recif AOI was based on this analysis rather than on anything that Recif provided to Juniper.
Ultimately, the Court granted Juniper’s motion for summary judgment because Recif failed to present evidence that raised a genuine issue of material fact as to the economic value of its proprietary information or Juniper’s use of such information. The key takeaway here is that speculation is not enough to prove a trade secrets case. Juniper’s use of expert testimony, and Recif’s failure to rebut any of Juniper’s allegations with facts led the Court to rule in Juniper’s favor.
Special thanks to Kyle Markwardt for his assistance with this blog post.