Calsep, Inc. v. Intelligent Petroleum Software Sols., LLC
Calsep, Inc. v. Intelligent Petroleum Software Sols., LLC
2020 WL 10759435 (S.D. Tex. 2020)
March 2, 2020
Palermo, Dena H., United States Magistrate Judge
Summary
The court found that IPSS had the legal right and practical ability to obtain documents from its employees and agents, including Sah, and ordered IPSS to produce any ESI in Sah's possession, custody, or control to Plaintiff no later than March 13, 2020. This information may contain trade secrets that Sah allegedly downloaded from Calsep A/S's servers.
Additional Decisions
CALSEP, INC. and CALSEP A/S, Plaintiffs,
v.
INTELLIGENT PETROLEUM SOFTWARE SOLUTIONS, LLC, ASHISH DABRAL, INSIGHTS RESERVOIR CONSULTING, LLC, Defendants
v.
INTELLIGENT PETROLEUM SOFTWARE SOLUTIONS, LLC, ASHISH DABRAL, INSIGHTS RESERVOIR CONSULTING, LLC, Defendants
No. 4:19-CV-1118
United States District Court, S.D. Texas, Houston Division
Filed March 02, 2020
Counsel
Alexis J. Gomez, Hunton Andrews Kurth LLP, Houston, TX, Daniel G. Vivarelli, Jr., Hunton Williams LLP, Washington, DC, Timothy Alan Cleveland, Cleveland Terrazas PLLC, Austin, TX, for Plaintiffs.Christopher Paul Hanslik, Andrew Delatin Pearce, BoyarMiller, Houston, TX, for Defendant Ashish Dabral.
Pritesh Soni, The Soni Law Firm PLLC, Houston, TX, for Defendant Bright Petroleum Software Solutions, LLP.
Palermo, Dena H., United States Magistrate Judge
ORDER
*1 On December 18, 2019, Plaintiffs Calsep A/S and Calsep, Inc. (collectively, “Plaintiffs”) filed a motion to compel Defendant Intelligent Petroleum Software Solutions, LLC (“IPSS”) to produce documents responsive to their First Set of Requests for Production and Interrogatories, including items held by former Defendant Pashupati Sah (“Sah”),[1] who Plaintiffs contend is a member, partner, and agent of IPSS. ECF Nos. 109, 110. Plaintiffs' theory of the case is that Sah, a former employee of Calsep A/S, downloaded trade secret information from its servers and used those trade secrets to develop software (“InPVT”) for IPSS to compete with Plaintiffs. ECF No. 142 at 2. The Court heard arguments on the motion on February 25 and 27, 2020. Based on a review of the applicable law, evidence, and argument of counsel, the Court GRANTS Plaintiffs' motion to compel.
A party may serve discovery requests on another party to produce items “in the responding party's possession, custody, or control.” FED. R. CIV. P. 34(a)(1). “Rule 34's definition of possession, custody, or control, includes more than actual possession or control of [documents]; it also contemplates a party's legal right or practical ability to obtain [documents] from a [non-party] to the action.” Duarte v. St. Paul Fire & Marine Ins. Co., No. 14-CV-305, 2015 WL 7709433, at *5 (W.D. Tex. Sept. 25, 2015) (quotations omitted); see also Shell Glob. Sols. (US) Inc. v. RMS Eng'g, Inc., No. 09-CV-3778, 2011 WL 3418396, at *2 (S.D. Tex. Aug. 3, 2011). A business entity has the legal right and practical ability to obtain documents from its employees and agents. First Am. Bankcard, Inc. v. Smart Bus. Tech., Inc., No. 15-CV-638, 2017 WL 2267149, at *3 (E.D. La. May 24, 2017) (“Because a corporation or other business entity may act only through the persons connected with it, possession, custody or control includes that exercised by the party's employees, agents and managers.”).
The party seeking the discovery bears the burden of showing possession, custody, or control. Washington-St. Tammany Elec. Coop., Inc. v. La. Generating, L.L.C., No. 17-CV-405, 2019 WL 1804849, at *7 (M.D. La. Apr. 24, 2019). Plaintiff has established, through the following evidence, a sufficient relationship between Sah and IPSS for the Court to conclude the requested items are in the possession, custody, or control of IPSS:
(1) Sah and IPSS executed a Form of Restricted Unit Agreement, effective February 25, 2019, which makes Sah a shareholder of IPSS and refers to him throughout as an employee. See ECF No. 111 at 2 (“[IPSS] hereby issues 14,285 Class C Units to [Sah] ... in connection with [Sah's] agreement to provide Services to [IPSS.]”).
(2) Sah recruited another former employee of Calsep, Casper Hadsbjerg (“Hadsbjerg”), to join IPSS in its endeavor to develop PVT software to compete with Calsep. See ECF No. 72-2 ¶ 12. Sah negotiated the terms of the relationship between IPSS and Hadsbjerg, in which Hadsbjerg would receive a percentage of revenue from the software. Id. ¶ 16; see also ECF No. 72-2 at 28-29 (email from Sah stating IPSS would not use Hadsbjerg's work without permission and making other representations on behalf of IPSS). These actions show Sah was working on behalf of IPSS to recruit other employees.
*2 (3) Sah's business card lists him as the Chief Technology Officer of IPSS, and IPSS's website names Sah as part of its “core team of consultants.” ECF No. 142 ¶¶ 5-6. In his role as employee of IPSS, Sah met with a potential marketing agent in Delhi on February 26, 2019 and gave his business card to the vendor at that meeting. ECF No. 147-1 ¶¶ 5-6.[2]
The evidence is sufficient to contradict Defendant Asish Dabral's conclusory affidavit claiming he was the only employee of IPSS, see ECF No. 35-1 ¶ 21, and Sah's conclusory affidavit claiming he does not work for IPSS, see ECF No. 38-1 ¶ 17. Based on the evidence, Sah was an agent and employee of IPSS, and therefore IPSS has the legal right and practical ability to obtain any items responsive to Plaintiffs' discovery requests that are in Sah's possession. See, e.g., First Am. Bankcard, Inc., 2017 WL 2267149, at *3 (“As ‘former owners and top officers’ of defendant, Fuente and Romero are precisely the kinds of individuals who owe an obligation to their ex-corporate employer to provide the requested materials upon request and from whom the corporate defendant would be expected to have a practical ability to obtain them.”).
Plaintiffs' motion to compel, ECF Nos. 109, 110, is therefore GRANTED. Accordingly, IPSS shall produce Sah's hard drives and other requested discovery to Plaintiff no later than March 13, 2020.
Signed on March 2, 2020 at Houston, Texas.
Footnotes
On January 23, 2020, Judge Ellison dismissed Sah from this litigation based on lack of personal jurisdiction. Minute Entry dated Jan. 23, 2020.
Defendants' argument that Sah had merely been contemplating joining IPSS, ECF No. 131 at 7, is belied by this evidence. See also ECF No. 72-2 at 28 (email from Sah to Hadsbjerg) (“[A]s per an agreement between you [Hadsbjerg] and IPSS, you would get X% of the revenue. This X value can be discussed at our next meeting also including my partner [Ashish Dabral].”) (emphasis added).