Logan International Inc. et al v. SureTech Completions (USA) Inc. et al
MEMORANDUM AND ORDER GRANTED 8 MOTION to Dismiss Plaintiffs' Verified Original Petition(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
LOGAN INTERNATIONAL INC.,
SURETECH COMPLETIONS (USA), §
INC., et al.,
CIVIL ACTION NO. H-13-0492
MEMORANDUM AND ORDER
This case is before the Court on the Motion to Dismiss [Doc. # 8] filed by
Defendants SureTech Completions (USA) Inc. (“SureTech”) and Sanjel (USA) Inc.
(“Sanjel”). Plaintiffs Logan International Inc. (“Logan”) and Logan Completion
Systems, Inc. (“LCS”) filed a Response [Doc. # 13], and Defendants filed a Reply
[Doc. # 17]. Having reviewed the full record, the Court concludes that this lawsuit
should be dismissed based on the doctrine of forum non conveniens. As a result, the
Court grants Defendants’ Motion to Dismiss and dismisses this case without
prejudice to its being litigated in Canada.
FACTUAL AND PROCEDURAL BACKGROUND
Logan is a Canadian corporation claiming to have its principal place of business
in Houston, Texas. Source Energy Tool Services Inc. (“Source”) (another Canadian
corporation) developed proprietary technology for manufacturing tools used in fracing
operations in oil fields. Sean Campbell, a citizen of Canada, was employed by Source
and participated in the development of the proprietary technology. Destiny Resource
Service Corp. (“Destiny”) purchased Source on May 3, 2010. Destiny then changed
its name to Logan International, Inc. on May 13, 2010. Logan’s wholly-owned
subsidiary, LCS, is the “successor-by-amalgamation” to Source. Plaintiffs allege that
Campbell unlawfully misappropriated Source’s trade secrets when he resigned his
employment with Source and formed his own Canadian company called “SureTech.”
In December 2011, Sanjel Corporation acquired Campbell’s company. Plaintiffs
allege that Sanjel began improperly marketing Source’s propriety technology as its
Logan filed a lawsuit in federal court on April 13, 2012, naming several
defendants including SureTech and Sanjel. See Civil Action No. H-12-1139. Logan
asserted theft of trade secrets, tortious interference with existing and prospective
business relations, unfair competition, violations of the Lanham Act and the Theft
Liability Act, conspiracy, conversion, and unjust enrichment against all defendants,
including SureTech and Sanjel.
On June 20, 2012, Logan and LCS filed a related lawsuit in Alberta, Canada,
against the same defendants named in the federal lawsuit, as well as three employees
of Orion Machining and Manufacturing Inc. (“Orion”) (“Canada Lawsuit”). In the
Canada Lawsuit, Logan and LCS alleged that Campbell willfully misappropriated
Source’s confidential and proprietary information. Plaintiffs in the Canada Lawsuit
alleged that Campbell and the Orion employees improperly copied Source’s tools and
marketed them to customers throughout North America.
Defendants in the first federal lawsuit moved to dismiss on the basis of forum
non conveniens and lack of personal jurisdiction. By Memorandum and Order [Doc.
# 23 in Civil Action No. H-12-1139], the Court held that it lacked personal
jurisdiction over all defendants except Defendants SureTech Completions Canada Ltd.
and Sanjel Corporation (not defendants in this new lawsuit). The Court found also
that forum non conveniens applied and required dismissal of the “lawsuit” in favor of
the Canadian court and without prejudice to its being litigated in Canada.1
Logan neither moved for reconsideration nor appealed the Court’s ruling.
Instead, Logan refiled the lawsuit in Texas state court. In the new lawsuit, LCS is an
additional Plaintiff, and SureTech and Sanjel are the only named defendants.
Plaintiffs included new allegations that Defendants have made a single sale of the
Plaintiffs argue that the Court’s forum non conveniens ruling in the prior lawsuit did
not apply to these two Defendants. In that lawsuit, the Court had already held that it
did not have personal jurisdiction over these two Defendants and, therefore, they were
not subject to any ruling by the Court. The Court’s analysis and ruling, however,
involved whether the lawsuit in its entirety was subject to dismissal based on forum
technology to a customer in Texas, and that Defendants made a presentation in August
2012 during a trade show in Houston.2
Defendants filed a timely Notice of Removal, and the new lawsuit was
transferred to the docket of the undersigned. Defendants moved to dismiss on the
basis of forum non conveniens.3 The Motion to Dismiss has been fully briefed and is
now ripe for decision.
DOCTRINE OF FORUM NON CONVENIENS
Forum Non Conveniens Generally
Defendants seek dismissal of this case on the basis of forum non conveniens in
favor of the lawsuit currently pending in Canada. The “doctrine of forum non
conveniens proceed[s] from [the] premise [that] . . . [i]n rare circumstances, federal
courts can relinquish their jurisdiction in favor of another forum.” DTEX, LLC v.
BBVA Bancomer, S.A., 508 F.3d 785, 794 (5th Cir. 2007) (quoting Quackenbush v.
Allstate Ins. Co., 517 U.S. 706, 722 (1996) (emphasis omitted)). “The essence of the
forum non conveniens doctrine is that a court may decline jurisdiction and may
actually dismiss a case, even when the case is properly before the court, if the case
more conveniently could be tried in another forum.” In re Volkswagen of Am., Inc.,
The August 2012 trade show presentation occurred prior to the dismissal of the first
federal lawsuit in September 2012.
Defendants argued also that venue in this district is improper.
545 F.3d 304, 313 (5th Cir. 2008) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507
(1947)). Building on its holding in Gilbert, the Supreme Court later established the
framework for analyzing forum non conveniens in an international context. See Piper
Aircraft Co. v. Reyno, 454 U.S. 235 (1981). Defendants have the burden to prove all
elements in the forum non conveniens analysis. In re Air Crash Disaster Near New
Orleans, 821 F.2d 1147, 1164 (5th Cir. 1987) (en banc).
Plaintiff’s Choice of Forum
Ordinarily, a strong favorable presumption is applied to the plaintiff’s choice
of forum. The plaintiff’s choice of forum is not a distinct factor in the analysis, but
“it is nonetheless taken into account as it places a significant burden on the movant
to show good cause for the transfer.” Volkswagen, 545 F.3d at 314, n.10. “[U]nless
the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should
rarely be disturbed.” Gilbert, 330 U.S. at 508. Stated differently, under the forum non
conveniens doctrine, dismissal is permitted “only in favor of a substantially more
convenient alternative.” Volkswagen, 545 F.3d at 314. This strong showing that the
alternative forum is substantially more convenient is required, in part, because
dismissal under forum non conveniens may cause the plaintiff to “lose out completely,
through the running of the statute of limitations in the forum finally deemed
appropriate.” Volkswagen, 545 F.3d at 313, n.8. In this case, however, Plaintiffs have
already filed a virtually identical lawsuit in Canada, and Defendants have
affirmatively waived any potential statute of limitations defenses in the Canadian
The plaintiff's choice of forum is not dispositive of the forum non conveniens
issue. See, DTEX, 508 F.3d at 795 (citing Piper Aircraft, 454 U.S. at 255-56; Wilson
v. Humphreys (Cayman) Limited, 916 F.2d 1239, 1246 (7th Cir. 1990)). “Judicial
concern for allowing citizens of the United States access to American courts has been
tempered by the expansion and realities of international commerce. When an
American corporation doing extensive foreign business brings an action for injury
occurring in a foreign country, many courts have partially discounted the plaintiff's
preference of a United States forum.” DTEX, 508 F.3d at 795.
In this case, Logan and LCS are both Canadian companies, although they claim
to have their principal place of business in Houston. SureTech is a Delaware
corporation, and Sanjel is a Montana corporation. It is undisputed that Logan and
LCS do extensive business in Canada and that the alleged wrongful misappropriation
of LCS’s proprietary technology occurred in Canada. As a result, the Canadian
Plaintiffs’ choice of forum is entitled to little preference.
Existence of an Alternative Forum
The Court must first “determine whether there exists an alternative forum.” Id.
at 794 (quoting Piper Aircraft, 454 U.S. at 254 n.22). The Court considers whether
each Defendant is subject to service of process in the alternative forum, and whether
an adequate remedy is available there. Id. (citing Piper Aircraft, 454 U.S. at 254-55
n.22; McLennan v. Am. Eurocopter Corp., 245 F.3d 493, 424 (5th Cir. 2001);
Gonzalez v. Chrysler Corp., 301 F.3d 377 (5th Cir. 2002)). A foreign forum is
available when the entire case and all the parties are within that forum’s jurisdiction,
either by operation of law or by consent. See id. (citing Baumgart v. Fairchild
Aircraft Corp., 981 F.2d 824, 835 (5th Cir. 1993) (quoting In re Air Crash, 821 F.2d
at 1164)). Logan and LCS have a related lawsuit pending in Canada, and Defendants
have affirmatively consented to personal jurisdiction in the Canadian court. As a
result, the Court concludes that Canada provides an available forum for this dispute.
“A foreign forum is adequate when the parties will not be deprived of all
remedies or treated unfairly, even though they may not enjoy all the benefits of an
American court.” Id. (citing Baumgart, 981 F.2d at 835). “Adequacy” does not
require that the alternative forum provide identical relief, either qualitative or
quantitative, as an American court. Id. “In a forum non conveniens context, the
Supreme Court has stated that a dismissal ‘may be granted even though the law
applicable in the alternative forum is less favorable to the plaintiff’s chance of
recovery.” Calix-Chacon v. Global Intern. Marine, Inc., 493 F.3d 507, 515 (5th Cir.
2007) (quoting Piper Aircraft, 454 U.S. at 250). A difference in the law that is
unfavorable to the plaintiff should not play a significant role in the forum non
conveniens analysis unless the remedy in the alternative forum “is so clearly
inadequate or unsatisfactory that it is no remedy at all.” Piper Aircraft, 454 U.S. at
Plaintiffs argue that Canada is not an adequate forum because injunctive relief
is not available in that forum. Plaintiff’s inability to obtain identical relief in Canada
does not render the Canadian court inadequate. See, e.g., DTEX, 508 F.3d at 797.
Moreover, the record reflects that injunctive relief is available in the Canadian court,
and that Plaintiffs in the Canada Lawsuit have requested that relief.
The Court concludes that the Canadian court is an available and adequate forum
for this dispute. This is true particularly in light of the Canada Lawsuit currently
Private and Public Interest Factors
The Court must next determine which forum is best suited to the litigation. See
DTEX, 508 F.3d at 794 (citing Piper Aircraft, 454 U.S. at 255). Specifically, the
Court must consider whether “certain private and public interest factors weigh in favor
of dismissal.” Id. (quoting McLennan, 245 F.3d at 424). “The court must bear in
mind that ‘the ultimate inquiry is where trial will best serve the convenience of the
parties and the interests of justice.’” Id. (quoting In re Air Crash, 821 F.2d at 1162
(quoting Koster v. Am. Lumbermens Mut. Cas. Co., 330 U.S. 518, 527 (1947)).
The private interest factors include: (1) ease of access to evidence; (2) the
availability of compulsory process for unwilling witnesses; (3) the cost of willing
witnesses attending trial; (4) if relevant, the possibility of viewing the subject
premises; and (5) all other factors that might make the trial more efficient or less
expensive. See DTEX, 508 F.3d at 798 (citing Gilbert, 330 U.S. at 508). With
reference to the first factor, the vast majority of the relevant documents – particularly
those related to the seminal misappropriation issue – are located in Canada or are
subject to the control of the Canadian plaintiffs or a Canadian defendant. Plaintiffs
argue that key evidence relating to “marketing and sale of these trade secrets” is in
Texas, but discovery relating to the single alleged sale in Texas and to the single trade
show presentation (at which Plaintiffs’ representatives were present) is relevant only
once the misappropriation issue has been determined in Plaintiffs’ favor.
Regarding the availability of compulsory process, the vast majority of the
essential witnesses on the misappropriation issue are employees of Canadian
corporations headquartered in Canada.
It is unlikely that testimony requiring
compulsory process would be needed to demonstrate an alleged sale of the technology
in Texas or to describe a lunchtime presentation at a trade show at which Plaintiffs’
representatives were present. Plaintiffs’ argument that they would need to subpoena
every individual present at the luncheon presentation is unpersuasive. The Court
notes also that the district courts in the United States may compel testimony or
production of documents from a resident of that district to be used in the litigation in
Canada. See 28 U.S.C. § 1782(a). There is no indication that Canada provides similar
statutory assistance for litigants in the United States to compel testimony and
documents from persons residing in Canada. “[T]o fix the place of trial at a point
where litigants cannot compel personal attendance and may be forced to try their cases
on deposition is to create a condition not satisfactory to litigants.” DTEX, 508 F.3d
at 799 (quoting Perez & Compania (Cataluna), S.A. v. M/V Mexico I, 826 F.2d 1449,
1453 (5th Cir. 1987)).
The cost of willing witnesses’ attendance weighs in favor of trial in Canada.
Although it is likely to be as expensive to travel from Canada to Houston as it is to
travel from Houston to Canada, it appears from the evidence that there are
significantly more material witnesses in Canada than in Houston.
Regarding the fourth factor, there is no indication that a premises view is
needed in this case. As to the fifth factor, judicial economy favors resolution of all
claims in one trial. DTEX, 508 F.3d at 800. Judicial economy strongly favors trying
this case one time in the Canada Lawsuit rather than having one trial in Canada and
a second trial in Houston.
The public interest factors include: (1) the administrative difficulties flowing
from and involving court congestion; (2) the local interest in having localized
controversies resolved at home; (3) the interest in having the trial in a forum that is
familiar with the law that governs the action; (4) the avoidance of unnecessary
problems in conflicts of law, or in application of foreign law; and (5) the unfairness
of burdening citizens in an unrelated forum with jury duty. DTEX, 508 F.3d at 802
(citations omitted). Regarding the first factor, all courts are busy. The courts in the
Southern District of Texas are efficient. Nonetheless, given the likely discovery
problems discussed above in trying to obtain discovery from individuals and
companies in Canada, there is little likelihood that the case would reach trial here
sooner than it would in Canada, where it has already been pending since June 2012.
The third and fourth factors relate to governing law. This lawsuit arises from
the alleged misappropriation by Sean Campbell, a Canadian citizen, of proprietary
information from a Canadian company in Canada. Campbell then, together with
employees of a different Canadian company, allegedly used Source’s proprietary
information to develop technology that Defendants are currently marketing. It appears
likely that Canadian law will govern the fundamental liability questions in this case
because Canada has the “most significant relationship” to the alleged
misappropriation. See Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694,
705 (5th Cir. 1999); Jelec USA, Inc. v. Safety Controls, Inc., 498 F. Supp. 2d 945,
951-52 (S.D. Tex. 2007). This factor weighs heavily in favor of trying this case in
The second and fifth factors relate to having controversies resolved locally.
This is fundamentally a Canadian dispute between Canadian companies involving
alleged trade secret misappropriate by a Canadian individual in Canada. It is Canada
that has significantly greatest local interest in the controversy, and it would be unfair
to burden citizens in Houston with this Canadian dispute simply because Defendants
made a one-time lunchtime presentation during a trade show.
The private and public interest factors indicate that the Canadian forum is a
substantially more convenient alternative. As a result, dismissal of this lawsuit in
favor of that court is appropriate.
CONCLUSION AND ORDER
Defendants have overwhelmingly satisfied their burden to demonstrate that the
Canadian forum is substantially more convenient for resolving this dispute. This is
particularly true where, as here, the misappropriation issues are pending and should
be resolved in Canada before damages issues become material. Therefore, this lawsuit
is dismissed pursuant to the doctrine of forum non conveniens, without prejudice and
in favor of the pending Canadian Lawsuit. As a result, it is hereby
ORDERED that Defendants’ Motion to Dismiss [Doc. # 8] is GRANTED.
The Court will issue a separate Dismissal Order.
SIGNED at Houston, Texas, this 10th day of June, 2013.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?