BHL Boresight, Inc. v. Geo-Steering Solutions, Inc. et al

Filing 375

OPINION AND ORDER. BHL's Motion 206 for Continuance is GRANTED. GSSI's Motion 185 for Partial Summary Judgment is DENIED WITHOUT PREJUDICE to GSSI to summarily reurge at a later date.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BHL BORESIGHT, INC., et al,
Plaintiffs,
VS.
GEO-STEERING SOLUTIONS, INC., et al,
Defendants.

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March 30, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. 4:15-CV-00627

OPINION AND ORDER
Pending before the Court in the above-referenced matter are Geo-Steering Solutions and
Geo-Steering Solutions USA’s (collectively, “GSSI”) Motion for Partial Summary Judgment of
No Trade Secrets, Doc. 185, and Plaintiff BHL Boresight, Inc.’s (“BHL”) Motion for
Continuance Under Rule 56(d) Regarding GSSI Defendants’ Motion for Partial Summary
Judgment, Doc. 206. Having considered the Motions, Response, Reply, Sur-Reply, and relevant
law, the Court grants BHL’s Motion and denies GSSI’s Motion.
I.

Background

This case arises from the parties’ dispute over the genesis of GSSI’s geo-steering
software. BHL filed suit against GSSI and Defendant Statoil alleging that Defendants
misappropriated confidential and proprietary software that constitutes trade secrets when GSSI
and Statoil accessed and used BHL’s geo-steering software to develop GSSI’s competing
software. See Doc. 1. On August 29, 2016, Magistrate Judge Stacy granted BHL’s Motion for
Leave to File First Amended Complaint and Add Additional Parties. Doc. 208. BHL filed its
First Amended Complaint the same day, adding five additional parties to the litigation. Doc. 209.
In its Motion for Partial Summary Judgment, GSSI argues it is entitled to summary
judgement on BHL’s trade-secret claims because BHL failed to make the required reasonable
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efforts to protect its alleged trade secrets, thereby precluding it from recovery on those claims.
Doc. 185. BHL responds to GSSI’s Motion with its Motion for Continuance Under Rule 56(d).
See Doc. 206. In its Motion, BHL argues that because GSSI moved to stay depositions in this
case, BHL has been unable to fully discover the material facts necessary to rebut GSSI’s Motion.
Id. BHL urges that whether it exercised reasonable efforts to maintain the secrecy of its trade
secrets is “an inherently factual inquiry,” and, therefore, it must be allowed to depose key
witnesses and obtain additional discovery before it can adequately respond. Id. BHL lists a
number of these “key witnesses”—four of whom are additional Defendants added to this case by
BHL’s First Amended Complaint. See Doc. 209.
II.

Legal Standard

Federal Rule of Civil Procedure 56(d) provides:
If a nonmovant shows by affidavit or declaration that, for specified reasons, it
cannot present facts essential to justify its opposition, the court may: (1) defer
considering the motion or deny it; (2) allow time to obtain affidavits or
declarations or to take discovery; or (3) issue any other appropriate order.
“Rule 56(d) motions are ‘broadly favored and should be liberally granted.’” Kean v. Jack Henry
& Assocs., Inc., 577 Fed. App’x 342, 348 (5th Cir. 2014) (quoting Raby v. Livingston, 600 F.3d
552, 561 (5th Cir. 2010)). Nevertheless, in order for continuance to be warranted, “[t]he Rule
56(d) movant ‘must set forth a plausible basis for believing that specified facts, susceptible of
collection within a reasonable time frame, probably exist and indicate how the emergent facts, if
adduced, will influence the outcome of the pending summary judgment motion.’” Id. (quoting
Raby, 600 F.3d at 561.)
III.

Analysis

To begin, the Court notes that GSSI is mistaken in urging that this Court must deny
BHL’s Motion for Continuance because it did not comply with the Federal Rules. GSSI argues
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that BHL’s Motion is procedurally flawed because it was filed without the Court’s prior approval
and failed to include the required affidavit or declarations. Doc. 224. However, BHL’s Motion
was filed on August 24, 2016—two days before a response to GSSI’s Motion for Partial
Summary Judgment was due—and included declarations from two of its principals specifically
disclosing the information in BHL’s possession. See Doc. 206. BHL’s Motion further explained
how this information was insufficient to respond to GSSI’s Motion and listed what it expected to
glean from discovery and how such information would support its case. See id. Accordingly, the
Court rejects GSSI’s arguments for denial and turns to the merits of BHL’s Motion.
In its Motion for Continuance, BHL is correct to note that GSSI moved to stay all
deposition testimony and scheduling deadlines in this case. See Doc. 92. In light the number of
motions pending at the time the Court took up GSSI’s Motion to Stay, this Court granted GSSI’s
request on March 30, 2016. Doc. 138. Over four months later, GSSI then filed its pending
Motion for Partial Summary Judgment. Doc. 185. Nevertheless, the parties’ discovery disputes
continue unabated.
On March 25, 2017 Magistrate Judge Stacy denied BHL’s Motion to Lift Suspension of
Depositions, Doc. 244, because there was “no appreciable change in circumstances since the
District Court entered its March 30, 2016, Order.” Doc. 370. As of now, a number of discovery
disputes as well as challenges to the First Amended Complaint (specifically to the Court’s
jurisdiction over a number of Defendants) remain pending. Accordingly, the Court concludes
that GSSI’s Motion is premature. As this Court recognized in a similar situation: “[a]ttempting
to adjudicate this issue while potentially relevant discovery disputes are ongoing could well
become an exercise in inefficiency and futility.” Robert Half Int’l, Inc. v. Burlingame, 4:12-CV2621, 2013 WL 3480834, at *3 (S.D. Tex. July 9, 2013).
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IV.

Conclusion

For the foregoing reasons, it is hereby
ORDERED that BHL’s Motion for Continuance, Doc. 206, is GRANTED. It is further
ORDERED that GSSI’s Motion for Partial Summary Judgment, Doc. 185, is DENIED
WITHOUT PREJUDICE to GSSI to summarily reurge its Motion at a later date.
SIGNED at Houston, Texas, this 30th day of March, 2017.
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MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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