Chevron U.S.A. Inc. v. Guajardo et al

Filing 5

MEMORANDUM AND ORDER entered GRANTING Application for a TRO. Order to follow. (Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CHEVRON U.S.A., INC.,
Plaintiff,
v.
RONALD GUAJARDO, et al.,
Defendants.

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May 24, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. H-17-1549

MEMORANDUM AND ORDER
The plaintiff, Chevron U.S.A., Inc., filed a Verified Application for a Temporary Restraining
Order and Motion for Preliminary Injunction. (Docket Entry No. 1). Based on Chevron’s
Application and the supporting Memorandum of Law, the supporting declarations and documentary
evidence, and the applicable law, this court enters the following temporary restraining order against
Ronald Guajardo and sets a hearing for May 30, 2017 at 9:30 a.m. The reasons are set out below.
Before issuing a temporary restraining order, a court must find that four conditions are
present:
(1) a substantial likelihood that the plaintiff will prevail on the merits;
(2) a substantial threat that the plaintiff will suffer irreparable injury
if the injunction is not granted; (3) a showing that the threatened
injury to the plaintiff outweighs the potential harm to defendants if
the injunction issues; and (4) a showing that issuance of the
injunction will not disserve the public interest.
Anderson v. Jackson, 556 F.3d 351, 360 (5th Cir. 2009). A court may issue a temporary restraining
order without notice to the other party or its attorney only if:
(A) specific facts in an affidavit or a verified complaint clearly show
that immediate and irreparable injury, loss, or damage will result to
the movant before the adverse party can be heard in opposition; and
(B) the movant’s attorney certifies in writing any efforts made to give
notice and the reasons why it should not be required.

FED. R. CIV. P. 65(b)(1). An order must “describe the injury and state why it is irreparable [and]
state why the order was issued without notice[.]” FED. R. CIV. P. 65(b)(2).
Chevron has filed verifications from Kyle Simson, Chevron’s Midcontinent Business Unit
Commercial Team Lead; Robert Hunziker, Chevron’s General Manager of Commercial Support
(North America); Scott McKay, Chevron’s Commercial Manager for the Midcontinent Business
Unit; and Nick Vitruk, a forensics investigator for Chevron Global Security. (Docket Entry No. 1).
These filings form the basis of the temporary relief ordered.
Chevron and the defendant, Swift Technical, are parties to an International Master
Agreement No. IMA/169A Engineering and Technical Staffing Services contract dated January 1,
2013, known as the Master Agreement. (Docket Entry No. 1, Ex. 1 at ¶21). Chevron and Swift
Technical are parties to a Service Order dated March 7, 2016 that incorporates by reference the
terms of the Master Agreement. (Id., Ex. 2). The Swift defendants provided engineering and
temporary staffing services to Chevron under the terms of that Service Order. The defendant,
Ronald Guajardo, contracted with Chevron to work under the Service Order to provide natural gas
liquids and gas-processing related services. Id.
Mr. Guajardo was to use his expertise to assist on commercial project teams. The work
included making recommendations on decisions related to gas processing and natural gas liquids
handling. He also assisted in revising and negotiating agreements for gas processing and natural
gas liquids “fractionation” and transportation and storage. His work included developing or
providing input into economic models for gas processing and natural gas liquids fractionation.
(Docket Entry No. 1-17 at ¶ 4).
Mr. Guajardo had access to Chevron’s confidential, proprietary, and trade-secret information.
This information included subsurface analysis, “playbooks” (type curve, fluid composition, and
commercial), privileged materials relating to litigation matters he was involved in, “shape files,”
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management presentations, maps, and requests for proposals. Chevron has presented verifications
stating that it paid millions of dollars to acquire this information.
Chevron protects this confidential and trade-secret information by password protection for
its computers, network, and other databases. Chevron limits access to certain databases to
individuals who require the information they contain. Chevron restricts access to its facilities.
Cabinets containing confidential information are locked, and keys are given only to those who need
the information. Chevron requires its employees to return all confidential and trade-secret
information when they end their employment with Chevron; requires confidentiality agreements
from employees; and regularly trains employees on their obligations as to confidential and tradesecret information.
Mr. Guajardo was subject to confidentiality obligations. Chevron informed Mr. Guajardo
of these obligations during compliance training at the start of his employment, and he acknowledged
these obligations in writing after his termination but before his departure.
Chevron’s submissions stated that Mr. Guajardo downloaded 8,290 files to two separate
external-storage devices between February 26, 2017 and March 21, 2017. Ninety-nine percent of
these files were downloaded on the evening of Sunday, February 26, 2017, and the morning of
February 27, 2017. The download included 3,000 unique files containing Chevron’s confidential
information and trade secrets. On multiple dates in March 2017, Mr. Guajardo downloaded
additional confidential information and trade secrets to an external storage device. Mr. Guajardo
also sent confidential information and trade secrets from his Chevron email account to his personal
email account during and after his employment. (Docket Entry No 1-18).
Chevron’s submissions show that there was no legitimate business reason for Mr. Guajardo
to have downloaded or emailed to his personal email account the confidential and trade secret
information. Downloading and emailing this information to a personal email account was against
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Chevron’s written policies, which Mr. Guajardo was given when he began working and after he
acknowledged the terms and conditions.
To prevail on its claims under the Defend Trade Secrets Act and the California Uniform
Trade Secrets Act, Chevron must show that Mr. Guajardo acquired its trade secrets by improper
means or had reason to know that the trade secrets were acquired by improper means. 18 U.S.C.
§ 1836(b); Cal. Civ. Code § 3426, et seq. The Verified Application and supporting documents
sufficiently show that Chevron is likely to succeed on the merits of its claims that Mr. Guajardo has
misappropriated confidential and trade-secret information in violation of both federal and state Trade
Secrets Acts. The submissions are also sufficient to show a likelihood of success on the merits of
the claim that Mr. Guajardo’s misappropriation violated the Master Agreement.
Chevron’s submissions are sufficient to show that it will suffer irreparable harm without a
temporary restraining order. “The damages occasioned by a case involving breach of confidentiality
and misappropriation of trade secrets is, by its nature, irreparable and not susceptible of adequate
measurement for remedy at law.” Glycobiosciences, Inc. v. Woodfield Pharmaceutical, LLC, 2016
WL 1702674, at *8 (S.D. Tex. Apr. 27, 2016); see, e.g., Traders Intern., Ltd. v. Scheuermann, 2006
WL 2521336, at *9 (S.D. Tex. Aug. 30, 2006) (quoting Am. Express Fin. Advisors, Inc. v. Scott, 955
F. Supp. 688, 693 (N.D. Tex. 1996) (“[I]njury resulting from the breach of non-compete covenants
is the epitome of irreparable injury.”)). This established law is particularly applicable when, as here,
a former contract employee takes confidential information and trade secrets while pursuing
employment with industry competitors. (Docket Entry No. 1 at ¶¶ 43–44).
The balance of hardships also favors a temporary restraining order. Chevron seeks to restrain
Mr. Guajardo from improperly retaining or using Chevron’s confidential information and trade
secrets, not to enjoin him from seeking employment or working with competitors. Nor does
Chevron seek to enjoin the Swift defendants. The balance of hardships favors a temporary
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restraining order. See, e.g., Glycobiosciences, 2016 WL 1702674, at *9 (“[T]he threatened injury
of Glyco’s trade secrets falling into the hands of a competitor outweighs the threatened harm to
Woodfield.”); Farmers Ins. Exch. v. Steele Ins. Agency, Inc., 2013 WL 2151553, at *14 (E.D. Cal.
May 16, 2013) (“Courts have found that the balance of hardships tips in favor of a plaintiff seeking
an injunction which would ‘merely prohibit the defendants from misappropriating the trade secrets
of the plaintiff.’”).
Chevron seeks an order that Mr. Guajardo provide a third-party forensics vendor with access
to all locations where Mr. Guajardo holds electronic information including devices, systems, cloud
storage, or remote storage platforms that he has used since May 19, 2016. The temporary restraining
order is not this broad. Although Mr. Guajardo is not required to provide access to all locations
where he stores electronic information, he is enjoined from distributing, copying, printing,
transferring, disclosing, selling, publishing, describing, modifying, or using this information in any
way during the pendency of this temporary restraining order.
Until June 7, 2017, or the court issues a further order, whichever occurs earlier, Mr. Guajardo
is enjoined from:
a.

distributing, transferring, disclosing, selling, publishing, or describing the
confidential information and trade secrets to any person or entity;

b.

copying, printing, modifying, or using the confidential and trade secret
information in any way; and from opening or viewing the electronic files on
any device or electronic storage platform or hard copy.

A hearing will be held on May 30, 2017 at 9:30 a.m in Courtroom 11-B. Chevron must post
a $1,000 bond under FED. R. CIV. P. 65(c).
SIGNED on May 24, 2017, at Houston, Texas.
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Lee H. Rosenthal
Chief United States District Judge

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