No. 01-14-00776-CV 

# In the Court of Appeals for the First Judicial District Houston, Texas

S CHLUMBERGER L IMITED AND S CHLUMBERGER T ECHNOLOGY C ORPORATION , Appellants/Cross-Appellees , v. C HARLOTTE R UTHERFORD , Appellee/Cross-Appellant. On Appeal from the 127th District Court at Houston, Texas



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Craig Smyser Land Murphy Justin Waggoner S MYSER K APLAN & V ESELKA , L.L.P. 700 Louisiana Street, Suite 2300 Houston, Texas 77002-2700 [Tel.] (713) 221-2300 [Fax] (713) 221-2320 Sean D. Jordan State Bar No. 00790988 Kent C. Sullivan Danica L. Milios Peter C. Hansen S UTHERLAND A SBILL & B RENNAN LLP 600 Congress Ave., Suite 2000 Austin, Texas 78701 [Tel.] (512) 721-2679 [Fax] (512) 721-2656 sean.jordan@sutherland.com C OUNSEL FOR A PPELLANTS

O RAL A RGUMENT R EQUESTED ACCEPTED 01-14-00776-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 3/13/2015 6:10:37 PM CHRISTOPHER PRINE

CLERKi 

### T ABLE OF 

### C ONTENTS Index of Authorities ......................................................................... iii Summary of Argument ...................................................................... 2 Argument ........................................................................................... 5 I. The Court Has Jurisdiction To Consider Schlumberger’s Appeal. .................................................. 5 II. The TCPA Does Not Appl y to Schlumberger’s Claims Against Rutherford. ............................................ 7 A. The TCPA Protects Public Communications with a Nexus to Participation in Government, Not Private Communications for Commercial Gain. ............................................. 8 1. The TCPA should be construed consistent with the express purpose set forth in its text. ..................................... 10 2. The Cheniere Energy , Jardin , and Whisenhunt decisions do not misconstrue the TCPA. ............................... 12 B. The TCPA Is Inapplicable Because Schlumberger’s Suit Is Not Premised on TCPA-Protected Communications. ..................... 15 1. Schlumberger’s suit does not implicate the First Amendment concerns addressed by the TCPA. ............................. 16 2. Applying the TCPA to a broad array of claims unrelated to the statute’s purpose leads to unreasonable and absurd results. ............................................ 18ii III. Even Assuming the TCPA Applies, Schlumberger Met Its Evidentiary Burden To Prevent Dismissal of Its Claims. ................................................................. 21 A. The TCPA Imposes a Minimal Evidentiary Burden on the Non-Movant. ................................ 21 B. Schlumberger Carrie d Its Evidentiary Burden To Prove a Prima Facie Case with Clear and Specific Evidence for Every Claim Asserted Against Rutherford............................... 23 1. Breach of fiduciary duty ............................. 24 2. Misappropriation of trade secrets .............. 27 3. Conversion. ................................................. 30 4. Texas Theft Liability Act ............................ 32 IV. The Trial Court Abused Its Discretion in Awarding $350,000 in Attorneys’ Fees and $250,000 in Sanctions Agai nst Schlumberger. ............ 34 A. Rutherford Failed To Segregate Her Fees as Required by Texas Law. ...................................... 34 B. The Trial Court’s Award of Sanctions Cannot be Reconciled with the Record. .............. 36 Prayer ............................................................................................... 38 Certificate of Service ....................................................................... 39 Certificate of Compliance ................................................................ 40iii 

### I NDEX OF 

### A UTHORITIES Cases Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson , 209 S.W.3d 644 (Tex. 2006) ............................................................... 6 Aviles v. Aguirre , 292 S.W.3d 648 (Tex. 2009) (per curiam) ....................................... 12 BBB of Metro. Houston, Inc. v. John Moore Servs., Inc. , 441 S.W.3d 345 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) ... 14 Biopolymer Eng'r, Inc. v. ImmuDyne, Inc. , 304 S.W.3d 429 (Tex. App.—San Anto nio 2009, op. vacated pursuant to settlement) ............................................... 35 Bonito Boats, Inc. v. Thunder Craft Boats , Inc. , 489 U.S. 141 (1989) ......................................................................... 17 Casso v. Brand , 776 S.W.2d 551 (Tex. 1989) ............................................................. 29 Charalambopoulos v. Grammer , 3:14–CV–2424–D, 2015 WL 390664 (N.D. Tex. Jan. 29, 2015) ..... 10 Cheniere Energy, Inc. v. Lotfi , 449 S.W.3d 210 (Tex. App.—Houston [1st Dist.] 2014, no pet.) ....................... 9, 14, 19 Cohen v. Cowles Media Co. , 501 U.S. 663 (1991) ......................................................................... 17 Dolcefino v. Randolph , No. 14-00-00602-CV, 2001 WL 931112 (Tex. App.—Houston [14th Dist .] 2001, pet. denied) ....................... 7 Freeman v. Schack , 154 Cal. App. 4th 719 (Cal. App. 4 Dist. 2007) .............................. 18iv Grainger v. W. Cas. Life Ins. Co. , 930 S.W.2d 609 (Tex. App.—Houston [1st Dist .] 1996, writ denied) ....................... 30 Hyde Corp. v. Huffines , 314 S.W.2d 763 (Tex. 1958) ............................................................. 17 Jardin v. Marklund , 431 S.W.3d 765 (Tex. App.—Houston [14th Dist.] 2014, no pet.) .................. 9, 14, 16 Kinney v. BCG Attorney Search , No. 03–12–00579–CV, 2014 WL 1432012 (Tex. App.—Austin Apr. 11, 2014, pet. denied) (mem. op.) ............. 7 KTRK Television, Inc. v. Fowkes , 981 S.W.2d 779 (Tex. App.—Houst on [1st Dist.] 1998, writ denied), rev’d in part on other grounds , Turner v. KTRK Television, Inc. , 38 S.W.3d 103 (Tex. 2000) .......... 7 Marks v. St. Luke’s Episcopal Hosp ., 319 S.W.3d 658 (Tex. 2010) ............................................................. 13 Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd. , 416 S.W.3d 71 (Tex. App.—Houston [1st Dist .] 2013, pet. denied) ....................... 24 Paulsen v. Yarrell , No. 01–14–00351–CV, 2014 WL 7174259 (Tex. App.—Houston [1st Dist.] Dec. 16, 2014, no pet.) .................. 5 R.J. Suarez Enters. v. PNYX, L.P. , 380 S.W.3d 238 (Tex. App.—Dallas 2012, no pet.) ........................ 33 Rivers v. Johnson Custodial Home, Inc ., No. A-14-CA-484-SS, 2014 WL 4199540 (W.D. Tex. Aug. 22, 2014) ... 10 RRR Farms, Ltd. v. Am. Horse Prot. Ass’n, Inc. , 957 S.W.2d 121 (Tex. App.—Houston [14th Dist .] 1997, pet. denied) ..................... 30v Schimmel v. McGregor , 438 S.W.3d 847 (Tex. App.—Houston [1st Dist.] 2014, pet. filed) ............... 22, 24, 26 Smith v. Baldwin , 611 S.W.2d 611 (Tex. 1980) ............................................................. 12 St. Martin Evangelical Lutheran Church v. S. Dakota , 451 U.S. 772 (1981) ................................................................... 10, 11 TGS–NOPEC Geophysical Co. v. Combs , 340 S.W.3d 432 (Tex. 2011) ............................................................. 13 T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc. , 965 S.W.2d 18 (Tex. App.—Houston [1st Dist .] 1998, pet. dism’d)........................ 28 Tony Gullo Motors I, L.P. v. Chapa , 212 S.W.3d 299 (Tex. 2006) ............................................................. 35 U.S. Fire Ins. Co. v. Sheppard, Mullin, Richter & Hampton , 171 Cal. App. 4th 1617 (Cal. App. 4 Dist. 2009) ............................ 18 West v. Schlumberger Tech. Corp. , 234 F.3d 1279 (9th Cir. 2000) ......................................................... 37 Whisenhunt v. Lippincott , 416 S.W.3d 689 (Tex. App.—Texarkana 2013, pet. filed) .............................. 9, 10, 14 Statutes T EX

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. C ODE § 27.002 ............................................ 2, 8, 11 T EX

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. C ODE § 27.005(c) ................................................ 22 T EX

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. C ODE § 27.008(b) .................................................. 5 T EX

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. C ODE § 27.011 ..................................................... 11 T EX

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. C ODE § 27.011(b) ............................................ 2, 13vi T EX

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. C ODE § 51.014(a)(12) ............................................ 5 T EX

. G OV ’ T C ODE § 311.023(3) .................................................................... 6 T EX

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. P. 97(a) ............................................................................ 20, 21 Other Authorities Senate Comm. on State Affairs, Engrossed Bill Analysis, Tex. H.B. 2935, 83d Leg., R.S. (2013) ..................................................... 6No. 01-14-00776-CV 

# In the Court of Appeals for the First Judicial District Houston, Texas

S CHLUMBERGER L IMITED AND S CHLUMBERGER T ECHNOLOGY C ORPORATION , Appellants/Cross-Appellees , v. C HARLOTTE R UTHERFORD , Appellee/Cross-Appellant

. On Appeal from the 127th District Court at Houston, Texas



## A PPELLANTS 

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## B RIEF

T O THE H ONORABLE F IRST C OURT OF A PPEALS : As its text and history make clear, the Texas Citizens’ Participation Act (TCPA) was never intended to protect private communications for personal gain, lik e those involved here. And when it does apply, the TCPA imposes on ly a minimal eviden tiary burden on the non-movant. Misconstruing both the scope of the TCPA and its evidentiary standards, the trial co urt dismissed nearly every claim asserted by Schlumberger against Ru therford. In so doing, the trial2 court created troubling precedent. If the TCPA’s purpose will no longer be consulted in determining its app licability, and rational inferences from circumstantial evidence no long er allowed, the statute’s reach will be constrained only by the creativ ity of counsel. As this case demonstrates, bizarre results will follow. 

### S UMMARY OF 

### A RGUMENT When it enacted the TCPA, the Le gislature includ ed a “Purpose” provision, making clear that the stat ute is intended to “encourage and safeguard the constitution al rights of persons to petition, speak freely, and otherwise participate in gove rnment to the maximum extent permitted by law . . .” T EX

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. C ODE § 27.002. It also commanded that courts must constr ue the statute “to effectuate its purpose and intent fully.” Id . § 27.011(b). In this case, the trial court demonstrably failed to interpret and a pply the TCPA consistent with its purpose and the Legislature’s command. Schlumberger’s lawsuit against Ruth erford has nothing to do with abridging her constitutional rights to “petition, speak freely, and otherwise participate in government to the maximum extent permitted by law.” Nor does the TCPA protec t Rutherford’s conduct at issue in3 this lawsuit: breach of fiduciary duties by use of Schlumberger’s confidential information obtained while Rutherford was its top Intellectual Property lawyer; improper removal and use of physical and electronic property fr om Schlumberger’s premises; allowing third parties to access Schlumberger’s confidential information and documents in her possession; and im properly and without permission deleting a large number of company files, including files containing confidential data and information. See CR.1344, 1415, 1418–21. Disregarding the mismatch betw een Schlumberger’s claims and the purpose and scope of the TCPA, the trial co urt concluded that the TCPA was applicable in this case. Rutherford now urges the Court to ratify that decision. Heedless of the broader consequences, Rutherford invites this Court to likewise ignore the TCPA’s purpose of protecting only public communications analogou s to participation in government, advocating instead that the Court en dorse a myopic reading of isolated portions of the statute, focused solely on its definitions of the “right to petition” and “right of associatio n.” Thus, Rutherford envisions a virtually unlimited reach for the TC PA’s dismissal mechanism, leading to unworkable and absurd results. Th e Court should reject Rutherford’s4 invitation to expand the scope of the TCPA beyond the text of the statute and the intent of the Legislature. But even if the TCPA applies, Sc hlumberger introduced more than sufficient clear and specific evidence to establish a prima facie case, precluding dismissal of its claims. The trial court reached a contrary conclusion only by determining th at circumstantial evidence is inadmissible to defeat a TCPA motion , a construction of the statute that is unsupported by its text and th at runs afoul of longstanding evidentiary standards in Texas. For her part, Rutherford is unwilling to endorse explicitly the trial court’s indefensible “no circumstanti al evidence” rule, choosing instead to focus on mischaracterizing Sc hlumberger’s evidence as mere speculation and innuendo. But the reco rd speaks for itself, and includes ample direct and circumstantial evid ence to defeat Rutherford’s TCPA motion. For all of these reasons, the Court should reverse the trial court’s decision dismissing Schlumberger’s claims for breach of fiduciary duty, misappropriation of trade secret s, conversion, and violation of the Texas Theft Liability Act.5 

### A RGUMENT I. T HE C OURT H AS J URISDICTION T O C ONSIDER S CHLUMBERGER ’ S A PPEAL . Referencing dicta from Paulsen v. Yarrell , No. 01–14–00351–CV, 2014 WL 7174259 (Tex. App. —Houston [1st Dist.] Dec. 16, 2014, no pet.), Rutherford asserts that th e Court lacks jurisdiction over Schlumberger’s appeal. Specifically, Rutherfo rd claims that an amendment to Texas Civil Practice and Remedies Code Section 51.014 impliedly negates Schlumberger’s ability to appeal the grant—as opposed to a denial

― of a TCPA motion to di smiss under Texas Civil Practice and Remedies Code Section 27.008(b). 1 Rutherford is wrong. Section 27.008(b) provides for a ppeals from orders on TCPA motions to dismiss without regard for whether an order is a grant or denial. And legislative history confir ms that (1) the intent of the TCPA was to allow appeals from both gran ts and denials of TCPA motions to dismiss, and (2) the am endment to Section 51. 014 did not alter the

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. C ODE § 27.008(b) (“An appellate court shall expedite an appeal or other writ, whether interlocutory or not, from a trial court order on a motion to dismiss a legal action under Section 27.003 or from a trial court’s failure to rule on that motion in the time prescribed by Section 27.005.”); § 51.014(a)(12) (“A person may appeal from an interlocutory order of a district court, county court at law, statutory probate court, or county court that . . . denies a motion to dismiss filed under Section 27.003.”).6 TCPA in that regard. See Senate Comm. on State Affairs, Engrossed Bill Analysis, Tex. H.B. 2935, 83d Leg., R.S. (2013) (sponsor explains that the original legislation allows appeals from grants and denials of TCPA dismissal motions, and that the amendment was simply intended to correct a Second Court of Appeals case finding no jurisdiction over the denial of a TCPA motion). The Court should not read an implied modification of Section 27.008(b) into Section 51.014(a)( 12)—doing so woul d be contrary to the express intent of the author of both provisions. See T EX

. G OV ’ T C ODE § 311.023(3) (courts may consid er legislative history); Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson , 209 S.W.3d 644, 651–52 (Tex. 2006) (“cautiously” looking to le gislative history where statutory language nebulous). Indeed, Rutherfo rd fails to point to any analogous case law holding that an amendment to one statute impliedly modified another, contrary to the express legisl ative intent of that amendment. In any event, the Court has jurisd iction because the trial court’s order partially denied the TCPA moti on, thereby providing jurisdiction over the entire order un der Section 51.014(a)(12). See Kinney v. BCG Attorney Search , No. 03–12–00579–CV, 2014 WL 1432012, at *1, 137 (Tex. App.—Austin Apr. 11, 2014, pet. denied) (mem. op.) (finding jurisdiction over both appeal and cross-appeal of partial denial and partial grant of TCPA motion to dismiss). In a closely analogous context, Texas courts of appeals have held that when jurisdiction under Section 51.014(a)(6) is triggered, juri sdiction exists over the entire order, and not just over the cl aims triggering jurisdiction. See Dolcefino v. Randolph , No. 14-00-00602-CV, 2001 WL 931112, at *3 (Tex. App.— Houston [14th Dist.] 2001, pet. denied) (“this court has jurisdiction over the entire order denying appellants’ motions for summary judgment”); but see KTRK Television, Inc. v. Fowkes , 981 S.W.2d 779 (Tex. App.— Houston [1st Dist.] 1998, writ denied), rev’d in part on other grounds , Turner v. KTRK Television, Inc. , 38 S.W.3d 103 (Tex. 2000) (finding jurisdiction present only with regard to specif ic claims triggering jurisdiction). In sum, the Court has appellate jurisdiction and should address the merits of Schlumberger’s appeal. II. T HE TCPA D OES N OT A PPLY TO S CHLUMBERGER ’ S C LAIMS A GAINST R UTHERFORD . Rutherford asserts that Schlum berger’s claims implicate the TCPA’s protection of her “right to pe tition” and “right of association.”8 CR.237. Rutherford bore the initial burden of demonstrating the TCPA’s applicability by a preponde rance of the evidence. Because Rutherford did not, and could not, meet that burden, the trial court erred in dismissing Schlumberger’s claims. A. The TCPA Protects Public Communications with a Nexus to Participation in Government, Not Private Communications for Commercial Gain. The TCPA’s language, context, an d legislative history confirm that it protects communications made publicly and wi th a nexus to participation in government, an d not private communications for commercial gain. Section 27.002 describes the purp ose of the TCPA as follows: “to encourage and safeguard th e constitutional rights of persons to petition, speak freely, associate freely, and otherwise participa te in government to the maximum extent permitted by law.” T EX

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. C ODE § 27.002 (emphasis added). As decisions from both this Co urt and the Fourt eenth Court of Appeals have noted, because the stat ed purpose of the TCPA includes the phrase “otherwise participate in government,” it is apparent that the Legislature intended to protec t only communications that are9 analogous to participating in government. See Cheniere Energy, Inc. v. Lotfi , 449 S.W.3d 210, 216 (Tex. App. —Houston [1st Dist.] 2014, no pet.) (explaining that the terms “cit izen” in the title of the TCPA and “participate in government” in it s purpose provision “contemplate a larger public purpose”); id . at 217 (Jennings, J., concurring) (“By including the phrase ‘otherwise part icipate in government’ in Section 27.002, the legislature intended to protect only constitutionally protected freedoms that rise to such a level that they can be considered participation in government.”) (internal punctuation omitted); Jardin v. Marklund , 431 S.W.3d 765, 770–73 (Tex. App.—Houston [14th Dist.] 2014, no pet.). Other Texas courts have also re cognized that the TCPA is not intended to protect priv ate communications. In Whisenhunt v. Lippincott , for example, the Sixth Court of Appeals held that the TCPA did not apply to a motion to dismiss defamation claims based on internal emails that had never been published in a newspaper, social media, or other public forum. 416 S.W.3d 689, 697–700 (Tex. App.— Texarkana 2013, pet. filed). See also Rivers v. Jo hnson Custodial Home, Inc ., No. A-14-CA-484-SS, 2014 WL 4199540, at *1–2 (W.D. Tex. Aug.10 22, 2014); Charalambopoulos v. Grammer , 3:14–CV–2424–D, 2015 WL 390664 (N.D. Tex. Jan. 29, 2015). Th e court explained, “Considering the language of the statute as a wh ole, the Legislature’s statement of intent, and existing law, which was referenced by the Legislature, we conclude that the TCPA does not appl y to speech that is only privately communicated. Only under such an in terpretation can both purposes of the TCPA be served.” Whisenhunt , 416 S.W.3d at 700. 1. The TCPA should be co nstrued consistent with the express purpose set forth in its text. Rejecting the considered an alysis of the issue in the Cheniere Energy , Jardin , and Whisenhunt decisions, Rutherford argues that the language in the TCPA’s purpose provision should be given no consideration in this case. Rather , in Rutherford’s view, the Court should focus solely on the language in Section 27.001 of the statute defining the “right to petition ” and “right of association.” See Appellee’s Br. 27–28. For the proposition that the TCPA ’s “Purpose” provision should be ignored, Rutherford directs the Court to St. Martin Evangelical Lutheran Church v. South Dakota , 451 U.S. 772 (1981). According to Rutherford, in St. Martin the U.S. Supreme Court “observ[es] that11 general statements of legislative purp ose ‘cannot defeat the specific and clear wording of a statute.’” Appellee’s Br. 28 (quoting St. Martin , 451 U.S. at [791] 786 n.19). But Rutherford misquotes St. Martin , omitting key language from the opinion that negates her argu ment. The actual quote from St. Martin reads as follows: “general st atements of overall purpose contained in legislative reports cannot defeat the specific and clear wording of a statute.” St. Martin , 451 U.S. at 786 n.19 (emphasis added). Of course, Schlum berger, like this Court in Cheniere Energy , points first and foremost to the clear statutory text of the TCPA setting forth its purpose, not legislative reports as discussed in St. Martin

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. C ODE § 27.002 (“Purpose”). Further, the text of the TCPA itself directs that it be interpreted in light of its purpose. See id . § 27.011 (“Construction”) . Rutherford’s suggestion that the TCPA’s purpose be given little or no weig ht in interpreting its operative provisions runs afoul of the pl ain text of the statute. Contrary to Rutherford’s suggest ion, Texas courts consistently interpret statutes pursuant to expr ess purposes set forth in statutory

text. See, e.g. , Aviles v. Aguirre , 292 S.W.3d 648, 649 (Tex. 2009) (per12 curiam) (noting that no other construc tion of the statut e at issue would comply with the explicit purpose of the statute); Smith v. Baldwin , 611 S.W.2d 611, 615 (Tex. 1980) (interpret ing DTPA, which commands that it be construed to promote its purp ose set forth in Section 17.44 of the Texas Business and Commerce Code, in light of the legislative intent expressed in that section). Rutherfo rd offers no legitimate reason, nor could she, why the TCPA—unlike othe r Texas statutes with “purpose” provisions—should be interpreted with out reference to that provision. 2. The Cheniere Energy , Jardin , and Whisenhunt decisions do not misconstrue the TCPA. Leaving aside Rutherford’s misreading of St. Martin , she goes on to suggest that the Cheniere Energy , Jardin , and Whisenhunt courts all misconstrued the TCPA. But it is Rutherford who misunderstands both the statute and these decisions, urging a construction of the TCPA that is contrary to both the statute’s te xt as well as established canons of construction. As to Cheniere Energy and Jardin , Rutherford maintains that these decisions incorrectly read th e TCPA’s “Purpose” provision to “override” the definitions of the “r ight to petition ” and “right of association” provisions in the statute. See Appellee’s Br. 27–30. Not so.13 Cheniere Energy and Jardin do not stand for the proposition that the TCPA’s purpose provision “overr ides” any other provision of the statute. Rather, these decisi ons properly recognize that all the provisions in the TCPA are informed by, and should be construed in harmony with, the TCPA’s overarchin g purpose articulated in Section 27.002. This approach to construing the TCPA is consistent with both the text of the statute as well as es tablished canons of construction. See T EX

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. C ODE § 27.011(b) (expressl y requiring Texas courts to construe all of the TCPA ’s provisions “to effectuate its purpose”); see also TGS–NOPEC Geop hysical Co. v. Combs , 340 S.W.3d 432, 441 (Tex. 2011) (explaining that th e words of a statute should not be examined in isolation, but rather must be informed by the context in which they are used); Marks v. St. Luke’s Episcopal Hosp ., 319 S.W.3d 658, 663 (Tex. 2010) (expla ining that courts cannot interpret a statute in a manner that renders any part of the statute meaningless or superfluous). 2

2. Rutherford argues that Cheniere Energy conflicts with this Court’s decision in BBB of Metro. Houston, Inc. v. John Moore Servs., Inc. , 441 S.W.3d 345 (Tex. App.— Houston [1st Dist.] 2013, pet. de nied). Rutherford overreads John Moore . In that case, the Court made clear that it was decidi ng only that “the scope of [the TCPA] is not limited only to protect speech directed toward the government.” Id . at 353 (emphasis added). The Cheniere Energy decision also does not conclude that the14 Rutherford also argues that Whisenhunt , and in turn Cheniere Energy and Jardin , incorrectly conclude that the TCPA does not protect private communications. See Appellee’s Br. 31–32. Again, however, Rutherford’s argument turns on her request that the Court ignore the TCPA’s language, which makes clear that the statute protects public communications analogous to or invo lving participatio n in government, not private communications for commercial gain. Whisenhunt , 416 S.W.3d at 697; Jardin , 431 S.W.3d at 770–71; Cheniere Energy , 449 S.W.3d at 216. In sum, the basis for Rutherford’s disagreement with Whisenhunt , Cheniere Energy , and Jardin is that each of thos e decisions recognized an essential aspect of the TCPA th at Rutherford urges this Court to ignore: the TCPA was designed to promote public discourse, citizen participation, and the exchange of id eas for the betterment of all. A reading of the TCPA that disregards this purpose would be contrary to the text and intent of the statute, and would dangerously expand its reach well beyond the expectat ions of the Legislature. TCPA is so limited. Rather, Cheniere Energy understands the TCPA to protect public communications involving citizen participation—whether directed to the government or simply to the public—not private communications for personal gain. Thus the holdings in John Moore and Cheniere Energy do not conflict, as Rutherford suggests.15 B. The TCPA Is Inapplicable Because Schlumberger’s Suit Is Not Premised on TCPA-Protected Communications. Rutherford could not, and did not, meet her burden to prove by a preponderance of the evidence that Schlumberger’s lawsuit was filed in response to, premised upon, or ot herwise implicated TCPA-protected communications. Rutherford argues that her co nduct triggering Schlumberger’s lawsuit is protected by the TCPA because it is somehow “connected” to the filing of patent litigation ag ainst Schlumberger by Dynamic 3D Geosolutions, a subsidiary of her employer Acacia. See Rutherford’s Cross-Appellant’s Br. 29–30. The Court should reject this argument for several reasons. First, none of Schlumberger’s clai ms are “based on,” “related to,” or a “response” to Dynamic’s patent litigation. Rather, Schlumberger brought claims against Rutherford addressing rights and remedies independent of and different from thos e at issue in patent litigation. Likewise, none of Schlumberger’s claims implicates First Amendment concerns, much less the specific Firs t Amendment concerns protected by16 the TCPA. Finally, accepting Rutherford’s expa nsive interpretation of the TCPA leads to unreasonable and absurd results. 1. Schlumberger’s suit do es not implicate the First Amendment concerns addressed by the TCPA. According to Rutherford, if any connection can be drawn between Dynamic’s patent litigation and Schl umberger’s suit against her, the protections of the TCPA are invoke d. Rutherford is mistaken. To begin with, Rutherford’s argu ment is premised on the notion that Dynamic ’s pursuit of patent litigat ion somehow constitutes an exercise of Rutherford ’s constitutional rights. This is not the case. See Jardin , 431 S.W.3d at 774. Rutherford cannot invoke any “right to petition” that Dynamic may possess. See id. And although Dynamic’s allegati ons alerted Schlumberger that Rutherford may have violated her co ntractual and legal duties, causing Schlumberger to investigate her de parture, the fact that information discovered during that investigation re sulted in the filing of this lawsuit does not equate to this lawsuit be ing connected to Dynamic’s patent case. Rather, Schlumberger’s suit ag ainst Rutherford involves multiple causes of action, including breach of contract, breach of fiduciary duty, and misappropriation of trade secrets claims, all of which address rights17 and remedies independent of and differe nt from those at issue in patent litigation. As both the U.S. Su preme Court and Texas courts have recognized, the law protecting trade secrets advances “goals outside the contemplation of the federal patent scheme” in a manner “not aimed exclusively at the promotion of [the] invention itself.” Bonito Boats, Inc. v. Thunder Craft Boats , Inc. , 489 U.S. 141, 166 (1989); see also Hyde Corp. v. Huffines , 314 S.W.2d 763, 773 (Tex. 1958). Further, as in this case, trad e secret misappropriation cases often involve breaches of contracts or brea ches of confidence. Such cases do not implicate First Amendment concer ns, much less the specific First Amendment concerns prot ected by the TCPA. See, e.g. , Cohen v. Cowles Media Co. , 501 U.S. 663, 668–72 (1991) (holding that First Amendment protections were not triggered by a private cause of action for promissory estoppel); see also Schlumberger’s Cross-Appellees’ Br. 31–
37. Under Rutherford’s expansive view of the TCPA, contrary to these precedents, an employee and even a fiduciary such as herself, can invoke the TCPA as a shield to “immunize” tortious, unlawful, and unethical conduct so long as that misconduct has some connection to a18 subsequently filed patent lawsuit. Surely the Legislature did not intend the TCPA to apply in this manner. 3 2. Applying the TCPA to a broad array of claims unrelated to the statute’s purpose leads to unreasonable and absurd results. Rutherford’s argument that the TCPA’s protections are invoked by the mere existence of any connectio n between Dynamic’s patent lawsuit and Schlumberger’s claims agains t her is perhaps most troubling because it is predicated on an in terpretation of the TCPA that is unworkable, unreasonable, and leads to absurd results. It turns on an expansive and aggressive reading of the TCPA, particularly regarding

3. California courts have rejected the overly broad interpretation of that State’s anti-SLAPP statute that Rutherford advocates here. California courts look to the “gravamen of a cause of action [to determine] whether the anti-SLAPP statute applies.” U.S. Fire Ins. Co. v. She ppard, Mullin, Richter & Hampton , 171 Cal. App. 4th 1617, 1625 (Cal. App. 4 Dist. 2009). With particular reference to suits asserting attorney misconduct, California courts have recognized a “growing body of case law [holding] that actions based on an attorn ey’s breach of professional and ethical duties owed to a client are not SLAPP suits, even though protected litigation activity features prominently in the factual background.” Appellants’ Br. 40. Rutherford calls this precedent “irrelevan t” because the California statute applies to a cause of action “arising from” protected activity, whereas the Texas statute applies to a cause of action that is “based on, relates to, or is in response to” protected activity. Appellee’s Br. 40-41. But California courts are not focused on the distinction between the asserted technical definitions of the phrases “arises from” and “relates to.” Rather, like Texas courts, California courts look to the purpose of the anti-SLAPP statute and determine whether the act underlying the plaintiff’s cause of action was “an act in furtherance of the defendant’s right of petition or free speech.” Freeman v. Schack , 154 Cal. App. 4th 719, 727 (Cal. App. 4 Dist. 2007).19 the breadth of its provisions protecti ng the “right to petition” and the “right of association,” that insists th ese provisions be read broadly, and in isolation, rather than in light of the TCPA’s “Purpose” set forth in Section 27.002. As this Court has recognized however, untethering the TCPA’s “right to petition” and “right of asso ciation” provisions from its “larger public purpose” and the “generally recognized parameters of First Amendment protections” leads to an unreasonable and absurd expansion of the statute’s applicability. Cheniere Energy , 449 S.W.3d at 216–17 (noting that if the statute is not read in light of these considerations, “any communication th at is part of the decision-making process in an employment dispute—to name just one example—could be used to draw within the TCPA’s su mmary dismissal procedures private suits implicating only private issues”). The consequences of applying Ru therford’s rule demonstrate the concerns articulated in Cheniere Energy . For example, under Rutherford’s interpretation, the TCPA would apply to any and all compulsory counterclaims because th ey are necessarily “associated” or “connected” with the trig gering claim or suit. See T EX

. R. C IV

. P. 97(a)20 (providing that a pleading “shall stat e as a counterclaim any claim . . . if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim”). The upshot would be that every compulsory counterclaim would in voke the TCPA’s procedures, including a potential award of atto rneys’ fees, sanctions against the (compulsory) counterclaimant, an d—according to the trial court— dismissal of the compulsory counte rclaims unless the counterclaimant can prove its case by non-circumstan tial evidence at the outset of a lawsuit and long before th e completion of discovery. 4 In addition, under Rutherford’s interpretation, the TCPA could be used to abrogate or substantially undermine longstanding Texas statutory and common law remedies fo r tortious and unlawful conduct. Applied as broadly as Rutherford suggests, the TCPA could shield

4. Rutherford argues that it is “implausible” to suggest that all compulsory counterclaims would implicate the TCPA’s protections because “[a] counterclaim can be, but is not necessarily, filed in resp onse to—that is, in retaliation for—the plaintiff’s filing of the original claim, whic h is an act of petitioning.” Appellee’s Br. 34. Rutherford appears to have forgotten what she asserts elsewhere in the same brief: under Section 27.003(a) the TCPA is also tri ggered by a legal action that “relates to” the “right to petition,” not just legal actions that are filed “in response to” the exercise of the right to petition. Of course, by their nature compulsory counterclaims are necessarily “related to” the triggering claim or suit. See T EX

. R. C IV

. P. 97(a).21 conduct contravening Texas’s Free Enterprise and Antitrust Act of 1983, the Texas Insurance Code, and Texas’s anti-discrimination and anti-retaliation laws. See Schlumberger’s Cross- Appellees’ Br. 40–48. The notion that the Legislature inte nded the TCPA’s reach to be so broad and all-encompassing, shielding all manner of illegal and tortious conduct unrelated to the purposes of the TCPA, strains credulity. 5 III. E VEN A SSUMING THE TCPA A PPLIES , S CHLUMBERGER M ET I TS E VIDENTIARY B URDEN T O P REVENT D ISMISSAL OF I TS C LAIMS . Even if the Court concludes that Schlumberger’s lawsuit implicates the TCPA, it should reve rse the trial court’s dismissal of Schlumberger’s claims for breach of fiduciary duty, misappropriation of trade secrets, conversion, and violatio n of the Texas Theft Liability Act. The TCPA imposes a minimal evidenti ary burden on plaintiffs seeking to avoid dismissal, and Schlumberger more than adequately met that burden. A. The TCPA Imposes a Minima l Evidentiary Burden on the Non-Movant. If the trial court determines that a movant in a TCPA dismissal motion has met her initial burden to demonstrate that the non-movant’s
5. Even if the TCPA applies in this case, the commercial speech exception in Section 27.010(b) of the TCPA prevents dismissa l of Schlumberger’s claims against Rutherford. See Appellants’ Br. 46–48.22 lawsuit implicates the TCPA, the burd en shifts to the non-movant to establish “by clear and specific evid ence a prima facie case for each essential element of the claim in question.” T EX

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. P RAC

. & R EM

. C ODE § 27.005(c). In determining whether a non-movant carries that burden, the trial court “shall consider ” both the pleadings and evidence, id. § 27.006, and it must review them in the light most favorable to the

non-movant. Schimmel v. McGregor , 438 S.W.3d 847, 855–56 (Tex. App.—Houston [1st Dist.] 2014, pet. filed). Here, the trial court made clea r that it interpreted Section 27.005(c)’s requirement that the non-mo vant submit “clear and specific” evidence establishing a prima facie case to foreclose the court’s consideration of any circumstanti al evidence. RR.IX.45. But interpreting the TCPA to preclu de rational inferences from circumstantial evidence would violat e the definition of a prima facie case under Texas law, the ordinary me aning of “clear an d specific,” and the elementary principl e of Texas law that any fact may be proved through circumstantial evidence. Appellants’ Br. 50–54. Moreover, precluding rational infe rences from circumstanti al evidence would by definition lead to absurd results, and would require the Court to23 conclude that the Legislature intended to impose on litigants a higher burden to survive a motion to dismiss filed at the outset of a case than would be necessary ultimately to prevail at trial. See id

. 6 The Court should confirm that (1) the prima facie standard defines the quantum of evidence n eeded to overcome a TCPA motion, and (2) the terms “clear and specific” relate to the quality of evidence and do not exclude circumstantial evidence and rational inferences. B. Schlumberger Carried Its Evidentiary Burden To Prove a Prima Facie Case with Clear and Specific Evidence for Every Claim Asserted Against Rutherford. Rutherford does not deny that in evaluating a TCPA motion, the Court must review the pleadings and evidence in the light most favorable to the non-movant. Schimmel , 438 S.W.3d at 855–56; Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd. , 416 S.W.3d 71, 80–81 (Tex. App.—Houston [1st Dist.] 2013, pet. denied).

6. In addition, precluding the use of circu mstantial evidence would violate the Open Courts provision of the Texas Constitution. See Appellants’ Br. 55–58. Tellingly, Rutherford’s lead argument in response to Schlumberger’s Open Courts argument is a wholesale retreat from any claim of a heightened evidentiary standard, as Rutherford instead argues that she is appl ying only generally applicable Texas law precluding “meager” circumstantial evidence and “stacked” inferences. Appellee’s Br. 50. This is irreconcilable wi th both her argument on appeal, e.g. Rutherford’s Cross-Appellant’s Br. 20, and her trial court argument, e.g. , RR.VII.42, which convinced the trial court that the TCPA proh ibits the use of circumstantial evidence by a plaintiff, e.g. , RR.VII.41-42, RR. IX.45, 47–48.24 Nevertheless, she makes strained a ttacks on Schlumberger’s evidence that serve only to underscore the in validity of the evidentiary standard she advocates. By presenting dire ct and circumstantial evidence to support each of its claims, Schlumberger met its burden under Section 27.005(c). See Appellants’ Br. 59–71. 1. Breach of fiduciary duty In support of its breach of fidu ciary duty claim, Schlumberger presented evidence showing that a nu mber of USB drives were attached to Rutherford’s computer between the time she accepted her new position with Acacia and her last day at Schlumberger—a timeframe in which, as Schlumberger’s Deputy General Counsel for Intellectual Property, Rutherford indisputably ow ed Schlumberger the highest of fiduciary duties. CR.1334. Those drives contained confidential Schlumberger information, includ ing trade secrets. CR.1334, 1415, 18– 21. Rutherford accessed these drives after accepting employment with Acacia, CR.1334, connected some of them to her Acacia laptop, CR.2859, and ultimately failed to return thos e drives to Schlumberger upon her departure from the company, CR.1 406–07, 1414, 1431. Ru therford also failed to return a My Book extern al hard drive, which contained25 confidential Schlumberger ema ils. CR.73, 1406–07, 1414, 1431. Finally, Rutherford deleted files from her company-issued laptop before returning it. CR.1334. 7 In response, Rutherford asserts that Schlumberger’s evidence established only that it could not fi nd the drives, not that Rutherford had taken them. Appellee’s Br. 53 & n.6. But Rutherford fails to explain witness testimony directly contradicting her account of what she did with the missing devices. See CR.1431 (Supplemental Declaration of Janet Lennon). Al though Rutherford would have the factfinder believe her testimony and not Schlumberger’s witnesses, the governing standard requir es just the opposite. See Schimmel , 438 S.W.3d at 855–56. Rutherford also argues that the affidavit of David Cowen, demonstrating that she accessed confid ential information, is invalid.

7. Moreover, as Schlumberger discovered after bringing its lawsuit, Rutherford breached her fiduciary duties by concu rring in the filing of a lawsuit against Schlumberger involving subject matter she wo rked on as a Schlumberger attorney. CR.1422, CR.2849–52, RR.VIII.PX.13 p.46. Rutherford does not deny that this constituted a breach of her fiduciary duti es, which was also established through the affidavits of two experts on Texas’ disc iplinary rules and ethical requirements. See CR.2998–3045 (Affidavits of Charles Herring and James McCormack). Rutherford’s consciousness of her misconduct is evidence d by the fact that her narrative changed as the case progressed. While she initially insisted that she had no communications whatsoever with Acacia pertaining to Sc hlumberger, she later admitted to having such communications. Compare , CR.1187–96, CR.1210, with RR.VIII.PX13 p.36.26 She maintains that testimony based on an “understanding” is not evidence, and Cowen stated that he has an “understanding” of what devices were used by Rutherford . Appellee’s Br. 55. But Cowen explains that he identified the va rious files accessed while the user “crutherford2” was logged in. E.g. , CR.1334. Rutherford’s assertion that this is insufficient to show that she was using the devices at issue demonstrates that her interpretati on of the “clear and specific” standard excludes rational infere nces, and is therefore unworkable. 8 Rutherford also argues that the deleted files could have been sent to the recycling bin or could have been backed up. Appellee’s Br. 56. However, the mere fact that inform ation was potentially recoverable does not negate a prima facie case , particularly where evidence is viewed in the light most favorable to the plaintiff defending against a TCPA motion to dismiss. Again, Rutherford’s argument improperly inverts the applicable standard.

8. Similarly, Rutherford attacks the Robi n Nava affidavit as not being based on personal knowledge, claiming that “it is not proper for a lay witness with no computer or forensic background to rely on a purported expert to reach her conclusions.” Appellee’s Br. 56. However, the substantive portion of Nava’s affidavit is her testimony that various files contained IP content based on her personal familiarity with Rutherford’s naming conventions, and her personal knowledge of the value of Schlumberg er’s IP content. CR.1413–22.27 Finally, Rutherford asserts that Schlumberger did not address the damages element of the breach of fi duciary duty claim. Appellee’s Br. 57. This argument fails . First, damages are not necessary for a breach of fiduciary duty claim. See Appellants’ Br. 59–63. Second, the evidence establishes that Rutherford removed confidential trade secret information. See id. at 62. To the extent Rutherford implies this information is somehow valueless, Na va’s testimony includes evidence of the value of the trade secrets that Rutherford improperly removed in breach of her fiduciary duties. CR.1413–22. In any event, it is undisputed that Schlumberger sought injunctive relief requesting the return of its information. 2. Misappropriation of trade secrets As Schlumberger previously demo nstrated regarding its breach of fiduciary duty and misappropriation of trade secrets claims, Rutherford was in possession of a substantial amo unt of secret information, both on the devices she failed to return upon her departure and also as a result of her position with Schlumberger as Deputy General Counsel for Intellectual Property. CR.1205, 1414, 18–21, 1614–15. She developed, managed, and assessed Schlumberger’s IP strategies. Id. The very fact28 that Rutherford had and took secret information after accepting employment with Acacia, where she is indisputably in a position to use it to compete against Schlumberger, demonstrates the prima facie case. See T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc. , 965 S.W.2d 18 (Tex. App.—Houston [1st Dist.] 1998, pet. dism’d). In response, Rutherford assert s that Schlumberger failed to identify any purportedly stolen in formation. Appellee’s Br. 17. Rutherford is incorrect. The Cowe n affidavit specific ally identified Schlumberger files accessed by Ruth erford, including numerous files whose names plainly signify IP content. CR.1334 et seq . In addition, Nava explained that the files referenced by Cowen contained Schlumberger’s confidential trade secret information, CR.1415, and she identified specific files as containi ng trade secret information pertaining to Petrel, CR.1415, 18–21. Further, Rutherford herself has admitted that some of the drives contained co nfidential information. CR.1205. Rutherford goes on to make va rious complaints about the Nava affidavit, none of which have merit. First, Rutherford argues that Nava’s affidavit does not state the basis for Nava’s claim that the affidavit is based on her personal kn owledge. Appellee’s Br. 59. But29 Nava’s declaration explains that she is familiar with Schlumberger’s IP information and strategy based on her position as Schlumberger’s Deputy General Counsel for Inte llectual Property. CR.1413–15. As such, Rutherford’s complaint is meritless. Second, Rutherford asserts that Nava’s testimony is that of an interested witness that cannot easily be controverted. Appellee’s Br. 59. But that evidentiary prin ciple arises in the summary-judgment context, and has no application here. See, e.g. , Casso v. Brand , 776 S.W.2d 551, 557 (Tex. 1989) (holding, inter alia , that if an affidavit of an interested witness cannot be easily controvert ed, it will not support a summary judgment). 9 Further, the case cited by Rutherford for this argument, Grainger v. Western Casual ty Life Insurance Co. , 930 S.W.2d 609 (Tex. App.—Houston [1st Dist.] 1996, writ denied), concerns testimony regarding an individual’s subjective knowledge or intentions, which are not susceptible of being easily controverted. See Grainger , 930 S.W.2d at 615. Here, Nava testified to factual information about Schlumberger’s intellectual proper ty and business strategies, in 9. More generally, the rationale of the body of law regarding an interested witness’s testimony that cannot easily be controverted is that the jury should decide the issue, and it therefore should not be finally determined at an early stage of litigation. E.g., RRR Farms, Ltd. v. Am. Horse Prot. Ass’n, Inc. , 957 S.W.2d 121, 132 (Tex. App.—Houston [14th Dist.] 1997, pet. denied).30 contrast to the Grainger plaintiffs’ testimony as to their own expectations and intentions. Thus, Grainger is inapposite. Finally, Rutherford argues th at Schlumberger has no damages and “fails to explain how [Rutherford] used the information or why Schlumberger thinks she used the information.” Appellee’s Br. 60. Again, this argument ignores the re cord. Schlumberg er’s prima facie case is established by, among other things, the fact that Rutherford possessed and removed confidenti al information belonging to Schlumberger after she accepted empl oyment with Acacia, where she is indisputably in a position to use th at information to compete against Schlumberger, and that Rutherford’s actions have impaired the value of Schlumberger’s trade secrets. Appellants’ Br. 65–66. 3. Conversion. In support of its conversion clai m, Schlumberger provided direct evidence that it owned computer devices that Rutherford had control over and failed to return to Schlum berger when she left the company, despite being asked to do so at her exit interview. CR.73, 77, 1406–07, 1414, 1431. Schlumberger is entitled to have that property returned or to be reimbursed for its value.31 In response, Rutherford offers no legitimate complaints about Schlumberger’s evidence. She begins by asserting that the testimony of Janet Lennon, Rutherford’s assistant at Schlumberger, somehow does not establish that Schlumberger owne d the devices at issue. Appellee’s Br. 61–62. But Lennon testified that she provided the devices (USB flash drives) to Rutherford at Rutherford’s request. CR.76. Contrary to Rutherford’s suggestion, the rational inference from Lennon’s testimony is that Lennon met Rutherford’s requ est by obtaining the devices from Schlumberger. 10 Similarly, Rutherford claims th at the affidavit of Gary DeLeon fails to demonstrate that Schlumberg er owned the external hard drive because he inaccurately stated the da te that he assisted in backing up Rutherford’s files. Appellee’s Br. 61. This is another instance, however, of Rutherford arguing that a minor discrepancy in a witness’s testimony requires draconian results. After a ll, Rutherford does not dispute that

10. Rutherford also attacks Lennon for st ating in an affidavit that she provided “about ten USB flash drives,” while late r testifying that she could not “put a number to” the flash drives she provided. Appellee’s Br. 62. However, there is no meaningful discrepancy in this testimony. In both instances, Lennon was unable to recall the exact number of devices provided to Rutherford, but in one instance she estimated the number was “about ten.” Rutherford’s suggestion that Lennon’s testimony is invalid or not credible based on these answers is transparently without merit.32 Schlumberger provided her the exte rnal hard drive. Rutherford’s assertion that an IT Department Mana ger’s failure to correctly recall a date hardly supports her suggestion that his testimony should therefore be ignored in its entirety. Finally, Rutherford claims th at Schlumberger “does not even make an argument regarding conv ersion damages in its brief.” Appellee’s Br. 62. But Schlumberger explained that it “is entitled to have [its] property returned or be re imbursed for its value.” Appellant’s Br. 68. 11 In sum, Rutherford fails to raise any meaningful challenge to the prima facie evidence supporting Schlumberger’s co nversion claim. 4. Texas Theft Liability Act Finally, the evidence Schlum berger submitted below readily establishes a prima facie case of each of the elements of its Texas Theft Liability Act claim. See Appellants’ Br. 70. In response, Rutherford asserted that Schlumberger presented no evidence and made no ar gument with regard to intent and damages.

11. Rutherford cites R.J. Suarez Enters. v. PNYX, L.P. , 380 S.W.3d 238, 242 (Tex. App.—Dallas 2012, no pet.), for the propos ition that Schlumberger must provide evidence of the value of converted pr operty. But that case involved the unremarkable requirement that, by the end of a trial, a party must provide evidence of the specific amount of damages it incurred. Id. As such, it is inapposite to a party’s prima facie burden.33 Appellee’s Br. 64. Rutherford is mist aken. Schlumberger argued in the trial court and this Court that co mputer devices provided by the company to Rutherford, containing confidential business information, were intentionally taken by Rutherford and not returned. See Appellants’ Br. 70–71. In support of this argument, Sc hlumberger cited record testimony directly contradict ing Rutherford’s account of what she did with the devices at issue. See id . (citing, inter alia , CR.1431 in comparison to CR.1206–08). As such, Schlumberger introd uced evidence clearly and specifically showing that Rutherford has been untruthful with regard to her taking of the drives and info rmation, demonstrating that she intentionally and wrongfully remo ved Schlumberger’s devices and information. Schlumberger further explained that Ruth erford’s actions “have damaged Schlumberger” and ci ted Nava’s testimony describing the value of the intellectual property taken. Appellants’ Br. 70 (citing CR.2892–93). Rutherford’s contrary claims are belied by the record.34 IV. T HE T RIAL C OURT A BUSED I TS D ISCRETION IN A WARDING $350,000 IN A TTORNEYS ’ F EES AND $250,000 IN S ANCTIONS A GAINST S CHLUMBERGER . Finally, the trial court’s attorn eys’ fees and sanctions awards cannot withstand scrutiny. Specific ally, Rutherford’s submission for attorneys’ fees was insufficient and in ternally inconsistent with regard to segregation of fees between the dismissed causes and the breach of contract claim. Moreover, to the extent Rutherford is correc t that her attorneys’ fees cannot be segregated because the breach of contract claim is intertwined with the other causes of action, bringing those other causes cannot constitute sanctionable wrongd oing. In any event, the trial court’s imposition of sanctions is independently unreasonable because Rutherford’s claims that Schlumbe rger has engaged in a history of revenge litigation, and engaged in improper conduct here, are demonstrably false. A. Rutherford Failed To Segr egate Her Fees as Required by Texas Law. As an initial matter, Rutherford erroneously asserts that the fee segregation requirements of Tony Gullo Motors I, L.P. v. Chapa , 212 S.W.3d 299, 310–14 (Tex. 2006), do no t apply to TCPA fee awards35 because the TCPA’s fee provision auth orizes fees “as justice and equity require.” Appellee’s Br. 65–66. But the authority Rutherford cites for that supposed proposition, Biopolymer Engineer, Inc. v. ImmuDyne, Inc. , 304 S.W.3d 429, 446 (Tex. App.—San Antonio 2009, op. vacated pursuant to settlement), sa ys nothing of the sort. Rather, the Biopolymer court applied Tony Gullo ’s segregation holding and determined that the plai ntiff’s declaratory judgment claims against three defendants were “int ertwined to the point of being inseparable.” Biopolymer , 304 S.W.3d at 446. Thus, Rutherford has cited to no case law actually support ing her argument that the “justice and equity” language in the TCPA’s attorneys’ fees provision means the fee segregation requirements of Tony Gullo do not apply. Rutherford also claims that her affidavits established that more than $580,000 of her $611,000 in f ees could not be segregated. Appellee’s Br. 66. But Rutherford tellingly makes no attempt to respond to Schlumberger’s Appellant s’ Brief, which explained that Rutherford’s submitted billing reco rds demonstrated that she made a minimal, insufficient, and internally inconsistent effort to comply with36 Tony Gullo

. See Appellants’ Br. 76 & n.24. As such, the attorneys’ fee award should be reversed. B. The Trial Court’s Awar d of Sanctions Cannot be Reconciled with the Record. The trial court’s award of sanction s is unsupported by the record. To the extent that Rutherford is co rrect that Schlumberger’s dismissed claims were inextricably intertwined wi th its breach of contract claim, the trial court’s imposition of sanc tions for bringing those claims was necessarily arbitrary and an abuse of discretion. And regardless, the trial court’s award of sanctions was unreasonable and should be overturned because Rutherford’s a llegations of a history of revenge litigation by Schlumberger, an d improper conduct here, are unsupported by history or the record. For example, Rutherford claims that “Schlumberger has filed more than one revenge suit against former employees,” citing two prior instances of litigation. In Schlumberger Tech. Corp. v. Krall , No. 2011– 23838 in the 127th District Court of Harris County, a no-evidence summary judgment was granted ag ainst Schlumberger in a case involving a former employee defendant. See CR.2282. But Rutherford fails to disclose to the Court that Schlumberger in fac t prevailed against37 the employee’s new employer, and wa s awarded $1.2 million in damages for tortious interference. The second case relied on by Rutherford is even less compelling— it is a 15-year-old case, brought against Schlumberger, and thus selfevidently fails to demonstrate a pattern of revenge suits. See West v. Schlumberger Tech. Corp. , 234 F.3d 1279, at *2 (9th Cir. 2000) (unpublished opinion). Rutherford unsurprisingly fails to cite any authority imposing sanctions based on wholly dissimilar litigation separated by fifteen years. Rutherford’s allegations that Sc hlumberger should be sanctioned for introducing “sham affidavits” are equally unpersuasive. For example, Rutherford claims that Lennon’s affidavit stated that Rutherford organized many hard copy documents in her office prior to leaving, but that Lennon later testif ied that Rutherford “used very few paper files.” Appellee’s Br. 70 (citing CR.264–65, 268). However, Lennon never testified that “Rutherford used very few paper files.” Her actual testimony was that Rutherford didn’t like to have a lot of paper, regularly shredded documents, and th at the amount of physical paper on Rutherford’s desk was typically less than a foot high—but it “just38 depended.” CR.264. As such, Rutherford’s attack on Lennon’s testimony cannot be reco nciled with the record. In sum, the trial court’s awar ds of fees and sanctions are unsupported by history or the reco rd, and should be reversed as arbitrary and unreasonable. 

### P RAYER The Court should reverse the tr ial court’s order dismissing Schlumberger’s claims for breach of fiduciary duty, misappropriation of trade secrets, conversion, and violat ions of the Texas Theft Liability Act, hold that Rutherford’s dismissa l motion is denied in its entirety, and remand the case for further proceedings. Alternatively, the Court should re verse the imposition of sanctions and award of attorneys’ fees an d render judgment that neither sanctions nor attorneys’ fees should be awarded against Schlumberger. In the further alternative, the Court should remand with instructions that the trial court require proper segregation of Rutherford’s fee request to exclude recovery for any work related to Schlumberger’s breach of contract claim.39 Respectfully submitted,

/s/ Sean D. Jordan Craig Smyser Land Murphy Justin Waggoner S MYSER K APLAN & V ESELKA , L.L.P. 700 Louisiana Street, Suite 2300 Houston, Texas 77002-2700 [Tel.] (713) 221-2300 [Fax] (713) 221-2320 Sean D. Jordan State Bar No. 00790988 Kent C. Sullivan Danica L. Milios Peter C. Hansen S UTHERLAND A SBILL & B RENNAN LLP 600 Congress Ave., Suite 2000 Austin, Texas 78701 [Tel.] (512) 721-2679 [Fax] (512) 721-2656 sean.jordan@sutherland.com C OUNSEL FOR A PPELLANTS



### C ERTIFICATE OF 

### S ERVICE On March 13, 2015, the foregoing document was served via Odyssey File & Serve, U.S. Certifie d Mail, return receipt requested, electronic mail, or third-pa rty carrier on the following: Thomas C. Wright Shelley J. White W RIGHT & C LOSE L.L.P. One Riverway, Suite 2200 Houston, Texas 77056 wright@wrightclose.com white@wrightclose.com C OUNSEL FOR A PPELLEE

/s/ Sean D. Jordan Sean D. Jordan40 

### C ERTIFICATE OF 

### C OMPLIANCE In compliance with Texas Rule of Appellate Procedure 9.4(i)(2), this brief contains 7,494 words, ex cluding the portions of the brief exempted by Rule 9.4(i)(1).

/s/ Sean D. Jordan Sean D. Jordan