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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

JONATHAN VILLAREAL, individually §

and on behalf of ZROBLACK, LLC, §

 §

Plaintiffs, §

 §

v. § CAUSE NO: SA-20-CV-0571-OLG

§

JOHN SAENZ, MIGUEL VILLAREAL, JR. §

and GUNN, LEE & CAVE, P.C., §

 §

Defendants. § 

ORDER

On this date, came on to be considered the status of the above-styled and numbered cause. 

For the reasons and to the extent set forth below, certain of Plaintiffs’ claims will be dismissed. 

BACKGROUND AND DISCUSSION

This case concerns an employment dispute between former business partners Plaintiff 

Jonathan Villareal (“Villareal”) and Defendant John Saenz (“Saenz”), as well as Saenz’s alleged 

conduct after Saenz assigned his interest in the company—ZroBlack, LLC—to Villareal pursuant 

to a “Release” signed by the parties. See generally docket nos. 1 & 2. 

On May 8, 2020, Plaintiff Jonathan Villareal (both individually and on behalf of Plaintiff 

ZroBlack, LLC) sued Saenz, and in doing so, requested ex parte preliminary and permanent relief. 

See docket nos. 1, 2, 34 & 37. Specifically, Plaintiffs asserted the following claims against Saenz: 

(1) violations of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 and Texas Uniform 

Trade Secrets Act (“TUTSA”), Tex. Civ. Prac. & Rem. Code § 134A.001 (Count 1); (2) violations 

of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030(g) (Count 2); (3) violations 

of the Anti-cybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d) (Count 3); 

FILED

DEPUTY 

CLERK, U.S. DISTRICT COURT

WESTERN DISTRICT OF TEXAS 

BY: ________________________________ August 04, 2021

 JU

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(4) breach of contract (Count 4); (5) breach of fiduciary duty (Count 5); (6) tortious interference 

with prospective business relations (Count 8); (7) Conversion (Count 9); (8) violations of the Texas 

Theft Liability Act (“TTLA”), Tex. Civ. Prac. & Rem. Code § 134.001 (Count 10); and (9) fraud 

(Count 11). See docket no. 35. In addition, Plaintiffs also assert state law legal malpractice and 

breach of fiduciary duty claims (Counts 6 & 7) against attorney Miguel Villareal and the law firm 

of Gunn, Lee, & Cave (collectively, the “Law Firm Defendants”), based on the Law Firm 

Defendants’ role in drafting the Release. See docket no. 35. Finally, Plaintiffs also seek a 

declaratory judgment pursuant to 28 U.S.C. § 2201 that the Release is void and unenforceable. See

docket no. 35. On February 4, 2021, Defendant Saenz and the Law Firm Defendants each filed 

Motions to Dismiss, in which Defendants seek dismissal of the claims asserted by Plaintiffs. See

docket nos. 40 & 41. 

Pursuant to the Local Rules of this District, this case was referred to Magistrate Judge 

Richard B. Farrer for resolution of all pretrial matters, including requests for injunctive relief. See

docket nos. 22 & 36. On May 14, 2021, Judge Farrer issued his first Report and Recommendation

in this case, in which Judge Farrer recommended that Plaintiffs’ First Amended Application for 

Seizure, Temporary Restraining Order, Preliminary Injunction, and Permanent Injunctive Relief 

(docket nos. 34 & 37) be denied. See docket no. 58. No party filed objections to that Report and 

Recommendation by the deadline to do so. On May 18, 2021, Judge Farrer issued a second Report 

and Recommendation, in which Judge Farrer recommended that certain of Plaintiffs’ claims be 

dismissed. See docket no. 59 (collectively, with docket no. 58, the “Reports and 

Recommendations”). Specifically, Judge Farrer recommended that Plaintiffs’ claims against Saenz 

for violations of the DTSA and TUTSA, breach of fiduciary duty—to the extent such claim is 

premised on conduct allegedly committed while Saenz served as ZroBlack’s CEO—conversion, 

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fraud, breach of contract, tortious interference, violations of the TTLA, CFAA, ACPA—to the 

extent Plaintiffs’ CFAA and ACPA claims are premised on Saenz’s refusal to return ZroBlack’s 

laptop—and request for declaratory relief be dismissed. See docket no. 59. On the other hand, 

Judge Farrer recommended that Plaintiffs’ claims against Saenz for breach of fiduciary duty and 

for violations of the CFAA and ACPA—insofar as these claims are premised on Saenz’s alleged 

conduct after the parties executed the Release—should survive dismissal. See id. Finally, Judge 

Farrer’s May 18, 2021 Report and Recommendation also recommended that the Court decline to 

exercise supplemental jurisdiction over Plaintiffs’ state law claims against the Law Firm 

Defendants and instead sever and dismiss those claims pursuant to 28 U.S.C. § 1367(c). See id. 

Only Defendant Saenz filed objections to Judge Farrer’s Report and Recommendation. See docket 

no. 61. Specifically, Defendant Saenz’s objections contend that (i) Plaintiffs’ ACPA and breach of 

fiduciary duty claim against Saenz should be dismissed in full and (ii) Judge Farrer erred in failing 

to award certain attorneys’ fees to Saenz. See id. 

I. Plaintiffs’ claims that are not subject to Defendant Saenz’s objections 

When no party objects to a magistrate judge’s recommendation, the Court need not conduct 

a de novo review of the entire record. See 28 U.S.C. § 636(b)(1) (“A judge of the court shall make 

a de novo determination of those portions of the report or specified proposed findings and 

recommendations to which objection is made.”); Fed. R. Civ. P. 72(b). Rather, the Court need only 

review the Magistrate Judge’s recommendation to determine whether it is clearly erroneous or 

contrary to law. United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989). 

As noted above, no party objected to the majority of Judge Farrer’s recommendations. 

Specifically, no party objected to Judge Farrer’s recommendation that Plaintiffs’ application for 

preliminary relief be denied. See docket no. 58. Additionally, no party objected to Judge Farrer’s 

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recommendations that many of Plaintiffs’ claims be dismissed on the merits, nor to Judge Farrer’s 

recommendation that Plaintiffs’ state-law claims against the Law Firm Defendants be severed and 

dismissed pursuant to 28 U.S.C. § 1367(c). See docket no. 59. Finally, although Defendant Saenz 

objected to certain of Judge Farrer’s recommendations, Saenz did not object to Judge Farrer’s 

conclusion that Plaintiffs’ CFAA claim (to the extent it was premised on Saenz’s post-Release 

conduct) should survive dismissal. See docket no. 61. After reviewing the Reports and 

Recommendations and the papers on file in this case, the Court concludes that Judge Farrer’s 

Reports and Recommendations are correct and should be adopted with respect to these 

conclusions.

Accordingly, the Court will order that: (i) Plaintiffs’ application for preliminary relief 

(docket nos. 34 & 37) be denied; (ii) Plaintiffs’ claims against Saenz for violations of the DTSA 

and TUTSA, breach of fiduciary duty—to the extent such claim is premised on conduct allegedly 

committed while Saenz served as ZroBlack’s CEO—conversion, fraud, breach of contract, tortious 

interference, violations of the Texas Theft Liability Act, CFAA, ACPA—to the extent Plaintiffs’ 

CFAA and ACPA claims are premised on Saenz’s refusal to return ZroBlack’s laptop—and 

request for declaratory relief be dismissed with prejudice;1(iii) Plaintiffs’ state law claims against 

the Law Firm Defendants be severed and dismissed without prejudice pursuant to 28 U.S.C. 

§ 1367(c); and (iv) Defendant Saenz’s Motion to Dismiss be denied as to Plaintiffs’ CFAA claim 

premised on Plaintiffs’ post-Release conduct.

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Judge Farrer’s Report and Recommendation explained that a second amended complaint would 

be futile as to the claims for which relief is barred by the Release. See docket no. 59 p. 11. 

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II. Plaintiffs’ claims that are subject to Defendant Saenz’s objections

When a party objects to a magistrate judge’s recommendation, the Court must make a de 

novo determination as to those portions of the recommendation to which an objection is made. 

Kreimerman v. Casa Veerkamp, S.A. de C.V., 22 F.3d 634, 646 (5th Cir. 1994); 28 U.S.C. 

§ 636(b)(1); Fed. R. Civ. P. 72(b). Having conducted an independent, de novo review of the record 

and the applicable law, the Court arrives at the same conclusions as Judge Farrer with respect to 

whether Plaintiffs’ other claims should be dismissed on the merits at this stage. Specifically, 

having drawn every reasonable inference in the light most favorable to Plaintiff, the Court cannot 

conclude that Plaintiffs’ allegations fail to satisfy the federal pleading standard with respect to the 

claims asserted against Saenz for breach of fiduciary duty and for violations of the ACPA, at least 

insofar as these claims are premised on Saenz’s alleged conduct after the parties executed the 

Release. Accordingly, Defendant Saenz’s Motion to Dismiss will be denied with respect to these 

claims. 

Similarly, the Court declines to award attorneys’ fees—at least as part of the instant 

Order—either pursuant to the parties’ Release and/or Tex. Civ. Prac. & Rem. Code § 134.005(b). 

Nor does the Court conclude that Judge Farrer was incorrect in omitting Defendant Saenz’s fee 

request from the Report and Recommendations. Notably, Defendant Saenz’s request for fees was 

listed as a single clause of a list of various relief requests in the conclusion paragraph of 

Defendant’s motion, and Saenz did not (i) separately move for attorneys’ fees, (ii) specifically 

brief the issue for Judge Farrer, or (iii) provide any information substantiating the amount in fees 

that Saenz purportedly incurred with respect to the defense of the TTLA claim (or otherwise). On 

the other hand, the Court does recognize that the award of fees is mandatory to a prevailing party 

under the TTLA. See Transverse, L.L.C. v. Iowa Wireless Services, L.L.C., 992 F.3d 336, 343-44

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(5th Cir. 2021). Thus, the Court concludes that the most appropriate approach is to provide 

Defendant Saenz with an opportunity to file a formal motion for attorneys’ fees at the conclusion 

of the case, in which Defendant Saenz provides legal support for such an award (pursuant to the 

Release or Tex. Civ. Prac. & Rem. Code § 134.005(b) or otherwise) as well as documentary 

support for the requested fee total.

CONCLUSION AND ORDER

For the reasons set forth above, the Reports and Recommendations submitted by Magistrate 

Judge Farrer (docket nos. 58 & 59) are hereby ADOPTED IN FULL, and for the reasons set forth 

in those Reports and Recommendations and in the above Order:

• Plaintiffs’ First Amended Application for Seizure, Temporary Restraining Order, 

Preliminary Injunction, and Permanent Injunctive Relief (docket nos. 34 & 37) is 

DENIED; 

• Defendant Saenz’s Motion to Dismiss (docket no. 41) is GRANTED IN PART

and DENIED IN PART; 

• Plaintiffs’ claims against Saenz for violations of the DTSA and TUTSA, breach of 

fiduciary duty—to the extent such claim is premised on conduct allegedly 

committed while Saenz served as ZroBlack’s CEO—conversion, fraud, breach of 

contract, tortious interference, violations of the TTLA, CFAA, ACPA—to the 

extent Plaintiffs’ CFAA and ACPA claims are premised on Saenz’s refusal to return 

ZroBlack’s laptop—and request for declaratory relief are hereby DISMISSED 

WITH PREJUDICE;

• Plaintiffs’ claims against the Law Firm Defendants are hereby SEVERED and 

DISMISSED WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(c); and

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• Law Firm Defendants’ Motion to Dismiss (docket no. 40) is DENIED AS MOOT.

Only Plaintiffs’ claims against Defendant Saenz for breach of fiduciary duty and for 

violations of the CFAA and ACPA—insofar as these claims are premised on Saenz’s alleged 

conduct after the parties executed the Release—shall proceed in this litigation. 

Finally, at the conclusion of the case, Defendant Saenz may—if he so chooses—file a 

formal Motion for Attorneys’ Fees, in which Saenz requests any fees and/or costs to which Saenz 

contends he is entitled (under the Release, Tex. Civ. Prac. & Rem. Code § 134.005(b) and/or 

otherwise). Any such motion must provide legal and evidentiary support for Defendant’s 

request(s).

It is so ORDERED. 

Signed this _____ day of August, 2021. 

 ORLANDO L. GARCIA 

CHIEF UNITED STATES DISTRICT JUDGE 

4th

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