Petition for Writ of Mandamus Conditionally Granted and Opinion filed 

December 23, 2021.

In The

Fourteenth Court of Appeals 

NO. 14-20-00849-CV

IN RE 4X INDUSTRIAL, LLC, Relator

ORIGINAL PROCEEDING

WRIT OF MANDAMUS

334th District Court

Harris County, Texas

Trial Court Cause No. 2019-65517

O P I N I O N

Relator, 4X Industrial, LLC filed a petition for writ of mandamus in this court.

See Tex. Gov’t Code Ann. § 22.221; see also Tex. R. App. P. 52. In the petition, 4X 

Industrial asks this court to compel the Honorable Dawn Rogers, presiding judge of 

the 334th District Court of Harris County, to vacate her March 29, 2021 order

compelling 4X Industrial to produce documents that it claims are protected from 
2

disclosure by the trade secrets privilege.

1

 See Tex. R. Evid. 507. We conditionally 

grant the petition. 

Background

4X Industrial and real party in interest Russell Marine are direct competitors 

in the railroad construction industry with common clients such as Union Pacific and 

Kansas City Southern. Russell Marine employed in its railroad division Frank 

Thielen as vice president of operations and head of the railroad division and Esteban 

Ruiz as a project engineer. According to Russell Marine, Thielen and Ruiz were 

entrusted with Russell Marine’s trades secrets for the sole purpose of preparing bid 

proposals, servicing customer inquiries and requests, managing projects, and 

marketing railroad construction business. Russell Marine asserts that its protected

trade secret information includes bid proposals, pricing information, bidding and 

pricing strategy and processes, targeted projects, prospective projects, client lists, 

client information, budgets, estimates, marketing plans, and project management 

processes and procedures.

Russell Marine terminated Thielen in April 2019, and 4X Industrial hired him 

two months later. Russell Marine terminated Ruiz in August 2019, and 4X Industrial 

1 When 4X Industrial filed this original proceeding, the judge of the 334th District Court 

was the Honorable Steven Kirkland. Judge Kirkland signed a December 13, 2020 order, which 

was the subject of the mandamus proceeding when filed. Judge Kirkland ceased to hold office of 

the 334th District Court on January 1, 2021. We abated this original proceeding to permit his 

successor, Judge Rogers, to reconsider Judge Kirkland’s December 13, 2020 ruling. On March 

29, 2021, Judge Rogers signed an order adopting Judge Kirkland’s December 13, 2020 order in all 

respects. We now consider whether 4X Industrial is entitled to mandamus relief as to Judge 

Rogers’ order.
3

hired him that same month. Russell Marine alleges that, prior to leaving its employ, 

Ruiz downloaded 15,000 pages of Russell Marine trade secrets onto thumb drives, 

which Ruiz took with him upon his termination. Russell Marine further asserts that 

a forensic examination of Ruiz’s computer confirmed that Ruiz had downloaded 

Russell Marine’s trade secrets, including information regarding pricing, budgeting, 

bidding and pricing strategies and processes, payroll information, and project 

management process and procedures. 

Claiming that 4X Industrial is using its trade secrets to compete for railroad 

projects, Russell Marine sued 4X Industrial, Thielen, and Ruiz for trade secrets

misappropriation and other claims on September 11, 2019. This mandamus 

proceeding involves 4X Industrial’s objections to the following sixteen requests for 

production of documents served by Russell Marine:

REQUEST FOR PRODUCTION NO. 15:

All documents relating to any bids, proposals, job estimates, project 

budgets or project management processes and procedures for any 

Projects, prepared by Thielen during his employment by 4X.

REQUEST FOR PRODUCTION NO. 16:

All documents relating to any bids, proposals, job estimates, project 

budgets or project management processes and procedures for any 

Projects, prepared by Ruiz during his employment by 4X.

REQUEST FOR PRODUCTION NO. 17:

Any and all correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any bids, proposals, job estimates, project budgets or project 
4

management processes and procedures for any Projects, prepared by 

Thielen during his employment by 4X.

REQUEST FOR PRODUCTION NO. 18:

Any and all correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any bids, proposals, job estimates, project budgets or project 

management processes and procedures for any Projects, prepared by 

Ruiz during his employment by 4X.

REQUEST FOR PRODUCTION NO. 19:

All documents (including email and documents attached to email) 

relating to any money, compensation or payments made to 4X on any 

Project worked on by Thielen during his employment by 4X.

REQUEST FOR PRODUCTION NO. 20:

All documents (including email and documents attached to email) 

relating to any money, compensation or payments made to 4X on any 

Project worked on by Ruiz during his employment by 4X.

REQUEST FOR PRODUCTION NO. 21:

Any and all correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any money, compensation or payments made to 4X on any 

Project worked on by Thielen during his employment by 4X.

REQUEST FOR PRODUCTION NO. 22:

Any and all correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any money, compensation or payments made to 4X on any 

Project worked on by Ruiz during his employment by 4X.

* * *
5

REQUEST FOR PRODUCTION NO. 47:

All documents relating to any bids, proposals, job estimates, project 

budgets or project management processes and procedures for any 

Projects, prepared by 4X during the twelve (12) months prior to 

Thielen’s employment by 4X.

REQUEST FOR PRODUCTION NO. 48:

All bid estimates submitted by 4X to UP since Thielen became 

employed by 4X.

REQUEST FOR PRODUCTION NO. 49:

All correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any bid estimates submitted by 4X to UP since Thielen 

became employed by 4X.

REQUEST FOR PRODUCTION NO. 50:

All bid estimates submitted by 4X to KSU since Thielen became 

employed by 4X.

REQUEST FOR PRODUCTION NO. 51:

All correspondence or communication of any kind whatsoever 

(including without limitation any texts, emails or email attachments) 

relating to any bid estimates submitted by 4X to KSU since Thielen 

became employed by 4X.

REQUEST FOR PRODUCTION NO. 52:

All documents relating to any bids, proposals, job estimates, project 

budgets or project management processes and procedures for any 

Projects, prepared by 4X during the twelve (12) months prior to Ruiz’s 

employment by 4X.
6

REQUEST FOR PRODUCTION NO. 53:

All documents (including email and documents attached to email) 

relating to any money, compensation or payments made to 4X on any 

Project bid and awarded to 4X during the twelve (12) months prior to 

Thielen’s employment by 4X.

REQUEST FOR PRODUCTION NO. 54:

All documents (including email and documents attached to email) 

relating to any money, compensation or payments made to 4X on any 

Project bid and awarded to 4X during the twelve (12) months prior to 

Ruiz’s employment by 4X.

Among other objections, 4X Industrial invoked the trade secrets privilege in 

response to the above requests. 4X Industrial stated, however, that it would produce 

“bid summaries reflecting bids prepared by Defendant Thielen and/or Defendant 

Ruiz that were won by Defendant 4X Industrial from either Kansas City Southern 

Railway Company or Union Pacific in which Plaintiff Russell Marine was also a 

bidder” following the entry of a protective order and “after Plaintiff Russell Marine 

identifies which projects for Kansas City Southern Railway Company or Union 

Pacific [it] bid on during the Relevant Time Frame.” 

On March 4, 2020, the trial court signed a confidentiality order. Subsequently, 

on March 16, 2020, 4X Industrial produced 220 pages of documents, which included 

bid summaries for projects prior to and after 4X Industrial hired Thielen and Ruiz. 

Russell Marine asserted that 4X Industrial’s production was deficient because it did 

not include documents related to 4X Industrial’s formulation of railroad project bids, 

proposals, job estimates, project budgets, project management processes, records of 

payment and communications. 
7

In the meantime, 4X Industrial asked Russell Marine by interrogatory to 

identify all trade secrets it contended 4X Industrial misappropriated or used.2

 In 

response, Russell Marine referred 4X Industrial to approximately 15,000 pages of 

documents, which Russell Marine claimed Ruiz saved to his computer and later 

deleted. 

In September 2020, Russell Marine’s counsel emailed 4X Industrial’s 

counsel, identifying the perceived deficiencies in 4X Industrial’s discovery 

responses. Specifically, Russell Marine requested supplementation of: “all internal 

worksheets showing how the bid sheet numbers were arrived at, payroll expenses, 

drafts of estimates and bids, final estimates and bids, notes, invoices from 

subcontractors and equipment suppliers, equipment rental contracts, records of 

payment and internal and external communications related to each bid and each job”,

as well as bid information on projects that 4X Industrial may have bid but was not 

awarded. Further, Russell Marine’s counsel asked 4X Industrial’s counsel to dedesignate 4X Industrial’s documents to a “Confidential” classification only or allow 

up to four individuals from Russell Marine to view the “Attorney’s Eyes Only” 

documents for the purpose of assisting its counsel in preparing for trial. 

The record is unclear as to 4X Industrial’s response to Russell Marine’s 

September email, but approximately one month later, Russell Marine filed a motion 

2 Interrogatory No.1 stated: 

Please identify and describe in reasonable detail each piece of Russell Marine Information that You 

allege that Defendants misappropriated, converted, or otherwise wrongfully used. If the Russell 

Marine Information was not disclosed in writing but exists in written form, please identify the bates 

number(s) of the Document(s) containing the Russell Marine Information.
8

to compel responses to the sixteen requests for production at issue and also moved

to de-designate the attorneys’-eyes-only designation of certain documents. In its 

motion to compel, Russell Marine asserted that, although 4X Industrial had produced 

its final bids for Union Pacific and Kansas City, it can only determine if 4X Industrial

had usurped and used its proprietary, confidential, and trade secret information by 

examining the supporting worksheets, drafts, supporting invoices from third-parties, 

budgets, payroll information, project management processes and procedures, and 

related backup information relating to those bids. In other words, Russell Marine 

asserted that it could not identify every trade secret that Ruiz, Thielen, and 4X 

misappropriated and used for their benefit until it had the opportunity to review 4X 

Industrial’s responsive documents. 

In response to the motion to compel, 4X Industrial argued that the information 

Russell Marine sought constitutes 4X Industrial’s trade secrets. In support of that 

contention, 4X Industrial attached an affidavit of its chief financial officer. 

Additionally, 4X Industrial argued that because it had established that the requested 

documents were trade secrets, the burden shifted to Russell Marine to demonstrate 

that the information is necessary for a fair adjudication of its claims. According to 

4X Industrial, Russell Marine had not made the required showing. 

In a reply, Russell Marine contended that its case will be materially impaired 

if it cannot determine the extent to which its confidential information was misused. 

Russell Marine argued that 4X Industrial should not be able to withhold documents 

based upon a “trade secret” argument when there is a likelihood that the information 

it seeks to hide contains Russell Marine’s trade secrets. 
9

The trial court signed an order granting the motion to compel as to request for 

production numbers 15-22 and 47-54 and directing 4X Industrial to produce all 

internal worksheets and documents showing how the bid sheet numbers on each 

Union Pacific and each Kansas City bid were arrived at, payroll expenses, drafts of 

estimates and bids, final estimates and bids, notes, invoices from subcontractors and 

equipment suppliers, anticipated profits, equipment rental contracts, records of 

payment, and external and internal communications related to each bid and each job, 

for the six-month period prior to April 2019 and for the period from April 2019 to 

the present, with timely supplements through the time of trial. The trial court further 

ordered 4X Industrial to produce all documents relating to any money, 

compensation, or payments made to 4X Industrial on any Union Pacific or Kansas 

City bid awarded to 4X Industrial for the six months prior to April 2019 and for the 

period from April 2019 to the present. The trial court also ordered that “if the trade 

secrets are entitled to protection, then they shall be produced pursuant to the Agreed 

Confidentiality Order.” 

4X Industrial filed this original proceeding challenging the above order. 4X 

Industrial contends that the trial court abused its discretion because the information 

at issue is protected by the trade secrets privilege, and Russell Marine failed to 

demonstrate that the materials are necessary for a fair adjudication of its claims. 4X

Industrial also asserts that it does not have an adequate remedy by appeal. 

Mandamus Standard of Review

To obtain mandamus relief, a relator generally must show both that the trial 

court clearly abused its discretion and that the relator has no adequate remedy by 
10

appeal. In re Dawson, 550 S.W.3d 625, 628 (Tex. 2018) (orig. proceeding) (per 

curiam); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. 

proceeding). A trial court clearly abuses its discretion if it reaches a decision so 

arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if 

it clearly fails to analyze the law correctly or apply the law correctly to the facts. In 

re H.E.B. Grocery Co., L.P., 492 S.W.3d 300, 302-03 (Tex. 2016) (orig. proceeding) 

(per curiam); In re Cerberus Capital Mgmt. L.P., 164 S.W.3d 379, 382 (Tex. 2005) 

(orig. proceeding) (per curiam). The relator must establish that the trial court could 

reasonably have reached only one decision. Walker v. Packer, 827 S.W.2d 833, 840 

(Tex. 1992) (orig. proceeding). Appeal is not an adequate remedy when the 

appellate court would not be able to cure the trial court’s discovery error on appeal. 

In re Dana Corp., 138 S.W.3d 298, 301 (Tex. 2004) (orig. proceeding) (per curiam); 

In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex. 1998) (orig. proceeding). 

Analysis

“A trade secret is any formula, pattern, device or compilation of information 

which is used in one’s business and presents an opportunity to obtain an advantage 

over competitors who do not know or use it.” Computer Assocs. Int’l, Inc. v. Altai, 

Inc., 918 S.W.2d 453, 455 (Tex. 1996). Texas Rule of Evidence 507 provides for 

the protection of trade secrets. See Tex. R. Evid. 507. The rule entitles a party to 

refuse to disclose trade secrets the party owns unless the court finds that 

nondisclosure “will tend to conceal fraud or otherwise work injustice.” Id. 507(a).

The trade secrets privilege seeks to accommodate two competing interests. In 

re Continental Gen. Tire, Inc., 979 S.W.2d 609, 612 (Tex. 1998) (orig. proceeding); 
11

In re Cooper Tire & Rubber Co., 313 S.W.3d 910, 915 (Tex. App.—Houston [14th 

Dist.] 2010, orig. proceeding). First, it recognizes that trade secrets are an important 

property interest, worthy of protection. In re Continental Gen. Tire, Inc., 979 

S.W.2d at 612. Second, it recognizes the importance placed on fair adjudication of 

lawsuits. Id. Rule 507 accommodates both interests by requiring a party to disclose 

a trade secret only if necessary to prevent “fraud” or “injustice.” Id. Disclosure is 

required only if necessary for a fair adjudication of the requesting party’s claims or 

defenses. Id. 

The party asserting the trade secrets privilege has the initial burden to prove

that the information sought qualifies as a trade secret. In re Bass, 113 S.W.3d 735, 

737 (Tex. 2003) (orig. proceeding). If the resisting party meets its burden, the 

burden shifts to the party seeking the trade secret discovery to establish that the 

information is necessary for a fair adjudication of its claim. Id. It is an abuse of 

discretion for the trial court to order production once trade secret status is proven if 

the party seeking production has not shown necessity for the requested materials. 

Id. at 738. 

A. 4X Industrial proved that the requested information constitutes trade 

secrets.

We turn first to whether 4X Industrial met its initial burden, which Russell 

Marine disputes. 

To determine whether a trade secret exists, we weigh the following six factors 

in the context of the surrounding circumstances: (1) the extent to which the 

information is known outside of the business; (2) the extent to which it is known by 
12

employees and others involved in the business; (3) the extent of measures taken to 

guard the secrecy of the information; (4) the value of the information to the business 

and to its competitors; (5) the amount of effort or money expended in developing the 

information; and (6) the ease or difficulty with which the information could be 

properly acquired or duplicated by others. In re Union Pac. R.R. Co., 294 S.W.3d 

589, 592 (Tex. 2009) (orig. proceeding) (per curiam); In re Cooper Tire & Rubber 

Co., 313 S.W.3d at 915. The party claiming a trade secret is not required to satisfy 

all six factors because trade secrets do not fit neatly into each factor every time. In 

re Bass, 113 S.W.3d at 740. 

In support of its claim that the requested documents constitute trade secrets, 

4X Industrial submitted the affidavit of its chief financial officer, John Warren. 

Warren attested to the following: 

. . .

5. The documents sought by Russell Marine in the Production Requests 

and the Motion would encompass virtually every document in 4X 

Industrial’s possession related to its customers Union Pacific and 

Kansas City Southern. The documents include all of 4X lndustrial’s 

internal strategy relating to Union Pacific and Kansas City Southern,

including the supporting bid worksheets, bid drafts, budgets, payroll 

information, project management processes and procedures, and all 

related backup information that supports a bid. The documents sought 

seek internal strategy communications relating to the bids submitted to 

Union Pacific and Kansas City Southern and payment documents from 

these customers. Producing these documents would allow Russell 

Marine to calculate 4X Industrial’s profits on Union Pacific and Kansas 

City Southern projects, what costs are assumed for these projects, and 

the markup applied for the inputs to these projects for labor, material, 

equipment, and other costs.
13

6. . . . These sweeping requests encompass documents that contain 

information that is highly confidential and proprietary to 4X Industrial. 

The internal backup for bids contain confidential information that is not

present in the bids provided to customers. In addition, these documents 

contain trade secrets that should be protected from public disclosure, 

especially given that Russell Marine is a direct competitor.

. . .

8. The information sought by Russell Marine is not publicly available. 

This non-public information allows 4X Industrial to compete in the 

highly competitive market for railroad construction projects. In 

particular, the backup bid documents will divulge how 4X Industrial 

determines its bidding strategy. These documents could allow Russell 

Marine to estimate 4X Industrial’s bids, and severely undermine 4X 

Industrial’s likelihood of success in future competitive bids.

9. The documents seek trade secrets and confidential information, the 

disclosure of which would cause direct and substantial harm to 4X 

Industrial. 4X Industrial has spent years acquiring expertise in 

analyzing and developing the inputs for its final bids, including the 

markup on costs and predicting the duration of a project. 4X Industrial 

derives independent economic value from the fact that its strategy 

remains confidential and is withheld from its competitors.

10. 4X Industrial has consistently and rigorously policed the 

confidentiality of its confidential business strategies. This information 

is not publicly available and is not provided to customers or other thirdparties.

Regarding the first factor—the extent to which the information is known 

outside 4X Industrial’s business—Warren’s affidavit identified the nature of the 

internal information subject to the request and demonstrated that the information is 

not known outside of 4X Industrial. He stated that the information is highly 

confidential and proprietary to 4X Industrial. 
14

Warren’s affidavit addressed part of the second factor: the extent to which the 

information is known by employees and others involved in the business. Although 

he did not state the extent to which the information is known by employees, he 

asserted that the internal backup for bids contain confidential information that is not

present in the bids provided to customers. 

Regarding the third factor, Warren averred that 4X Industrial diligently 

protects the confidentiality of the information, and 4X Industrial does not provide 

the information to its customers or third parties. He stated that 4X Industrial has 

consistently and rigorously policed the confidentiality of its confidential business 

strategies. 

Regarding the fourth factor, Warren asserted that the information has 

significant value to 4X Industrial’s business and its competitors because it allows 

4X Industrial to compete in the highly competitive market for railroad construction 

projects, it shows how 4X Industrial determines its bid strategy, and it could allow a 

competitor such as Russell Marine to estimate 4X Industrial’s bids. 

Regarding the fifth factor, Warren attested that 4X Industrial has spent years 

acquiring expertise in analyzing and developing the inputs for its final bids. 

Warren’s affidavit does not appear to address the sixth factor.

4X Industrial presented evidence on most of the factors, and it is not required 

to prove all six factors. See In re Bass, 113 S.W.3d at 740; In re Cooper Tire & 

Rubber Co., 313 S.W.3d at 918. Weighing the factors in the context of the 

surrounding circumstances, we conclude that 4X Industrial has established that the 

requested documents contain trade secrets. See In re Union Pac. R.R. Co., 294 
15

S.W.3d at 592. Because 4X Industrial met its burden to establish that the documents 

contain trade secrets, the burden shifted to Russell Marine to establish that discovery 

of the information is necessary for a fair adjudication of its claims. See In re Bass, 

113 S.W.3d at 737; In re Bridgestone/Firestone, Inc., 106 S.W.3d 730, 732 (Tex. 

2003) (orig. proceeding). 

B. Russell Marine has not established the information is necessary to a fair 

adjudication of its claims.

Whether the requested information is necessary to a fair adjudication of a 

party’s claims depends on the nature of the information and the context of the case. 

In re Bridgestone/Firestone, Inc., 106 S.W.3d at 732. As the supreme court has 

made clear, this showing requires more than general assertions of unfairness or 

merely that the information is relevant. See id.; In re Cont’l Gen. Tire, Inc., 979 

S.W.2d at 613-14. Russell Marine must make a “particularized showing” that the 

information is necessary to prove one or more material elements of its claim and that 

it is reasonable to conclude that the information sought is essential to a fair resolution 

of the lawsuit. In re Valero Ref.-Tex., L.P., 415 S.W.3d 567, 570 (Tex. App.—

Houston [1st Dist.] 2013, orig. proceeding) (citing In re Bridgestone/Firestone, 106 

S.W.3d at 731, 732; In re Cont’l Gen. Tire, Inc., 979 S.W.2d at 611, 613). The party 

seeking trade secret information “cannot merely assert unfairness but must 

demonstrate with specificity exactly how the lack of the information will impair the 

presentation of the case on the merits to the point that an unjust result is a real, rather 

than a merely possible, threat.” In re Bridgestone/Firestone, Inc., 106 S.W.3d at 

733; In re Cooper Tire & Rubber Co., 313 S.W.3d at 915. 
16

As several courts have stated, this is a “heightened burden,” In re Cont’l Gen. 

Tire, Inc., 979 S.W.2d at 613-14, and requires the requesting party to present 

evidence. See id. at 615; In re Konsberg, Inc., 563 S.W.3d 915, 921-23 (Tex. App.—

Beaumont 2018, orig. proceeding); In re Daimler Trucks N.A., LLC, 551 S.W.3d 

833, 841 (Tex. App.—San Antonio 2018, orig. proceeding); In re Waste Mgmt. of 

Tex., Inc., 286 S.W.3d 615, 618 (Tex. App.—Texarkana 2009, orig. proceeding); In 

re XTO I, LP, 248 S.W.3d 898, 905 n.1 (Tex. App—Fort Worth 2008, orig. 

proceeding); In re Diamond Shamrock Ref. Co., No. 07-06-0315-CV, 2007 WL 

63370, at *1 (Tex. App.—Amarillo Jan. 10, 2007, orig. proceeding) (mem. op.); see 

also In re Cooper Tire & Rubber Co., 313 S.W.3d at 918-19. 

Russell Marine asserts that it met its burden because it already has “substantial 

circumstantial evidence that Ruiz misappropriated thousands of pages of its trade 

secrets to enable the undercutting of Russell Marine’s bids to key customers.”3

 

Russell Marine argues that it cannot adequately present its claims to a jury without 

an analysis of 4X Industrial’s records showing that 4X Industrial used Russell 

Marine’s trade secrets. Russell Marine maintains that, because it is unlikely that 4X 

Industrial will produce “smoking gun” documents that directly demonstrate that 4X 

Industrial used Russell Marine’s trade secrets, it will have to compare 4X

Industrial’s documents from bids before Thielen joined 4X Industrial to documents 

and bids generated after Thielen and Ruiz joined 4X Industrial to establish that 4X 

Industrial used Russell Marine’s trade secrets. Moreover, Russell Marine asserts 

3 We presume that the claimed misappropriated information constitutes Russell Marine’s 

trade secrets.
17

that the measure of damages is 4X Industrial’s profit from any use of Russell 

Marine’s trade secrets. 

Russell Marine relies on an opinion from the United States District Court for 

the Southern District of Texas in support of its position that it is entitled to discovery 

of 4X Industrial’s trade secrets to determine whether 4X Industrial misappropriated

Russell Marine’s trade secrets. See M-I LLC v. Stelly, 733 F. Supp. 2d 759 (S.D. 

Tex. 2010). In Stelly, M-I LLC (“M-I”) was an oilfield contractor that provided 

“products and services to oilfield drillers and operator who are involved in successful 

completion of downhole operations and the cleanout of wellbores.” Id. A former 

employee of the plaintiff, M-I, formed his own company and hired M-I employees, 

Stelly and Squyres. Id. at 770. M-I alleged that Stelly and Squyres stole its trade 

secrets and claimed that the defendants designed wellbore tools by relying on M-I’s 

trade secrets. Id. 

The defendants filed a motion for protection from discovery of their trade 

secret information, arguing that M-I had failed to establish that the information was 

necessary for a fair adjudication of its claim. Id. at 800. The court observed that MI had stated a claim for misappropriation of trade secrets and sought discovery in 

order to support its claim with evidence. Id. at 802. In other words, M-I did not 

seek the trade secrets to prove a tangential or connected claim but sought the trade 

secrets to bolster its claim that its trade secrets had been misappropriated. Id. 

The third element of trade secret misappropriation required M-I to prove that 

the defendants were using its trade secrets, i.e., incorporating M-I’s design features. 

Id. M-I submitted the affidavits of two experts, who stated that they could not come 
18

to any determination of whether the defendants had misappropriated M-I’s trade 

secrets without first inspecting tool drawings and other proprietary information. Id. 

The court held that “[t]he trade secrets are both relevant and necessary for that 

reason” and “[n]ot being able to argue that certain tool diameters were identical, or 

that [the defendants] adopted the same unique material as M-I in the construction of 

its tools, would be fatal to M-I’s claims.” Id. 

M-I also presented the deposition testimony of engineers, who, stopping short 

of claiming the defendants’ tools were exact copies of MIs tools, were able to point 

to specific design features that were unique to M-I before the defendants launched 

their suite of wellbore cleanout tools. Id. The engineers pointed to features that they 

“strongly” believed the defendants copied from M-I. Id. at 802-03. At the very least, 

the engineers boosted M-I’s argument that examining the drawings of the tools and 

other information was necessary to fairly adjudicate its claim for misappropriation 

of trade secrets. Id. at 803.

The court concluded that M-I would not be able to prove misappropriation of 

trade secrets, which required that it show that the defendants had actually 

incorporated trade secrets into their own competitive products, without examining 

the defendants’ tool drawings and other proprietary information. Id. at 804. Also, 

M-I had proffered evidence on the issue of necessity, and that evidence established 

that “experts must have access to proprietary information in order to prepare their 

conclusions.” Id. The information was necessary, not simply useful, for M-I’s 

experts. Id. The court, however, observed that M-I would need to produce its own 

tool drawings and other information to the defendants so that they could build their 
19

defense in this case. Id. The court was satisfied that, with both parties disclosing 

the material at the heart of their companies’ success, each would have strong 

incentives to rigorously apply the protective order and safeguard one another’s trade 

secrets. Id. 

Stelly is distinguishable from the case at hand. M-I offered evidence, which 

included the affidavits of two experts, who attested that “they cannot come to any 

determination” as to whether the defendants had misappropriated M-I in their “own 

tool line without first inspecting tools drawings and other proprietary information.” 

Id. at 802. M-I also offered deposition testimony of engineers, who identified

specific design features that were unique to M-I before the defendants launched their 

suite of wellbore cleanout tools. Id. at 802. The court determined that, at the very 

least, the engineers’ testimony boosted M-I’s “argument that examining drawings of

these tools, and other information, is necessary to fairly adjudicate its 

misappropriation of trade secrets claim.” Id. at 803. In contrast to the claimants in 

Stelly, Russell Marine did not offer evidence of a similar character to support its

argument that 4X Industrial’s trade secrets are necessary for a fair adjudication of its 

case. 

Emphasizing the lack of evidence, 4X Industrial points out that Russell 

Marine did not specify which materials it claims that 4X Industrial misappropriated, 

and it did not file any of the subject material with the trial court, introduce it into 

evidence, offer it for in camera review, or describe it to the trial court in any detail.

Thus, 4X Industrial contends that Russell Marine did not describe with particularity 

how the trade secret information is required to prove its claims. 4X Industrial cites
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In re PrairieSmarts, LLC, 421 S.W.3d 296 (Tex. App.—Fort Worth 2018, orig. 

proceeding), in support of its argument that Russell Marine has not made the 

required a particularized showing of necessity under Rule 507. There, four former 

employees of TD Ameritrade changed employment to PrairieSmarts. Id. at 299. 

Subsequently, PrairieSmarts filed a patent application for a program called 

PortfolioDefense. Id. at 300. TD Ameritrade then filed a rule 202 petition, seeking 

pre-suit depositions and alleging that it appeared likely that PrairieSmarts’ 

employees had, in designing the program, misappropriated TD Ameritrade’s 

confidential and proprietary assets in violation of nondisclosure provisions in their 

respective employment contracts with TD Ameritrade. Id. PrairieSmarts objected 

to the depositions and the document production on the basis that TD Ameritrade was 

seeking privileged trade secret information. Id. 

TD Ameritrade argued that the circumstances constituted “smoke” and “red 

flags” or provided “the indicia of a potential appropriation of trade secrets case,” 

sufficient to justify the requested discovery. Id. TD Ameritrade argued that the 

following facts justified its rule 202 pre-suit discovery:

the fact that three of the four PrairieSmarts principals were directly 

responsible for TD Ameritrade’s confidential risk analysis; the fact that 

PrairieSmarts’s principals have thirty-one combined years of TD 

Ameritrade tenure; the fact that five days after Dr. Piccinini left TD 

Ameritrade, he co-founded PrairieSmarts; the fact that three months 

after Rockwell started working at PrairieSmarts, a patent application 

was filed for PortfolioDefenseTM, while it took fourteen months after

Dr. Piccinini’s hire at TD Ameritrade until the Profit Margin 

application was submitted to FINRA; the fact that similarities exist 

between the two products—TD Ameritrade contends four matching 

components are observable by comparing PrairieSmarts’s website and 
21

the FINRA application for Portfolio Margin; and the fact that the 

products have nearly identical outcomes, which TD Ameritrade 

explained was PortfolioDefenseTM’s having nearly the same predictive 

capability as TD Ameritrade’s Portfolio Margin. 

Id. at 300-01. 

TD Ameritrade argued that these “red flags” “established ‘that there is a 

significant advantage to be gained for [TD Ameritrade] to do some investigation, 

some discovery to see how these concepts that line up on both sides are actually 

performed and whether they are performed using confidential information [from] 

TD Ameritrade.’” Id. at 301. PrairieSmarts argued that TD Ameritrade should not 

be allowed to “look ‘under the hood’ at PortfolioDefenseTM only to determine that it 

is not based on TD Ameritrade’s confidential or proprietary assets.” Id. The trial 

court granted the rule 202 petition. Id. at 302. 

In the subsequent mandamus proceeding, TD Ameritrade asserted that the 

facts showed “highly suspect circumstances at play,” establishing necessity because 

“the [trade secret] information at issue is the very subject of TD Ameritrade’s claim 

of misuse or misappropriation.” Id. at 308. The court of appeals held that the 

circumstances cited by TD Ameritrade were relevant to establishing whether it had 

met its rule 202 burden. Id. at 308-09. However, those facts did not rise to the level 

of a particularized showing that PrairieSmarts’s trade secret information was 

necessary to enable TD Ameritrade to prove one or more material elements of its 

claims against PrairieSmarts or that it was reasonable to conclude that the 

information sought was essential to a fair resolution of a misuse of misappropriation 

lawsuit against Prairie Smarts under rule 507. Id. at 309. 
22

Here, Russell Marine maintains that it cannot determine whether 4X Industrial 

used Russell Marine’s trade secret information without comparing the worksheets, 

drafts, supporting invoices from third-parties, budgets, payroll information, project 

management processes and procedures, and related backup information supporting 

4X Industrial’s bids from before Thielen’s and Ruiz’s joining 4X Industrial to those 

bids generated after they had started working for 4X Industrial. According to Russell

Marine, it cannot be more specific about its claim for misappropriated trade secrets 

until it has had the opportunity to review 4X Industrial’s supporting bid documents. 

Based on the record before us, we conclude Russell Marine has not made the 

required “particularized showing” that the information sought is necessary to 

establish its claim for trade secret misappropriation and that it is reasonable to 

conclude that the information sought is essential to a fair resolution of the lawsuit. 

See In re Valero Ref.-Tex., LP, 415 S.W.3d at 570 (citing In re 

Bridgestone/Firestone, 106 S.W.3d at 731, 732; In re Cont’l Gen. Tire, Inc., 979 

S.W.2d at 611, 613). The supreme court has made clear that this is an evidentiary 

burden, and Russell Marine has not presented evidence demonstrating that access to 

4X Industrial’s trade secrets is necessary for a fair adjudication of its 

misappropriation claim. See In re Cont’l Gen. Tire, Inc., 979 S.W.2d at 615 

(observing that plaintiff had not presented evidence supporting theory justifying 

discovery of trade secrets and holding plaintiff had not carried burden under rule 

507); In re Waste Mgmt. of Tex., Inc., 286 S.W.3d at 618 (holding that trial court 

erred by ordering production of trade secret information when plaintiffs did not offer 

any evidence showing that such information was necessary to fair adjudication of 

claims); In re XTO I, LP, 248 S.W.3d at 905 n.1 (stating that argument of counsel is 
23

insufficient to support discovery of trade secrets; “a party must present evidence”);

In re Diamond Shamrock Ref. Co., 2007 WL 63370, at *1 (“[T]the litigant must 

satisfy the test through the presentation of competent evidence. If it does not, then 

compelling disclosure amounts to an instance of abused discretion warranting 

mandamus relief.”). 

To be sure, one of Russell Marine’s claims is for trade secret 

misappropriation, which was the case in Stelly. This fact also distinguishes the 

present dispute from cases like Cooper Tire & Rubber and others that involved 

personal injury or product liability claims, where the sought-after trade secrets were 

collateral to those claims. For that reason, Russell Marine’s pleading, on its face, 

shows that a dispute over the substance of trade secrets is the core dispute in this 

case. To establish liability for misappropriation of trade secrets, Russell Marine will 

have to prove that it disclosed a trade secret to the defendants, in confidence, and 

that one or more of the defendants breached this confidence and made unauthorized 

use of the secret, causing damage to Russell Marine. See RSM Prod. Corp. v. Global 

Petrol. Grp., 507 S.W.3d 383, 393 (Tex. App.—Houston [1st Dist.] 2016, pet. 

denied); Bancservices Grp., Inc. v. Strunk & Assocs., L.P., No. 14-03-00797-CV, 

2005 WL 2674985, at *4 (Tex. App.—Houston [14th Dist.] Oct. 20, 2005, pet. 

denied) (mem. op.). Nonetheless, the parties have not directed us to a case relieving 

a party seeking discovery of trade secrets from its evidentiary burden to show that 

they are necessary for a fair adjudication of the claim, even when the claim at issue 

is for trade secret misappropriation. 
24

Russell Marine asserts it has “substantial circumstantial evidence that Ruiz 

misappropriated thousands of pages of its trade secrets to enable undercutting of 

Russell Marine’s bids to key customers.” Russell Marine attached to its petition the 

declaration of its President, who testified that a forensic examination of Ruiz’s 

computer uncovered evidence that Ruiz, without permission, copied Russell 

Marine’s trade secrets and downloaded them onto personal thumb drives just before 

leaving Russell Marine’s employ. Ruiz then attempted to “conceal his theft by 

deleting all emails and all Trade Secret information saved on his office computer.” 

According to Russell Marine, Ruiz’s described conduct, combined with the events 

related to Russell Marine’s termination of Thielen and Ruiz and 4X Industrial’s 

subsequent hiring of them, warrant independent verification through 4X Industrial’s 

trade secrets. 

The affidavit of Russell Marine’s President is certainly relevant to many of 

the elements Russell Marine must prove to prevail on its trade secrets 

misappropriation claim. Assuming its truth, the affidavit presents some evidence 

that Russell Marine disclosed trade secrets to Ruiz, in confidence, and that Ruiz

breached this confidence. It also explains why 4X Industrial would be interested in 

the information Ruiz allegedly took. Nonetheless, it does not provide any 

“particularized” or specific facts demonstrating what trade secrets are at issue and 

why the requested documents from 4X Industrial are essential—as opposed to 

helpful—to a fair adjudication of Russell Marine’s claim. Russell Marine does not 

direct us to any other evidence in the record sufficient to meet the burden required 

of a party seeking discovery of an opponent’s trade secrets. 
25

Finally, Russell Marine argues that the agreed confidentiality order is 

sufficient to protect 4X Industrial’s trade secrets. However, Russell Marine must 

first show that it met its burden. See In re Valero Ref.-Tex., LP, 415 S.W.3d at 572 

(holding that ability of protective order to limit harm from disclosure of trade secret 

becomes factor only if trade secrets are necessary and must be disclosed); In re 

Hewlett Packard, 212 S.W.3d 356, 364 (Tex. App.—Austin 2006, orig. proceeding 

[mand. denied]) (“That a trial court has ordered the parties to enter into a protective 

order with respect to trade secret information does not dispense with the requesting 

party’s burden to establish the necessity for the discovery of the trade secret 

information to fairly adjudicate a claim or defense.”); In re Frost, 998 S.W.2d 938, 

939 (Tex. App.—Waco 1999, orig. proceeding) (holding trial court abused its 

discretion by ordering trade secrets disclosed even though such disclosure was 

subject to protective order). Because Russell Marine did not meet its burden under 

Rule 507, we do not address whether the parties’ agreed protective order is sufficient 

to protect 4X Industrial’s trade secrets. 

Conclusion

The trial court abused its discretion by ordering 4X Industrial to produce 

requests for production numbers 15-22 and 47-54.4

 4X Industrial also does not have 

an adequate remedy by appeal. See In re Dana Corp., 138 S.W.3d at 301; In re Ford 

Motor Co., 988 S.W.2d at 721. We conditionally grant 4X Industrial’s petition for 

4 In a second issue, 4X Industrial asserts that the discovery order is overbroad because it 

exceeds the issues at hand and encompasses every document related to every 4X Industrial project 

for Union Pacific and Kansas City. Given our disposition of 4X Industrial’s first issue, we need 

not address 4X Industrial’s contention that the order is overbroad.
26

writ of mandamus and direct the trial court to vacate its March 29, 2021 order to the 

extent that it compels 4X Industrial to produce documents in response to requests 

for production numbers 15-22 and 47-54. We are confident the trial court will act 

in accordance with this opinion and the writ will issue only if the court fails to do 

so. Our December 23, 2020 stay order is lifted.

/s/ Kevin Jewell

Justice

Panel consists of Justices Jewell, Poissant, and Wilson.