Court Opinion

ID: 66060
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:06:08+00
Date Added: 2024-06-11T14:58:34.720877
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                            May 28, 2009

                                       No. 08-30860                    Charles R. Fulbruge III
                                                                               Clerk

OCEANEERING INTERNATIONAL INC

                                                   Plaintiff - Appellant
v.

GRI SIMULATIONS INC; STEPHEN G DODD

                                                   Defendants - Appellees

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 6:05-CV-00258

Before BARKSDALE, DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant Oceaneering International, Inc. (“Oceaneering”)
appeals the district court’s entry of summary judgment and award of costs,
expenses, and attorney’s fees in favor of Defendants-Appellees GRI Simulations,
Inc. (“GRI”) and Stephen Dodd on all counts. We VACATE the district court’s
grant of summary judgment and award of costs, expenses, and attorney’s fees
and REMAND.

       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
                                  No. 08-30860

               I. FACTUAL AND PROCEDURAL HISTORY
      Oceaneering and GRI develop and market simulators of remotely operated
vehicles (“ROVs”) used to facilitate underwater hydrocarbon exploration and
extraction. Oceaneering is a Delaware corporation with its principal place of
business in Houston, Texas. GRI is a Canadian corporation with its principal
place of business in Mount Pearl, Newfoundland, Canada. Oceaneering also has
operations in Newfoundland. Both companies market and sell their products in
the United States and Canada. In the late 1990's, the companies collaborated
and shared details about their respective simulators. On August 2, 1999, GRI
and Oceaneering executed a “Letter Agreement” in which the parties agreed to
share certain confidential information.
      The parties eventually went their separate ways. Oceaneering, which is
far larger than GRI, hired three of GRI’s four employees in 2001 and 2002. GRI
saw Oceaneering’s new products at a trade show in Houston in May 2003, and
believed that Oceaneering had used GRI’s former employees to misappropriate
GRI’s copyrighted material and trade secrets.          GRI sent Oceaneering a
cease-and-desist letter in September 2003.        In February 2004, GRI sued
Oceaneering and the former GRI employees in Canadian provincial court. In
2004, Oceaneering filed a declaratory judgment action in Texas district court,
but the suit was subsequently dismissed.
      On February 10, 2005, Oceaneering filed the instant suit in the Western
District of Louisiana.    Oceaneering sought declaratory judgment on eight
claims. On June 3, 2005, GRI sought dismissal of the action pursuant to Rule
12(b)(2) (lack of personal jurisdiction); Rule 12(b)(7) (failure to join necessary
parties); “the first-filed rule, which permits a court to decline jurisdiction when
an action involving the same parties and issues has previously been filed in

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                                     No. 08-30860

another court;” 1 or the court’s “inherent discretion to refuse to entertain a
declaratory judgment action.” The court denied the motion without issuing
reasons on February 16, 2006.
      Following a period of discovery, Oceaneering amended its complaint in
July 2006. Ultimately, Oceaneering’s Second Amended Complaint sought a
declaratory judgment holding that (1) Oceaneering did not breach the Letter
Agreement under Texas law; (2) Oceaneering did not misappropriate GRI’s trade
secrets under Louisiana law; (3) any potential claims by GRI for trade secret
misappropriation under Louisiana law were prescribed and were barred by the
statute of limitations for such a cause of action; (4) Oceaneering did not infringe
any copyright in GRI’s VROV Software or computer architecture under United
States copyright law; (5) portions of the GRI VROV Software and computer
architecture are not protectable under United States copyright law; (6) GRI
committed copyright misuse by impermissibly attempting to use copyright to
secure an exclusive right or limited monopoly not granted by the Copyright
Office, including a limited monopoly over software components and/or a
computer architecture not protectable under United States copyright law; (7) any
failure by Oceaneering to attribute authorship of VROV Software to GRI at a
January 2000 trade show is not unfair competition under § 43 of the Lanham
Act, 15 U.S.C. § 1125(a); and (8) potential claims brought by GRI for unfair
competition under § 43(a) of the Lanham Act relating to Oceaneering’s failure
to display a sign attributing authorship of VROV Software to GRI at a January
2000 trade show were barred by the statute of limitations for causes of action
asserted under § 43(a) of the Lanham Act.              In addition to these claims,
Oceannering added two claims of trade secret misappropriation against GRI and

      1
         Before the proceedings in the instant suit, GRI filed suit against Oceaneering in
Canadian court under Canada’s copyright laws. The underlying claims of misconduct in the
instant suit appear to be similar to those litigated in Canada.

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                                   No. 08-30860

one of its directors, Stephen Dodd. Oceaneering sought injunctive and monetary
relief for these claims. Dodd moved to dismiss for lack of personal jurisdiction
and failure to state a claim; the court denied the motion without stating reasons
on March 15, 2007.
      At the close of discovery, Oceaneering moved for summary judgment in
part and dismissal of counts four through six due to lack of subject matter
jurisdiction. GRI and Dodd moved for summary judgment on all claims. The
court held a hearing on August 14, 2008. After hearing argument, the court
orally ruled on the motions.      The court denied Oceaneering’s motions and
granted GRI’s and Dodd’s summary judgment motions and awarded expenses,
costs, and attorney’s fees on all counts. Other pretrial motions were denied as
moot. The court entered final judgment on August 27, 2008. The district court
did not provide findings of fact or conclusions of law supporting its judgment.
Before the court determined the quantum of costs and attorney’s fees,
Oceaneering appealed.
                                 II. ANALYSIS
      This court reviews a district court judgment on cross-motions for summary
judgment de novo. First Colony Life Ins. Co. v. Sanford, 555 F.3d 177, 180 (5th
Cir. 2009) (citation omitted).      Summary judgment is appropriate “if the
pleadings, the discovery and disclosure materials on file, and any affidavits show
that there is no genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law.” F ED. R. C IV. P. 56(c). There is a
“genuine” issue of material fact “if the evidence is sufficient for a reasonable jury
to return a verdict for the nonmoving party.” First Colony Life Ins. Co., 555 F.3d
at 181 (citation omitted). If the record before this court, “taken as a whole, could
not lead a rational trier of fact to find for the non-moving party, then there is no
genuine issue for trial.” LeMaire v. Louisiana, 480 F.3d 383, 390 (5th Cir. 2007)
(citation omitted). We review the record and “the facts and the inferences to be

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                                    No. 08-30860

drawn therefrom in the light most favorable to the nonmoving party.” Weeks
Marine, Inc. v. Fireman’s Fund Ins. Co., 340 F.3d 233, 236 (5th Cir. 2003).
      As required by Federal Rule of Civil Procedure 56(c), when we review a
motion for summary judgment, this Court engages “in a two-fold analysis – first,
whether the parties have raised a genuine issue of material fact requiring trial
and, second, whether the prevailing party was entitled to judgment as a matter
of law.” Lloyd v. Lawrence, 472 F.2d 313, 316 (5th Cir. 1973). GRI, the moving
party, bears the burden of demonstrating an absence of evidence in the record
before this Court to support Oceaneering’s, the nonmoving party’s, case. See
Carson v. Dynegy, Inc., 344 F.3d 446, 451 (5th Cir. 2003) (citation omitted);
McNealy v. Emerson Elec. Co., 121 F. App’x 29, 32 (5th Cir. 2005). “It is [GRI’s]
burden to exclude any real doubt as to the existence of any genuine issue of
material fact.” Lloyd, 472 F.2d at 317.
      We note that our review of this case is complicated by the fact that the
district court provided virtually no rationale for its decision. See, e.g., LeMaire,
480 F.3d at 387. “While findings of fact and conclusions of law are not necessary,
as our review is de novo, we have emphasized in the past that such findings and
conclusions are ‘often quite helpful for appellate review.’” Id. (citation omitted)
(emphasis added). “When we have no notion of the basis for a district court’s
decision . . . there is little opportunity for effective review. In such cases, we have
not hesitated to remand the case for an illumination of the court’s analysis
through some formal or informal statement of reasons.” Myers v. Gulf Oil Corp.,
731 F.2d 281, 284 (5th Cir. 1984) (footnotes omitted). While we choose not to
remand for this purpose in the instant case, a detailed analysis from the district
court would have been quite beneficial as the parties zealously contest each
count, the “arguments of the parties are less than clear,” and the parties were
unable to agree at oral argument as to which counts are still contested and
which should be dismissed from the case. See LeMaire, 480 F.3d at 387.

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                                       No. 08-30860

       After engaging in a de novo review of the record before this Court, we hold
that GRI failed on all counts to meet its burden of demonstrating that there are
no genuine issues of material fact and that it is entitled to judgment as a matter
of law. GRI’s principal arguments are that (1) it never “intended” to bring claims
against Oceaneering in the United States (counts one, three, five, six, seven, and
eight); 2 (2) Oceaneering’s suit was a “waste of time and resources for all
involved” (counts one, three, seven, and eight); (3) Oceaneering destroyed
evidence that is necessary to decide issues in the case (counts two and four); and
(4) claims of trade secret misappropriation are pending in the Canadian lawsuit,
and that Oceaneering’s alleged trade secrets were not in fact trade secrets
(counts nine and ten). GRI, however, has failed to demonstrate that it is entitled
to judgment as a matter of law.
       For example, the record before us demonstrates that GRI failed to
establish that it is entitled to judgment as a matter of law based on its assertions
that it never intended to bring claims against Oceaneering in the United States
and that Oceaneering’s suit is a waste of judicial resources. In addition, the
record before us demonstrates a genuine issue of material fact as to whether (1)
Oceaneering acted with bad faith when it failed to preserve certain portions of
software and source code, and (2) the source code is actually necessary to render
judgment. Cf. Lloyd, 472 F.2d at 317 (stating that “the simple truth is that on
the [r]ecord we have before us, we are incapable of concluding beyond a doubt
that the Banks are ‘holders’”). Finally, the record before us demonstrates a
genuine issue of material fact as to whether Oceaneering’s alleged trade secrets

       2
          With respect to counts five and six, GRI’s brief states that the district court agreed
with GRI’s arguments and held that GRI was entitled to copyright protection. This is
inconsistent with the arguments GRI made at the hearing before the district court, and the
district court’s ruling does not allow for such an inference. At the hearing, GRI argued that
it was entitled to summary judgment on counts five and six because Oceaneering had no
reason to believe GRI was “seeking protection under the copyright laws of the United States,”
because GRI had “already filed suit in Canada.”

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                                 No. 08-30860

were in fact trade secrets. Id. Thus, after reading the parties’ briefs, hearing
oral argument, and reviewing the record before us we hold that the district court
erred in granting summary judgment in favor of GRI.
                             III. CONCLUSION
      For the foregoing reasons, we VACATE the district court’s grant of
summary judgment in favor of GRI. Because we vacate the district court’s grant
of summary judgment, we also VACATE the award for costs, expenses and
attorney’s fees on all counts.   Nothing in this opinion, however, should be
construed as ruling on the merits of the instant case. We REMAND for further
proceedings as the district court deems appropriate. All outstanding motions are
denied.

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