This hard-fought appellate victory builds on Foley’s 2023 success in defeating a $42 million damages claim brought by DistributionNOW (DNOW), a Houston-based supplier of energy and industrial products, against 12 former employees now associated with a competitor.
New precedent under TUTSA
The chief justice of the Fourteenth Court of Appeals authored a detailed opinion in favor of Foley’s clients. The court ruled that TUTSA preempts conspiracy claims based on the misappropriation of trade secrets and instructed other courts to evaluate preemption under the “compare the facts” or “same conduct” test. The court also agreed with the defendants that the charge submitted to the jury, based on the Texas PJC for fiduciary claims against trustees, was improper in the context of departing managers. The appellate court fully adopted the defendants’ proposed jury instructions for breach of fiduciary duty claims against departing managers in Texas. The decision also expands TUTSA’s preemption of claims based on misappropriation of trade secrets to the Texas Theft Liability Act and breaches of fiduciary duties.
Texas Theft Liability Act requires award of attorneys’ fees as a result of TUTSA preemption
The court further rendered judgment in favor of Foley’s clients, ruling that attorneys’ fees and costs are mandatory under the Texas Theft Liability Act for a prevailing party, even when the case is won on preemption grounds. The case now serves as a roadmap for damages causation standards for future Texas trade secret misappropriation cases.
Foley’s trial team included Rachel Powitzky Steely, Jessica Glatzer Mason, Katherine Harrington, Taylor Appling, and Gaylyn Kinsley. Geoffrey Bracken served as Foley’s attorneys’ fees expert at trial.
Foley’s appellate team included Stacy Obenhaus, Taylor Appling, Jessica Glatzer Mason, and Rachel Powitzky Steely.
Lead defendant Toby Eoff was represented by Mark Levine of Andrews Myers P.C.
The company defendant was represented by John Kim and Denise Kim of The Kim Law Firm.
DNOW was represented by John Zavitsanos and Jason McMannis of Ahmad, Zavitsanos & Mensing, Scott West of The West Law Firm, and Richard L. Tate.
Coe v. DNOW LP, __ S.W.3d __, No. 14-23-00410-CV, 2025 WL 1759382, at *22-23 (Tex. App.—Houston [14th Dist.] June 26, 2025, no pet. h.),
