In a long-awaited decision, the Texas Supreme Court has ruled that a state court has jurisdiction over a foreign oil company sued by a Texas company for misappropriation of trade secrets in Texas. In Moncrief Oil International Inc. v. OAO Gazprom, Gazprom Export, LLC, and Gazprom Marketing & Trading, Ltd. (No. 11-0195), Justice Guzman, writing for a unanimous court (Chief Justice Jefferson not sitting), held that Texas courts could exercise personal jurisdiction over Gazprom because the nonresident company allegedly committed a tort in Texas and that the exercise of such jurisdiction does not violate state or federal constitutional due process. The decision is a significant victory for Texas companies that do business on Texas soil with foreign entities. As noted in the opinion,TCJL, joined by the Texas Oil & Gas Association, Texas Association of Manufacturers, Association of Electric Companies of Texas, and Texas Association of Business filed an amicus brief in support of Moncrief.
Specifically, the Court found that Gazprom established the necessary minimum contacts in Texas. “Here, Gazprom attended two Texas meetings with a Texas corporation and accepted alleged trade secrets created in Texas regarding a potential joint venture in Texas with the Texas corporation,” wrote Justice Guzman. “Far from seeking to avoid Texas, Gazprom sought out Texas and the benefits and protections of its laws.” The court further held that the exercise of personal jurisdiction over Gazprom satisifies traditional notions of fair play and substantial justice on the basis of the state’s substantial interest in enforcing its laws with respect to alleged tortious activity in Texas and the minimal burden on Gazprom, which owns a subsidiary doing business in Texas, of litigating in Texas. The court specifically rejected Gazprom’s claim that because the Russian government is a majority owner of the country, Texas courts should refrain from exercising jurisdiction because the case implicates U.S. foreign relations. Justice Guzman pointed out that Gazprom is not wholly owned by the Russian government, that Moncrief’s trade secret claim does not implicate any foreign government officials, and that no other jurisdiction has as substantial an interest in the claim as Texas.
The court ruled in favor of Gazprom with respect to Moncrief’s tortious interference claims, but remanded the case to the district court for further proceedings on the trade secret claim.