“Communications in the due course of a judicial proceeding will not serve as the basis of a civil action for libel or slander, regardless of the negligence or 7 malice with which they are made.”
How later courts described this case
- “Communications in the due course of a judicial proceeding will not serve as the basis of a civil action for libel or slander, regardless of the negligence or 7 malice with which they are made.”
- “The promissory estoppel claim is of a different order from the tort claims. Promissory estoppel is a quasi-contract theory. . . . This cause of action applies when a contract does not exist, but equity compels enforcement of the promise.”
- “Any communication, oral or written, uttered or published in the due course of a judicial proceeding is absolutely privileged and cannot constitute the basis of a civil action in damages for slander or libel.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT October 29, 2024
Nathan Ochsner, Clerk
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
WEATHERFORD U.S., L.P., et al., §
§
Plaintiffs, §
§
v. § CIVIL ACTION NO. 4:23-cv-3416
§
IRON IQ, INC., §
§
Defendant. §
MEMORANDUM AND RECOMMENDATION
Pending before the Court is Plaintiffs Weatherford U.S., L.P. and
Weatherford Technology Holdings, LLC’s (collectively, “Weatherford”) Motion
for Reconsideration or Clarification of Order Allowing Promissory Estoppel
Counterclaim (ECF No. 110).1 Based on a review of the motion, arguments,
and relevant law, the Court RECOMMENDS Weatherford’s Motion for
Reconsideration or Clarification of Order Allowing Promissory Estoppel
Counterclaim (ECF No. 110) be DENIED.
I. Background
Weatherford filed suit against Defendant Iron IQ, Inc. (“Iron IQ”) on
September 12, 2023. (ECF No. 1). The basis of this suit, as alleged by
1 On April 24, 2024, this case was referred to the Undersigned for all purposes
pursuant to 28 U.S.C. § 636(b)(1)(A) and (B) and Federal Rule of Civil Procedure 72. (ECF
No. 88).
Weatherford, is that “Iron-IQ devised and executed a scheme to obtain
unauthorized copies of Weatherford’s CygNet® supervisory control and data
acquisition (‘SCADA’) platform.” (ECF No. 65-1 at ¶ 2).
On September 27, 2023, Weatherford and Iron IQ entered into a
stipulated preliminary injunction in which Iron IQ “is enjoined from obtaining,
retaining, disclosing, copying, or using any of Weatherford’s confidential
information and trade secrets, in any tangible or electronic form, in” CygNet.
(ECF No. 29 at 1). The stipulated preliminary injunction also required Iron IQ
“to immediately return to Weatherford or destroy all copies in its possession,
custody, or control of confidential information and trade secrets, in any
tangible or electronic form, in” CygNet and states that Iron IQ “may not copy,
possess, access, use, install or download CygNet®, or login to CygNet®, or login
to Weatherford’s non-public CygNet® download website.” (Id. at 1–2).
However, the stipulated preliminary injunction allows “Iron IQ [to] act on
behalf of a licensed CygNet® customer, under the customer’s license, and only
on the customer’s systems (directly or via remote access).” (Id. at 2).
On June 7, 2024, the Court filed a Memorandum and Recommendation,
recommending Iron IQ’s Motion for Leave to Amend Counterclaims (ECF No.
84) be granted as to its proposed promissory estoppel claim, among other
counterclaims. (ECF No. 93 at 37). District Court Judge Andrew Hanen
adopted this recommendation on July 12, 2024. (ECF No. 100).
2
II. Legal Standard
“When a party seeks to revise an order that adjudicates fewer than all
the claims among all of the parties, then Rule 54(b) controls.” Cormier v.
Turnkey Cleaning Servs., L.L.C., 295 F. Supp. 3d 717, 719–20 (W.D. La. 2017).
“Under Rule 54(b), the district court possesses the inherent power to
reconsider, rescind, or modify an interlocutory order for cause seen by it to be
sufficient.” Id. at 720. “Rule 54(b) motions are construed under the same
standards that govern Rule 59(e) motions to alter or amend a final judgment.”
Id. “To prevail on a Rule 59(e) motion, the moving party must ‘clearly establish
either a manifest error of law or fact or must present newly discovered
evidence.’” Id. (quoting Simon v. United States, 891 F.2d 1154, 1159 (5th Cir.
1990)). “In general, reconsideration of a judgment ‘is an extraordinary remedy
that should be used sparingly.’” Id. (quoting Templet v. HydroChem Inc., 367
F.3d 473, 479 (5th Cir. 2004)). Reconsideration under Rule 54(b) is within the
trial court’s broad discretion. Koeppel v. Hartford Accident & Indem. Co., 608
F. Supp. 3d 398, 402 (E.D. La. 2022).
“District courts will ‘often accept [motions to reconsider] in the interest
of substantial justice.’” Anderson v. Red River Waterway Comm’n, 16 F. Supp.
2d 682, 683 (W.D. La. 1998), aff’d, 231 F.3d 211 (5th Cir. 2000) (quoting
Baustian v. State of La., 929 F. Supp. 980, 981 (E.D. La. 1996)). “Although the
court will consider such a motion, one ‘based on recycled arguments only serves
3
to waste the resources of the court.’” Anderson, 16 F. Supp. 2d at 683 (quoting
Baustian, 929 F. Supp. at 981). “A ruling, therefore, ‘should only be
reconsidered where the moving party has presented substantial reasons for
reconsideration.’” Id. (quoting State of La. v. Sprint Communications Co., 899
F. Supp. 282, 284 (M.D. La. 1995)). “[R]evisiting the issues already addressed
is not the purpose of a motion to reconsider, and advancing new arguments or
supporting facts which were otherwise available [when the original motion was
filed] is likewise inappropriate.” Id. (quotations omitted).
III. Discussion
Weatherford asks the Court “to reconsider its Order and find that Iron-
IQ’s promissory estoppel claim is futile and is, therefore, stricken.” (ECF No.
110 at 3). “In the alternative, Weatherford requests the Court to clarify its
Order making it clear that Iron-IQ’s counterclaims cannot be based on
‘Weatherford’s pre-suit demands, [this] lawsuit, and [the stipulated and
agreed] injunction.’” (Id. (quoting 110-1 at 5)).
First, Weatherford argues Iron IQ’s promissory estoppel claim is no
longer based on “Iron IQ’s allegation that Weatherford notified prospective
customers that Iron IQ can no longer perform integration services under the
stipulated injunction” (“the Allegation”) because Iron IQ did not assert the
Allegation in its Amended Counterclaims (ECF No. 101) or its supplemental
interrogatory responses (ECF No. 110-1). (ECF No. 110 at 4 (quotations
4
omitted)). Weatherford alleges Iron IQ’s promissory estoppel claim is now
erroneously based on Weatherford barring it from pursuing thirty newly
identified prospective customers due to Weatherford’s pre-suit demands, the
lawsuit, and the stipulated preliminary injunction. (Id. at 5). Iron IQ counters
that its promissory estoppel claim is supported with multiple allegations, and
it never abandoned the Allegation. (ECF No. 115 at 1). Moreover, Iron IQ
argues the Court did not only rely upon this allegedly abandoned allegation,
but rather, the Court compared elements of promissory estoppel to the facts
asserted by Iron IQ in allowing amendment of this counterclaim. (Id. at 1–2).
The Court agrees with Iron IQ. Although Iron IQ does not explicitly re-
state the Allegation in their Amended Counterclaims and supplemental
interrogatory responses, the promissory estoppel claim is not futile as alleged.
In the Court’s Memorandum and Recommendation (ECF No. 93), the Court
discusses the Allegation with respect to Weatherford’s argument “that the
stipulated preliminary injunction contradicts Iron IQ’s promissory estoppel
claim because the stipulated preliminary injunction ‘expressly confirms Iron
IQ’s admission that it is not prevented from lawfully performing CygNet®
integrator services.’” (Id. at 34 (quoting ECF No. 85 at 19) (emphasis in
original)). The Court found “[t]he fact that Weatherford does not dispute that
Iron IQ is an integrator with actual customers along with Iron IQ’s allegation
that Weatherford notified prospective customers that Iron IQ can no longer
5
perform integration services is evidence to base its promissory estoppel claim
on.” (Id. at 35 (citing ECF No. 84-2 at ¶ 180)). The Court pointed to this
allegation showing Weatherford’s argument that the stipulated preliminary
injunction did not contradict Iron IQ’s promissory estoppel claim. (See id. at
34–35). However, immediately following this discussion, the Court found Iron
IQ sufficiently alleged facts that support a promissory estoppel claim without
citing to the Allegation:
Here, Iron IQ alleges “Weatherford, through communications
and/or conduct, made a promise to Iron-IQ that it would be able to
perform integrator services with [Weatherford’s On-Site] training”
(promise); “Iron-IQ’s reliance on Weatherford’s promise was
foreseeable as Weatherford controlled the SCADA integrator
market, controlled who it would allow to serve as outside
integrators for CygNet, charged third parties a fee to provide
training on CygNet integration services, and allowed other outside
integrators to perform integrator services” (foreseeability of
reliance); and “Iron-IQ relied on Weatherford’s promise by
expending significant costs and resources to obtain training from
Weatherford on the CygNet platform, promoting and marketing its
integration services to customers, and developing an integration
business that involved integration of CygNet” (substantial
detrimental reliance). (ECF No. 84-2 at ¶¶ 193–96). Iron IQ has
pled a facially plausible claim for relief because it is “not required
to plead each and every element of the claim in specific factual
detail.” Team Healthcare/Diagnostic Corp. v. Blue Cross & Blue
Shield of Tex., No. 3:10-cv-1441-BH, 2012 WL 1617087, *6 (N.D.
Tex. May 7, 2012).
(Id. at 36–37). As such, Iron IQ’s failure to re-assert the Allegation is not
detrimental to its promissory estoppel claim at this juncture of litigation.
6
Next, the Court must determine whether Iron IQ’s promissory estoppel
counterclaim should be reconsidered based on its interrogatory answer where
Iron IQ lists prospective business relationships it “was barred from pursuing
due to Weatherford’s pre-suit demands, lawsuit, and [the stipulated
preliminary] injunction.” (ECF No. 110-1 at 5). Weatherford argues Iron IQ
cannot base its promissory estoppel claim on pre-suit demands, lawsuit, or
stipulated preliminary injunction because: (1) Texas law prohibits it and (2)
the stipulated preliminary injunction is an express contract. (ECF No. 110 at
6).
First, Weatherford argues the “new basis” for Iron IQ’s promissory
estoppel claim fails because Texas law prohibits it. (ECF No. 110 at 6).
Weatherford asserts “Texas law allows absolute privilege or immunity for a
communication that is related to the litigation.” (Id.). However, Weatherford
fails to cite a case where this privilege or immunity specifically applies as to a
promissory estoppel claim. See Intel Corp. v. Intel-Logistics, Inc., No. 05-cv-
2255, 2006 WL 1517510, at *2 (S.D. Tex. May 30, 2006) (“The statements in
the complaint and subpoenas are covered by the litigation privilege under
Texas law and cannot form the basis of a claim for tortious interference or
business disparagement.”); James v. Brown, 637 S.W.2d 914, 916 (Tex. 1982)
(“Communications in the due course of a judicial proceeding will not serve as
the basis of a civil action for libel or slander, regardless of the negligence or
7
malice with which they are made.”); Reagan v. Guardian Life Ins. Co., 140 Tex.
105, 111, 166 S.W.2d 909, 912 (1942) (“Any communication, oral or written,
uttered or published in the due course of a judicial proceeding is absolutely
privileged and cannot constitute the basis of a civil action in damages for
slander or libel.”).
Although the Court is aware that the privilege or immunity for
communications related to litigation is not limited to libel and slander cases,
Weatherford has failed to provide case law showing that the privilege or
immunity applies outside of tort claims. “Promissory estoppel is not a tort; it
is an equitable doctrine.” United States v. Ins. Co. of the State of Pa., No. 5:15-
cv-1744, 2017 WL 1458203, at *2 n.4 (W.D. La. Apr. 24, 2017) (citing Eagle
Metal Prod., LLC v. Keymark Enters., LLC, 651 F.Supp.2d 577, 592 (N.D. Tex.
2009) (“The promissory estoppel claim is of a different order from the tort
claims. Promissory estoppel is a quasi-contract theory. . . . This cause of action
applies when a contract does not exist, but equity compels enforcement of the
promise.”)). As such, to the extent Weatherford argues the absolute privilege
or immunity for a communication that is related to the litigation applies to
claims other than libel and slander, the cases it provides refer to other tortious
acts rather than equitable claims. See Landry’s, Inc. v. Animal Legal Def.
Fund, 631 S.W.3d 40, 46 (Tex. 2021) (“Although commonly applied in
defamation cases, the privilege prohibits any tort litigation based on the
8
content of the communication at issue.” (quotations omitted)); Laub v. Pesikoff,
979 S.W.2d 686, 689 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (“Any
communication, even perjured testimony, made in the course of a judicial
proceeding, cannot serve as the basis for a suit in tort.”). As such, this
argument is unavailing.
Second, Weatherford argues, the “agreed and stipulated preliminary
injunction . . . cannot serve as the basis for the promissory estoppel claim
because it is an agreed stipulation and order [and a] stipulation is an express
contract.” (ECF No. 110 at 6). Although the Court agrees that a stipulation is
a valid contract under Texas law, the issue here concerns a stipulated
preliminary injunction rather than a stipulation.
“In Texas, ‘[a] stipulation is a contract between the parties to a
proceeding.’” Yado v. Palomar Specialty Ins. Co., No. 7:17-cv-00083, 2017 WL
7735159, at *3 (S.D. Tex. May 11, 2017) (quoting Kinner Transp. Enters., Inc.
v. Texas, 614 S.W.2d 188, 189 (Tex. App.—Eastland 1981, no writ)). “A
stipulation has been held to be such an admission as to constitute a waiver of
proof as to the matters stipulated.” Kinner Transp. Enters., Inc., 614 S.W.2d
at 189. ‘“A court will not construe a stipulation so as to effect an admission of
something intended to be controverted or so as to waive a right not plainly
agreed to be relinquished.’” Id. at 190 (quoting U.S. Fire Ins. Co. v. Carter, 468
S.W.2d 151, 154 (Tex. App.—Dallas 1971), writ ref’d n.r.e., 473 S.W.2d 2 (Tex.
9
1971)). “The purpose of a preliminary injunction is merely to preserve the
relative positions of the parties until a trial on the merits can be held.” Univ.
of Tex. v. Camenisch, 451 U.S. 390, 395 (1981).
While the Parties agreed to the preliminary injunction in the instant
case, it does not amount to a stipulation or admission of proof of certain
matters. The two are not synonymous. Further, the movant, Weatherford, has
failed to cite a case standing for the notion that a stipulated preliminary
injunction is a valid contract. As such, the Court finds this argument
unavailing.
Moreover, in the alternative, “Weatherford requests the Court clarify its
Order making it clear that Iron-IQ’s counterclaims cannot be based on
Weatherford’s pre-suit demands, [this] lawsuit, and [the stipulated and
agreed] injunction.” (ECF No. 110 at 3 (quotations omitted)). Because the
Court does not find any of Weatherford’s arguments adequately supported by
case law or relevant authority, the Court will not issue a clarification.
IV. Conclusion
Based on the foregoing, the Court RECOMMENDS Weatherford’s
Motion for Reconsideration or Clarification of Order Allowing Promissory
Estoppel Counterclaim (ECF No. 110) be DENIED.
The Clerk shall send copies of this Memorandum and Recommendation
to the respective parties who have fourteen days from the receipt thereof to file
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written objections thereto pursuant to Federal Rule of Civil Procedure 72(b)
and General Order 2002-13. Failure to file written objections within the time
period mentioned shall bar an aggrieved party from attacking the factual
findings and legal conclusions on appeal.
SIGNED in Houston, Texas on October 29, 2024.
Net Bue
Richard W. Bennett
United States Magistrate Judge
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