Electro-Mechanical Recertifiers, L.L.C. v. Samsung E&C America, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

ELECTRO-MECHANICAL RECERTIFIERS,

L.L.C.

CIVIL ACTION

VERSUS

24-652-SDD-EWD

SAMSUNG E&C AMERICA, INC.

RULING

This matter is before the Court on the Motion to Dismiss, or alternatively to Transfer

Venue,1 filed by Defendant Samsung E&C America, Inc. (“SECAI”). Plaintiff Electro-

Mechanical Recertifiers, L.L.C. (“EMR”) opposes the Motion.2 SECAI filed a Reply,3 and

EMR filed a Surreply.4 For the reasons that follow, the Motion will be granted in part and

denied in part.

I. BACKGROUND

This case arises from a contractual relationship between EMR and SECAI. At the

relevant time, SECAI was the general contractor on a construction project located in

Taylor, Texas (the “Project”).5 In January of 2024, some of SECAI’s electrical gear at the

Project was damaged by rainwater.6 SECAI sought the services of EMR to assess the

damaged gear and prepare a plan and proposal for cleaning and restoration.7

1 Rec. Doc. 9.

2 Rec. Doc. 17.

3 Rec. Doc. 18.

4 Rec. Doc. 21.

5 Rec. Doc. 1, ¶ 4.

6 Id. at ¶ 5.

7 Id. at ¶ 6.

On February 5, 2024, SECAI and EMR entered into a Technical Emergency

Response Agreement (the “TERA”). The opening paragraph of the TERA reads, in part,

as follows:

EMR agrees to perform technical emergency consulting and

technical restoration services for property and equipment

damage restoration, repair, replacement and recertification

services as more specifically set forth in Work Order(s) (the

“Work”) for Client [SECAI]…8

EMR alleges that it agreed to perform “consulting services, including an

assessment of the impacted Gear and the preparation of a plan and proposal for cleaning

and restoration of the Gear (“Consulting Work”),” in exchange for payment on a time and

expense basis not to exceed $24,800.9 EMR performed the Consulting Work and invoiced

SECAI $24,108.52.10

Shortly after the completion of the Consulting Work, EMR alleges it “entered into

a contractual agreement or modification” with SECAI whereby EMR would clean and

restore the damaged electrical gear (the “Restoration Work”) in exchange for a projected

total cost of $4,300,000.11 EMR alleges it performed the Restoration Work “diligently” from

February 23, 2024, until March 8, 2024, when “SECAI represented that a stop work order

was forthcoming in light of weather and flooding.”12 On March 11, 2024,13 SECAI sent

EMR a letter (the “March 11 Letter”) stating that “SECAI will not be requiring any services

of EMR for the [Project] including those related to the deep cleaning of electrical gear.”14

8 Rec. Doc. 9-4, p. 1.

9 Rec. Doc. 1, ¶¶ 6–7.

10 Id. at ¶ 8.

11 Id. at ¶ 9.

12 Id. at ¶ 10.

13 According to EMR, the letter was incorrectly dated March 7, 2024. See Rec. Doc. 17, p. 5.

14 Rec. Doc. 1, ¶ 12. EMR alleges the March 11 letter did not contain any reference to weather as the

reason for the order to discontinue work. Id. at ¶ 13.

The March 11 Letter further provided that SECAI “has not and will not authorize or

otherwise approve EMR to render any services . . . other than the consulting services

rendered from Feb 7-11, 2024.”15 EMR demobilized from the Project following receipt of

the March 11 Letter.16

EMR alleges that it completed approximately 38.3% of the Restoration Work prior

to the March 11 Letter.17 EMR asserts that it is entitled to payment in proportion to the

amount of work it completed.18

EMR also alleges:

During the time that EMR was on the Project site and

continuing thereafter in the Baton Rouge, La. area, Plaintiff’s

computers and cell phones were hacked and electronically

stored information, private satellite video communications,

and other communications personal and proprietary to EMR

and its employees, was accessed, intercepted, disclosed,

copied and damaged without permission, consent or

authorization.19

EMR states that, “[u]pon information and belief,” SECAI committed these actions

intentionally.20

Based on the foregoing facts, EMR’s Complaint enumerates the following seven

claims:

• Count I: Breach of Contract (Non-Payment on Work Performed);21

• Count II: Breach of Contract (Wrongful Termination);22

15 Id. at ¶ 13.

16 Id. at ¶ 14.

17 Id. at ¶ 16.

18 Id. EMR alleges that the only payments SECAI has made for the Consulting and Restoration Work are

$765,924.95 paid on May 38, 2024, and $516,743.38 paid on June 26, 2024. Id. at ¶ 19.

19 Id. at ¶ 21.

20 Id.

21 Id. at ¶¶ 23–25.

22 Id. at ¶¶ 26–30.

• Count III: Quantum Meruit;23

• Count IV: Misappropriation of Trade Secrets (Texas Law);24

• Count V: Louisiana Uniform Trade Secrets Act;25

• Count VI: Louisiana Unfair Trade Practices Act;26

• Count VII: Civil Action Under the Computer Fraud and Abuse Act, Stored

Communications Act, and Wire and Electronic Communications Interception

and Interception of Oral Communications Law.27

SECAI moves to dismiss for lack of personal jurisdiction, failure to state a claim,

and improper venue, or alternatively to transfer venue.28

II. LAW AND ANALYSIS

A. Motion to Dismiss for Improper Venue, or to Transfer Venue

1. Rule 12(b)(3)

SECAI moves to dismiss for improper venue pursuant to Federal Rule of Civil

Procedure (“Rule”) 12(b)(3). In considering a Rule 12(b)(3) motion, the court is not limited

to considering the facts pleaded in the complaint.29 Further, a plaintiff “need only make a

prima facie case to establish venue if the court does not hold an evidentiary hearing.”30

The court “must accept as true all allegations in the complaint and resolve all conflicts in

favor of plaintiff.”31

23 Id. at ¶¶ 31–33.

24 Id. at ¶¶ 34–38.

25 Id. at ¶¶ 39–43.

26 Id. at ¶¶ 44–50.

27 Id. at ¶¶ 51–54.

28 Rec. Doc. 9.

29 Ambraco, Inc. v. Bossclip B.V., 570 F.3d 233, 238 (5th Cir. 2009).

30 Martin v. Impact Health, No. CV 23-2497, 2023 WL 7498175, at *3 (E.D. La. Nov. 13, 2023) (citing

Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008)).

31 Sinners and Saints, L.L.C. v. Noire Blanc Films, L.L.C., 937 F. Supp. 2d 835, 845 (E.D. La. 2013) (quoting

Braspetro Oil Servs. Co. v. Modec (USA), Inc., 240 Fed. App'x 612, 615 (5th Cir. 2007)).

Parties may limit future litigation to a particular venue through the use of a forum

selection clause. The TERA contains a forum selection clause which reads as follows:

Disputes. All disputes shall be resolved in a court of

competent jurisdiction in East Baton Rouge Parish, Baton

Rouge, Louisiana.32

Forum selection clauses “are prima facie valid and should be enforced unless

enforcement is shown by the resisting party to be ‘unreasonable’ under the

circumstances.”33 This may be done through demonstration that the clause “results from

fraud or overreaching, that it violates a strong public policy, or that enforcement of the

clause deprives the plaintiff of his day in court.”34 “The party resisting enforcement on

these grounds bears a ‘heavy burden of proof.’”35

SECAI does not argue the forum selection clause is unenforceable. Rather, SECAI

acknowledges the forum selection clause but argues it does not apply to this dispute.36

Specifically, SECAI asserts that the TERA – the contract containing the forum selection

clause – only applies to Consulting Work. Because EMR’s lawsuit seeks payment for the

Restoration Work rather than the Consulting Work, SECAI concludes the forum selection

clause does not apply.37 In opposition, EMR argues the TERA encompasses the

Restoration Work.38

In support of its position that the TERA covers the Restoration Work, EMR

emphasizes the following language of the TERA: “EMR agrees to perform technical

32 Rec. Doc. 9-4, p. 2.

33 M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972) (citation omitted).

34 Mitsui & Co. v. Mira M/V, 111 F.3d 33, 35 (5th Cir. 1997) (citing M/S Bremen, 407 U.S. at 12).

35 Haynsworth v. The Corp., 121 F.3d 956, 963 (5th Cir. 1997) (citing M/S Bremen, 407 U.S. at 17).

36 Rec. Doc. 9-3, pp. 10–11.

37 SECAI states that it paid for the Consulting Work in full (see id. at p. 3). EMR does not argue otherwise

in its Opposition.

38 Rec. Doc. 17, pp. 7–9.

emergency consulting and technical restoration services for property and equipment

damage restoration, repair, replacement and recertification services as more specifically

set forth in Work Order(s)…”39 EMR explains that with the signing of the TERA on

February 5, 2024, it submitted a work order detailing the scope of the Consulting Work

and a price of $24,800, which SECAI accepted.40 After completing the Consulting Work,

on February 10, 2024, EMR states that it sent SECAI a second “work order package,” this

time for the Restoration Work, specifying a total cost of $4,300,000.41 In response, two

days later, SECAI sent EMR correspondence entitled “LETTER OF INTENT / NOTICE

TO PROCEED” (the “Notice to Proceed”), which stated in part:

This LETTER OF INTENT shall serve as notice of our intent

to [EMR] to proceed with Deep cleaning of electrical gear, on

February 12, 2024. We will put our best efforts to issue an

official purchase order as soon as possible.

The contract amount that we agreed on this project is as

shown below:

…

Contract Amount: TBD ($4,300,000 + $24,800)

…

We look forward to your successful implementation of the

works and would like to welcome you to our project.42

According to EMR, SECAI enclosed two documents with the Notice to Proceed: a

copy of the executed TERA, and a copy of EMR’s proposal package for the Restoration

Work.43 EMR contends that the Notice to Proceed was a “Work Order” as contemplated

by the TERA such that the Restoration Work is covered by that agreement and its forum

39 Rec. Doc. 9-4, p. 1 (emphasis added).

40 Rec. Doc. 17, p. 2 (citing Rec. Doc. 17-1, pp. 2–3, ¶¶ 4–5).

41 Id. at p. 3 (citing Rec. Doc. 17-1, p. 3, ¶ 7).

42 Rec. Doc. 17-1, p. 51.

43 Id. at pp. 2–3, ¶ 9.

selection clause.44 Although SECAI stated in its Notice to Proceed that it would make

“best efforts to issue an official purchase order as soon as possible,”45 EMR represents

that it had no expectation that any such possible forthcoming purchase order would

materially differ from the Notice to Proceed, the TERA, and the corresponding accepted

project proposal for the Restoration Work.46 EMR further explains that, “[t]hroughout

EMR’s performance of the Restoration Phase Work, Defendant closely oversaw and

provided input/direction on EMR’s work.”47

Continuing, EMR avers:

On February 22, 2024, after the parties had executed the

TERA, Defendant had issued its Notice to Proceed, and EMR

had mobilized to the project site at Defendant’s direction,

Defendant unexpectedly sent EMR a proposed “Master

Services Agreement for Construction Services” (“MSA”),

which, like the TERA, called for work to be performed under

subsequent work orders and contained general terms and

conditions that were to apply to such work.48

EMR explains that it “entertained the possibility of negotiating and executing the MSA” in

order to avoid unnecessary disputes, but that it “never disclaimed or otherwise abrogated

the existing and fully executed TERA.”49 According to EMR, it made clear to SECAI that

as long as the MSA remained unexecuted, EMR was performing the Restoration Work

pursuant to the TERA and the Notice to Proceed.50 The MSA was never finalized.

In support of its argument that the TERA only covers the Consulting Work, SECAI

first points to the following provision of the TERA:

Client acknowledges that the EMR inspection of the Project

44 Rec. Doc. 17, pp. 8–9.

45 Rec. Doc. 17-1, p. 51.

46 Rec. Doc. 17, p. 4.

47 Id. (citing Rec. Doc. 17-1, p. 3, ¶ 10).

48 Id.

49 Id. at p. 5 (citing Rec. Doc. 17-1, p. 5, ¶ 12).

50 Id.

site was limited to an inspection of the damage existing as of

the inspection date. EMR did not and will not conduct any

tests or inspections of the Project site not specifically identified

in this Agreement. Any additions to the Work identified during

any written damage communication, site walk, and/or pre-bid

inspection but not specifically included herein or in an

approved Change Order are not included in the scope of the

Work.51

SECAI concludes the TERA and its forum selection clause do not apply to the Restoration

Work because “[t]here was no Change Order and the TERA was never amended to add

Restoration Work.”52

In the Court’s view, the language providing that “EMR’s inspection of the Project

site was limited to an inspection of the damage existing as of the inspection date” does

not clearly limit the overall scope of the work under the TERA. By its terms, the provision

limits “EMR’s inspection,” not “the Work.” Moreover, the TERA expressly defines “the

Work” as including not only consulting services, but also “technical restoration services

for property and equipment damage restoration, repair, replacement and recertification

services as more specifically set forth in Work Order(s)…”53 The TERA further provides

that all of its provisions “are incorporated by reference into any Work Order(s)

subsequently executed by or performed for Client such that all the terms and conditions

stated above shall apply to any project upon which EMR performs work for Client as

directed by a Work Order.”54 At this stage, the Court finds that the TERA does not

expressly limit EMR’s services to consulting; rather, it contemplates the possibility of

multiple Work Orders which may involve various services, namely including

51 Rec. Doc. 9-4, p. 1.

52 Rec. Doc. 9-3, p. 11.

53 Rec. Doc. 9-4, p. 1 (emphasis added).

54 Id.

“restoration.”55

SECAI additionally relies on the following language of the TERA:

In the event that the parties are unable to execute a written

Work Order, and upon receipt of oral authorization from a

Client Representative, EMR shall commence the Work as

soon as reasonably practicable, and the Client shall be bound

to pay for said Work in accordance with the Contract

Documents. … Within 72 hours of commencement of the

Work, the parties shall execute a written Work Order. If the

parties cannot agree upon the terms of a Work Order within

72 hours of the commencement of Work, EMR shall stop Work

and be entitled to payment for any partial Work performed in

compliance with the Contract Documents.56

SECAI argues the Restoration Work is not encompassed by the TERA because it never

issued a written Work Order for such services.57

The Court does not find support for SECAI’s position in the contractual language

quoted above. First, the Court is not inclined to find at this stage that the Notice to Proceed

was not a “Work Order” in the context of the TERA. Further, even if the Notice to Proceed

was not a “Work Order,” the Court does not read the quoted provision to exclude

restoration services from the scope of the TERA. Rather, even without a written Work

Order, the TERA states that “EMR shall commence the Work as soon as reasonably

practicable.” The only specified consequence for the absence of a Work Order is that

EMR is directed to stop work within 72 hours, and is entitled to partial payment for any

work performed pursuant to “oral authorization.”

SECAI also relies on the circumstances surrounding the unexecuted MSA. SECAI

argues EMR was aware that the TERA did not govern the Restoration Work because an

55 Id.

56 Id.

57 Rec. Doc. 18, p. 2.

EMR representative stated in an email that “[m]y partner and I need to sign this contract

[the MSA] today.”58 SECAI also asserts that EMR made revisions to the proposed draft

MSA.59 However, in dispute, EMR asserts that it “re-iterated to Defendant on numerous

occasions that, as long as the MSA remained in negotiation and unexecuted, EMR was

performing the Restoration Phase Work under the executed TERA and Defendant’s

Notice to Proceed.”60 The Court finds there is a conflict as to the facts with respect to this

argument which should be resolved in EMR’s favor at this stage of the litigation.

Finally, SECAI argues the forum selection clause is permissive rather than

mandatory. “A forum selection clause is mandatory if it ‘affirmatively requires that litigation

arising from the contract be carried out in a given forum.’”61 In PCL Civ. Constructors, Inc.

v. Arch Ins. Co., the Fifth Circuit found a forum selection clause providing that “any

litigation arising under or related to the contract or the bidding or award thereof shall be

instituted in the 19th Judicial District Court in and for the Parish of East Baton Rouge,

State of Louisiana,” was mandatory.62 Similarly, the TERA provides that “[a]ll disputes

shall be resolved in a court of competent jurisdiction in East Baton Rouge Parish, Baton

Rouge, Louisiana.”63 As in the PCL case, the Court finds that this language creates a

mandatory forum selection clause.64

58 Id. (citing Rec. Doc. 9-8, p. 1).

59 Id.

60 Rec. Doc. 17, p. 5 (citing Rec. Doc. 17-1, p. 5, ¶ 12).

61 PCL Civ. Constructors, Inc. v. Arch Ins. Co., 979 F.3d 1070, 1073 (5th Cir. 2020) (quoting Weber v. PACT

XPP Techs., AG, 811 F.3d 758, 766 (5th Cir. 2016)).

62 Id. (emphasis in original).

63 Rec. Doc. 9-4, p. 2 (emphasis added).

64 See also All. Health Grp., LLC v. Bridging Health Options, LLC, 553 F.3d 397, 398–99 (5th Cir. 2008)

(provision stating that “exclusive venue for any litigation related hereto shall occur in Harrison County,

Mississippi,” was mandatory); Kevlin Servs., Inc. v. Lexington State Bank, 46 F.3d 13, 14-15 (5th Cir. 1995)

(finding mandatory a forum selection clause which stated: “The legal venue of this contract and any disputes

arising from it shall be settled in Dallas County, Texas.”); All. Consulting Grp., LLC v. SMICO Mfg. Co., No.

Further, although neither party raised an issue in this respect, the Court notes that

the Fifth Circuit has expressly held that where a forum selection clause mandates venue

“in” a certain county (or in this case, a parish), venue is proper in either federal or state

court as long as the courthouse is physically located within the named location.65 Because

the Middle District of Louisiana courthouse in located “in East Baton Rouge Parish,”

venue is proper.

Viewing the conflicts in the facts in EMR’s favor,66 the Court finds that EMR has

made a sufficient showing of proper venue in this District pursuant to the mandatory forum

selection clause of the TERA. In response to a proposal package from EMR detailing the

Restoration Work, SECAI issued a written Notice to Proceed directing EMR to proceed

with the “[d]eep cleaning of electrical gear,”67 and transmitted to EMR along with the

Notice to Proceed the TERA and EMR’s proposal. Further, the terms of the TERA do not

explicitly limit “the Work” to consulting services. Under these circumstances, the Court

finds that EMR has made a sufficient showing that the Restoration Work was covered by

the TERA which contains the forum selection clause.

EMR has asserted multiple claims, and venue must be proper for each of them.68

The forum selection clause clearly applies to EMR’s claims for breach of contract (Counts

I and II) and quantum meruit (Count III) because those claims directly arise from the

contractual relationship of the parties.

1:13CV274-HSO-RHW, 2013 WL 5949552, at *2 (S.D. Miss. Nov. 6, 2013) (parties’ agreement “to have

[all] disagreements heard in Oklahoma courts unless [otherwise] agreed to” constituted mandatory forum

selection clause).

65 All. Health Grp., LLC, 553 F.3d at 399–400.

66 See Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241–42 (5th Cir. 2008);

Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000).

67 Rec. Doc. 17-1, p. 51.

68 See Guajardo v. State Bar of Texas, 803 F. App'x 750, 755 (5th Cir. 2020); 14D Charles Alan Wright &

Arthur R. Miller Federal Practice and Procedure § 3808 (4th ed. 2019).

EMR’s remaining claims involve SECAI’s alleged computer hacking activities and

misappropriation of EMR’s trade secrets (Counts IV through VII). Courts in this Circuit

have explained that “[t]he scope of a forum selection clause is not limited solely to claims

for breach of the contract that contains it. Whether a forum selection clause encompasses

other claims depends principally on how broadly the clauses are worded.”69 In cases

where a forum selection clause states that it embraces claims “relating to” the contract,

courts have found that the clause extends to tort claims “if those claims ultimately depend

on the existence of a contractual relationship between the parties, if resolving those

claims relates to the interpretation of the contract, or if those tort claims involve the same

operative facts as the parallel claim for breach of contract.”70 Courts hold that “[s]uch

clauses are broad, ‘encompassing all claims that have some possible relationship with

the contract, including claims that may only “relate to” ... the contract.’”71

SECAI does not put forth any argument addressing whether the forum selection

clause, assuming its applicability to the lawsuit, encompasses EMR’s claims based on

hacking and theft of trade secrets. The phrasing of the forum selection clause in this case

is extremely broad, applying to “all disputes.”72 EMR alleges that the hacking and

misappropriation committed by SECAI occurred “[d]uring the time that EMR was on the

Project site and continuing thereafter[.]”73 EMR also alleges that it disclosed proprietary

information to SECAI “under the premise that [SECAI] would be paying EMR to perform

the Restoration Work in total[.]”74 Analysis of whether EMR was reasonable in disclosing

69 MaxEn Cap., LLC v. Sutherland, No. H-08-3590, 2009 WL 936895, at *6 (S.D. Tex. Apr. 3, 2009)

(citations omitted).

70 Id. (citation omitted).

71 Id. (quoting Phillips v. Audio Active Ltd., 494 F.3d 378, 389 (2d Cir.2007)).

72 Rec. Doc. 9-4, p. 2.

73 Rec. Doc. 1, ¶ 21.

74 Id. at ¶ 35.

its trade secrets to SECAI may well depend on an interpretation of the TERA, and the

claims seem to involve overlapping operative facts with the contractual claims. While a

close question, in the absence of argument by SECAI, the Court finds sufficient overlap

of the operative facts exists among all of EMR’s claims such that the forum selection

clause applies to all counts enumerated in the Complaint. The Motion to Dismiss for

improper venue will be denied.

2. 28 U.S.C. § 1404(a)

SECAI alternatively moves to transfer this action to the Western District of Texas

pursuant to 28 U.S.C. § 1404(a), which provides that, “[f]or the convenience of parties

and witnesses, in the interest of justice, a district court may transfer any civil action to any

other district or division where it might have been brought.” A § 1404(a) analysis typically

involves consideration of both private and public interest factors.75 However, where a

forum selection clause is involved, the analysis changes. In the context of a § 1404(a)

motion, the Supreme Court stated in Atlantic Marine Const. Co. v. U.S. Dist. Court for

Western Dist. of Texas that “a valid forum-selection clause [should be] given controlling

weight in all but the most exceptional cases.”76 The party resisting application of the forum

selection clause is given no weight as to their preferred forum, and courts “should not

consider arguments about the parties’ private interests.”77 Therefore, the Court will only

consider the public interest factors, which are: “(1) the administrative difficulties flowing

from court congestion; (2) the local interest in having localized interests decided at home;

75 In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004).

76 Atlantic Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 63 (2013) (quoting Stewart

Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988)).

77 Id. at 63–64. See also Stellar Restoration Servs., LLC v. James Christopher Courtney, 533 F. Supp. 3d

394, 427 (E.D. Tex. 2021).

(3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance

of unnecessary problems of conflict of laws [or in] the application of foreign law.”78

Because of the deference given to forum selection clauses, the public interest factors will

“rarely” defeat a forum selection clause, and the clause “should control except in unusual

cases.”79

With respect to the first public interest factor, SECAI cites statistics showing that

the average time from filing to trial for civil cases is about 4.4 months longer in this District

than in the Western District of Texas.80 However, SECAI concedes that the factor is

“relatively neutral.”81 The second factor relates to the principle that “[j]ury duty is a burden

that ought not to be imposed upon the people of a community which has no relation to

the litigation.”82 Overall, the Court finds this factor leans in favor of transfer because most

of the events allegedly occurred in Texas. With respect to the third factor, SECAI

acknowledges the TERA contains a choice of law provision providing that “[a]ll

interpretations are to be made in accordance with Louisiana law.”83 As discussed above,

SECAI’s argument that the TERA does not apply to this case is rejected at this stage.

SECAI submits no further argument that Louisiana law should not apply to this diversity

action. Further, to the extent Texas law may apply, courts within this District have

sufficient familiarity with Texas law. Accordingly, this factor does not heavily favor

transfer. Finally, SECAI concedes the fourth public interest factor is not a concern in this

78 In re Volkswagen AG, 371 F.3d at 203.

79 Atlantic Marine, 571 U.S. at 64.

80 Rec. Doc. 9-3, p. 24 (citing https://www.uscourts.gov/statistics/table/na/federal-court-management-

statistics/2024/06/30-3).

81 Id.

82 In re Volkswagen AG, 371 F.3d at 206.

83 Rec. Doc. 9-4, p. 3.

case and is therefore neutral.84

On balance, the Court finds that an application of the public interest factors does

not reveal extraordinary circumstances which would warrant deviation from the forum

selection clause. Accordingly, SECAI’s motion to transfer the case to the Western District

of Texas will be denied.

B. Motion to Dismiss for Lack of Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) allows defendants to challenge personal

jurisdiction. However, a party may waive its right to assert a lack of personal jurisdiction

by consenting to an enforceable forum selection clause.85 As the Court noted above in

analyzing venue, EMR has made a sufficient showing that the claims in this case are

governed by an enforceable forum selection clause. Accordingly, SECAI has waived its

objection to personal jurisdiction by agreeing in advance to resolve disputes in this

locale.86

C. Motion to Dismiss for Failure to State a Claim

1. Legal Standard

84 Rec. Doc. 9-3, p. 25.

85 See, e.g., New South Equipment Mats, LLC v. Keener, 989 F.Supp.2d 522, 526 (S.D. Miss Nov. 5, 2013)

(citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.14 (1985)); Receivables Exch., LLC v.

Advanced Tech. Servs., Inc., No. CIV.A. 14-668, 2014 WL 5782849, at *2 (E.D. La. Nov. 6, 2014) (citing

Kevlin Servs., Inc. v. Lexington State Bank, 46 F.3d 13, 15 (5th Cir. 1995) (“a valid forum selection clause

in a contract confers personal jurisdiction over the parties to the contract in the chosen forum.”). See also

Weber Aircraft, L.L.C. v. Krishnamurthy, No. 4:12CV666, 2013 WL 1898280, at *4 (E.D. Tex. Apr. 12, 2013),

report and recommendation adopted, No. 4:12CV666, 2013 WL 1898267 (E.D. Tex. May 7, 2013) (“When

a party consents to jurisdiction in a forum, the trial court's exercise of personal jurisdiction over it does not

violate due process even in the absence of contacts with [the forum state].”).

86 Where forum selection clauses “have been obtained through ‘freely negotiated’ agreements and are not

‘unreasonable and unjust,’ their enforcement does not offend due process.” Burger King, 471 U.S. at 473

(quoting M/S Bremen, 407 U.S. at 15). SECAI makes no argument that its agreement to the forum selection

clause was a product of any fraud or coercion, or that enforcement of the forum selection clause would

violate due process. The Court does not find that enforcement of the clause offends due process.

When deciding a Rule 12(b)(6) motion to dismiss, “[t]he ‘court accepts all well-

pleaded facts as true, viewing them in the light most favorable to the plaintiff.’”87 The Court

may consider “the complaint, its proper attachments, documents incorporated into the

complaint by reference, and matters of which a court may take judicial notice.”88 “To

survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state

a claim to relief that is plausible on its face.’”89

In Bell Atlantic Corp. v. Twombly, the United States Supreme Court set forth the

basic criteria necessary for a complaint to survive a Rule 12(b)(6) motion to dismiss:

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed

factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief

requires more than labels and conclusions, and a formulaic recitation of the elements of

a cause of action will not do.”90 A complaint is also insufficient if it merely “tenders ‘naked

assertion[s]’ devoid of ‘further factual enhancement.’”91 However, “[a] claim has facial

plausibility when the plaintiff pleads the factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.”92 In order

to satisfy the plausibility standard, the plaintiff must show “more than a sheer possibility

that the defendant has acted unlawfully.”93 “Furthermore, while the court must accept well-

pleaded facts as true, it will not ‘strain to find inferences favorable to the plaintiff.’”94 On a

87 In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin v. Eby Constr.

Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).

88 Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (internal citations omitted).

89 In re Katrina Canal Breaches Litigation, 495 F.3d at 205 (quoting Bell Atl. Corp. v. Twombly, 550 U.S.

544 (2007)).

90 Twombly, 550 U.S. at 555 (2007) (internal citations and brackets omitted).

91 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted).

92 Id.

93 Id.

94 Taha v. William Marsh Rice Univ., 2012 WL 1576099, at *2 (S.D. Tex. 2012) (quoting Southland Sec.

Corp. v. Inspire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir. 2004)).

motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as

a factual allegation.”95

2. Discussion

SECAI seeks dismissal of Counts IV–VII of the Complaint. The Court will address

the claims in turn.

a. Count IV: Misappropriation of Trade Secrets under Texas Law

In Count IV, EMR lodges a claim for misappropriation of trade secrets under Texas

law. EMR alleges that, “under the premise that [SECAI] would be paying EMR to perform

the Restoration Work in total, SECAI requested that EMR provide certain trade secrets

relating to the Restoration Work, including but not limited to a demonstration of EMR’s

work methods and a list of products and chemicals used to restore electrical gear and

related information concerning means and methods for various levels of cleaning and

restoration (“Trade Secrets”).”96 Pursuant to SECAI’s request, EMR “disclosed some but

not all of the Trade Secrets to SECAI in confidence.”97 EMR alleges that “SECAI has

misappropriated the Trade Secrets, including those not disclosed by EMR but obtained

by SECAI through illicit means including the hacking of Plaintiff’s computers and cell

phones, and utilized this information to either self-perform the remaining Restoration

Work or have this work performed by others.”98

Under Texas law, misappropriation of trade secrets is established by showing: “(1)

existence of a trade secret, (2) breach of a confidential relationship or improper discovery

of a trade secret, (3) use of the trade secret without the plaintiff's authorization, and (4)

95 Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

96 Rec. Doc. 1, ¶ 35.

97 Id. at ¶ 36.

98 Id. at ¶ 37.

resulting damages.”99

EMR alleges the trade secrets at issue include “a demonstration of EMR’s work

methods and a list of products and chemicals used to restore electrical gear and related

information concerning means and methods for various levels of cleaning and

restoration.”100 SECAI argues this is insufficient to allege the existence of a trade secret

because “[EMR] does not allege that it created or formulated the ‘products and chemicals

used to restore electrical gear,’” and “[EMR] fails to identify with any particularity its

supposedly secret ‘means and methods’ of cleaning and restoration and why those

methods are not generally known or readily accessible by others in the same industry.”101

As understood under Texas law, “[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.”102 Further, “to qualify

as a trade secret the information cannot be generally known by others in the same

business nor readily ascertainable by an independent investigation.”103 Texas courts

apply the following six factors in determine whether a trade secret exists:

(1) the extent to which the information is known outside of [the

claimant's] business; (2) the extent to which it is known by

employees and others involved in [the claimant's] business;

(3) the extent of the measures taken to guard the secrecy of

the information, (4) the value of the information to [the

claimant] and to his competitors; (5) the amount of effort or

money expended by [the claimant] in developing the

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

information could be properly acquired or duplicated by

99 Pension Advisory Grp., Ltd. v. Country Life Ins. Co., 771 F. Supp. 2d 680, 701 (S.D. Tex. 2011) (quoting

Calce v. Dorado Exploration, Inc., 309 S.W.3d 719, 737–38 (Tex.App.-Dallas 2010)).

100 Rec. Doc. 1, ¶ 35.

101 Rec. Doc. 9-3, p. 15.

102 Pension Advisory Grp., Ltd., 771 F. Supp. 2d at 701.

103 Zoecon Indus., a Div. of Zoecon Corp. v. Am. Stockman Tag Co., 713 F.2d 1174, 1179 (5th Cir. 1983).

others.104

The Court finds that EMR has not sufficiently alleged the existence of a trade

secret. The Complaint essentially leaves all six of the Texas law factors cited above

unaddressed. EMR has particularly failed to allege these materials were not generally

known or readily ascertainable, the value of the information, and measures taken to guard

the secrecy of the information. Furthermore, “[t]he owner of a trade secret will lose its

trade secret by disclosure unless the secret is revealed in some manner by which the

owner creates a duty and places that duty on the other party not to disclose further or use

the trade secret in violation of that duty.”105 Aside from alleging it disclosed its trade

secrets to SECAI “in confidence,”106 EMR fails to allege supporting facts giving rise to a

duty of confidentiality on the part of SECAI. Accordingly, the claim for misappropriation of

trade secrets under Texas law will be dismissed without prejudice.

b. Count V: Louisiana Uniform Trade Secrets Act

Based on the same allegations as Count IV, EMR brings an alternative claim under

the Louisiana Uniform Trade Secrets Act (LUTSA).107 To state a LUTSA claim, a plaintiff

must allege: “(a) the existence of a trade secret, (b) a misappropriation of the trade secret

by another, and (c) the actual loss caused by the misappropriation.”108 LUTSA defines

“trade secret” as follows:

“Trade secret” means information, including a formula,

pattern, compilation, program, device, method, technique, or

process, that:

104 EEMSO, Inc. v. Compex Techs., Inc., No. 305-CV-0897-P, 2006 WL 2583174, at *5 (N.D. Tex. Aug. 31,

2006) (citations omitted).

105 EEMSO, Inc., 2006 WL 2583174, at *6 (citations omitted).

106 Rec. Doc. 1, ¶ 36.

107 La. R.S. 51:1431 et seq.

108 Brand Servs., L.L.C. v. Irex Corp., 909 F.3d 151, 156 (5th Cir. 2018) (quoting Reingold v. Swiftships,

Inc., 126 F.3d 645, 648 (5th Cir. 1997) (citing La. R.S. 51:1431).

(a) derives independent economic value, actual or potential,

from not being generally known to and not being readily

ascertainable by proper means by other persons who can

obtain economic value from its disclosure or use, and

(b) is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy.109

Thus, to establish the existence of a trade secret, EMR “must allege that (1) it has taken

specific measures to protect information that has (2) independent economic value from

not being generally known or readily ascertainable.”110

In Bureau Veritas Commodities & Trade, Inc. v. Nanoo, the plaintiff alleged its trade

secrets included “laboratory technology” consisting of “equipment lists, laboratory

designs, and testing processes and procedures.”111 The Eastern District of Louisiana held

the allegations insufficient to establish the existence of a trade secret because the plaintiff

“provide[d] no basis for the Court to conclude that this information is distinct from generally

available knowledge, or information that any specialist in the [ ] industry would know.”112

Similarly here, the Complaint contains no allegations that EMR’s purported trade secrets

derive independent economic value from not being generally known or readily

ascertainable. Accordingly, further factual enhancement is needed, and Count V will be

dismissed without prejudice.

c. Count VI: Louisiana Unfair Trade Practices Act

109 La. R.S. 51:1431(4).

110 Brock Servs., LLC v. Rogillio, No. CV 18-867-JWD-EWD, 2019 WL 9096410, at *6 (M.D. La. June 17,

2019).

111 Bureau Veritas Commodities & Trade, Inc. v. Nanoo, No. CV 20-3374, 2021 WL 2142466, at *6 (E.D.

La. May 26, 2021).

112 Id. (citing Select Energy Servs., Inc. v. Mammoth Energy Servs., Inc., No. 19-28, 2019 WL 1434586, at

*5 (W.D. Okla. Mar. 29, 2019)).

“LUTPA prohibits ‘[u]nfair methods of competition and unfair or deceptive acts or

practices in the conduct of any trade or commerce.’”113 The statute provides a private

right of action for “‘[a]ny person who suffers any ascertainable loss’ as a result of the

unlawful conduct.”114 “To recover, the plaintiff must ‘prove some element of fraud,

misrepresentation, deception or other unethical conduct.’”115 The Louisiana Supreme

Court instructs that, “in establishing a LUTPA claim, plaintiff must show that ‘the alleged

conduct offends established public policy and is immoral, unethical, oppressive,

unscrupulous, or substantially injurious.’”116 The range of conduct covered by LUTPA is

“extremely narrow.”117

EMR alleges:

Upon information and belief, SECAI has developed or

supplied a service using the stolen or misappropriated

computer data to acquire the methods and techniques

proprietary to EMR to perform or hire others to perform the

work that SECAI contracted with EMR to perform, and such

activity constitutes an unfair method of competition and unfair

practice or act[.]118

SECAI argues that EMR’s failure to adequately allege a claim for misappropriation of

trade secrets should result in the dismissal of the LUTPA claim.119

The Court has concluded that further factual elaboration is needed regarding

SECAI’s alleged misappropriation of EMR’s trade secrets. Given EMR’s LUTPA claim is

113 IberiaBank v. Broussard, 907 F.3d 826, 839 (5th Cir. 2018) (quoting La. R.S. 51:1405(A)).

114 Id. (quoting La. R.S. 51:1409(A)).

115 Id. (quoting Tubos de Acero de Mexico, S.A. v. Am. Int'l Inv. Corp., 292 F.3d 471, 480 (5th Cir. 2002)

(quoting, in turn, Omnitech Intern., Inc. v. Clorox Co., 11 F.3d 1316, 1332 (5th Cir. 1994)).

116 J&J Sports Prods., Inc. v. Tienda y Taqueiria “La Frontera,” LLC, No. 16-568, 2017 WL 3166734, at *13

(M.D. La. July 25, 2017) (quoting Quality Envtl. Processes, Inc. v. I.P. Petroleum Co., Inc., 13-1582 (La.

5/7/14), 144 So. 3d 1011, 1025)).

117 Id. (quoting Quality Envtl. Processes, Inc., 144 So. 3d at 1025).

118 Rec. Doc. 1, ¶ 50.

119 Rec. Doc. 9-3, pp. 16–17.

based on the same alleged underlying conduct, the Court finds that Count VI should also

be dismissed without prejudice.

d. Count VII: Computer Fraud and Abuse Act; Stored

Communications Act; and Electronic Communications Privacy Act

In Count VII, EMR asserts causes of action under three federal statutes: the

Computer Fraud and Abuse Act (CFAA), the Stored Communications Act (SCA), and the

Electronic Communications Privacy Act (ECPA).

Computer Fraud and Abuse Act (18 U.S.C. § 1030)

“The CFAA criminalizes various fraudulent or damaging activities related to the

use of computers.”120 The CFAA also authorizes civil actions for violations of the statute,

but only under specified circumstances.121 As SECAI points out, the pleading

requirements for civil actions under the CFAA are complex, and EMR does not specify in

its Complaint which of the several subsections it claims SECAI violated. Further, EMR

provides no clarification in its Opposition regarding the CFAA claim.

The Court finds that EMR’s CFAA claim “provides little more than a recitation of

certain statutory elements,”122 and it requires further factual enhancement. As another

court observed under similar circumstances, “it isn't up to [the defendant] or this Court to

guess what statutory provisions are at issue” in connection with EMR’s claim.123 Due to

120 Fiber Sys. Int'l, Inc. v. Roehrs, 470 F.3d 1150, 1156 (5th Cir. 2006).

121 18 U.S.C. § 1030(g); see also 18 U.S.C. § 1030(c)(4)(A)(i)(I–V).

122 Energy Intel. Grp. Inc v. Kirby Inland Marine LP, No. 4:19-CV-03520, 2021 WL 183428, at *1 (S.D. Tex.

Jan. 19, 2021).

123 Id. See also Pointenorth Ins. Grp. v. Wade, No. 1:13-CV-04203-HLM, 2014 WL 12690895, at *5 (N.D.

Ga. Feb. 19, 2014) (dismissing CFAA claim for similar reasons).

the conclusory nature of EMR’s allegations,124 EMR’s CFAA action will be dismissed

without prejudice.

Stored Communications Act (18 U.S.C. § 2701 et seq.)

The SCA “governs the privacy of stored electronic communications in the United

States.”125 The statute provides, in pertinent part:

Except as provided in subsection (c) of this section whoever-

(1) intentionally accesses without authorization a

facility through which an electronic communication

service is provided; or

(2) intentionally exceeds an authorization to access

that facility;

and thereby obtains, alters, or prevents authorized access to

a wire or electronic communication while it is in electronic

storage in such system shall be punished as provided in

subsection (b) of this section.126

Accordingly, to be liable under the SCA, SECAI “must have gained unauthorized access

to a facility through which electronic communication services are provided (or the access

must have exceeded the scope of authority given) and must thereby have accessed

electronic communications while in storage.”127

The statute defines an “electronic communication service” as “any service which

provides to users thereof the ability to send or receive wire or electronic

communications.”128 The statute’s definition of “electronic storage” is: “(A) any temporary,

intermediate storage of a wire or electronic communication incidental to the electronic

124 See Rec. Doc. 1, ¶¶ 21, 54.

125 Pope v. Stanley, No. 6:17-CV-01422, 2018 WL 1954307, at *2 (W.D. La. Apr. 4, 2018), report and

recommendation adopted, No. 6:17-CV-01422, 2018 WL 1936697 (W.D. La. Apr. 24, 2018).

126 18 U.S.C. § 2701(a).

127 Garcia v. City of Laredo, Tex., 702 F.3d 788, 791 (5th Cir. 2012).

128 18 U.S.C. § 2510(15) (incorporated by reference in 18 U.S.C. § 2711(1) of the SCA).

transmission thereof; and (B) any storage of such communication by an electronic

communication service for purposes of backup protection of such communication.”129

EMR alleges SECAI accessed its “computers and cell phones.”130 SECAI argues

EMR’s allegations fall outside the scope of the SCA. The Court agrees. In Garcia v. City

of Laredo, Tex., the Fifth Circuit adopted the view that “the relevant ‘facilities’ that the

SCA is designed to protect are not computers that enable the use of an electronic

communication service, but instead are facilities that are operated by electronic

communication service providers and used to store and maintain electronic storage.”131

In other words, “the statute envisions a provider (the [Internet Service Provider] or other

network service provider) and a user (the individual with an account with the provider),

with the user’s communications in the possession of the provider.”132 Thus, EMR has

failed to allege that its “computers and cell phones” are protected “facilities” under the

SCA. Furthermore, “information that an individual stores to his hard drive or cell phone is

not in electronic storage under the statute.”133 Because EMR has not alleged that SECAI

obtained any information from a “facility through which an electronic communication

service is provided” while the information was “in electronic storage,” the EMR’s claim

under the SCA will be dismissed.

Electronic Communications Privacy Act (18 U.S.C. § 2511 et seq.)

Under 18 U.S.C. § 2511(a), “any person who ... intentionally intercepts, endeavors

129 18 U.S.C. § 2510(17).

130 Rec. Doc. 1, ¶ 21.

131 Garcia v. City of Laredo, Tex., 702 F.3d 788, 792 (5th Cir. 2012) (emphasis in original) (quoting Freedom

Banc Mortg. Servs., Inc. v. O'Harra, No. 2:11–cv–01073, 2012 WL 3862209, at *9 (S.D.Ohio Sept. 5, 2012)).

132 Id. at 793 (emphasis in original) (quoting Orin S. Kerr, A User's Guide to the Stored Communications

Act, and a Legislator's Guide to Amending It, 72 Geo. Wash. L. Rev. 1208, 1215 n.47 (2004)).

133 Id. (citing Freedom Banc, 2012 WL 3862209, at *8–9; Hilderman v. Enea TekSci, Inc., 551 F.Supp.2d

1183, 1205 (S.D. Cal. 2008); Bailey v. Bailey, No. 07–11672, 2008 WL 324156, at *6 (E.D. Mich. Feb. 6,

2008).

to intercept, or procures any other person to intercept or endeavor to intercept, any wire,

oral, or electronic communication ... shall be punished as provided [in proceeding

sections].” In § 2520, the statute provides for a civil action for violations of § 2511.134

The ECPA defines “intercept” as “the aural or other acquisition of the contents of

any wire, electronic, or oral communication through the use of any electronic, mechanical,

or other device.”135 The Fifth Circuit holds that, “in order for electronic communications to

be intercepted, acquisition must occur contemporaneously with transmission—i.e.,

acquisition must occur during ‘flight.’”136 Therefore, the statute does not protect

communications stored on a device; for example, “[o]nce an email is received, it is no

longer in transit—the email is stored and accessing it does not constitute an

interception.”137

EMR alleges that “electronically stored information, private satellite video

communications, and other communications personal and proprietary to EMR and its

employees, was accessed, intercepted, disclosed, copied and damaged without

permission, consent or authorization.”138 Aside from the use of the word “intercepted,” the

Court agrees with SECAI that EMR’s allegations provide insufficient factual support. To

state an ECPA claim, EMR must provide factual allegations giving rise to a plausible

inference that SECAI acquired communications contemporaneously with transmission.

Because no such allegations with any substance are found in the Complaint, the Court

134 18 U.S.C. § 2520(a). See also DIRECTV, Inc. v. Bennett, 470 F.3d 565, 569 (5th Cir. 2006). However,

the Fifth Circuit has held that “there is no civil liability for ‘procurement[.]’” Peavy v. WFAA-TV, Inc., 221

F.3d 158, 168–69 (5th Cir. 2000).

135 18 U.S.C. § 2510(4).

136 Beasley v. Greenlee, No. 3:22-CV-00532-X-BT, 2024 WL 3851382, at *9 (N.D. Tex. July 25, 2024),

report and recommendation adopted, No. 3:22-CV-0532-X-BT, 2024 WL 3851599 (N.D. Tex. Aug. 16,

2024) (citing Steve Jackson Games, Inc. v. U.S. Secret Serv., 36 F.3d 457, 461–62 (5th Cir. 1994)).

137 Id. (citing Steve Jackson Games, Inc., 36 F.3d at 461–62).

138 Rec. Doc. 1, ¶ 21.

will dismiss the ECPA claim without prejudice.

III. CONCLUSION

For the foregoing reasons, the Motion139 is GRANTED IN PART and DENIED IN

PART.

SECAI’s Motion to Dismiss Counts IV–VII of the Complaint pursuant to Rule

12(b)(6) is GRANTED, and the claims are dismissed without prejudice. EMR is granted

leave to replead Counts IV–VII in an amended complaint within twenty-one (21) days from

the date of this Ruling.

SECAI’s Motion to Dismiss for improper venue pursuant to Rule 12(b)(3) and for

lack of personal jurisdiction pursuant to Rule 12(b)(2) is DENIED. SECAI’s Motion to

Transfer Venue pursuant to 28 U.S.C. § 1404 is DENIED.

IT IS SO ORDERED.

Baton Rouge, Louisiana, this _1_s_t day of _____J_u_ly________, 2025.

S

________________________________

SHELLY D. DICK

CHIEF DISTRICT JUDGE

MIDDLE DISTRICT OF LOUISIANA

139 Rec. Doc. 9.