Mesquite Energy, Inc. f/k/a Sanchez Energy Corporation, on its behalf and as the assignee of Evolve Transition Infrastructure, LP f/k/a Sanchez Midstream Partners LP f/k/a Sanchez Production Partners LP v. Sanchez Oil & Gas Corporation

Summary

The Texas Business Court addresses the allocation of settlement proceeds from a prior trade-secret misappropriation lawsuit and reimbursement of related litigation expenses. It concludes that Mesquite Energy and Sanchez Oil & Gas jointly owned the underlying trade secrets, requiring the settlement proceeds to be divided equally. The court also orders Sanchez Oil & Gas to reimburse Mesquite for half of the pre-March 2019 litigation expenses paid by Mesquite’s predecessor.

Holdings

1. Sanchez Production Partners did not prove an independent ownership interest in the trade secrets or a distinct injury, and its status as a co-plaintiff and any later assignment could not expand the assignor's rights or support a separate share of the settlement proceeds.
2. Mesquite and Sanchez Oil & Gas were co-owners of the Zero Dark Forty trade secrets, and the Terra settlement proceeds were to be divided equally between them.
3. The 2022 Settlement Agreement did not bar Mesquite's claim to its share of the Terra settlement proceeds because the settlement fund did not exist until 2024.
4. Sanchez Oil & Gas was required to pay Mesquite one-half of the legal expenses Mesquite paid to prosecute the Terra Litigation before March 2019.

Questions Presented

1. Whether Sanchez Production Partners possessed an independent ownership interest in the trade secrets sufficient to support allocation of a separate share of the Terra settlement proceeds through assignment.
2. Whether the Services Agreement or other governing principles established exclusive ownership of the Zero Dark Forty trade secrets in Mesquite or Sanchez Oil & Gas.
3. Whether the 2022 post-bankruptcy Settlement Agreement barred Mesquite's claim to a share of the Terra settlement proceeds.
4. Whether Sanchez Oil & Gas was required under unjust-enrichment principles to reimburse Mesquite for half of the litigation expenses incurred in prosecuting the Terra Litigation.

Disposition

other