A company being sued for the third time by a former business partner over the alleged misuse of proprietary designs for frac sand shipping containers lost a bid Friday to pause the Texas case while it appeals a $49 million judgment stemming from the second lawsuit.
At a hearing Friday morning, Harris County District Court Judge Steven Kirkland denied two motions by Arrows Up LLC — one seeking a stay of the proceedings and another seeking protection from discovery requests filed by SandBox Logistics LLC. SandBox filed the current lawsuit in January, telling the court that Arrows Up has continued to lease out SandBox's property assuming it has "free rein" to do so until the appeal is decided.
SandBox's attorneys told Judge Kirkland at the hearing that since the final judgment, Arrows Up has also manufactured 200 new shipping containers that use the same design at issue in the first two lawsuits. The prior judgment included no injunctive relief, which is why SandBox filed the new lawsuit, Matthew P. Whitley and M. Jake McClellan of Beck Redden LLP told the court.
"This suit is for conduct that occurred post-verdict and post-judgment," McClellan said.
Judge Kirkland rejected Arrows Up's argument that a stay was merited because the case litigates the same issues that are on appeal before the Fourteenth Court of Appeals, saying it's a different case with "a whole new set of damages."
"You guys are doing exactly the same thing we went through this process for already," he said before denying the motions.
Oral arguments will take place before the Fourteenth Court of Appeals on Dec. 17 in the appeal where Arrows Up is trying to undo the $49 million judgment against it. In court filings, SandBox has called the appeal by Arrows Up "a remarkable exercise in willful ignorance."
The verdict against Arrows Up included $21.7 million in profit disgorgement and $27.5 in punitive damages for stealing the design of the containers used to ship sand used in the hydraulic fracturing of oil and gas wells. The court also ordered all the containers that Arrows Up had manufactured, sold or leased to be turned over to SandBox, according to court documents.
SandBox is represented by Matthew P. Whitley, Michael E. Richardson, Seepan Parseghian and M. Jake McClellan of Beck Redden LLP.
Excerpted from Law360. To read the full article, click here.