A Houston federal judge last week awarded $3 million to oil industry employment website Rigzone.com and its parent company, DHI, several days after a jury found co-founder David Kent misappropriated trade secrets to help grow a competing website that he left to start.
The jury, which returned its verdict March 26 after roughly a day of deliberation, also found Kent violated the Racketeer Influenced and Corrupt Organization Act and breached his fiduciary duty to Rigzone, but no damages were awarded on those charges. The verdict marked the end of a four-month slog to adjudication after the trial was paused in November due to a Covid-19 outbreak amongst a few lawyers involved. It resumed in late March.
Founded in 1999, Houston-based Rigzone helps oil companies and recruiters find their next hires through a portal where candidates upload their résumés and employer members pay for access.
Rigzone’s lawyers at Houston law firm Jordan, Lynch & Cancienne argued at trial that Kent improperly accessed Rigzone’s website and stole 587,104 résumés between 2013 and 2015 and exploited the information by inviting Rigzone members to join his new website, Oilpro.com. The jury also learned that Kent was criminally prosecuted for his deeds, pleading guilty in 2016 to one count of intentionally accessing a computer without authorization under the Computer Fraud and Abuse Act.
“He [Kent] was basically unhappy with the speed at which he was able to grow Oilpro so he decided to take the shortcut and hack into our database,” said Walter Lynch, Rigzone’s lead attorney at trial. “This collection of résumés has a great deal of commercial value and under the law was treated and decided by the jury as a trade secret.”
But Kent’s lead attorney at trial, Jay Munisteri, told a different story and described Wednesday’s $3 million judgment as a “complete victory.”
“We’re talking about a complicated circumstance in which an individual did make things right, owned up to what he did, and frankly, what he owned up to — what he agreed to in the criminal case — the jury found he did not do in the civil trial,” said Munisteri, a partner in Foley & Lardner’s Houston office.
Kent owned up to his conduct when, as a result of the criminal case, Kent paid Rigzone $3.3 million in restitution, Munisteri said.
“We believe there will be an offset — what we believe will be a 100% offset — because Texas law does not allow a double recovery,” Munisteri said.
Munisteri questioned why a company like Rigzone would take a dispute like this all the way to trial when its own witnesses admitted on the stand that the company suffered no monetary loss as a result of his client’s actions. He speculates that the only reason was to “snuff out a competitor.
“It’s vengeance,” Munisteri said. “He shouldn’t have done what he did. He paid an incredible price for it. … Then he had to defend himself for five years in a civil case over nothing, where there was no damage.”
Lynch disagreed.
“All we were doing was pursuing our remedy in civil court,” Lynch said. “The amount of restitution is a criminal matter, a negotiation between Mr. Kent and the federal government without Rigzone or DHI being able to [weigh in on] a final decision on any of those matters.
“We’re supposed to not seek full justice? No, I don’t think so,” Lynch added. “It has nothing to do with wiping out a competitor. That’s something he did on his own. He wiped himself out by being a criminal.”
In addition to Lynch, the trial team for Rigzone and RHI included Jordan Lynch attorneys Amir Halevy and Jeb Golinkin.
In addition to Munisteri, the trial team for Kent included Foley’s Sara Ann Brown and Kent Rutter of Haynes and Boone.