Laird v. Amoco Production Co.

604 N.E.2d 1249, 126 Oil & Gas Rep. 468, 1992 Ind. App. LEXIS 1856, 1992 WL 379776
CourtIndiana Court of Appeals
DecidedDecember 23, 1992
Docket25A05-9204-CV-00099
StatusPublished
Cited by1 cases

This text of 604 N.E.2d 1249 (Laird v. Amoco Production Co.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laird v. Amoco Production Co., 604 N.E.2d 1249, 126 Oil & Gas Rep. 468, 1992 Ind. App. LEXIS 1856, 1992 WL 379776 (Ind. Ct. App. 1992).

Opinion

RUCKER, Judge.

Plaintiff-Appellee - Amoco - Production Company ("Amoco") obtained information concerning the location of potential oil production sites in Indiana by employing a third party to conduct an exploratory sur *1251 vey. An Amoco employee later drew a map showing the geographic location of the sites and made the map available to Appellants-Defendants William D. Laird, Gary T. Casper, Control Flow, Inc., LK. Production Company, and Laird Exploration Company {collectively referred to as "Laird Exploration"). Laird Exploration used the geographic information to develop oil leases and Amoco sought injunctive relief on the theory that the geographic information constituted a trade secret pursuant to Ind. Code § 24-2-3-1, et seq. Laird Exploration appeals the trial court's entry of a preliminary injunction, presenting but one issue for our review: whether the trial court erred in concluding that the disclosed geographic information constitutes a trade secret.

We reverse and remand.

Amoco is in the business of developing new sources of oil. A study group of geologists at Amoco was interested in an area which included southern Michigan, northeastern Indiana, and northwestern Ohio because of the known geological fault lines in that area. Such fault lines are known to be favorable for the location of oil in quantities sufficient to warrant development. The Amoco geologists recommended conducting a microwave radar 1 study of the area.

On the recommendation of John Clenden-ing, an Amoco geologist and a specialist in - microwave radar, Amoco contracted with Airborne Petroleum, Inc. (Airborne) to carry out the microwave radar study. Airborne conducted the study from August 18, 1990 to September 19, 1991, at a cost to Amoeo of $150,000.00. The information developed by Airborne was forwarded by Amoco to QC Data, Inc. QC Data converted the information into digitized maps. Amoco made efforts to keep the study information confidential by means of internal security measures and contractual arrangements with Airborne and QC Data.

The Amoco geologists evaluated the maps produced by QC Data and determined there was a likelihood of pools of oil in producible quantities in two large areas in Fulton, Marshall, and Kosciusko Counties, Indiana. Further particularized study of the two oil pools would be necessary in order to develop precise drilling locations from the QC Data maps. After an internal disagreement, the study group recommended that the Indiana oil fields not be developed at that time because their production potential was not large enough.

Clendening was disgruntled with what he perceived to be Amoco's continuing lack of interest in capitalizing on microwave radar information. Sure that Amoco was once again about to ignore the results of microwave radar technology, Clendening resolved to prove the value of the technology by giving William Laird, an oil wildeatter from Texas, the opportunity to develop the information. On November 9, 1991, Clen-dening sent Laird a Rand McNally road map on which he had drawn circles indicating the location of the two Indiana oil fields.

Laird Exploration quickly set about to develop the information released to Laird. A dowser 2 was hired to determine the edges of the oil pools indicated on the Clen-dening map. Laird Exploration thereupon began acquiring oil and gas exploration leases on November 20, 1991. Laird Exploration managed to obtain leases on a sizable portion of the area disclosed on the Clendening map before the present proceedings halted further acquisition.

Even as Laird Exploration was acquiring oil leases in Indiana, upper management at Amoco overruled their geologists and, much to the shock of Clendening, resolved to develop the Indiana sites. Clendening contacted Laird and unsuccessfully attempted to have Laird Exploration cease its leasing efforts. On December 8, 1991, a *1252 representative of Amoco was sent to Indiana to begin leasing operations and soon discovered the existence of the Laird Exploration leases. Clendening later confessed to the unauthorized disclosure of information.

On January 24, 1992, Amoco brought this action against Laird Exploration for a temporary retraining order, a preliminary injunction, a permanent injunction, damages and attorney's fees. In its verified complaint Amoco alleged the information disclosed to Laird is a trade secret pursuant to 1C. § 24-2-3-1 et seq. After three days of hearings the trial court granted Amoco's request for a preliminary injunction. The injunction prohibited Laird Exploration from using or disclosing the information in Clendening's map and specifically prohibited Laird Exploration from pursuing or developing oil and gas leases in the areas indicated on the map. The injunction also enjoined Laird Exploration from using or disclosing any other information gained in the discovery or litigation of this case. Pursuant to Ind.Trial Rules 65(D) and 52(A), the trial court later issued findings of fact and conclusions of law.

This interlocutory appeal ensued in due course. Additional facts will be recited where relevant.

Laird Exploration asserts the trial court committed reversible error in finding that the information concerning the geographic location of the oil field sites was a trade secret protected under the Uniform Trade Secrets Act, L.C. § 24-2-3-1 et seq. Laird Exploration argues this information was discoverable by reasonable means and therefore could not be a trade secret as a matter of law, citing Xpert Automation Systems Corp. v. Vibromatic Co., Inc. (1991) Ind.App., 569 N.E.2d 351. We agree that Xpert is controlling on this issue.

The decision whether to issue a preliminary injunction is committed to the sound discretion of the trial court, and this court will not reverse unless the trial court abused that discretion. Harvest Ins. Agency, Inc. v. Inter-Ocean Ins. Co. (1986), Ind., 492 N.E.2d 686, 688. In determining whether an abuse of discretion exists in the grant of a preliminary injunction, this court must investigate whether the findings of fact and conclusions of law are sufficient to establish that the information at issue is a trade secret pursuant to statute. See Xpert, supra.

Indiana Code § 24-2-8-2 provides:

"Trade secret' means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(1) derives independent economic value, actual or potential, from not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

We note there is no dispute that the second part of the statutory test was met by Amoco.

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Related

Amoco Production Co. v. Laird
622 N.E.2d 912 (Indiana Supreme Court, 1993)

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604 N.E.2d 1249, 126 Oil & Gas Rep. 468, 1992 Ind. App. LEXIS 1856, 1992 WL 379776, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laird-v-amoco-production-co-indctapp-1992.