Texas Jury returns nearly $9M verdict against Toby Eoff and others involved in conspiracy against energy giant February 23, 2023
RICHMOND, TX – A unanimous Fort Bend County jury late Wednesday found that prominent Odessa businessman Toby Eoff willfully and maliciously conspired with other former employees of DistributionNOW (DNOW) to steal the energy sector giant’s trade secrets.
The verdict included a finding that Mr. Eoff breached his fiduciary duty to Houston-based DNOW when he conspired with the others to cripple Odessa Pumps, a business his family had started 40 years ago and subsequently sold to DNOW, a leading global supplier of energy and industrial products.
Mr. Eoff, described in testimony as the ringleader of the conspiracy, sold his family business to AZA’s client DNOW for $170 million in 2015. He continued to run Odessa Pumps after the sale and was promoted within DNOW before retiring from the company.
According to the lawsuit, Mr. Eoff helped establish a competing company called Permian Pump & Valve after his retirement and conspired with other former DNOW employees to steal DNOW trade secrets and systematically poach employees to help Permian Pump & Valve. Jurors heard how Mr. Eoff hoped to cripple Odessa Pumps and sell his new company to DNOW or, alternatively, buy back the crippled Odessa Pumps for himself.
In testimony starting in November, jurors in 434th District Judge J. Christian Becerra‘s court reviewed 32 boxes of evidence. The jury heard testimony describing how the former employee defendants emailed themselves DNOW documents, drawings and spreadsheets, and even discussed in writing what they wanted to steal and had stolen and how they planned to go after other employees.
Jurors deliberated two and a half days before returning the nearly $9 million verdict for DNOW, including punitive damages and attorneys’ fees (including appellate attorneys’ fees awarded).
The verdict included a finding that Mr. Eoff along with former DNOW employees Russell Dauphin, Jake Lewallen, Brian Madison, Michael Wheeler, Justin Coe, and Bo Young conspired to damage DNOW, and that the acts were of willful and malicious intent triggering punitive damages awards rendered against several of the defendants individually. The jury also found that Messrs. Eoff, Dauphin, Madison, and Wheeler breached the fiduciary duty they owed to DNOW.
In closing arguments, John Zavitsanos, co-founder of AZA and the lead lawyer in the case, told jurors they are the conscience of the community, and that the blatant, malicious thefts should not go unpunished. “These men were after DNOW. They were out to destroy Odessa Pumps. What we are doing here is trying to prevent other companies from thinking this is OK and trying to prevent these guys from doing it again,” he said.
Mr. Zavitsanos tried the case with AZA partner Jason McManis and associates Louis Liao and Michael Gorrell. Co-counsel included S. Scott West and Maddison M. West from The West Law Firm; Christopher E. Moore from Ogletree Deakins; and attorney Richard L. Tate.
The verdict was covered by Law360 here “Jury Hits Oilfield Pump Workers With $7M IP Theft Verdict” (subscription required) and by Texas Lawyer here “Texas jury delivers $9 million verdict for malicious theft of intellectual property” (subscription required).
The case is DNOW LLP v. Toby Eoff et al. Case number 22-DCV-294327 in Fort Bend County’s 434th District Court.
AZA, or Ahmad, Zavitsanos & Mensing, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, healthcare, intellectual property, and business dispute cases. AZA is recognized by Chambers USA 2022 among the best in Texas commercial law and intellectual property; by U.S. News – Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for 11 years running; has been named Litigation Department of the Year by Texas Lawyer three times including for 2021; and was previously dubbed by Law360 a Texas Powerhouse law firm.