A sand box fight is underway in Texas.
Not just any sand box. But a plastic fracking sand box.
It’s developed into a multi-million dollar fight originated when SandBox Logistics hired Arrows Up LLC of Illinois to design the container. That was in 2014 and last week, Arrows Up asked a Houston District judge for a new trial after it lost a $49 million judgment won by SandBox Logistics.
Judge Steven Kirland affirmed a jury verdict a month ago that found Arrows Up and its CEO John Allegretti wrongly used information provided by SandBox to design its own fracking sand container and is now in competition against SandBox.
Here’s how Natalie Posgate at The Texas Lawbook reported things:
Judge Kirkland’s final judgment also declared that all frac sand containers Arrows Up has manufactured, sold or leased since January 2015 are “owned solely and exclusively” by SandBox because key features of Arrows Up’s containers were derived from SandBox’s design. The verdict found Arrows Up liable for fraud and breach of the NDA it made with SandBox.
While SandBox views the controversy as a betrayal by a vendor to create the copycat products, Arrows Up considers itself the victim. In a press release issued shortly after the final judgment was issued, the company asserts that it is only the latest target of “SandBox’s demonstrated pattern of lawsuits against competitive innovation within the frac sand logistics industry.”
If it does not have luck with its motion for a new trial, Arrows Up is expected to appeal the final judgment.
After the verdict, Arrows Up hired Gibson Dunn appellate partner Allyson Ho, who says restraints included in the Sandbox NDA agreement are “unlawful under well-settled Texas law.”
Beck Redden partner Matthew Whitley, who represented SandBox at trial, said his client and his firm’s trial team “were very happy with the jury’s verdict and the final judgment entered by the court. The result was consistent with the evidence presented at trial and the applicable law, so we look forward to defending the judgment on appeal.”
Whitley said several jurors told his team after the four-week trial that “they did not believe Arrows Up’s witnesses told the truth” when they testified.
“For example, they pointed out how Arrows Up’s CEO had ‘photoshopped’ SandBox’s logo out of pictures of SandBox containers, and then he told customers that the altered images depicted Arrows Up’s original container design,” Whitley said. “That evidence of Arrows Up’s behavior seemed to resonate with the jurors who spoke to us.”
Arrows Up argues that Judge Kirkland should grant its motion for a new trial on several grounds, including an improper disgorgement finding by the jury (that SandBox failed to plead to begin with), the improper omission of certain questions on the jury charge, unreliable experts and insufficient evidence that Arrows Up misused confidential SandBox information.
“SandBox went for broke before the jury… But now, like the dog that’s caught the car, SandBox must face the consequences of its overreach,” the motion asserts. “If not entitled to reverse and render, Arrows Up is entitled to a new trial on every issue, because each of the jury’s findings is either against the great weight of the evidence or is unsupported by factually sufficient