Boulette Golden & Marin has secured a judgment in favor of its client, ES3 Minerals, as well as a $9-million award in the first Texas Business Court trial in Austin.
ES3 Minerals, LLC v. Kreines, Ryan, LMP, et al., cause no. 24-BC03B-0005, was tried in the Texas Business Court’s Third Division before Judge Patrick Sweeten. The trial last two weeks and ended when the 12-person jury found that three former ES3 executives and their competing entity willfully and maliciously misappropriated ES3’s proprietary system for acquiring and selling mineral rights in Texas.
The jury valued ES3’s integrated trade secrets at more than $40 million and unanimously awarded $9 million in exemplary damages.
The Boulette Golden & Marin trial team was led by Michael Marin, with Steven Garrett, Tori Bell, and Taylor Graham serving as trial counsel, and Jason Boulette serving as litigation advisor. Appellate counsel Ryan Clinton and Laine Weatherford of Hunton Andrews Kurth supported the trial team throughout the proceedings.
The jury found defendants Nicholas Kreines, David Ryan, and Jettie Rangel (Jennings) — who served as ES3’s vice president of business development, vice president of acquisitions, and lead analyst, respectively — acted together to replicate ES3’s proprietary business system while Kreines was employed by ES3. The jury found the defendants used ES3’s five trade secrets to launch a competing mineral brokerage, Liberty Mineral Partners (LMP), which generated more than $20 million in revenue in approximately the first eight months of its operation using ES3’s trade secrets.
The jury further found the defendants misappropriated every identified trade secret willfully and maliciously — a finding that was unanimous among all twelve jurors.
ES3’s software engineering expert testified the defendants’ competing software — called “Gold Digger” — plagiarized ES3’s Rainmaker software platform, noting specific details he testified were as improbable as winning the Powerball lottery three times in a row.
The jury’s damages findings spanned multiple categories. The jury’s $40 million valuation of ES3’s integrated trade secret system was supported by expert testimony from M. Ray Perryman. Exemplary damages of $2 million were assessed against each of four defendants, with $1 million against a fifth, totaling $9 million.
Beyond trade secret misappropriation, the jury also found Kreines liable for breach of fiduciary duty in connection with his involvement in developing LMP’s competing software and facilitating LMP transactions while still serving as ES3’s vice president of business development. The jury found all defendants engaged in a civil conspiracy to breach Kreines’s fiduciary duties, and found LMP and Ryan liable for intentional interference with ES3’s employee agreements. The jury also found Kreines and Ryan violated their confidentiality agreements and that Kreines transferred assets with the actual intent to hinder, delay, and defraud ES3.
“This verdict sends a clear message that Texas courts and Texas juries will hold employees accountable when they misappropriate their employer’s most valuable assets,” said Michael Marin, lead trial counsel for ES3 Minerals. “Trey Stanton built something genuinely innovative at ES3, a proprietary system that allowed a bootstrapped company with no outside funding to compete with private-equity-backed rivals in one of the most competitive markets in the energy sector. When his most trusted people took that system and used it against him, the jury saw through it and returned a verdict that held every defendant accountable.”
The court will enter final judgment on the jury’s findings and is expected to address post-trial motions and potential injunctive relief in the coming weeks.
The case is among the first major trade secret jury verdicts rendered in the Texas Business Court. The trial proceeded from filing to verdict in under two years.