City of Houston v. U.S. Filter Wastewater Group, Inc – Case Brief Summary (Texas)

In City of Houston v. U.S. Filter Wastewater Group, Inc., 190 S.W.3d 242 (Tex. App.--Houston 1st Dist. 2006, no pet.), U.S. Filter was concerned that the City of Houston had improperly used knowledge about U.S. Filter's patented odor treatment process to secure bids for chemicals contained in that treatment to circumvent U.S. Filter's patents. 190 S.W.3d at 243.

Altivia Corporation was the winning bidder to supply the chemicals at issue. Id.

U.S. Filter filed a Rule 202 petition, seeking pre-suit depositions of two City of Houston Employees "to investigate a potential claim or suit against the City of Houston and Altivia for the violation of proper competitive bidding procedures under applicable state and municipal law, potential theft of trade secrets and/or misappropriation, and/or for the ongoing violation of its intellectual property rights." Id. at 243-44.

The Rule 202 petition also alleged that "an important factual element regarding such potential claims concerns the matter in which the City of Houston is using the commodity chemical procured from Altivia Corporation; U.S. Filter believes and therefore avers that the deponents Messres. Mehta and Manno, are the individuals most knowledgeable concerning such facts." Id. at 244.

The City filed a plea to the jurisdiction, which the trial court denied. The City then brought an interlocutory appeal to this Court, arguing that "U.S. Filter failed to state any valid potential state law cause of action which could serve as the future basis for bringing suit in state court against the City." Id. at 245.

Specifically, it contended that "it is immune from any state law claims and that the only potentially actionable claim against it--patent infringement--lies exclusively in federal court." Id.

It reasoned that "because there is no possibility of liability against it if suit were ever filed in state district court, the state district court, likewise, has no jurisdiction over the Rule 202 petition." Id.

The Court rejected the City's argument and affirmed the trial court's denial of the City's pleas to the jurisdiction, reasoning that because the district court had jurisdiction over "a portion of the claim under investigation--a claim against Altivia," the "court did not err in denying the City's plea to the jurisdiction." Id.