A Colorado state judge has dismissed Morning Gun Exploration LLC’s allegations that Anschutz Exploration Corp. abused the judicial process by suing for sharing confidential well production data. Denver District Court Judge Sarah B. Wallace ruled Wednesday that there was insufficient evidence to support claims that Anschutz filed its trade secrets lawsuit with an ulterior motive, granting Anschutz’s motion for partial summary judgment.

Judge Wallace stated that Morning Gun’s argument that Anschutz’s claims were filed with an improper purpose was unsupported by any evidence, noting that the only evidence offered was counsel’s argument. She also emphasized that Morning Gun had failed to demonstrate that Anschutz improperly used the litigation process.

“While Morning Gun may believe Anschutz's case is weak, it was strong enough to survive summary judgment,” Judge Wallace wrote. “The lack of any evidence showing an ulterior motive and the absence of improper use of litigation means Morning Gun's abuse of process claim cannot succeed.”

In addition, Judge Wallace rejected Morning Gun's attempts to dismiss the claims of misappropriation of trade secrets and civil theft, ruling that a jury could reasonably conclude that the data Morning Gun shared in an email—including production details from Anschutz’s Torrey's Well in Utah—may have influenced leasing negotiations, potentially resulting in millions of dollars in damages for Anschutz.

Anschutz filed its lawsuit against Morning Gun and its president, Paul J. Flatley, in February 2024, seeking an injunction to prevent further sharing of confidential well production data. The company accused Morning Gun and Flatley of obtaining and sharing this sensitive information, which allegedly affected Anschutz’s lease negotiations with oil and gas producers.

According to Anschutz, Flatley sent an email to several recipients that included confidential production data from the company’s Uinta Basin wells. This email was sent just before the North American Prospect Expo, an energy industry summit in Texas, where Flatley promoted Morning Gun's Seep Ridge Project. Anschutz claims the disclosure of this data contributed to higher lease counters from landowners, who had received Flatley’s email.

Anschutz alleges it lost more than $27 million in lease negotiations due to the leak, which gave competitors insight into the production potential of Anschutz's wells. The company also required its employees to keep well production data confidential, and at the time of the email, that information had not yet been reported to the state of Utah.

While Judge Wallace acknowledged that the evidence linking Morning Gun’s email to the lease negotiations was “scant,” she noted that a jury could still infer a connection. The judge also stressed that the issue of damages was for the jury to decide, as Anschutz may still be able to prove its losses.

Additionally, Judge Wallace dismissed Morning Gun’s argument that it had not benefited from the disclosure of the data, pointing to evidence that Morning Gun had raised the price of its Seep Ridge Project land from $150 an acre to $4,000 an acre after the Torrey Well began producing. If the production data was improperly obtained, Morning Gun could have used that information to increase the value of its property.

“Morning Gun could have benefited from the knowledge of the well’s production, regardless of whether it has sold the property,” the judge stated.

Anschutz Exploration Corp. is seeking an injunction to prevent Morning Gun and Flatley from using or sharing the disputed well production data, as well as damages for civil theft and misappropriation of trade secrets.

Attorneys for Anschutz declined to comment, while Morning Gun’s legal team has not responded to requests for comment.

The case is Anschutz Exploration Corp. v. Morning Gun Exploration LLC et al., case number 2024CV30400, in the 2nd Judicial District of Colorado.