A CrowdStrike office is seen in Sunnyvale, Calif., July 19, 2024.
Haven Daley/AP Photo/Haven Daley, File
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CrowdStrike Inc. isn’t a Texas company after all, a judge has ruled.
Because of that, Judge Melissa Andrews of the 3rd Business Court Division in Austin dismissed all claims against the cybersecurity firm by GoSecure, which said it had built its global empire on another company’s trade secrets.
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GoSecure, which moved the case to Texas from California seeking a quicker resolution, failed to show that CrowdStrike Inc. and the alleged improprieties had enough of a connection to Texas to give her court the ability to rule in the case.
CrowdStrike’s status in Texas can be confusing.
Though CrowdStrike Holdings Inc., the publicly traded company that owns Crowdstrike Inc., announced in 2021 it was moving its principal offices to Austin from California, CrowdStrike Inc. headquarters remained in California. In court filings, Crowdstrike Inc. said its Austin office is just a “satellite office” without senior leaders, only low-level salespeople. The products and executives are all run out of California, it said, which is where it argued the case should be heard.
The judge agreed, and GoSecure has since filed a new suit in California.
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In Texas, it had accused CrowdStrike Inc. founders and a former engineer — two of whom worked for GoSecure — of stealing trade secrets to build what’s become the company’s most profitable cybersecurity product, the Falcon Platform.
GoSecure attempted to prove CrowdStrike has enough of a corporate presence and enough business in Texas to give the Austin court oversight. It showed that the company’s Austin office is its largest, that at least one corporate executive works from Texas and that some of its largest customers, including Dell Technologies Inc., are based in the state.
It also argued that CrowdStrike told the the U.S. Securities and Exchange Commission its principal office is in the state.
The court did not agree, finding that the SEC filing was made by CrowdStrike Holdings and that GoSecure failed to “pierce the corporate veil,” and could not attribute the holding company’s Texas presence to the allegations against CrowdStrike Inc. for purposes of the court venue.
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However, the court disagreed with CrowdStrike’s characterization of its Austin office as a low-level “satellite” office, but said it still didn’t pass the “nerve-center” test for a headquarters. For CrowdStrike Inc., it found, that has always been in California.
“GoSecure’s evidence … indicates that CrowdStrike’s Austin office is more than just the inconsequential ‘satellite’ office for low-level sales staff CrowdStrike portrayed it to be,” Judge Andrews wrote in her order. “But GoSecure identifies no evidence that CrowdStrike’s officers ‘direct, control, and coordinate’ its activities from Austin, or anywhere in Texas.”
GoSecure also argued the Texas court had specific jurisdiction because Austin-based engineers were using its stolen trade secrets and building on it for sale. The court disagreed again, saying all the allegations against CrowdStrike Inc occurred between 2011 and 2012, five years before its first Austin office opened.
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After the ruling, GoSecure filed a near-identical set of claims in federal court for the Northern District of California against only CrowdStrike Inc. and a former engineer it says stole trade secrets. Rather than focusing on corporate structure, the new federal complaint focuses on individual wrongdoing.
GoSecure had originally filed a suit in California state courts in November 2024 but dismissed it for lack of progress last year before refiling in Texas.