Is a Hospital Lien Dispute Subject to Texas Anti-Slapp - Personal Injury Attorneys Get Guidance from the Tyler COA in 2019.

The Tyler COA is on the board early in 2019 with an interesting opinion that could have ripple effects on hospital lien disputes. ETX Successor Tyler f/k/a East Texas Medical Center v. Terrie Pridgeon, as Guardian of the Person and Estate of Jason C. Dubos, NO. 12-18-00083-CV, 2019 WL 623603 (Tyler COA 2019) provides some insight.

Defendant hospital filed a Texas Anti-Slapp against the plaintiff’s declaratory judgment claim concerning (a) the limitations on the hospital’s lien under Tex. Prop. Code §55.004(d)(1) and; (b) what is the reasonable amounts owed under the statute.  While I do not practice in personal injury law, I assume this dispute must occur fairly regularly in the personal injury context.

First, the Tyler COA determined the hospital filing a lien falls within the Right of Free Speech under the Texas Anti-Slapp.  The Tyler COA did not reach the issue of whether the lien also would trigger protection under the Right of Petition.

Second, the Tyler COA held that both the personal injury exemption (§27.010(c)) and commercial speech exemption (§27.010(b)) applied to exclude plaintiff’s claim from the ambit of the Texas Anti-Slapp.  Because the hospital lien is designed to attach to judgments or settlement of a personal injury action it fell within the personal injury exemption.  Further, because the lien related to medical services provided by the hospital to the underlying injured party it fell within the commercial speech exemption.

Third, the Tyler COA took the somewhat unusual step of addressing whether the plaintiff met her burden concerning the declaratory judgment claim.  Even though the Tyler COA could have stopped its analysis after holding that two exemptions apply, it went on to conclude plaintiff established the elements of a justiciable controversy that will be resolved by the declaration sought.  Interestingly, the Tyler COA did not adopt the hospital’s position that the plaintiff had to establish the amount of the lien that is recoverable (arguably a difficult proposition that early in the dispute) but only that the declaration sought would resolve the controversy.

(As a side note, if the Texas Supreme Court takes the issue up, by addressing whether plaintiff met her elements prevents a delay in sending the case back to the Tyler COA if the TSC disagreed with the exemption analysis).

Lastly, the Tyler COA also rejected the affirmative defenses brought by the hospital because quasi-estoppel and estoppel by contract do address whether a justiciable controversy is resolved by the declaratory judgment claim.

(Another side note – the Tyler COA did point out that the hospital did not argue that the declaration sought would not resolve the controversy.  If the hospital argued that the dispute was already ripened there may have been a different outcome, but that is a debate for another day).

pot hole.jpg

While We Wait for the Fifth Circuit's Ruling on Whether Texas Anti-Slapp Applies in Federal Court, What is the 2018/19 Trend in Texas Federal District Courts?

One of my first blog posts dealt with application of the Texas Anti-Slapp in the Fifth Circuit. https://www.antislapptexas.com/blog/2018/12/30/the-texas-anti-slapp-and-federal-courts

The Fifth Circuit has at least two cases fully submitted that may finally decide the issue. Until then, a look at twelve 2018/19 District Court opinions shows it depends on the district you are in and the judge you draw as to whether the TCPA will be applied.

Off the cases I located, here’s the score card:

7 times Court’s held the TCPA does not apply in federal court.

3 times the Court held the TCPA did apply.

2 times were effectively no decisions where the Court assumed, without deciding, it applied.

SD TX — 2 apply, 1 no decision, 1 does not apply

ED TX — 3 does not apply,

WD TX — 2 does not apply

ND TX — 1 apply, 1 no decision, 1 does not apply

Make sure to vet your Judge’s opinions on Texas Anti-Slapp, there are clear patterns for certain courts.

2018 Federal District Court Table for Blog_Page_1.jpg
US COA.jpg

How will the Texas Anti-Slapp fare Under the New Dallas COA?

This past November eight new judges (all Democrats) were elected to the Dallas Court of Appeals. While the Dallas COA has yet to issue a Texas Anti-Slapp opinion in 2019, we may have a glimpse of how at least one of the new justices views its application to trade secrets claims. Law 360 reports the following questions from newly elected Justice Ken Molberg:

“Justice Molberg described the TCPA as “a statutory enactment stepping on a constitutional right to be in court,” and questioned how it could possibly apply in a case where Dyer is accused of wrongdoing. “Say I have a case where two thieves conspire to steal someone’s property,” Justice Molberg said. “And then the thieves enjoy the benefit of using the TCPA to shut down the case. That’s what you’re saying to me.”

In 2017, the Austin COA issued Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 2017 WL 1833495, Tex.App. – Austin, May 5, 2017) which dismissed a trade secret misappropriation claim under the Texas Anti-Slapp. Elite Auto Body relied upon ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017), which reversed the Dallas COA’s refusal to apply the Texas Anti-Slapp to an employment dispute case. The Austin COA determined that Coleman stands for the proposition that the broad definitions of the Texas Anti-Slapp covers claims that otherwise would not fall within the typical understanding of constitutional rights. This analysis is consistent with the Texas Supreme Court’s analysis in Youngkin v. Hines, 546 S.W.3d 675 (2018) that the Texas Anti-Slapp is broader than constitutional safeguards. (See my earlier blog post on the TSC 2018 Year in Review).

How the case will turn out remains to be seen. But we may see a dissent or concurrence that joins a growing list of jurists that are issuing opinions( in dissents or concurrences) that request legislative change to the Texas Anti-Slapp.

Judge Doubts Use Of Free Speech Law To Dodge IP Theft Suit - Law360_Page_1.jpg
Judge Doubts Use Of Free Speech Law To Dodge IP Theft Suit - Law360_Page_2.jpg

And One to Grow On - Updating the 2018 Dallas COA chart to 19 Opinions

A reader emailed me to point out I missed Vodicka v. A.H. Belo Corporation, No. 05-17-00728-CV (Dallas COA 2018), where the Dallas COA upheld the trial court’s dismissal of a defamation claim under the Texas Anti-Slapp. Updated data points and chart below.

UPDATE

The Dallas COA issued nineteen (19) opinions involving Texas Anti-Slapp, one of which was withdrawn and superseded.  Demonstrating the complexity of the statute, the TC’s results were a mixed bag, with TC’s being upheld slightly more than they were reversed.  Two of the opinions were the result of reversals by the TSC, remanding the issue back to the Dallas COA for further determination.

·       In seven  (7) opinions the trial court’s (“TC”) decision was completely upheld.

·       In four (4) opinions the TC was completely reversed. 

·       Six (6) other opinions were either split (upheld in part, reversed in part), did not reach the main issue of whether the Texas Anti-Slapp should have been granted, or were not addressing the merits of a grant or denial of the motion.

 ·       Six (6) opinions dealt with the grant of a Texas Anti-Slapp dismissal  (3 upheld, 2 reversed, and 1 split decision).

·       Six (6) opinions dealt with the denial of a Texas Anti-Slapp dismissal (2 upheld, 2 reversed, and 2 split decisions).

·       Three (3) opinions dealt with attorneys’ fee issues.

·       Two (2) opinions were on remand from the TSC.

·       One (1) dealt with the breadth of discovery.

pot hole.jpg
Dallas  COA Table 2018_Page_1.jpg

The Houston COA Gets on the Board with its First Texas Anti-Slapp Opinion of 2019 - Reminding Everyone to Pay Attention to the Interlocutory Appeal Rules

In Humberto Leniek v. Evolution Well Services, LLC, NO. 14-18-00954-CV, 2019 WL 438825 (Houston COA 2019), the Houston COA dismissed an appeal where the trial court granted the Texas Anti-Slapp motion but had not ruled on the attorneys’ fees request when the non-movant appealed.  The Houston COA held that the lack of a ruling on the attorneys’ fees request meant there was not a final judgment subject to appeal.  This ruling is consistent with other COAs that take a narrow view of interlocutory appellate rights under Tex. Civ. Prac. & Rem. Code §51.014(a)(12) (interlocutory appeal only for denial of Texas Anti-Slapp Motion).

 To ensure you do not further delay appellate review, practitioners need to make sure they fully understand the appellate rule interplay with the Texas Anti-Slapp.

pot hole.jpg

The Opinion Applying Anti-Slapp in Federal Court No One Has Heard Of.

In Craig PC Sales & Service, LLC v. CDW Government, LLC, Case No. CIV-17-003-F, 2018 WL 4861522 (W.D. OK April 30, 2018), Senior Judge Stephen P. Friot issued an unusual opinion applying the Oklahoma Anti-Slapp in federal court, despite determining that the statute conflicts with Fed. R. Civ. P. 12 and 56. 

This is precisely the argument adopted in dissent by Justice James E. Graves, Jr., in Cuba v. Pylant, 814 F.3d 701, 718 (5th Cir. 2016), wherein he argued the conflict should prevent application of the Texas Anti-Slapp in federal court.  Several federal district courts in Texas have since adopted Justice Graves dissent to reject application of the Texas Anti-Slapp in federal court.  (Side note – practitioners in Texas are still waiting on rulings in Klocke v. Watson (No. 17-11320) and Van Dyke v. Retzlaff, (18-40710) which should finally set precedent for the Fifth Circuit as to whether the Texas Anti-Slapp applies in federal court.).

Following 10th Circuit precedent regarding the Rules Enabling Act, Judge Friot determined that because F.R.C.P. 12 and 56 abridge or modify the substantive rights of the Oklahoma Anti-Slapp, those rules must yield and the statute applies in federal court..

In the case at bar, the application of Rule 12 or Rule 56 instead of the OCPA would therefore abridge or modify the state substantive right to recover attorney’s fees as recognized by the Oklahoma Supreme Court. Although Justice Stevens cautioned that the bar for finding a violation of the Rules Enabling Act is “a high one,” the court concludes that Rules 12 and 56 cannot be applied here in a manner consistent with the strictures of the Rules Enabling Act, since they abridge or modify substantive rights as recognized by the Oklahoma Supreme Court. Shady Grove, 559 U.S. at 432. Because Rules 12 and Rule 56 may not, consistently with the Rules Enabling Act and Justice Stevens’ concurring opinion, be applied here, and the court concludes that application of the OCPA conforms with the twin aims of Erie “discouragement of forum-shopping and avoidance of inequitable administration of the laws,” Hanna, 380 U.S. at 468, the court will apply the OCPA to plaintiffs’ claims.

Despite this opinion issuing in April 2018, and multiple federal courts weighing in on anti-slapp statutes around the country since then, no court has cited to Craig P.C.. Making it unheralded, and either prescient or an outlier when SCOTUS someday addresses the anti-slapp issue.

Uncertain.jpg

How did Trial Court Rulings on the Texas Anti-Slapp do in the Dallas Court of Appeals in 2018?

The Dallas COA issued eighteen (18) opinions involving Texas Anti-Slapp, one of which was withdrawn and superseded.  Demonstrating the complexity of the statute, the TC’s results were a mixed bag, with TC’s being upheld slightly more than they were reversed.  Two of the opinions were the result reversals by the TSC, remanding the issue back to the Dallas COA for further determination.

·       In six  (6) opinions the trial court’s (“TC”) decision was completely upheld. 

·       In four (4) opinions the TC was completely reversed. 

·       Six (6) other opinions were either split (upheld in part, reversed in part), did not reach the main issue of whether the Texas Anti-Slapp should have been granted, or were not addressing the merits of a grant or denial of the motion.

 ·       Five (5) opinions dealt with the grant of a Texas Anti-Slapp dismissal  (2 upheld, 2 reversed, and 1 split decision).

·       Six (6) opinions dealt with the denial of a Texas Anti-Slapp dismissal (2 upheld, 2 reversed, and 2 split decisions).

·       Three (3) opinions dealt with attorneys’ fee issues.

·       Two (2) opinions were on remand from the TSC.

·       One (1) dealt with the breadth of discovery.

pot hole.jpg
Dallas 2018.jpg

The Texas Supreme Court Gets on the Board Early with a “Non-Opinion” on the Applicability of the Texas Anti-Slapp to TRCP 202 (Pre-Suit Depositions)

Texas Rule of Civil Procedure 202 allows a litigant to take pre-suit depositions to investigate claims and/or preserve evidence prior to actually  filing a lawsuit.  Some Texas COAs have determined that a “202 Petition” is covered by the Texas Anti-Slapp because of the breadth of the definition of “[l]egal action,” defined as “a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief.”

 In Glassdoor, Inc., Doe 1, and Doe 2 v. Andra Group, LP, Ca. No. 17-0463, the petitioner, Andra Group, filed a 202 Petition to discover the identity of unknown individuals that allegedly disparaged/defamed the company with online posts on Glassdoor.  The trial court denied Glassdoor’s Texas Anti-Slapp motion and the Dallas COA, upheld (assuming (without deciding) the Texas Anti-Slapp applied and that Andra Group met its evidentiary burdens (s to the elements of a 202 Petition).

 Glassdoor argued at the trial court that the 202 should be denied because the statute of limitations on any claims against the Doe Defendants expired, mooting any potential claim Andra Group could investigate. The TSC reversed on the mootness argument, and sidestepped whether a 202 Petition is actually covered by the Texas Anti-Slapp.

 The TSC’s discussion on statute of limitations is instructive as it noted that once the petitioner knew of the statements the clock starts ticking, and it is upon the injured party to use whatever tools, including a “Doe lawsuit,” to discover who made the statements.

 The TSC also denied Glassdoor’s request for recovery of attorneys’ fees (distinguishing its mootness analysis from State v. Harper, 562 S.W.3d 1, 6 (Tex. 2018)).  Because the statute of limitations issue mooted the 202 Petition (and Glassdoor failed to win its Texas Anti-Slapp motion at the trial court) Glassdoor could not recover attorneys’ fees. 

In essence, Glassdoor’s mootness argument defeated its Texas Anti-Slapp motion.

Texas Supreme Court Flag and Gavel.jpg

Oklahoma Court of Appeals Looks to Cases Interpreting the Texas Anti-Slapp

The Oklahoma Citizens Participation Act (“OCPA”) is substantially similar to the Texas Anti-Slapp, and recently in Southwest Orthopaedic Specialists, P.L.L.C. v. Allison, Case No. 116,348, --- P.3d ---- (OK COA 2018), the Oklahoma Court of Appeals relied heavily on Texas case law in drawing the contours of the OCPA. In particular, with regard to what is necessary to survive dismissal for the damages elements of a claim. Although determining the plaintiff had not met the damage elements of their claims, it remanded to the trial court for a new hearing (ostensibly giving the plaintiff a chance to cure its damage deficiencies).It’s safe to guess that Oklahoma litigators will continue to look to Texas Anti-Slapp case law in the future.

https://antislapplaws.com/oklahoma-anti-slapp-acts-laws.php

Texas Supreme Court- 2018 Year in Review (Part 5 of 5): Starside

Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890 (2018) was the first Texas Ant-Slapp opinion of 2018, and the last in our review.  In this ugly dispute between a homeowner and a real estate developer (Starside), Starside sued the homeowner for business disparagement and later defamation. The trial court dismissed the business disparagement claim (which was non-suited by an amended petition after the Texas Anti-Slapp motion was filed) but did not rule on the defamation claim (added by the same amended petition).  Because the trial court did not timely rule as to defamation claim the motion was denied by operation of law and homeonwner appealed.  The Dallas COA upheld the denial and the TSC reversed and remanded for a determination as to whether Starside met the elements of defamation (which the Dallas COA did not reach). 

The TSC noted that the Texas Anti-Slapp “casts a wide net.”  Something litigants realize all too late. The TSC also determined that homeowner adequately raised whether the amended petition fell under the community or environmental well being prongs of the right to free speech, even though such arguments were apparently raised only in oral argument at the trial court.

As noted in an early blog post, the Starside battle is not over.  The Dallas COA recently dismissed part of the defamation claim but determined that Starside met the elements for a separate defamatory statement.  And it only took three years to get back to the starting point.

 http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=9443fd5f-f844-4bbf-acbf-d841a3c080b7&coa=coa05&DT=Opinion&MediaID=ba244be9-17f8-4d64-8dc6-51554826feec

Texas Supreme Court Flag and Gavel.jpg

How Long Does it Take to Wind Through the Texas Anti-Slapp Appeal Process? The Starside Case Odyssey.

Adams v. Starside Custom Builders, LLC (547 S.W.3d 890) will be the Fifth (and last) TSC opinion of 2018 that I’ll cover (in a later blog post).  But from a timing perspective it provides a case study on how the Texas Anti-Slapp can extend the life of a dispute.

The lawsuit began on March 20, 2015, was met quickly with a Texas Anti-Slapp motion, which was denied by operation of law (because the trial court did not timely rule) on September 14, 2015.  After a timely filed appeal and briefing, the Dallas COA entered an opinion on June 28, 2016.  The TSC accepted the petition for review and rendered an opinion on April 20, 2018.

In other words, the Texas Anti-Slapp motion created a 15 month span until the Dallas COA ruled, and a 3 year span from filing of the lawsuit until the TSC ruled. That’s 3 years and one month.

And the Starside battle continues as the Dallas COA recently issued an opinion December 7, 2018, in response to the TSC’s opinion.  I’ll leave the excitement of how it came down (at least so far) for your reading pleasure.

 http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=9443fd5f-f844-4bbf-acbf-d841a3c080b7&coa=coa05&DT=Opinion&MediaID=ba244be9-17f8-4d64-8dc6-51554826feec

clock.jpg

Texas Supreme Court- 2018 Year in Review (Part 4 of 5): Youngkin - Affirmative Defenses can be Deadly

Youngkin v. Hines, 546 S.W.3d 675 (2018) is a case study on the impact of how an affirmative defense can kill a claim before it gets out the gate.  In Youngkin the plaintiff sued opposing counsel for allegedly defrauding him into a settlement agreement that was read into the record before the trial court.  Plaintiff’s fraud claim was met head on with a Texas Anti-Slapp motion under the “right of petition” that both the trial court and Waco COA denied.  The TSC reversed, determining the defendant attorney established the attorney immunity defense, defeating plaintiff’s claim.

Two things stand out from the Youngkin.  First, the Court noted that it is not limited only to constitutional safeguards. “It does not follow from the fact that the TCPA professes to safeguard the exercise of certain First Amendment rights that it should only apply to constitutionally guaranteed activities.” This is because the Texas legislature defined the terms of the statute broader than the commonly understood concepts of (in this instance) “right of petition.”  This language will assuredly come into play as challenges to the Texas Anti-Slapp, in particular when the TSC finally weighs in on the breadth of “right of association.”

Second, the TSC applied the attorney immunity defense without any submission of evidence by the defendant attorney.  While the TSC noted the better practice is to submit evidence on the affirmative defense, it did not prevent application of the attorney immunity defense relying solely on plaintiff’s pleadings.

Texas Supreme Court Flag and Gavel.jpg

Texas Supreme Court- 2018 Year in Review (Part 3 of 5): Castleman, the Commercial Speech Exemption, and Abatecola.

Castleman v. Internet Money Limited, 546 S.W.3d 684 (Tex. 2018) is arguably the most important decision by the TSC on the Texas Anti-Slapp in 2018 because it provided clarity to the commercial speech exemption. 

 §27.010(b) states “This chapter does not apply to a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product, insurance services, or a commercial transaction in which the intended audience is an actual or potential buyer or customer.

 

The TSC established a four factor test that negates a defendant’s ability to bring a Texas Anti-Slapp claim when: “(1) the defendant was primarily engaged in the business of selling or leasing goods, (2) the defendant made the statement or engaged in the conduct on which the claim is based in the defendant's capacity as a seller or lessor of those goods or services, (3) the statement or conduct at issue arose out of a commercial transaction involving the kind of goods or services the defendant provides, and (4) the intended audience of the statement or conduct were actual or potential customers of the defendant for the kind of goods or services the defendant provides.”

 Abatecola v. 2 Savages Concrete Pumping, LLC, 2018 WL 3118601 (Tex. App.—Houston [14th Dist.] June 26, 2018) (mem. op.) provides an example of the application of the commercial speech exemption.

 http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=fe6d5ad2-48e2-49fc-af43-ffa3edb60983&coa=coa14&DT=Opinion&MediaID=ebcef764-829c-4e67-a867-167a106999d3

 In Abatecola, Defendants were accused of tortiously interfering with plaintiff’s customers.  The Houston COA determined that defendants’ statements to customers were about Defendants’ services (i.e. “buy my services”) to potential customers of such services.  Thus, the exemption applied and Defendants could not use the Texas Anti-Slapp against that particular tortious interference claim.

 The Defendants are trying to appeal but (as of this post) have not filed their brief.  If the Abatecola decision holds, this type tortious interference claim will have a safe harbor from the Texas Anti-Slapp.

Texas Supreme Court Flag and Gavel.jpg

Neiman Marcus walks into the Texas Anti-Slapp

Marble Ridge has accused Neiman Marcus of a $1 billion fraudulent transfer. NM recently responded with a defamation counterclaim, walking squarely into the teeth of a Texas Anti-Slapp claim. More concerning for NM is the nasty judicial proceeding privilege affirmative defense raised by MR. Under Step 3 of the Texas Anti-Slapp, even if NM establishes all the elements of defamation, MR can still obtain dismissal by winning an affirmative defense.

Little doubt that this dog fight ends up before the Dallas COA.

https://www.retaildive.com/news/marble-ridge-files-anti-slapp-motion-against-neiman-marcus/545201/

pot hole.jpg

Texas Supreme Court- 2018 Year in Review (Part 2 of 5): State ex. rel. Best

In State ex rel. Best v. Harper, 16-0647, 2018 WL 3207125 (Tex. June 29, 2018), reh'g denied (Dec. 21, 2018), opinion corrected and superseded (Dec. 21, 2018) the Texas Supreme Court applied the Texas Anti-Slapp statute to a lawsuit to remove a county official under Chapter 87 of the Texas Local Government Code.  The trial court denied the motion and the Waco COA reversed.  The Court affirmed the reversal with a modification. First, the Court determined that a petition to remove an elected official falls within the protection of the Texas Anti-Slapp.  Second, because the removal statue requires the county attorney to participate, the Court examined whether the enforcement exemption applies.  See §27.010(a) (“This chapter does not apply to an enforcement action that is brought in the name of this state or a political subdivision of this state . . .county attorney.”).  The Court then defined “enforcement action” to mean “governmental attempt to enforce a substantive legal prohibition against unlawful conduct.” 

 The TSC ultimately determined that the exemption only applied to the allegations in the removal action related to the county attorney alleging violations of the Open Meetings Act, but not to removal allegations of the official’s incompetency.  Third, the TSC held that sovereign immunity did not protect the government from attorneys’ fees or sanctions. On remand to the trial court the plaintiff will be entitled to a portion  of his fees associated with the dismissed allegations of incompetency action.

 This is a unique fact pattern but demonstrates the long reach of the Texas Anti-Slapp statute.

Texas Supreme Court Flag and Gavel.jpg

Is a Pre-suit demand a set up for an Anti-Slapp Motion under the Right to Petition?

So you are in a dispute with another party and they send you a pre-suit demand? You end up suing and the defendant files a Texas Anti-Slapp motion arguing your lawsuit is in response to their pre-suit demand and thus violates the Right to Petition. Does that argument have legs? Dallas and Houston COAs have said NO, because there is no pending judicial proceeding. QTAT BPO Solutions, Inc. v. Lee & Murphy Law Firm, G.P, 524 S.W.3d 770 (Houston COA 2017) sets out the holding, previously established by the Dallas COA in Levatino v. Apple Tree Cafe’ Touring, Inc.,486 S.W.3d 724 (Dallas COA 2016).

But not so fast, because the Austin COA, in Long Canyon Phase II & III Homeowners Ass'n, Inc. v. Cashion, 517 S.W.3d 212 (Austin CAO 2017.), agreed with Levatino, but analyzed 27.001(4)(E) to determine that a while a demand letter does not apply if there is no pending judicial proceeding, it falls within “any other communication that falls within the protection of the right to petition government under the Constitution of the United States or the constitution of this state.”

Until the TSC weighs in, this will remain an unsettled area of law and demonstrates the breadth and difficulty courts are having with the Texas Anti-Slapp.

pot hole.jpg

What Happens after the Texas Anti-Slapp Motion is Granted or Denied? It’s Way More Complicated than You Think.

A trial court’s decision to grant or deny the Texas Anti-Slapp Motion creates a cascade effect of different scenarios that can impact the lawsuit for a year or more (and depends on the procedural posture of the case.).  This is a non-exclusive list, and I’ll address them in order of easiest to most complex.

I certainly do not envy trial courts having to work through these issues.

Scenario 1:  The Motion is Granted and all of plaintiff’s claims are dismissed and there are no counterclaims.  A final judgment exists and it’s up to the plaintiff to appeal otherwise plaintiff’s lawsuit is over and they are paying attorneys’ fees plus the sanction.

 Scenario 2:  The Motion is Denied.  Defendant now has to decide whether to take an interlocutory appeal pursuant to Tex. Civ. Prac. & Rem. Code §51.014(a)(12).  https://statutes.capitol.texas.gov/Docs/CP/htm/CP.51.htm

To pull off a timely interlocutory appeal you have to understand the Texas Rules of Appellate Procedure (“TRAP”).

·       TRAP 26.1(b) – 20 days from entry of order for accelerated appeals.

·       TRAP 28.1(a) – interlocutory appeals are accelerated appeals.

So the answer is defendant has 20 days to file a Notice of Appeal from the Denial.

But the real impact of the Notice of Appeal is found in §51.014(b)  - which states

“ . . An interlocutory appeal under Subsection (a)(3), (5), (8), or (12) also stays all other proceedings in the trial court pending resolution of that appeal.”

This means an appeal of a Denial effectively stays the entire case.  The plaintiff cannot move forward and neither can the defendant.

Scenario 3:  Plaintiff brings a defamation claim and tortious interference with contract claim (“TIC”).  The Motion is Granted in Part (dismissing the defamation claim) and Denied in Part (keeping the TIC claim alive).  The plaintiff cannot appeal the grant and will have to wait until a final judgment is entered to try and revive the defamation claim.  The defendant, however, can timely perfect an appeal as to the denial of the motion as to TIC claim.  This circles back to Scenario 2, and the stay that will be in play while the appeal progresses.

Playing that scenario out, the defendant gets a ruling (for instance six months after the Order is entered) from the COA that reverses and renders the trial court’s denial of the TIC claim.  The case goes back to the trial court for an award of attorneys’ fees because the COA has fully resolved the TIC claim. 

But, the plaintiff, having completely lost all their claims at this point, now has to decide whether to appeal the initial grant on the defamation claim.  Otherwise, the Plaintiff is stuck in Scenario 1 and is paying attorneys’ fees as to both the defamation and TIC claims.

Scenario 4:  I’ll call these permutations “Absolute Chaos.”  Take Scenario 3 and throw in a  counterclaim by the defendant (and in most disputes there is a counterclaim of some sort).  Until those counterclaims are fully resolved, the plaintiff does not have a final judgment to appeal.

There are other permutations when you factor in that the COA could deny the appeal on the TIC claim, or if you  have an intervening plaintiff or third party.  You could also have multiple parties bringing Texas Anti-Slapp motions  at different times during the litigation, including motions that need to be heard while a denial is pending before the COA.

Hat tip to my partner Jeff Hellberg https://www.wickphillips.com/professionals/hellberg-jeffrey/ who helped me work through this one.

Uncertain.jpg

How Far Across the Judicial Road Does the Texas Anti-Slapp Statute Stretch?

Derek Gaskamp et al v. WSP USA, Inc. (NO. 01-18-00079-CV), highlights both the breadth and complexity of the Texas Anti-Slapp.  Three plaintiffs brought claims for violations of the Texas Uniform Trade Secrets Act, Uniform Fraudulent Transfer Act, breach of loyalty, breach of fiduciary duty, tortious interference with existing contacts and prospective business relations, unjust enrichment, unfair competition, and civil conspiracy.  The defendants moved to dismiss and the trial court denied the motion.

 Although the Houston COA determined the Texas Anti-Slapp applied to all the claims, it upheld the denial as to two plaintiffs and reversed as to the other.  The two plaintiffs that survived the motion did so because the defendants failed to address the application of the commercial speech exemption (§27.010(b)) in their appeal. (I’ll address the exemption in an upcoming  blog on Castleman v. Internet Money Ltd., 546 S.W.3d 684, 688 (Tex. 2018)). 

 The plaintiff, who suffered the reversal, did not respond to the Anti-Slapp motion because it had non-suited itself from the lawsuit (but only after defendants filed their Anti-Slapp motion).  But a non-suit, after filing of an Anti-Slapp motion, does not prevent an award of attorneys’ fees if the motion is successful.  Here, the plaintiff failed to raise any defenses, even the commercial speech exemption that saved the day for its former co-plaintiffs. 

 

 

 

pot hole.jpg