Ryan R. Grant (Individually, and as Trustee of the Ryan R. Grant 2007 Trust) Laura Grant Jana Grimes John E. Grimes (Trustee of the John E. Grimes 2007 Trust) Anne Fielding Scott Sizemore John D. Rowell Herschel Sova v. Pivot Technology Solutions, Ltd. Pivot Acquisition Corp. And ARC Acquisition (US), Inc.
556 S.W.3d 865
Tex. App.2018Background
- GTS (a certified Texas Historically Underutilized Business, or HUB) sold certain assets to ARC Acquisition (a Pivot subsidiary) in 2011; the sale excluded HUB-related contracts. Ryan Grant later worked for Acquisition, and GTS owners granted Pivot an assignable option to buy ownership interests.
- After internal legal advice in 2014 recommended structural changes to protect GTS’s HUB status, GTS and Acquisition took steps (employee transfers, separate payroll, renegotiated service agreements) and GTS was recertified as a HUB in March 2015.
- Pivot and Acquisition sued GTS and many individuals in November 2016 alleging breach of contract, misappropriation, unfair competition, solicitation of customers and employees, breach of fiduciary duty, fraud, conversion, trade-secret misappropriation, conspiracy, and related claims—claiming the Grants and others used HUB recertification steps to convert non-HUB business to GTS.
- GTS defendants moved to dismiss under the Texas Citizens Participation Act (TCPA). The trial court denied the motion, finding TCPA inapplicable and that plaintiffs had made a prima facie case; defendants appealed.
- The court of appeals considered (a) whether plaintiffs’ claims were "based on, relate to, or in response to" protected TCPA communications (speech/association), (b) whether plaintiffs established clear-and-specific prima facie proof of each claim element (especially damages), and (c) alternative issues including timeliness and statutory exemptions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TCPA applies (nexus) | Pivot: claims arise from commercial misconduct and not protected TCPA communications about public matters | GTS: claims are predicated on communications about HUB status and intra-group association—protected as free speech and association | Court: TCPA applies — HUB-related communications are "matter of public concern" and intra-party communications qualify as association; many claims relate to those communications |
| Whether plaintiffs showed clear-and-specific prima facie case (esp. damages) | Pivot: pleadings and attached documents suffice; damages will be proved in discovery and were concealed by defendants | GTS: plaintiffs provided only generalized damage allegations and conclusory statements—insufficient under In re Lipsky standard | Held: plaintiffs failed to provide clear and specific evidence of actual damages or of entitlement to equitable relief; dismissal required for most claims |
| Timeliness of TCPA motion | Pivot: GTS counsel orally accepted service Dec 2, 2016; TCPA motion filed too late for some defendants | GTS: no Rule 119 written waiver/memorandum predated defendants’ appearance; answer filed Jan 13, 2017 triggered 60-day window; motion timely | Held: motion timely as to GTS, Ryan and Laura Grant because formal waiver/appearance occurred Jan 13, 2017 |
| Applicability of TCPA commercial-speech exemption | Pivot: some claims arise from sale/solicitation of goods/services and thus are exempt | GTS: many wrongful acts are regulatory/HUB-related or internal and not commercial-speech exempt | Held: commercial-speech exemption applies to claims based on communications with actual or potential Pivot customers for securing sales (improper solicitation/competition), but not to other claims (e.g., employee transfers, website/logo confusion) |
Key Cases Cited
- ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) (TCPA two-step framework and scope of "in connection with" public concern)
- Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015) (TCPA can cover private communications tied to a matter of public concern)
- In re Lipsky, 460 S.W.3d 579 (Tex. 2015) ("clear and specific evidence" prima facie standard under TCPA)
- Elite Auto Body, LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.—Austin 2017) (communications among competitors/employees protected as exercise of association)
- Castleman v. Internet Money Ltd., 546 S.W.3d 684 (Tex. 2018) (construction of TCPA commercial-speech exemption)