618 S.W.3d 118
Tex. App.2020Background
- Republic Tavern contracted with Roland Laurenzo’s company, Midtown, to convert and operate a Houston restaurant as "Laurenzo’s Bar & Grill." The venture failed.
- Republic sued Midtown (and 17 related Laurenzo entities) for breach of fiduciary duty and breach of contract; Midtown counterclaimed and impleaded nine "Chopra Parties" alleging breach, fraud, conspiracy, unjust enrichment, quantum meruit, and alter-ego/alter-ego theories.
- Republic and the Chopra Parties moved to dismiss Midtown’s claims under the pre-2019 Texas Citizens Participation Act (TCPA), asserting the claims were based on defendants’ exercise of free speech, petition, or association.
- The trial court denied the TCPA motion; Republic and the Chopra Parties appealed interlocutorily.
- The principal legal question was whether Midtown’s claims arise from communications that are (1) in connection with a matter of public concern (free speech), (2) in response to a judicial petition (right to petition), or (3) an exercise of association (common interests) such that the TCPA applies.
Issues
| Issue | Plaintiff's Argument (Midtown) | Defendant's Argument (Republic/Chopra Parties) | Held |
|---|---|---|---|
| Whether Midtown’s claims are based on defendants’ exercise of free speech (a communication on a matter of public concern) | Statements at issue were private assurances about funding in a private contract and not public matters | Statements were communications about goods/services in the marketplace and thus a matter of public concern under the TCPA | Held for Midtown: statements were private, limited-business communications and not a matter of public concern; TCPA free-speech ground rejected |
| Whether Midtown’s claims were in response to exercise of the right to petition (judicial proceeding) | Midtown’s claims arise from pre-suit private communications outside any judicial proceeding | Counterclaims/third-party claims are "revenge pleadings" filed in response to Republic’s suit, so they are in response to petitioning | Held for Midtown: claims rely on facts outside judicial communications; right-to-petition ground rejected; only the party who petitioned (Republic) could invoke this basis anyway |
| Whether Midtown’s claims implicate the right of association (communications by those with "common interests") | The communications concern a private transaction between parties and do not reflect a public/common associational interest | Membership in a joint business or enterprise shows a common interest and thus invokes the TCPA association protection | Held for Midtown: "common interests" requires a public/community component; private contract/conspiracy claims do not implicate protected association |
| Entitlement to attorney’s fees, costs, and sanctions under the TCPA | No TCPA relief applies, so fees/sanctions are not warranted | If the TCPA applied, defendants would be entitled to fees and sanctions | Held for Midtown: because the TCPA does not apply, defendants are not entitled to fees or sanctions |
Key Cases Cited
- Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127 (Tex. 2019) (communications about goods/services must be relevant to a wider marketplace to be a public "matter of public concern")
- Dall. Morning News, Inc. v. Hall, 579 S.W.3d 370 (Tex. 2019) (de novo review of TCPA burdens)
- Youngkin v. Hines, 546 S.W.3d 675 (Tex. 2018) (statutory construction: plain meaning governs)
- Hersh v. Tatum, 526 S.W.3d 462 (Tex. 2017) (basis of a legal action is determined by the pleader’s allegations)
- Kawcak v. Antero Res. Corp., 585 S.W.3d 566 (Tex. App.—Fort Worth 2019) ("common interests" in TCPA requires a public/community component, not merely interests shared by two parties)
- Bandin v. Free & Sovereign State of Veracruz de Ignacio de la Llave, 590 S.W.3d 647 (Tex. App.—Houston [14th Dist.] 2019) (conspiracy/theft claims do not implicate the right of association under the TCPA)
- Gaskamp v. WSP USA, Inc., 596 S.W.3d 457 (Tex. App.—Houston [1st Dist.] 2020) ("common" in "common interests" construed to require public/community element)
- ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) (private communications can qualify as free speech under the TCPA —court there did not reach association issue)
- Landry's, Inc. v. Animal Legal Def. Fund, 566 S.W.3d 41 (Tex. App.—Houston [14th Dist.] 2018) (TCPA dismissal is determined claim-by-claim)
- Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418 (Tex. App.—Dallas 2019) (right of association requires public or citizen participation)