Lead Opinion
OPINION
This is a second state court lawsuit involving parties who are in a dispute over membership in an association that circulates business ratings to consumers in the
BACKGROUND
The Better Business Bureau of Metropolitan Houston, Inc. (the Houston BBB), the Better Business Bureau of Metropolitan Houston Education Foundation, Dan Parsons, Chris Church, Church Enterprises, Inc., Gary Milleson, Ronald N. McMillan, D’Artagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow appeal the trial court’s denial by operation of law of their motion to dismiss brought under the TCPA. The Houston BBB is a nonprofit corporation that provides the general public with consumer information and reviews about local businesses. John Moore Services, Inc. and John Moore Renovation, LLC, (collectively, John Moore) are home services companies that provide plumbing, electrical, security and home renovation services to consumers in Houston and the surrounding areas. Don Valentine is the Owner and President of John Moore. Dan Parsons is the Chief Executive Officer of the Houston BBB. Valentine is a former Chairman of the Houston BBB Board of Directors, and John Moore was a member of the Houston BBB from 1971 until jt resigned in November 2010.
The parties' are embroiled in a dispute over the Houston BBB’s ratings for local area businesses that it publishes on its website. Before December 2010, the Houston BBB published an “A+” rating for John Moore. Around that time, the BBB changed its ratings criteria, which adversely affected John Moore’s BBB rating. John Moore protested the changes but could not persuade the Houston BBB to raise John Moore’s rating, leading John Moore to resign its membership in the Houston BBB. John Moore’s resignation coincided with the Houston BBB’s decision to revoke John Moore’s accreditation and membership with the Houston BBB.
John Moore continued to use the Houston BBB’s logo in its advertising about awards that John Moore had received from the Houston BBB in the past; the Houston BBB viewed these displays as an infringement on its trademark, and claimed that its rules provide that only currently accredited Houston BBB members may advertise using the Houston BBB logo. John Moore also attempted to affiliate with other branches of the BBB, namely the Bryan-College Station BBB and the Dallas BBB, by contending that its “home office” was now located in these cities. When an investigation revealed'that John Moore did not have operations in these cities, the branches rescinded its affiliation with them. In April 2012, the Houston BBB gave John Moore an “F” rating and posted information about the parties’ dispute. In the two years prior to that rating, John Moore was listed as “NR” or “not rated” because its business headquarters ivas listed as having moved, first to Bryan-College Station, and then to Dallas.
John Moore then filed two state court lawsuits, including the one that has prompted this appeal. Because the relationship between the first and second lawsuits factors in our disposition, we discuss the procedural history of both.
The First Lawsuit
The first state court lawsuit involved most of the parties to this appeal, and this court thoroughly described the background of that case in the course of deciding an interlocutory appeal. See Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc.,
The Houston BBB moved to dismiss under the TCPA, asserting that John Moore’s legal action was “based on, relates to, or is in response to” the exercise of the Houston BBB’s right of free speech and that John Moore lacked evidence that demonstrated a prima facie case for each element of its claims. Id. After the trial court denied the motion to dismiss, the Houston BBB filed an interlocutory appeal. Tex. Civ. Peac. & Rem. Code Ann. § 27.003.
While' that appeal was pending, the trial court issued a docket control order, which required joinder of any additional party by November 16, 2012, and imposed an April 6, 2013 deadline for filing amended and supplemental pleadings. That docket control order set trial for July 5, 2013. The parties proceeded with discovery and, when the docket deadlines neared, filed an agreed motion for continuance, which the trial court granted. The new docket control order extended the pleading amendment deadline until July 26, 2013, and reset trial for October 21,2013.
On July 16, 2013, our court issued an opinion reversing the trial court’s denial of the Houston BBB’s motion to dismiss the first lawsuit under the TCPA. Our court held that the Houston BBB had satisfied its burden under the TCPA to show that John Moore’s claims in the lawsuit related to or were in response to the exercise of the Houston BBB’s right of free speech. Furthermore, our court determined that John Moore had failed to sustain its burden to avoid dismissal under the TCPA. Id. Accordingly, our court remanded the case for proceedings to award costs, attorney’s fees, expenses, and sanctions as mandated under the TCPA. Id.
John Moore then filed an amended petition in the trial court in BBB /—two months after the trial court’s extended pleading amendment deadline and this court’s first opinion in. the case. The amended petition added members of the Houston BBB’s board of directors, the Houston BBB’s president, and the Houston BBB’s Education Foundation. The amended petition alleged the following:
• The Better Business Bureau of Metropolitan Houston Education Foundation: John Moore claimedthat the Foundation’s director encouraged John Moore to display the Award of Excellence emblem and the BBB logo in its advertising, which became an issue between the parties. The Foundation also was a party to the federal trademark infringement lawsuit against John Moore.
• Dan Parsons, the Houston BBB President: According to the amended petition, Parsons, “engaged in a personal campaign to damage John Moore’s business throughout Texas” by manipulating and misleading the Houston BBB board and committee members into seeking revocation of John Moore’s membership and by influencing other regional Bureaus into denying John Moore headquarter status outside of Houston.
• Houston BBB Board of Directors members: Chris Church, Gary Milleson, Ronald N. McMillan, D’Ar-tagnan Bebel, Mark Goldie, Charlie Hollis, and Steven Lufburrow are ' named as directors who allegedly conspired with Parsons and the Houston BBB to end John Moore’s membership status, arbitrarily change its rating by the Houston BBB, and unlawfully restrain John Moore by impairing its ability to compete in and forcing it from the Houston market.
The amended petition also added state law antitrust claims against the Houston BBB and the other defendants, based on an alleged tying agreement to produce “unbiased ratings and fair commentary.” On the Houston BBB’s motion, the trial court struck John Moore’s amended pleading, relying on the automatic stay provision of Chapter 51 of the Civil Practice and Remedies Code, which the Legislature had by that time amended to apply to TCPA appeals. See Tex Civ. Peac. & Rem. Code Ann. § 51.014(a)(12) (West 2015) (eff-Jun. 14, 2018).
John Moore petitioned the Supreme Court of Texas for review of our court’s decision in the interlocutory appeal. See id. § 51.014(b) (West 2015). The Supreme Court denied John Moore’s petition for review on February 14, 2014. John Moore Servs., Inc. v. Better Bus. Bureau of Metro. Houston, Inc., No. 13-0658 (Tex. Feb. 14, 2014). At that point, BBB I returned to the trial court for the required assessment of attorney’s fees and costs under the TCPA. See Tex. Civ. Prac. & Rem. Code Ann. § 27.009(a) (providing for the mandatory assessment of court costs and attorney’s fees in cases in which relief is granted). On remand, the parties tried the issue of attorney’s fees to a jury. The trial court awarded attorney’s fees based on the jury’s verdict and entered a final judgment. John Moore has appealed that judgment, and we issue our opinion and judgment in that appeal together with the opinion and judgment in this case. See John Moore Servs., Inc. v. Better Bus. Bur. of Metro. Houston, Inc., No. 01-14-00906-CV,
The Second Lawsuit
After the trial court struck John Moore’s amended petition in BBB I, John Moore filed a second state court lawsuit— the basis for this appeal—against the Houston BBB and others. In this second suit, John Moore added the same claims and defendants that John Moore unsuccessfully had attempted to add in BBB I through an amended petition after it failed to prevail on appeal in BBB I. John Moore also added as a .defendant Church Enterprises, a Houston plumbing company that is. a member of the Houston BBB and owned by one of the board member defendants. The second suit was transferred to
In its petition in this suit, John Moore alleges that its claims “are distinct from the live pleadings-in [BBB /] and are not pending in the appellate courts.” It further alleges that the causes of action do not arise out of the defendants’ free speech rights “in any respect.”
The petition, however, largely mirrors the amended petition struck by the trial court in BBB I. The second suit again alleges claims for fraud, state law antitrust violations, breach of contract, civil conspiracy, and violations of the DTPA. With respect to the individual defendants, John Moore alleges that “[e]ven when acting in a representative capacity, the individual Defendants are personally liable for their individual acts.” It alleges that each defendant “unlawfully conspired with the Houston BBB and the other Defendants as set forth herein,” and that the Houston BBB unlawfully “tie[d]” John Moore’s entry into the home repair' and renovation market to participation in the business ratings/consumer advocacy market and to the Houston BBB’s interference in its business practices.” It alleges that the Houston BBB has “market power in the home repair and renovation market because of the influence that it has with John Moore’s potential customers.”
With respect to defendant Church Enterprises, the newly added defendant, John Moore alleges that “Church also has market power in the home repair and renovation market because of his company’s market share and other factors.” John Moore alleges that Church Enterprises and the other defendants together unreasonably restrained trade in the home repair market by reducing John Moore’s ability to compete and interfered with John Moore’s contractual relationships with its customers by revoking John Moore’s right to advertise the “Awards for Excellence” that it had received from the Houston BBB before the Houston BBB revoked John Moore’s membership in the organization.
The Motion to Dismiss Under the TCP A and the Appeal
The Houston BBB timely moved to dismiss the second lawsuit under the TCPA. In its motion, the Houston BBB contended that (1) “this lawsuit involves the same facts and circumstances that were at issue in [BBB I ]”; (2) the lawsuit is an “action to interfere with the Houston BBB’s publication of business reviews and ratings” that seeks to circumvent the decision in BBB I; (3) the lawsuit was filed in response to the Houston BBB’s exercise of its free speech rights; and (4) John Moore cannot establish a prima facie case for each essential element of its causes of action with clear and specific evidence.
As evidence in support of its motion to dismiss, the Houston BBB and other defendants attached (1) the amended petition that the trial court struck in BBB I; (2) Valentine’s declaration that he filed on behalf of John Moore in the. parties’ federal court proceeding, together with exhibits of BBB logos used by John Moore in its advertising; and (3) an affidavit from Susan Schade, the Senior Director of Dispute Resolution and. Alternative Dispute Resolution for the Houston BBB, which attached the Houston BBB’s 2012 accreditation standards and a statement of its dispute with John Moore, published on its website at that time.
In his declaration filed in the federal suit, Valentine averred that John Moore had received the Houston BBB Award of Excellence from 2003 through 2010 and used the award logo in its. advertising and marketing campaigns, but as of October 2013, it had “discontinued all use, in any form, format, or context, of the name ‘BBB’ and/or. ‘Better Business Bureau’”
In her affidavit, Schade averred that membership in the Houston BBB is voluntary. Members must agree to abide by its Code of Business Practices; meet or exceed a minimum rating level; and pay a membership fee. The Houston BBB generates a letter rating that reflects its opinion of its members’ services, but a rating is not a guarantee of reliability or performance.
In response to the Houston BBB defendants’ motion to dismiss, John Moore amended its petition and moved for limited expedited discovery, which' the trial court granted; John Moore sought discovery of the Houston BBB’s advertising and ratings requirements, consumer complaints relating to John Moore, and correspondence between the Houston BBB and the Bryan-College Station BBB. The trial court ordered the Houston BBB to produce the complaints that lead to John Moore’s change in rating status.
John Moore then ’filed a response on the merits in the trial court. In its response, John Moore details the ratings process at the Houston BBB and the kinds of customer complaints that factor into the ratings process. When John Moore was no longer allowed to use either Dallas or Bryan-College Station as its headquarters, it contends that the Houston BBB documented an additional 392 complaints against John Moore in its database, and that some of these complaints were duplicates of existing complaints.
■ John Moore alleges a conspiracy to remove it from the Houston BBB membership beginning in March 2010, in which Parsons and John Moore’s competitors fabricated customer complaints and breaches of the Houston BBB’s advertising rules. It further alleges that the Houston BBB cancelled its advertising cooperative, in which the Houston BBB purchased bulk advertising for the use of its members. When it was a member, John Moore had purchased a significant portion of this advertising for its advertising needs.
In support of its response, John Moore attached an additional affidavit from Don Valentine, to which the Houston BBB filed 169 objections. It details John Moore’s history with the Houston BBB, and that in early 2010, the number of complaints against John Moore reported by the Houston BBB “began to trend upward.” Valentine averred that many of these complaints were from consumers who were unhappy with the quoted price for the work or who later found better pricing for their repair work. He further averred that pricing complaints are not the type of complaint that the Houston BBB uses to rate its members. According to Valentine, in the summer of 2010, John Moore agreed to modify an advertisement regarding a special on drain cleaning after consumers complained to the Houston BBB that their situation did not qualify for the advertised offer. He avers that the Houston BBB led him to believe that this issue was resolved. Unbeknownst to Valentine, during that same period, the membership committee planned to recommend that John Moore’s membership be revoked. When the committee notified Valentine of that recommendation, he determined that he would transfer his membership to Bryan-College Station. On November 23, 2010, Valentine notified Parsons that John Moore Services was resigning from the Houston BBB.
The trial court held an oral hearing on the motion to dismiss on June 27, 2014. The trial court did not rule on the motion within 30 days of the hearing, however, causing the motion to be overruled by operation of law on July 28, 2014. See Tex, Civ. Prac. & Rem. Code Ann. § 27.004(a). The Houston BBB filed this
After the motion to dismiss was overruled by operation of law, the trial court issued an order on August 11, 2014, purporting to grant the motion. The trial' court also issued an August 8 order with rulings on the Houston BBB’s objections to the second Valentine affidavit.
DISCUSSION
I. Appellate Jurisdiction
The parties dispute the effect of the trial court’s belated order granting the Houston BBB parties’ motion to dismiss. Because this question implicates our jurisdiction to review the ruling under the TCPA, we consider whether Texas law confers intermediate appellate courts with jurisdiction over the appeal when a TCPA motion is overruled by operation of law and the trial court subsequently signs an order granting the motion outside the time permitted by the statute.
The TCPA’s purpose is “to encourage and safeguard the constitutional rights of the persons to petition,, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for dempnstrable injury.” Tex. Civ. Prac. & Rem. Code Ann. § 27.002. To that end, the TCPA provides a procedure for the expedited dismissal of retaliatory lawsuits that seek to intimidate or silence citizens on matters of public concern. In re Lipsky,
The Legislature’s recent amendments to the Civil Practice and Remedies Code, requiring a stay of proceedings pending a final resolution of the defendant’s TCPA motion, reinforce this right of appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(12), (b) (West 2015); see also
The trial court’s later order in this case, issued after the time for ruling on a-motion to dismiss under the TCPA, does not divest our court of its jurisdiction to hear the issues in this interlocutory appeal. The Texas Rules of Appellate Procedure address our jurisdiction when the trial court has issued orders that affect a pending appeal. Rule 29.5 provides that a trial court’s further orders may not “interfere[ ] with or impair[] the jurisdiction of the appellate court or effectiveness of any relief sought or that may be granted on appeal.” Tex. R. App, P. 29.5(b). Rule 29.5 protects against any party’s forfeiture of its appellate rights due to later events in the trial court, a risk presented when subsequent rulings may render an appealable interlocutory order unreviewable and leave a party to the appeal without a remedy. See Dallas Morning News, Inc. v. Mapp, No. 05-14-00848-CV,
Here, the trial court’s untimely ruling granting the motion is subject to challenge as outside the time for a ruling; thus, dismissal of this appeal presents the risk that the Houston BBB’s request for appellate relief would be impaired in a subsequent appeal of that order. See Direct Comm’l Funding, Inc. v. Beacon Hill Estates, LLC,
Cognizant of the potential problems raised by this procedural posture, the Houston BBB appealed the denial by operation of law rather than relying on the
We hold that the trial court’s untimely order granting Houston BBB’s motion to dismiss under the TCPA does not deprive our court of its appellate jurisdiction to review the denial of a TCPA motion when it is overruled by operation of law. See Tex. R. App. P. 29.6(a); Tex. Civ. Prag & Rem. Code Ann. § 51.014(a)(12); Tex. R. App. P. 29.6(a); Mapp,
II. Dismissal Under the TCPA
In this appeal, The Houston BBB contends that John Moore’s second lawsuit should be dismissed under the TCPA based on the doctrines of res judicata and collateral estoppel. It observes that this case involves the same facts as BBB I and that John Moore filed essentially the same pleading in BBB I. See Tex. Civ. Prac. & Rem. Code Ann. § 27.005(b)(1). John Moore responds that the Houston BBB and the other defendants have failed to demonstrate that BBB I bars John Moore from bringing its claims and further, that (1) it has adduced clear and specific evidence for all of its claims; (2) the commercial speech exception to the TCPA applies; and (3) the TCPA is unconstitutional. We first determine whether- the Houston BBB and the other defendants have borne their burden to demonstrate that BBB I bars this suit under the doctrines of either res judicata or collateral estoppel.
A. Standard of Review
To obtain dismissal under the TCPA, a defendant must show “by á preponderance of the evidence that the legal action is based on, relates to, or is in response to the party’s exercise of the right of free speech; the right to petition; or the right of association.”. Tex. Civ. Prac. & Rem. Code Ann, § 27.005(b). We review this determination de novo. See BBB I,
Under the TCPA, the exercise of the right of free speech “means a communication made in connection with a matter -of public concern.” Tex. Civ. Prao. & Rem, Code Ann. §■ 27.001(3). A “matter of public concern,” includes, among other things, “an issue related to a good, product, or service in the - marketplace.” Id. § 27.001(7)(E). If the movant meets its burden -to show that a claim is covered by the TCPA, then to avoid dismissal of that claim; a plaintiff must establish “by clear and specific evidence a prima facie case for each essential element of the claim in question.” Id. § 27.005(c).
B. Res Judicata
Res judicata, broadly speaking, is the generic name for a group of related concepts concerning the preclusive effect of prior judgments. Barr v. Resolution Trust Corp.,
Texas courts apply the transactional approach to res judicata, which requires that claims arising out of the same subject matter be litigated in a single lawsuit. Hallco Tex., Inc. v. McMullen Cty.,
1. Earlier final judgment on the merits
A dismissal with prejudice under the TCPA constitutes a final determination on tlqe merits for res judicata purposes. Cf. Harris Cty. v. Sykes,
The second element, identity of the parties, does not require that the parties in both lawsuits be identical if the parties named in the subsequent action are in privity with a party to the prior judgment—that is, a party who is so connected with a party to the prior judgment that the party represented the same legal right. See Benson v. Wanda Petroleum Co.,
In addition to the Houston BBB, the second suit names as defendants Houston BBB President Parsons and members of the Houston BBB’s board of directors, in both their official and individual capacities; the Houston BBB’s Education . Foundation; and Church Services, a local plumbing company owned by board member Church. With respect to the Houston BBB president and the board members, we apply the general rule that “the actions of a corporate agent on behalf of the corporation are deemed the corporation’s acts.” Holloway v. Skinner,
With respect to the two remaining defendants—the Houston BBB Education Foundation and Church Enterprises, Inc.—the record does not address the requirement that they share an identity of interest with the Houston BBB, the only defendant in the first suit. These defendants did not become parties to the suit because the trial court struck John Moore’s amended petition naming them as defendants. These defendants thus did not satisfy their burden to establish by a preponderance of the evidence that they either exerted control over the first action, had an adequate representative in the pri- or action, or are successors-in-interest to a defendant in the first action. See Amstadt,
3. Claims that could have been raised
We next consider the third element—whether the claims in this action
Even though the requirements for applying res judicata are met, John Moore responds that the Houston BBB’s conduct in BBB I prevented John Moore from bringing its new claims and adding parties; thus, it contends, res judieata should not apply as a matter of equity. It observes that, though it conducted discovery in BBB I, the Houston BBB successfully moved to strike John Moore’s amended petition in BBB I, and it opposed John Moore’s motion to consolidate this lawsuit with BBB I after BBB I was remanded to the trial court.
The record does not support the conclusion that John Moore was prevented from amending its pleadings in BBB I based on circumstances outside of its control. Before the Houston BBB sought the automatic stay, the parties actively pursued discovery and jointly asked the trial court to extend the discovery period and pleading amendment deadline. John Moore was not precluded from adding the claims it brings in this second suit before that extended deadline passed—while it still could amend its pleadings as a matter, of right. John Moore did not seek to amend its suit until it lost the appeal in BBB I. The decision to forgo amendment of its pleadings until after the time for amending them as a matter of right had ended and after an adverse ruling on appeal occurred was an obstacle unrelated to any litigation conduct of the Houston BBB.
A trial court has no discretion to refuse a pleading amendment unless the opposing party presents evidence of surprise or prejudice, or the amendment asserts a new cause of action or defense, and thus is prejudicial on its face, and the opposing party objects to the amendment. Greenhalgh v. Serv Lloyds Ins. Co.,
John Moore contends that-the Houston BBB improperly arguéd for the imposition of a stay pending appeal in BBB I and that the trial court struck the amended pleading because the Houston BBB invoked the stay. While the appeal in BBB 1 was pending, the Legislature amended Chapter 51 of the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ahn. § 51.014(a)(12), (b). When the amendments became effective, the Houston BBB argued for the automatic stay. See id. (declaring amendments effective as of June 13,- 2013). As amended, section 51.014(a)(12) allows for an interlocutory appeal from a trial court order that “denies a motion to dismiss filed under section 27.003,” and incorporates by reference a section 27.003 appeal into the list of interlocutory appeals subject to an automatic stay of trial court proceedings. Id. But
In essence, John Moore collaterally attacks the trial court’s interim rulings in BBB I to avoid BBB I’s preclusive effect in this suit. But- the law of claim preclusion is that those challenges must be raised and litigated in the first proceeding—not in a subsequent suit brought after a party does not prevail in the ■ trial court during, the course of the first one.
John Moore relies on three cases for its contention that res judicata does not apply because Houston BBB’s litigation strategy prevented John Moore from amending its petition in the first suit, but the facts in each of them are inapposite. In Sysco Food Services, Inc. v. Trapnell, a federal procedural requirement prevented the plaintiff from bringing its state law claims in federal court.
In the second case that John Moore relies on, Van Dyke v. Boswell, O’Toole, Davis & Pickering, the trial court severed claims for attorney’s fees and legal malpractice from a divorce case, so that the separate trials held for each led to final judgments.
John Moore’s third case, Finger v. Southern Refrigeration Services, Inc.,
Chapter 27 places parties on notice that, when claims arguably involve statements made in the exercise of the right of free speech .or the right of association, the defending party may promptly file a motion
We hold that the Houston BBB, its president, and the board members have established the elements of res judicata. Accordingly, the claims against those defendants should be dismissed. Because the BBB .Houston Education Foundation and Church Enterprises were not parties to the first suit and have not demonstrated an identity of interest with the parties in the first suit, we turn to the additional grounds for dismissal urged by the defendants in their motion to dismiss under the TCPA.
C. Collateral Estoppel
We next consider whether collateral estoppel, or issue preclusion, applies to the remaining defendants, Church Enterprises and the BBB Houston Education Foundation. Collateral estoppel “prevents relitigation of particular issues already resolved in a prior suit.” Barr,
To establish collateral estoppel, a party must demonstrate that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first ■ action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action. John G. & Marie Stella Kenedy Mem’l Found, v. Dewhurst,
A party in a subsequent suit may invoke collateral estoppel even if it did not participate in the first suit, if the party against whom collateral estoppel is asserted was either a party or in privity
John Moore’s pleadings allege that the defendants (1) deviated from the Houston BBB’s established membership standards in changing John Moore’s rating; (2) manipulated, misled, and conspired with the Houston BBB board and committee members into seeking revocation of John- Moore’s membership; (3) disregarded established board procedures to terminate John Moore’s Houston BBB membership without a full board vote; (4) threatened John Moore to refrain from appealing the termination decision; and (5) conspired to contest John Moore’s right to display the Houston BBB Awards for Excellence it had won in the past and pressured other regional BBBs into declining or revoking John Moore’s headquarter status in other cities. The pleadings allege that Church Enterprises and the Houston BBB Education Foundation participated in the conspiracy.
The second suit asserts causes of action not raised in first suit, including violations of state antitrust law, codified in the Texas Free Enterprise Act; breach of contract; unjust enrichment; violations of the Texas Deceptive Trade Practices Act; and conspiracy to violate the TFEA and the DTPA. But the second suit indisputably arises from the same nucleus of operative facts that gave rise to the first suit. The third element of collateral estoppel is satisfied by a showing that “the party against whom the doctrine is asserted was a party or in .privity with a party in the first action.” Neely v. Comm’n for Lawyer Discipline,
Our court in BBB I concluded that all of the claims in the first lawsuit were “based on, relate[d] to, or ... in response to” the Houston BBB’s exercise of its free speech rights, thereby satisfying TCPA section 27.005(b). See BBB I,
The factual allegations in this case arise out of the same conduct that served as the basis for the claims in BBB I. Thus, the panel made .an express finding on the merits as to the applicability of the -TCPA to the facts alleged in both.lawsuits. Similarly, in the first suit, as it does here, John Moore argued that the business exemption under TCPA section 27.010(b) prevented the TCPA from applying, but the panel opinion in BBB I expressly held that the exemption did not apply. Id. at -354. These findings were essential to the judgment dismissing John Moore’s claims. Accordingly, we hold that these findings in BBB I apply to this case and bar relitigation of the applicability of the TCPA.
Because the court in BBB I heard and expressly rejected John Moore’s challenges to the applicability of the TCPA, we hold that John Moore is collaterally es-topped from asserting those same challenges in this suit. We further hold that its claims for fraud and equitable relief are collaterally estopped, because these claims were fully considered in BBB I and found against John Moore. See BBB I, 441
D. The TCPA and John Moore’s Remaining Claims
At the outset, John Moore challenges the constitutionality of the TCPA, arguing that its requirement that a plaintiff adduce “dear and specific evidence” to avoid dismissal under the TCPA violates the Open Courts Provision of the Texas Constitution and its right to trial by jury. The Houston BBB defendants respond that the panel in BBB I expressly held that John Moore waived this issue; thus, John Moore is collaterally estopped from raising its constitutional challenge again in this suit. See BBB I,
The BBB defendants cite' no authority for the proposition that a finding of waiver of an issue can collaterally estop litigation of the waived issue in a subsequent proceeding. Thus, we examine the merits of John Moore’s constitutional challenge. John Moore contends that the TCPA violates the Texas Constitution as applied to the facts of this case, contending that the requirement that it adduce “clear and specific” evidence is a higher burden than that required to counter a motion for summary judgment, because it does not allow for reasonable inferences and instead requires direct evidence to support a claim. Thus, it contends,- this language deprives it of its right of access to the courts and to a trial by jury by imposing a higher burden of proof than allowed to prove a claim at trial.
During the pendency of this appeal, however, the Texas Supreme Court rejected that interpretation; it expressly held that the clear and specific evidence standard under the TCPA does riot require direct evidence of each essential element of the underlying claim to avoid dismissal, but instead the evidence may ‘ encoriipass circumstantial evidence and rational inferences. See Lipsky,
With respect to its remaining claims against the Education Foundation and Church Services, John Moore must adduce clear and specific evidence to support each element of its claims in response to the motion brought under the TCPA. See Tex. Civ. Prac. & Rem. Code Ann. § 27.005(c). We address each of the remaining claims in turn.
1. Breach of contract, unjust enrichment, and detrimental reliance
A breach of contract claim requires the existence of an enforceable contract with definite terms. See T.O. Stanley Boot Co., Inc. v. Bank of El Paso,
2. DTPA
John Moore alleges that the Education Foundation and Church Services, together with the other defendants, conspired to commit violations of the DTPA, by causing “confusion and misunderstanding by authorizing [John Moore] to display and advertise the BBB Awards for Excellence and then retrospectively applying a rule change prohibiting said display and advertisement.” The specific allegations against the Education Foundation are that its executive director authorized John Moore to “prominently display the [BBB] Award for Excellence name and logo on all of John Moore’s mediums of advertising” and “encouraged award recipients to prominently. advertise its name and logo in order to increase the interest of local businesses and consumers in its awards competition.” As a result, John Moore contends, it spent “millions of dollars advertising with the Awards of Excellence.”
As the defendants note, however, Valentine’s affidavit in the federal court lawsuit evidences his agreement to discontinue use of the BBB trademark and logo to obtain dismissal of that suit; John Moore proffers no evidence that its removal of the BBB trademark and logo to end the federal court suit caused confusion about the sponsorship or approval of John Moore’s services. Ultimately, John Moore itself agreed to remove the BBB logo and trademark from John Moore’s advertising. Thus, we conclude that John Moore did not adduce evidence in support of its claim under the DTPA that either of these defendants caused or conspired to cause a violation of the sponsorship and approval provisions of the DTPA. See Tex, Bus. & Com. Code Ann. § 17.46(b)(2) & (5) (West Supp.2015). In addition, John Moore does not direct us to any evidence that it is a “consumer” who sought to acquire goods by purchase or lease, as required by the DTPA. Id. § 17.45(4). Accordingly, we hold that its DTPA claim is properly dismissed under the TCPA.
3. State Law Antitrust Claims and the Texas Free Enterprise Act
John Moore has pleaded (1) restraint of free trade in violation of the Texas Free Enterprise Act Section 15.05(a); and (2) conspiracy to monopolize and attempted monopolization in violation of section 15.05(b). See id. § 15.05(a), (b) (West 2011). Section 15.05(a) provides: “Every contract, combination, or conspiracy in restraint of trade or commerce is unlawful.” Id. § 15.05(a). Section 15.05(b) provides: “It is unlawful for any person to monopolize, attempt to monopolize, or conspire to monopolize any part of trade or commerce.” Id. § 15.05(b). '
Under the Act, a plaintiff may sue if its business or-property has been injured by reason of any conduct declared unlawful under the Act. See id. In other words, a plaintiff must demonstrate standing to sue with evidence of (1) an injury to the plaintiff proximately caused by the defendant’s
In its brief, John Moore contends that the Houston BBB violated section 15.05(a) by forming a trade association that (1) restrained trade in the markets for home repair and renovation and for trade association memberships and services; and (2) imposed a “horizontal non-price restraint” by isolating John Moore from its competitors. It contends that the Houston BBB’s business reviews and ratings reflect its business for “trust” and that it “lends that trust to businesses by giving those businesses positive reviews and ratings under its trademark.” Thus, it contends, the “tying product is consumer trust in the Houston BBB trademark,” which it ties with membership in the Houston BBB.
John Moore’s briefing does not specifically address Church or the Education Foundation. In its petition, John Moore alleges that Church Services and the Education Foundation “unlawfully conspired” with the Houston BBB and the other defendants to prevent John Moore from “becoming] a member of and receiving] ratings from any Better Business Bureau other than the Houston BBB” for the improper purpose of damaging John Moore’s ability to compete “in the home repair and renovation market so that its competitors (specifically Church Enterprises) could gain market share without competing on an even playing field.” But John Moore points to no evidence supporting its claim there was any agreement to restrain trade in violation of Section 15.05(a). See Aquatherm Indus. Inc. v. Fla. Power & Light Co.,
In addition, John Moore does not point to any evidence of injury or damage that it sustained—that it suffered a loss in market share or any adverse effect because it stopped using the BBB trademark in its advertising and was no longer a member of the organization. Regarding damages, John Moore’s brief states: “Indeed, without membership and facing scathing reviews and an ‘F’ rating, John Moore’s call volume (and associated revenue) fell 13%.” But John Moore offers no evidence that its lack of membership or negative rating caused its decline in call volume or that the Houston BBB ratings affected John Moore’s share of the Houston market. It also does not offer evidence that the Houston BBB’s alleged restraint of trade had any adverse effect on competition for home services in the Houston market. See De-Santis v. Wackenhut Corp., 793 S.W.2d
John Moore’s claim under séction 15.05(b) fails for similar reasons. On appeal, it limits its claim to attempted monopolization. To prove a claim of attempted monopolization, a plaintiff must show: (1) that the defendant has engaged in predatory or anticompetitive conduct; (2) a specific intent to monopolize; and (3) a dangerous probability of achieving monopoly power. See Spectrum Sports, Inc. v. McQuillan,
(John Moore alleges that the Education Foundation and Church Services engaged in a conspiracy that attempted to monopolize “the market[ ] for consumer trust, for membership in similar trade organizations, and for mediation of consumer complaints (by the Houston BBB) and in the market for home repair and renovation services (by Church Enterprises).” John Moore offers no parameters of these markets or any evidence of relative market share for any of them. John Moore claims that Chris Church “was a key player in convincing the Membership Committee to revoke John Moore Renovation’s membership,” pointing to an email from Church in which Church states, “I truly will help in this situation, I see the issue,” and “I have some thoughts on not only solving this problem -but also keeping] this from occurring in the future.”
Evidence of Church’s opposition to John Moore’s membership in the Houston BBB, however, is not tantamount to evidence of participation in a conspiracy to monopolize a market. Evidence of ill will among competitors, without more, is not evidence of anticompetitive behavior. See Aquatherm,
For these reasons, we hold that John Moore has not adduced clear and specific evidence of its claims against the Houston BBB Education Foundation and Church Services for a conspiracy to violate the TFEA.
CONCLUSION
We hold that the TCPA requires dismissal of John Moore’s claims against the Houston BBB, its president, and its board, as barred by res judicata, and the claims
Dissenting Opinion
dissenting.
The trial court in this case granted the TCPA motion 'to dismiss. Our court now enters an appellate judgment of reversal in this interlocutory appeal, and concludes ... the trial court should have granted the TCPA motion to dismiss.
In contrast to a flawed interpretation of the TCPA in Direct Commercial Funding v. Beacon Hill Estates, LLC,
Because our court incorrectly exercises interlocutory appellate jurisdiction to reverse the interlocutory denial of the motion by operation of law—which the trial court already had reversed by revising the ruling—I respectfully dissent. The TCPA simply does not require this wasteful, du-plicative, and time-consuming exercise.
I
The Texas Citizens Participation Act, Tex. Civ. Prac. & Rem. Code §§ 27.001-.011 (TCPA), provides that if a trial court does not rule on a motion to dismiss within 30 days of the hearing, the motion is denied by operation of law. Tex. Civ. Prac. & Rem. Code § 27.008(a). When that happens, the movant may appeal. Id. §§ 27.008(a), 51.014(a)(12). But the movant is not required to appeal, nor is it required to appeal instantaneously. The movant has 20 days within which to file a notice of interlocutory appeal.
In this case, the trial court held a hearing on the Bureau’s TCPA motion to dismiss on June 27, 2014. After hearing the arguments of counsel, the court advised the parties of its intention to read their voluminous filings, including the motion, responses, and objections related to the motion to dismiss. Alluding to the 30-day statutory deadline for a ruling, the trial judge stated:
I will try and rule as fast as I can. I know there is a statutory deadline. I will do my very best. But I hope you will just indulge me that you understand I want to read everything and make sure I am making an informed decision, whichever way I go, and I’m not just,you know, flipping a coin or just trying to meet a deadline. So thank you for all of that.
The court did not rule before the 30-day statutory deadline, and the motion to dismiss was denied by operation of law on July 28,2014. See id. § 27.008(a).
Perhaps aware of the 20-day window to file a notice of appeal and the trial judge’s comments about his desire to make an “informed decision,” the Bureau did not file its notice of appeal the next day. It waited. And on August 11, 2014, the trial court ruled, granting the Bureau’s motion to dismiss.
Despite prevailing on its motion, the Bureau nevertheless filed a notice of interlocutory appeal from the July 28 denial of its motion which had occurred by operation of law. Why? Under Direct Commercial Funding, a recent and possibly controlling authority from another intermediate appellate court with coterminous appellate jurisdiction over the district court,
II
Generally, appeals may be taken only from final judgments. Lehmann v. Har-Con Corp.,
Our interlocutory jurisdiction hinges on what effect the August 11 order had on the July 28 denial by operation of law. If the trial court lacked the authority to enter the August 11 order,
A .
In general, a trial court retains plenary power over'its ipterlocutory orders until a final judgment is entered. Fruehauf Corp. v. Carrillo,
Fruehauf Corp. v. Carrillo,
A trial court has plenary power over its judgment until it becomes final. Mathes v. Kelton,569 S.W.2d 876 , 878 (Tex.1978); Transamerican Leasing Co. v. Three Bears, Inc.,567 S.W.2d 799 , 800 (Tex.1978). The trial court.also retainscontinuing control over interlocutory orders and has the power to set those orders aside any time before a final judgment is entered. Texas Crushed, Stone Co. v. Weeks, 390 S.W.2d 846 , 849 (Tex.Civ.App.—Austin 1965, writ ref'd n.r.e.). An order granting a new trial is an unappealable, interlocutory order. B.F. Walker, Inc. v. Chaney,446 S.W.2d 896 , 897 (Tex.Civ.App.—Amarillo 1969, writ ref'd n.r.e.). Denying the trial court the authority to reconsider its own order for new trial during the 75-day period needlessly restricts the trial court, creates unnecessary litigation, and is inconsistent with the notion of inherent plenary power vested in the trial courts.
Id. at 84 (emphasis supplied). Thus, because the trial court in Fruehauf retained plenary power, it did not act improperly by vacating its order granting a new trial. Id.
John Moore argues for the application of an exception to the general rule, relying on Direct Commercial Funding for its argument that the trial court lacked authority to grant the Bureau’s motion to dismiss on August 11. In Direct Commercial Funding, the trial court granted the defendant’s TCPA motion to dismiss 72'days after the hearing on the motion. Direct Commercial Funding,
The TCPA provides that a party may file a motion to dismiss a legal action which is “based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association.” Tex.'Civ. Prac. & Rem. Code § 27.003(a). Although such a motion “must be filed” within 60 days of service of the legal action, the statute expressly authorizes a trial court to “extend the time to file a motion” to dismiss “on a showing of good cause.” Id. § 27.003(b). In á similar way, the TCPA requires a hearing on the motion to dismiss to be set within 60 days of service of the motion, but the statute expressly authorizes an extension of up to 90 days from service of the motion due to docket conditions of the court, a showing of good cause, or agreement of the parties. Id. § 27.004(a). The statute also expressly authorizes an extension of time for the hearing of up to 120 days from service of the motion if discovery is, necessary. Id. § 27.004(c).
A trial court is required to rule on a TCPA motion to dismiss within 30 days from the date of hearing on the motion. Id. § 27.005(a). ' Unlike the provisions addressing the time for filing the motion or holding a hearing, the provision addressing the court’s ruling on a motion to dismiss does not expressly authorize a trial court to extend the time for ruling on a motion to dismiss. Id.
Considering these statutory provisions together, the Fourteenth Court concluded that in enacting the TCPA, the Legislature deliberately distinguished between “extendable deadlines” and “firm deadlines.” Direct Commercial Funding,
The distinction drawn by the legislature between extendable deadlines and firm deadlines—and more particularly, the mandatory deadline that applies to the trial court’s authority to rule on a motion to dismiss—would be meaningless if the trial court, acting sua sponte, couldreverse the consequences imposed. by statute for failure to timely act.
Id.
The Direct Commercial Funding opinion also drew analogies from Rules 165a and 329b of the Texas Rules of Civil Procedure, which specifically allow a court to grant a motion to reinstate a case that has been dismissed for want of prosecution, a motion for new trial, or a motion to vacate, modify, correct, or reform a judgment after such motions have been denied by op-ératión of law. Id. at 402 (discussing Tex. R. Civ. P. 165a & 329b), The court compared the TCPA to Rules 165a and 329b, and it observed: “Unlike these procedural rules, the Citizens Participation Act contains no analogous provision empowering the trial court to grant a motion to dismiss after it has been overruled by operation of law.” Id. Thus, because the TCPA does not expressly authorize a court to grant a motion to dismiss more than 30 days after the hearing, the Fourteenth Court of Appeals held that the trial court was “not authorized to grant a motion to dismiss under the Act more than 30 days after the hearing on the motion.” Id.
. I respectfully disagree with the statutory analysis in Direct Commercial Funding. Section 27.005 pertains to a ruling on a motion to dismiss, and it provides in relevant part that the court “must rule” within 30 days of the hearing and that the court “shall dismiss” a legal action when the movant meets his burden and the non-movant fails to meet his burden. See Tex. Civ. Prac. & Rem. Code § 27.005. When used in statutes, both “shall” and “must” are ordinarily construed as creating mandatory obligations. Tex. Dept. of Pub. Safety v. Shaikh,
But “mandatory statutory duties are not necessarily jurisdictional.” Crosstex Energy Services, L.P. v.. Pro Plus, Inc.,
I would hold that the requirement that thé court rule on a TCPA motion to dismiss within 30 days of the hearing is not jurisdictional. The denial of the Bureau’s motion to dismiss was an interlocutory order, subject to the ongoing control and continuing plenary power of the trial court. See Fmehauf,
B
In reaching the opposite conclusion, this court accepts the Direct Commercial Funding rule as a given, despite the fact that the Bureau argues the case was incorrectly decided, and our interlocutory appellate jurisdiction hinges on it.
Rule 29.5 (“Further Proceedings in Trial Court”) applies to permit “further” interlocutory trial court orders to be made “[w]hile an appeal from an interlocutory
The other provision, Rule 29.6 (“Review of Further Orders”) permits interlocutory review, of two categories of interlocutory trial court orders ancillary to one that has been appealed. First, we may review “a further appealable interlocutory order concerning the same subject matter.” Tex. R. App. P. 29.6(a)(1). That category is inapplicable to this appeal because an order granting a TCPA motion to dismiss,- such as the August 11 order, is not an “appeal-able interlocutory order.” Schlumberger,
Instead of exercising any power under Rules 29.5 or 29.6, the real crux of the court’s reasoning is its assertion that the August 11 order should not be considered to “divest our court of its jurisdiction” over reviewing the denial of the motion to dismiss by operation of law. However, the Supreme Court already has acknowledged that an interlocutory appeal may be mooted by a subsequent order. See Hernandez,
Finally, to the extent the relief requested in this particular appeal encompasses a resolution of the Bureau’s procedural quandary stemming from the holding of Direct Commercial Funding, that issue is fully resolved by the analysis necessary to dismiss the appeal, which explains why the trial court maintained plenary power to enter the order granting the TCPA motion to dismiss. Thus stretching our appellate jurisdiction to engage in a merits review of the denial of the TCPA motion to dismiss by operation of law is not necessary to provide the Bureau its full measure of relief And given the constitutional underpinnings of the mootness doctrine,
In sum, the provisions of Rule 29.5 and 29.6 do not compel us to resolve an interlocutory appeal from an order rendered moot by subsequent events, nor do they justify our doing so.
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The trial court’s August 11 order set aside the July 28 denial of the Bureau’s motion to dismiss. It therefore rendered moot - an appeal from the denial of the Bureau’s motion. See Hernandez,
• Our “duty to dismiss moot cases arises from a proper respect for the judicial branch’s unique role under our constitution: to decide contested cases. Under our constitution, courts simply have no jurisdiction to render advisory opinions.” Speer v. Presbyterian Children’s Home & Serv. Agency,
Notes
. Tex, R. App. P. 26.1(b). The TCPA previously permitted an appeal to be filed within 60 days of the ruling, but that provision was repealed effective June 14, 2013. Act of May 24, 2013, 83rd Leg., R.S. Ch. 1042, Sec. 5, 2013 Tex. Gen. Laws 2502,
. The applicability of Direct Commercial Funding, which the Bureau contends was wrongly decided, was an unknown variable. Litigants in Harris County and the nine other counties that constitute the First and Fourteenth Judicial Districts do not know which appellate court will have jurisdiction over- an appeal until after filing a notice of appeal. See Tex. Gov’t Code § 22.202(h). The litigants in this appeal reasonably may have expected an appeal to be heard by the First Court of Appeals due to the assignment of a prior related appeal to this court, see 1st Tex.App. (Houston) Loe. R. 1.3(b), but they could not have known with certainty whether this court would adopt the Fourteenth Court’s reasoning in Direct Commercial Funding. For a discussion of this peculiar feature of appellate jurisdiction over some Texas counties and some of its undesirable consequences, see generally Kem Thompson Frost, Predictability in ,the Law, Prized Yet Not Promoted: A Study in Judicial Priorities, 67 Baylor L.Rev. 48 (2015).
. After the Bureau filed its notice of interlocutory appeal, the trial court signed an order staying further proceedings in the case. The court explained that its order granting the motion to dismiss was entered 14 days -after the statutory deadline due to the volume of material the parties filed (a combined total of 1,601 pages) and a “busier-than-normal” month. The order detailed what the court was doing during the 30-day window for ruling on the motion to. dismiss, including: (1) three jury trials; (2) a 'three-day bench trial; (3) 129 motions set for submission with or without oral hearing; and (4) 254 uncontested motions or requests. The court also noted that it was in trial for a total of 14 days and had no support in the form of a briefing ' attorney, law clerk, or associate judge.
.To the extent the court relies on a legisla- ' tor’s statement of intent for the proposition that the "legislative intent" of section 51.014(a)(12) of the Civil Practice and Remedies Code is "to provide for a right of interlocutory appeal in all possible circumstances,” this court has rejected the relevance of that particular artifact of legislative history in both Paulsen v. Yarrell,
. See, e.g., Direct Commercial Funding, Inc. v. Beacon Hill Estates, LLC,
. See Fruehauf,
. To the extent it matters, see Crosstex Energy Services, L.P. v. Pro Plus, Inc.,
. See Hernandez v. Ebrom,
. This procedural fact distinguishes the case of Dallas Morning News, Inc. v. Mapp, No. 05-14-00848-CV,
. The Bureau stated in its statement of jurisdiction that it "had no choice but to file this interlocutory appeal based on the Fourteenth Court of Appeals’ decision in Direct Commercial Funding v. Beacon Hill Estates, LLC,
. Speer v. Presbyterian Children’s Home & Serv. Agency,