Texas’s anti-SLAAP statute, the Texas Citizens Participation Act (TCPA), can apply to a variety of commercial litigation claims, including claims for misappropriation of trade secrets and breach of non-disclosure agreements (NDAs). If the TCPA is invoked in a case and is found to apply, the plaintiff must respond with clear and specific evidence of the prima facie elements of its causes of action. Recently, the Texas Supreme Court addressed what evidence would satisfy plaintiff’s burden to establish causation and damages.
S & S Emergency Training Solutions, Inc. v. Elliot, 564 S.W.3d 843 (Tex. 2018) is a case involving an employer suing its former employee for breach of her NDA. The employee responded to the lawsuit by filing a motion to dismiss pursuant to the TCPA. The employer submitted its response to the motion and included affidavits seeking to establish the elements of breach of the NDA. On appeal, the only issue before the Texas Supreme Court was whether the employer had established evidence “sufficient to allow a rational inference that some damages naturally flowed from the defendant’s conduct.”
The Texas Supreme Court held that the employer had met this burden. Noting that the employer was not required to provide evidence sufficient to allow exact calculation of its lost profits, the Court found that the employer’s affidavits supported a rational inference that plaintiff’s actions “caused it to lose some specific, demonstrable profits.” Specifically, the affidavit provided evidence that (1) its paramedic courses were profitable before the employee’s alleged disclosure of confidential information and (2) the disclosure of confidential information was a cause of the termination of employer’s contract to provide profitable paramedic courses. The Court also noted that the record provided information–the revenues from the classes, the number of classes, number of students enrolled, and evidence that the classes were profitable–that made the employer’s evidence more than a general averment of a loss of revenue. Therefore, the employer met its burden.
S & S Emergency Training Solutions provides a great example of the type of proof needed to establish causation and damages in responding to a TCPA motion to dismiss.