Texas Citizens Participation Act

The Dallas Court of Appeals opinion in Damonte v. Hallmark Financial Services, Inc., No. 05-18-00874-CV, 2019 WL 3059884 (Tex. App.–Dallas July 12, 2019) is the latest in a string of cases restricting the application of the Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA).  In this case, Hallmark sued Damonte, its former employee, for breach of fiduciary duty, breach of contract, and violations of the Texas Uniform Trade Secret Act (TUTSA) after employees were found to be emailing themselves proprietary information in the weeks immediately before his departure.  In response, Damonte filed a motion to dismiss under the TCPA, alleging that Hallmark’s lawsuit was based on, relates to, or in response to his rights of free speech and association. 
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As previously discussed, the current version of the Texas Citizens Participation Act (TCPA) can apply in a variety of commercial litigation cases.  One of the exceptions to application of the TCPA, though, is the commercial speech exemption.  Under the commercial speech exemption, the TCPA does not apply if (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 good 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.

The new Dallas Court of Appeals case of Clean Energy and Clean Energy Fuels Corp. v. Trillium Transportation Fuels, LLC, No. 05-18-01228, (Tex. App.—Dallas July 9, 2019, no pet. h.) interprets the third prong of this exemption.
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Texas Tech School of Law professor and my former colleague at Brackett & Ellis Rob Sherwin co-wrote a new law review article with Haynes and Boone attorney Laura Lee Prather.   The article discusses the Texas Citizens Participation Act (TCPA) and the changes to the TCPA that went into effect on September 1, 2019.
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In one of my previous posts, I mentioned how the Fort Worth Court of Appeals restricted the scope of Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) by determining that the “common interest” in the definition of “right of association” under the TCPA requires interests that are “shared by the public or at least a group.”  This is a holding that arguably conflicts with other courts of appeals that have held that the “right of association” is implicated in situations where alleged tortfeasors are working together to further a competing business or other interest “common” to the tortfeasors.
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As discussed in previous posts, multiple Texas cases have held that Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) applies in most commercial litigation cases. In a recent string of decisions, though, the Dallas Court of Appeals is attempting to restrict the application of the TCPA to commercial litigation cases.
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If you have been following this blog, you know that a frequent topic is the application of Texas’s anti-SLAAP statute–the Texas Citizens Participation Act (TCPA)–to the Texas Uniform Trade Secrets Act.  In cases such as Craig v. Tejas Promotions, LLC, 550 S.W.3d 287 (Tex. App.–Austin 2018, pet. filed) and Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520 S.W.3d 191 (Tex. App.–Austin 2017, pet. denied), the Austin Court of Appeals held that a petition alleging that two conspirators are working together to misappropriate a competitor’s trade secrets implicates the right of association prong of the TCPA.  In a surprising new opinion, though, the Fort Worth Court of Appeals indicates that it is not going to follow these holdings.
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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.
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A plaintiff who believes its trade secrets have been misappropriated can pursue those claims in either federal or state court. One of the advantages of choosing federal court is the growing body of case law holding that the Texas Citizens Participation Act (TCPA), Texas’s anti-SLAAP statute, does not apply in federal court.
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One of the most common defenses to a misappropriation of trade secrets case under the Texas Uniform Trade Secrets Act (TUTSA) is to file a motion to dismiss under Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA). The defendants in Mancilla v. Taxfree Shopping, Ltd, No. 05-18-00136-CV, 2018 WL 6850951 (Tex. App.—Dallas Nov. 16, 2018, no pet.) employed the TCPA to defend against plaintiff’s TUTSA claim. Unfortunately, though, the defendants were too late in filing the motion.
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As previously mentioned in this blog, one of the biggest issues in trade secrets litigation in Texas is the application of the state’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) to claims under the Texas Uniform Trade Secret Act (TUTSA). Because of the broad language of the TCPA, defendants can file a TCPA motion to dismiss in almost any trade secrets case.

On June 2, 2019, Governor Abbott signed a bill to change that.
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