Texas Citizens Participation Act

Beginning with the Texas Supreme Court decisions in Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015) and ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017) and continuing with the Austin Court of Appeals 2017 decision in Elite Auto Body LLC, d/b/a Precision Auto Body v. Autocraft Bodywerks, Inc., Texas courts had taken the position that Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) had almost unlimited application to commercial litigation cases such as those involving misappropriation of trade secrets. Beginning in 2019, though, certain courts of appeal have begun to reject or limit those holdings.
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In 2019, the Dallas Court of Appeals issued a decision in Goldberg v. EMR (USA Holdings) Inc., a complex opinion in evaluating the application of the previous version of the Texas Citizens Participation Act (TCPA) to trade secrets and other claims.  In 2020, the Court reissued that opinion with a more streamlined analysis.
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Pearl Energy Inv. Mgmt., LLC v. Gravitas Res. Corp., No. 05-18-01012-CV, 2019 WL 3729501 (Tex. App.—Dallas Aug. 7, 2019, no pet.) is a trade secrets case involving the previous version of Texas’s anti-SLAPP statute the Texas Citizens Participation Act (TCPA).  (Effective September 1, 2019, the TCPA no longer applies to trade secrets claims.)  In Pearl Energy, Gravitas, an oil and gas production company, alleged that it spent years researching and evaluating the purchase of certain natural gas assets in Utah from Anadarko.  In 2016, Gravitas approached Anadarko about purchasing the assets.  Gravitas eventually won the bid for the assets and began negotiating a purchase and sale agreement for the assets.
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Through most of 2019, the Dallas Court of Appeals has refused to apply the Texas Citizens Participation Act (TCPA) to commercial litigation claims.  Goldberg v. EMR (USA Holdings) Inc., No. 05-18-00261-CV, 2019 WL 3955771 (Tex. App.–Dallas Aug. 22, 2019, no pet. h.) reverses that trend in part.  Goldberg is too complex of a case to summarize here.  Therefore, I’ll just hit the highlights:
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Most cases that have evaluated the Texas Citizens Participation Act (TCPA) have focused on whether the TCPA applied to the claims.  This isn’t the issue in Neurodiagnostic Consultants, LLC v. v. Nallia, No. 03-18-00609-CV, 2019 WL 4231232 (Tex. App.—Austin Sept. 6, 2019, no pet. h.).  Instead, Nalia focuses on whether the non-movant offered sufficient proof to defeat a TCPA motion to dismiss.
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Over the past several months, I’ve been tracking the explosion of cases where a defendant uses Texas’s anti-SLAAP statute the Texas Citizens Participation Act (TCPA) as a defense to a misappropriation of trade secrets claim under the Texas Uniform Trade Secrets Act (TUTSA).  The Beaumont Court of Appeals case in Callison v. C&C Pers., LLC, No. 09-19-00014-CV, 2019 WL 3022548(Tex. App.–Beaumont July 11, 2019, no pet. h.) is another one of those cases.  Callison involves the familiar fact pattern of an employee accused of acquiring her former employee’s trade secrets and then using those trade secrets to solicit her former customers.  In defense to those claims, the employee filed a motion to dismiss under the TCPA.  The trial court denied employee’s motion by operation of law.  The Beaumont Court of Appeals affirmed.
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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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