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Dallas Court of Appeals Continues its Efforts to Restrict the Application of the TCPA

By Heath Coffman on May 3, 2020

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.

The Dallas Court of Appeals is one such court. For example, in Erdner v. Highland Park Emergency Centers, LLC, No. 05-18-00654-CV, 2019 WL 2211091 (Tex. App.—Dallas May 22, 2019, pet. filed), a physician member of a free-stranding emergency room (FSER) was sued for breach of fiduciary duty by that FSER for allegedly failing to inform the other members of the FSER about an opportunity to open a new FSER in Fort Worth. In response, the physician (and the Fort Worth FSER, who was sued for aiding and abetting the breach) filed motions to dismiss under the TCPA, arguing that the physician’s communications with investors involved the exercise of association and free speech under the TCPA. The motions were denied by the trial court.

The Dallas Court of Appeals upheld the judgment. In evaluating whether the physician’s communications involved the right of association, the Court acknowledged that TCPA defined the exercise of the right of association as a “communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” Nevertheless, the Court, citing the Dyer case, held that the “communication between individuals who join together” must “involve public or citizen’s participation.” Here, the communications were between private communications between a physician and investors about opening an FSER in Fort Worth. The Court concluded that such communications did not involve public or citizen’s participation.

Regarding the right of free speech under the TCPA, the Court noted that private communications that are in connection with “a matter of public concern” as defined by the TCPA meet the definition of the exercise of free speech. However, the Court, citing the Staff Care case, flatly held that “[a] private communication made in connection with a business dispute is not a matter of public concern under the TCPA.” Here, the Defendants’ communications were about the formation of a business. Therefore, the communications did not involve the exercise of free speech—despite the fact that the business could offer healthcare services in the future, which is a “matter of public concern” under the TCPA. Under the Dallas Court of Appeals’ reasoning, “a communication cannot have a ‘tangential relationship’ to a matter of public concern that does not yet exist.”

It remains to be seen whether other courts will follow lead of the Dallas Court of Appeals in restricting the application of the TCPA.

Note: this case is based on the previous version of the TCPA.  A more restrictive version of the TCPA applies to cases filed after September 1.