News

Houston’s First Court of Appeals Reverses Itself on the Application of the TCPA to Trade Secret Claims

By Heath Coffman on June 5, 2020

In 2018, the First Court of Appeals issued its opinion in Gaskamp v. WSP USA, Inc., No. 01-18-00079-CV, 2018 WL 6695810 (Tex. App.—Houston [1st Dist.] Dec. 20, 2018, no pet.), which involves the application of Texas’s anti-SLAPP statute the Texas Citizen Participation Act (TCPA) to a trade secrets case.  The Court’s opinion determined that the TCPA applied to such claims and reversed the trial court’s decision in part.  Recently, though, the Court reconsidered its opinion en banc and determined that the TCPA did not apply to the claims.  Gaskamp v. WSP USA, Inc., No. 01-18-00079-CV, 2020 WL 826729 (Tex. App.–Houston [1st Dist.] Feb. 20, 2020, no pet. h.).

To understand why the Court changed direction, you must only look at the shift in TCPA case law since 2018.  First, the Court looked at the definition of the right of association under the TCPA.  The Court noted that the Third, Twelfth, and Fourteenth Courts of Appeals had held that the TCPA’s right of association “protects alleged conduct by tortfeasors accused of sharing and using misappropriated trade secrets or conspiring together to advance tortious conduct in furtherance of their own business interests.”  However, since 2018, the Dallas Court of Appeals in Dyer v. Medoc and the Fort Worth Court of Appeals in Kawcak v. Antero Resources Corporation determined that misappropriation of trade secrets claims generally do not implicate the association prong of the TCPA because the right of association requires more than two tortfeasors conspiring to act tortiously for their own selfish benefit.  The Court decided to reverse course and follow the Dallas and Forth Worth courts, holding the TCPA’s right of association required communications “of or relating to a community at large: public.”  Because the allegations in Gaskamp only related to misappropriation of trade secrets for the benefit of the five alleged tortfeasors, the communication did not relate to the community at large, and, therefore, the TCPA did not apply under the association prong.

(Strangely, the Court based part of its analysis on the fact that the Legislature recently amended the TCPA to change the definition of the TCPA.  The Court believed that the Legislature amendments reflect the true meaning of the right of association under this version of TCPA.  To the contrary, the Legislature’s amendments reflect that the TCPA did not say what it meant.)

Next, the Court reevaluated its position under the TCPA’s free speech prong.  Defendants alleged that their communications were made in connection with a matter of public concern under the free speech prong because the communications related to a “good, product, or service in the marketplace.”  The Court, citing the Texas Supreme Court’s decision in Creative Oil and Gas, noted that a communication about a “good, product, or service in the marketplace” must have some relevance to a public audience of potential buyers or sellers.  The Court held that the alleged internal communications regarding misappropriation of trade secrets did not have a relevance to a public audience of potential buyers or sellers.  Additionally, the Court held that to the extent the free speech prong was activated by the allegations related to the sending of brochures to one of the plaintiff’s clients, the commercial speech exemption to the TCPA applied