                                                                                   ACCEPTED
                                                                              03-15-00064-CV
                                                                                     4445641
                                                                    THIRD COURT OF APPEALS
                                                                               AUSTIN, TEXAS
                                                                         3/10/2015 4:45:02 PM
                                                                            JEFFREY D. KYLE
                                                                                       CLERK
                 CAUSE NO. 03-15-00064-CV

                                                              FILED IN
                                                       3rd COURT OF APPEALS
                     In the Court of Appeals               AUSTIN, TEXAS
             For the Third Court of Appeals District   3/10/2015 4:45:02 PM
                          Austin, Texas                  JEFFREY D. KYLE
                                                               Clerk



ELITE AUTO BODY LLC, d/b/a PRECISION AUTO BODY, REY R.
     HERNANDEZ, YESICA DIAZ, AND DAVID DAMIAN,
                        Appellants,
                            v.
AUTOCRAFT BODYWERKS, INC., now known as WASSON ROAD
     VENTURES, INC., d/b/a AUTOCRAFT BODYWERKS,
                         Appellee.


     Expedited Appeal from the 353rd Judicial District Court,
      Travis County, Texas, the Hon. Tim Sulak, Presiding


                    APPELLANTS’ BRIEF


                       Rick Harrison
                       Texas Bar No. 09120000
                       rharrison@fbhh.com
                       FRITZ, BYRNE, HEAD & HARRISON, PLLC
                       98 San Jacinto Boulevard, Suite 2000
                       Austin, Texas 78701
                       Telephone: (512) 476-2020
                       Telecopier: (512) 477-5267

                       COUNSEL FOR APPELLANTS

             ORAL ARGUMENT REQUESTED
                     IDENTITY OF PARTIES AND COUNSEL

      Pursuant to Rule 38.1(a) of the Texas Rules of Appellate Procedure,

Appellant lists the following parties affected by this appeal, and their respective

counsel:



            APPELLANTS                                    APPELLEE


Elite Auto Body, LLC d/b/a Precision         Autocraft Bodywerks, Inc., now known
Auto Body, Rey R. Hernandez, Yesica          as Wasson Road Ventures, Inc., d/b/a
Diaz, and David Damian                       Autocraft Bodywerks


Trial and Appellate Counsel:                 Trial and Appellate Counsel:

Rick Harrison                                James Ruiz
Texas Bar No. 09120000                       Texas Bar No. 17385860
rharrison@fbhh.com                           jruiz@winstead.com
S. King                                      Jacylyn G. Austein
Texas Bar No. 24067708                       Texas Bar No. 24069760
aking@fbhh.com                               Jaustein@winstead.com
Dale L. Roberts                              W INSTEAD, P.C.
Texas Bar No. 24001123                       401 Congress Avenue, Suite 2100
droberts@fbhh.com                            Austin, Texas 78701
FRITZ, BYRNE, HEAD & HARRISON,               Telephone: (512) 370-2818
PLLC                                         Facsimile: (512) 370-2850
98 San Jacinto Blvd., Suite 2000
Austin, Texas 78701
Telephone: (512) 476-2020
Facsimile: (512) 477-5267




                                         i
                                         TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ......................................................... i
TABLE OF CONTENTS ....................................................................................... ii
I. STATEMENT OF THE CASE .........................................................................1
II. STATEMENT REGARDING ORAL ARGUMENT .................................2
III. ISSUES PRESENTED ...................................................................................2
IV. STATEMENT OF FACTS ............................................................................2
V.      SUMMARY OF THE ARGUMENT ............................................................5
VI. ARGUMENT ..................................................................................................7
  A. The TCPA Applies to Autocraft’s Claims Against the Precision
     Parties ..............................................................................................................7
   1. The scope of the TCPA and the rights it protects are broad ..................7
     2. Autocraft’s claims are in response to, or relate to, the Precision
        Parties’ exercise of their freedoms of association and free speech .......10
  B. Because Autocraft wholly failed to meet its evidentiary burden, the
     trial court was required to dismiss Autocraft’s claims. ............................12
     1. Conclusory statements in affidavits do not constitute “clear and
        specific evidence.” ......................................................................................12
     2. Autocraft failed to submit prima facie case for each essential
        element of its claims .................................................................................14
  C. The Precision Parties are entitled to an award of their reasonable
     attorneys’ fees and expenses ........................................................................16
 D. The trial court erred by refusing to hear live testimony at the
    hearing on Motion to Dismiss ......................................................................17
CONCLUSION AND PRAYER ...........................................................................18
CERTIFICATE OF SERVICE ............................................................................20
CERTIFICATE OF COMPLIANCE ..................................................................21




                                                            ii
                                       TABLE OF AUTHORITIES

CASES
Beck v. Law Offices of Edwin J. (“Ted”) Terry, Jr., P.C., 284 S.W.3d 416
 (Tex. App.—Austin 2009, no pet.) .......................................................................14

Campbell v. Campbell, Cause No. 03-07-00672-CV, 2010 WL 2477782
 (Tex. App.—Austin June 18, 2010, no pet.) .........................................................13

Combined Law Enforcement Assocs. of Texas v. Sheffield, Cause No. 03-13-
 00105-CV, 2014 WL 411672 (Tex. App.—Austin, January 31, 2014, pet.
 filed) ............................................................................................................. 8, 9, 10

Rehak Creative Svcs., Inc. v. Witt, 404 S.W.3d 716 (Tex. App. – Houston
 [14th Dist.] 2013, pet. denied) .............................................................. 8, 12, 13, 14

Schimmel v. McGregor, 438 S.W.3d 847 (Tex. App.—Houston [1st Dist.]
 2014, pet. filed) .....................................................................................................13

Sprayberry v. Siesta MHC Income Partners, L.P., Cause No. 03-08-00649-
 CV, 2010 WL 1404598 (Tex. App.—Austin April 8, 2010, no pet.) ...................13
STATUTES

TEX. CIV. PRAC. & REM. CODE § 27.001 ................................................................1, 6

TEX. CIV. PRAC. & REM. CODE § 27.001(2) ...............................................................9

TEX. CIV. PRAC. & REM. CODE § 27.001(3) ...............................................................9

TEX. CIV. PRAC. & REM. CODE § 27.001(7)(e) ...........................................................9

TEX. CIV. PRAC. & REM. CODE § 27.002 ................................................................5, 8

TEX. CIV. PRAC. & REM CODE § 27.003(a) ................................................................8

TEX. CIV. PRAC. & REM. CODE § 27.005(b) ...............................................................6


                                                             iii
TEX. CIV. PRAC. & REM. CODE § 27.005(c)..................................................... 6, 8, 12

TEX. CIV. PRAC. & REM. CODE § 27.006 ..................................................................18

TEX. CIV. PRAC. & REM. CODE § 27.009 ..................................................................16

TEX. CIV. PRAC. & REM. CODE § 27.011(b) ...............................................................9

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12) .........................................................1

TEX. CIV. PRAC & REM. CODE § 134A.002 ....................................................... 14, 16

TEX. CIV. PRAC. & REM. CODE § 134A.004 .............................................................14




                                                   iv
                      I.     STATEMENT OF THE CASE

      In response to Appellants’ desire to pursue their common interest in

operating a competing business, Appellee filed suit against Appellants seeking

injunctive relief and damages. [CR 3-11]        In particular, Appellee claims that

Appellants have misappropriated alleged trade secrets as Appellants engage in a

competitive business in the marketplace. These claims are a veiled attempt to

thwart Appellants’ exercise of association, both with regard to the internal

management of their business as well as with recruiting qualified labor to their

company. Appellants filed a Motion to Dismiss Pursuant to Chapter 27 of the

Texas Civil Practice and Remedies Code (the “Motion to Dismiss”), because

Appellee’s claims are in response to, or are at least related to, Appellants’ exercise

of their freedom of association and speech as defined in the Texas Citizens

Participation Act (“TCPA”). See TEX. CIV. PRAC. & REM. CODE § 27.001, et seq.

[CR 18-31] The trial court conducted a hearing on the Motion to Dismiss on

January 22, 2015, and entered an order denying the Motion to Dismiss on January

23, 2015. [CR 49] Appellants filed this expedited appeal pursuant to TEX. CIV.

PRAC. & REM. CODE § 51.014(a)(12) on January 28, 2015. [CR 50-51]




APPELLANTS’ BRIEF                                                              PAGE 1
           II.   STATEMENT REGARDING ORAL ARGUMENT

      This appeal arises from a relatively new statute that has been a matter of

significant debate among the appellate courts as to its scope and application. The

trial court’s decision regarding the scope of the statute’s coverage conflicts with

decisions made by this Court. Accordingly, Appellants believe that oral argument

would likely be helpful in this matter and therefore respectfully requests that oral

argument be granted.

                          III.    ISSUES PRESENTED

1.    Did the trial court commit reversible error when it denied the Motion to
Dismiss on the grounds that the TCPA did not apply to Appellee’s claims despite
evidence showing that such claims were in response to, or related to, Appellants’
exercise of their rights of free association?

2.    In the absence of clear and specific evidence establishing a prima facie case
for each element of Appellee’s claims, was it error for the trial court to deny the
Motion to Dismiss and refuse to award the Precision Parties’ their attorneys’ fees
and expenses?

3.   Was the trial court correct to refuse live testimony at the hearing for the
Motion to Dismiss where the statute does not preclude such evidence?


                        IV.      STATEMENT OF FACTS

      Appellee, Autocraft Bodywerks (“Autocraft”), is an automobile body repair

business in Austin. [CR 4] Until recently, John Borek was Autocraft’s owner and

general manager. Borek Affidavit, ¶ 1 [CR 41] By multiple accounts, Borek was


APPELLANTS’ BRIEF                                                            PAGE 2
a harsh manager whose abusive behavior eventually led to key employees leaving

the company to form a competing business. Hernandez Declaration, ¶ 4 [CR 26];

Damian Declaration, ¶¶ 3, 5 [CR 29-30] Two Appellants, Rey R. Hernandez

(“Hernandez”) and David Damian (“Damian”), are former Autocraft employees.

Hernandez Declaration, ¶ 4 [CR 26]; Damian Declaration, ¶¶ 3-5 [CR 29-30]

      Before working for Autocraft, Hernandez gained extensive expertise

performing various types of auto bodywork for over nineteen years including

several years at a BMW assembly plant in California. Hernandez Declaration, ¶ 2

[CR 25] After coming to Austin in 2008, Hernandez worked for Autocraft for

approximately one year. Hernandez Declaration, ¶ 4 [CR 26] Ultimately,

Hernandez resigned from Autocraft due to the hostile work environment created by

Borek.   Hernandez Declaration, ¶ 6 [CR 26] During his time at Autocraft,

Hernandez was never asked to sign a non-competition, non-solicitation or non-

disclosure agreement. Hernandez Declaration, ¶ 5 [CR 26]

      After leaving Autocraft, Hernandez began operating Precision Automotive

(“Precision”) in 2009. Over the years, Precision developed into a successful auto

body repair business under Hernandez’s leadership. Hernandez Declaration, ¶¶ 6-

7 [CR 26-27] Through his experience in the auto body repair business, Hernandez

became aware of the general business practices employed by such repair shops


APPELLANTS’ BRIEF                                                         PAGE 3
including the use of forms, checklists and Technical Service Bulletins. Hernandez

Declaration, ¶¶ 3,5 [CR 25, 27]

      Damian likewise has many years of experience in the auto body repair

industry including several years working for Autocraft as its Production Manager.

Before working for Autocraft, Damian worked for many years in his father’s auto

body repair shop. Damian Declaration, ¶¶ 2-3 [CR 29] During that time, Damian

became aware of the common business practice of using forms and checklists such

as those used by Autocraft on which Autocraft’s alleged trade secret and

confidential information claims are based. Damian Declaration, ¶¶ 2,4,6 [CR 29-

30] In March, 2014 after several years at Autocraft, David Damian left Autocraft’s

employment and joined Precision.        Damian Declaration, ¶¶ 3-5 [CR 29-30]

During his time at Autocraft, Damian was never asked to sign a non-competition,

non-solicitation or non-disclosure agreement. Damian Declaration, ¶ 4 [CR 30]

Likewise, he was not told that any of the business practices employed by Autocraft

(which were not unique or secret in the industry) were confidential or trade secrets.

      Not long after Damian joined Precision, Joyce Garcia, Autocraft’s office

manager, followed. The employees at Precision enjoy a healthy and productive

working environment in contrast to the stressful and often hostile environment

created by Autocraft’s former manager, Borek. Damian Declaration, ¶¶ 3-5 [CR


APPELLANTS’ BRIEF                                                             PAGE 4
29-30] Hereafter, the Appellants Elite Auto Body, LLC d/b/a Precision Auto, Rey

R. Hernandez, Yesica Diaz, and David Damian are referred to collectively as the

“Precision Parties.” Autocraft’s claims have impacted their communications

among the Precision Parties regarding common business practices that Autocraft

now claims constitute proprietary information as well as communications with

potential customers and potential employees that are currently employed by

Autocraft. Hernandez Declaration, ¶¶ 8-9 [CR 27]; Damian Declaration, ¶ 6 [CR

30]

                    V.    SUMMARY OF THE ARGUMENT

      The TCPA must be broadly construed to protect parties’ rights of association

and free speech. TEX. CIV. PRAC. & REM. CODE § 27.002. The trial court in this

case failed to follow that admonition. The trial court narrowly construed the

TCPA and incorrectly concluded that the statute did not apply to Autocraft’s

claims. Because the TCPA actually applies to Autocraft’s claims, the trial court

incorrectly failed to dismiss the action in the absence of clear and specific evidence

of a prima facie case for each element of Autocraft’s claims.

      This action was clearly instituted in response to the Precision Parties’

exercise of their rights to freedom of association and free speech under the TCPA.

Specifically, Autocraft’s claims target the Precision Parties’ communications in


APPELLANTS’ BRIEF                                                              PAGE 5
pursuit of their common interest of operating a competitive automobile body repair

business. See TEX. CIV. PRAC. & REM. CODE § 27.001(2-3) (defining the rights of

association and free speech under the TCPA).          Although cast as trade secret

misappropriation, Autocraft’s claims are a thinly veiled attempt to interfere with

the Precision Parties’ lawful business competition by preventing them from

communicating non-proprietary business practices and communicating with

Autocraft’s employees. Notably, there is zero evidence of business information

that arguably constitutes trade secret or confidential information. The Precision

Parties clearly met their burden and established that Autocraft’s claims “relate to,

or [are] in response to” the Precision Parties’ exercise of their rights of association

and free speech. TEX. CIV. PRAC. & REM. CODE § 27.005(b).

      Because the TCPA applies to Autocraft’s claims, Autocraft bore the burden

of “establish[ing] by clear and specific evidence a prima facie case for each

essential element” of its claims. TEX. CIV. PRAC. & REM. CODE § 27.005(c).

Autocraft wholly failed to meet that burden.        Instead of providing clear and

specific evidence, Autocraft submitted a conclusory affidavit that primarily recited

allegations from its pleadings. In the absence of clear and specific evidence of

each element of Autocraft’s claims, the trial court was required to dismiss this




APPELLANTS’ BRIEF                                                              PAGE 6
action and award the Precision Parties their reasonable attorneys’ fees and

expenses.

                              VI.   ARGUMENT

A.    The TCPA Applies to Autocraft’s Claims Against the Precision Parties

      Autocraft’s claims are in response to, or at least relate to, the Precision

Parties’ exercise of their rights of association and free speech. Those rights, as

defined by the TCPA, have broad reach and include the Precision Parties’

communications in pursuit of their common interest – the Precision Parties’

competing business – and regarding the Precision Parties provision of services in

the marketplace. Because Autocraft’s claims relate to those communications, the

TCPA applies.

      1.    The scope of the TCPA and the rights it protects are broad.

      Before the enactment of Chapter 27 of the TEXAS CIVIL PRACTICE         AND

REMEDIES CODE, there was no means to avoid the significant expense required to

defend baseless claims intended to stifle people’s rights to freely associate and

communicate. As enacted, the statute’s purpose is to “encourage and safeguard the

constitutional rights of persons to petition, speak freely, associate freely, and

otherwise participate in government to the maximum extent permitted by law, and,

at the same time protect the rights of a person to file meritorious lawsuits for


APPELLANTS’ BRIEF                                                          PAGE 7
demonstrable injury.” TEX. CIV. PRAC. & REM. CODE § 27.002. The statute

accomplishes that purpose by requiring Autocraft to produce clear and specific

evidence of a prima facie case for each essential element of Autocraft’s claims

covered by the statute. Id. § 27.005(c).

      Chapter 27 applies to a broad swath of actions to protect people’s rights of

association and free speech. The statute applies to any legal action that “is based

on, relates to, or is in response to a party’s exercise of the right of free speech . . .

or right of association.” Id. § 27.003(a) (emphasis added). Thus, the statute

applies to any claim that merely relates to a party’s exercise of their freedoms of

association and free speech. See Rehak Creative Svcs., Inc. v. Witt, 404 S.W.3d

716, 733 (Tex. App. – Houston [14th Dist.] 2013, pet. denied) (holding that

conversion and misappropriation claims were covered by the TCPA where they

had “a connection to” protected communications).

      The rights covered by the TCPA are broader than the protections provided

by the Constitution for those same rights. See Combined Law Enforcement Assocs.

of Texas v. Sheffield, Cause No. 03-13-00105-CV, 2014 WL 411672, at *11-12

(Tex. App.—Austin, January 31, 2014, pet. filed). Indeed, the exercise of the right

of association is defined by the statute as follows:




APPELLANTS’ BRIEF                                                                PAGE 8
        “Exercise of the right of association” means a communication between
        individuals who join together to collectively express, promote, pursue, or
        defend common interests.

Id. § 27.001(2) (emphasis added). The exercise of free speech has broad reach as

well:

        “Exercise of the right of free speech” means a communication made in
        connection with a matter of public concern.

Id. § 27.001(3). Matters of public concern include “an issue related to . . . a good,

product, or service in the marketplace.” Id. § 27.001(7)(e).

        In addition to those broad definitions, the TCPA clearly states that it must

“be construed liberally to effectuate its purpose and intent fully.”           Id. §

27.011(b)(emphasis added).         The TCPA’s scope reaches beyond public

participation in government and media defendants.              See Combined Law

Enforcement Assocs. of Texas v. Sheffield, Cause No. 03-13-00105-CV, 2014 WL

411672, at *2, n.1 (Tex. App.—Austin, January 31, 2014, pet. filed) (“There is

nothing in the plain language of the statute that limits its scope, as Sheffield

argues, to a media defendant or solely to public participation in government.”)

(emphasis added). Rather, this Court recognized that the TCPA reaches beyond

constitutional protections “to require a preliminary substantiation of legal actions

relating to a broad range of organizational communications.” Id., at *12.



APPELLANTS’ BRIEF                                                             PAGE 9
Accordingly, this Court found that communications among an organization’s

members to promote the organization’s purpose were covered by the TCPA. Id., at

*5.

      2.     Autocraft’s claims are in response to, or relate to, the Precision
             Parties’ exercise of their freedoms of association and free speech.

      All of Autocraft’s claims center upon the Precision Parties communications

as they promote and pursue their common interests in developing and maintaining

a competitive auto body repair business. Autocraft’s claims are based on the

alleged disclosure of general business information or the alleged attempts by the

Precision Parties “to convince employees to leave Autocraft and join [Precision].”

Pl.’s Orig. Pet. at ¶ 13 [CR 6]; see also id. at ¶ 16 (seeking injunctive relief

prohibiting communication of alleged confidential information and solicitation of

Autocraft’s employees)[CR 6]; id. at ¶ 21 (alleging that the Precision Parties are

conspiring to use Autocraft’s alleged trade secrets) [CR 7]; id. at ¶ 28 (claiming

that Damian assisted in “unfairly competing with Autocraft,” communicated

business information to the other Precision Parties, and communicated with

Autocraft employees encouraging them to change jobs). [CR 8]               Based on

Autocraft’s own pleadings, it is clear that Autocraft’s claims relate to the Precision

Parties’ communication in pursuit of their common interest and regarding their

services in the marketplace.

APPELLANTS’ BRIEF                                                            PAGE 10
      Beyond the pleadings, the Precision Parties’ evidence likewise establishes

that Autocraft’s claims impinge on the Precision Parties’ exercise of their rights of

association and free speech. Rey Hernandez testified that on multiple occasions he

communicated     with    Autocraft    employees    about     potential   employment

opportunities at Precision and, absent Autocraft’s claims in this lawsuit, he

expected that he would continue to do so. [CR 26]          It is obvious that Borek’s

abusive management style was causing Autocraft to hemorrhage employees, with

many seeking employment with the Precision Parties and Autocraft filed this suit

to prevent communications with its employees that could lead to them relocating.

Likewise, Both Hernandez and Damian testified that all of the mundane business

practices claimed to be trade secrets in this case were not kept confidential and

were well known throughout the industry.          [CR 25-27, 29-30]        Even so,

Autocraft’s claims, if successful, would prevent the Precision Parties from

communicating regarding business procedures that are commonly employed in the

automobile body repair shop industry. [CR 27, 30]

      Clearly, the Precision Parties have met their burden establishing that

Autocraft’s claims are in response to, or at least relate to, the Precision Parties’

exercise of their rights of association and free speech. Autocraft’s claims seek to

curtail the Precision Parties’ use and communication of allegedly proprietary


APPELLANTS’ BRIEF                                                            PAGE 11
information as they pursue their common interest of their competing business and

recruit potential employees. Yet Autocraft wholly failed to put on evidence of the

proprietary nature of the information or that the Precision Parties ever used it. The

trial court committed reversible error by finding that the TCPA did not apply.

B.    Because Autocraft wholly failed to meet its evidentiary burden, the trial
      court was required to dismiss Autocraft’s claims.

      Because the TCPA applies to Autocraft’s claims, the burden shifted to

Autocraft to establish by clear and specific evidence a prima facie case for each

essential element of its claims. See Rehak Creative Svcs., Inc., 404 S.W.3d. at

723-724 (discussing the burden-shifting characteristics of the TCPA). Autocraft

did not come close to meeting its burden. Autocraft’s sole, conclusory affidavit

amounts to no evidence of its claims, and certainly does not provide the clear and

specific evidence required by the TCPA.        Therefore dismissal of Autocraft’s

claims was required.

      1.     Conclusory statements in affidavits do not constitute “clear and
             specific evidence.”

      Conclusory statements without factual foundation do not meet the “clear and

specific evidence” burden required by TEX. CIV. PRAC. & REM. CODE § 27.005(c)

to avoid dismissal. Thus, a party’s conclusory statements regarding causation in a

tortious interference with contract claim failed to meet the TCPA’s burden


APPELLANTS’ BRIEF                                                           PAGE 12
resulting in the dismissal of the plaintiff’s claims. See Schimmel v. McGregor, 438

S.W.3d 847, 860-862 (Tex. App.—Houston [1st Dist.] 2014, pet. filed) (“We agree

with Schimmel that the Buy-Out Owners presented only their conclusory

statements, unsupported by any facts, that Schimmel’s actions caused the City of

Galveston to fail to close on the purchases.”). Likewise, conclusory statements

regarding damages are insufficient to meet the TCPA’s burden of clear and

specific evidence.   See Rehak Creative Svcs, Inc., 404 S.W.3d at 734 (“This

conclusory assertion does not rise to the level of ‘clear and specific’ evidence

sufficient to make out a prima facie case of damages caused by and attributable to

the alleged misappropriation.”). And this Court has long held that affidavits that

do not provide a basis for the affiant’s conclusions or their personal knowledge are

fatally defective and constitute no evidence. See Campbell v. Campbell, Cause No.

03-07-00672-CV, 2010 WL 2477782, at *4-5 (Tex. App.—Austin June 18, 2010,

no pet.) (finding affidavit insufficient because it did not show the basis for the

affiant’s personal knowledge of facts recited therein); Sprayberry v. Siesta MHC

Income Partners, L.P., Cause No. 03-08-00649-CV, 2010 WL 1404598, at *3-4

(Tex. App.—Austin April 8, 2010, no pet.) (discussing insufficiency of a

conclusory affidavits because it “consists of factual or legal conclusions or




APPELLANTS’ BRIEF                                                           PAGE 13
opinions that are not supported by facts”). Thus, Autocraft had to present more

than conclusory evidence to meet its burden and avoid dismissal.

      2.    Autocraft failed to submit prima facie case for each essential
            element of its claims.

      Autocraft’s sole affidavit submitted in response to the Precision Parties’

Motion to Dismiss misses the mark. Autocraft asserts claims for trade secret

misappropriation, unfair competition, and breach of fiduciary duty. Autocraft was

required to present clear and specific evidence for each element for each of those

claims. See Rehak Creative Svcs, Inc., 404 S.W.3d at 732-734 (analyzing whether

plaintiff had provided prima facie evidence of its claims for tortious interference,

intentional infliction of emotional distress, conspiracy, and conversion and then

dismissing those claims in the absence of evidence).

      With regard to misappropriation of trade secrets (as well as Autocraft’s other

claims relying on such allegations), Autocraft was required to establish all of the

elements set forth in TEX. CIV. PRAC & REM. CODE § 134A.002 for both

“misappropriation” and “trade secret.” Likewise, all of Autocraft’s causes of

action require evidence of damages and causation. See id. § 134A.004 (stating that

a claimant seeking damages must prove causation or the amount of a reasonable

royalty for the alleged trade secrets); Beck v. Law Offices of Edwin J. (“Ted”)

Terry, Jr., P.C., 284 S.W.3d 416, 429 (Tex. App.—Austin 2009, no pet.)(listing

APPELLANTS’ BRIEF                                                           PAGE 14
elements for breach of fiduciary duty claims including existence of a fiduciary

duty, breach of that duty, causation, and damages). 1

         Instead of providing clear and specific evidence for its claims, Autocraft

instead submitted a sole, conclusory affidavit from John Borek. But Borek’s

affidavit is rife with speculation and unsubstantiated conclusions. These include:

         •        “Autocraft has reason to believe David Damian and other former
                  employees who recently left and joined Rey Hernandez and Precision
                  Auto Body . . . may have used or disclosed Autocraft’s confidential,
                  proprietary, and trade secret information . . ..” [CR 42, ¶ 2]
                  (emphasis added)

         •        “After David Damian and Joyce Garcia joined Precision Auto . . .
                  Autocraft learned Prevision Auto was using its proprietary business
                  forms and documents . . ..” [CR 42, ¶ 4] (emphasis added)

         •        “It is my understanding and belief that David Damian and/or Joyce
                  Garcia and possibly others, provided Rey Hernandez with most, if not
                  all, of the above-mentioned confidential, proprietary and trade secret
                  documents and information . . ..” [CR 42, ¶ 6] (emphasis added)

         •        “It is also my understanding and belief that Precision Auto has used
                  Autocraft’s confidential information, including employee salary
                  information, to recruit and solicit more Autocraft employees to join
                  Precision Auto.” [CR 42, ¶ 7] (emphasis added)

Statements based on Borek’s understanding or belief do not provide any evidence

of Autocraft’s claims and certainly do not provide clear and specific evidence.

Furthermore, Borek provides no factual basis to establish his purported personal
1
  In addition to these elements, Autocraft was required to submit clear and specific evidence for each element of
Autocraft’s other causes of action as well including its claims for injunctive relief, civil conspiracy, and vicarious
liability. See, e.g., Chon Tri v. J.T.T., 162 S.W.2d 552, 556 (Tex. 2005) (listing elements for civil conspiracy).


APPELLANTS’ BRIEF                                                                                             PAGE 15
knowledge of any actions taken by the Precision Parties or any of his conclusions

that the Precision Parties are unfairly competing with him.

      In fact, Borek’s affidavit provides absolutely no evidence regarding: (1) the

efforts Autocraft took, if any, to maintain the secrecy of the alleged proprietary

information, (2) the Precision Parties’ appropriation of that information by

improper means, or (3) that the information derives economic value from not being

generally known or ascertainable by proper means. See TEX. CIV. PRAC. & REM.

CODE § 134A.002 (defining the elements to show misappropriation by improper

means and the existence of a trade secret). Similarly, and without limitation,

Autocraft failed to provide any evidence of damages or causation for its claims.

Because Autocraft failed to provide clear and specific evidence for each element of

its claims, all of Autocraft’s claims should have been dismissed.

C.    The Precision Parties are entitled to an award of their reasonable
      attorneys’ fees and expenses.

      The trial court likewise erred by failing to award attorneys’ fees and

expenses to the Precision Parties. Upon dismissal of an action pursuant to the

TCPA, the moving party is entitled to an award of its “court costs, reasonable

attorneys’ fees, and other expenses incurred in defending against the legal action.”

TEX. CIV. PRAC. & REM. CODE § 27.009. The Precision Parties’ counsel presented

evidence, without objection, of their reasonable and necessary attorneys’ fees and

APPELLANTS’ BRIEF                                                           PAGE 16
expenses incurred at the time of the hearing. [RR 29-30] Because the Precision

Parties were entitled to dismissal of Autocraft’s claims under the TCPA, they are

entitled to an award of their attorneys’ fees and expenses in the amount of $15,250.

D.       The trial court erred by refusing to hear live testimony at the hearing on
         Motion to Dismiss.

         Although the Precision Parties’ evidence attached to the Motion to Dismiss

was sufficient to meet their burden, they were nonetheless prepared to present live

testimony at the hearing on the Motion to Dismiss. But the trial court refused to

hear that testimony. [RR 22-24] That testimony would have provided additional

evidence of the impact Autocraft is urging upon the Precision Parties’ freedoms of

association and free speech.2 [RR 24-26] Without limitation, that evidence would

have shown that the forms claimed to be trade secrets by Autocraft are well known

in the industry and can be freely found and ordered online. That evidence would

have also established that the Precision Parties have been restricted from

communicating with potential customers and employees. [RR 25-26]

         The trial court excluded this evidence based upon an unduly narrow reading

of section 27.006 which states:



2
     The declarations of Hernandez and Damian along with Autocraft’s pleadings provide ample evidence that
Autocraft’s claims relate to the Precision Parties’ rights of association and free speech. However, and in the
unlikely event that this Court finds that the Precision Parties failed to meet their burden, the proffered but excluded
testimony should be considered in that regard. [CR 25-28, 29-31]


APPELLANTS’ BRIEF                                                                                          PAGE 17
      In determining whether a legal action should be dismissed under this
      chapter, the court shall consider the pleadings and supporting and
      opposing affidavits stating the facts on which the liability or defense
      is based.

TEX. CIV. PRAC. & REM. CODE § 27.006. While that provision requires the trial

court to consider the pleadings and affidavits, it does not restrict the evidence to

pleadings and affidavits. The fact that materials other than the pleadings and

affidavits may be considered is foreshadowed by other portions of the statute.

Indeed, the TCPA allows for other discovery (including depositions or

interrogatories) on a showing of good cause.       Id.   Such discovery would be

meaningless if the discovery materials could not be considered as evidence relating

to the Motion to Dismiss. The trial court erred by excluding the Precision Parties’

live testimony.

                        CONCLUSION AND PRAYER

      The Precision Parties were entitled to dismissal of this action. Autocraft’s

claims directly impact, and certainly relate to, the Precision Parties’

communications in pursuit of their common interest and regarding their services in

the marketplace. Under these circumstances, Autocraft was required by the TCPA

to present clear and specific evidence of each element of its claims. Autocraft

wholly failed to do so thereby requiring that Autocraft’s action be dismissed and



APPELLANTS’ BRIEF                                                           PAGE 18
the Precision Parties be awarded their attorneys’ fees and expenses. Accordingly,

this Court should provide the Precision Parties the relief they deserve.

      Accordingly, the Precision Parties respectfully request that this Court

reverse the trial court’s order denying the Motion to Dismiss, order that all of

Autocraft’s claims in this matter shall be dismissed, award the Precision Parties

their attorneys’ fees and expenses described above, and grant the Precision Parties

such other and further relief to which they show themselves justly entitled.

                                       Respectfully submitted,

                                       FRITZ, BYRNE, HEAD & HARRISON, PLLC

                                       BY:     /s/ Rick Harrison
                                              Rick Harrison
                                              Texas Bar No. 09120000
                                              rharrison@fbhh.com
                                              S. King
                                              Texas Bar No. 24067708
                                              aking@fbhh.com
                                              Dale L. Roberts
                                              Texas Bar No. 24001123
                                              droberts@fbhh.com

                                       ATTORNEYS FOR APPELLANTS




APPELLANTS’ BRIEF                                                              PAGE 19
                        CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing document has
this 10th day of March, 2015, been forwarded to counsel of record via electronic
service, as follows:

James Ruiz
Texas Bar No. 17385860
jruiz@winstead.com
Jacylyn G. Austein
Texas Bar No. 24069760
Jaustein@winstead.com
W INSTEAD, P.C.
401 Congress Avenue, Suite 2100
Austin, Texas 78701
Telephone: (512) 370-2818
Facsimile: (512) 370-2850

ATTORNEYS FOR APPELLEES


                                      /s/ Rick Harrison
                                      Rick Harrison




APPELLANTS’ BRIEF                                                         PAGE 20
                     CERTIFICATE OF COMPLIANCE

       I certify that this brief complies with the word limit of Tex. R. App. P.
9.4(i)(2)(B) because this brief contains 3,616 words, excluding the parts of the
brief exempted by Tex. R. App. P. 9.4(i)(1).



                                           /s/ Rick Harrison
                                           Rick Harrison


Dated: March 10, 2015




APPELLANTS’ BRIEF                                                       PAGE 21
                    APPENDIX INDEX


ORDER DENYING MOTION TO DISMISS

ROBERTS DECLARATION

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HERNANDEZ DECLARATION

DAMIAN DECLARATION

BOREK AFFIDAVIT

COMBINED LAW ENFORCEMENT ASS’N OF TEXAS V. SHEFFIELD

SCHIMMEL V. McGREGOR

TEX. CIV. PRAC. & REM CODE § 27.001 – 27.006
                                         DC       BK15044 PG310


                                                                                 Filed In The District Court
                                                                                   of ~ty, Te~as
                                                                                on                    flQt,~DI~:
                                                                                at                 I \:00 lrM.
                                 CAUSE NO. D-1-GN-14-004535                      Velva 1.. Price, District Clerk

AUTOCRAFT BODYWERKS, INC.,                       §                         IN THE DISTRICT COURT
                                                 §
       Plaintiff,                                §
                                                 §
vs.                                              §
                                                 §
ELITE AUTO BODY LLC,                             §
dba PRECISION AUTO BODY,                         §
REY R. HERNANDEZ,                                §                         TRAVIS COUNTY, TEXAS
YESICA DIAZ, and                                 §
DAVID DAMIAN,                                    §
                                                 §
       Defendants,                               §
                                                 §
vs.                                              §
                                                 §
JOHN BOREK,                                      §
                                                 §
       Tltird-Party Defendant.                   §                         345th JUDICIAL DISTRICT

      ORDER DENYING DEFENDANTS' MOTION TO DISMISS PURSUANT TO
      CHAPTER 27 OF THE TEXAS CIVIL PRACTICE AND REMEDIES CODE

       On the 22nd day of January, 2015, the Court heard Defendants' Motion to Dismiss

Pursuant to Chapter 27 of the Texas Civil Practice and Remedies Code (the "Motion"). After

considering the pleadings, affidavits, and legal arguments, llle-Gourt lind• tlmt Chopter 27 of tl>e       ~/.
'Fexas Civil Prac dee and Remedies Code is inapplicable t6        tb:i~ ~ttit. It is therefore,             'I z.~/'.5
       ORDERED that the Motion is hereby DENIED in all respects.



Signed this   2.~"day of January 2015.




                                                                      49
                     CAUSE NO. 03-15-00064-CV


                          In the Court of Appeals
                  For the Third Court of Appeals District
                               Austin, Texas


ELITE AUTO BODY LLC, d/b/a PRECISION AUTO BODY, REY R.
     HERNANDEZ, YESICA DIAZ, AND DAVID DAMIAN,
                        Appellants,
                            v.
AUTOCRAFT BODYWERKS, INC., now known as WASSON ROAD
     VENTURES, INC., d/b/a AUTOCRAFT BODYWERKS,
                         Appellee.


             DECLARATION OF DALE L. ROBERTS

1. My name is Dale L. Roberts.           I am fully competent to make this

   Declaration.     I have personal knowledge of the facts stated in this

   Declaration. I am one of the attorneys representing the Appellants in this

   matter.

2. The Finding of Fact and Conclusions of Law contained in the Appendix

   of Appellants’ Brief is a true and correct copy of that signed by Judge

   Sulak on February 20, 2015.

3. My name is Dale L. Roberts. My date of birth is February 6, 1970, and

   my address is 1309 Choquette Drive, Austin, Texas 78757.               As

   authorized by Section 132.001 of the Texas Civil Practice and Remedies


                                     1
Code, I declare under penalty of perjury that the foregoing is true and

correct.

Executed in Travis County, State of Texas, on March 10, 2015.



                                  /s/ Dale L. Roberts
                                  Dale L. Roberts




                              2
                                             CAUSE NO. D-1-GN-14-004535

              AUTOCRAFT BODYWERKS, INC.,           §                      IN THE DISTRICT COURT
              now known as WASSON ROAD             §
              VENTURES, INC, dba AUTOCRAFT         §
            · BODYWERKS,                           §
                                                   §
                   Plaintiff,                      §
                                                   §
                                                   §
              vs.                                  §                       TRAVIS COUNTY, TEXAS
                                                   §
              ELITE AUTO BODY LLC, d/b/a PRECISION §
              AUTO BODY, REY R. HERNANDEZ,         §
              YESICA DIAZ, AND DAVID DAMIAN,       §
                                                   §
                   Defendants.                     §


                                       DECLARATION OF REY R. HERNANDEZ


                      1.      My name is Rey R. Hernandez. I am fully competent to make this Declaration. I

              have personal knowledge of all the facts stated in this Declaration.

                      2.      I have been working in the auto body manufacture or repair industry for over 19

               years. I have worked for BMW for over 12 years, achieving a management position overseeing

               body work on new BMW vehicles. In addition, I have worked in auto body repair shops for

               seven years.

                      3.      Through my experience in the auto body repair industry, I have become aware of

               common practices employed by auto body repair shops. It is common practice in the industry to

               use forms and checklists for tracking payment receipts, insurance information, workflow

               assignments and other information. Although the forms and checklists may follow different

               formats, they commonly contain information such as payment, information, authorizations, and

               vehicle and customer information.



                                                                                                       Page I




4R£4&&&4Zi&&2SEE&EE                                                                                  I          EXHIBIT

                                                                                                                           1
                                                                                                                          25
       4.     When I came to Austin in 2008, I accepted a job as a production manager at

Autocraft Bodywerks ("AB") and worked there for approximately twelve months. During that

time, the working conditions at AB were very unpleasant and hostile. AB's former owner, and

now manager, John Borek, created that unpleasant working environment. For example, Mr.

Borek frequently used abusive and vulgar language when speaking with employees and

threatened them with reprisals, illegally withheld paychecks, and on occasion, physically

assaulted them. Despite Mr. Borek's behavior, it was my impression that AB's employees were

very competent and often talented.

       5.      While working at AB, I was never asked to sign or even agree to any limitations

on my ability to compete with AB or solicit AB's employees following my employment.

Likewise, I was never asked to sign a confidentiality agreement nor was I informed that any

information about how AB conducted its business was secret or confidential. In fact, with the

exception of Mr. Borek's behavior, AB's business was conducted similar to other auto body

repair businesses. This included the use and content of AB's forms and checklists as well as

referencing, when necessary, any technical service bulletins relating to a repair. I was never told

by Mr. Borek, or anyone else, that AB's forms, checklists or compilation of technical service

bulletins were secret or confidential, and I did not consider them to be secret because the use of

similar forms, checklists and technical service bulletins is commonplace in the industry.

        6.      Due in large part to the unhealthy working environment caused by Mr. Borek, I

 left AB, and started Precision Auto Body ("Precision") in March, 2009. Over the next several

 years and through my experience in the industry, we developed Precision into a successful

 business. As part of that business, Precision subscribed to Alldata. That service provides access

 to, and the ability to search, all technical service bulletins that have been issued by all automobile



                                                                                                Page2




                                                                                                          26
manufacturers. Precision remains a subscriber to that setvice to this day. Whenever a Precision

employee needs to reference a technical setvice bulletin, the materials are obtained from Alldata.

       7.      By the beginning of 2014, Precision had seven employees and the business was

continuing to grow.    In March 2014, Precision hired David Damian to work as body shop

manager.     Over the years since leaving AB, I have occasionally been contacted by AB

employees inquiring as to whether Precision could hire them, and on some occasions Precision

has done so. That is how Damian came to work for Precision as well as Joyce Garcia. Mr.

Damian, Ms. Joyce, and I have all expressed a desire to continue to grow Precision's business

and attract experienced and talented individuals to work for Precision.

        8.     Because it was my impression that many of AB's employees were talented, I

would expect and intend to communicate with AB employees regarding employment

opportunities at Precision just as I would expect to communicate with any other potential

Precision employees that are unrelated to AB. If AB is successful in its lawsuit, or even obtains

a temporary i-qjunction as it has requested, I would not be able to communicate with any other

 AB employees about potential employment opportunities.

        9.      Precision has not used any confidential or secret information in its business that

 was disclosed by either Mr. Damian or Joyce Garcia. Precision has not used any AB payroll or

 other AB financial information in arty manner.          This includes, without limitation, any

 employment decisions concerning any current or potential Precision employees. With regard to

 the business practices claimed by AB to be confidential or secret, these allegations would

 prevent me and others at Precision from communicating regarding mundane business issues such

 as using checklists and forms to ensure that office and shop procedures are followed.




                                                                                             Page3




                                                                                                     27
        10.     My name is Rey R. Hemandez. My date of birth is January 4, 1976, and my

address is 1261 Cherrywood, Kyle, Texas 78640. As authorized by Section 132.001 of the

Texas Civil Practice and Remedies Code, I declare under penalty of peljury that the foregoing is

true and correct.

        Executed in Travis County, State of Texas on this~O th day of December, 20




                                                                                          Page4




                                                                                                   28
                                          CAUSE NO. D-1-GN-14-004535

           AUTOCRAFT BODYWERKS, INC.,                          §      IN THE DISTRICT COURT
           now known as WASSON ROAD                            §
           VENTURES, INC. dba AUTOCRAFT         §
           BODYWERKS,                           §
                                                §
                Plaintiff,                      §
                                                §
                                                §
           vs.                                  §                      TRAVIS COUNTY, TEXAS
                                                §
           ELITE AUTO BODY LLC, d/b/a PRECISION §
           AUTO BODY, REY R. HERNANDEZ,         §
           YESICA DIAZ, AND DAVID DAMIAN,       §
                                                §
                Defendants,                     §


                                      DECLARATION OF DAVID DAMIAN


                   1.      My name is David Damian. I am fully competent to make this Declaration. I

           have personallmowledge of all the facts stated in this Declaration.

                   2.      I have been working in the auto body repair industry for over 16 years. Through

           my experience in the auto body repair industry, I have become aware of common practices

           employed by auto body repair shops. It is common practice in the indushy to use forms and

            checklists for tracking payment receipts, insurance information, workflow assignments and other

            information.

                   3.      Between 2008 until March 2014, !.worked as a Production Manager at Autocraft

            Bodywerks ("AB"). During that time, the working conditions at AB were very unpleasant and

            hostile. AB's former owner, and now manager, John Borek, created that unpleasant working

            environment. Mr. Borek constantly cursed at employees and was prone to angry outbursts.




                                                                                                      Page 1

                                                                                                       EXHIBIT


W4E&E&MUMIM 1(1
                                                                                                       :a        29
       4.        While working at AB, I was never asked to sign, or even agree to, any limitations

on my ability to compete with AB or solicit AB's employees following my employment.

Likewise, I was never asked to sign a confidentiality agreement nor was I informed that any

information about how AB conducted its business was secret or confidential. AB's business was

conducted similar to other auto body repair businesses. This included the use and content of

AB's forms and checklists as well as referencing, when necessary, any technical service bulletins

relating to a repair. I was never told by Mr. Borek, or anyone else, that AB's forms, checklists or

compilation of technical service bulletins were secret or confidential, and I did not consider them

to be secret because the use of similar forms, checklists and technical service bulletins is

commonplace in the industry.

        5.       Due in large part to the unhealthy working environment caused by Mr. Borek, I

left AB, and joined Precision. Mr. Hernandez, Ms. Garcia, and I have all expressed a desire to

continue to grow Precision's business and attract experienced and talented individuals to work

for Precision.

        6.       I have not used any AB payroll or other AB financial information in any manner

since leaving the employ of AB, and certainly not in any negotiations or business decisions.

 With regard to the business practices claimed by AB to be confidential or secret, these

 allegations would prevent me and others at Precision from communicating regarding mundane

 business issues such as using checklists and forms to ensure that office and shop procedures are

 followed.




                                                                                             Page 2




                                                                                                      30
       7.       My name is David Damian. My date of birth is June 10, 1978, and my address is

11303 Stormy Ridge Road, Austin, Texas 78739. As authorized by Section 132.001 of the

Texas Civil Practice and Remedies Code, I declare under penalty of perjury that the foregoing is

true and correct.

       Executed in Travis County, State of Texas on this lOth day of December, 2014.




                                                                                         Page 3




                                                                                                   31
                                          CAUSE NO. D-1-GN-14-004535

     AUTOCRAFT BODYWERKS, INC.,                          §                  IN THE DISTRICT COURT
                                                         §
              Plaintiff.                                 §
                                                         §
     vs.                                                 §
                                                         §
    ELITE AUTO BODY LLC,                                 §
    dba PRECISION AUTO BODY,                             §
    REY R. HERNANDEZ,                                    §                  TRAVIS COUNTY, TEXAS
    YESICA DIAZ, and                                     §
    DAVID DAMIAN,                                        §
                                                         §
              Defendants,                                §
                                                         §
    vs.                                                  §
                                                         §
    JOHN BOREK,                                          §
                                                         §
              Third-Party Defendant.                     §                  345th JUDICIAL DISTRICT

                                       AFFIDAVIT OF JOHN BOREK

    STATE OF TEXAS                    §
                                      §   (</


    TRAVIS COUNTY                     §

              Before the undersigned authority, on this day appeared John Borek, who, after being duly

    sworn, states as follows:

              l.        "My name is John Borek. I am over the age of eighteen years, am of sound mind,

    and capable of making this affidavit. I am the founder and general manager of Autocraft

    Bodywerks, Inc. ("Autocraft"), a full service high-end collision restoration auto-repair shop I

    established in 1984. I have personal knowledge of the facts and statements contained in this

    affidavit, and they are tme and cotTect.
                                                                                          •
              2.        Over the span of the three decades, during which I built Autocraft's business and

    customer base, I have spent substantial time and money developing specific business practices

    and forms, and ct·eating a unique compilation of technical setvice bulletins and other information
                                                                                                   Page I
    770588v.l 57457·1                           EXHIBIT A
                                                                       41
1
    which have been used in Autocraft's business and have provided Autocraft with an advantage

    over its competitors who do not know or use Autocraft's trade secrets and confidential and

    proprietary information. Autocraft has reason to believe David Damian and other former

    employees who recently left and joined Rey Hernandez and Precision Auto Body ("Precision

    Auto") may have used or disclosed Autocraft's confidential, proprietary, and trade secret

    infmmation they obtained while employed with Autocraft in the course of their work for

    Precision Auto to provide Autocraft's competitor with an unfair competitive advantage.
                                                                                                            •
              3.        Although Autocraft welcomes honest and fair competition, it will not tolerate

    dishonesty and unfair competition through use of its trade secrets and confidential and

    proprietaty information by any of its former employees to provide a competitor with an unfair

    competitive advantage in the marketplace. For such reason, Autocraft commenced this suit

    against the Defendants to stop their use of Autocraft's trade secrets and proprietary and

    confidential information to unfairly compete in the marketplace. Autocraft has not asserted any

    claim to interfere with anyone's constitutional rights to free speech or association in this action.

              4.        Since Rey Hernandez started Precision Auto in the 2009 time frame, a few f01mer

    employees of Autocraft joined Rey Hernandez at Precision Auto without incident. After David

    Damian and Joyce Garcia joined Precision Auto, however, Autocraft learned Precision Auto was

    using its proprietary business fmms and documents, and that a copy of its proprietary

    compilation of Technical Service Bulletins had been taken to Precision Auto rather than

    Precision Auto spending the time and money subscribing to the various publications and

    searching through the tens of thousands of Technical Service Bulletins issued over the years to

    create its own compilation of information. I did not give David Damian, Joyce Garcia, or any

    other Autocraft employee, consent to take any proprietary work product, confidential

    information or trade secret with them when they left.
                                                                                                    Page2
    770588v.l 57457-1




l                                                                    42
              5.        David Damian and Joyce Garcia, while employed at Autocraft and in connection

     with their job responsibilities, also had access to personnel information on employees, including

     salary inf01mation, and Autocraft's financial information, including profit and loss statements,

     which in the hands of a competitor provides it with an unfair competitive advantage.

              6.        It is my understanding and belief that David Damian and/or Joyce Garcia, and

     possibly others, provided Rey Hernandez with most, if not all, of the above-mentioned

     confidential, proprietary and trade secret documents and information, and that they are now

    using the documents and information to unfairly compete with Autocraft. In fact, I saw a

    photograph of the service forms used at Precision Auto and they appear to be identical to

    Autocraft's proprietary business forms which have evolved and been tailored based on my thirty

    years of experience in the industry.

              7.        It is also my understanding and belief that Precision Auto has used Autocraft's

    confidential information, including employee salary information, to recruit and solicit more

    · Autocraft employees to join Precision Auto. Any such use of Autocraft's confidential personnel

    and financial information would be improper and unfair.

              8.        This lawsuit has nothing to do with violating anyone's rights to ft·ee speech or free

    association. Instead, the lawsuit is intended to protect Autocraft's trade secrets and proprietary

    and confidential information."




                                                                                                                '




                                                                                                       Page3

I   770588v.l 57457-1


                                                                        43
1
          Further, Affiant sayeth naught.




          SWORN TO AND SUBSCRIBED before me on this     I7    day of January, 2015.



                                            Notary Public, State of Texas




                                                                                      Page4
770588v.l 57457-1


                                                         44
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


                                                                  [5] restrictions on discovery during pendency of a TCPA
                                                                  motion to dismiss do not violate open-courts provision; and
                   2014 WL 411672
    Only the Westlaw citation is currently available.
                                                                  [6] TCPA's definition of “right of association” was not
          SEE TX R RAP RULE 47.2 FOR                              unconstitutionally overbroad or void for vagueness as applied
    DESIGNATION AND SIGNING OF OPINIONS.                          in present case.

             MEMORANDUM OPINION
              Court of Appeals of Texas,                          Affirmed in part, reversed in part, and remanded.
                       Austin.

          COMBINED LAW ENFORCEMENT
                                                                   West Headnotes (14)
            ASSOCIATIONS OF TEXAS
            and John Burpo, Appellants
                       v.                                          [1]    Appeal and Error
            Mike SHEFFIELD, Appellee.                                        On motions relating to pleadings
                                                                          The Court of Appeals had jurisdiction under civil
       No. 03–13–00105–CV.           |   Jan. 31, 2014.                   practices and remedies code over interlocutory
                                                                          appeal from the denial of a motion under Texas
Synopsis
                                                                          Citizens Participation Act (TCPA) to dismiss
Background: Former employee of labor union representing
                                                                          defamation action, regardless of whether TCPA
law enforcement officers filed defamation action against
                                                                          expressly authorized the interlocutory appeal.
union and its executive director. Defendants moved to dismiss
                                                                          V.T.C.A., Civil Practice & Remedies Code §§
action pursuant to the Texas Citizens Participation Act
                                                                          27.008, 51.014(a)(12).
(TCPA). The District Court, Travis County, 353rd Judicial
District, Amy Clark Meachum, J., denied motion. Defendants                3 Cases that cite this headnote
brought interlocutory appeal.

                                                                   [2]    Appeal and Error
                                                                             Constitutional questions
Holdings: The Court of Appeals, Jeff Rose, J., held that:
                                                                          Labor union and its executive director could
                                                                          not raise arguments relating to their free speech
[1] former employee's defamation allegations related in part
                                                                          or petition rights on interlocutory appeal from
to defendants' exercise of right of association, such that
                                                                          the denial of their motion under Texas Citizens
former employee was required under TCPA to prove prima
                                                                          Participation Act (TCPA) to dismiss defamation
facie case with respect to allegations relating to exercise of
                                                                          action by former employee, though union and
that right;
                                                                          executive asserted those rights in an affirmative
                                                                          defense, where their motion to dismiss asserted
[2] defamation action arose in context of a labor dispute, such
                                                                          only the right of association. V.T.C.A., Civil
that former employee was required to prove actual malice;
                                                                          Practice & Remedies Code §§ 27.005, 51.014.

[3] there was no clear and specific evidence that statements              Cases that cite this headnote
made in exercise of defendants' right of association were
made with actual malice;
                                                                   [3]    Pleading
[4] standard of proof for surviving motion to dismiss                         Frivolous pleading
under TCPA does not violate open-courts provision of state                Pleading
constitution;                                                                 Application and proceedings thereon
                                                                          Former employee's defamation claim against
                                                                          labor union representing law enforcement



               © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                            1
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


       officers and against union's executive director            officers and against union's executive director
       related to those defendants' exercise of right             related to those defendants' exercise of right
       of association, such that former employee                  of association, such that former employee
       was required to prove prima facie case to                  was required to prove a prima facie case to
       survive motion to dismiss under Texas Citizens             survive motion to dismiss under Texas Citizens
       Participation Act (TCPA), to the extent that               Participation Act (TCPA), to the extent the
       claim concerned an e-mail sent by executive                claim was based on alleged statements by union
       director to union's board and staff, stating that          officials to president of a constituent local
       executive board had directed him to file criminal          police association that criminal charges could
       charges against former employee for deleting               be filed against former employee by union for
       computer files that were union's property, and             what former employee had done. V.T.C.A.,
       that union's corporate attorney had advised that           Civil Practice & Remedies Code §§ 27.001(2),
       such conduct was a criminal act under state law.           27.005(b, c).
       V.T.C.A., Civil Practice & Remedies Code §§
       27.001(2), 27.005(b, c).                                   Cases that cite this headnote

       Cases that cite this headnote
                                                           [6]    Pleading
                                                                      Frivolous pleading
 [4]   Pleading                                                   Pleading
           Frivolous pleading                                         Application and proceedings thereon
       Pleading                                                   Former employee's defamation claim against
           Application and proceedings thereon                    labor union representing law enforcement
       Former employee's defamation claim against                 officers and against union's executive director
       labor union representing law enforcement                   did not relate to those defendants' exercise of
       officers and against union's executive director            their right of association, so as to require former
       related to those defendants' exercise of right             employee to prove a prima facie case to avoid
       of association, such that former employee                  dismissal under the Texas Citizens Participation
       was required to prove a prima facie case                   Act (TCPA), to the extent the claim was based
       to survive motion to dismiss under Texas                   on an alleged remark by union's corporate
       Citizens Participation Act (TCPA), to the extent           attorney that a local police chief had created
       the claim related to an alleged comment by                 a special employment position for the former
       executive director to a prospective employee,              employee after union fired him, where there
       made while prospective employee was president              was no allegation or evidence that counsel made
       of a constituent local police association, that            alleged remark to a member of union. V.T.C.A.,
       executive director and union were still dealing            Civil Practice & Remedies Code §§ 27.001(2),
       with former employee because of former                     27.005(b, c).
       employee's “criminal conduct.” V.T.C.A., Civil
       Practice & Remedies Code §§ 27.001(2),                     Cases that cite this headnote
       27.005(b, c).
                                                           [7]    Pleading
       Cases that cite this headnote
                                                                      Frivolous pleading
                                                                  Pleading
 [5]   Pleading                                                       Application and proceedings thereon
           Frivolous pleading
                                                                  Former employee's defamation claim against
       Pleading                                                   labor union representing law enforcement
           Application and proceedings thereon                    officers and against union's executive director
       Former employee's defamation claim against                 did not relate to those defendants' exercise of
       labor union representing law enforcement                   their right of association, so as to require former



             © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                        2
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


       employee to prove a prima facie case to avoid               necessary for former employee to establish
       dismissal under the Texas Citizens Participation            prima facie case of defamation on motion
       Act (TCPA), to the extent the claim was based on            of union and executive director under Texas
       alleged remarks by union's corporate attorney to            Citizens Participation Act (TCPA) to dismiss
       a county district attorney attempting to persuade           a claim arising from defendants' exercise of
       the latter to permit corporate attorney to present          right of association. V.T.C.A., Civil Practice &
       evidence to a grand jury in pursuit of an                   Remedies Code § 27.005.
       indictment of former employee, where there was
       no allegation of evidence that district attorney            Cases that cite this headnote
       was a member of union. V.T.C.A., Civil Practice
       & Remedies Code §§ 27.001(2), 27.005(b, c).          [10]   Libel and Slander
                                                                       Existence and Effect of Malice
       Cases that cite this headnote
                                                                   Pleading
                                                                       Frivolous pleading
 [8]   Libel and Slander
                                                                   Pleading
           Qualified Privilege
                                                                       Application and proceedings thereon
       Defamation action by former employee against
                                                                   There was no clear and specific evidence
       labor union and its executive director in
                                                                   that statements by officials of labor
       connection with alleged statements attributing
                                                                   union representing law enforcement officers
       criminal conduct to former employee arose in
                                                                   to president of constituent police officer
       context of a “labor dispute” under National
                                                                   association, that conduct of a former employee
       Labor Relations Act (NLRA), such that former
                                                                   of union “could go criminal,” that it was “going
       employee was required to prove actual malice;
                                                                   to court,” and that criminal charges could be
       former employee invoked NLRA regarding the
                                                                   filed against former employee by union for
       dispute twice by filing unfair labor practices
                                                                   what he had done were untrue or were made
       claims with National Labor Relations Board
                                                                   with reckless disregard for the truth of those
       (NLRB) months after his employment was
                                                                   statements, as necessary for former employee
       terminated. National Labor Relations Act, § 2(9),
                                                                   to establish prima facie case of defamation and
       29 U.S.C.A. § 152(9).
                                                                   thereby survive motion of union and executive
       Cases that cite this headnote                               director under Texas Citizens Participation Act
                                                                   (TCPA) to dismiss claim as being a response to
                                                                   their exercise of right of association. V.T.C.A.,
 [9]   Libel and Slander                                           Civil Practice & Remedies Code § 27.005.
           Existence and Effect of Malice
       Pleading                                                    Cases that cite this headnote
           Frivolous pleading
       Pleading                                             [11]   Constitutional Law
           Application and proceedings thereon                          Conditions, Limitations, and Other
       There was no evidence that e-mail from                      Restrictions on Access and Remedies
       executive director of labor union to union's                Pleading
       board and staff, stating that executive board had               Application and proceedings thereon
       directed him to file criminal charges against               Texas Citizens Participation Act (TCPA) does
       former employee for deleting computer files                 not impose a higher standard of proof, with
       that were union's property, and that union's                respect to surviving a motion to dismiss an
       corporate attorney had advised that such conduct            action filed in response to the exercise of free
       was a criminal act under state law, was untrue              speech, petitioning, or association rights, than
       or that executive director acted with reckless              would be required at trial, and thus does not,
       disregard for truth of those statements, as                 under that theory, violate open-courts provision


             © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                       3
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


        of state constitution; TCPA requires only that
        claimant produce evidence that establishes a                 Cases that cite this headnote
        prima facie case, and thus does not increase the
        preponderance-of-evidence standard applicable         [14]   Constitutional Law
        at trial, despite characterizing evidence needed                 Particular Issues and Applications
        to support prima facie case as “clear and
                                                                     Constitutional Law
        specific.” Vernon's Ann.Texas Const. Art. 1, §
                                                                         Course and conduct of proceedings in
        13; V.T.C.A., Civil Practice & Remedies Code §
                                                                     general
        27.005(c).
                                                                     Pleading
        Cases that cite this headnote                                    Frivolous pleading
                                                                     Definition in Texas Citizens Participation
 [12]   Constitutional Law                                           Act (TCPA), stating that the exercise of
             Conditions, Limitations, and Other                      the “right of association” encompassed a
        Restrictions on Access and Remedies                          communication between individuals who join
                                                                     together to express, promote, pursue or defend
        Pretrial Procedure
                                                                     common interests, was not unconstitutionally
            Objections and protective orders
                                                                     overbroad under First Amendment or void
        Restrictions on discovery during the pendency                for vagueness under due process principles as
        of a motion to dismiss under Texas Citizens                  applied in action in which labor union and
        Participation Act (TCPA) are reasonable and                  its executive director successfully moved for
        therefore do not violate a plaintiff's rights                dismissal of defamation claims asserted by
        under open-courts provision of state constitution;           former employee in connection with statements
        provisions staying discovery are tempered                    regarding alleged criminal conduct on his part.
        by provisions permitting discovery upon a                    U.S.C.A. Const.Amends. 1, 14;; V.T.C.A., Civil
        showing of good cause, and stay provisions                   Practice & Remedies Code §§ 27.001(2), 27.005.
        can curtail potentially costly discovery in a
        potentially meritless case, thus serving TCPA's              Cases that cite this headnote
        goal of keeping litigation from being used to
        chill exercise of constitutional rights. Vernon's
        Ann.Texas Const. Art. 1, § 13; V.T.C.A.,
        Civil Practice & Remedies Code §§ 27.003(b),         From the District Court of Travis County, 353rd Judicial
        27.006(b).                                           District, No. D–1–GN–12–003281; Amy Clark Meachum,
                                                             Judge Presiding.
        Cases that cite this headnote
                                                             Attorneys and Law Firms
 [13]   Constitutional Law
                                                             Sean E. Breen, Howry, Breen & Herman, L.L.P., Randy T.
            Costs and fees; indigency
                                                             Leavitt, The Law Office of Randy T. Leavitt, Austin, TX, for
        Costs                                                appellee.
            On dismissal, nonsuit, default, or settlement
        Texas Citizens Participation Act (TCPA) does         Molly Lawrence, Tanner and Associates, P.C., James Roddy
        not mandate fee awards to a defendant that           Tanner, Fort Worth, TX, B. Craig Deats, Deats Durst, Owen
        prevails on motion to dismiss an action arising      & Levy, P.L.L.C., Austin, TX, for appellant.
        from the exercise of constitutional rights of
                                                             Before Justices PURYEAR, ROSE, and GOODWIN.
        expression and association, and, therefore,
        TCPA's fee award provisions do not violate
        open-courts guarantees on their face. Vernon's                      MEMORANDUM OPINION
        Ann.Texas Const. Art. 1, § 13; V.T.C.A., Civil
                                                             JEFF ROSE, Justice.
        Practice & Remedies Code § 27.009(a).



              © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                      4
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


 *1 Combined Law Enforcement Associations of Texas and              laptop to CLEAT and says he was assured by the employee
John Burpo brought this interlocutory appeal of the denial          receiving it that his actions were acceptable.
of their motions to dismiss Mike Sheffield's defamation
claims. Appellants contend that they triggered the dismissal        Appellants assert that CLEAT's practice was always to
procedures of the Texas Citizens Participation Act by               control the computer-scrubbing process, downloading files
showing that Sheffield filed his lawsuit in response to their       beforehand to avoid the complete loss of data. CLEAT's
exercise of their right of association. See Tex. Civ. Prac. &       expert analyzed Sheffield's computer and found some
Rem.Code §§ 27.001–.011. Appellants contend that Sheffield          data—including some partial documents and emails—that
failed to respond with clear and specific evidence showing          appellants contend support their reasons for firing Sheffield.
a prima facie case for each essential element of his claims         Appellants contend that the data was potentially relevant
as required to avoid dismissal under the TCPA. They further         in legal proceedings relating to the firing that followed—
contend that the trial court erred by failing to award them their   complaints and suits by both sides that have been rejected,
costs, reasonable attorney's fees, and other expenses incurred      dismissed, or withdrawn.
in defending this suit.
                                                                     *2 The parties have engaged in a series of legal
We will reverse the trial court's order denying the motion          wranglings. Sheffield filed unfair labor practices grievances
to dismiss with respect to claims based on comments made            and complaints against CLEAT with his union and the
among CLEAT members and will dismiss those claims                   National Labor Relations Board. The union declined to
pursuant to the TCPA. We will affirm the order denying the          pursue the grievance in arbitration, and the NLRB dismissed
motion to dismiss Sheffield's claim based on comments made          one complaint before Sheffield withdrew the other two.
to the district attorney and other unnamed persons. We will         Meanwhile, Sheffield returned to work at the Austin Police
remand the case for further proceedings consistent with this        Department, which prompted APD's Special Investigations
opinion, including consideration by the trial court of an award     Unit to investigate CLEAT's allegations that Sheffield had
of costs and fees relating to the motion to dismiss.                committed a crime by scrubbing his CLEAT computer's
                                                                    memory. APD found no criminal element in the conduct
                                                                    by Sheffield. According to APD's memo, however, its
                                                                    investigation was limited by CLEAT's decision not to
               FACTUAL BACKGROUND
                                                                    supply APD with evidence because CLEAT wanted either
CLEAT is a labor union that represents law enforcement              Williamson County or federal authorities to investigate. APD
officers. Burpo was its executive director, and Sheffield           also referred the issue to the FBI's cybercrimes unit which
worked for CLEAT as a field service representative, having          found “no federal [criminal] element” in Sheffield's behavior.
retired from the Austin Police Department. He was assigned          Sheffield averred that the Lockhart Police Department (where
to help various local police associations including the Austin      he also worked post-CLEAT) also investigated and “likewise
Police Association (APA). After disagreements relating to           cleared [him].” The Williamson County grand jury in August
the scope and manner of Sheffield's interactions with APA           2012 declined to indict Sheffield. CLEAT states that in
members, Burpo fired him on July 18, 2011.                          August 2012 it filed a conversion action against Sheffield in
                                                                    Williamson County that was transferred to Travis County and
The comments giving rise to the defamation claims in this           then nonsuited.
case relate to Sheffield's conduct with respect to his CLEAT-
issued laptop computer in the aftermath of his firing. When
he was fired, Sheffield had his CLEAT computer at home.                         PROCEDURAL BACKGROUND
Sheffield asserts by affidavit that the standard practice at
CLEAT was to erase a departing employee's computer,                 Sheffield's defamation suit is based on comments allegedly
reprogram it, and then give it to another employee. Sheffield       made by Burpo and others associated with CLEAT. The core
states that a computer store technician saved his personal files    of Sheffield's complaint in his live petition is as follows:
to a thumb drive. Sheffield says he then took the computer
home and deleted data from the laptop's hard drive intending                    [O]n one or more occasions, the
to prevent disclosure of personal information. He turned in his                 Defendants defamed Mr. Sheffield
                                                                                by uttering and/or broadcasting



                © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                            5
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


             and/or repeating statements and
             false allegations that Mr. Sheffield                         (1) An email sent on January 4 from Burpo to the CLEAT
             committed criminal acts in connection                        board and staff. 2 Burpo sent the email after the NLRB
             with his employment with CLEAT.                              set a hearing on Sheffield's complaint that he was fired
             Those allegations included that                              for violating an overly broad limitation on work-related
             Sheffield inappropriately accessed                           communications. In the email, Burpo discussed the nature
             CLEAT's computer system and                                  and consequences of the NLRB's action. Sheffield focuses
             deleted files with the intention of                          on this statement, “The Executive Board has directed me
             harming CLEAT. Upon information                              to file criminal charges against Sheffield for deleting files
             and belief, such false accusations were                      that were the property of CLEAT which [CLEAT attorney]
             broadcast to 70 plus police officers and                     Rod Tanner advises is a criminal act under Texas law.”
             former co-workers of Mr. Sheffield,
             at least. The statements were made by                    2        This is the email that appellants asserted was the sole
             an officer or agent of CLEAT acting                               basis of Sheffield's complaint.
             within his or her scope of authority in
             publishing the defamatory statement.                         (2) An alleged comment by Burpo to Corpus Christi Police
                                                                          Officers Association President Mike Staff in the summer.
Appellants moved to dismiss this claim under the TCPA, a
                                                                          Staff said in an affidavit that Burpo offered him a job
statute enacted by the Texas Legislature in 2011 to “safeguard
                                                                          with CLEAT and discussed an ongoing reshuffling within
the constitutional rights of persons to petition, speak freely,
                                                                          CLEAT. According to Staff, Burpo told him that “he and
associate freely, and otherwise participate in government to
                                                                          CLEAT were still dealing with Mike Sheffield because
the maximum extent permitted by law and, at the same time,
                                                                          of what Mr. Burpo told me was Mr. Sheffield's ‘criminal
protect the rights of a person to file meritorious lawsuits
                                                                          conduct’ and that he thought that would end soon.”
for demonstrable injury.” 1 Tex. Civ. Prac. & Rem.Code §
27.002. One way the statute seeks to protect those rights is by             (3) Alleged statements various CLEAT officials made
providing an early dismissal mechanism for certain categories               to Laredo Police Association President Luis Dovalina.
of lawsuits. If a defendant shows by a preponderance of the                 In his affidavit, Dovalina states that CLEAT Region 2
evidence that the plaintiff's suit is based on, relates to, or is           Director Mark Guerra “would not or could not provide
in response to the defendant's exercise of the rights listed in             an answer to why Mr. Sheffield was terminated but
section 27.002, the TCPA requires dismissal of the suit unless              did state to me ‘it could go criminal, for what he
the party bringing the legal action “establishes by clear and               did.’ “ Although Dovalina said he asked for specifics
specific evidence a prima facie case for each essential element             on Sheffield's termination, he said he never received
of the claim in question.” See id. §§ 27.003, .005(c). The                  them and was not told that “a grand jury and other
TCPA must be “construed liberally to effectuate its purpose                 investigations had never led to any charges against
and intent fully.” Id. § 27.011(b). In their motions to dismiss             Mr. Sheffield.” Dovalina said that, when he later asked
under the TCPA, appellants asserted that Sheffield's suit was               Burpo about Guerra's comments, Dovalina said that
in response to a single email Burpo sent to the CLEAT board                 Burpo “informed me that it was ‘going to court,’ and that
and staff. They argued that TCPA applies because Sheffield's                he would brief me on it at a later date” but never did. He
suit impinges on their right of association and that Sheffield              averred that three or four CLEAT officials “stated to me
could not establish a prima facie case for defamation.                      that criminal charges could be filed against Sheffield by
                                                                            CLEAT for what Mr. Sheffield had done.”
1       There is nothing in the plain language of the statute that
                                                                            (4) Statements allegedly made by CLEAT corporate
        limits its scope, as Sheffield argues, to a media defendant
                                                                            counsel John Curtis that APD chief Art Acevedo
        or solely to public participation in government.
                                                                            created a special employment position for Sheffield
 *3 In his response to appellants' motions to dismiss,                      after CLEAT fired him. Sheffield asserts that this
Sheffield listed five communications that he alleges were                   allegation (a) was false because the positions were
made in 2012 and were defamatory:                                           created previously and independent of his employment
                                                                            situation and (b) was “tantamount to an assertion of



                 © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                                     6
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


      conduct violating Section 39 .02 of the Texas Penal
      Code” governing abuse of official capacity.                    II. Applicability of the TCPA
                                                                     Appellants contend in their second issue that the trial court
      (5) Statements Curtis allegedly made to Williamson             erred if it denied the motions to dismiss on grounds that
      County District Attorney John Bradley attempting to            the TCPA does not apply in this case. The party seeking
      persuade him to allow Curtis to present information to         dismissal of a legal action under the TCPA must show by a
      the grand jury in pursuit of an indictment of Sheffield on     preponderance of the evidence that the legal action is “based
      grounds that he had violated Penal Code chapter 33.            on, relates to, or is in response to the party's exercise of
                                                                     the right of free speech, the right to petition or the right of
    The district court denied the motions to dismiss without         association.” Tex. Civ. Prac. & Rem.Code § 27.005. “ ‘Legal
    stating a basis 3 and was not asked to make findings of fact     action’ means a lawsuit, cause of action, petition, complaint,
    or conclusions of law in support of its decision.                cross-claim, or counterclaim or any other judicial pleading or
3        Appellants also sought dismissal for want of jurisdiction   filing that requests legal or equitable relief.” Id. § 27.001(6).
         and through special exceptions, but those motions are not   Appellants argue that the TCPA does apply to the disputed
         presented in this appeal because interlocutory appeal is    statements.
         authorized only from the denial of the motion to dismiss
         under the TCPA. See Tex. Civ. Prac. & Rem.Code §§       As an initial matter, we note that appellants cited only
         27.008, 51.014.                                         the right of association in their motions to dismiss, so the
                                                                 trial court's rejection of that theory is the only one of the
                                                                 three rights protected under the TCPA that is preserved
                        DISCUSSION                               here for appellate review. See Tex.R.App. P. 33.1; Tex.
                                                                 Civ. Prac. & Rem.Code § 27.005. Because interlocutory
 *4 Appellants contend that the trial court erred in denying
                                                                 appeals are allowed only in limited situations, we strictly
their motions to dismiss because the TCPA applies and
                                                                 construe the statute permitting such appeals. See Tex. Civ.
Sheffield failed to establish a prima facie case of defamation.
                                                                 Prac. & Rem.Code § 51.014; see also Bally Total Fitness
They also contend that the trial court erred by failing to award
                                                                 Corp. v. Jackson, 53 S.W.3d 352, 355 (Tex.2001). Although
them attorney's fees.
                                                                 appellants argue on appeal that their statements relating
                                                                 to prosecution are within the TCPA as exercises of the
I. Jurisdiction over this appeal                                 rights of free speech or petition, they listed those claims as
 [1] [2] By their first issue, appellants respond to appellee's their thirteenth affirmative defense but did not raise those
motion to dismiss this interlocutory appeal. Sheffield           arguments at the trial court in their motions to dismiss.
contends that this Court lacks jurisdiction because the TCPA     Because they did not raise the free speech or petition rights as
does not expressly authorize an interlocutory appeal when the    grounds for dismissal under the TCPA, the trial court did not
trial court expressly denies the motion. Sheffield contends      reject them in denying the motions to dismiss, and arguments
that interlocutory appeal is authorized only when the trial      relating to those contentions are not properly within the
court fails to rule and the motion to dismiss is overruled by    limited scope of this interlocutory appeal. See Tex.R.App. P.
operation of law under the statute. See Tex. Civ. Prac. &        33.1(a)(1). Further, although the TCPA is intended to protect
Rem.Code § 27.008. This Court has determined, however,           the exercisers of certain constitutionally protected rights from
that regardless of the meaning of the original statute, the      unfounded lawsuits, there is no showing that the TCPA's
civil practice and remedies code as amended in 2013 confers      dismissal process is a fundamental right. We find no statutory
jurisdiction over appeals such as this one. See Kinney v. BCG    or judicial exception permitting these arguments to be raised
Att'y Search, Inc., No. 03–12–00579–CV, 2013 WL 4516106          for the first time in this interlocutory appeal of the denial of
at *4 (Tex.App.-Austin Aug.21, 2013, no pet. h.); see also       appellants' motions to dismiss. We overrule those portions
Tex. Civ. Prac. & Rem.Code § 51.014(a)(12); Act of May           of issue two concerning arguments about the exercise of the
24, 2013, 83d Leg., H.B. 2935, ch. 1042, § 4. Based on the       rights of free speech and petition. For the same reason, we
reasoning in that opinion, we sustain appellants' first issue,   will not consider the merits of the remaining appellate issues
deny Sheffield's motion to dismiss, and proceed to consider      with respect to the free-speech and petition theories but rather
the remaining issues raised on appeal.                           will evaluate appellants' claims under the rights asserted in
                                                                 their motion to dismiss, i.e. the right of association.



                 © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                               7
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


 *5 [3] [4] [5] Appellants plainly asserted in their motion unknown persons. We overrule issue two on those claims.
to dismiss that Sheffield's claim related to their exercise of   Because appellants did not show by a preponderance of
the right of association. The TCPA defines the exercise of the   evidence that these statements were communications made
right of association as “a communication between individuals     in the exercise of appellants' right of association as defined
who join together to collectively express, promote, pursue,      by the TCPA, the burden did not shift to Sheffield to present
or defend common interests.” Tex. Civ. Prac. & Rem.Code          a prima facie case on these claims to avoid dismissal, and
§ 27.001(2). Affidavits from Burpo, Staff, and Dovalina          we need not consider the propriety of the denial of the
show that three of the communications (those set forth above     motion to dismiss these claims any further. See Tex. Civ.
in numbered paragraphs 1–3) that Sheffield alleges to be         Prac. & Rem.Code §§ 27.001(2), .005(b). With respect to
defamatory fall within the TCPA's definition of the exercise     the communications described in paragraphs 1, 2, and 3
of the right of association. Burpo's email to the CLEAT          above, evidence showed that these communications were
board and staff regarding Sheffield's NLRB claim as well         made between or among CLEAT members and, thus, that
as Burpo's and CLEAT staff's comments to two presidents          the trial court erred if it dismissed based on a finding that
of CLEAT's constituent local police associations (Corpus         appellants did not show that Sheffield's claims related to their
Christi's Staff and Laredo's Dovalina) were made between or      exercise of the right of association. We sustain issue two with
among members of CLEAT. In the statute's terms, these were       regard to the communications described in paragraphs 1, 2,
communications between individuals who joined together           and 3 above.
in CLEAT to collectively express, promote, or defend the
common interests of police officers. See id. § 27.001(2).
Sheffield's suit against CLEAT and Burpo for defamation          III. Prima facie case
through those statements plainly is based on, relates to, or is   *6 By their third issue, appellants assert that the trial court
in response to these communications made in the exercise of      erred if it denied their motions to dismiss by concluding that
the right of association, triggering Sheffield's burden to prove Sheffield made a prima facie case on each element of his
a prima facie case on these complaints.                          claims regarding the communications described in paragraphs
                                                                 1, 2, and 3 above as required to avoid dismissal of those claims
 [6]    [7] Appellants did not show by a preponderance of under the TCPA. To make a prima facie case of defamation,
the evidence that two other communications (those set forth      the plaintiff must prove that the defendant (1) published a
above in numbered paragraphs 4–5) that Sheffield alleged         statement (2) that was defamatory concerning the plaintiff (3)
were made by CLEAT's corporate attorney were within the          while acting with either actual malice or negligence regarding
TCPA's definition of the exercise of the right of association:   the truth of the statement, depending on the nature of the
(1) Curtis's allegations that APD chief Art Acevedo created      parties and the dispute. See WFAA–TV, Inc. v. McLemore,
a special employment position for Sheffield after CLEAT          978 S.W.2d 568, 571 (Tex.1998). Persons who are not public
fired him, and (2) Curtis's conversation with the Williamson     figures or involved in public issues typically need show
County district attorney when asking that he file charges.       only that the defendant knew or should have known that
There is no allegation or evidence that Curtis made either set   the defamatory statement was false. See Foster v. Laredo
of these remarks to a member of CLEAT. Indeed, there is          Newspapers, Inc., 541 S.W.2d 809, 819 (Tex.1976).
no allegation or evidence regarding to whom Curtis allegedly
said that Acevedo created a job for Sheffield. There is also      Appellants contend that Sheffield had to meet the higher
no allegation or evidence that then-district attorney Bradley     intent standard because this dispute arose in the context of
was a CLEAT member. Appellants have not shown by                  a labor dispute. In defamation claims arising out of labor
a preponderance of the evidence that Curtis made these            disputes, the plaintiff must show that the defendant acted
communications to an individual with whom he had joined           with actual malice in order to prevail in state court. The
together to collectively express, promote, pursue, or defend      Supreme Court has held that the National Labor Relations
common interests.                                                 Act preempts most state laws related to labor disputes and
                                                                  vests exclusive jurisdiction for related formal legal disputes
We conclude that the trial court did not err by denying           in the NLRB. See San Diego Bldg. Trades Council, Local
the motions to dismiss under the TCPA with respect to the         2020 v. Garmon, 359 U.S. 236, 243–44, 79 S.Ct. 773, 3
communications described in paragraphs 4 and 5 above-             L.Ed.2d 775 (1959) (cited in Linn v. United Plant Card
i.e., Curtis's communications with the district attorney or       Workers of Am., Local 114, 383 U.S. 53, 59, 86 S.Ct. 657, 15
                                                                  L.Ed.2d 582 (1966)). The Garmon court excepted from that


               © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                            8
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


preemption those claims that are peripheral to the concerns        his publication.” See St. Amant v. Thompson, 390 U.S. 727,
articulated in the NLRA and that are based on interests            731, 88 S.Ct. 1323, 20 L.Ed.2d 262 (1968); Huckabee, 19
deeply-rooted in local concerns. Id. The Linn court wrote that     S.W.3d at 420. Plaintiffs who must show actual malice have
defamation was an issue of such deeply-rooted local interest       the burden to prove that the defamatory statement was not
that state courts could retain jurisdiction over defamation        true. See Huckabee, 19 S.W.3d at 420.
cases if the plaintiff showed the defendant had actual malice
in making the defamatory statement. 383 U.S. at 64–65. The         A timeline of the parties' legal proceedings is helpful to
court opined that this approach balances the tensions among        provide the context needed to assess whether each alleged
preserving expressive leeway for participants in heated labor      defamatory statement was made with knowledge of its falsity
disputes, limiting use of state-court defamation suits as a        or reckless disregard of its truth—i.e., whether Sheffield
weapon in labor disputes, and allowing participants in those       proved a prima facie case of defamation. Sheffield filed his
disputes to defend their reputations from untruthful attacks.      unfair labor practices claim with the NLRB on October 20,
Id.                                                                2011. On December 30, 2011, the NLRB set one of his labor
                                                                   dispute claims for hearing in early 2012. In February 2012,
 [8] While the seminal Supreme Court cases involved larger-        APD's Special Investigation Unit found no criminal element
scale labor disputes and activities like picketing (Garmon,        present in Sheffield's behavior and the FBI's cybercrimes unit
359 U.S. at 237) and union organizing (Linn, 383 U.S.              found no violations of federal law. Sheffield filed another
at 55), this case, too, presents a labor dispute under the         NLRB complaint on March 12, 2012, but withdrew it on April
law. The NLRA defines “labor dispute” as “any controversy          30, 2012. He withdrew his remaining NLRB complaint on
concerning the terms, tenure, or conditions of employment ...      July 19, 2012. The Williamson County Grand Jury declined
regardless of whether the disputants stand in the proximate        to indict Sheffield in August 2012. We will consider each
relation of employer or employee.” 29 U.S.C. § 152(9).             allegedly defamatory statement in the context of the speaker's
Sheffield was a CLEAT employee who had his tenure ended,           knowledge at the time of the statement.
then disputed the terms of his employment and their role in his
termination. Sheffield plainly elevated this controversy above       (1) The January 4, 2012 email sent from Burpo to the
a standard job-termination case when he invoked the NLRA             CLEAT board and staff stating, “The Executive Board
regarding this dispute twice by filing unfair labor practices        has directed me to file criminal charges against Sheffield
claims with the NLRB months after his employment was                 for deleting files that were the property of CLEAT which
terminated. His complaints—first that CLEAT discharged               [CLEAT attorney] Rod Tanner advises is a criminal act
him for union activities and for violating an overly broad           under Texas law.”
workplace rule, and then that CLEAT retaliated against him
for filing the first unfair labor practices claim—show that the     [9] Sheffield produced no evidence that, when Burpo sent
circumstances of this case constitute a labor dispute as defined   this email, appellants either knew that any aspect of this
by the NLRA. See id.                                               statement was false or recklessly disregarded whether it was
                                                                   true. Although Sheffield clearly disagrees that his actions
 *7 For such cases, the Supreme Court adopted the standard         were criminal or warranted criminal charges, he has not
of actual malice used in defamation cases brought by public        alleged or established a prima facie case that Burpo was
officials against media defendants. Linn, 383 U.S. at 65           reckless with the truth of his statement about the board's
(citing New York Times Co. v. Sullivan, 376 U.S. 254, 84           direction to him or CLEAT's attorney's advice to him. There
S.Ct. 710, 11 L.Ed.2d 686 (1964)). “Actual malice” in the          is no showing that the investigations Sheffield cites as
defamation context does not necessarily include ill will, spite,   exonerating him were complete when Burpo sent the email,
or evil motive. Sullivan, 376 U.S. at 279–80; Huckabee v.          or that the allegations had been presented to and rejected by
Time Warner Entm't Co., 19 S.W.3d 413, 420 (Tex.2000).             the district attorney or grand jury. The only indication in the
To establish actual malice, a plaintiff must prove that the        record is that the investigations and presentation to the grand
defendant made the statement “with knowledge that it was           jury occurred after January 4, 2012. Sheffield has not shown
false or with reckless disregard of whether it was true or not.”   that Burpo made an untrue statement or had the requisite
Sullivan, 376 U.S. at 279–80; Huckabee, 19 S.W.3d at 420.          disregard for the truth of these statements when he sent the
To establish reckless disregard, a plaintiff must prove that       January 4, 2012 email.
the publisher “entertained serious doubts as to the truth of



                © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                           9
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


                                                                  to the grand jury. The allegations did in fact go “to court”—
   *8 (2) Burpo's statement in the summer of 2012 to              arguably in the grand jury presentation and definitely in the
  Corpus Christi Police Officers Association President Mike       civil action. Sheffield failed to show by clear and specific
  Staff that Burpo “and CLEAT were still dealing with Mike        evidence a prima facie case that appellants' statements to
  Sheffield because of what Mr. Burpo told me was Mr.             Dovalina were not true, much less that appellants either
  Sheffield's ‘criminal conduct’ and that he thought that         knew that Sheffield's conduct was not criminal or entertained
  would end soon.”                                                serious doubts about the truth of their statements. See id.
                                                                  As such, Sheffield has failed to carry his burden to present
The potentially defamatory aspect of this statement is the use    a prima facie case that CLEAT defamed him with the
of the term “criminal conduct.” APD's February investigation      statements made by CLEAT staff.
that found no criminal element in Sheffield's conduct does not
prove that CLEAT knew this statement was false or recklessly       *9 We sustain appellants' third issue with respect to
disregarded whether it was true. Given the lack of evidence on    the communications described in paragraphs 1, 2, and 3
the scope and purpose of APD's investigation and CLEAT's          above. The trial court erred if it concluded that Sheffield
alleged lack of cooperation with the investigation, Sheffield     made a prima facie case of defamation with respect to the
has not set out a prima facie case that APD's conclusion          communications described in those three paragraphs.
informed appellants that their statements were false or gave
them serious doubts about their truth. Appellants, supported
by CLEAT's attorney's opinion, insisted at least through the      IV. Constitutional challenges
August 2012 presentation to the Williamson County grand           Sheffield contends that the TCPA is unconstitutional because
jury that Sheffield committed a crime, and Sheffield has not      its proof requirements unreasonably restrict his right of access
presented a prima facie case that Burpo was reckless with         to the courts for redress of his defamation claim and because
regard to the truth of his statement. Even if the grand jury's    the definition of the right to freely associate is vague and
no-bill made any subsequent allegation of criminal conduct        overbroad on its face or as applied.
reckless, Sheffield did not present clear and specific evidence
that the statement to Staff occurred after the grand jury's
decision. We find no clear and specific evidence that, when       Open courts
attributing “criminal conduct” to Sheffield in a statement to     The Texas Constitution provides that “[a]ll courts shall be
Staff, appellants either knew that Sheffield's conduct was not    open, and every person for an injury done him, in his
criminal or entertained serious doubts about the truth of their   lands, goods, person or reputation, shall have remedy by
statements. See St. Amant, 390 U.S. at 731.                       due course of law.” Tex. Const. art. I, § 13. To prove that
                                                                  the statute violates the open-courts provision, Sheffield must
  (3) Statements to Laredo Police Association President           show that (1) a cognizable common-law cause of action
  Luis Dovalina by CLEAT Region 2 Director Mark Guerra            is being restricted and (2) the restriction is unreasonable
  that “it could go criminal, for what [Sheffield] did.”          or arbitrary when balanced with the statute's purpose and
  Dovalina said Burpo “informed me that it was ‘going to          basis. Hebert v. Hopkins, 395 S.W.3d 884, 901 (Tex.App.-
  court.’ “ Other CLEAT officials “stated to me that criminal     Austin 2013, no pet.) (citing Sax v. Votteler, 648 S.W.2d 661,
  charges could be filed against Sheffield by CLEAT for           666 (Tex.1983)). Defamation is undisputedly a common-law
  what Mr. Sheffield had done.”                                   cause of action. Cf. Houston Livestock Show & Rodeo, Inc.
                                                                  v. Hamrick, 125 S.W.3d 555, 583 (Tex.App.-Austin 2003, no
 [10] As with the statements to Staff, Sheffield did not          pet.).
pinpoint the timing of these alleged communications. It is also
not clear exactly what it means for charges to “go criminal.”     Sheffield argues that the open courts provision of the Texas
This lack of specificity undermines Sheffield's attempt to        Constitution guarantees, among other things, that (1) the
make a prima facie case of defamation. Reaction to Sheffield's    Legislature cannot impede access to the courts through
actions “could ” have “go[ne] criminal”—and arguably              unreasonable financial barriers, and (2) meaningful remedies
did, briefly, in the Williamson County District Attorney's        must be afforded so that the Legislature may not abrogate
presentation of the allegations to the grand jury. Similarly,     the right to assert a well-established common law cause of
“criminal charges could [have been] filed,” and appellants        action unless the reason for its action outweighs the litigants'
attempted to make that happen by pursuing their presentation      constitutional right of redress. See Trinity River Auth. v. URS


               © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                            10
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


Consultants, Inc., 889 S.W.2d 259, 262 (Tex.1994); see also         [12] Sheffield also attacks the restrictions on discovery
Tex. Const. art. I, §§ 8, 13. “A statute or ordinance that         during the pendency of the motions to dismiss. Motions to
unreasonably abridges a justiciable right to obtain redress        dismiss under the TCPA must be filed, heard, and ruled upon
for injuries caused by the wrongful acts of another amounts        within 120 days of the service of the lawsuit, with some
to a denial of due process under article I, section 13, and        leeway upon a showing of good cause by the party (for the
is, therefore, void.” Sax, 648 S.W.2d at 665. A claim of           motion) or the court (for holding a hearing). The motions to
unconstitutionality under the open courts provision will only      dismiss under the TCPA must be filed no later than the sixtieth
succeed if the claimant (1) has a cognizable common-law            day after the action was served, unless the court extends the
cause of action being restricted by a statute, and (2) the         time to file a motion on a showing of good cause. Tex. Civ.
restriction is unreasonable or arbitrary when balanced against     Prac. & Rem.Code § 27.003(b). The hearing must be held
the purpose and basis of the statute. Id. at 666. In applying      not later than thirty days after the motion was served unless
this test, we consider both the statute's general purpose and      the court's docket requires a later hearing. Id. § 27.004. The
the extent to which the claimant's right to bring a common-        court must rule no later than thirty days after the hearing.
law cause of action is affected. See id.                           Id. § 27.005(a). The filing of a motion to dismiss under the
                                                                   TCPA automatically stays all discovery. Id. § 27.003(c). The
Sheffield contends that the TCPA unreasonably restricts his        stay may be lifted—on motion by a party or the court and
ability to pursue his claim for defamation in the following        a showing of good cause—to permit specific and limited
ways: (1) provisions that purport to impose a higher standard      discovery relevant to the dismissal motion. Id. § 27.006(b).
of proof than would ordinarily be required for the plaintiff/
respondent to prevail at trial; (2) unreasonable prohibitions,     Sheffield has not shown that these restrictions are
limitations or restrictions on discovery prior to the hearing on   unreasonable. The TCPA's express purpose is to balance
the motions to dismiss (particularly when coupled with the         protections for persons exercising their constitutional rights
expedited notice/hearing requirements under the act); and (3)      of expression and association with those of persons filing
mandatory (non-discretionary) fee awards and sanctions upon        meritorious lawsuits for demonstrable injury. Id. § 27.002.
dismissal. We will consider these in turn.                         The provisions staying discovery are tempered by provisions
                                                                   permitting discovery upon a showing of good cause. These
 *10 [11] We find no provision in the TCPA that purports           provisions can curtail potentially costly discovery in a
to impose a higher standard of proof than would be required        possibly meritless case, thus serving the TCPA's goal of
at trial. If the defendant shows by a preponderance of the         keeping litigation from being used to chill the exercise
evidence that the legal action impinges on a specified right,      of constitutional rights, but can permit discovery upon a
the TCPA requires only that the claimant produce evidence          showing of good cause. They do not on their face violate the
that establishes a prima facie case. See Tex. Civ. Prac. &         open-courts provision. Our review of the case on appeal does
Rem.Code § 27.005(c). “A prima facie case represents the           not reveal how the stay of discovery as applied here prevented
minimum quantity of evidence necessary to support a rational       Sheffield from establishing a prima facie case through clear
inference that the allegation of fact is true.” Rodriguez v.       and specific evidence and violated the constitution.
Printone Color Corp., 982 S.W.2d 69, 72 (Tex.App.-Houston
[1st Dist.] 1998, pet. denied) (quoting Rosales v. H.E. Butt        *11 [13] Finally, Sheffield has not shown that fees awards
Grocery Co., 905 S.W.2d 745, 748 (Tex.App.-San Antonio             are mandatory under the TCPA, much less that they violate
1995, writ denied)). That standard does not increase the           the open-courts provision. The fees provisions are as follows:
burden of proof. The characterization of the evidence needed
to support the prima facie case as “clear and specific” does         If the court orders dismissal of a legal action under this
not alter the burden or cause it to exceed a preponderance of        chapter, the court shall award to the moving party:
the evidence. This TCPA motion-to-dismiss process imposes
                                                                        (1) court costs, reasonable attorney's fees, and other
a burden to produce evidence almost certainly sooner than
                                                                        expenses incurred in defending against the legal action
a typical trial, but so do the summary-judgment processes.
                                                                        as justice and equity may require; and
See Tex.R. Civ. P. 166a. Sheffield has not shown that the
TCPA requires a higher standard of proof, much less one that            (2) sanctions against the party who brought the legal
violates the open-courts provision of the Texas constitution.           action as the court determines sufficient to deter the




                © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                          11
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)


     party who brought the legal action from bringing similar      words, an overbroad statute improperly limits protected
     actions described in this chapter.                            freedoms. Cf. id. In this case, however, Sheffield complains
                                                                   that the statutory “definition exceeds the scope of the
Id. § 27.009(a). While the introductory language of                Constitutional right of association”—that is, that the statute
subsection (a) uses the seemingly mandatory term “shall            provides more protection for freedom of association than
award,” the subsequent language tempers the conditions for         the constitution does. We do not find support for the
making an award with discretionary terms like “justice” and        proposition that a statute that provides extra protection for
“equity” and “sufficient to deter.” Id. A trial court may decide   a right violates the constitutional provision guaranteeing
that justice and equity do not require that costs, fees, or        that right. See Marquez v. State, 725 S.W.2d 217, 243
expenses be awarded and may determine that no sanctions            (Tex.Crim.App.1987) (“[I]t is by now axiomatic that the
are needed to deter the plaintiff from bringing similar actions.   federal constitution provides only a minimum standard of
These provisions do not mandate an award and do not violate        protection to be afforded citizens of the several states and the
the open-courts guarantees on their face. As no fees were          states are free to provide greater protection by constitution or
awarded, the provisions as applied here did not violate the        statute.”)
open-courts provisions.
                                                                    *12 Also, the challenged definition of the exercise of the
                                                                   right of association is not unconstitutionally vague. Sheffield
Vagueness and overbreadth
                                                                   complains that the TCPA's definition of the exercise of
 [14] Sheffield attacks the TCPA's definition that the exercise
                                                                   the right of free association “could literally encompass all
of the right of association encompasses “a communication
                                                                   communications or activities of any corporation, partnership,
between individuals who join together to express, promote,
                                                                   joint venture, limited liability company, organization agency,
pursue or defend common interests.” Tex. Civ. Prac. &
                                                                   association or group.” A statute is void for vagueness if
Rem.Code § 27.001(2). He complains that this definition
                                                                   it (1) fails to give a person of ordinary intelligence fair
exceeds the actual constitutional right, is overbroad facially
                                                                   notice of the conduct prohibited or (2) is so indefinite
and/or as applied, and is unconstitutionally vague because
                                                                   that it encourages arbitrary and discriminatory enforcement.
it could encompass all communications or activities of any
                                                                   Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 75
group. He cites no authority in support of his argument as
                                                                   L.Ed.2d 903 (1983); see also Clark v. State, 665 S.W.2d
required. See Tex.R.App. P. 38.1(I), 38.2(a).
                                                                   476, 482 (Tex.Crim.App.1984). To be void for vagueness,
                                                                   a statute must be so vague and indefinite as really to be no
We note first that the TCPA's relationship to First
                                                                   standard at all. Jones v. City of Lubbock, 727 F.2d 364, 373
Amendment protections is somewhat unusual. In relevant
                                                                   (5th Cir.1984). We note initially that the TCPA does not
part, the First Amendment prohibits the government from
                                                                   prohibit any activity. Sheffield argues that the plain language
making laws abridging freedom of speech or the right of
                                                                   of the statute may invite an interpretation that it applies to an
the people to peaceably assemble. See U.S. Const. amend. I.
                                                                   extremely broad right to association, but that does not render
The TCPA attempts to shield people exercising certain rights
                                                                   the TCPA's definition improperly vague. The legislature's
protected by the First Amendment not from governmental
                                                                   choice to require a preliminary substantiation of legal actions
restriction, but from meritless civil claims. See Tex. Civ.
                                                                   relating to a broad range of organizational communications
Prac. & Rem.Code §§ 27.002, .005. Rather than imposing
                                                                   does not create difficulty in determining whether or how
a governmental limit on speech or association, the TCPA
                                                                   it applies. We need not determine the outer constitutional
places preliminary proof requirements on parties to litigation
                                                                   limits of the TCPA, only whether the TCPA's terms are
concerning the results of the exercise of those rights.
                                                                   permissible as applied to the statements at issue in this case,
                                                                   each of which generally relate to CLEAT's internal affairs
Because of the nature of the relationship between the TCPA
                                                                   which are a common interest among CLEAT's members.
and the First Amendment, Sheffield's complaint that the
                                                                   The TCPA's definition of the exercise of free association is
definition of the right of association is too broad assumes
                                                                   not unconstitutionally overbroad or void for vagueness as
an unusual posture. A statute is considered impermissibly
                                                                   Sheffield contends.
overbroad only if, in addition to constitutionally proscribed
activities, it restricts speech or conduct protected by the
First Amendment. Walker v. State, 222 S.W.3d 707, 713              V. Attorney's fees
(Tex.App.-Houston [14th Dist.] 2007, pet. ref'd). In other


                © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                            12
Combined Law Enforcement Ass'n of Texas v. Sheffield, Not Reported in S.W.3d (2014)



Appellants urge by their fourth issues that the trial court
                                                                       We reverse the trial court's denial of the motions to dismiss
erred by failing to award them attorney's fees. As this is
                                                                       Sheffield's claim that Burpo and other CLEAT employees
an interlocutory appeal and we have reversed some aspects
                                                                       defamed him in the statements described in numbered
of the trial court's denial of appellants' motions to dismiss,
                                                                       paragraphs 1, 2, and 3 set out in section I of the Discussion
affirmed other aspects, and determined that the attorney's fees
                                                                       above—namely, the January 4 email to CLEAT board and
provisions are not mandatory, we conclude that the trial court
                                                                       staff and alleged statements to Mike Staff and Luis Dovalina.
should consider whether attorney's fees are warranted when
                                                                       We conclude that Sheffield did not make the required prima
it resumes its consideration of this case. Our resolution of the
                                                                       facie showing under the TCPA on each element of his
first three issues has rendered our consideration of appellants'
                                                                       defamation claims relating to the statements in paragraphs 1,
fourth issues moot.
                                                                       2 and 3, and we dismiss those claims.

                                                                        *13 We reject Sheffield's arguments that the TCPA is
                       CONCLUSION                                      unconstitutional and return the issue of costs and attorney's
                                                                       fees to the trial court. The case may proceed in the trial court
We affirm the trial court's denial of the motions to dismiss
                                                                       consistent with our resolution of these issues on interlocutory
Sheffield's claims that CLEAT defamed him through John
                                                                       appeal. The stay of discovery imposed by this Court's order
Curtis's statements in numbered paragraphs 4 and 5 set out
                                                                       dated February 26, 2013, will expire on the same date as this
in section I of the Discussion above. We find that appellants
                                                                       Court's plenary power over this appeal expires.
did not make the required showing under the TCPA that those
claims are within the scope of the exercise of appellants' right
of association, which was the only constitutional basis for
Sheffield's objection preserved for appeal.

End of Document                                                    © 2014 Thomson Reuters. No claim to original U.S. Government Works.




                © 2014 Thomson Reuters. No claim to original U.S. Government Works.                                                13
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


                                                                            Application and proceedings thereon
                    438 S.W.3d 847                                     A “prima facie case” within meaning of Texas
                Court of Appeals of Texas,                             Citizens Participation Act (TCPA) prohibiting
                  Houston (1st Dist.).                                 dismissal if plaintiff establishes by clear and
                                                                       specific evidence a prima facie case for
           Bruce I. SCHIMMEL, Appellant                                each essential element represents the minimum
                          v.                                           quantity of evidence necessary to support a
        Gary McGREGOR, Teri McGregor, Kris                             rational inference that the allegation of fact is
         Hall, Soledad Pineda, Larry Bishop,                           true. V.T.C.A., Civil Practice & Remedies Code
        Cynthia Bishop, George Clark, Deborah                          § 27.005(c).
        Clark, and Carol Severance, Appellees.                         1 Cases that cite this headnote

       No. 01–13–00721–CV. | July 10, 2014.
        | Rehearing Overruled Sept. 18, 2014.                    [2]   Pleading
                                                                           Application and proceedings thereon
Synopsis
                                                                       Although attorney filed his motion to dismiss
Background: Homeowners sued homeowners' association's
                                                                       homeowners' tortious interference lawsuit, under
attorney for tortious interference with prospective business
                                                                       Texas Citizens Participation Act (TCPA), one
relations in connection with the sale of their respective
                                                                       day late, in making a statement concerning the
beachfront properties to city. Attorney moved to dismiss
                                                                       timeliness of the motion, trial court implicitly
under Texas Citizens Participation Act (TCPA). The 113th
                                                                       ruled that if attorney technically filed the motion
District Court, Harris County, denied motion. Attorney
                                                                       late he had good cause for the late filing,
appealed.
                                                                       therefore, motion was timely filed. V.T.C.A.
                                                                       Civil Practice and Remedies Code § 27.003(b).

Holdings: The Court of Appeals, Evelyn V. Keyes, J., held              Cases that cite this headnote
that:
                                                                 [3]   Pleading
[1] motion was timely filed;                                               Frivolous pleading
                                                                       Statements allegedly made by attorney to city,
[2] attorney's statements did not come within “commercial
                                                                       which homeowners alleged tortiously induced
speech” exemption from application of Act;
                                                                       city to back out of its agreements to purchase
                                                                       homeowners' properties, did not arises out of
[3] attorney's statements were “matters of public concern,”
                                                                       the sale or lease of goods, services, or an
supporting motion to dismiss;
                                                                       insurance product, or a commercial transaction,
                                                                       as required to come within commercial speech
[4] homeowners failed to establish a prima facie case on their
                                                                       exception to application of Texas Citizens
claim;
                                                                       Participation Act (TCPA); when attorney made
                                                                       the statements he was undisputedly working
[5] remand on issue of attorney fees was warranted.
                                                                       as an attorney for homeowners association,
                                                                       attorney did not represent the city, nor was the
Reversed and remanded.                                                 city a “potential buyer or customer” of his legal
                                                                       services. V.T.C.A. Civil Practice and Remedies
                                                                       Code § 27.010(b).

 West Headnotes (12)                                                   1 Cases that cite this headnote


 [1]    Pleading                                                 [4]   Pleading



               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           1
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


            Frivolous pleading
                                                              [7]    Torts
       Statements of homeowners' association's
                                                                           Improper means; wrongful, tortious or
       attorney, forming basis of homeowners'
                                                                     illegal conduct
       action for tortious interference with sale of
       their respective beachfront properties to city,               Conduct that is merely “sharp” or unfair is
       were “matters of public concern,” supporting                  not actionable and cannot be the basis for an
       attorney's motion to dismiss under Texas                      action for tortious interference with prospective
       Citizens Participation Act (TCPA); challenged                 relations.
       statements, regardless of to whom the statements
                                                                     Cases that cite this headnote
       were made, were related to the dispute
       between homeowners and association about
       city's purchase of properties, and were made “in       [8]    Pleading
       connection with an issue under consideration or                   Frivolous pleading
       review” by the city and the Texas Department                  Pleading
       of Public Safety. V.T.C.A. Civil Practice and                     Application and proceedings thereon
       Remedies Code § 27.001(7).                                    Torts
                                                                         Attorneys
       Cases that cite this headnote
                                                                     Homeowners'           conclusory        statements,
                                                                     unsupported by any facts, that actions of
[5]    Pleading
                                                                     homeowner associations' attorney caused city to
           Application and proceedings thereon
                                                                     fail to close on the purchases of their properties,
       Attorney's affidavits, in support of his motion               did not establish, by clear and specific evidence,
       under Texas Citizens Participation Act (TCPA),                a prima facie case on the essential element of
       stating that he was “personally acquainted with               causation, as required to prevail on a claim for
       facts stated therein,” instead of stating that                tortious interference with prospective business
       they were based on personal knowledge, were,                  relations, and, therefore, trial court erroneously
       nonetheless, competent and admissible.                        denied attorney's motion to dismiss under Texas
                                                                     Citizens Participation Act (TCPA); even if
       Cases that cite this headnote
                                                                     attorney had induced the city not to close on
                                                                     the purchase of the properties, the homeowners
[6]    Torts                                                         would have no cause of action against him for
           Prospective advantage, contract or relations;             inducing city to do that which it had a right to
       expectancy                                                    do, which was not to purchase the homeowners'
       To prevail on a claim for tortious interference               properties. V.T.C.A., Civil Practice & Remedies
       with prospective business relations, the plaintiffs           Code § 27.005(b, c).
       must establish that (1) a reasonable probability
                                                                     1 Cases that cite this headnote
       existed that the plaintiffs would have entered into
       a business relationship with a third party; (2) the
       defendant either acted with a conscious desire to      [9]    Torts
       prevent the relationship from occurring or knew                   Contracts
       the interference was certain or substantially                 Merely inducing a contract obligor to do what it
       certain to occur as a result of the conduct; (3) the          has a right to do is not actionable interference.
       defendant's conduct was independently tortious
       or unlawful; (4) the interference proximately                 Cases that cite this headnote
       caused the plaintiffs injury; and (5) the plaintiffs
       suffered actual damage or loss as a result.            [10]   Appeal and Error
                                                                         Ordering New Trial, and Directing Further
       Cases that cite this headnote
                                                                     Proceedings in Lower Court



              © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                          2
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


        When an appellate court determines that the trial
        court erroneously denied a defendant's motion to
        dismiss under the Texas Citizens Participation                                   OPINION
        Act (TCPA), the appropriate disposition of the
        case is to reverse the trial court's denial of the    EVELYN V. KEYES, Justice.
        motion and remand for the trial court to conduct
                                                              In this interlocutory appeal, appellees Gary McGregor,
        further proceedings to determine damages and
                                                              Teri McGregor, Kris Hall, Soledad Pineda, Larry Bishop,
        costs and to order dismissal of the suit. V.T.C.A.,
                                                              Cynthia Bishop, George Clark, Deborah Clark, and Carol
        Civil Practice & Remedies Code § 27.009(a)(1).
                                                              Severance (collectively, “the Buy–Out Owners”), sued Bruce
        1 Cases that cite this headnote                       Schimmel, an attorney hired by The Sands of Kahala Beach
                                                              HOA, Inc. (“SOKB”), the homeowners' association for the
                                                              subdivision in which the Buy–Out Owners lived, for tortious
 [11]   Costs
                                                              interference with prospective business relations, specifically,
            Evidence as to items
                                                              the sale of their respective beachfront properties to the City
        Proof of attorney's fees should include the basic     of Galveston. Schimmel moved to dismiss the Buy–Out
        facts underlying the lodestar, which are: (1)         Owners' tortious interference claim pursuant to the Texas
        the nature of the work, (2) who performed the
                                                              Citizens Participation Act (“TCPA”). 1 The trial court denied
        services and their rate, (3) approximately when
                                                              Schimmel's motion to dismiss. In two issues, Schimmel
        the services were performed, and (4) the number
                                                              contends that the trial court erroneously (1) found that
        of hours worked.
                                                              Schimmel's complained-of actions did not involve “matters of
        Cases that cite this headnote                         public concern” and did not implicate the exercise of his right
                                                              to petition, right of free speech, or right of association and thus
                                                              erroneously denied his motion to dismiss; and (2) refused to
 [12]   Appeal and Error                                      award Schimmel court costs, reasonable attorney's fees, and
           Ordering new trial of certain issues only          other expenses incurred in defending the action against him.
        Remand for further proceedings on issue
        of amount of attorney fees was warranted,             1       See TEX. CIV. PRAC. & REM.CODE ANN. §§
        given that appellant was entitled to attorney                 27.001–.011 (Vernon Supp.2013).
        fees and costs by establishing his entitlement
                                                              We reverse and remand for further proceedings.
        to dismissal of tortious interference with
        prospective business relations suit under Texas
        Citizens Participation Act (TCPA). V.T.C.A.,
        Civil Practice & Remedies Code § 27.009(a)(1).                                  Background

        Cases that cite this headnote                         The Buy–Out Owners all own beachfront property in the
                                                              Sands of Kahala Beach, a small, gated subdivision located
                                                              on Galveston Island. In September 2008, Hurricane Ike
                                                              made landfall in the region and caused extensive property
Attorneys and Law Firms                                       damage to numerous homes, including those of the Buy–
                                                              Out Owners. Because their homes were allegedly more than
*849 Daniel Goldberg, Houston, TX, for Appellant.             fifty percent damaged, the Buy–Out Owners sought to sell
                                                              their properties to the City of Galveston under a Federal
Wayne H. Paris, Paris Law Group, PLLC, Houston, TX, for
                                                              Emergency Management Agency (“FEMA”) program called
Appellees.
                                                              the Hazard Mitigation Grant Program (“HMGP”). The Texas
Panel consists of Justices KEYES, BLAND, and BROWN.           Department of Public Safety assists in administering this
                                                              program. The Buy–Out Owners and an attorney for the City of
                                                              Galveston signed agreements in September 2009 concerning
                                                              the purchase of the respective properties.




               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            3
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


SOKB and the remaining owners who owned property in the            with prospective business relations. 2 The Buy–Out Owners
subdivision but did not wish to sell their property to the City    alleged that a reasonable probability existed that they would
of Galveston (“the Remaining Owners”) opposed the Buy–             have entered into a business relationship with the City of
Out Owners' plans to sell. Under the HMGP, the properties          Galveston, that Schimmel intentionally interfered with the
that the City of Galveston purchased “were to be kept as open      relationship, and that Schimmel's conduct was independently
space in perpetuity.” *850 This requirement concerned the          tortious and unlawful “in that Defendant Schimmel made
SOKB, the entity in charge of collecting assessments and           fraudulent statements about these Plaintiffs to third parties
fees from the property owners within the subdivision, and the      and persuaded others to illegally boycott these Plaintiffs.”
Remaining Owners, who believed that the required public use
of the purchased land and the loss of a private roadway and        2      SOKB did not join the homeowners in asserting this
utility easement would cause the value of their properties to
                                                                          claim against Schimmel, and SOKB is not a party to
drop.
                                                                          this appeal, which concerns only the Buy–Out Owners'
                                                                          tortious interference claim.
Due to the dispute between the Buy–Out Owners, SOKB,
                                                                   The Buy–Out Owners alleged that Schimmel made several
and the Remaining Owners, in October 2009, the City of
                                                                   misrepresentations that interfered with the purchase of their
Galveston added a condition to the purchase of the Buy–
                                                                   properties by the City of Galveston. For example, in response
Out Owners' properties: the president of SOKB's Board of
                                                                   to an article in the Houston Chronicle about the potential sale
Directors (“the Board”) needed to sign a document releasing
                                                                   of the properties, Schimmel allegedly wrote to the author of
the City from paying future homeowners' dues and other fees
                                                                   the article and stated that if the City purchased the properties
and assessments to SOKB once it purchased the properties.
                                                                   the Remaining Owners would lose their access to a nearby
In December 2009, SOKB hired Schimmel, an attorney, to
                                                                   state highway because the private road in the subdivision
represent its interests and those of the Remaining Owners
                                                                   would be demolished. He also allegedly misrepresented to the
in the dispute with the Buy–Out Owners. SOKB refused to
                                                                   author that all of the properties were behind the vegetation
sign the releases and the Board voted to amend SOKB's by-
                                                                   line and “repairable for less than 50% of *851 their value,”
laws to raise the voting requirement to remove directors from
                                                                   which would preclude them from participation in the HMGP.
the Board, purportedly on Schimmel's advice. The Buy–Out
                                                                   Schimmel also allegedly made misrepresentations to the
Owners subsequently held a special meeting of the Board
                                                                   Board concerning how the HMGP's definition of “substantial
and elected new directors, including Kris Hall, one of the
appellees, as the new President. Hall then signed the releases     damage” to the properties was calculated; 3 to lot owners
for the Buy–Out Owners' properties and delivered them to the       in the subdivision that the buyout would not include the
City of Galveston.                                                 opportunity to buy out all of the properties in the subdivision;
                                                                   and to various individuals that he “had no intention of
Schimmel continued to work on behalf of SOKB and the               changing any more By–Laws,” that the SOKB had been
Remaining Owners to convince the City of Galveston not to          working with the Buy–Out Owners to settle the dispute, and
buy the Buy–Out Owners' properties until February 1, 2011,         that developers no longer owned lots in the subdivision, even
when he withdrew from representation. Ultimately, the time         though they did.
period to participate in the HMGP expired without the City of
Galveston's having closed on the purchases of the Buy–Out          3      The Buy–Out Owners alleged that Schimmel told the
Owners' properties.                                                       Board that “the definition of Substantial Damage is
                                                                          damages that total at least 50% of the pre-event fair
The Buy–Out Owners, joined by SOKB, sued Schimmel on                      value of the property,” but he allegedly knew that the
January 28, 2013, asserting claims for breach of fiduciary                fair market value of the property was based on the local
duty and equitable fee forfeiture. Neither of those claims is at          appraisal district's value for the structure, which did not
issue in this interlocutory appeal.                                       include the value of the land. According to the Buy–Out
                                                                          Owners, “This is a significant distinction which the BOD
                                                                          later misrepresented to FEMA when they alleged false
On March 28, 2013, the Buy–Out Owners and SOKB filed
                                                                          damage estimates.”
their first amended petition. In addition to the breach of
fiduciary duty and fee forfeiture claims, the Buy–Out Owners       The Buy–Out Owners also alleged that Schimmel had
asserted a claim against Schimmel for tortious interference        “systematically excluded members from voting [at resident



                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                     4
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


meetings] in order to boycott the Buyout owners,” such as by        With respect to his alleged statements to the Board, Schimmel
quickly setting a voting eligibility date to prevent owners who     argued that those statements were “an exercise of the right
had not paid their annual assessments from voting at meetings       of association” and thus were entitled to protection under the
and by recommending the elimination of voting by proxy,             TCPA.
which would affect the Buy–Out Owners who used their
properties as vacation homes but did not live permanently           Schimmel also argued that he was entitled to mandatory
in the subdivision. The Buy–Out Owners further alleged that         court costs, reasonable attorney's fees, and other expenses
Schimmel had stated that neither SOKB nor its Board had             incurred in defending the claim pursuant to Civil Practice
the power to waive assessments as required by the City of           and Remedies Code section 27.009(a). Schimmel attached
Galveston to purchase the properties, and “[w]ithout releases,      an affidavit setting out the amount of attorney's fees he had
the [City] would not close on the properties and [Schimmel]         incurred in defending against the Buy–Out Owners' claims.
had the [Board] refuse to sign [the] release[s] which was an        This affidavit set out the billing rate, the date tasks were
unreasonable restraint or alienation. Defendant Schimmel's          performed, the hours spent, and a description of the tasks
position was that the Buy-[O]ut owners would not be allowed         completed.
to sell to the [City] under any circumstances.” The Buy–Out
Owners alleged that they had suffered economic damages              Schimmel attached numerous exhibits to his motion to
consisting of the difference between the proposed buy-out           dismiss. One of these exhibits was an order of dismissal in a
values and the market values of their properties.                   suit filed by the Buy–Out Owners in the Southern District of
                                                                    Texas against the City of Galveston and several Department
On May 28, 2013, Schimmel filed a motion to dismiss under           of Public Safety officials involved in the administration of
the TCPA. In this motion, Schimmel stated that the Buy–             the HMGP. The Buy–Out Owners had raised claims under
Out Owners served him with their first amended petition on          the Fourteenth Amendment and Section 1983, 4 arguing that
March 28, 2013, and that this motion to dismiss addressed           the City of Galveston's failure to close on the purchase of
only the tortious interference claim raised for the first time in   their properties deprived them of funds under the HMGP
that amended petition.                                              without due process of law. The district court granted the
                                                                    defendants' motion to dismiss pursuant to Federal Rule of
Schimmel stated that he advised the Board and the Remaining         Civil Procedure 12(b)(1) and, in its order, noted that state
Owners that he thought the issue concerning the value of            agencies involved with administering the HMGP have “wide
the repairs to the Buy–Out Owners' properties, which was            discretion in administering the program.” The court stated,
relevant to their eligibility to participate in the HMGP, was       “Nothing in the regulations [governing the HMGP] dictates
“a matter between [the Buy–Out Owners] and governmental             that qualified property owners are entitled to participate in
agencies” and should not be pursued by SOKB, “but that if           the program or limits the State's discretion in determining a
any lot owner wanted to pursue that issue on his or her own,        property owner's qualifications for the program or reviewing
it would aid [SOKB] by distracting [the Buy–Out Owners].”           those qualifications at any time in the process.” The court
Schimmel argued that the TCPA protected these statements            concluded that the Buy–Out Owners “have no entitlement to
because they involved his right of association and right to         HMGP funds or a property right to such funds” and ultimately
petition regarding a matter of public concern. He argued that       dismissed their suit.
his statements to the Houston Chronicle reporter were “a
‘communication’ which is ‘an exercise of the right of free          4      See 42 U.S.C. § 1983 (2006) (providing civil cause of
speech’ and related to an exercise of the right of petition”
                                                                           action for deprivation of rights).
and were made “in connection with a matter of public
concern” because the statements related to the expenditure          In response to Schimmel's motion to dismiss, the Buy–
of government money and “interference with the community            Out Owners argued that their claim fell within a statutory
of the Subdivision and economic concerns.” He asserted that         exemption to the TCPA because Schimmel was engaged in
those statements were also “reasonably likely to encourage          the business of selling his legal services, he was paid to
consideration or review *852 of an issue by” an executive           render legal services by SOKB and the Remaining Owners,
or other governmental body or were “reasonably likely to            and his conduct at issue in the suit occurred while he was
enlist public participation in an effort to effect consideration    rendering legal services. The Buy–Out Owners also argued
of an issue by” an executive or other governmental body.            that Schimmel had not timely filed his motion to dismiss



                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                5
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


because the TCPA required such motions to be filed not later               signed contracts with the City of Galveston to purchase
than the sixtieth day after service of the legal action and                the properties for specified amounts.
Schimmel filed his motion to dismiss on the sixty-first day
after the homeowners served him with their amended petition.           But for Schimmel's misrepresentations and conduct there
                                                                       is a reasonable probability that all of our buy-out
The Buy–Out Owners further stated,                                     contracts would have closed.... Schimmel's independent
                                                                       misrepresentations and boycott, set out above, prevented
             The individual Plaintiffs['] claims are                   our agreements from closing and the purchase of our
             not based on, related to, or in response                  property by the [City]. Schimmel's acts, set out above,
             to a right of Schimmel to voice free                      were done with a conscious desire to prevent our sales and
             speech, have a right of association or                    purchases from occurring. I, as well as the other Buy–Out
             a right to petition. It is totally about                  Owners, have suffered actual damages as a result of this
             his tortious interference with Plaintiffs'                interference of Schimmel. We have incurred thousands of
             prospective business and contractual                      dollars in legal fees and have lost the difference between
             relations which caused the individual                     the buy-out values that we were to be paid and the lesser
             Plaintiffs money damages. Plaintiffs'                     amounts that our properties now are valued at. There was
             claims are based upon the independent                     a reasonable probability that I, as well as the rest of the
             torts of fraud, misrepresentations and                    Buy–Out Owners, would have entered into a business
             illegal boycott.                                          relationship and closed our contracts with the [City].
                                                                       The Buy–Out Owners did not attach affidavits from
They further argued, “Schimmel's conduct is at issue here, not
                                                                       attorneys with the City of Galveston or from personnel
anyone's free speech, right to associate, or to file a lawsuit.”
                                                                       with the Department of Public Safety, which assisted in
The Buy–Out Owners also challenged the affidavits that
                                                                       administering the HMGP, nor did they attach any other
Schimmel had submitted *853 with his motion to dismiss
                                                                       evidence from persons involved with the City's decision
on the ground that Schimmel stated that he is “personally
                                                                       not to close on the purchase of the Buy–Out Owners'
acquainted with the facts stated herein, except where I state
                                                                       properties.
that I am testifying on information and belief, in which
                                                                    Schimmel filed a reply and asserted that he had timely filed
case I am testifying based on information and my belief
                                                                    his motion to dismiss. He argued that although the Buy–
thereof.” The Buy–Out Owners argued that these affidavits
                                                                    Out Owners filed their amended petition with the trial court
did not constitute competent evidence because “personal
                                                                    on March 28, 2013, the Buy–Out Owners did not serve
acquaintance” is not “personal knowledge.” The homeowners
                                                                    him with a copy of the petition. He did not see a copy
also challenged Schimmel's attorney's fees affidavit on the
                                                                    of the petition until April 1, when a legal assistant to his
ground that it did not meet the requirements for establishing
                                                                    attorney in the case downloaded the petition from the ProDoc
reasonable and necessary attorney's fees as set out by the
                                                                    eFiling service. In the alternative, Schimmel moved the trial
Texas Supreme Court in El Apple I, Ltd. v. Olivas.
                                                                    court to allow late filing of the motion to dismiss, as is
                                                                    permitted by the TCPA. Schimmel also argued that the Buy–
The Buy–Out Owners attached their own affidavits to their
                                                                    Out Owners' supporting affidavits were conclusory and not
response and argued that these affidavits established a prima
                                                                    supported by evidence that a reasonable probability existed
facie case for tortious interference with prospective business
                                                                    that their buy-out contracts with the City of Galveston would
relations. 5 The affidavits were substantively identical. The       have closed but for Schimmel's allegedly tortious actions.
affidavits set out numerous representations allegedly made by       He further argued that the Buy–Out Owners did not provide
Schimmel that, according to the Buy–Out Owners, caused the          “any evidence that any act of Schimmel's caused the [Texas
City of Galveston to fail to purchase their properties. As an       Department *854 of Public Safety] to order the City not to
example, Kris Hall, one of the Buy–Out Owners, averred:             close the alleged contracts.”

5      Although the Buy–Out Owners pleaded a claim for              After an oral hearing, the trial court issued an order denying
       tortious interference with prospective relations, the Buy–   Schimmel's motion to dismiss. The order stated:
       Out Owners admit in their affidavits submitted in
       opposition to Schimmel's motion to dismiss that they had       The parties announced on the record their stipulation that
                                                                      the Motion relates only to the Plaintiffs' cause of action


                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                  6
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


  for damages resulting from an alleged tortious interference        In enacting the TCPA, the Legislature stated that the purpose
  with a prospective relationship between Plaintiffs and the         of the statute “is to encourage and safeguard the constitutional
  City of Galveston....                                              rights of persons to petition, speak freely, associate freely,
                                                                     and otherwise participate in government to the maximum
  The Court finds that the Motion was timely filed.                  extent permitted by law and, at the same time, protect the
                                                                     rights of a person to file meritorious lawsuits for demonstrable
  The Court finds that the docket conditions in the court
                                                                     injury.” TEX. CIV. PRAC. & REM.CODE ANN. § 27.002
  prevented the scheduling of the hearing on the Motion
                                                                     (Vernon Supp.2013); KTRK Television, Inc. v. Robinson, 409
  within 30 days following the date of its filing.
                                                                     S.W.3d 682, 688 (Tex.App.-Houston [1st Dist.] 2013, pet.
  The Court finds that the Plaintiffs' tortious interference         denied). The TCPA created “an avenue at the early stage of
  claim does not affect Schimmel's right to participate in           litigation for dismissing unmeritorious suits that are based
  government.                                                        on the defendant's exercise” of certain constitutional rights.
                                                                     In re Lipsky, 411 S.W.3d 530, 539 (Tex.App.-Fort Worth
  The Court finds that Schimmel's actions alleged as the             2013, orig. proceeding). The Legislature has directed courts
  basis of the tortious interference claim concerned matters         to construe the statute liberally “to effectuate its purpose
  disputed between individual parties, and the statements            and intent fully.” TEX. CIV. PRAC. & REM.CODE ANN.
  alleged as a basis of the claim were not made in connection        § 27.011(b) (Vernon Supp.2013); Robinson, 409 S.W.3d at
  with a matter of public concern.                                   688.

  The Court finds that Schimmel's actions alleged as the             Under the TCPA, if a party files a legal action that is
  basis of the tortious interference claim were not a part of        “based on, relates to, or is in response to” the defendant's
  Schimmel's exercise of the right of association defined in         exercise of *855 the right of free speech, right to petition,
  TEX. CIV. PRACT. & REM.CODE § 27.001(2).                           or right of association, the defendant may file a motion to
                                                                     dismiss the action. TEX. CIV. PRAC. & REM.CODE ANN.
  The Court finds that Schimmel's actions alleged as the
                                                                     § 27.003(a) (Vernon Supp.2013). The TCPA statutorily
  basis of the tortious interference claim do not concern
                                                                     defines “exercise of the right of association,” “exercise of
  Schimmel's right to petition defined in TEX. CIV. PRACT.
                                                                     the right of free speech,” and “exercise of the right to
  & REM.CODE § 27.001(4).
                                                                     petition.” See id. § 27.001(2)-(4) (Vernon Supp.2013). The
  The Court finds that the tortious interference claim was           TCPA defines “exercise of the right of association” as “a
  not brought to deter or prevent Schimmel's exercise of             communication between individuals who join together to
  his constitutional rights, for an improper purpose, for            collectively express, promote, pursue, or defend common
  harassment, to cause unnecessary delay, or to increase             interests.” Id. § 27.001(2). “Communication” is further
  litigation costs.                                                  defined as “the making or submitting of a statement or
                                                                     document in any form or medium, including oral, visual,
The trial court did not award attorney's fees or costs to either     written, audiovisual, or electronic.” Id. § 27.001(1). The
party. This interlocutory appeal followed.                           TCPA defines “exercise of the right of free speech” as
                                                                     “a communication made in connection with a matter of
                                                                     public concern.” Id. § 27.001(3). “Matter of public concern”
              Texas Citizens Participation Act                       includes issues relating to health or safety; environmental,
                                                                     economic, or community well-being; the government; a
In his first issue, Schimmel contends that the trial court           public official or public figure; or a good, product, or service
erroneously determined that his communications that are the          in the marketplace. Id. § 27.001(7). The statutory definition
basis of the Buy–Out Owners' tortious interference claim did         of “exercise of the right to petition” includes, among other
not involve “matters of public concern” and did not implicate        things, “a communication in connection with an issue under
his “exercise of the right to petition,” “exercise of the right of   consideration or review by a legislative, executive, judicial,
free speech,” or “exercise of the right of association.”             or other governmental body or in another governmental or
                                                                     official proceeding.” Id. § 27.001(4)(B).

A. Standard of Review and Applicable Law



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Schimmel v. McGregor, 438 S.W.3d 847 (2014)


A party filing a motion to dismiss under the TCPA must file         and specific” evidence to support each element of their
the motion “not later than the 60th day after the date of service   tortious interference claim. See Robinson, 409 S.W.3d at 689.
of the legal action.” Id. § 27.003(b). The trial court may
extend the time to file a motion to dismiss upon a showing of
good cause. Id.                                                     B. Applicability of TCPA to the Buy–Out Owners' Claim


When deciding whether to grant a motion to dismiss a                             1. Timeliness of Motion to Dismiss
lawsuit pursuit to the TCPA, the trial court must “consider
the pleadings and supporting and opposing affidavits stating        The Buy–Out Owners argue that this Court should affirm the
the facts on which the liability or defense is based.” Id.          trial court's ruling denying Schimmel's motion to dismiss on
§ 27.006(a) (Vernon Supp.2013); Robinson, 409 S.W.3d at             the basis that he did not timely file the motion.
688. The court must determine, after a hearing, whether the
moving defendant has demonstrated by a preponderance of             Section 27.003(b) provides that a party filing a motion to
the evidence that the legal action is “based on, relates to,        dismiss must file the motion “not later than the 60th day after
or is in response to the party's exercise of the right of free      the date of service of the legal action.” TEX. CIV. PRAC. &
speech, the right to petition, or the right of association.” TEX.   REM.CODE ANN. § 27.003(b). The statute further provides,
CIV. PRAC. & REM.CODE ANN. § 27.005(b) (Vernon                      however, that the trial court may extend the time to file a
Supp.2013); Robinson, 409 S.W.3d at 688. We review de               motion to dismiss “on a showing of good cause.” Id.; see
novo the trial court's determination whether the defendant          also Newspaper Holdings, 416 S.W.3d at 79 (“The TCPA sets
carried this burden. Robinson, 409 S.W.3d at 688.                   strict deadlines for filing, hearing, and ruling on a motion to
                                                                    dismiss. Absent a showing of good cause, the defendant must
 [1] If the trial court determines that the defendant has met       move to dismiss pursuant to the TCPA ‘not later than the 60th
his burden, the burden then shifts to the plaintiff to establish    day after the date of service of the legal action.’ ”).
“by clear and specific evidence a prima facie case for each
essential element of the claim in question.” TEX. CIV. PRAC.         [2] Here, the Buy–Out Owners' first amended petition,
& REM.CODE ANN. § 27.005(c); Robinson, 409 S.W.3d at                which was the first pleading in which the Buy–Out Owners
688. The Legislature's use of “prima facie case” in the second      raised the tortious interference claim against Schimmel, bears
step of the inquiry implies a minimal factual burden: “[a]          a file-stamped date of March 28, 2013. Schimmel filed his
prima facie case represents the minimum quantity of evidence        motion to dismiss on May 28, 2013, sixty-one days later. In
necessary to support a rational inference that the allegation       his initial motion to dismiss, Schimmel stated, “On March
of fact is true.” Robinson, 409 S.W.3d at 688; Rodriguez v.         28, 2013, Plaintiffs served Schimmel with their Plaintiffs'
Printone Color Corp., 982 S.W.2d 69, 72 (Tex.App.-Houston           Amended Petition, in which, for the first time, Natural
[1st Dist.] 1998, pet. denied). The statute requires that the       Plaintiffs added a separate cause of action against Schimmel
plaintiff's proof address and support each “essential element”      alleging tortious interference with prospective relations.”
of every claim and that the proof constitute “clear and
specific evidence.” Robinson, 409 S.W.3d at 688. Because            In response to the motion to dismiss, the Buy–Out Owners
the statute does not define “clear and specific,” we apply the      argued that the motion was untimely because Schimmel filed
ordinary meaning of these terms. Id. at 689. “Clear” means          his motion on the sixty-first day after he had been served
“unambiguous,” “sure,” or “free from doubt,” and “specific”         with the action and he could not demonstrate that good cause
means “explicit” or “relating to a particular named thing.” Id.     existed for his late filing. In reply, Schimmel asserted that his
We review the pleadings and evidence in the light *856 most         motion was not untimely because, although he received notice
favorable to the plaintiffs. Newspaper Holdings, Inc. v. Crazy      that the first amended petition had been filed on March 28,
Hotel Assisted Living, Ltd., 416 S.W.3d 71, 80–81 (Tex.App.-        2013, the Buy–Out Owners did not serve him with a copy of
Houston [1st Dist.] 2013, pet. denied). Accordingly, here,          the petition on that date. Instead, he did not receive a copy
if we determine that Schimmel carried his initial burden            of the petition until April 1, 2013, when his counsel's legal
of proof, we must examine the pleadings and the evidence            assistant downloaded the amended petition from the ProDoc
presented in response to Schimmel's motion to dismiss to            eFiling service. In the alternative, Schimmel sought leave of
determine whether the Buy–Out Owners marshaled “clear               court to allow the late filing of his motion.




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Schimmel v. McGregor, 438 S.W.3d 847 (2014)


In the order ruling on the motion to dismiss, the trial court        The El Paso Court of Appeals addressed a similar situation
explicitly stated, “The Court finds that the Motion was timely       in Pena. In that case, Pena, who had been indicted on two
filed.” We conclude that, although Schimmel filed his motion         counts of intoxicated manslaughter and two counts of failure
to dismiss one day late, in making a statement concerning the        to stop and render aid, hired Dolph Quijano to represent
timeliness of the motion, the trial court implicitly ruled that if   him. Pena, 417 S.W.3d at 553. A jury ultimately convicted
Schimmel technically filed the motion late he had good cause         Pena, assessed punishment at confinement in the Texas
for the late filing. We therefore decline to dismiss this suit       Department of Criminal Justice, and imposed a total of
on the ground that Schimmel did not timely file his motion           $30,000 in fines. Id. at 553–54. Pena and his wife then began
to dismiss.                                                          running advertisements that were critical of Quijano. Id. at
                                                                     554. Quijano hired Bobby Perel to represent him, and Perel
                                                                     sent letters to local newspapers and to the Texas Board of
                                                                     Pardons and Paroles to inform it of Pena's conduct. Id. One of
            2. Applicability of Services Exclusion
                                                                     Perel's letters to the Board of Pardons and Paroles informed
The Buy–Out Owners also argue that the TCPA does not                 it that he believed Pena had not taken responsibility for his
apply to this case because this case falls under the statutory       underlying criminal actions and that Pena was responsible
 *857 exemption for commercial speech found in section               for “vicious ads” attacking Quijano, and he requested that
27.010(b).                                                           the Board consider this information when making decisions
                                                                     about Pena's parole. Id. Pena filed suit against Quijano and
Section 27.010(b) states:                                            Perel, asserting, among other things, that they had conspired
                                                                     to slander and defame him by sending the letter to the Board.
             [The TCPA] does not apply to a                          Id. The trial court granted Perel's motion to dismiss pursuant
             legal action brought against a person                   to the TCPA. Id.
             primarily engaged in the business of
             selling or leasing goods or services,                   On appeal, Pena argued that the trial court erred in dismissing
             if the statement or conduct arises out                  his claims because his claims fell within the “commercial
             of the sale or lease of goods, services,                speech” exemption to the TCPA. Id. at 555. The El Paso Court
             or an insurance product, insurance                      of Appeals noted that Pena's suit was based on the letter that
             services, or a commercial transaction                   Perel had sent to the Board. Id. The court reasoned, “The letter
             in which the intended audience is an                    does not arise out of the sale or lease of goods, services, or an
             actual or potential buyer or customer.                  insurance product or a commercial transaction. Further, the
                                                                     Board of Pardons and Parole is not an actual or potential buyer
TEX. CIV. PRAC. & REM.CODE ANN. § 27.010(b)                          or customer of any goods or services sold by Perel.” Id. The
(Vernon Supp.2013). The party asserting the exemption                court held that Pena failed to establish the applicability of the
bears the burden of proving its applicability. See Newspaper         exemption. Id.
Holdings, 416 S.W.3d at 89; see also Pena v. Perel, 417
S.W.3d 552, 555 (Tex.App.-El Paso 2013, no pet.) (“The                [3]    Here, Schimmel allegedly made statements that,
burden of proving the applicability of an exemption under            according to the Buy–Out Owners, induced the City of
Section 27.010 is on the party asserting it.”).                      Galveston to back out of its agreements to purchase the
                                                                     Buy–Out Owners' properties. When Schimmel made the
The Buy–Out Owners argue that their tortious interference            statements at issue, he *858 was undisputedly working
claim falls within this exemption because (1) Schimmel               as an attorney for SOKB and the Remaining Owners. The
was primarily engaged in the business of selling his legal           ultimate intended audience for his statements, however, was
services; (2) the Buy–Out Owners' cause of action arose              the City of Galveston. Schimmel did not represent the City of
from Schimmel's conduct consisting of representations of fact        Galveston, nor was the City a “potential buyer or customer”
about Schimmel's services; (3) Schimmel's conduct occurred           of Schimmel's legal services. See TEX. CIV. PRAC. &
in the course of delivering his legal services; and (4) the          REM.CODE ANN. § 27.010(b). We therefore conclude, as
intended audience of his conduct was a potential buyer, the          the El Paso Court of Appeals did in Pena, that the Buy–
City of Galveston. We disagree that Schimmel's conduct falls         Out Owners have failed to establish the applicability of the
within this exemption.                                               “commercial speech” exemption. See id.; see also Pena,



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Schimmel v. McGregor, 438 S.W.3d 847 (2014)


417 S.W.3d at 555; Newspaper Holdings, 416 S.W.3d at 89            to, or is in response to” Schimmel's exercise of the right to
(“With respect to the newspaper, it is undisputed that NHI was     petition on behalf of his clients. See id. § 27.003(a) (providing
in the business of reporting community events, but the Hotel's     that defendant may move to dismiss legal action that is based
complained—of statements do not arise out of the lease or          on, relates to, or is in response to exercise of right to petition).
sale of the goods or services that NHI sells—newspapers.”).
                                                                   Moreover, the Buy–Out Owners' claim implicates not just
                                                                   Schimmel's exercise of the right to petition on behalf of
                                                                   his clients but also Schimmel's exercise of his right to
             3. Whether the Buy–Out Owners'
                                                                   freedom of speech on behalf of his clients. See id. §
               Claim Falls Under the TCPA
                                                                   27.001(3) (defining “exercise of the right of free speech”
The Buy–Out Owners complain about numerous actions and             as “a communication made in connection with a matter of
statements allegedly made by Schimmel during the course of          *859 public concern”); id. § 27.001(7) (defining “matter of
his representation of SOKB and the Remaining Owners. All           public concern”). Contrary to the trial court's determination,
of these statements, whether they were made to a journalist at     in its order denying Schimmel's motion to dismiss, that
the Houston Chronicle, attorneys with the City of Galveston,       the dispute at issue “concerned matters disputed between
or members of the Board, concerned or were related to the          individual parties” and thus “were not made in connection
City's plan to purchase the Buy–Out Owners' properties and         with a matter of public concern,” Schimmel's statements all
were made to further Schimmel's clients' interest in ensuring      related to and were made in connection with the purchase
that should the purchase of the properties go forward SOKB         by the City of Galveston, a governmental entity, of five
would receive compensation for the loss of future assessments      properties in a small subdivision, the purchase of which
on the purchased properties.                                       would allegedly damage the values of the neighboring
                                                                   properties and would damage the future revenue stream of
The TCPA defines “exercise of the right to petition” as            SOKB, the homeowners' association, by denying it the ability
including “a communication in connection with an issue             to collect future assessments on the bought-out properties. In
under consideration or review by a legislative, executive,         addition to relating to the government, the dispute at issue also
judicial, or other governmental body ....” TEX. CIV. PRAC.         relates to “economic or community well-being,” all of which
& REM.CODE ANN. § 27.001(4)(B). The statute defines                are issues included in the statutory definition of “matter of
“exercise of the right of free speech” as “a communication         public concern” under the TCPA. See id. § 27.001(7).
made in connection with a matter of public concern.” Id.
§ 27.001(3). And a “matter of public concern” is further           In arguing that their claim is not based on, does not
defined as “an issue related to health or safety; environmental,   relate to, and is not in response to Schimmel's exercise of
economic, or community well-being; the government; a               constitutionally protected rights, the Buy–Out Owners focus
public official or public figure; or a good, product, or service   on the fact that their claims “are based upon the independent
in the marketplace.” Id. § 27.001(7). None of these statutory      torts of fraud, misrepresentations and illegal boycott,” which
definitions includes a requirement that the communications         do not implicate constitutional protections. That argument,
be made to a particular individual or entity, such as a            however, is relevant to the second step of the inquiry—
governmental body, to constitute protected conduct.                whether the Buy–Out Owners have demonstrated a prima
                                                                   facie case for relief on every essential element of their
 [4] SOKB and the Remaining Owners retained Schimmel               tortious interference claim. See In re Lipsky, 411 S.W.3d
to represent their interests during the dispute concerning         at 543 (“But chapter 27 dictates that we should review
the buy-out of the Buy–Out Owners' properties. All of              evidence concerning whether [the defendants'] statements
Schimmel's challenged statements, regardless of to whom the        were defamatory and thus actionable in the second part of our
statements were made, related to this dispute and were made        review, in which [the plaintiff] has the burden of establishing
“in connection with an issue under consideration or review”        ‘by clear and specific evidence a prima facie case for each
by the City of Galveston and the Texas Department of Public        essential element of the claim in question.’ ”).
Safety, both of which are governmental bodies. See id. §
27.001(4)(B) (defining “exercise of the right to petition”).        [5] The Buy–Out Owners also argue that Schimmel's
The Buy–Out Owners' action for tortious interference with          affidavits supporting his motion to dismiss are incompetent
prospective business relations is therefore “based on, relates     and inadmissible because they state that he is “personally



                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                               10
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


acquainted with facts stated therein,” instead of stating that     Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923
they are based on personal knowledge, and that some portions       (Tex.2013); Wal–Mart Stores, Inc. v. Sturges, 52 S.W.3d
state that Schimmel is testifying based on information             711, 726 (Tex.2001) (holding that plaintiff must establish that
and belief. We first note that, in making a determination          defendant's conduct was independently tortious or wrongful,
on a motion to dismiss, the trial court is not limited to          meaning that defendant's conduct “would be actionable under
considering only supporting and opposing affidavits, but           a recognized tort”). “Conduct that is merely ‘sharp’ or unfair
the court “shall consider the pleadings” as well. See TEX.         is not actionable and cannot be the basis for an action for
CIV. PRAC. & REM.CODE ANN. § 27.006(a). Thus,                      tortious interference with prospective relations ....” Sturges,
even if Schimmel's affidavits do not constitute competent          52 S.W.3d at 726.
and admissible evidence, his motion to dismiss does not
necessarily fail. Secondly, we agree with Schimmel that there       One of the essential elements for which the Buy–Out Owners
is no meaningful distinction between “personal knowledge”           had to establish a prima facie case is causation, that is,
and “personal acquaintance,” and to hold otherwise is               whether Schimmel's interference proximately caused their
to impose an unduly restrictive reading on the personal             injury, which, in this case, is the City of Galveston's failure
knowledge requirement for affidavits. See WEBSTER'S                 to close on the purchase of their properties. See Coinmach
NEW COLLEGIATE DICTIONARY 8 (1956) (defining                        Corp., 417 S.W.3d at 923 (listing causation as element of
“acquaintance” as “[p]ersonal knowledge (of a person                tortious interference with prospective relations claim). As
or thing) which results from becoming acquainted”). We              evidence to support their contention that they are entitled
therefore conclude that Schimmel's affidavits are competent         to relief on their tortious interference claim, the Buy–Out
and admissible to support his motion to dismiss.                    Owners presented to the trial court identical affidavits from
                                                                    each property owner as well as copies of several e-mails
We hold that Schimmel met his initial burden to show, by            between Schimmel and members of the Board. They did
a preponderance of the evidence, that the Buy–Out Owners'           not present any affidavits or other admissible evidence
claim is based on, relates to, or is in response to his exercise of from any individual at the City of Galveston, the city
the right to petition and his exercise of the right of free speech. attorney's office, the Texas Department of Public Safety,
See TEX. CIV. PRAC. & REM.CODE ANN. § 27.005(b)(1)-                 which allegedly informed the City to put a hold on the
(2).                                                                transactions while officials conducted a new “substantial
                                                                    damage determination” of the Buy–Out Owners' properties,
                                                                    or any other official or agency with decision-making authority
                                                                    concerning the City's purchase of the properties. Instead,
            4. Buy–Out Owners' Prima Facie Case
                                                                    the only evidence of this element that the Buy–Out Owners
 [6] [7] Because we have held that Schimmel's statements produced is the statements in their identical affidavits
forming the basis of the Buy–Out Owners' tortious                   that “[b]ut for Schimmel's misrepresentations and conduct
interference *860 claim constitute protected conduct under          there is a reasonable probability that all of our buy-out
the TCPA, we must now determine whether the Buy–Out                 contracts would have closed,” that “Schimmel's independent
Owners met their burden to establish, by clear and specific         misrepresentations and boycott, set out above, prevented our
evidence, a prima facie case for every essential element of         agreements from closing and the purchase of our properties
their tortious interference claim. See id. § 27.005(c). To          by the [City],” and that “Schimmel's action and conduct, set
prevail on a claim for tortious interference with prospective       out above, caused me and the other Buy–Out Owners money
business relations, the plaintiffs must establish that (1) a        losses ... that would not have occurred, but for [Schimmel's]
reasonable probability existed that the plaintiffs would have       conduct.”
entered into a business relationship with a third party;
(2) the defendant either acted with a conscious desire               [8] We agree with Schimmel that the Buy–Out Owners
to prevent the relationship from occurring or knew the              presented    only their conclusory statements, unsupported
interference was certain or substantially certain to occur          by any facts, that Schimmel's actions caused the City of
as a result of the conduct; (3) the defendant's conduct             Galveston to fail to close on the purchases. Evidence of
was independently tortious or unlawful; (4) the interference        Schimmel's conduct, by itself, is not evidence that, with
proximately caused the plaintiffs injury; and (5) the plaintiffs    respect to communications made to other individuals and
suffered actual damage or loss as a result. See Coinmach            entities, that conduct caused the City not to purchase the Buy–



               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            11
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


Out Owners' properties. The fact that Schimmel's alleged            Department to do that which they had a right to do—not to
conduct occurred roughly contemporaneously with the City            purchase the Buy–Out Owners' houses.
of Galveston's and the Department of Public *861 Safety's
consideration of whether to move forward with the purchases         We also note that, in this regard, the Buy–Out Owners have
does not establish that Schimmel's conduct caused the               made no argument, with citation to authority, that SOKB
governmental agencies to act as they did.                           and the Board were legally required or obligated to sign the
                                                                    releases that the City of Galveston required to close on the
Furthermore, in October 2009, the City of Galveston                 purchases, and they have produced no evidence on such a
required the Buy–Out Owners to obtain a release from                point. The Buy–Out Owners have thus presented no evidence
future assessments, signed by SOKB, as a condition for              that Schimmel induced the Board to take an action that it
the purchases to close, two months before SOKB and                  was not legally authorized to take. This is, therefore, not a
the Remaining Owners hired Schimmel to represent their              situation in which Schimmel, as a corporate agent, induced
interests. The Buy–Out Owners contend that Schimmel                 the corporation, SOKB, to breach a contractual obligation.
tortiously interfered with their prospective contracts with the     See, e.g., Holloway v. Skinner, 898 S.W.2d 793, 796
City of Galveston because he urged the Board not to sign the        (Tex.1995) (noting that “a party cannot tortiously interfere
required releases, and, as a result of the Board's refusal to       with its own contract” and holding that even when corporate
sign the releases, the City did not proceed with the purchases.     agent induces corporation to breach contractual obligation,
Ultimately, however, one of the appellees, Kris Hall, signed        agent will not be held liable for tortious interference with
the releases on behalf of SOKB once he became president             corporation's contract unless plaintiff can demonstrate that
of the Board, but the City of Galveston did not close on the        agent “acted in a fashion so contrary to the corporation's best
purchases.                                                          interests that his actions could only have been motivated by
                                                                    personal interests”).
Additionally, in the federal suit between the Buy–Out Owners
and the City of Galveston and several Department of Public           *862 We conclude that the Buy–Out Owners' supporting
Safety employees the district court ruled that governmental         evidence does not establish, by clear and specific evidence,
entities have “wide discretion” in administering the HMGP           a prima facie case on the essential element of causation. See
and that nothing in the regulations governing the HMGP              TEX. CIV. PRAC. & REM.CODE ANN. § 27.005(c) (“The
“dictates that qualified property owners are entitled to            court may not dismiss a legal action under this section if
participate in the program or limits the State's discretion in      the party bringing the legal action establishes by clear and
determining a property owner's qualifications for the program       specific evidence a prima facie case for each essential element
or reviewing those qualifications at any time in the process.”      of the claim in question.”) (emphasis added); Coinmach
The court thus concluded that the Buy–Out Owners had no             Corp., 417 S.W.3d at 923 (stating that interference as
“entitlement to HMGP funds or a property right to such              proximate cause of plaintiff's injury is essential element of
funds.” Thus, a court has already determined during the             tortious interference with prospective relations claim).
litigation arising out of this dispute that the City of Galveston
and the Department of Public Safety acted within their              We therefore hold that because Schimmel established by a
discretionary authority when they declined to close on the          preponderance of the evidence that the Buy–Out Owners'
purchase of the Buy–Out Owners' properties.                         tortious interference claim is based on, relates to, or is in
                                                                    response to his exercise of his right to petition on behalf of
 [9] As the Texas Supreme Court has held, “merely inducing          his clients and his right of free speech and because the Buy–
a contract obligor to do what it has a right to do is not           Out Owners failed to establish a prima facie case on every
actionable interference.” ACS Investors, Inc. v. McLaughlin,        essential element of their tortious interference claim, the trial
943 S.W.2d 426, 430 (Tex.1997); Newspaper Holdings,                 court erroneously denied Schimmel's motion to dismiss under
416 S.W.3d at 87. Even if Schimmel induced the City of              the TCPA. See TEX. CIV. PRAC. & REM.CODE ANN. §
Galveston and the Department of Public Safety not to close          27.005(b), (c).
on the purchase of the Buy–Out Owners' properties, as the
Buy–Out Owners allege, the Buy–Out Owners would have                We sustain Schimmel's first issue.
no cause of action against him for inducing the City or the




                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             12
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


                                                                   their respective billing rates without further indicating how
                                                                   they spent their time, Schimmel's attorney's fees affidavits
           Award of Costs and Attorney's Fees
                                                                   stated the date on which work was performed, the number of
In his second issue, Schimmel contends that because the            hours spent, the particular tasks involved, and the applicable
trial court erroneously denied his motion to dismiss it also       billing rate. See id. at 763 (“[P]roof [of attorney's fees]
erroneously failed to award him mandatory costs, reasonable        should include the basic facts underlying the lodestar, which
attorney's fees, and expenses incurred in defending against the    are: (1) the nature of the work, (2) who performed the
claim, as required by the TCPA.                                    services and their rate, (3) approximately when the services
                                                                   were performed, and (4) the number of hours worked.”);
 [10] Section 27.009(a)(1) provides that if the court orders       see also City of Laredo v. Montano, 414 S.W.3d 731, 736
dismissal of a legal action pursuant to the TCPA, the court        (Tex.2013) (“In El Apple, we said that a lodestar calculation
“shall award to the moving party court costs, reasonable           requires certain basic proof, including itemizing specific
attorney's fees, and other expenses incurred in defending          tasks, the time required for those tasks, and the rate charged
against the legal action as justice and equity may require.”       by the person performing the work.”). We therefore do not
TEX. CIV. PRAC. & REM.CODE ANN. § 27.009(a)(1)                     agree with the homeowners that Schimmel's attorney's fees
(Vernon Supp.2013). When an appellate court determines             affidavits are insufficient under Olivas.
that the trial court erroneously denied a defendant's motion
to dismiss under the TCPA, the appropriate disposition of           [12] Finally, even if Schimmel's attorney's fees evidence
the case is to reverse the trial court's denial of the motion      presented with his motion to dismiss were insufficient to
and remand for the trial court to conduct further proceedings      establish the reasonableness and necessity of the fee amount,
pursuant to section 27.009(a) and to order dismissal of the        because Schimmel is statutorily entitled to an award of
suit. See Newspaper Holdings, 416 S.W.3d at 90.                    attorney's fees, the appropriate disposition of this case would
                                                                   be to remand the attorney's fees issue back to the trial court for
The Buy–Out Owners contend that, even if the trial court           further proceedings. See Alphonso v. Deshotel, 417 S.W.3d
erroneously denied Schimmel's motion to dismiss, remand is         194, 202 (Tex.App.-El Paso 2013, no pet.) (“[G]iven that
not appropriate in this case because Schimmel's affidavit on       Appellees are entitled to attorney's fees and costs under
attorney's fees was “incompetent evidence of reasonableness        the [TCPA] because the trial court granted their motion to
and necessity” under the Texas Supreme Court's decision in         dismiss and we have upheld that ruling on appeal, the proper
El Apple I, Ltd. v. Olivas.                                        disposition in this case is to reverse the award of attorney's
                                                                   fees and costs [which was not supported by an affidavit
Olivas involved a claim for sex discrimination and retaliation     admitted into evidence] and remand that issue back to the
pursuant to the Texas Commission on Human Rights Act,              trial court for a new trial.”); see also Uhl v. Uhl, 524 S.W.2d
under which courts calculate attorney's fees using the             534, 538 (Tex.Civ.App.-Fort Worth 1975, no writ) (“When a
lodestar method, or the number of hours worked multiplied          [party] is clearly entitled to attorney's fees in some amount but
by prevailing hourly rates. See 370 S.W.3d 757, 758–59             where there had been no proof in the trial court of the amount
(Tex.2012). The court explained that the lodestar method of        there may be severance of that issue with remand to the trial
calculating attorney's fees involves two steps: (1) the court      court for a new trial on that issue.”).
first determines the reasonable number of hours spent by
counsel in the case and a reasonable hourly rate for such work;    We hold that because Schimmel has established his
and (2) the court then multiples the number of such hours          entitlement to dismissal under the TCPA, he is entitled to
by the applicable rate, which yields the lodestar, which may       “court costs, reasonable attorney's fees, and other expenses
then be adjusted up or down to reach a reasonable fee for the      incurred in defending against the legal action as justice and
case. Id. at 760. The court held that a party seeking attorney's   equity may require.” TEX. CIV. PRAC. & REM.CODE
fees when the lodestar method is used “bears the burden of         ANN. § 27.009(a)(1); see also Newspaper Holdings, 416
documenting the hours expended on the litigation and the           S.W.3d at 90 (“We therefore reverse the trial court's denial of
value of those hours.” Id. at 761.                                 the defendants' motions to dismiss, and we remand the case
                                                                   to the trial court for further proceedings as required by the
 *863 [11] Unlike the attorneys in Olivas, who presented           statute and to order dismissal of the suit.”).
only their aggregate number of hours spent on the case and



                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            13
Schimmel v. McGregor, 438 S.W.3d 847 (2014)


                                                        We reverse the trial court's order denying Schimmel's motion
We sustain Schimmel's second issue.
                                                        to dismiss and remand the case to the trial court for further
                                                        proceedings relating to Schimmel's attorney's fees, costs, and
                                                        expenses and to order dismissal of the suit.
                       Conclusion


End of Document                                     © 2015 Thomson Reuters. No claim to original U.S. Government Works.




              © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                  14
                                     Tex. Civ. Prac. & Rem. Code § 27.001
                                     This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.001. Definitions
  In this chapter:
            (1) "Communication" includes the making or submitting of a statement or document in any form or medium,
                including oral, visual, written, audiovisual, or electronic.
            (2) "Exercise of the right of association" means a communication between individuals who join together to
                collectively express, promote, pursue, or defend common interests.
            (3) "Exercise of the right of free speech" means a communication made in connection with a matter of public
                concern.
       (4) "Exercise of the right to petition" means any of the following:
            (A) a communication in or pertaining to:
                     (i) a judicial proceeding;
                     (ii) an official proceeding, other than a judicial proceeding, to administer the law;
                     (iii) an executive or other proceeding before a department of the state or federal government or a subdivision
                           of the state or federal government;
                     (iv) a legislative proceeding, including a proceeding of a legislative committee;
                     (v) a proceeding before an entity that requires by rule that public notice be given before proceedings of that
                         entity;
                     (vi) a proceeding in or before a managing board of an educational or eleemosynary institution supported
                          directly or indirectly from public revenue;
                     (vii) a proceeding of the governing body of any political subdivision of this state;
                     (viii) a report of or debate and statements made in a proceeding described by Subparagraph (iii), (iv), (v), (vi),
                           or (vii); or
                     (ix) a public meeting dealing with a public purpose, including statements and discussions at the meeting or
                          other matters of public concern occurring at the meeting;
            (B) a communication in connection with an issue under consideration or review by a legislative, executive, judicial,
                or other governmental body or in another governmental or official proceeding;
            (C) a communication that is reasonably likely to encourage consideration or review of an issue by a legislative,
                executive, judicial, or other governmental body or in another governmental or official proceeding;
            (D) a communication reasonably likely to enlist public participation in an effort to effect consideration of an issue
                by a legislative, executive, judicial, or other governmental body or in another governmental or official
                proceeding; and
            (E) any other communication that falls within the protection of the right to petition government under the
                                                                                                                      Page 2 of 2
                                              Tex. Civ. Prac. & Rem. Code § 27.001
                  Constitution of the United States or the constitution of this state.
             (5) "Governmental proceeding" means a proceeding, other than a judicial proceeding, by an officer, official, or
                 body of this state or a political subdivision of this state, including a board or commission, or by an officer,
                 official, or body of the federal government.
        (6) "Legal action" means a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other
            judicial pleading or filing that requests legal or equitable relief.
        (7) "Matter of public concern" includes an issue related to:
             (A) health or safety;
             (B) environmental, economic, or community well-being;
             (C) the government;
             (D) a public official or public figure; or
             (E) a good, product, or service in the marketplace.
        (8) "Official proceeding" means any type of administrative, executive, legislative, or judicial proceeding that may be
            conducted before a public servant.
        (9) "Public servant" means a person elected, selected, appointed, employed, or otherwise designated as one of the
            following, even if the person has not yet qualified for office or assumed the person's duties:
             (A) an officer, employee, or agent of government;
             (B) a juror;
             (C) an arbitrator, referee, or other person who is authorized by law or private written agreement to hear or
                 determine a cause or controversy;
             (D) an attorney or notary public when participating in the performance of a governmental function; or
             (E) a person who is performing a governmental function under a claim of right but is not legally qualified to do so.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011.
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
                                  Tex. Civ. Prac. & Rem. Code § 27.002
                                  This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.002. Purpose
The purpose of this chapter is to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate
freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights
of a person to file meritorious lawsuits for demonstrable injury.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011.
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
                                   Tex. Civ. Prac. & Rem. Code § 27.003
                                   This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.003. Motion to Dismiss
   (a) If a legal action is based on, relates to, or is in response to a party's exercise of the right of free speech, right to petition,
       or right of association, that party may file a motion to dismiss the legal action.
   (b) A motion to dismiss a legal action under this section must be filed not later than the 60th day after the date of service of
       the legal action. The court may extend the time to file a motion under this section on a showing of good cause.
   (c) Except as provided by Section 27.006(b), on the filing of a motion under this section, all discovery in the legal action is
       suspended until the court has ruled on the motion to dismiss.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011.
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
                                  Tex. Civ. Prac. & Rem. Code § 27.004
                                  This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.004. Hearing
   (a) A hearing on a motion under Section 27.003 must be set not later than the 60th day after the date of service of the motion
       unless the docket conditions of the court require a later hearing, upon a showing of good cause, or by agreement of the
       parties, but in no event shall the hearing occur more than 90 days after service of the motion under Section 27.003,
       except as provided by Subsection (c).
   (b) In the event that the court cannot hold a hearing in the time required by Subsection (a), the court may take judicial notice
       that the court's docket conditions required a hearing at a later date, but in no event shall the hearing occur more than 90
       days after service of the motion under Section 27.003, except as provided by Subsection (c).
   (c) If the court allows discovery under Section 27.006(b), the court may extend the hearing date to allow discovery under
       that subsection, but in no event shall the hearing occur more than 120 days after the service of the motion under Section
       27.003.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011; am. Acts 2013, 83rd Leg., ch. 1042 (H.B.
2935), § 1, effective June 14, 2013.
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
                                    Tex. Civ. Prac. & Rem. Code § 27.005
                                   This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.005. Ruling
   (a) The court must rule on a motion under Section 27.003 not later than the 30th day following the date of the hearing on the
       motion.
   (b) Except as provided by Subsection (c), on the motion of a party under Section 27.003, a court shall dismiss a legal action
       against the moving party if the moving party shows by a preponderance of the evidence that the legal action is based on,
       relates to, or is in response to the party's exercise of:
        (1) the right of free speech;
        (2) the right to petition; or
        (3) the right of association.
   (c) The court may not dismiss a legal action under this section if the party bringing the legal action establishes by clear and
       specific evidence a prima facie case for each essential element of the claim in question.
   (d) Notwithstanding the provisions of Subsection (c), the court shall dismiss a legal action against the moving party if the
       moving party establishes by a preponderance of the evidence each essential element of a valid defense to the
       nonmovant's claim.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011; am. Acts 2013, 83rd Leg., ch. 1042 (H.B.
2935), § 2, effective June 14, 2013.
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                                  Tex. Civ. Prac. & Rem. Code § 27.006
                                  This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL,
JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 27. ACTIONS
INVOLVING THE EXERCISE OF CERTAIN CONSTITUTIONAL RIGHTS

§ 27.006. Evidence
   (a) In determining whether a legal action should be dismissed under this chapter, the court shall consider the pleadings and
       supporting and opposing affidavits stating the facts on which the liability or defense is based.
   (b) On a motion by a party or on the court's own motion and on a showing of good cause, the court may allow specified and
       limited discovery relevant to the motion.


History
Enacted by Acts 2011, 82nd Leg., ch. 341 (H.B. 2973), § 2, effective June 17, 2011.
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
