McDonald Oilfield Operations, LLC v. 3B Insp., LLC, No. 01-18-00118-CV, 2019 Tex. App. LEXIS 6400 (Tex. App.—Houston [1st Dist.] July 25, 2019, no pet.) and Pearl Energy Inv. Mgmt., LLC v. Gravitas Res. Corp., 2019 Tex. App. LEXIS 6833 (Tex. App.—Dallas Aug. 7, 2019, no pet.)
In this business torts case between pipeline monitoring companies, Houston’s First Court of Appeals held that the trial court erred by denying a motion to dismiss pursuant to the Texas Citizens Participation Act (TCPA). At issue were causes of action for defamation, business disparagement, tortious interference with contract, and tortious interference with prospective business relations. Each of these causes of action centered around an alleged conversation where Kelly McDonald contacted a former client of 3B Inspection, and said 3B was “not a real company” and its principal “did not know what he was doing.” 3B also asserted that McDonald Oilfield intentionally cancelled sponsorship of federal “Operator Qualifications,” allegedly with “malicious intent to shut down the project and cause harm to 3B Inspection’s business relationship with its client.”
At the outset, the court held that the TCPA applied because these statements were an exercise of McDonald’s right of free speech on a matter of public concern because they related to environmental, economic, and safety concerns regarding goods and services in the marketplace. Because the TCPA applied, the court explained that each cause of action based on these statements must be dismissed unless the party bringing the action establishes by clear and specific evidence a prima facie case for each essential element of the respective claim.
As to the defamation action, the court held that dismissal was required because 3B did not submit clear and specific proof of defamation damages nor defamation per se. As for the business disparagement claim, dismissal was required because the only evidence of damages submitted to the court was a “general statement that 3B Inspection suffered unspecified ‘delay damages’ and ‘damages to its reputation.’” As the court explained, “bare, baseless opinions do not create fact questions and neither are they a sufficient substitute for the clear and specific evidence required to establish a prima facie case under the TCPA.”
Regarding the tortious interference with contract claim, dismissal was also required because “A general statement that a contract with a customer exists, without details about the specific terms of the contract, is insufficient to maintain a tortious-interference-with-contract claim.”
Finally, the court turned to the claims for tortious interference with prospective business relations, which were asserted by 3B and several of 3B’s employees. After McDonald filed its TCPA motion, 3B and the employees nonsuited this cause of action. However, McDonald argued it was still entitled to attorney’s fees because its TCPA motion survived the nonsuit. The court held that, while a plaintiff has an absolute right to nonsuit a claim before resting its case-in-chief, “that nonsuit shall have no effect on any motion for sanctions, attorney’s fees or other costs, pending at the time of the dismissal.” Because the employees made no effort to provide clear and specific proof of this cause of action, the appellate court reversed the trial court’s holding denying McDonald’s TCPA motion to dismiss those claims, and remanded the case to the trial court for further proceedings.
Pearl Energy Inv. Mgmt., LLC v. Gravitas Res. Corp., 2019 Tex. App. LEXIS 6833 (Tex. App.—Dallas Aug. 7, 2019, no pet. h.)
Gravitas sued Pearl Energy, Pearl’s founder William Quinn, and AVAD Energy Partners, LLC relating to the purchase of natural gas assets in Utah.
Gravitas discovered what it believed was “substantial potential” of undrilled wells and the potential for significantly reduced operating costs in an area in Utah that was then owned by Anadarko. Gravitas approached Anadarko about purchasing the assets, and submitted an offer. Anadarko sought a bidding process, and Gravitas submitted the highest bid. Gravitas then turned to find additional financing.
Gravitas approached Pearl with a high-level description of the investment, and sent Pearl a signed NDA. Pearl never countersigned the NDA. Gravitas shared with Pearl significant information about the property and their beliefs regarding substantial potential of undrilled wells and potential reduced operating costs.
About one month later, Gravitas advised Anadarko it expected to have financing commitments soon, but Anadarko indicated it was considering a sale to another buyer. One month later Anadarko indicated it had already signed a purchase and sale agreement with AVAD. Pearl’s founder sits on the board for AVAD, and AVAD is a company within Pearl’s investment portfolio.
Gravitas filed suit against Pearl, Quinn, and AVAD for, among other things, breach of the NDA and violations of the Texas Uniform Trade Secrets Act. The defendants moved to dismiss pursuant to the TCPA. The trial court denied the TCPA motion to dismiss on the grounds that the suit did not relate to the Defendants’ exercise of the rights of free speech or association. The Dallas Court of Appeals affirmed.
The court held that the claims did not implicate the right of association because “communication between individuals who join together must involve public or citizen’s participation” and the Defendants did not show the communication of Gravitas’s confidential information involved any public or citizen participation. As the court explained, “Construing the TCPA to find a right of association simply because there are communications between parties with a shared interest in a private business transaction does not further the TCPA’s purpose to curb strategic lawsuits against public participation.”
The court held the Defendants did not meet their burden to prove the claims implicate the exercise of the right of free speech, defined as “a communication made in connection with a matter of public concern.” Here, the court explained that the communications were not of a public concern, because they all involved private business transactions, the economic interests involved were private, and the plaintiffs and certain defendants took steps to keep the information private. Accordingly, the court could not conclude the communications were at least tangentially related to a matter of public concern.
As a result, the court affirmed the trial court’s order denying the motions to dismiss pursuant to the TCPA.
Will Grubb
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