Online Defamation & Anonymity

tjb-seal-144Back in late 2015, I wrote a five-part series on the Expanding Scope of the TCPA or Texas’ Anti-SLAPP law. The Supreme Court of Texas confirmed our analysis last week with its decision in the ExxonMobil v. Coleman confirming that Anti-SLAPP protections can and do apply to internal corporate communications when there is a defamation claim.

ANTI-SLAPP 101

The Texas Anti-SLAPP law is known as the Texas Citizens Participation Act (the “TCPA” found at Tex. Civ. Prac. & Rem. Code at § 27.001, et seq.).

“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.”  Id. at 27.003(a).   A defendant invoking the TCPA must therefore show three elements by a preponderance of the evidence: (1) there is a legal action; (2) “based on, relates to, or is in response to”; and (3) one of the protected activities.

“[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.”  Id. at 27.005(b).

The Dallas Court of Appeals ruled no “public concern” in internal communications

In 2015, the Dallas Court of Appeals held that the law did not apply to internal communications within a company about an employee’s performance because that was not a matter of “public concern” despite the claim by the employer (ExxonMobil) that the issues touched on matters of public safety.  See ExxonMobil v. Coleman, 2015 WL2206466 (Tex.App.—Dallas May 12, 2015).

ExxonMobil claimed that the plaintiff failed to “gauge” one of the storage tanks and after an investigation ExxonMobil terminated him.  The plaintiff denied all wrongdoing and sued ExxonMobil and the employees who participated in the investigation for publishing defamatory statements about him during the internal investigation bringing the TCPA into a typical employment dispute.

Both the trial court and the court of appeals held the TCPA did not apply and refused to dismiss the suit.  Despite the defendants’ efforts to claim it was a matter of public safety, the court found the investigation focused on job performance and not the results that could happen if the storage tanks were not properly maintained.  Therefore, the statements “involve nothing more than an internal personnel matter at Exxon” and therefore “were not a matter of public concern.”

The Texas Supreme Court says matters of public concern are matters of public concern        

Relying upon its earlier decision of Lippincott v. Wisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam), the Supreme Court of Texas ruled there is no requirement that the communications themselves have to be public.  Instead, the statute only requires that the communication be made in connection with a matter of public concern. The court wrote:

The allegations include claims that Whisenhunt “failed to provide adequate coverage for pediatric cases,” administered a “different narcotic than was ordered prior to pre-op or patient consent being completed,” falsified a scrub tech record on multiple occasions, and violated the company’s sterile protocol policy. We have previously acknowledged that the provision of medical services by a health care professional constitutes a matter of public concern. See Neely v. Wilson, 418 S.W.3d 52, 70 n.12 & 26 (Tex. 2013) (determining that the public had a right to know about a doctor’s alleged inability to practice medicine due to a mental or physical condition); see also TEX. CIV. PRAC. & REM. CODE § 27.001(7) (defining “matter of public concern” to include issues related to health or safety, community well-being, and the provision of services in the marketplace, among other things). Thus, we conclude these communications were made in connection with a matter of public concern.

In ExxonMobil v. Coleman, the Supreme Court of Texas criticized the Dallas Court for suggesting that the communications at issue had to involve more than a “tangential relationship” to matters of public concern. Not finding that required by the statute which expressly states that the communications have to be made “in connection with” or about “an issue related to” safety, the court held the TCPA applied. As a result, the case was sent back to see whether the plaintiff Coleman met his burden of establishing clear and specific evidence for each essential element of his claim.

Plead defamation with care

If you add a defamation claim to your case, do so with caution. Regardless of who sees the alleged defamatory statement, if the defendant can make an argument that the alleged statement was made “in connection with” or about “an issue related to”  a public concern, you will likely face a Motion to Dismiss.  It automatically stays discovery, gives the defendant an automatic right to appeal and if a defendant prevails on a motion to dismiss, Texas courts are required to award the defendant “(1) court costs, reasonable attorney’s fees, and other expenses incurred in defending against the legal action as justice and equity may require; and (2) sanctions against the party who brought the legal action as the court determines sufficient to deter the party who brought the legal action from bringing similar actions described in this chapter.”  Id. at 27.009(a).

If you watched the first round of the NFL Draft, the big story was the sliding of Ole Miss offensive tackle Laremy Tunsil out of the top five to number 13. As the draft was unfolding, someone released a video of him smoking marijuana through a gas mask.  You can read the story here.  You can watch this interview right after he was picked.

To make matters worse, after he was picked, someone released text messages between Tunsil and one of the assistant coaches at Ole Miss where it looks like Ole Miss was paying Tunsil’s rent or his mother’s electric bill.  Read about it and see the texts here. Here is another interview where Tunsil admits the texts were his.

So, can Tunsil sue or is there a possible crime?

Yes and yes.

Assuming someone “hacked” his Twitter or Instagram account, even if Tunsil was somewhat lackadaisical about protecting it, and that this person did not have “authority” to access the account, then there is likely a violation of the Stored Communications Act.

The SCA makes it illegal for anyone to “intentionally access[] without authorization a facility through which an electronic communication service is provided or . . . intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorize access to a wire or electronic communication while it is in electronic storage in such system.” Accessing his Twitter or Instagram accounts without his permission would likely be a violation.

In addition to these statutes, there could be additional claims like RICO, breaches of contracts, fiduciary duty, wire fraud, trespassing, theft, extortion if there was money demanded in advance, and a number of other state law claims.

So, what are the criminal penalties?

Pursuant to 18 U.S.C. § 2701, “if the offense is committed for purposes of commercial advantage, malicious destruction or damage, or private commercial gain,” the criminal penalty for a first offense is a fine or imprisonment for not more than five years or both.

What about a civil lawsuit?

Tunsil could also sue the perpetrator.  Assuming he can establish there was no authority to access his accounts, the SCA provides that a plaintiff can recover:

damages in a civil action under this section the sum of the actual damages suffered by the plaintiff and any profits made by the violator as a result of the violation, but in no case shall a person entitled to recover receive less than the sum of $1,000. If the violation is willful or intentional, the court may assess punitive damages. In the case of a successful action to enforce liability under this section, the court may assess the costs of the action, together with reasonable attorney fees determined by the court.

18 U.S.C. § 2707.

To prove damages, I would have a composite of the mock drafts immediately prior to the release of the video to determine where Tunsil would have likely been drafted had the video not come out. Then, you take the difference between the guaranteed money that pick would have received and the money the 13th pick receives as your actual damages. Those damages could easily exceed $10 million.

Assuming the defendant wanted to purposefully hurt Tunsil, punitive damages would also be available.

What about Tunsil’s conduct?

Yes, Tunsil is shown smoking marijuana.  Yes, it appears he took benefits from Ole Miss in violation of the NCAA rules. If you are making a negligence claim, the plaintiff’s own negligence comes into play.

But, under the Stored Communications Act, his alleged bad acts don’t really come into play as far as liability.  A jury might consider his actions when deciding the causation. What really caused his damages? Was it the hacking by the defendant or Tunsil’s own bad acts?

Causation is usually a fact question in a civil trial, but would anyone really be surprised that an NFL prospect smoked marijuana at some point in his life? Tunsil says the video is old and his pre-draft drug tests all came up clean.

The video came out 13 minutes before the draft started. The argument is the slide in the draft only happened when the video came out. After all, even after he did these things (although no one knew), he was still considered a top five pick.

If there was a civil case, there could be a huge verdict, but then there is always the matter of collecting.

GawkerA few days ago, a jury in Florida awarded Hulk Hogan (real name Terry Bollea)  $140 million because Gawker posted a leaked sex video of the former wrestler. Rather than focus on the lurid details (which you can Google), let’s look at the law that led to the two-week trial.

To recap, Gawker allegedly received the video from an anonymous source. Other news outlets reported the existence of the tape. Gawker decided to publish the video in 2012 and had it on its site for six months.

What Issues Went to the Jury

The lengthy jury instructions indicate Bollea sued for (1) invasion of privacy; (2) violation of his right of publicity; (3) intentional infliction of emotional distress; and (4) a violation of Florida’s Security of Communications Act.  Gawker denied the allegations and contend their actions were protected by the First Amendment.

Florida law on invasion of privacy

A number of acts can constitute an invasion of privacy. The first claim was for invasion of privacy based upon the publication of private facts which requires: (1) the publication of truthful private information; (2) that a reasonable person would find highly offensive; and (3) that does not relate to a matter of legitimate public concern. The final element is why there was a lot of discussion about the “newsworthiness” of the video and the effort by Bollea to distinguish between his real self and the character that he plays as Hulk Hogan.

Bollea also sued for invasion of privacy based on intrusion upon seclusion which requires: (1) the wrongful intrusion through physical or electronic means; (2)  into a place in which Bollea had a reasonable expectation of privacy; (3) in such a manner as to outrage or cause mental suffering, shame or humiliation to a person of ordinary sensibilities. Because of this claim, there was a lot of discussion about whether Bollea knew about videotaping.

Finally, there was a claim for invasion of privacy based on misappropriation of the right of publicity which requires: (1) the unauthorized use of the plaintiff’s name or likeness; (2) for a commercial or advertising gain.

Intentional Infliction of Emotional Distress

This claim consists of: (1) extreme and outrageous conduct by the defendant; (2) that causes severe emotional distress; and (3) was engaged in either with an intent to cause severe emotional distress or a reckless disregard of the high probability that it would cause severe emotional distress.  Extreme and outrageous conduct is behavior which, under the circumstances, goes well beyond all possible bounds of decency and is regarded as shocking, atrocious, and utterly intolerable in a civilized community.

Florida Security of Communications Act

This statutory claim requires: (1) the disclosure of oral communications; (2) in which the plaintiff had a reasonable expectation of privacy; (3) by one who knows or has reason to know that the communications were recorded without plaintiff’s knowledge or consent.

The First Amendment

The court instructed the jury that the newsworthiness of the video was a defense to Bollea’s claim for publication of private facts and a First Amendment defense to each claim. The court explained: “A matter of public concern is one that can be fairly considered as relating to any matter of political, social, or other concern to the community or that is subject to general interest and concern to the public. . . . The line between the right to privacy and the freedom of the press is drawn where the publication ceases to be the giving of information to which the public is entitled, and becomes a morbid and sensational prying into private lives for its own sake, with which a reasonable manner of the public, with decent standards, would say that he or she had no concern.”

Damages

As you know, the jury found in favor of Bollea.  The jury therefore had to assess damages. Bollea’s experts claimed the video raised the value of the website by $5 million to $15 million. Gawker retorted that it only added $11,000 in value because there were no advertisements next to the video.

The court instructed the jury to award “the amount of money that . . . will fairly and adequately compensate Plaintiff for the emotional distress he experienced as a consequence of the publication of the Video.”

On the misappropriation of the right of publicity, the court instructed the jury to award “an amount of money that . . . will fairly and adequately compensate Plaintiff for any economic damages relating to the publication of the Video.” 

The jury awarded compensatory damages in the amount of $55 million for economic damages and another $60 million in pain and suffering. The jury added another $25 million in punitive damages made up of $15 million against Gawker, $10 million against the founder of the site and $100,000 against one of the editors involved. Some media reports suggested Bollea only asked for $100 million in damages. There were reports that the jurors were disgusted by jokes made by Gawker employees at the time of publication and during depositions.

You can read another interesting take on the case here.

Gawker intends to appeal.

I have been watching the events at my alma mater that led to the resignation of MU System President Tim Wolfe and Chancellor R. Bowen Loftin from afar. While I had heard inklings of discontent, I had no idea it was at this point until the football team got involved.

73741_1401374325373_749181_nOn many levels, I am trying my best to understand all the nuance involved, but am having difficulty. I haven’t been back to campus for five years to, of course, watch a football game.

Do I believe there is racism in Columbia, Missouri? Probably. Just like there probably is anywhere else in society. As a white male, I am probably not in a position to fully understand.

From the published reports, the protesters’ complaints appear to be isolated events that were handled poorly by the school administration or without enough concern. Part of the students’ concerns centered on how their protest at the Homecoming Parade was handled which you can watch here.  Things also did not go well when Wolfe was confronted in Kansas City a few weeks later.

Another complaint centers on racist taunts by unknown passersby to the African American young man who was elected student body president and homecoming king. Painting an entire school as racist, a school that elects a gay African American student to be president and homecoming king, is unfair. You can read about the events that led to the resignations here.

Should the administration have handled it better? Obviously. Letting it get to the point where the football team threatened not to play means it wasn’t handled the right way and probably left the school with few options.

Were the protestors’ demands unreasonable? Probably. Asking the system president to write a handwritten apology to the Concerned Student 1950 demonstrators and hold a press conference reading the letter while acknowledging his “white male privilege” and admitting to “gross negligence” takes away from the otherwise legitimate concerns raised. To throw in some law in the discussion, demanding racial quotas for the faculty and staff (“We demand that by the academic year 2017/2018, the University of Missouri increases the percentage of black faculty and staff campuswide to 10%) is probably unconstitutional.

One of the students then began a public hunger strike until the demands were met. Then, the football team got involved and refused to play until the hunger strike ended.  Head coach Gary Pinkel supported his players. Was this the right move? It certainly moved the needle, but I worry about whether a handful of players and then the team, as a whole, were leveraged. It is both encouraging, and somewhat alarming, to see young men take their position of prestige as SEC college football players and use it to get involved. Will this set a precedent and where is the line? Reading Tigerboard (admittedly not a place for cool-headed, well-reasoned analysis), the fan reaction was certainly mixed.

LoftinAbout 24 hours after the football team’s actions became public, the president resigned followed by the chancellor. Although the chancellor’s resignation becomes effective at the end of the year and may have had more to do with issues other than the handling the student protests. Ironically, the football team may be worse off with a new chancellor less supportive of the athletics department.

In response, Mizzou has promised to implement changes within the next 90 days which include:

  • The creation of a new position for a Chief Diversity, Inclusion and Equity Officer within the UM System which has already been filled on an interim basis
  • A review of UM System policies regarding staff and student conduct
  • Additional support for students, faculty and staff who have “experienced discrimination and disparate treatment”
  • Additional support for the hiring and retention of diverse faculty and staff
  • the creation of system-wide and campus-based diversity, inclusion and equity task forces
  • an education training program for holders of the university’s top leadership positions

Had the administration taken these steps prior to the football team’s involvement, would there have been two resignations? We may never know because we don’t know what would have happened with the hunger strike and what would the reaction have been had the administration gone 90% of the way but not conceded to all of the demands (which they could have never done). It may have gone a long way to assuage opinion of the public and maybe, more importantly, the football team.

Yes, this story does speak to better crisis communication techniques and the importance of getting in front of a controversy. The number one lesson for crisis communications is to be prepared and to have a plan. Once the controversy began, the school should have had a singular unified message.

If bombarded off campus (or even during the Homecoming Parade), the proper response would have been a polite refusal to engage at that time as it was not the appropriate time and place. There could have been a somewhat prepared “holding statement” such as “we take these issues seriously and are taking steps to ensure that every student is provided the best environment we can provide. This is not the time or place to get into the specifics, but we will be providing more details soon and invite continued discussions on the topic in the near future.” It would not have placated the protesters at the time, but it would not have added more fuel to the fire. A flagship state university is a much different animal than a private business, but the same basic tenets apply.

But, I justify this longer than usual and personal musing based on what happened next. Watch this:

As my wife gets tired of hearing, the University of Missouri is home of the best journalism school in the world. (I linked to something so it has to be true!) The student journalist handled this situation perfectly. The protestors — not so much.

Here are some basics about the First Amendment. The protesters have a right protest in the public parts of campus. And, yes, the very same First Amendment gives the journalists the right to cover the story from public property.

For the legal wonks, the Carnahan Quadrangle is very likely a limited or designated public forum being that it is on a university campus. Content-based speech restrictions are therefore subject to strict scrutiny. The school, however, can put reasonable time, place and manner restrictions as long as the restrictions serve an important governmental interest and the restrictions are narrowly tailored to serve that important governmental interest.

No one kept the protestors from doing their thing. Instead, the protestors tried to keep the media from doing theirs – covering the protest, which ironically is normally what protestors want.  It is true that journalists have no greater rights than non-journalists when it comes to accessing public property, but when you engage in a protest on public property, you can’t claim some of the public property as your own. The journalists had a right to be anywhere on the public grounds to cover the story.

The photographer handled the situation well making the Mizzou Mafia proud. You can read some perspectives of the journalists covering the story here and here.

More troubling, however, was the conduct of some of the Mizzou faculty who, in my opinion, mistreated the journalist and should have known better. For example, near the end of the video, a Mizzou professor of mass media (with the School of Communications and not the School of Journalism) tried to grab the camera and then yelled, “Who wants to help me get this reporter out of here? I need some muscle over here.” Ironically (a repeated theme to this story), this same professor had asked for media attention a few days prior. Unfortunately, this strange treatment of journalists is detracting from the protester’s efforts to further their true cause.

I don’t believe MU System President Tim Wolfe, or Chancellor R. Bowin Loftin, or Mizzou itself, is, in any way, racist. They could have handled the situation better and reacted quicker. Their downfall is a result of that failure. But, shouldn’t we hold the protesters, or at least the faculty that joins the protesters, to the same standard? The faculty member could have handled it better and, perhaps there should be some repercussions, on her end. The School of Journalism has already started distancing themselves from the faculty member and released this statement in support of the journalists. (Here’s another perspective from a law professor at Mizzou and more from one my former instructors at the J-SchoolStacey Woelfel).

The bad news is that it looks like two men who worked hard and wanted the best for the university lost their jobs. Another person who appeared to be a well-liked professor may lose hers, too. The whole thing is a circus.

The good news is the hunger strike is over, there may be some changes to redress the situation, and hopefully both the administration and the protesters can learn from this.

For the rest of us, life will go on and I will continue to support my alma mater from afar. After all, there is a football game to played on Saturday.

Update: The professor in the video has apologized and resigned from her “courtesy appointment” with the J-School.

Go to Part 4 – A decision in Schlumberger

Go to Part 3 – The Schlumberger case and employment disputes

Go to Part 2 – In Practice

Go to Part 1 – The basics of the Texas Anti-SLAPP law

To conclude the series, we look at one more opinion — Serafine v. Blunt, No. 03-12-00726-CV, 2015 WL 2061922 (Tex. App.—Austin May 1, 2015).  This case dealt with a property dispute, but the real interest comes from the lengthy concurring opinion that is worth your read if you are studying the broad applicability of the Anti-SLAPP law.

In this property dispute amongst neighbors, Serafine asserted claims for trespass to try title, trespass, nuisance, negligence, and fraud by nondisclosure, and sought declaratory and injunctive relief, in addition to damages and attorneys’ fees. The Blunts answered Serafine’s suit and also filed counterclaims, asserting that Serafine tortiously interfered with their contract with the drainage and foundation company and that Serafine violated Chapter 12 of the Texas Civil Practice and Remedies Code by fraudulently filing a lis pendens in the Travis County Real Property Records.  Serafine moved to dismiss the Blunts’ counterclaims under the TCPA which the trial court denied.

Serafine contends that she established that the Blunts filed their counterclaims in response to her exercise of her right to petition, i.e., in response to her filing suit against them, because the two counterclaims on their face complained of her filing of the lawsuit and her filing of the lis pendens notice based on her claims related to the property boundary. The Blunts argued that their tortious-interference counterclaim was not based solely on Serafine’s filing of the lawsuit, but also on her harassing and threatening conduct before and after the lawsuit. They further argued that Serafine incorrectly argued that a lis pendens cannot serve as the basis for a fraudulent-lien claim.

The appellate court held the TCPA applied in part because the Blunts’ tortious interference counterclaim was, in part based on, related to, or in response to Serafine’s filing of the suit and that their fraudulent-lien counterclaim is based on, related to, or in response to Serafine’s filing of the lis pendens, both of which filings are exercises of Serafine’s “right to petition.”  However, to the extent that the Blunts’ tortious-interference counterclaim was based, in part, on Serafine’s alleged threats made outside the context of the lawsuit, then the TCPA did not apply.  The appellate court therefore dismissed the majority of the tortious interference and false lien claims and remanded the claim back to the trial court for consideration of the attorneys’ fee awards and the remaining claim related to threats as opposed to the filing of the suit.

The lengthy concurring opinion found the TCPA should apply in this case, but raised concerns that the TCPA was being used too broadly.  The Houston Court of Appeals may agree.  In Jardin v. Marklund, 431 S.W.3d 765 (Tex. App.-Houston [14th Dist.] 2014, no pet.), the court attacked at length the notion that the TCPA’s protections for the “exercise of the right to petition” can be invoked “simply by filing a petition in a lawsuit between private parties.” It found the TCPA incorporates, and must be construed in light of the purpose of the act and its First Amendment underpinnings.  The Jardin majority reasoned courts should draw lines between “public” versus “private” issues, such that merely filing a lawsuit would not invoke the constitutional right to petition (and, in turn, the TCPA) unless the suit’s subject matter independently concerned government or “the public interest.”

This would appear to be more in line with the ExxonMobil v. Coleman decision in Part 2.  The Dallas court considered the purpose of the TCPA and concluded that “to constitute an exercise of the right of association under the Act, the nature of the ‘communication between individuals who join together’ must involve public or citizen’s participation.” Id. at 12.  The court continued that reading the definition of the right “right of association” in isolation “would lead to absurd results” and would apply the TCPA to “to virtually any private communication between two people about a shared interest.” Id. at 10.

Erica Badu – music management and Anti-SLAPP

Another case to watch is Levatino v. Apple Tree Café Touring, Inc., No. 05-15-00614-CV in the Dallas Court of Appeals. In that case, the defendant had claimed he was the manager for Erica Badu.  He and his counsel sent Rule 408 demand letters to Badu and her company.  Badu and the company filed a declaratory judgment action.  The defendant, Levatino, then filed a TCPA motion to dismiss claiming his pre-suit demand were both the exercise of the right to petition and the right to associate.  The trial court, before the more recent Supreme Court of Texas decisions, denied the motion.

A final note on “clear and specific evidence”

In In Re Lipsky, __S.W.3d__, No. 13-0928, 2015 WL 1870073 (Tex. Apr. 24, 2015, orig. proceeding), Lipsky moved to dismiss a multimillion-dollar defamation suit the plaintiff, Range, filed against him after he criticized the company’s hydraulic fracturing activities near his home. Lipsky argued Range failed to prove that he said anything defamatory and has only offered a “conclusory” affidavit alleging the company suffered $3 million in damages, which is insufficient to meet the TCPA’s evidentiary standard.

The Supreme Court of Texas ruled the defendant is allowed to rely upon circumstantial evidence to satisfy its burdens under the TCPA writing:

 In a defamation case that implicates the TCPA, pleadings and evidence that establishes the facts of when, where, and what was said, the defamatory nature of the statements, and how they damaged the plaintiff should be sufficient to resist a TCPA motion to dismiss.

 Though the TCPA initially demands more information about the underlying claim, the Act does not impose an elevated evidentiary standard or categorically reject circumstantial evidence.   In short, it does not impose a higher burden of proof than that required of the plaintiff at trial.

The point of this series is that the Anti-SLAPP provisions aren’t just for us defamation lawyers anymore.  All litigators should have a basic understanding of how this works and ask of the opposing side’s claims have anything to do with: (1) the right of free speech; (2) the right to petition; or (3) the right of association.petitioning the government as those are broadly defined.

Go to Part 3 – The Schlumberger case and employment disputes

Go to Part 2 – In Practice

Go to Part 1 – The basics of the Texas Anti-SLAPP law

tjb-seal-144Since we published Part 3 that discussed the details of an interesting case here in Houston, Schlumberger v. Rutherford, the First Court of Appeals issued its opinion on Tuesday. The best description of the decision is a punt.  The court found it does not have jurisdiction to consider a partial granting of a motion to dismiss under the Anti-SLAPP provisions or TCPA and summarily affirmed the denial of the part of the motion related to the breach of contract claim. You can read the opinion here: Schlumberger v. Rutherford

While disappointing for Schlumberger and practitioners like us, it may be the right decision.  The Anti-SLAPP statute allows for an appeal of order that “denies a motion to dismiss filed under Section 27.003.” TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12). As pointed out by the court, “[b]y contrast, no statute expressly provides for interlocutory appeal of an order that grants such a motion.”

Because the court only dismissed some of the claims and the case is still proceeding, it is considered an “interlocutory order” which is not subject to an appeal under these circumstances.  For Schlumberger to appeal, it has to proceed to trial on the parts of the case that remain, such as breach of contract, and then decide whether or not to appeal after a final trial or other resolution of the entire case.

What about the breach of contract claim?

As you may recall, the trial court denied Rutherford’s Anti-SLAPP motion to dismiss as it related to her breach of contract claim.  Because that was a denial of the motion to dismiss, the court of appeals determined it could consider only that part of the decision.

The court stated that standard that the party moving to dismiss, in this case Rutherford, had to establish that she was engaged in one of the three protected activities: (1) the right of free speech; (2) the right to petition; or (3) the right of association.  If the moving party does this, then the party trying to defeat the motion to dismiss, Sclumberger, has to establish “by clear and specific evidence a prima facie case for each essential element of the claim in question” — in this case, breach of contract.

Unfortunately, the court of appeals glossed over the important first issue – does the TCPA even apply in this case and went straight to a consideration of whether Schlumberger could provide clear and specific evidence of each element of its breach of contract claim. There was no discussion from the court as to whether Rutherford was engaged in: (1) the right of free speech; (2) the right to petition; or (3) the right of association.  Can we assume that the court of appeals found she did engage in one of those activities in light of the fact that they glossed over it and went straight to the second step of the analysis? Maybe, that’s what lawyers are likely to argue if they want a broad application of the act.

As a result, we may now have to wait to see if the case goes to trial and is then subsequently appealed to determine whether the trial court got it wrong or right. Until then, the case goes back to the trial court and the large sanction penalty related to the granting of the motion to dismiss on the misappropriation of trade secrets, conversion, breach of fiduciary duty, and violation of the Texas Theft Liability Act claims stays in tact.

Part 2 – In Practice

Go to Part 1 – The basics of the Texas Anti-SLAPP law.

The exercise of the right to free speech on matters of public concern

             It is easy to see how this applies to your straightforward defamation case assuming the defendant engaged in the “exercise of the right of free speech” which means “a communication made in connection with a matter of public concern.” A “matter of public concern” is an issue related to:

  • health or safety;
  • environmental, economic, or community well-being;
  • the government;
  • a public official or public figure; or
  • a good, product, or service in the marketplace.

If the defendant who has been sued can show the allegedly defamatory speech was about a “matter of public concern,” then the burden shifts to the defendant to come up clear and convincing prima facie evidence of a valid defamation claim.  A lot of the litigation concerns whether the speech is a matter of public concern and whether the plaintiffs can provide the clear and convincing evidence to avoid dismissal.

What about the right to petition and the right to association? How broad are those?

            The Act also covers the right to petition and the right to association which greatly broadens its application as courts struggle with the definitions noting that only the “exercise of free speech” is limited to “matters of public concern.”  The TCPA defines “exercise of the right of association” to mean “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” Tex. Civ. Prac. & Rem Code § 27.001(2).  The “exercise of the right to petition” is defined with reference to a specified list of communications that have a nexus to participation in government. Id. at § 27.001(2)-(4).

Are internal emails matters of public concern and do they have to be?

            Earlier this year, the Dallas Court of Appeals held that the law did not apply to internal communications within a company about an employee’s performance because that was not a matter of public concern despite the claim by the employer (ExxonMobil) that the issues touched on matters of public safety.  See ExxonMobil v. Coleman, 2015 WL2206466 (Tex.App.—Dallas May 12, 2015), rule 53.7(f) motion granted May 29, 2015.  Of more interest is that ExxonMobil also moved to dismiss the claim because it argued it was engaged in the right of association.

            ExxonMobil claimed that the plaintiff failed to “gauge” one of the storage tanks and after an investigation ExxonMobil terminated him.  The plaintiff denied all wrongdoing and sued ExxonMobil and the employees who participated in the investigation for publishing defamatory statements about him during the internal investigation bringing the TCPA into a typical employment dispute.

            Both the trial court and the court of appeals held the TCPA did not apply and refused to dismiss the suit.  Despite the defendants’ efforts to claim it was a matter of public safety, the court found the investigation focused on job performance and not the results that could happen if the storage tanks were not properly maintained.  Therefore, the statements “involve nothing more than an internal personnel matter at Exxon” and therefore “were not a matter of public concern.”

            With regard to the right to the association, Exxon argued the communications were made between Exxon employees regarding issues in which they shared a common interest, specifically Coleman’s job performance and his compliance with the safety guidelines.  In response, the Court of Appeals wrote:

Although these commuinications seem to fall within the plain language of the Act’s definition of the exercise of the right of association, we decline to read the statute so broadly, concluding it would lead to absurd results.

Id. at *4.  The court then spent numerous pages explaining that reading the definition of the right to association in a vacuum without considering the purpose of the act would encompass any private communications between two people about any shared interest.  The court, therefore, reasoned the “public participation” had to apply to the defendant’s engagement in the right to association and the right to petition as well.

Can the right of association govern every corporate email?

            The court relied in part on the First Court of Appeals decision in See Cheniere Energy, Inc. v. Lotfi, 449 S.W.3d 210, 216–17 (Tex.App.–Houston [1st Dist.] 2014, no pet.). In that case, the plaintiff sued her former employer for wrongful termination and sued two former coworkers for tortious interference.   449 S.W.3d at 211–12.   The coworkers moved to dismiss the claim against them under the Act, asserting the plaintiff’s lawsuit was brought in response to their exercise of the right of association.  Id. at 212.   The plaintiff filed a response, but neither side filed any affidavit evidence.   With only the pleadings to go on, the trial court denied the motion to dismiss.  Id.  The court of appeals upheld the trial court’s ruling, concluding the coworkers failed to meet their burden to show they were entitled to dismissal because the limited allegations in the plaintiff’s pleadings did not show the coworkers had a communication, acted in furtherance of a common interest, or that the claim against them is related to their exercise of the right of association.  Id. at 214–15.

            Referring to the title of the Act, the court noted that the terms “citizen” and “participation” contemplate a larger public purpose.  Id. at 216.   It further stated the plaintiff’s lawsuit did not implicate the legislature’s express declaration of the purpose behind the Act, which indicates that a nexus is required between the communication and the generally recognized parameters of First Amendment protection.  Id.  “Otherwise, any communication that is part of the decision-making process in an employment dispute—to name just one example—could be used to draw within the [Act’s] summary dismissal procedures private suits implicating only private issues.”   Cheniere Energy, 449 S.W.3d at 216–17.

            Two members of the three-judge panel concurred, writing separately to emphasize that the Act did not apply to the plaintiff’s tortious interference claim against her coworkers.  Id. at 217 (Jennings, J., concurring).   The concurrence stated that, standing alone, the Act’s definition of the “exercise of the right of association” in section 27.001(2) appears to include communications that are not constitutionally protected and do not concern citizen or public participation.  Id. at 219.   The concurrence stated that reading section 27.001(2) in isolation would lead to absurd results and would “actually thwart any meritorious lawsuit for demonstrable injury in which a plaintiff alleges that two or more persons engaged in a civil wrong involving a communication.”  Id.  At a minimum, such a reading would add unnecessary delay and expense to a plaintiff’s lawsuit.  Id.

But, the Texas Supreme Court says don’t amend the Act.

            This decision followed the Supreme Court of Texas’s opinion in Lippincott v. Whisenhunt, __ S.W.3d __, No. 13-0926, 2015 WL1967025 (Tex. April 24, 2015).  In that case, the defendants allegedly made disparaging comments about the plaintiff, who was a certified registered nurse anesthetist contracted to provide anesthesiology services, in emails internally to the company.  The allegedly defamatory emails included allegations that the plaintiff represented himself to be a doctor, endangered patients for his own financial gain, and sexually harassed employees.

            The plaintiff sued for defamation, tortious interference with existing and prospective business relations, and conspiracy to interfere in business relations.  The defendants moved to dismiss all of the claims based on the TCPA.  The trial court dismissed all of the claims except for defamation because the plaintiff was able to provide prima facie evidence of the defamation claim, but not the others.

            The court of appeals reversed and remanded holding the act does not apply to “private” communications such as internal emails thereby reviving all of the plaintiff’s claims.  The Supreme Court ruled there is no requirement that the communications themselves have to be public.  Instead, the statute only requires that the communication be made in connection with a matter of public concern.

            With regard to whether the communications involved matters of public concern, the court wrote:

The allegations include claims that Whisenhunt “failed to provide adequate coverage for pediatric cases,” administered a “different narcotic than was ordered prior to pre-op or patient consent being completed,” falsified a scrub tech record on multiple occasions, and violated the company’s sterile protocol policy. We have previously acknowledged that the provision of medical services by a health care professional constitutes a matter of public concern. See Neely v. Wilson, 418 S.W.3d 52, 70 n.12 & 26 (Tex. 2013) (determining that the public had a right to know about a doctor’s alleged inability to practice medicine due to a mental or physical condition); see also TEX. CIV. PRAC. & REM. CODE § 27.001(7) (defining “matter of public concern” to include issues related to health or safety, community well-being, and the provision of services in the marketplace, among other things). Thus, we conclude these communications were made in connection with a matter of public concern.

Id. at *2. The court concluded that because the defendant had demonstrated the applicability of the act, the court of appeals had to consider whether the plaintiffs had met his prima facie burden of proof.

            In the decision the Supreme Court of Texas said that courts should not “judicially amend” the act by adding words that are not there.  Id. at *1.  The Dallas Court of Appeals considered the instruction from the higher court, but wrote:  “Although we are aware that in Lippincott, the supreme court cautioned against “judicially amending” the Act by adding words that are not there, we agree that the legislature could not have intended for section 27.001(2) to be read in isolation.  We conclude that, to constitute an exercise of the right of association under the Act, the nature of the “communication between individuals who join together” must involve public or citizen’s participation.”  ExxonMobil, 2015 WL 2206466 at *6.

Part 3 will look at the impending Schlumberger decision.

Kate bluebonnets

It’s Spring in Texas which means one of two things – the bluebonnets are out and in odd years, our legislature is back at work.  One makes me grateful to be in Texas and the other only meets every other year.  Here are a few bills we are watching this session:

Service of Process Via Social Media- HB 241

The Legislature is making another effort on this.

The bill provides:

Sec. 17.032.  SUBSTITUTED SERVICE THROUGH SOCIAL MEDIA PRESENCE.
(a)  If substituted service of citation is authorized under the Texas Rules of Civil Procedure, the court, in accordance with the rules adopted by the supreme court under Subsection (b), may prescribe as a method of service an electronic communication sent to the defendant through a social media presence.

(b)  The supreme court shall adopt rules to provide for the substituted service of citation by an electronic communication sent to a defendant through a social media presence.

It looks like the bill stalled in committee.

Codifying a fair reporting privilege – SB 627

The Legislature continues to show its disdain for defamation suits.  This time, they are considering a bill that would codify a sometimes-recognized common law fair reporting privilege.  The privilege allows for a fair reporting of public records and allegations as long as done in good faith.  It looks like this one may become law.

The bill provides:

(b)  This section applies to:

(1)  a fair, true, and impartial account of:

(A)  a judicial proceeding, unless the court has prohibited publication of a matter because in its judgment the interests of justice demand that the matter not be published; (B)  an official proceeding, other than a judicial  proceeding, to administer the law; (C)  an executive or legislative proceeding (including a proceeding of a legislative committee), a proceeding in or before a managing board of an educational or eleemosynary institution supported from the public revenue, of the governing body of a city or town, of a county commissioners court, and of a public school board or a report of or debate and statements made in any of those proceedings; or (D)  the proceedings of a public meeting dealing with a public purpose, including statements and discussion at the meeting or other matters of public concern occurring at the meeting; [and]

(2)  publication of allegations made by a third party regarding matters of public concern, regardless of the truth or falsity of the allegations; and

(3)  reasonable and fair comment on or criticism of an official act of a public official or other matter of public concern published for general information.

(c)  This section does not abrogate or lessen any other defense, remedy, immunity, or privilege available under other constitutional, statutory, case, or common law or rule provisions.

(d)  This section shall be construed liberally to effectuate its purpose and intent fully.

Civil Penalties for Frivolous Patent Claims – SB 1457

This bill also looks like it might be headed for passage.  The pertinent part of the bill states:

       Sec. 17.952.  BAD FAITH CLAIM OF PATENT INFRINGEMENT PROHIBITED.

(a)  A person may not send to an end user located or doing business in this state a written or electronic communication that is a bad faith claim of patent infringement.

(b)  A communication is a bad faith claim of patent infringement if the communication includes a claim that the end user or a person affiliated with the end user has infringed a patent and is liable for that infringement and:

(1)  the communication falsely states that the sender has filed a lawsuit in connection with the claim;

(2)  the claim is objectively baseless because:

(A)  the sender or a person the sender represents does not have a current right to license the patent to or enforce the patent against the end user; (B)  the patent has been held invalid or unenforceable in a final judgment or administrative decision; or (C)  the infringing activity alleged in the communication occurred after the patent expired; or

(3)  the communication is likely to materially mislead a reasonable end user because the communication does not contain information sufficient to inform the end user of:

(A)  the identity of the person asserting the claim; (B)  the patent that is alleged to have been infringed; and (C)  at least one product, service, or technology obtained by the end user that is alleged to infringe the patent or the activity of the end user that is alleged to infringe the patent.

The bill only allows for enforcement by the Attorney General and not private litigants.

We will keep on eye on these any other bills of note.

5.  Using Images Without Permission is No Monkey Business

From the Wikimedia Commons website

This was one of the more interesting stories of the year – does the photographer who set up everything to allow for a monkey to take a selfie own the copyright to that selfie?  This year we learned that no, the photographer does not.

 

 

 

4.  Infographic: The Use of Images From The Web on Your Site, Newspaper or Broadcast – Enough Said:

3.  The Law on Unpaid Interns – This post makes the list almost every year because I repost the guest post by Michael Kelsheimer of the Texas Employer Handbook every year as tech start-ups look to hire unpaid interns.  It’s a little more complicated than you may think.

2. #SMH-butnotacontestorasweepstakes – Check your online promotion hashtag or face scrutiny from the FTC – This post covered the surprise investigation of the Wandering Sole contest by Cole Haan.  The FTC basically said if you are going to have customers “endorse” your products by and through a contest, you better make sure the connection between the endorsement and contest is disclosed.  The legality of online contests is a popular topic with an older post Is Your Online Sweepstakes or Contest Legal still remaining popular.

1.  When Online Behavior Crosses the Line – The Law on Threats, Libel and Just Being Rude – Online defamation and related topics continue to be popular.  In fact, this post from 2012, remains one of the most popular on the site, How to Identify the Anonymous Online Defamer.  My suspicion is that SEO on these topics leads to more page views.  Nevertheless, it continues to be a very important issue for individuals and businesses and will likely continue in 2015.

 

A Georgia seventh-grader created a fake Facebook profile that defamed a classmate, according to this Wall Street Journal story.   In middle school fashion (I am not looking forward to parenting through this period), a boy created a fake Facebook profile of a female classmate, used a “Fat Face” app to alter her appearance and posted “false, profane, and ethnically offensive information” on the page.

The school found out, punished the boy with in school suspension for two weeks and told his parents.  At home, the boy was grounded for a week.  Despite this punishment in school, the page stayed up for 11 months before Facebook finally took it down.

The girl’s family sued claiming the parents were negligent and contributed to the girl’s suffering.  Parents have money and insurance and make a better target than a seventh-grader in a lawsuit for damages.  The trial court dismissed the negligence claims against the parents in a summary judgment ruling.

On appeal, the court upheld the dismissal  of the claims related to the original creation of the fake profile, but wrote:

Given that the false and offensive statements remained on display, and continued to reach readers, for an additional eleven months, we conclude that a jury could find that the [parents’] negligence proximately caused some part of the injury [the girl] sustained from [the boy’s] actions (and inactions).

You can read the full opinion here.

The court noted:

During the 11 months the unauthorized profile and page could be viewed, the Athearns made no attempt to view the unauthorized page, and they took no action to determine the content of the false, profane, and ethnically offensive information that Dustin was charged with electronically distributing. They did not attempt to learn to whom Dustin had distributed the false and offensive information or whether the distribution was ongoing. They did not tell Dustin to delete the page. Furthermore, they made no attempt to determine whether the false and offensive information Dustin was charged with distributing could be corrected, deleted, or retracted.

Georgia law is similar to the law in many states — parents are not simply liable based on the parent-child relationship.  Usually, there has to be some liability based on the parents’ alleged failure to supervise or control their child where there is a foreseeability of harm. Applying this standard the court wrote:

The [parents] contend that they had no reason to anticipate that [son] would engage in that conduct until after he had done so, when they received notice from the school that he had been disciplined for creating the unauthorized Facebook profile. Based on this, they contend that they cannot be held liable for negligently supervising [son]’s use of the computer and Internet account. The [parents]’ argument does not take into account that, as [son]’s parents, they continued to be responsible for supervising [son]’s use of the computer and Internet after learning that he had created the unauthorized Facebook profile.

This appears to be the first published opinion dealing with parental liability for a child’s online behavior.  I have dealt with this issue at the trial court level, but usually resolve the issues rather than force minors to go through a public trial and discovery.  The unfortunate aspect is the case returns to the trial court and continues.  If only there were a teachable moment.

Stealing a theme from Morrison Foster’s Socially Aware blog post entitled “Forced to Cyber-Spy” about the case, when your kids complain that you don’t give them any privacy online – you can tell them that until they pay the homeowners’ premiums or the lawyers, you get to monitor their social media use.