© 2014 The Texas Lawbook.
By Janet Elliott (December 4) – AUSTIN – Video of a Parker County man igniting his water well in flames helped spark a debate over the safety of fracking as a method natural gas extraction.
Those images and how the owners of the property used them to criticize driller Range Resources could now help define the reach of a 2011 Texas law designed to protect citizens engaged in public discourse from retaliatory lawsuits.
The Texas Supreme Court heard arguments Thursday in a case of first impression involving the Texas Citizens Participation Act. The law was designed to allow trial courts to quickly dismiss so-called strategic lawsuits against public participation, or SLAPP suits, filed by businesses attempting to use the courts to intimidate and silence their public critics.
First Amendment lawyers are watching to see how the high court resolves a split in the courts of appeals on the standard for dismissing a lawsuit under the TCPA. The law requires that the plaintiff prove the suit’s essential claims by “clear and specific” evidence.
In about a dozen reported cases, appeals courts have reached conflicted opinions on whether the evidence standard allows consideration of rational inferences.
“I am looking for the court to affirm that clear and specific evidence is a heightened standard of evidence that requires more than a preponderance of evidence and less than clear and convincing evidence,” says Laura Lee Prather, a Haynes and Boone partner who helped write the TCPA.
Prather represented at trial the Parker County couple that own the well, but said she is no longer involved in the case. She said the anti-SLAPP law has been widely used. She said the news media, individuals and businesses all have used the law to win dismissal of invalid claims.
Law Has Chilling Effect, Says Range
Range argues in its briefs that the case illustrates the “dangerous and chilling effect that the TCPA presents” to meritorious lawsuits.
“It was never the Legislature’s intent that the protection afforded by the TCPA to a party’s right to free speech, association, or petition trump another party’s right to pursue a meritorious claim by creating an insurmountable evidentiary hurdle to overcome a SLAPP motion,” Range says in a brief by John H. Cayce Jr. of Kelly, Hart & Hallman.
The dispute involves a 200-foot water well that was drilled in 2005 by Steven and Shyla Lipsky on their property near Weatherford. In 2009, Range drilled two horizontal gas wells in neighboring Hood County about one-half mile from the Lipskys’ land.
Range says that the Trinity aquifer that supplies water to the Lipskys’ well had contained methane gas for years before 2005 and that one well in a subdivision adjacent to the Lipskys’ property posted a sign warning of flammable gas.
In August 2010, Lipsky and his wife Shyla filed a complaint with the Texas Railroad Commission that their water was contaminated with gas. In March 2011, after a two-day hearing, the commission concluded that Range’s drilling operations did not cause any contamination of the Lipskys’ water.
Range claims that during the investigation, Lipsky conspired with environmental consultant Alisa Rich to disseminate videos purporting to show flaming water from a green hose attached to the well. Range says the hose was attached to the well’s gas vent, not the water line.
“The misleading videos – choreographed by Rich’s son and the Lipskys – were also distributed to media outlets, broadcast on television, and shared with the EPA,” says Range in its court filings.
In addition to the video, Range says Steven Lipsky defamed the company by alleging it was corrupt and “owned” state oil-and-gas regulators.
Range Suit Retaliatory, Say Lipskys
Lawyers for the Lipskys say it was not until the couple sued Range in June 2011 for contaminating their well that the driller countersued for defamation and business disparagement, claiming it had suffered $3 million in damages. The lawyers noted in court briefs that Range did not sue the media outlets that reported the homeowner’s statements and did not initiate legal action promptly after the statements were made.
The Lipskys, along with Rich, who was named in a conspiracy claim by Range, sought dismissal under the TCPA. After the trial court denied the motions to dismiss, the Lipskys and Rich appealed to the Fort Worth court of appeals. The appeals court in 2012 dismissed the claims against Shyla Lipsky and Rich, but allowed defamation and business disparagement claims against Steven Lipsky.
Brent Rosenthal, lead counsel for Lipsky, says in court filings that Range has not presented clear and specific evidence that Steven Lipsky made any defamatory or disparaging communication concerning Range.
“Statements on the issue of whether fracking caused the contamination of the Lipskys’ well are by their very nature not verifiable and thus cannot support a defamation or business disparagement action under Texas law,” Rosenthal says.
Lipsky also argues that statements he made to the EPA and the Parker County Appraisal Review Board are privileged and cannot be the basis of a defamation claim.
Range claims that after receiving video of the well, the EPA issued an emergency order erroneously concluding that Range caused or contributed to an alleged endangerment to the Lipskys’ well. After the Railroad Commission exonerated Range, the EPA withdrew its order.
The company says the court of appeals ignored circumstantial evidence and rational inferences when it held there was no clear and specific prima facie evidence to support the conspiracy claims against the couple and Rich as well as the defamation and business disparagement claims against Shyla Lipsky.
Range says that the court of appeals violated a fundamental restriction on mandamus review by resolving disputed issues of fact by considering evidence contrary to Range’s claims and the trial court’s ruling.
“The result is that an injured party with meritorious claims has been unjustly denied its day in court – even before it has had an opportunity to conduct discovery,” says Cayce.
Shawn McCaskill, a Godwin Lewis shareholder, represents Rich in the appeal.
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