Those who practice in the area of First Amendment law should be aware of several recent legislative and judicial developments that will likely have a significant impact on the legal landscape in Texas.
First, in response to growing concerns from attorneys, judges, and stakeholders regarding its expansive scope and perceived abuses, the Texas legislature passed a reform measure to the Texas Citizens’ Participation Act (TCPA), Texas’s anti-SLAPP statute. The TCPA offers substantive protection to individuals and companies who are sued in retaliation for their exercise of protected First Amendment rights. HB 2730, signed into law earlier this month, will make several important changes to how the TCPA operates.
While the legislature was working through its updates to the TCPA, the Supreme Court of Texas was making waves of its own. Earlier this year, the Texas high court handed down two significant decisions relating to defamation liability. The first, Dallas Symphony Orchestra v. Reyes, clarified the types of statements that constituted actionable defamation, affirming summary judgment against the plaintiff because the statements at issue were either true, rhetorical hyperbole, subjective opinion, or otherwise not capable of being defamatory. Barely two months later, the Supreme Court handed down its opinion in Dallas Morning News v. Hall, which provides litigants with additional clarity on Texas law regarding fair and accurate reporting of a third-party’s allegations regarding a matter of public concern.
Those who practice in the First Amendment field should be familiar with these developments, as they will likely have a significant impact on their practice moving forward.
HB 2730: Updates to the Texas Citizens Participation Act
On Sunday, June 2, 2019, Governor Greg Abbott signed HB 2730 into law. This bill makes several significant changes to the TCPA; it goes into effect on September 1, 2019 and applies to all legal actions filed on or after that date.
Changes to When the TCPA Can Be Used
One of the chief complaints about the existing Anti-SLAPP law was the breadth of the definitions resulting in its application to trade secret and employment disputes and attorney disciplinary proceedings. The TCPA currently defines “matter of public concern” with a non-exhaustive topical list of areas of discussion that had previously been determined by the courts to be of public concern. The new definition, taken in part from the United States Supreme Court case Snyder v. Phelps, provides a more generalized approach. It expressly expands the definition of “matter of public concern” to include “activity” not just communications, and it protects statements or activities about public officials, public figures, or other persons who have drawn substantial public attention due to their official acts, fame, notoriety, or celebrity; matters of political, social, or other interest to the community; and subjects of concern to the public.
The new law, however, narrows the protection for exercising one’s “right of association” by tying its protection to matters relating to a governmental proceeding or a matter of public concern. It also narrows the scope of the TCPA by removing the current provision that the action need only “relate to” a party’s right to petition, free speech or right of association as defined by the TCPA. Instead, now, the action must be “based on” or “in response” to a party’s exercise of those rights.
In addition to modifying the definitions, HB 2730 includes a laundry list of new exemptions to the TCPA to prevent its application in areas in which the statute was perceived to have been abused, including: trade secret misappropriation actions; enforcement of non-disparagement agreements or covenants not to compete in an employment or independent contractor relationship; family code cases and applications for protective orders; claims under the Texas Deceptive Trade Practices Act; medical peer review cases; eviction suits; attorney disciplinary proceedings; and common law fraud claims. There are, however, exemptions to certain of these exemptions for the media and online business reviews and ratings.
Changes to How It Can Be Used
Another complaint about the existing Anti-SLAPP law was the way in which lawyers were using the law as a sword in litigation rather than for its intended purpose. Lawyers were filing Anti-SLAPP motions in response to Anti-SLAPP motions, motions for sanctions, and various purely procedural matters. The new law modifies the definition of “legal action” to prevent this sort of gamesmanship by clarifying that one cannot file an Anti-SLAPP motion in response to a procedural action, in an alternative dispute resolution proceeding, or in a post-judgment enforcement action. It also clarifies that the law does apply to lawsuits seeking declaratory relief – an issue about which Texas appellate courts are currently in conflict.
Changes to Who Can Use the TCPA
Finally, as the result of some troubling offensive uses of the TCPA by governmental entities, the new law expressly states that a governmental entity, agency, or an official or employee acting in an official capacity does not qualify as a party who can invoke the law’s protections.
From an evidentiary standpoint, the new law makes clear that courts may consider the type of evidence that would be admissible in a summary judgment proceeding. It also provides a filing framework timeline that is consistent with Texas and local rules regarding other dispositive motions, including a movant providing 21 days’ notice for a hearing and a nonmovant’s response being due no later than 7 days before the hearing. In addition to the more structured framework, the new law provides some much needed flexibility for litigants to be able to agree to file an Anti-SLAPP motion beyond the current 60-day deadline.
When applying the law, Texas has removed all references to “preponderance of the evidence” and now merely requires a movant to demonstrate that the legal action in question is covered by the TCPA. When a movant seeks to prevail on an affirmative defense, it requires a party show they are entitled to judgment as a matter of law. Finally, although the new law will maintain the mandatory attorney’s fees award, it now makes the award of sanctions discretionary.
Two Texas Supreme Court Cases Involving First Amendment Concerns
In addition to the legislative changes to the TCPA, a pair of recent Texas Supreme Court cases are also likely to impact First Amendment litigation throughout the state. The first, Dallas Symphony Association, Inc. v. Reyes, confirmed the Fifth Court of Appeals’ analysis regarding a defendant’s entitlement to summary judgment for defamation claims arising out of statements that were not actionably defamatory. The second case, Dallas Morning News v. Hall, provided additional confirmation of the applicability of statutory protections for accurately reporting on third-party allegations about matters of public concern under Texas law. Both provide further clarity regarding defamation liability.
Dallas Symphony Assoc., Inc. v. Reyes, 571 S.W.3d 753 (Tex. 2019)
In March, the Texas Supreme Court weighed in on a long-running dispute between defamation Plaintiff Jose Reyes and the Dallas-area publication D Magazine and the Dallas Symphony Orchestra. That lawsuit arose from an article entitled “The Talented Mr. Reyes: How a man of Meager Means and a Mysterious Past Duped Dallas Society,” which chronicled how Reyes, a low-level bank employee of modest means had worked his way into Dallas high society, noting that he had garnered a reputation as a well-known “social butterfly.” The article reported further that people considered him to be somewhat of an imposter, and that “[p]eople griped that he crashed parties, blustered his way into photos and misrepresented his role with charities.” Reyes worked as a volunteer for the Dallas Symphony Orchestra, but after receiving complaints from other supporters, the Symphony cut ties with Reyes, and Reyes was eventually fired from his job.
Reyes sued D Magazine and the Orchestra for defamation and a variety of related tort claims arising from the publication of the article. D Magazine and the Orchestra each moved for summary judgment; the trial court partially granted D Magazine’s motion on some of its claims, but denied the motion as to Reyes’ defamation, conspiracy, negligence, and gross negligence claims.
On appeal, the Fifth Court of Appeals reversed the partial denial of D Magazine’s motion for summary judgment, holding that Reyes had failed to marshal evidence sufficient to establish a genuine issue of material fact concerning whether the magazine published a defamatory statement about him and, as a result, that the magazine was entitled to summary judgment as to all of Plaintiff’s claims.
The Supreme Court affirmed the Court of Appeals’ ruling that D Magazine was entitled to summary judgment on all of Reyes’ claims. Specifically, with regard to Reyes’ defamation claim, the Court noted that the Court of Appeals considered every one of the 15 statements in the allegedly defamatory D Magazine article and correctly concluded that they were either true, rhetorical hyperbole, subjective opinion, not verifiable, and as a result, that the statements were not actionable. The Court agreed with the court of appeals’ analysis and stated that the intermediate court “reached essentially the correct result.”
The Court also rejected Reyes’ argument that the Court of Appeals erred by assessing the defamatory nature of individual statements prior to evaluating whether the allegedly defamatory report had a defamatory gist as a whole. The Court disagreed, holding that “it does not matter whether the gist of the article is analyzed before or after the individual statements, as long as it is addressed independently.” Thus, the Court concluded that, although “the Article repeated many personal criticisms of Reyes in a manner that undoubtedly hurt his feelings . . . none of these statements can support a defamation claim against D Magazine.”
Dallas Morning News, Inc. v. Hall, No 17-0637 (Tex. May 10, 2019)
Barely two months after its decision in Reyes, in May, the Texas Supreme Court decided a second high-profile defamation lawsuit also involving a Dallas-area publication. In Dallas Morning News v. Hall, the Texas Supreme Court reaffirmed that media defendants cannot be held liable for accurately reporting on a third-party’s allegations regarding a matter of public concern.
Hall arose from a series of articles about Plaintiffs Lewis and Richard Hall and their drug-compounding pharmacies. In 2015 and 2016, the Halls were involved in multiple lawsuits related to their business; and, one of their pharmacies, Rxpress, was reportedly implicated in a federal investigation regarding kickback payments to doctors. During this time, the Dallas Morning News published several articles regarding controversies involving the pharmaceutical compounding industry, including several that mentioned Rxpress. Rxpress sued the Dallas Morning News for defamation. The News responded with an anti-SLAPP motion to dismiss under the TCPA, which was denied.
On appeal, the Fort Worth Court of Appeals held that the TCPA motion was properly denied. Specifically, it held that the Dallas Morning News had not established that the articles were substantially true and that Rxpress had met its burden under the TCPA to establish a prima facie case of defamation.
The Supreme Court reversed the Court of Appeals’ decision, disagreeing with its analysis on several grounds. First, the Court held that Rxpress failed to carry its burden of establishing that the News’ reporting that Rxpress was “under investigation” was false. In an effort to meet their burden under the TCPA to establish a prima facie case of falsity, Plaintiffs offered some evidence, including an affidavit from the plaintiff and an expert report, but the Supreme Court held that neither were sufficient to establish that Rxpress was not under investigation. As a result, the Court held that Plaintiffs failed to meet their burden under the TCPA of establishing the material falsity of the allegedly defamatory statement that Rxpress was under investigation.
Next, the Court held that the Dallas Morning News was entitled to protection under the statutory fair-report privilege and third-party allegation rule. “Generally,” the Court observed, “media outlets enjoy a privilege that protects publications describing official proceedings of public concern.” Accordingly, as long as an allegedly defamatory statement is “a fair, true, and impartial account” of such official proceedings, then the publication is privileged and not actionable. Looking to the fair report privilege and third-party allegation rule, codified in Texas Civil Practice & Remedies Code, Sections 73.002 and 73.005, respectively, the Court held that the allegedly defamatory articles fairly and accurately reported on allegations made in an ongoing lawsuit. While the Court observed that such allegations were certainly not flattering to RxExpress, it ultimately held that the Dallas Morning News reporting on those allegations was protected and, therefore, not actionable.