McLane Champions, LLC and R. Drayton McLane, Jr. v. Houston Baseball Partners LLC ( 2023 )

Supreme Court of Texas
══════════
No. 21-0641
══════════
McLane Champions, LLC and R. Drayton McLane, Jr.,
Petitioners,
v.
Houston Baseball Partners LLC,
Respondent
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fourteenth District of Texas
═══════════════════════════════════════
Argued October 25, 2022
JUSTICE LEHRMANN delivered the opinion of the Court, in which
Justice Boyd, Justice Devine, Justice Busby, Justice Bland, Justice
Huddle, and Justice Young joined.
CHIEF JUSTICE HECHT filed a dissenting opinion, in which Justice
Blacklock joined.
JUSTICE BLACKLOCK filed a dissenting opinion.
The Texas Citizens Participation Act provides special procedures
allowing parties to obtain early dismissal of meritless claims that
implicate the exercise of the rights of free speech, association, and
petition. The principal issue in this case, which arises out of the 2011
sale of the Houston Astros, is whether the Act applies to this dispute
between private parties to a private business transaction that later
generated public interest. The court of appeals assumed that the Act
applies, but it held that the plaintiff had met its burden to avoid
dismissal and affirmed the trial court’s denial of the defendants’ motion
to dismiss. We hold that the Act does not apply in the first instance.
Accordingly, while we express no opinion on the merits of the plaintiff’s
claims, we affirm the court of appeals’ judgment.
I. Background
In May 2011, Houston Baseball Partners LLC (Partners), led by
Jim Crane, entered into an agreement to purchase the Houston Astros
from McLane Champions, LLC (Champions). Surprising as it may seem
now, the Astros were struggling both competitively and financially at
the time. 1 When Partners purchased the club, the Astros were
approximately $200 million in debt and continuing to lose money.
The deal included not only the team, but also the Astros’ interest
in a soon-to-be-launched regional sports network. The Astros had
formed the Network with the Houston Rockets to broadcast their games
and related content to viewers in the Greater Houston area.
1 Since the sale closed in November 2011, the Astros have become one
of the most consistently successful teams in baseball, playing in four World
Series in six years and winning two. See, e.g., Bradford Doolittle, Dynasty!
Love ’em or Loathe ’em, the World Series Champion Astros Are an All-time
Team, ESPN (Nov. 5, 2022, 11:17pm), https://www.espn.com/mlb/story/_/id/
34957834/2022-world-series-houston-astros-mlb-dynasty (discussing team
history).
2
In October 2010, a Comcast Corporation affiliate invested $157.5
million to purchase a 22.5% equity interest in the Network, which was
scheduled to launch in October 2012. In addition to its substantial
financial investment, Comcast agreed to leverage its experience in
launching regional sports networks and negotiating with cable and
television service providers to help profitably launch the Network.
Given the Astros’ financial position, Partners alleges it viewed the club’s
interest in the Network as the key asset it was acquiring.
The Astros, the Rockets, and Comcast developed a business plan
for the Network to project its expected profitability after launch.
Affiliate rates—the fees cable and satellite television providers pay a
channel for the right to carry it on their cable or satellite service—would
primarily drive the Network’s revenues. The affiliate rates underlying
the business plan divided potential cable and satellite viewers into
geographic zones. The plan assumed that cable and satellite providers
would pay a higher affiliate rate for viewers living closer to downtown
Houston. As a result, the plan’s highest rate applied to potential viewers
living in the immediate Houston vicinity.
As a starting point, the business plan used the affiliate rates
Comcast had agreed to pay as a “market clearing” rate that other
providers would also likely pay. Based on these inputs, Partners valued
the Network at around $714 million. This meant that the Astros’
interest in the Network was worth around $332 million.
Whether Comcast’s affiliate rates were truly market clearing was
crucial to the viability of the Network’s business plan. Although
Comcast had agreed to the rates underpinning the plan, Comcast’s
3
agreement also included a “Most Favored Nation” clause. Pursuant to
that clause, if the Network signed agreements with other providers at
lower affiliate rates, Comcast would be entitled to reduce its own
affiliate rates to equal those lower rates. Consequently, less favorable
affiliate agreements could have a snowball effect on the Network’s
revenues, severely undermining the business plan’s viability.
Partners focused much of its due diligence on confirming the
Network’s valuation. Because the affiliate rates formed the foundation
for the business plan, Partners asserts that how those rates were
calculated—and who proposed them—was critical to assessing the
business plan’s viability.
Partners alleges that Champions’ investment bank, Allen &
Company, informed Partners that Comcast had proposed the input
affiliate rates, that Comcast believed those rates were reasonable and
achievable, and that Comcast expected the Network would be able to
enter into affiliate agreements with other providers at equivalent rates.
On April 12, 2011, Partners met with a Comcast executive who
purportedly confirmed each of these representations.
Based primarily on its valuation of the Astros’ interest in the
Network, Partners agreed to purchase the Astros from Champions for
over $615 million. Shortly after signing the Purchase and Sale
Agreement in May 2011, Partners assigned all its rights under the
agreement to a wholly owned subsidiary—HBP Team Holdings, LLC
(Holdings). Champions, Partners, and Holdings also executed an
amendment to the purchase agreement defining Holdings as the
Purchaser. However, the agreement’s indemnity provision identified
4
affiliates, direct owners, and indirect owners of the Purchaser as “Seller
Indemnified Parties.” Accordingly, Partners remained a Seller
Indemnified Party even after the assignment, and Champions agreed to
indemnify such parties for breaches of the purchase agreement.
When the Network launched in 2012, it had not signed affiliate
agreements with any providers besides Comcast. Those affiliate
agreements that Comcast was able to deliver with other providers
post-launch contained affiliate rates far below those outlined in the
business plan. Accepting those offers would trigger Comcast’s Most
Favored Nation clause, lowering the affiliate rates it was required to
pay. The Network quickly fell into severe financial distress and was
unable to pay media-rights fees to the Astros. Comcast filed an
involuntary bankruptcy petition against the Network in September
2013.
As the Network collapsed in December 2012, Partners met with
Comcast executives to discuss the Network’s alarming financial
position. At the meeting, a Comcast executive allegedly admitted that
Comcast had always known the Network’s business plan was
unreasonable and had told the Astros as much well before the purchase
agreement’s closing. In particular, Comcast first revealed its misgivings
about the business plan in 2010. Comcast also allegedly revealed that
the affiliate rates that formed the foundation for the plan were proposed
by the Astros and the Rockets, not Comcast.
In November 2013, Partners sued Comcast, Champions, and
Champions’ owner R. Drayton McLane, Jr. for fraud, negligent
misrepresentation, and civil conspiracy. Partners also brought breach-
5
of-contract claims against Champions and McLane. 2 Partners’ fraud
and misrepresentation claims are primarily based on the alleged
December 2012 revelations that the Astros and the Rockets, not
Comcast, originally proposed the affiliate rates and that Comcast and
the Astros had always known that the Network’s business plan was
unreasonable. Comcast removed the case to the bankruptcy court where
the Network’s involuntary bankruptcy was pending. The bankruptcy
court determined that the case should be remanded to state court; over
five years after that order was appealed, the district court affirmed and
remanded the case.
Within three weeks of remand, Champions moved to dismiss
Partners’ claims under the Texas Citizens Participation Act (TCPA).
Comcast joined the motion, which also challenged Partners’ standing to
sue on the ground that only Holdings had an interest under the purchase
agreement. In response, Holdings intervened and filed counterclaims
against Champions and third-party claims against Comcast identical to
those Partners asserted. The trial court denied the TCPA motion.
The court of appeals affirmed. 627 S.W.3d 398, 405 (Tex. App.—
Houston [14th Dist.] 2021). The court of appeals first held that Partners
had standing to sue despite its assignment of rights under the purchase
agreement to Holdings. Id. at 412. Assuming without deciding that the
TCPA applied to Partners’ claims, the court then held that Partners had
2 Unless necessary for context, we refer to Champions and McLane
collectively as Champions.
6
made a prima facie showing for each of its claims by clear and specific
evidence. Id. We granted Champions’ petition for review. 3
II. Discussion
In this Court, Champions continues to challenge Partners’
standing, asserts that the TCPA applies to Partners’ claims, and argues
that Partners failed to meet its burden to avoid dismissal. We address
these issues in turn.
A. Standing
As an initial matter, Champions argues that Partners lacks
standing to sue—and the courts thus lack subject matter jurisdiction
over Partners’ claims—because Partners assigned all its rights under
the purchase agreement to Holdings. Partners responds that
Champions is challenging its capacity to sue, not standing in the true
constitutional, and jurisdictional, sense of the term.
Lack of constitutional standing deprives the trial court of subject
matter jurisdiction. Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 773
(Tex. 2020). Because standing is a threshold jurisdictional issue that “is
essential to a court’s power to decide a case,” we address that issue
before turning to the substance of the TCPA motion. Bland Indep. Sch.
Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex. 2000) (“The absence of subject-
matter jurisdiction may be raised by a plea to the jurisdiction, as well as
by other procedural vehicles . . . .”); see also Buzbee v. Clear Channel
3 Comcast and its subsidiary, NBCUniversal Media, LLC, also
petitioned for review; however, Partners nonsuited its claims against those
parties after oral argument, and we dismissed Comcast’s petition.
7
Outdoor, LLC, 616 S.W.3d 14, 22 (Tex. App.—Houston [14th Dist.] 2020,
no pet.) (addressing standing issue raised in a TCPA motion to dismiss).
To show constitutional standing, a plaintiff must demonstrate
that: (1) it suffered a concrete and particularized injury-in-fact; (2) the
injury is fairly traceable to the defendant’s conduct; and (3) a favorable
decision is likely to redress the injury. In re Abbott, 601 S.W.3d 802, 808
(Tex. 2020). Partners easily satisfies these requirements. Partners
presented evidence that it transferred over $300 million of its own
money—and obligated itself to repay additional bank loans—to fund the
purchase of the Astros, a textbook “pocketbook injury.” See Collins v.
Yellen, 141 S. Ct. 1761, 1779 (2021). Partners further alleges that it
paid a bloated purchase price in reliance on Champions’ material
misrepresentations. And Partners seeks to recover money damages to
redress its injury.
Champions nevertheless contends that Partners’ assignment of
its rights under the purchase agreement to Holdings deprives Partners
of standing to sue because all its claims arise out of that purchase. Our
recent precedent confirms, however, that such “extra-constitutional
restrictions on the right of a particular plaintiff to bring a particular
lawsuit” do not implicate standing in the jurisdictional sense. Dyer v.
Tex. Comm’n on Env’t Quality, 646 S.W.3d 498, 505 n.36 (Tex. 2022)
(quoting Tex. Bd. of Chiropractic Exam’rs v. Tex. Med. Ass’n, 616 S.W.3d
558, 567 (Tex. 2021)). Stated differently, “a plaintiff does not lack
standing simply because some other legal principle may prevent it from
prevailing on the merits; rather, a plaintiff lacks standing if its claim of
injury is too slight for a court to afford redress.” Data Foundry, Inc. v.
8
City of Austin, 620 S.W.3d 692, 696 (Tex. 2021) (internal quotation
marks omitted); see also Nat’l Health Res. Corp. v. TBF Fin., LLC, 429
S.W.3d 125, 128–29 (Tex. App.—Dallas 2014, no pet.) (“Whether a party
is entitled to sue on a contract is not truly a standing issue because it
does not affect the jurisdiction of the court; it is, instead, a decision on
the merits.” (internal quotation marks omitted)).
Here, the legal principle Champions raises that may prevent
Partners from recovering is its capacity to sue on the purchase
agreement—that is, its “legal authority to act” despite the assignment.
Pike, 610 S.W.3d at 775 (“A plaintiff has standing when it is personally
aggrieved, regardless of whether it is acting with legal authority; a party
has capacity when it has the legal authority to act, regardless of whether
it has a justiciable interest in the controversy.” (citation omitted)). And
the assignment may (or may not) affect Partners’ ability to recover
damages from Champions. But it does not affect Partners’
constitutional standing and thus does not call into question the court’s
subject matter jurisdiction. 4 See id. at 774. At this stage of the
litigation, we need not inquire further into the assignment’s impact on
Partners’ claims. Accordingly, we turn to the applicability of the TCPA
to those claims.
4 We are aware that because the parties dispute the scope of the
assignment in the purchase agreement, they at times distinguish between
Partners’ tort and contract claims. And while we have said before that
“standing must be analyzed claim by claim,” Tex. Propane Gas Ass’n v. City of
Houston, 622 S.W.3d 791, 800 (Tex. 2021), we need not do so here. The scope
of the assignment may affect Partners’ capacity, but it does not change the fact
that Partners’ claims all arise from the same pocketbook injury.
9
B. Applicability of the TCPA
The Legislature enacted the TCPA “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.” TEX. CIV. PRAC. &
REM. CODE § 27.002; see also Youngkin v. Hines, 546 S.W.3d 675, 679
(Tex. 2018) (explaining that the TCPA protects persons who associate,
petition, or speak on matters of public concern from retaliatory lawsuits
that seek to intimidate or silence them). 5 The statute provides this
protection by authorizing a motion to dismiss early in the covered
proceedings, subject to expedited interlocutory review. See TEX. CIV.
PRAC. & REM. CODE §§ 27.003, .008. Trial courts review TCPA motions
to dismiss in a multi-step analysis. First, the moving party must show
by a preponderance of the evidence that the TCPA applies to the legal
action against it. Id. §§ 27.003, .005(b). If the moving party satisfies
that burden, the burden shifts to the nonmoving party to establish by
clear and specific evidence a prima facie case for each essential element
5 The TCPA was enacted in 2011 and amended in 2013 and 2019. See
Act of May 24, 2011, 82d Leg., R.S., ch. 341, 2011 Tex. Gen. Laws 961, 961–64,
amended by Act of May 27, 2013, 83d Leg., R.S., ch. 1042, 2013 Tex. Gen. Laws
2499, 2499–2500, and Act of May 20, 2019, 86th Leg., R.S., ch. 378, 2019 Tex.
Gen. Laws 684, 684–87. Unless otherwise noted, all references to the statute
are to the applicable 2013 version.
10
of its claim. See id. § 27.005(c). If the nonmoving party cannot satisfy
that burden, the trial court must dismiss the suit. Id. 6
In this case, our analysis begins and ends with the first step:
whether the TCPA applies to this action. Under the TCPA, a party may
file a motion to dismiss if a legal action is based on, related to, or in
response to that party’s exercise of the right of free speech, right to
petition, or right of association. Id. § 27.003(a). Champions argues that
Partners’ lawsuit is based on or in response to Champions’ exercise of
both the right of free speech and the right of association. 7 We address
each assertion in turn.
1. Free Speech Under the TCPA
The 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). The operative version of the TCPA defined “matter of public
6 Under the operative version of the statute, if the nonmoving party
makes the required prima facie showing, the trial court must still dismiss the
action if “the moving party establishes by a preponderance of the evidence each
essential element of a valid defense to the nonmovant’s claim.” TEX. CIV. PRAC.
& REM. CODE § 27.005(d).
7 In addition to disputing those arguments, Partners argues as
alternative grounds for affirmance that (1) the motion to dismiss was untimely
and (2) the TCPA does not apply because the action falls within the Act’s
“commercial speech” exemption. See id. § 27.010(a)(2) (providing that the
TCPA does not apply to a legal action “against a person primarily engaged in
the business of selling or leasing goods or services, if the statement or conduct
arises out of the sale or lease of goods, services, or an insurance product,
insurance services, or a commercial transaction in which the intended
audience is an actual or potential buyer or customer”). Because we agree with
Partners’ primary argument, we need not address the motion’s timeliness or
the commercial-speech exemption’s applicability.
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concern” to “include[] 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.” Id. § 27.001(7). The Legislature’s 2019
TCPA amendments modified the definition of “matter of public
concern”; 8 however, the amendments left the definition of “exercise of
the right of free speech” unaltered. See Act of May 20, 2019, 86th Leg.,
R.S., ch. 378, § 1, 2019 Tex. Gen. Laws 684, 684–85.
We have construed the TCPA’s overarching phrase
“communication made in connection with a matter of public concern” in
a broad, but not limitless, manner. Accordingly, we have held that
some—but certainly not all—private communications may be made in
connection with a matter of public concern and thus subject to a TCPA
motion to dismiss.
In Lippincott v. Whisenhunt, for example, we held that the TCPA
applied to defamation claims based on a hospital employee’s emails
discussing a nurse anesthetist’s allegedly substandard medical services,
even though the statements were not publicly communicated. See 462
S.W.3d 507, 509–10 (Tex. 2015) (noting that the TCPA broadly defines
“communication” to include any medium, regardless of whether it takes
8 The TCPA now defines “matter of public concern” as “a statement or
activity regarding: (A) a public official, public figure, or other person who has
drawn substantial public attention due to the person’s official acts, fame,
notoriety or celebrity; (B) a matter of political, social, or other interest to the
community; or (C) a subject of concern to the public.” Act of May 20, 2019, 86th
Leg., R.S., ch. 378, § 1, 2019 Tex. Gen. Laws 684, 684–85 (codified at TEX. CIV.
PRAC. & REM. CODE § 27.001(7)).
12
a public or private form). We explained that the provision of medical
services by a health care professional constitutes a matter of public
concern—it implicates issues of health and safety, community well-
being, and services in the marketplace. Id. at 510. Further, the
challenged communications related to the quality of a particular
professional’s medical services to his patients. Id. Accordingly, the
communications fell squarely within the exercise of the right of free
speech under the TCPA. See id.
Relying on Lippincott, we similarly held that the TCPA applied to
defamation claims brought against a former employer in ExxonMobil
Pipeline Co. v. Coleman. See 512 S.W.3d 895, 900 (Tex. 2017). Coleman,
the employee, was fired after he purportedly failed to record the fluid
volume of various storage tanks as required and then falsely reported
that he had complied with the requirement. Id. at 897. Coleman alleged
that two of his supervisors made false statements about the incident—
including in a formal written report—during the company’s internal
investigation. Id. Importantly, uncontroverted testimony established
the safety and environmental risks posed by failing to follow the
applicable protocol as well as the fact that the report was prepared, in
part, for use as a learning tool at monthly safety meetings. Id. We thus
concluded that the challenged statements, “although private and among
[company] employees, related to a ‘matter of public concern’ because
they concerned Coleman’s alleged failure to [follow a process intended],
at least in part, to reduce the potential environmental, health, safety,
and economic risks associated with noxious and flammable chemicals
overfilling and spilling onto the ground.” Id. at 901.
13
More recently, we elaborated on the limits of the TCPA’s broad
reach in Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, in which an
oil-and-gas lessee claimed that the lessor falsely told third-party
purchasers of production from the lease that the lease had terminated
for cessation of production. 591 S.W.3d 127, 130 (Tex. 2019). The lessor
moved to dismiss, arguing that its statements to the purchasers were an
“exercise of the right of free speech” under the TCPA because they
related to “a good, product, or service in the marketplace”—specifically,
“the [oil and gas] lease and its products.” Id. at 134. We disagreed,
clarifying that “not every communication related somehow to one of the
broad categories set out in section 27.001(7) always regards a matter of
public concern.” Id. at 137. 9 Noting that the communications involved
“a limited business audience” and concerned a “private contract dispute
affecting only the fortunes of the private parties involved,” id. at 136–
37, we held that the communications were not made in connection with
“a ‘matter of public concern’ under any tenable understanding of those
words,” id. at 137.
Taken together, these cases demonstrate that communications
that are merely “related somehow to one of the broad categories” set out
in the statute but that otherwise have no relevance to a public audience
are not “communications made in connection with a matter of public
concern.” Id.; see Goldberg v. EMR (USA Holdings) Inc., 594 S.W.3d
818, 828 (Tex. App.—Dallas 2020, pet. denied) (citing Creative Oil and
9 With this limitation, we necessarily cabined our statement in Coleman
that the TCPA does not “require more than a ‘tangential relationship’ to” the
public concerns identified in the statute. 512 S.W.3d at 900.
14
noting that “the communications themselves must relate to a matter of
public concern” (emphasis added)). To be sure, private communications
can implicate the right of free speech under the TCPA, but in both
Lippincott and Coleman the communications at issue, while made
privately, held some relevance to a public audience when they were
made. See Lippincott, 462 S.W.3d at 509–10; Coleman, 512 S.W.3d at
898.
Construing the TCPA to cover communications that hold some
relevance to a public audience when they are made is also more
consistent with the ordinary meaning of the phrase “in connection with.”
The TCPA does not define that phrase. Merriam-Webster, however,
defines it as an idiomatic expression meaning “for reasons that relate to
(something).” In connection with, MERRIAM-WEBSTER.COM DICTIONARY,
https://www.merriam-webster.com/dictionary/in%20connection%20with
(last visited June 28, 2023). The definition indicates the two connected
things are relevant to each other and provides an example that fleshes
this idea out: “Police arrested four men in connection with the robbery.”
Id. The arrest has some relevance to “the robbery,” not the crime of
robbery in the abstract.
Likewise, under the TCPA, the communication on which the suit
is based must have some relevance to a public audience. Absent this
limiting principle, grounded in the statute’s text, the TCPA would apply
to communications made as part of any private business deal involving
any industry that impacts economic or community well-being. It does
not. Creative Oil, 591 S.W.3d at 136; see also TotalGen Servs., LLC v.
Thomassen Amcot Int’l, LLC, No. 02-20-00015-CV, 2021 WL 210845, at
15
*4 (Tex. App.—Fort Worth Jan. 21, 2021, no pet.) (holding that the
TCPA did not apply to a breach-of-contract claim premised on disclosure
of confidential information in conjunction with the sale of power
generators because “the communications at issue involved nothing more
than an exclusively private, arm’s-length transaction between private
parties involving confidential and proprietary information about the
seller and equipment,” and “nothing in the alleged communications
addresse[d] a public component or the bigger picture of power generation
generally”).
Further, the statute’s plain terms impose a temporal anchor on
the relationship between the communication and the matter of public
concern: the “connection” between the communication and the matter of
public concern must exist when the communication is made. TEX. CIV.
PRAC. & REM. CODE § 27.001(3) (defining “exercise of the right of free
speech” as “a communication made in connection with a matter of public
concern” (emphasis added)). That is, a communication cannot be made
in connection with a matter of public concern unless it had relevance to
a public audience at the time it was made, regardless of the
happenstance of after-the-fact ramifications. See id.
Importantly, this construction harmonizes the various statutory
definitions with the TCPA’s express purpose: safeguarding
constitutional rights while simultaneously protecting plaintiffs’ rights
to file meritorious lawsuits for demonstrable injuries. See id. § 27.002.
While we have held that the TCPA is not limited in application to
constitutionally guaranteed activities, the purpose still provides context
for the statute’s definitions. Youngkin, 546 S.W.3d at 681; see also Dall.
16
Morning News, Inc. v. Hall, 579 S.W.3d 370, 376 (Tex. 2019) (noting that
the TCPA “is a bulwark against retaliatory lawsuits meant to intimidate
or silence citizens on matters of public concern”). Giving full effect to
the statute’s temporal anchor, and to the required relevance to a public
audience, ensures that the TCPA is not transformed into a far-reaching
procedural mechanism for obtaining early dismissal of cases well beyond
the statute’s express purpose.
With this, we turn to the specific communications underlying
Partners’ suit and their connection to a matter of public concern when
made. Partners bases its claims solely on private business negotiations
in an arms-length transaction subject to a nondisclosure agreement. In
particular, Partners’ suit focuses on Champions’ alleged assertions
during the negotiations that Comcast—not the Astros and Rockets—
proposed the affiliate rates that formed the foundation for the Network’s
business plan, that those affiliate rates were market clearing, that
Comcast believed that those rates were reasonable, and that the
business plan was achievable. Each of these assertions was relevant to
the price Partners was willing to pay for the Astros. But the fact that
the statements were, broadly speaking, about a network that would
carry Astros games, and the fact that the public has a general interest
in the Astros, does not mean that the statements were made in
connection with a matter of public concern under the TCPA. See
Creative Oil, 591 S.W.3d at 137; Blue Gold Energy Barstow, LLC v.
Precision Frac, LLC, No. 11-19-00238-CV, 2020 WL 1809193, at *7 (Tex.
App.—Eastland Apr. 9, 2020, no pet.) (noting that “communications do
17
not become a matter of public concern simply based on the nature of the
parties’ business”).
The dissent acknowledges that the alleged misrepresentations at
issue are “of a type that could occur in the analysis of any asset and its
potential,” which “happens every day and is usually important only to
the parties involved—rarely to the public.” Post at 4 (Hecht, C.J.,
dissenting). Here, however, the dissent finds a “direct” link between the
misrepresentations at issue and the community’s well-being. Id. at 5.
Specifically, the dissent relies on Partners’ allegation that Astros fans
have also been injured because
[Champions’] misrepresentations leave [Partners] with an
impossible choice: either accept the broken network as is,
and deprive thousands of fans the ability to watch Houston
Astros games on their televisions, or distribute the games
at market rates and take massive losses out of the Houston
Astros player payroll—thereby dooming the franchise for
years to come.
Id. at 4–5.
We disagree with the dissent’s assessment of Partners’ claim.
The allegation is that the misrepresentations left Partners with the
consequences of a broken network because they led Partners to purchase
the team and its interest in that broken network. And assuming the
allegations are true, the “impossible choice” on which the dissent bases
its matter-of-public-concern analysis was inevitable. According to
Partners, the Network’s failure was inevitable and Champions knew it.
Either Partners would purchase the team and its interest in the
Network, and the Network was doomed to fail under Partners’
ownership, or Champions would remain the owner, and the Network
18
was doomed to fail under Champions’ ownership. The effect on the
public writ large—namely, that the local professional sports team would
be saddled with a failed regional sports network—was the same. Who
would eventually take the financial loss associated with the Network’s
failure was relevant only to the parties that could end up holding the
bag: Champions and Partners.
Again, the core of Partners’ complaint is that the actual value of
the asset it purchased was substantially less than Champions
represented and that it was induced by those representations to pay an
inflated purchase price. Thus, Champions made the alleged
misrepresentations to Partners “in connection with” the negotiation of a
purchase price; the communications were relevant to Partners’
valuation of the Network and the price Partners was willing to pay to
purchase the Astros—a matter of private, not public, concern. By
contrast, the communications at issue in Coleman about the employee’s
failure to follow protocols designed to decrease the environmental and
safety risks associated with chemical spills, 512 S.W.3d at 901, and the
communications at issue in Lippincott about the substandard quality of
a health professional’s treatment of patients, 462 S.W.3d at 509–10, had
a clear connection to, and were made for reasons that relate to, public
health and safety.
As discussed, under the dissent’s overly broad view, the TCPA
and its accompanying dismissal procedures would apply to any suit
involving any communication about any economically important entity.
See TEX. CIV. PRAC. & REM. CODE § 27.001(7)(B) (defining “matter of
public concern” to include “an issue related to . . . environmental,
19
economic or community well-being”). 10 The dissent downplays this
ramification, opining that requiring a plaintiff to produce prima facie
evidence early in the litigation process is a justifiable hardship and that
we have provided for early dismissal of baseless causes of action in some
circumstances through our own Rules of Civil Procedure. Post at 12–13
(Hecht, C.J., dissenting); see TEX. R. CIV. P. 91a (providing for dismissal
of a cause of action based on the pleadings “on the grounds that it has
no basis in law or fact”). Perhaps this is correct as a matter of policy,
but judicial policy preferences should play no role in statutory
interpretation. See Iliff v. Iliff, 339 S.W.3d 74, 80 (Tex. 2011). The fact
that other procedural mechanisms allow for early dismissal of meritless
lawsuits has no bearing on whether the TCPA provides such an escape
hatch here.
In sum, the alleged misrepresentations were made in connection
with negotiations to close the purchase and sale of the Astros and its
interest in the Network at a favorable price. And the result is a garden-
variety fraud and breach-of-contract dispute between a private buyer
and a private seller regarding statements made during a private
negotiation that have nothing to do with “the constitutional rights of
10 Indeed, following the dissent’s view to its logical conclusion produces
results bordering on the absurd. Say, for example, a rich and famous woman
and her brother buy a vacation home as tenants-in-common. After a few years,
they decide to sell. The vacation home’s buyer discovers a foundation problem
after the sale and sues the previous owner, alleging that the presale disclosures
misrepresented the house’s structural integrity. Under the dissent’s view, the
TCPA arguably applies to the buyer’s claim against the rich and famous
woman but not to the buyer’s claim against the brother. See TEX. CIV. PRAC.
& REM. CODE § 27.001(7)(D) (defining “matter of public concern” to encompass
an issue regarding a public figure).
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persons to petition, speak freely, associate freely, and otherwise
participate in government to the maximum extent permitted by law.”
TEX. CIV. PRAC. & REM. CODE § 27.002. That the subject of the purchase
agreement—a professional sports team—is generally of public interest
does not render the specific communications at issue relevant to a public
audience when they were made. As a result, we hold that the
communications were not “made in connection with a matter of public
concern” under the TCPA.
2. Right of Association Under the TCPA
The operative version of the TCPA defined “exercise of the right
of association” as “a communication between individuals who join
together to collectively express, promote, pursue, or defend common
interests.” See Act of May 24, 2011, 82d Leg., R.S., ch. 341, § 2, 2011
Tex. Gen. Laws 961, 961. The Legislature substantially amended this
definition in 2019, and the TCPA now defines the term as “to join
together to collectively express, promote, pursue, or defend common
interests relating to a governmental proceeding or a matter of public
concern.” Act of May 20, 2019, 86th Leg., R.S., ch. 378, § 1, 2019 Tex.
Gen. Laws 684, 684 (codified at TEX. CIV. PRAC. & REM. CODE § 27.001(2)
(emphasis of amended language added)).
The courts of appeals are divided on when a communication
between individuals impinges on the exercise of the right of association
under the pre-2019 version of the TCPA. The split focuses on whether
an alleged conspiracy can constitute the “common interest” that
individuals join together to express, promote, pursue, or defend, thereby
implicating the TCPA. Compare Gaskamp v. WSP USA, Inc., 596
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S.W.3d 457, 475 (Tex. App.—Houston [1st Dist.] 2020, pet. dism’d)
(defining “common interest” to require that the object or purpose of the
protected conduct relate to a governmental proceeding or a matter of
public concern), 11 with Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865,
878 (Tex. App.—Austin 2018, pet. denied) (holding that the “common
interests” element of the exercise of the right of association is satisfied
by the private business interests being advanced through alleged
tortfeasors’ tortious conduct). 12 The 2019 amendments to the TCPA,
which do not apply here, have resolved this split for future cases by
redefining the exercise of the right of association to clarify that the
common interest parties join together to collectively express, promote,
pursue, or defend must relate to a governmental proceeding or a matter
of public concern. See Act of May 20, 2019, 86th Leg., R.S., ch. 378, § 1,
2019 Tex. Gen. Laws 684, 684.
The word “common” has a variety of meanings. These include:
(1) “belonging to, open to, or affecting the whole of a community or the
public”; and (2) “shared by, coming from, or done by more than one.”
Common, NEW OXFORD AMERICAN DICTIONARY (3d ed. 2010). The first
definition supports the Gaskamp court’s interpretation, see 596 S.W.3d
at 475, while the second supports Grant, see 556 S.W.3d at 878.
11See also Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 427 (Tex.
App.—Dallas 2019, pet. denied); Kawcak v. Antero Res. Corp., 582 S.W.3d 566,
576 (Tex. App.—Fort Worth 2019, pet. denied).
12See also Morgan v. Clements Fluids S. Tex., Ltd., 589 S.W.3d 177, 185
(Tex. App.—Tyler 2018, no pet.); Abetecola v. 2 Savages Concrete Pumping,
LLC, No. 14-17-00678-CV, 2018 WL 3118601, at *8 (Tex. App.—Houston [14th
Dist.] June 26, 2018, pet. denied).
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We conclude that the Gaskamp line of cases is more harmonious
with the TCPA as a whole. “Words in a vacuum mean nothing. Only in
the context of the remainder of the statute can the true meaning of a
single provision be made clear.” Bridgestone/Firestone, Inc. v. Glyn-
Jones, 878 S.W.2d 132, 133 (Tex. 1994). Again, the express purpose of
the TCPA is to protect constitutional rights while simultaneously
protecting plaintiffs’ rights to file meritorious lawsuits for demonstrable
injuries. See TEX. CIV. PRAC. & REM. CODE § 27.002. And the other two
specific rights safeguarded by the TCPA—the right of free speech and
the right to petition—have a public component as defined by the statute.
See id. § 27.001(3)–(4). Construing “common interest” to include a public
component is thus congruent with the statute as a whole. Accordingly,
we hold that the “common interest” covered by the pre-2019 TCPA must
relate to a matter of public concern.
Here, Champions claims that its conduct satisfies the statutory
definition of “exercise of the right of association” because it joined with
Comcast to promote their mutual business interests. But those mutual
business interests do not qualify as “common interests” under the proper
interpretation of the statute. As a result, we hold that Champions’
conduct falls outside the scope of the right of association under the
TCPA.
III. Conclusion
In sum, we hold that Partners’ suit against Champions is not
based on, related to, or in response to Champions’ exercise of either the
right of free speech or the right of association. Accordingly, we hold that
the TCPA does not apply to the legal action at issue and need not
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address whether Partners met its evidentiary burden to survive
dismissal under that statute. We further express no opinion on the
merits of Partners’ claims. Because we agree with the court of appeals
that the trial court properly denied Champions’ motion to dismiss, we
affirm the court of appeals’ judgment.
Debra H. Lehrmann
Justice
OPINION DELIVERED: June 30, 2023
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