Kinder Morgan SACROC, LP Kinder Morgan CO2 Co., LP Kinder Morgan Production Co., LP And Kinder Morgan Production Co., LLC v. Scurry County Snyder Independent School District Scurry County Junior College District D/B/A Western Texas College And Scurry County Hospital District D/B/A Cogdell Memorial Hospital ( 2022 )

Opinion filed January 13, 2022
In The
Eleventh Court of Appeals
__________
No. 11-21-00205-CV
__________
KINDER MORGAN SACROC, LP; KINDER MORGAN CO2 CO.,
LP; KINDER MORGAN PRODUCTION CO., LP; AND KINDER
MORGAN PRODUCTION CO., LLC, Appellants
V.
SCURRY COUNTY; SNYDER INDEPENDENT SCHOOL
DISTRICT; SCURRY COUNTY JUNIOR COLLEGE DISTRICT
D/B/A WESTERN TEXAS COLLEGE; AND SCURRY COUNTY
HOSPITAL DISTRICT D/B/A COGDELL MEMORIAL
HOSPITAL, Appellees
On Appeal from the 132nd District Court
Scurry County, Texas
Trial Court Cause No. 26387
MEMORANDUM OPINION
This interlocutory appeal arises out of a proceeding in which Appellees,
Scurry County, Snyder Independent School District, Scurry County Junior College
District d/b/a Western Texas College, and Scurry County Hospital District d/b/a
Cogdell Memorial Hospital (collectively the Taxing Units), are seeking to have
mineral interests owned by Appellants, Kinder Morgan SACROC, LP; Kinder
Morgan CO2 Co., LP; Kinder Morgan Production Co., LP; and Kinder Morgan
Production Co., LLC (collectively Kinder Morgan), re-appraised or back-appraised
for the 2013 through 2018 tax years. Kinder Morgan filed a motion to dismiss the
Taxing Units’ claims pursuant to the Texas Citizens Participation Act, TEX. CIV.
PRAC. & REM. CODE ANN. §§ 27.001–.011 (West 2020) (the TCPA). 1 The trial court
found that the TCPA did not apply to the Taxing Units’ claims and denied the motion
to dismiss.
In one issue, Kinder Morgan asserts that the trial court erred when it denied
the motion to dismiss because the Taxing Units’ claims implicate Kinder Morgan’s
exercise of the right to petition and of the right of free speech, as defined by the
TCPA. Because Kinder Morgan established that the TCPA applies to the Taxing
Units’ claims, we reverse the trial court’s order and remand this case for further
proceedings.
Background
An “ad valorem” tax is a tax on property at a certain rate based on the value
of the property. Jim Wells Cty. v. El Paso Prod. Oil & Gas Co., 189 S.W.3d 861,
870 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). The appraised value of the
property is the basis for the amount of ad valorem tax owed. Id. County-based
1
The Texas legislature amended the TCPA effective September 1, 2019. See Act of May 17, 2019,
86th Leg., R.S., ch. 378, §§ 1–9, 12 (H.B. 2730) (codified at TEX. CIV. PRAC. & REM. CODE ANN.
§§ 27.001, .003, .005–.007, .0075, .009–.010). Because the Taxing Units’ claims against Kinder Morgan
were filed prior to September 1, 2019, the 2019 amendments do not apply. See id. §§ 11–12; see also
Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 129 (Tex. 2019) (“The prior version
of the [TCPA] continues . . . to control cases filed before September 1, 2019.”). For convenience, all
citations to the TCPA in this opinion are to the version of the statute prior to September 1, 2019. See Act
of May 21, 2011, 82d Leg., R.S., ch. 341, § 2, 2011 Tex. Gen. Laws 961–64, amended by Act of May 24,
2013, 83d Leg., R.S., ch. 1042, 2013 Tex. Gen. Laws 2499–2500.
2
appraisal districts and appraisal review boards are responsible for the appraisal of
real property for ad valorem tax purposes. City of Austin v. Travis Cent. Appraisal
Dist., 506 S.W.3d 607, 613 (Tex. App.—Austin 2016, no pet.); see also TEX. TAX
CODE ANN. §§ 6.01(b), 6.41(a) (West 2015). “[E]xcept for certain specifically
circumscribed rights,” the Tax Code’s comprehensive legislative scheme generally
excludes the Taxing Units from the appraisal process. City of Austin, 506 S.W.3d at613–14 (quoting Jim Wells Cty., 189 S.W.3d at 871).
The Taxing Units had a statutory right to challenge before the Scurry
Appraisal Review Board (the ARB) certain actions by the Scurry County Appraisal
District (the Appraisal District). See TAX § 1.04(12); Act of May 28, 1999, 76th
Leg., R.S., ch. 631, § 10, 1999 Tex. Gen. Laws 3191, 3196 (amended 2019) (current
version at TEX. TAX. CODE ANN. § 41.03). The Taxing Units each exercised that
right by filing, for the 2013 through 2018 tax years, a challenge before the ARB to
the “[l]evel of appraisal of real property – oil and gas, minerals and other subsurface
interests (Category G)” in Scurry County and to the exclusion of property from the
Scurry County appraisal records. At the hearing before the ARB, the Taxing Units
limited their challenges to the appraised value of mineral interests owned by Kinder
Morgan in Scurry County. The ARB denied the challenges, and the Taxing Units
filed a petition for review and writ of mandamus in the trial court. See TAX
§ 42.031(a).
In their original petition, the Taxing Units cited to cases that discussed the
omission or exclusion of property from the appraisal roll based on, among other
things, taxpayer fraud and alleged that mineral interests owned by Kinder Morgan
were “erroneously and incorrectly omitted from appraisal,” in toto or ab initio. The
Taxing Units requested that the trial court either “fix the accurate and correct
appraised values” of the mineral interests or “issue a writ of mandamus” that
required the Appraisal District and the Chief Appraiser to re-appraise Kinder
3
Morgan’s mineral interests for tax year 2018 and back-appraise the mineral interests
for the 2013 through 2017 tax years.
Kinder Morgan moved to dismiss the Taxing Units’ claims pursuant to Rule
91a of the Texas Rules of Civil Procedure on the ground that the Taxing Units had
failed to allege any facts to support a viable, legally cognizable right to relief or to
provide Kinder Morgan with fair notice of the facts on which the claims were based.
In response, the Taxing Units filed a first amended petition followed by a second
amended petition.
As relevant here, in the second amended petition, the Taxing Units alleged
that mineral interests owned by Kinder Morgan were excluded and omitted from the
appraisal records, in toto and ab initio, for the 2013 through 2018 tax years and that,
although the statute did not require “proof or an appearance of fraud,” the
“appearance of fraud does constitute adequate evidence of omissions ab initio.” The
Taxing Units asserted (1) that a property owner was “required to provide accurate
and complete information and to pay [its] accurately calculated tax amounts”;
(2) that, based on Kinder Morgan’s and the Appraisal District’s conduct and the
review by experts of Kinder Morgan’s “federal and state filings,” Kinder Morgan
had “knowingly and purposefully provided inaccurate and/or incomplete
information” to the Appraisal District in an effort to evade payment of taxes; (3) that
Kinder Morgan misrepresented “price and operating expense issues,” as well as
other information, to the Appraisal District; (4) that the “information” provided to
the Appraisal District by Kinder Morgan was inconsistent with Kinder Morgan’s
“attested filings with state and federal agencies”; (5) that the “misrepresentations”
of Kinder Morgan meant that it did not pay ad valorem taxes on all of its mineral
interests in Scurry County; and (6) that the “intentional and knowing
misrepresentations by” Kinder Morgan resulted in ab initio exclusions or omissions
of property from the appraisal roll. The Taxing Units again requested that the trial
4
court “fix the accurate and correct appraised values” of the mineral interests or “issue
a writ of mandamus” that required the Appraisal District and the Chief Appraiser to
re-appraise Kinder Morgan’s mineral interests for tax year 2018 and back-appraise
the mineral interests for the 2013 through 2017 tax years.
Kinder Morgan withdrew its Rule 91a motion and filed a motion to dismiss
pursuant to the TCPA. In the motion to dismiss, Kinder Morgan asserted that the
TCPA applied because the Taxing Units’ claims were based on or related to Kinder
Morgan’s exercise of its right to petition and right of free speech and that the Taxing
Units could not establish by clear and specific evidence a prima facie case for each
essential element of their claims.
The Taxing Units objected that Kinder Morgan’s motion was untimely. See
CIV. PRAC. & REM. § 27.003(b). The trial court sustained the Taxing Units’ objection
and overruled the motion to dismiss. Kinder Morgan filed an interlocutory appeal
from the trial court’s ruling. After we affirmed the trial court’s ruling,2 the Texas
Supreme Court reversed, held that the motion to dismiss was timely, and remanded
the case to the trial court. See Kinder Morgan SACROC, LP v. Scurry Cty., 622
S.W.3d 835, 851 (Tex. 2021).
On remand, the Taxing Units filed a third amended petition. Although the
Taxing Units deleted a number of factual allegations, they sought the same
substantive relief in the Third Amended Petition as they had requested in the Second
Amended Petition. As relevant here, the Taxing Units alleged (1) that the valuation
of mineral interests “requires the property owner to provide accurate, complete, and
forthcoming renditions and representations” to the Appraisal District; (2) that
“instead of honesty,” Kinder Morgan had “purposefully provided fraudulent,
inaccurate, and false information” to the Appraisal District “so as to unlawfully cheat
2
See Kinder Morgan SACROC, LP v. Scurry Cty., 589 SW.3d 889 (Tex. App.—Eastland 2019),
rev’d, 622 S.W.3d 835 (Tex. 2021).
5
on the amount of property taxes to be collected” from Kinder Morgan; (3) that “[t]he
wrongful acts, unlawful conduct, and misrepresentations” of Kinder Morgan “were
purposefully executed and made” for the “purposeful and wrongful avoidance of the
payment of taxes justly owed” to the Taxing Units; (4) that “[t]o accomplish this tax
fraud,” Kinder Morgan “made material misrepresentations, which were false”;
(5) that “[t]he existence of fraud and the intentional and knowing misrepresentations
made by” Kinder Morgan resulted in “the ab initio excluded/omitted consideration
of the fraudulently tainted property value amounts and thus recognition of the
delinquent taxes in the correct or fixed amounts”; and (6) that Kinder Morgan
“intentionally and knowingly provide[d] false, incomplete, and inaccurate
information for the calculation of property values in an effort to avoid, cheat, and
unlawfully avoid payment of ad valorem taxes.”
The trial court denied the motion to dismiss on the ground that Kinder Morgan
“failed to meet [its] burdens as to the first component” of the motion to dismiss. The
trial court expressly “did not hear, consider, or rule on the second and third
components to” the motion to dismiss. Kinder Morgan then brought this second
interlocutory appeal.
Analysis
In one issue, Kinder Morgan asserts that the trial court erred when it denied
the motion to dismiss because the Taxing Units’ claims implicated Kinder Morgan’s
exercise of its right to petition and right of free speech. The Taxing Units respond
(1) that Kinder Morgan failed to present any evidence that the TCPA applies to the
Taxing Units’ claims or that the Taxing Units filed their claims for an improper
purpose; (2) that the Taxing Units’ claims based on Kinder Morgan’s allegedly
fraudulent misrepresentations, alleged fraud by nondisclosure, and alleged unlawful
conduct do not fall within the TCPA; and (3) that the TCPA does not apply to the
pervasive regulatory scheme set out in the Tax Code.
6
The TCPA protects citizens from retaliatory lawsuits meant to intimidate or
silence them on matters of public concern. Dallas Morning News, Inc. v. Hall, 579
S.W.3d 370, 376 (Tex. 2019); In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015) (orig.
proceeding). The Legislature enacted the TCPA “to safeguard ‘the constitutional
rights of persons to petition, speak freely, associate freely, and otherwise participate
in government to the maximum extent permitted by law’” while, at the same time,
protecting a person’s right “to file meritorious lawsuits for demonstrable injury.”
Kinder Morgan SACROC, 622 S.W.3d at 847 (quoting CIV. PRAC. & REM. § 27.002).
To effectuate this dual purpose, the TCPA employs a three-step process to
determine whether a lawsuit or claim is subject to dismissal. Montelongo v. Abrea,
622 S.W.3d 290, 296 (Tex. 2021). First, the movant must demonstrate by a
preponderance of the evidence that a legal action is based on, related to, or in
response to the movant’s exercise of the right of free speech, right to petition, or
right of association. CIV. PRAC. & REM. §§ 27.003(a), .005(b); see also Montelongo,
622 S.W.3d at 296. If the movant makes this showing, the burden shifts to the
nonmovant to establish by clear and specific evidence a prima facie case for each
essential element of the claim in question. CIV. PRAC. & REM. § 27.005(c);
Montelongo, 622 S.W.3d at 296. Finally, even if the nonmovant meets that burden,
the trial court is required to dismiss the legal action if the movant establishes by a
preponderance of the evidence each essential element of a valid defense to the
challenged claim. CIV. PRAC. & REM. § 27.005(d).
Whether the TCPA applies to a legal action is an issue of statutory
interpretation that we review de novo. Youngkin v. Hines, 546 S.W.3d 675, 680
(Tex. 2018). When we conduct this analysis, we interpret the statute’s language as
a whole, rather than reading its individual provisions in isolation from one another.
Id. “[W]e ascertain and give effect to the Legislature’s intent as expressed in the
language of the statute,” State ex rel. Best v. Harper, 562 S.W.3d 1, 11 (Tex. 2018)
7
(quoting City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008), and construe
the statute’s words “according to their plain and common meaning, unless a contrary
intention is apparent from the context, or unless such a construction leads to absurd
results,” Youngkin, 546 S.W.3d at 680 (quoting Hughes, 246 S.W.3d at 625–26); see
also Lipsky, 460 S.W.3d at 590 (“Words and phrases that are not defined by statute
and that have not acquired a special or technical meaning are typically given their
plain or common meaning.”). If an undefined statutory term has multiple common
meanings, we “apply the definition most consistent with the context of the statutory
scheme.” City of Richardson v. Oncor Elec. Delivery Co. LLC, 539 S.W.3d 252,
261 (Tex. 2018).
A. Preemption
We first consider the Taxing Units’ contention that the Tax Code is a
pervasive regulatory scheme that preempts the TCPA for claims based on the
omission or exclusion of property from the appraisal records. The Taxing Units
specifically argue (1) that the Tax Code establishes an administrative proceeding to
resolve the majority of tax protests and that the failure to exhaust administrative
remedies deprives courts of jurisdiction to decide most matters pertaining to ad
valorem taxes and (2) that the Tax Code limits the relief that a district court may
award in an appeal from the administrative proceeding. The Taxing Units contend
that “there is no room for the application of the TCPA” in such a pervasive regulatory
scheme.
We presume that the legislature enacts a statute with complete knowledge of,
and reference to, the existing law. Acker v. Tex. Water Comm’n, 790 S.W.2d 299,
301 (Tex. 1990); Sullivan v. Tex. Ethics Comm’n, 551 S.W.3d 848, 855 (Tex. App.—
Austin 2018, pet. denied). Where there is no clear repugnance between two statutes,
we must construe the statutes so to give effect, if possible, to both. Standard v.
Sadler, 383 S.W.2d 391, 395 (Tex. 1964) (orig. proceeding) (quoting Wintermann v.
8
McDonald, 102 S.W.2d 167, 171 (Tex. 1937)); see also Highsmith v. Highsmith,
587 S.W.3d 771, 778 (Tex. 2019) (per curiam).
We agree that the Tax Code establishes the exclusive procedure by which a
taxing unit is allowed to challenge before an appraisal review board certain actions
of an appraisal district and to appeal an adverse ruling of the appraisal review board
to a district court. See In re ExxonMobil Corp., 153 S.W.3d 605, 618 (Tex. App.—
Amarillo 2004, orig. proceeding [mand. denied]); see also Act of May 28, 1999,
76th Leg., R.S., ch. 631, § 10, 1999 Tex. Gen. Laws 3191, 3196; TAX §§ 41.04–.07,
42.031(a), 42.21–.28. However, the appeal in the district court is by trial de novo in
which the district court is required to “try all issues of fact and law raised by the
pleadings in the manner applicable to civil suits generally.” TAX § 42.23(a). During
the appeal, the district court is statutorily authorized to enter “orders necessary to
preserve rights protected by and impose duties required by the law.” Id. § 42.24(3).
The relevant procedures for a taxing unit to challenge an action of an appraisal
district and to appeal any adverse decision by an appraisal review board predated the
TCPA. With presumed knowledge of the provisions of Tax Code, the legislature
established in the TCPA the right to seek dismissal of a legal action that was based
on, related to, or in response to a person’s exercise of the rights of free speech, to
associate, and to petition, as defined in the TCPA. Although the legislature expressly
exempted certain legal actions from the application of the TCPA, it did not exempt
a taxing unit’s appeal of an adverse determination by an appraisal review board from
the reach of the TCPA. See CIV. PRAC. & REM. § 27.010.
Pursuant to the dictates of the Tax Code, the trial court must try the Taxing
Units’ appeal in the same manner as civil cases generally and may enter orders to
preserve rights protected by law, including the rights established in the TCPA. We
cannot conclude that there is such a clear repugnance between the TCPA and an
appeal by a taxing unit under the Tax Code of an adverse determination of the taxing
9
units’ challenge by an appraisal review board that both statutes cannot be given
effect. See Reed v. State Dept. of Licensing & Regulation, 820 S.W.2d 1, 2 (Tex.
App.—Austin 1991, no writ) (per curiam) (“When there is no positive repugnance
between the provisions of old and new statutes and no express repeal of the old
statute, the old and new statutes must be construed to give effect, if possible, to both
statutes.”).3 Therefore, the Taxing Units’ claims are not exempt from the application
of the TCPA.
B. Exercise Of The Right To Petition
The TCPA sets out numerous ways in which a person can exercise the right
to petition, all of which involve a “communication.” See CIV. PRAC. & REM.
§ 27.001(4); see also Tervita, LLC v. Sutterfield, 482 S.W.3d 280, 283 (Tex. App.—
3
In Sullivan, the Austin Court of Appeals determined that the TCPA did not apply to the appeal to
the district court of a final order of the Texas Ethics Commission. 551 S.W.3d 856. However, that case
involved an appeal by Sullivan of a determination by the Ethics Commission that he had failed to register
as a lobbyist. Id. at 850–51. Because the Commission had the burden of proof in the trial de novo, Sullivan
moved to realign the parties. Id. at 851. The trial court granted the motion and named the Ethics
Commission as the plaintiff. Id. After the Ethics Commission amended its pleadings to comply with the
realignment, Sullivan filed a TCPA motion to dismiss the amended pleading, in effect seeking to dismiss
his own appeal. Id. at 850–51. The trial court denied the motion to dismiss. Id.
The Austin Court of Appeals noted that Texas Government Code Chapters 305 and 571 predated
the TCPA and provided “a specific procedure for addressing allegations already admittedly related to one
particular iteration of the exercise of First Amendment rights: lobbying.” Id. at 855. The court concluded
that:
[T]he only reasonable way to harmonize the TCPA and chapters 305 and 571 is to conclude
that the TCPA’s catch-all term “legal action” does not encompass de novo appeals of
Commission orders enforcing the lobbyist-registration statute wherein the Commission
seeks no new relief but prays only that the district court uphold the Commission’s previous
violation and penalty determinations. To hold otherwise would allow respondents to end-
run the specifically enacted scheme for enforcement of the lobbyist-registration statute, a
result that the legislature could not have intended when enacting the TCPA.
Id. at 855–56.
No similar concerns are presented in the appeal by a taxing unit from an adverse determination of
the taxing unit’s challenge by an appraisal review board. The appraisal review board is not a party to the
trial de novo in the district court, and the taxing unit seeks relief different from that ordered by the appraisal
review board. Therefore, the application of the TCPA to the taxing unit’s claims would neither undermine
the statutory procedure for seeking review of the order of the appraisal review board nor allow a taxing unit
to “end run” the administrative procedure established by the Tax Code.
10
Dallas 2015, pet. denied) (noting that the TCPA broadly defines “the exercise of the
right to petition”). The TCPA defines a “communication” as “includ[ing] the
making or submitting of a statement or document in any form or medium, including
oral, visual, written, audiovisual, or electronic.” Id. § 27.001(1); see also Adams v.
Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018) (recognizing that,
under the TCPA, “[a]lmost every imaginable form of communication, in any
medium, is covered”). Kinder Morgan contends that it exercised its right to petition
because it communicated with the Appraisal District “in connection with an issue
under consideration or review by a legislative, executive, judicial, or other
governmental body or in another governmental or official proceeding.” CIV.
PRAC. & REM. § 27.001(4)(B).
In determining whether the TCPA applies to a legal action, we consider the
relevant pleadings and any supporting or opposing affidavits “stating the facts on
which the liability or defense is based.” CIV. PRAC. & REM. § 27.006(a); Sullivan v.
Tex. Democratic Party, No. 03-19-00936-CV, 2021 WL 1256891, at *3 (Tex.
App.—Austin Apr. 6, 2021, pet. denied). The plaintiff’s petition is “the best and all
sufficient evidence of the nature of the action.” Hersh v. Tatum, 526 S.W.3d 462,
467 (Tex. 2017) (quoting Stockyards Nat’l Bank v. Maples, 95 S.W.2d 1300, 1302
(Tex. 1936)).4
4
The Taxing Units assert that Kinder Morgan did not meet its burden because it failed to present
any evidence at the hearing on the motion to dismiss to establish (1) that the TCPA applied to the Taxing
Units’ claims or (2) that, by filing a challenge to the appraisal records, the Taxing Units intended or
threatened to silence or intimidate Kinder Morgan’s exercise of a statutorily-protected right. However,
Kinder Morgan was entitled to rely on the Taxing Units’ pleadings to establish that the TCPA applied to
the Taxing Units’ claims. See Adams, 547 S.W.3d at 897 (holding that, if “a holistic review of the
pleadings” demonstrates that the legal action is covered by the TCPA, the movant “need show no more”
(quoting Hersh, 526 S.W.3d at 467)). Further, there is no statutory requirement that Kinder Morgan prove
that the Taxing Units filed the lawsuit with the intent to silence or intimidate Kinder Morgan. See CIV.
PRAC. & REM. § 27.003(a), .005(b).
11
As set out above, in both their second amended petition, which was the
operative pleading when Kinder Morgan filed the motion to dismiss, and third
amended petition, which was the live pleading at the time of the hearing on the
motion to dismiss, the Taxing Units alleged that Kinder Morgan purposefully and
intentionally provided the Appraisal District with false and inaccurate information
related to factors that affected the appraised value of Kinder Morgan’s mineral
interests in Scurry County. Therefore, as pleaded, the Taxing Units’ claims
implicate the making and submitting of a statement to the Appraisal District by
Kinder Morgan.
We, therefore, turn to whether Kinder Morgan’s communications to the
Appraisal District constituted the exercise of the right to petition because those
communications were made in connection with an issue under consideration or
review by a governmental body. See CIV. PRAC. & REM. § 27.001(4)(B). An issue
means “a vital or unsettled matter.” Issue, https://www.merriam-webster.com
/dictionary/issue?src=search-dict-box (last visited on January 10, 2022). Here, the
appraised value of Kinder Morgan’s mineral interests in Scurry County was an
unsettled matter when Kinder Morgan communicated with the Appraisal District in
any given tax year.
The phrase “in connection with” is one of “intentional breadth,” Titan
Transp., LP v. Combs, 433 S.W.3d 625, 637 (Tex. App.—Austin 2014, pet. denied),
that generally does not imply any material or significant connection, Tarrant Cty. v.
Bonner, 574 S.W.3d 893, 898 (Tex. 2019). Under the TCPA, to be “in connection
with” requires no more than a tangential, tenuous, or remote relationship between
the connected items. ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 900–
01 (Tex. 2017) (per curiam) (interpreting term “in connection with” in
Section 27.001(3) of the TCPA). Here, Kinder Morgan’s communications with the
12
Appraisal District had more than a “tangential, tenuous, or remote relationship” with
the appraised value of Kinder Morgan’s mineral interests.
The final question is whether the Appraisal District is a “governmental body.”
CIV. PRAC. & REM § 27.001(4)(B). The TCPA does not define the term
“governmental body.” However, “governmental” means “[o]f, relating to, or
involving a government,” Governmental, BLACK’S LAW DICTIONARY (10th ed.
2014), and the most applicable common definition of the term “body” is “[a]n
aggregate of individuals or groups” or “a deliberative assembly,” Body, BLACK’S
LAW DICTIONARY (10th ed. 2014). The Appraisal District is a political subdivision
of the State. TAX § 6.01(c). It is governed by a board of directors, which are selected
by the Taxing Units, id. § 6.03(a), and has the responsibility to determine the value
of property in Scurry County for purposes of ad valorem taxes, id. § 6.01(b).
Therefore, as an aggregate of individuals or a deliberative assembly related to or
involving the government, the Appraisal District is a “governmental body.” See
Enter. Crude GP LLC v. Sealy Partners, LLC, 614 S.W.3d 283, 295 (Tex. App.—
Houston [14th Dist.] 2020, no pet.) (holding that the City of Sealy was “a
‘governmental body’ and a political subdivision of this state”).
The Taxing Units argue that the TCPA is intended to protect constitutional
rights; that Kinder Morgan had a constitutional duty to pay taxes without fraud and
did not have a constitutional right to engage in criminal behavior or to commit civil
wrongs; that the TCPA’s broad definition of the exercise of the right to petition is
necessarily restricted by the statute’s purpose to protect constitutional rights; and
that “[a]ny application of the TCPA to taxpayer fraud for property tax evasion would
be contrary to the purpose of the TCPA, the constitutional requirement that equal
and uniform taxes be paid, and the comprehensive tax scheme established by the
Legislature.” However, in determining whether the TCPA applies to a legal action,
we are required to apply the statutory definitions, which are not co-extensive with
13
rights protected by the First Amendment to the United States Constitution. Creative
Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 133–34 (Tex. 2019);
Youngkin, 546 S.W.3d at 680–81 (“It does not follow from the fact that the TCPA
professes to safeguard the exercise of certain First Amendment rights that it should
only apply to constitutionally guaranteed activities.”); Beving v. Beadles, 563
S.W.3d 399, 405 (Tex. App.—Fort Worth 2018, pet. denied) (“[D]espite the TCPA’s
express purpose to protect constitutional rights, the TCPA’s definition of ‘the right
to petition’ is far broader.”). Based on the statutory definitions, Kinder Morgan
established that it exercised its right to petition because its communications to the
Appraisal District, a governmental body, had more than a tangential, tenuous, or
remote relationship with an issue, the value of Kinder Morgan’s mineral interests in
Scurry County, that was under consideration by the Appraisal District for purposes
of imposing ad valorem taxes. See CIV. PRAC. & REM. § 27.001(4)(B); Enter. Crude,
614 S.W.3d at 294 (holding that applications for land disturbance and building
permits to the city was the exercise of the right to petition under Section
27.001(4)(B) of the TCPA); CVK Enters., L.L.C. v. Pullen, No. 13-20-00047-CV,
2020 WL 6602153, at *5 (Tex. App.—Corpus Christi–Edinburg Nov. 12, 2020, no
pet.) (mem. op.) (holding that a rezoning application was “indisputably” the exercise
of the right to petition under Section 27.001(4)(B) of the TCPA). 5
The TCPA applies to the Taxing Units’ claims if those claims are based on,
related to, or in response to Kinder Morgan’s exercise of the right to petition. CIV.
PRAC. & REM. § 27.003(a), .005(b). Kinder Morgan, as the TCPA movant, was
required to establish a nexus between its exercise of the right to petition and the
Taxing Units’ claims. See Davis v. Gulf Coast Auth., No. 11-19-00309-CV, 2020
5
Because we hold that Kinder Morgan’s communications with the Appraisal District constituted
the exercise of Kinder Morgan’s right to petition, we need not consider whether those communications also
constituted the exercise of the right of free speech. See TEX. R. APP. P. 47.1.
14
WL 5491201, at *8 (Tex. App.—Eastland Sept. 11, 2020, no pet.) (mem. op.). To
meet that burden, Kinder Morgan had to demonstrate that the Taxing Units’ claims
were “factually predicated on the alleged conduct that falls within the scope of [the]
TCPA’s definition of ‘exercise of the right of free speech,’ petition or association.”
Id. (quoting Grant v. Pivot Tech. Sols., Ltd. 556 S.W.3d 865, 879 (Tex. App. —
Austin 2018, pet. denied)). The Taxing Units’ pleadings, which were “the best and
all sufficient evidence of the nature of the action,” Hersh, 526 S.W.3d at 467, clearly
established that the Taxing Units’ claims were based on or related to Kinder
Morgan’s exercise of its right to petition through its communications to the
Appraisal District.
The Taxing Units, however, argue that the TCPA does not apply (1) to any
claims based on or related to an alleged affirmative misrepresentation by Kinder
Morgan because Kinder Morgan’s alleged fraud rendered the entire appraisal
process, “including any right to action under the TCPA based on false
misrepresentation,” void ab initio or (2) to any claims based on Kinder Morgan’s
nondisclosure of information or on Kinder Morgan’s “unlawful conduct” because
those claims were not based on or related to Kinder Morgan’s communications.
The Taxing Units’ position that the TCPA does not apply to any claims based
on or related to Kinder Morgan’s affirmative communications to the Appraisal
District assumes that suits that are subject to the TCPA are automatically dismissed.
However, establishing that the statute applies is just the first step of the procedure
and does not involve consideration of whether the movant’s communications were
false or fraudulent. See CIV. PRAC. & REM. § 27.005; Scout Energy Mgmt., LLC v.
Indian Springs Cattle Co., LLC, No. 07-21-00031-CV, 2021 WL 5150995, at *3
(Tex. App.—Amarillo Nov. 5, 2021, no pet. h.) (mem. op.) (holding that the claim
that the defendant made allegedly false statements to the Moore County
Commissioners Court to induce a favorable outcome was based on or in response to
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the defendant’s exercise of the right to petition); Enter. Crude, 614 S.W.3d at 296
(holding that “alleged misstatements and promises” to a governmental body
qualified as an exercise of the right to petition under the TCPA). If the TCPA applies
to a claim, the nonmovant can avoid dismissal by establishing by clear and specific
evidence a prima facie case of each essential element of the claim. CIV. PRAC. &
REM. § 27.005(c). The question of whether any of Kinder Morgan’s
communications to the Appraisal District were fraudulent pertains to the second step
of the TCPA analysis. See Garton v. Shiloh Vill. Partners, LLC, No. 12-16-00286-
CV, 2017 WL 6884451, at *3 (Tex. App.—Tyler Aug. 23, 2017, no pet.) (holding
that whether a defendants’ communications were true or false “pertains to the second
part of the [TCPA] analysis, which requires [the plaintiff] to establish by clear and
specific evidence a prima facie case for each essential element” of its claims).
The Taxing Units also contend that the TCPA does not apply to any claim
based on Kinder Morgan’s unlawful conduct or fraud by nondisclosure, rather than
on Kinder Morgan’s communications. “[W]hen a claim does not allege a
communication, and is instead based on a defendant’s conduct, the TCPA is not
implicated.” Davis, 2020 WL 5491201, at *8 (quoting Pacheco v. Rodriguez, 600
S.W.3d 401, 410 (Tex. App.—El Paso 2020, no pet.)). Similarly, claims based on
the alleged failure to disclose or failure to communicate are not subject to the TCPA.
Clayton Mountain, LLC v. Ruff, No. 11-20-00034-CV, 2021 WL 3414754, at *6
(Tex. App.—Eastland Aug. 5, 2021, no pet.) (mem. op.); White Nile Software, Inc. v.
Carrington, Coleman, Sloman & Blumenthal, LLP, No. 05-19-00780-CV, 2020 WL
5104966, at *5 (Tex. App.—Dallas Aug. 31, 2020, pet. denied) (mem. op.).
However, this is not a case in which there was a complete absence of an alleged
communication by Kinder Morgan. Rather, in both their second and third amended
petitions, the Taxing Units alleged that Kinder Morgan made false, inaccurate, or
incomplete representations to the Appraisal District on factors that were relevant to
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the determination of the appraised value of Kinder Morgan’s mineral interests and
that the Appraisal District relied on those representations.
Any claim by the Taxing Units is “related to” Kinder Morgan’s exercise of
the right to petition if there is “some sort of connection, reference, or relationship
between” the claim and the exercise of the protected right. Cavin v. Abbott, 545
S.W.3d 47, 69 & n.85 (Tex. App.—Austin 2017, no pet.); see also Reeves v. Harbor
Am. Cent., Inc., 631 S.W.3d 299 (Tex. App.—Houston [14th Dist.] 2020, pet.
denied) (holding that a claim was at least “related to” a protected communication
when the claim was “closely and necessarily” intertwined with allegations that
constituted the exercise of a TCPA-protected right). Based on the Taxing Units’
pleadings, any claim that is purportedly based on Kinder Morgan’s failure to disclose
any information in its communications to the Appraisal District or on Kinder
Morgan’s “unlawful conduct” pertaining to the determination of the appraised value
of Kinder Morgan’s property has a connection to, or relationship with, Kinder
Morgan’s communications to the Appraisal District and the information that was
included in, or omitted from, those statements. See ML Dev, LP v. Ross Dress For
Less, Inc., No. 01-20-00773-CV, 2021 WL 2096656, at *2 (Tex. App.—Houston
[1st Dist.] May 25, 2021, no pet. h.) (holding that “relates to” was the most expansive
of the three categories of connections and brought tangential communications within
the TCPA’s reach); Cavin, 545 S.W.3d at 69 & n.85; see also CIV. PRAC. & REM.
§ 27.005(b) (requiring the trial court to dismiss a claim that relates to the exercise of
a right protected by the statute).
Because the Taxing Units’ claims, whether based on alleged affirmative
misrepresentations by Kinder Morgan to the Appraisal District, the alleged failure
of Kinder Morgan to disclose information to the Appraisal District, or Kinder
Morgan’s alleged “unlawful conduct” in committing taxpayer fraud, are connected
to or have a relationship with Kinder Morgan’s exercise of its right to petition
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through its communications to the Appraisal District, Kinder Morgan met its burden
to establish that the Taxing Units’ claims fall within the scope of the TCPA. See
Enter. Crude, 614 S.W.3d at 297 (holding that all claims that were related to the
protected communications fell within the scope of the TCPA); Porter-Garcia v.
Travis Law Firm, P.C., 564 S.W.3d 75, 85 (Tex. App.—Houston [1st Dist.] 2018,
pet. denied) (“The TCPA’s ‘is based on, relates to, or is in response to’ language
captures, at a minimum, a ‘legal action’ that is factually predicated upon or related
to alleged conduct that would fall within the TCPA’s definition of exercise of [a
protected right].”); see also CIV. PRAC. & REM. §§ 27.003(a), .005(b). Therefore,
the trial court erred when it denied the motion to dismiss on the basis that Kinder
Morgan failed to establish that the TCPA applies to the Taxing Units’ claims. We
sustain Kinder Morgan’s issue on appeal.
This Court’s Ruling
We reverse the trial court’s order in which it denied Kinder Morgan’s TCPA
motion to dismiss and remand this case to the trial court for further proceedings.
JOHN M. BAILEY
CHIEF JUSTICE
January 13, 2022
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.
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