John N. Burgger v. Jerry Swinford and Jason Swinford ( 2016 )

Appeal Dismissed and Memorandum Opinion filed August 23, 2016.
In The
Fourteenth Court of Appeals
NO. 14-16-00069-CV
JOHN N. BRUGGER, Appellant
V.
JERRY SWINFORD AND JASON SWINFORD, Appellees
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 2015-58884
MEMORANDUM OPINION
Appellees Jerry Swinford and Jason Swinford sued appellant John Brugger
for defamation, libel and business disparagement. In this interlocutory appeal,
Brugger challenges the trial court’s order denying his motion to dismiss under
section 27.003 of the Texas Civil Practice and Remedies Code, a provision of the
Texas Citizens’ Participation Act (TCPA). Because Brugger has not proven by a
preponderance of the evidence that the Swinfords’ legal action is based on, relates
to, or is in response to Brugger’s exercise of the right of free speech, we dismiss
the appeal.
BACKGROUND
This case arose from a dispute concerning Coil Tubing Technology, Inc.
(“CTT”), a publicly traded company that develops and markets specialty tools and
solutions for the exploration and production of hydrocarbons. According to the
Swinfords’ petition, appellee Jerry Swinford was the owner of several patents that
interested CTT. Jerry and Jason Swinford joined CTT and became officers of the
company. CTT also agreed to purchase Jerry’s patents in a separate transaction,
but a significant portion of the agreed payment was not made.
The Swinfords allege that Brugger, an attorney connected to CTT, sent a
letter to Jerry Swinford indicating that he had discussed the “CTBG Intellectual
Property Purchase” with a number of CTT shareholders, who authorized him to
bring self-dealing claims against the Swinfords. Brugger also indicated he warned
an individual named “Mr. Connaughton” not to settle with the Swinfords and
discussed the matter with CTT’s largest shareholder, “Mr. Pohlmann.” The
Swinfords allege that Brugger admitted he told shareholders of CTT that the
Swinfords “[were] self-dealing, guilty of crimes, and that they should have
criminal charges brought against them,” and “compared the Swinfords to Jim Dial,
a Houston businessman who plead guilty to conspiracy to commit wire fraud
relating to artificial inflation of stock prices.”
In October 2015, the Swinfords filed suit against CTT alleging breach of
contract, and against Brugger alleging defamation, business disparagement, and
libel. Brugger answered with a general denial and filed a motion to dismiss under
2
the TCPA, our State’s “anti-SLAPP” statute.1 Brugger’s motion to dismiss argued
that the TCPA applies because the Swinfords’ claims against him, on their face,
were based on, related to, and were made in response to his exercise of the right of
free speech. The Swinfords responded that Brugger had not met his burden to
establish the suit was based on, related to, or in response to his exercise of free
speech because he had offered no evidence and relied on a conclusory statement
that the claims arose from his exercise of the right to free speech.
The trial court denied Brugger’s motion to dismiss without specifying the
grounds on which it based its ruling. This interlocutory appeal followed. See Tex.
Civ. Prac. & Rem. Code Ann. § 51.014(a)(12) (West Supp. 2015).
ANALYSIS
In his sole issue, Brugger contends the trial court erred by denying his
motion to dismiss the Swinfords’ claims because (1) the claims against Brugger
were based on, related to, or in response to Brugger’s exercise of the right of free
speech as defined in the TCPA, and (2) the Swinfords failed to present clear and
specific evidence of each element of their causes of action. The Swinfords contend
Brugger failed to meet his burden of showing by a preponderance of the evidence
that their claim was based on, related to, or in response to Brugger’s exercise of the
right to free speech. We agree.
I. Standard of review
We review the trial court’s denial of Brugger’s motion to dismiss de novo,
making “an independent determination and appl[ying] the same standard used by
the trial court in the first instance.” Rehak Creative Servs. v. Witt, 404 S.W.3d
716, 726 (Tex. App.—Houston [14th Dist.] 2013, pet. denied), disapproved on
1
“SLAPP” is an acronym for “Strategic Lawsuits Against Public Participation.” Jardin
v. Marklund, 431 S.W.3d 765, 769 (Tex. App.— Houston [14th Dist.] 2014, no pet.).
3
other grounds by In re Lipsky, 460 S.W.3d 579 (Tex. 2015). Application of this
standard is a “two-step process.” Lipsky, 460 S.W.3d at 586. First, we must
determine whether the defendant-movant has shown, by a preponderance of the
evidence, the plaintiff’s legal action is “based on, relates to, or is in response to the
exercise of: (1) the right of free speech; (2) the right to petition, or (3) the right of
association.” Id. (citing Tex. Civ Prac. & Rem. Code Ann. § 27.005(b) (West
2015)). “If the movant is able to demonstrate that the plaintiff’s claim implicates
one of these rights, the second step shifts the burden to the plaintiff to ‘establish[]
by clear and specific evidence a prima facie case for each essential element of the
claim in question.’” Id. at 587 (citing Tex. Civ Prac. & Rem. Code Ann.
§ 27.005(c)). We consider the parties’ pleadings and affidavits when reviewing a
ruling on a TCPA motion to dismiss. Tex. Civ Prac. & Rem. Code Ann.
§ 27.006(a). We are to view the pleadings and evidence in the light most favorable
to the non-movant. Cheniere Energy, Inc. v. Lotfi, 449 S.W.3d 210, 214–15 (Tex.
App.—Houston [1st. Dist.] 2014, no pet.).
II. Brugger has not shown that the Swinfords’ action is based on, relates to,
or is in response to his exercise of the right of free speech.
Brugger contends the TCPA applies because the facts alleged in Swinfords’
petition, on its face, establish that their claim is based on, related to, or in response
to Brugger’s exercise of the right of free speech.
The purpose of the TCPA “is 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 Ann. § 27.002. To that end,
the TCPA provides a procedure for the expedited dismissal of retaliatory lawsuits
that seek to intimidate or silence citizens on matters of public concern. In re
4
Lipsky, 460 S.W.3d 579, 586 (Tex. 2015). The TCPA “shall be construed liberally
to effectuate its purpose and intent fully.” Tex. Civ. Prac. & Rem. Code Ann.
§ 27.011(b). The TCPA defines the “exercise of the right of free speech” as “a
communication made in connection with a matter of public concern.” Id.
§ 27.001(3). A “matter of public concern” includes 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).
In his motion to dismiss, Brugger focused solely on the statements alleged in
paragraph twelve of the Swinfords’ original petition, arguing that they implicate
Brugger’s exercise of his right of free speech under the TCPA because the
statements are related to economic well-being. We therefore look only to the facts
alleged in paragraph twelve of the Swinfords’ petition to determine whether
Brugger’s free speech rights were implicated. See Tex. R. App. P. 33.1; see also
Lahijani v. Melifera Partners, LLC, No. 01-14-01025-CV, 2015 WL 6692197, at
*3 (Tex. App.—Houston [1st. Dist.] November 3, 2015) (no pet.) (mem. op.)
(concluding where defendant’s motion to dismiss under TCPA argued only that
defendant’s statements were related to a “service in the marketplace,” only that
theory was preserved for review).
Paragraph twelve of the Swinfords’ petition alleged that Brugger sent a
communication to Jerry Swinford, in which Brugger said he discussed the “CTBG
Intellectual Property Purchase” with a number of shareholders, who authorized him
to bring self-dealing claims against the Swinfords. In addition, Brugger said he
had “informed Mr. Pohlmann of my disgust with your proposal to settle with Mr.
Connaughton” and had warned Mr. Connaughton that he risked being sued for
aiding and abetting the Swinfords.
5
The original petition does not elsewhere mention a “CTBG Intellectual
Property Purchase,” the alleged subject of Brugger’s statements that the Swinfords
were self-dealing. Although the Swinfords alleged that Jerry sold patents to CTT,
there is no indication that this sale was the CTBG Intellectual Property Purchase.
The pleading further lacks any details that would connect the CTBG Intellectual
Property Purchase or the possible settlement with Connaughton to a matter of
public concern related to economic well-being. Brugger points to an allegation that
CTT’s purchase of patents from Jerry Swinford was publicly disclosed in a Form
10 filing. As we have explained, however, the petition does not indicate that this
sale was the subject of Brugger’s accusation of self-dealing. Because we are to
view the pleadings and evidence in the light most favorable to the non-movant, we
cannot draw inferences against the Swinfords to hold that the TCPA applies. See
Cheniere Energy, 449 S.W.3d at 214–15 (concluding that the TCPA could not be
applied where, based on the pleadings alone, it was “simply unknown” whether the
alleged communication satisfied the statutory definition of an exercise of the right
of association).
At most, the facts alleged in paragraph twelve establish that Brugger’s
communication is connected to a business dispute, which is insufficient to elevate
it to a matter of public concern under the TCPA. See Lahijani, 2015 WL 6692197,
at *4 (concluding statements regarding a business dispute over a real estate
transaction were not a matter of public concern); see also ExxonMobil Pipeline
Company v. Coleman, 464 S.W.3d 841, 846 (Tex. App.—Dallas 2015, pet. filed)
(concluding that communications regarding an employee’s failure to perform his
duties were an internal personnel matter and were not a matter of public concern,
despite a tangential relationship to economic well-being). We conclude that the
facts alleged in paragraph twelve of the Swinfords’ original petition do not
6
establish by a preponderance of the evidence that the alleged communications were
made in connection with a matter of public concern. Accordingly, Brugger has not
demonstrated that the Swinfords’ suit was based on his exercise of the right to free
speech. We overrule Brugger’s sole issue.
CONCLUSION
Because Brugger failed to meet his initial burden under section 27.005(b),
we conclude that Brugger has not properly invoked the TCPA. Under binding
precedent of this Court, therefore, we lack jurisdiction over Brugger’s interlocutory
appeal. See Jardin, 431 S.W.3d at 769; cf. id. at 775–76 (Frost, C.J., dissenting).
We dismiss the appeal without reaching the question whether the Swinfords
established a prima facie case for their claims. See id. at 774.
/s/ J. Brett Busby
Justice
Panel consists of Justices Busby, Donovan, and Wise.
7