Robert A. Hay v. eCorp International, LLC eCorp Energy Marketing LLC And SENSA-LREC LLC, as Assignee of the Rights of Sensa Holdings, Inc. ( 2022 )

Affirmed in Part and Reversed and Rendered in Part and Memorandum
Opinion filed August 23, 2022.
In The
Fourteenth Court of Appeals
NO. 14-20-00771-CV
ROBERT A. HAY, Appellant
V.
ECORP INTERNATIONAL, LLC; ECORP ENERGY MARKETING LLC;
AND SENSA-LREC LLC, AS ASSIGNEE OF THE RIGHTS OF SENSA
HOLDINGS, INC., Appellees
On Appeal from the 334th District Court
Harris County, Texas
Trial Court Cause No. 2019-23189
MEMORANDUM OPINION
Appellant Robert A. Hay brings this interlocutory appeal challenging the
trial court’s denial of his motion to dismiss under the Texas Citizens Participation
Act (TCPA) the claim of tortious interference asserted by appellees eCORP
International, LLC; eCORP Energy Marketing LLC (eCEM); and SENSA-LREC,
LLC, as assignee of the rights of SENSA Holdings, Inc. (SENSA), for Hay’s
anonymous mailing of information to a third party to interfere with or prevent
SENSA’s purchase of a natural-gas storage facility. See Tex. Civ. Prac. & Rem.
Code Ann. § 51.014(a)(12) (interlocutory appeal of denial of TCPA motion to
dismiss).
Hay argues the trial court erred by (1) denying his motion to dismiss and
(2) finding that his motion to dismiss was frivolous or filed solely for purposes of
delay. We conclude that in the first step of the TCPA analysis Hay demonstrated
that appellees’ claim for tortious interference with prospective business relations is
based on or in response to his exercise of free speech. In the second step, SENSA
met its burden of establishing the prima facie elements of its cause of action
against Hay. However, eCORP International and eCEM did not meet their burden
on their claims for tortious interference with prospective business relations against
Hay. In the third step of the TCPA analysis, Hay did not establish his defense of
truth or substantial truth as a matter of law. Therefore, we affirm the trial court’s
denial of Hay’s motion to dismiss as to SENSA but reverse with respect to eCORP
International and eCEM. We also hold the trial court erred in determining that
Hay’s motion to dismiss was frivolous or brought solely for purposes of delay.
I. BACKGROUND
Among other ventures, eCORP International is involved in the development,
operation, sale, and acquisition of natural-gas storage facilities across the United
States. In 2014, eCORP International, through affiliated entities, began
strategically acquiring natural-gas storage assets which it believed to be
undervalued. eCORP International also found a financial partner to raise capital for
these acquisitions and created SENSA Holdings, Inc.1 for the purpose of managing
1
SENSA Holdings, Inc. is a platform company created for the purpose of acquiring and
managing a portfolio of natural-gas storge assets. SENSA Holdings is owned by Sciens eCORP
2
the storage assets. eCORP International also created and formed eCEM to act as
the exclusive marketing affiliate for the storage assets and platform, focusing on
optimizing the capacity of storage facilities through trading and hedging strategies.
Hay had been involved with eCORP affiliated companies2 for several years
and was an officer at eCEM when he left the company in 2017. After he left
eCEM, Hay’s relationship with eCORP International’s chairman of the board and
CEO, John Thrash, deteriorated. The eCORP affiliated companies allege that Hay
left eCEM to pursue a competing venture using proprietary models and
information developed by eCORP affiliated companies. They also allege that
Hay’s departure and his alleged conspiracy with competing ventures resulted in the
eCORP affiliated companies’ inability to satisfy certain contractual requirements
and acquire business investment, resulting in financial losses. In April 2019,
appellees filed suit against Hay (as well as several other individuals and entities not
relevant to this appeal)3 alleging he conspired with the company that hired him on
his departure from eCEM to usurp and misappropriate business plans and
proprietary trading models developed by the eCORP affiliated companies.
The eCORP affiliated companies identified the Gill Ranch facility4 as an
acquisition target in 2017. About a year later, SENSA along with other eCORP
affiliated companies,5 filed a joint application with the owners of the Gill Ranch
Storage, in which eCORP Storage, LLC owns a direct 50% interest. Although the record does
not provide specifics, eCORP Storage is represented, in the joint application to the California
Public Utilities Commission, to be part of the “eCORP International, LLC family of companies.”
2
We generally refer to the “eCORP International, LLC family of companies” in this
opinion as the eCORP affiliated companies.
3
All of these additional claims remain pending in the trial court and are not a subject of
this appeal.
4
The Gill Ranch facility is located in Fresno, California. Pacific Gas and Electric
Company (PG&E), a California utility, owns a 25% stake in the facility.
5
The other eCORP entities involved in the joint application were Sciens eCORP Natural
3
facility, then a wholly-owned subsidiary of NW Natural Gas Storage, LLC, for
transfer of control of Gill Ranch Storage, LLC. According to the joint application,
Gill Ranch Storage, LLC owns a 75% undivided interest in the Gill Ranch facility.
In the agreement between SENSA and NW Natural Gas Storage, LLC, SENSA
agreed to purchase the outstanding limited liability interests in Gill Ranch Storage,
LLC. The transfer had to be approved by the California Public Utilities
Commission (CPUC) under California law.
Though the transaction was initially supported by all stakeholders, the CEO
of NW Natural Gas Storage, LLC received the following anonymous letter in
February 2019:
To Whom It May Concern:
RE: Gill Ranch
John Thrash lies profusely in his statement to the California Public
Utility Commission.
The last utility that got tangled up with John Thrash wound up being
pilfered for more than $25MM thru fraudulent transfers (see attached),
the Stuart storage field did not perform as promised, and involved
legal action that spanned a period of 6 years.
The Stagecoach project likewise ended up in substantial litigation.
eCORP did not build the Katy Hub, rather that honor goes to Western
Gas Resources.
There are five separate lawsuits currently filed against eCORP and
John Thrash in Houston. All of the information, and more, can be
found in the public record.
The last thing PG&E needs is a partner like eCORP.
The documents attached to the letter included pleadings from various federal
lawsuits which alleged misrepresentations and financial misconduct on the part of
Gas Storage Holdings, LLC; eCORP Storage, LLC; and SCIENS Natural Gas Holdings, LLC.
None of these entities were parties in the trial court.
4
Thrash. The package appeared to be mailed from eCORP’s Houston address. NW
Natural Gas Storage, LLC forwarded the anonymous letter to eCORP affiliated
companies, CPUC and CPUC’s Office of the Safety Advocate (OSA), which
withdrew from a settlement agreement approving the transfer in order to
investigate the materials in the anonymous letter. After the eCORP affiliated
companies filed suit against Hay, they learned he was the author of the anonymous
letter.
CPUC ultimately approved the transfer, and the acquisition was completed
after a delay. After a hearing, SENSA agreed to provide an additional
commercial-crime insurance policy protecting CPUC and PG&E against financial
malfeasance on the part of Thrash or any other officer of the eCORP affiliated
companies. Appellees maintain the delay resulted in substantial additional costs,
attorneys’ fees, and other consequential damages.
In August 2020, appellees amended their petition to add a claim against Hay
for tortious interference with prospective business relations arising from his
dissemination of the anonymous package. Hay filed a motion to dismiss appellees’
claims of tortious interference with prospective business relations pursuant to the
TCPA, which was denied by the trial court. In addition, the trial court ordered
sanctions imposed against Hay, stating:
The Court further finds that the Motion is frivolous and/or was solely
intended to delay. Accordingly, pursuant to Tex. Civ. Prac. & Rem.
Code § 27.009(b), Defendant Robert A. Hay is hereby ORDERED to
pay Plaintiffs’ reasonable costs and attorneys’ fees incurred in
opposing the Motion.
After filing an interlocutory appeal, Hay asked this court to abate the appeal so that
the trial court could make findings of fact in accordance with the TCPA. See Tex.
Civ. Prac. & Rem. Code Ann. § 27.007(a) (“If the court awards sanctions under
5
Section 27.009(b), the court shall issue findings regarding whether the legal action
was brought to deter or prevent the moving party from exercising constitutional
rights and is brought for an improper purpose, including to harass or to cause
unnecessary delay or to increase the cost of litigation.”) (emphasis added).
We abated the appeal, and in December 2020 the trial court made the
following finding:
Plaintiff ECorp International did not bring the legal action to deter or
prevent the moving party Defendant Robert Hay from exercising
constitutional rights or for any improper purpose, including to harass
or cause unnecessary delay or to increase the cost of litigation.
II. ANALYSIS
In issue 1, Hay argues that the trial court erred in denying his motion to
dismiss because (1) Hay’s anonymous letter to Gill Ranch implicated his right to
free speech and right to petition, (2) appellees failed to demonstrate their claim of
tortious interference falls within the TCPA’s commercial-speech exemption, and
(3) appellees did not present clear and specific evidence supporting every element
of their claim of tortious interference.6
A. TCPA framework
The purpose of the TCPA is to identify and summarily dispose of lawsuits
designed only to chill First Amendment rights, not to dismiss meritorious lawsuits.
See Tex. Civ. Prac. & Rem. Code Ann. § 27.002. The TCPA contemplates an
expedited dismissal procedure when a “legal action” is “based on or is in response
to a party’s exercise of the right of free speech, right to petition, or right of
6
Instead of responding to Hay’s two appellate issues, appellees raise six separate issues
that generally overlap with the issues raised by Hay. See Tex. R. App. P. 38.2 (“When
practicable, the appellee’s brief should respond to the appellant’s issues or point in the order the
appellant present those issues or points.”). To the extent appellees’ issues address points of error
raised by Hay, we will address those issues.
6
association.” Tex. Civ. Prac. & Rem. Code Ann. § 27.003(a). The right of free
speech and right to petition are at issue in this appeal. To accomplish this
objective, the TCPA provides a multi-step process for the dismissal of a “legal
action” to which it applies. Montelongo v. Abrea, 622 S.W.3d 290, 295–96 (Tex.
2021). In the first step, the party filing a motion to dismiss under the TCPA bears
the burden to demonstrate that the “legal action” is “based on or is in response to,”
as relevant to this appeal, the party’s exercise of the right of free speech and right
to petition. Tex. Civ. Prac. & Rem. Code Ann. §§ 27.003(a), .005(b). But under the
second step, the court may not dismiss the action if the non-moving party
“establishes by clear and specific evidence a prima facie case for each essential
element of the claim.” Tex. Civ. Prac. & Rem. Code Ann. § 27.005(c). Under the
third step, the movant can still win dismissal if he establishes “an affirmative
defense or other grounds on which the moving party is entitled to judgment as a
matter of law.” Id. § 27.005(d).
In construing the TCPA and determining its applicability, we review
statutory construction issues de novo. See Lippincott v. Whisenhunt, 462 S.W.3d
507, 509 (Tex. 2015) (per curiam). Similarly, whether the parties have met their
respective burdens is a question of law that we review de novo. See Dallas
Morning News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019). Under the de novo
standard, we “make an independent determination and apply the same standard
used by the trial court in the first instance.” Fawcett v. Grosu, 498 S.W.3d 650,
656 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (internal quotation marks
omitted).
B. The TCPA analysis
Hay argues that the trial court erred in denying his motion to dismiss
because appellees’ tortious interference claim is based on or in response to his
7
exercise of the right to petition and right of free speech.
1. First step—the right of free speech
“‘Exercise of the right of free speech’ as defined in the TCPA is a
communication made in connection with a matter of public concern.” Tex. Civ.
Prac. & Rem. Code Ann. § 27.001(3). Therefore, as an initial matter, there must be
a “communication.” Id. (right of free speech is defined in TCPA to include
communication). “Communication” as defined in the TCPA includes “making or
submitting of a statement or document in any form or medium, including oral,
visual, written, audiovisual, or electronic.” Tex. Civ. Prac. & Rem. Code Ann.
§ 27.001(1). Moreover, as the supreme court has recognized, private
communications are covered by the TCPA, provided that they were made in
connection with a matter of “public concern.” See ExxonMobil Pipeline Co. v.
Coleman, 512 S.W.3d 895, 901 (Tex. 2017).
The parties agree that Hay’s letter to Gill Ranch is considered a
communication. However, they disagree about whether it was made in connection
with a matter of public concern. The TCPA defines a 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.” Tex. Civ. Prac. & Rem.
Code Ann. § 27.001(7). Hay argues his anonymous letter clearly involved a matter
of public concern because (1) the acquisition of the Gill Ranch facility required
approval from the CPUC and (2) allegations of Thrash’s history revealed appellees
were “unreliable purchasers of a public utility.” In response, appellees argue the
anonymous package is not a matter of public concern because it was designed only
to “besmudge a competitor and derail a private business deal.” They further argue
8
that the letter itself belies Hay’s position because the letter was sent to the owner of
the Gill Ranch facility, not CPUC, nor did it seek the disclosure of information to
the CPUC.
Appellees argue that the 2019 TCPA amendments and recent opinions from
the supreme court reflect a concerted attempt to limit the broad applicability of the
TCPA and have introduced a heightened standard for “a matter of public concern.”
Appellees rely on Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, in which the
supreme court explained that not every communication related to one of the broad
categories set out in section 27.001(7) is always a matter of public concern. 591
S.W.3d 127, 137 (Tex. 2019) (interpreting prior version of TCPA). In examining
the context in which the Creative Oil & Gas communications were made, the court
noted they were “private business communications to third-party purchasers of a
single well’s production” and there was no evidence “that the dispute had any
relevance to the broader marketplace or otherwise could reasonably be
characterized as involving public concerns” but, rather, that “the alleged
communications were made to two private parties concerning modest production at
a single well.” Id. at 136. For that reason, the supreme court held that the
“communications, with a limited business audience concerning a private contract
dispute, do not relate to a matter of public concern under the TCPA.” Id.This court has previously applied the Creative Oil & Gas analysis in holding
that communications directed to an audience of existing customers or tenants
regarding a private business dispute are not a matter of public concern for purposes
of TCPA applicability. Bowman v. Fortitude Consulting Grp., Inc., No.
14-19-00686-CV, 2020 WL 3967807, at *4 (Tex. App.—Houston [14th Dist.] July
14, 2020, no pet.) (mem. op.); see also Navidea Biopharmaceuticals, Inc. v.
Capital Royalty Partners II, L.P., 14-18-00740-CV, 2020 WL 5087826, at *5
9
(Tex. App.—Houston [14th Dist.] Aug. 28, 2020, pet. denied) (mem. op.)
(publicly-traded company failed to show by preponderance of evidence that
amount owed pursuant to judgment was matter of public concern for purposes of
TCPA). Utilizing the current statutory language, the facts before us do not solely
describe a private business dispute.
The anonymous letter sent by Hay has a direct connection to a matter of
public concern. The joint application requesting CPUC approval to transfer control
of Gill Ranch Storage, LLC to SENSA states the “proposed transfer of control is in
the public interest.” In fact, California’s statute requires that a transfer of control of
such a utility must be approved by the CPUC. See Cal. Pub. Util. Code § 854(a).
Further, SENSA’s purchase of Gill Ranch Storage, LLC makes SENSA business
partners with a public utility. Hay’s anonymous letter addresses this fact by voicing
his opinion that eCORP affiliated companies would not be good partners for
PG&E, a public utility. The potential for the public utility to be exposed to
unexpected financial costs, safety issues, or material misrepresentations by a
business partner qualifies as a matter of political or other interest to the community
or a subject of concern to the public. The fact that Hay sent the letter to NW
Natural Gas Storage, LLC, instead of the public utility, is not determinative. See
Coleman, 512 S.W.3d at 901 (statements need not be public to address matter of
public concern). The communication, although sent to a private party, was
regarding a matter of public concern.
The handling of Hay’s letter also supports this conclusion. NW Natural Gas
Storage, LLC forwarded Hay’s letter to CPUC. After receiving the letter, OSA, an
office within CPUC, filed a notice of withdrawal of consent to the settlement
agreement. OSA expressed concern about whether the acquisition of Gill Ranch
Storage, LLC by SENSA would negatively affect the Gill Ranch facility’s ability
10
to safely operate and maintain their storage facilities and ensure the safety of its
workers and the public as required by California law. See Cal. Pub. Util.
Code § 451.
CPUC ultimately approved the transfer of ownership of the Gill Ranch
Storage, LLC to SENSA; however, because of the allegations in the anonymous
letter, SENSA provided expanded commercial crime insurance coverage for Gill
Ranch Storage, LLC to protect the public utility from financial malfeasance of any
officer of the eCORP affiliated companies and provided additional safety
assurances and programs related to the Gill Ranch facility. Without regard to the
merits of the accusations against Thrash, it is relevant that a public agency in
California found Hay’s letter to address a matter of public concern. We conclude
that Hay has demonstrated that appellees’ claim of tortious interference with
prospective business relations is based on or in response to his exercise of free
speech. Therefore, we need not address Hay’s argument that appellees’ claim of
tortious interference is based on or in response to his exercise of his right to
petition. See Tex. R. App. P. 47.1.
2. Commercial-speech exemption
The TCPA does not apply to “a legal action brought 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.” Tex. Civ. Prac. &
Rem. Code Ann. § 27.010(a)(2). Appellees argued in the trial court, and here, that
the TCPA’s commercial-speech exemption applies to its claim against Hay. They
argue that Hay was acting, not as an individual, but as an officer or executive of
competing ventures, and was therefore primarily engaged in the business of selling
11
his services related to natural-gas trading. They further assert that Hay was in a
position to profit from the anonymous letter because Hay might have “potentially
greater access to [Gill Ranch] and [NW Natural Gas Storage], or by the economic
blow this would potentially cause to Plaintiffs, leaving more space in the industry
for him and his competing entities.” Finally, appellees assert the prior owners of
Gill Ranch facility are the types of customers “that Hay has and/or currently
provides natural gas trading services to” and that Hay is in the business of
providing natural gas trading services. However, accepting appellees arguments
here would require us to impermissibly speculate beyond the record in front of us.
The supreme court clarified the proper construction of the
commercial-speech exemption in Castleman v. Internet Money Ltd., 546 S.W.3d
684 (Tex. 2018) (per curiam) (interpreting prior version of TCPA). The exemption
applies when:
(1) the defendant was primarily engaged in the business of selling or
leasing goods;
(2) the defendant made the statement or engaged in the conduct on
which the claim is based in the defendant’s capacity as a seller or
lessor of those goods or services;
(3) the statement or conduct at issue arose out of a commercial
transaction involving the kind of goods or services the defendant
provides; and
(4) the intended audience of the statement or conduct were actual or
potential customers of the defendant for the kind of goods or services
the defendant provides.
Id. at 688. Thus, the court concluded, “the commercial-speech exemption applies
only to certain communications related to a good, product, or service in the
marketplace—communications made not as a protected exercise of free speech by
an individual, but as commercial speech which does no more than propose a
commercial transaction.” Id. at 690 (internal quotations omitted).
12
Here, Hay sent an anonymous letter to a company that was already in a
contract with SENSA to transfer its ownership of Gill Ranch Storage, LLC (and
therefore its ownership and interest in the Gill Ranch facility) to SENSA. Though
Hay may be in the business of providing energy-trading services to customers, the
record does not support the conclusion that he sent the anonymous letter in his
capacity as a seller or lessor of energy-trading services. It is also relevant to our
consideration that while Hay provides energy-trading services, the contract he
intended to impact was not one for energy-trading services. It was, instead, a
contract to purchase a business entity which owned a 75% interest in a natural-gas
storage facility. Therefore, we conclude the commercial-speech exemption is
inapplicable to the appellees’ claim of tortious interference with prospective
business relations.
Because Hay met this initial burden under the TCPA, the burden now shifts
to appellees to provide clear-and-specific evidence of the prima facie case for each
essential element on their claims to the court. Tex. Civ. Prac. & Rem. Code Ann.
§ 27.005(c).
3. Second step—prima facie case
The TCPA does not define “clear and specific,” so we apply the ordinary
meaning of those terms: “clear” means “unambiguous,” “sure,” or “free from
doubt,” and “specific” means “explicit” or “relating to a particular named thing.”
O’Hern v. Mughrabi, 579 S.W.3d 594, 604 (Tex. App.—Houston [14th Dist.]
2019, no pet.); see also Code Construction Act, Tex. Gov’t Code Ann. §311.011
(“Words and phrases shall be read in context and construed according to the rules
of grammar and common usage.”). The supreme court has explained the
clear-and-specific evidence standard requires a plaintiff to “provide enough detail
to show the factual basis for its claim.” Bedford v. Spassoff, 520 S.W.3d 901, 904
13
(Tex. 2017) (per curiam) (internal quotation omitted). We only consider the
pleadings and evidence in favor of the plaintiff’s case when determining whether it
established the requisite prima facie proof. See Gensetix, Inc. v. Baylor Coll. of
Med., 616 S.W.3d 630, 644 (Tex. App.—Houston [14th Dist.] 2020, pet. dism’d)
(“We review both the pleadings and evidence attached to Gensetix’s motion to
dismiss to determine whether Gensetix has provided ‘enough detail to show the
factual basis for its claim.’”).
To prevail on a claim for tortious interference with prospective business
relations, the plaintiffs must establish that: (1) a reasonable probability existed that
the plaintiffs would have entered into a business relationship with a third party;
(2) the defendant either acted with a conscious desire to prevent the relationship
from occurring or knew the interference was certain or substantially certain to
occur as a result of the conduct; (3) the defendant’s conduct was independently
tortious or unlawful; (4) the interference proximately caused the plaintiffs injury;
and (5) the plaintiffs suffered actual damage or loss as a result. See Coinmach
Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013);
Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001) (holding
plaintiff must establish defendant’s conduct was independently tortious or
wrongful, meaning defendant’s conduct “would be actionable under a recognized
tort”). “Conduct that is merely ‘sharp’ or unfair is not actionable and cannot be the
basis for an action for tortious interference with prospective relations[.]” Sturges,
52 S.W.3d at 726.
a. eCEM and eCORP International
Hay argues that eCEM and eCORP International cannot meet their burden of
establishing clear-and-specific evidence of the prima facie case for each essential
element on their claims. We agree.
14
SENSA contracted to purchase Gill Ranch Storage, LLC (and ultimately
purchased), the owner and operator of the Gill Ranch facility. SENSA, along with
eCORP Storage, was a party to the joint application for transfer of control filed
with the CPUC. eCEM and eCORP International were not parties to the
acquisition.7 Based on the record, eCORP International and eCEM have not
demonstrated that a reasonable probability existed that they would have entered
into a business relationship with NW Natural Gas Storage, LLC for the purchase of
Gill Ranch Storage, LLC. Therefore, eCEM and eCORP International cannot
establish the prima facie elements for the claim of tortious inference with
prospective business relations, and the trial court erred in denying Hay’s motion
with respect to eCEM and eCORP International.
We sustain Hay’s issue one in part.
b. SENSA
As the facts reflect, SENSA is differently situated. Viewing the pleadings
and evidence in the light most favorable to SENSA, we conclude that they support
a rational inference that: (1) Hay intended for his anonymous letter to interfere
with SENSA’s prospective business relations, see In re Lipsky, 460 S.W.3d 579,
591 (Tex. 2015) (explaining that TCPA “does not impose an elevated evidentiary
standard or categorically reject circumstantial evidence”); (2) there was a
reasonable probability that Hay’s letter interfered with those relations by delaying
the contract, see Richardson-Eagle, Inc. v. William M. Mercer, Inc., 213 S.W.3d
7The joint application also identifies eCorp Storage, LLC as one of the buyer companies.
However, while eCORP Storage, LLC is identified as part of the “eCORP International, LLC
family of companies,” the relationship between eCORP Storage, LLC and eCORP International
was not established. eCORP International and eCEM argue in the briefing that they would have
benefited from the agreement between SENSA and NW Natural Gas Storage, LLC. However,
the fact they would have benefited from SENSA’s acquisition of Gill Ranch Storage, LLC after
SENSA’s acquisition does not establish any prima facie elements of their claim for tortious
interference with prospective business relations.
15
469, 474 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (explaining that
“causation requires that the plaintiff bring forth sufficient facts so that the
evidence, and logical inferences drawn from the evidence, support a reasonable
probability that the defendant’s acts or omissions were a substantial factor in
bringing about injury”); and (3) SENSA suffered actual damage or loss through
additional attorney’s fees and costs, see Coinmach Corp., 417 S.W.3d at 923.
However, the requirement that Hay’s conduct was independently tortious or
unlawful is disputed and requires further analysis.
In his motion to dismiss, Hay maintains his conduct in sending the letter was
not tortious or unlawful and that appellees cannot meet their burden. In response,
appellees assert three independent bases for determining Hay’s conduct was
independently tortious or unlawful: (1) Hay’s statement was false and defamatory8;
(2) Hay committed mail fraud by sending the letter with eCORP International’s
return address9; and (3) Hay committed common-law fraud by making fraudulent
statements.10 However, appellees are not required to prove an independent tort. See
8
In the trial court, appellees argued that Hay made false and defamatory statements in the
anonymous letter that are sufficient to constitute independently tortious conduct, specifically
Hay’s statement that Thrash lied profusely in his statement to CPUC. On appeal, appellees argue
that Hay’s statement constitutes business disparagement. A claim of business disparagement
requires—among other elements—that the defendant published false and disparaging
information about a plaintiff. Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170
(Tex. 2003).
9
Mail fraud is a federal crime. See 18 U.S.C. § 1341. The two basic elements of a
mail-fraud offense are (1) the scheme to defraud and (2) causing a mailing for the purpose of
executing the scheme. Pereira v. United States, 347 U.S. 1, 8 (1954). Hay argues that mail fraud
is not a cause of action that satisfies the requirement that defendant’s conduct was independently
tortious or unlawful under state law because it is a federal crime. We need not consider this
argument as SENSA succeeded in meeting the prima facie elements of its cause of action by
demonstrating that Hay’s conduct in making false and defamatory statements was independently
tortious. Tex. R. App. P. 47.1.
10
We similarly do not reach whether Hay’s conduct in sending the anonymous letter was
independently tortious as common-law fraud. Tex. R. App. P. 47.1.
16
Sturges, 52 S.W.3d at 726. Appellees only have to prove that Hay’s conduct would
be actionable under a recognized tort. Id. (“a plaintiff may recover for tortious
interference from a defendant who makes fraudulent statements about the plaintiff
to a third person without proving that the third person was actually defrauded”).
If not true, Hay’s accusation that Thrash and SENSA made false statements
in a governmental filing would support the conclusion such an accusation was
disparaging or defamatory to SENSA’s business reputation. Therefore, SENSA
meets its burden of demonstrating that Hay’s conduct was independently tortious if
it demonstrates that Hay’s statement was false.
c. Prima facie evidence Hay’s statement was false and
therefore tortious
With his anonymous letter, Hay enclosed a single page from the joint
application offering information about the history and industry experience of
eCORP Storage and the eCORP affiliated companies. Therefore, the parties
confine their arguments to the statements and representations made in the joint
application for the transfer of control of Gill Ranch Storage, LLC. Thrash also
included a verification of the information provided in the joint application on
behalf of SENSA under penalty of perjury. Thrash was described in the joint
application as a director of SENSA as well as the sole manager of eCORP Storage.
The first sentence of Hay’s anonymous letter forms the primary dispute
between the parties:11 “John Thrash lies profusely in his statement to the California
Public Utility Commission.” The only statement in Hay’s letter that addresses the
accusation that Thrash had lied or made misrepresentations to the CPUC is the
11
The appellees’ response to the motion to dismiss only addresses the first sentence of
Hay’s letter as false. The remainder of the statements in Hay’s letter do not address false
statements in the joint application. Rather, they can best be described as providing additional
information that Hay believed to be relevant.
17
following: “eCORP did not build the Katy Hub, rather that honor goes to Western
Gas Resources.” The joint application filed by SENSA did not state that an eCORP
affiliated company built the Katy Hub. Rather, the joint application states, “the
eCORP Companies developed and operated the highly market significant Katy
[Hub].” Further, SENSA supports its position with an affidavit from Thrash that
explains why the statement about Thrash lying in the joint application was false:
eCORP and Alcorn Exploration entered a joint venture to develop
storage at Katy Hub. Western Gas Resources later acquired eCORP’s
position in the joint venture for ten times its investment and
contracted eCORP to develop and build Katy Hub Phase II.
In determining whether a plaintiff presented evidence supporting a prima
facie case, we consider only the pleadings and evidence in favor of the plaintiff’s
case. See Gensetix, Inc., 616 S.W.3d at 644. We do not consider whether the
defendant presented evidence rebutting the plaintiff’s case; such evidence is not
appropriate in determining whether the plaintiff presented a prima facie case. See
Tex. Civ. Prac. & Rem. Code Ann. § 27.005(c) (issue is whether claimant
established prima facie case for each essential element). Because SENSA has
brought forward clear-and-specific evidence, even if disputed, that Hay’s statement
“John Thrash lies profusely” was false and defamatory, we conclude that SENSA
has met its burden under the TCPA’s second step.
4. Third step—proof of defense as a matter of law
Hay’s burden in the third step is to establish a defense as a matter of law. See
Tex. Civ. Prac. & Rem. Code Ann. § 27.005(d). We consider all the evidence in
determining whether Hay established a defensive ground. See D Magazine
Partners, L.P. v. Rosenthal, 475 S.W.3d 470, 488 (Tex. App.—Dallas 2015), aff’d
in part, rev’d in part on other grounds, 529 S.W.3d 429 (Tex. 2017).
The parties disagree over the history of the Katy Hub and what role, if any,
18
the eCORP affiliated companies played in its development. The record developed
as part of Hay’s motion to dismiss reflects that the Katy Hub was built in the 1990s
and did not involve any of the now-existing eCORP affiliated companies. Hay
provided evidence reflecting that the records of the Railroad Commission of Texas
do not include any reference to Thrash or any eCORP affiliated companies. It is
notable that while in some places the joint application refers to “Members of the
eCORP Companies” when discussing the Katy Hub, the joint application states
only “the eCORP Companies developed and operated the highly market significant
Katy [Hub].” There is also no indication in the joint application that involvement
in the Katy Hub was limited to principals of eCORP affiliated companies. As it
relates to operating the Katy Hub, though the joint application represents that
eCORP affiliated companies previously operated the facility, the record developed
as part of Hay’s motion to dismiss reflects the eCORP affiliated companies were
never involved with the operation of the Katy Hub. Thrash’s affidavit, produced in
litigation, establishes the eCORP affiliated companies never operated the facility
though principals at eCORP International previously served in management roles
for the entity that did operate the Katy Hub.
Considering the record established by both parties, a fact question has been
raised whether Hay’s statement “John Thrash lies profusely in his statement to the
California Public Utility Commission” was false. Therefore, we conclude that Hay
has not established his defense as a matter of law. The trial court did not err in
denying Hay’s motion to dismiss with respect to SENSA’s claims.12
We overrule issue one in part.
12
In both the trial court and this court, appellees argued that if the TCPA requires
dismissal of their claim against Hay, then the TCPA is unconstitutional because it violates their
due process rights and the Texas Constitution’s “open courts” provision. Tex. Const. art. I. § 13.
On appeal, Hay raises a sub-issue that the TCPA does not violate the Texas Constitution. Having
concluded that the TCPA does not bar appellees’ claim, we need not address this issue.
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C. Hay’s motion to dismiss was not frivolous
In issue 2, Hay argues the trial court erred in determining his motion to
dismiss was frivolous or filed solely for purposes of delay.
The trial court in its order denying Hay’s motion to dismiss allowed
appellees to recover their attorney’s fees stating that Hay’s motion was “frivolous
and/or was solely intended to delay.” Hay asserts the trial court erred in making
this determination. He argues that even if we do not agree that his motion to
dismiss should have been granted, he had a reasonable basis for seeking dismissal
pursuant to the TCPA. Although the court’s order does not determine the amount
of fees and costs recoverable by appellees, it made the threshold recoverability
findings under section 27.009(b) necessary to support an award, and we may
consider Hay’s challenge to those findings. See Patriot Contracting, LLC v. Mid-
Main Properties, LP, No. 14-20-00724-CV, 2022 WL 1251236, at *9 (Tex.
App.—Houston [14th Dist.] Apr. 28, 2022, pet. filed).
If a trial court grants a motion to dismiss under the TCPA, the trial court
(1) is required to award the moving party court costs and reasonable attorney’s fees
incurred in defending against the action and (2) may also award sanctions against
the party who brought the legal action as the court determines sufficient to deter
the party from bringing similar actions. Tex. Civ. Prac. & Rem. Code Ann.
§ 27.009(a). As discussed above, the trial court erred by not granting Hay’s motion
with respect to eCORP International and eCEM. Therefore, Hay is entitled to an
award of attorney’s fees and costs as to eCORP International and eCEM. Id. On
remand, the trial court shall consider an appropriate award. Id.In contrast, “[i]f the court finds that a motion to dismiss filed under this
chapter is frivolous or solely intended to delay, the court may award court costs
and reasonable attorney’s fees to the responding party.” Tex. Civ. Prac. & Rem.
20
Code § 27.009(b) (emphasis added). “[A] finding that a motion to dismiss is not
well taken must precede an award of the respondent’s attorney’s fees under Section
27.009(b).” In re Calkins, 580 S.W.3d 287, 300 (Tex. App.—Houston [1st Dist.]
2019, no pet.). We review the trial court’s decision to award attorney’s fees under
this section for an abuse of discretion. Patriot Contracting, 2022 WL 1251236, at
*9; see also Sullivan v. Tex. Ethics Comm’n, 551 S.W.3d 848, 857 (Tex. App.—
Austin 2018, pet. denied). “A trial court abuses its discretion if its decision ‘is
arbitrary, unreasonable, or without reference to guiding principles.’” Sullivan, 551
S.W.3d at 857 (quoting Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997)); see
also Navidea, 2020 WL 5087826, at *6.
The term “frivolous” is not defined in the TCPA. But “the word’s common
understanding contemplates that a claim or motion will be considered frivolous if it
has ‘no basis in law or fact’ and ‘lacks a legal basis or legal merit.’” Sullivan, 551
S.W.3d at 857 (quoting Frivolous, Webster’s Third New Int’l Dictionary 913
(2002); Frivolous, Black’s Law Dictionary 739 (9th ed. 2009)). The fact that a
motion to dismiss under the TCPA is ultimately denied is not sufficient, in and of
itself, to support a finding that the motion was frivolous. Caliber Oil & Gas, LLC
v. Midland Visions 2000, 591 S.W.3d 226, 244 (Tex. App.—Eastland 2019, no
pet.); see also Mosaic Baybrook One LP v. Cessor, No. 14-19-00514-CV, 2021
WL 2656613, at *12 (Tex. App.—Houston [14th Dist.] June 29, 2021, pet. dism’d)
(mem. op.) (“Several courts, including our own, have concluded that even if the
TCPA ultimately does not apply, a movant’s motion to dismiss may still be
non-frivolous.”).
In his motion to dismiss, Hay argued the TCPA applied because the
anonymous letter was an exercise of his right to free speech and his right to
petition. Though we expressed no opinion on whether Hay’s anonymous letter was
21
an exercise of his right to petition, we concluded that the letter was based on his
right to free speech as defined in the TCPA. Further, although we conclude that
SENSA established a prima facie case for its claim of tortious interference with
prospective business relations, the evidence of the falsity of Hay’s statements in
the anonymous letter was disputed and raised a fact issue. On this record, we
cannot conclude that the motion did not have a basis in fact or law. Therefore, we
hold the trial court erred in its determination that Hay’s motion was “frivolous
and/or was solely intended to delay.”
We sustain Hay’s second issue.
III. CONCLUSION
Having concluded the trial court did not err in denying Hay’s motion to
dismiss with respect to SENSA’s claim for tortious interference, we overrule Hay’s
first issue in part. We reverse the trial court’s order denying Hay’s motion to
dismiss with respect to eCORP International and eCEM’s claim for tortious
interference against Hay. We sustain Hay’s second issue, reverse the trial court’s
award of attorney’s fees and costs against Hay, and render judgment denying
appellees’ request for attorney’s fees and costs. See Stallion Oilfield Servs. Ltd. v.
Gravity Oilfield Servs., LLC, 592 S.W.3d 205, 223 (Tex. App.—Eastland 2019,
pet. denied) (rendering judgment that non-movant take nothing on its request for
attorney’s fees under TCPA when trial court abused its discretion in awarding fees
under TCPA § 27.009(b)); Navidea, 2020 WL 5087826, at *6.
We further direct the clerk of this court to issue the mandate immediately.13
13
Appellees filed a motion with this court seeking issuance of the mandate at the same
time as the judgment. They argue that although this appeal concerns a very narrow part of the
case pending in the trial court, because of TCPA’s mandatory stay of all trial court proceedings,
the entire case has been stayed since November 2020. See Tex. Civ. Prac. & Rem. Code Ann.
§ 51.014(b). This court may issue a mandate early “if the parties so agree, or for good cause on
the motion of a party.” Tex. R. App. P. 18.1(c). In an accelerated appeal, as the appeal before us
22
At that time, the trial court should conduct proceedings regarding consideration of
fees and costs pursuant to the TCPA with respect to eCORP International and
eCEM’s claim for tortious interference against Hay.
/s/ Charles A. Spain
Justice
Panel consists of Justices Wise, Spain, and Hassan.
is, this court may issue the mandate with its judgment or delay the mandate until the appeal is
finally disposed of. Tex. R. App. P. 18.6. Hay has filed no opposition to appellees’ motion to
expedite the mandate. Given the circumstances of this case and the stay of the trial-court
proceedings, we grant appellees’ motion.
23