Kim Hoa Huynh, Khoa Dang Huynh, Henny Duong, and Hien Duong, Individually and on Behalf of Swampcity, L.L.C. v. Viet D. Francois-Le and Michael-Anh D. Le ( 2021 )

Affirmed and Memorandum Opinion filed February 23, 2021.
In The
Fourteenth Court of Appeals
NO. 14-19-00138-CV
KIM HOA HUYNH, KHOA DANG HUYNH, HENNY DUONG, AND HIEN
DUONG, INDIVIDUALLY AND ON BEHALF OF SWAMPCITY, L.L.C.,
Appellants
V.
VIET D. FRANCOIS-LE AND MICHAEL-ANH D. LE, Appellees
On Appeal from the 269th District Court
Harris County, Texas
Trial Court Cause No. 2018-89043
MEMORANDUM OPINION
Appellants Kim Hoa Huynh, Khoa Dang Huynh, Henny Duong, and Hien
Duong (collectively, “Appellants”), individually and on behalf of SwampCity,
L.L.C., sued appellees Viet D. Francois-Le and Michael-Anh D. Le (together,
“Appellees”), seeking a declaratory judgment pertaining to the management of the
parties’ jointly-owned restaurant. Appellees filed counterclaims and Appellants
moved to dismiss the counterclaims under the Texas Citizens’ Participation Act
(“TCPA”). The trial court denied the motion and Appellants filed this
interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(12). For
the reasons below, we affirm.
BACKGROUND
Appellants and Appellees are joint owners of SwampCity, L.L.C., a Cajun
seafood restaurant in north Houston. Appellants collectively own 66.67% of
SwampCity and Appellees jointly own the remainder. In fall 2018, the parties’
working relationship began to deteriorate.
Appellants sued Appellees in December 2018, alleging Appellees
improperly restricted Appellants’ access to SwampCity’s offices, records, and
software systems. Appellants requested a declaratory judgment, a temporary
restraining order, and a temporary and permanent injunction. The trial court
granted a temporary restraining order and ordered Appellees to refrain from
restricting Appellants’ access to SwampCity’s property.
Appellees assert counterclaims against Appellants for (1) conspiracy,
(2) tortious interference with prospective business relations, and (3) conversion.
Appellees allege that, while the parties were in the midst of negotiations for
Appellees to buy out Appellants’ interest in SwampCity, Appellants undertook a
coordinated effort to damage the restaurant and its reputation. Specifically,
Appellees allege Appellants committed the following acts:
• Kim Hoa Huynh’s nephew removed from SwampCity a commercial
grade mixer and ingredients.
• Several times, Henny Duong failed to show up for her shift at
SwampCity or left abruptly during her shift.
• Kim Hoa Huynh’s niece and nephew abruptly quit working at
SwampCity without explanation.
• Kim Hoa Huynh stopped mixing SwampCity’s seasonings and sauces
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and refused to provide the recipe to Appellees.
• Appellants purchased equipment that was being utilized for purposes
unrelated to SwampCity.
Appellants filed a TCPA motion to dismiss Appellees’ claims. The trial court
denied Appellants’ motion in an order signed February 8, 2019. Appellants timely
appealed.
ANALYSIS
Challenging the trial court’s denial of their TCPA motion to dismiss,
Appellants raise three issues on appeal:
1. the TCPA applies to Appellees’ conspiracy claim;
2. Appellees cannot establish a prima facie case as to each element of
their conspiracy claim or the underlying torts; and
3. this case should be remanded for a determination of attorney’s fees
and sanctions.
Because the first issue is determinative of this appeal, we do not reach Appellants’
second and third issues.
I. TCPA Framework
The TCPA is an anti-SLAPP law; “SLAPP” is an acronym for “Strategic
Lawsuits Against Public Participation”. Fawcett v. Grosu, 498 S.W.3d 650, 654
(Tex. App.—Houston [14th Dist.] 2016, pet. denied). The TCPA “protects citizens
from retaliatory lawsuits that seek to intimidate or silence” their exercise of First
Amendment freedoms and provides a procedure for the “expedited dismissal of
such suits.” In re Lipsky, 460 S.W.3d 579, 586 (Tex. 2015) (orig. proceeding); see
also Tex. Civ. Prac. & Rem. Code Ann. § 27.002. The TCPA is not intended to
bring about the dismissal of meritorious claims. In re Lipsky, 460 S.W.3d at 589.
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The TCPA utilizes a three-step process.1 First, the burden is on the movant
to show by a preponderance of the evidence that the challenged claim “is based on,
relates to, or is in response to the [movant’s] exercise of: (1) the right of free
speech; (2) the right to petition; or (3) the right of association.” Act of May 21,
2011, 82nd Leg., R.S., ch. 341, 2011 Tex. Gen. Laws 961, 963 (amended 2019)
(current version at Tex. Civ. Prac. & Rem. Code Ann. § 27.005). Next, 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.” Id. If the nonmovant
satisfies this second step, the trial court nonetheless shall dismiss the challenged
claim if the movant “establishes by a preponderance of the evidence each essential
element of a valid defense to the nonmovant’s claim.” Id.
The trial court’s ruling on a TCPA motion to dismiss is reviewed de novo.
Roach v. Ingram, 557 S.W.3d 203, 217 (Tex. App.—Houston [14th Dist.] 2018,
pet. denied). Under this standard, we “make an independent determination and
apply the same standard used by the trial court in the first instance.” Cox Media
Grp., LLC v. Joselevitz, 524 S.W.3d 850, 859 (Tex. App.—Houston [14th Dist.]
2017, no pet.) (internal quotation omitted). We review the pleadings and the
relevant evidence in the light most favorable to the nonmovant. Hieber v.
Percheron Holdings, LLC, 591 S.W.3d 208, 211 (Tex. App.—Houston [14th Dist.]
2019, pet. denied).
1
The Texas Legislature amended the TCPA in its 2019 legislative session and the
amendments are effective September 1, 2019. Because this suit was filed before the effective
date of the amendments, it is governed by the statute as it existed before the amendments and all
of our citations are to the TCPA as it existed prior to September 1, 2019. See Act of May 17,
2019, 86th Leg., R.S., ch. 378, §§ 1-12, 2019 Tex. Gen. Laws 684, 684-87 (current versions at
Tex. Civ. Prac. & Rem. Code Ann. §§ 27.001-27.011); see, e.g., HDG, Ltd. v. Blaschke, No. 14-
18-01017-CV, 2020 WL 1809140, at *3 n.2 (Tex. App.—Houston [14th Dist.] Apr. 9, 2020, no
pet.) (mem. op.).
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II. Right of Association
Addressing the first step of the TCPA process, Appellants assert they
established by a preponderance of the evidence that Appellees’ conspiracy claim is
based on, relates to, or is in response to Appellants’ exercise of the right of
association.
The applicable version of the TCPA defines an exercise of the right of
association as “a communication between individuals who join together to
collectively express, promote, pursue, or defend common interests.” Act of May
21, 2011, 82nd Leg., R.S., ch. 341, 2011 Tex. Gen. Laws 961, 961 (amended 2019)
(current version at Tex. Civ. Prac. & Rem. Code Ann. § 27.001). We recently
examined this definition at length in Republic Tavern and Music Hall, LLC v.
Laurenzo’s Midtown Management, LLC, __ S.W.3d __, 2020 WL 7626253 (Tex.
App.—Houston [14th Dist.] Dec. 22, 2020, no pet. h.). There, Midtown brought
tort and contract claims against Republic and several third-party defendants in
connection with a failed restaurant venture. Id. at *1. The Republic parties filed a
TCPA motion to dismiss arguing Midtown’s claims implicated their right of
association. Id. at *1, *4.
Analyzing this contention, we focused on which “common interests” fall
within the TCPA’s definition of “right of association.” See id. at *4-6. Relying on
an opinion from the Fort Worth Court of Appeals, we recognized that “common”
generally is subject to a primary and secondary definition:
Primary definition: “‘of or relating to a community at large : generally shared or
participated in by individuals of a community: not
limited to one person or special group’”
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Secondary definition: “‘marked by or resulting from joint action of two
or more parties: practiced or engaged in by two or
more equally.’”
Id. at *5 (quoting Kawcak v. Antero Res. Corp., 582 S.W.3d 566, 576 (Tex.
App.—Fort Worth 2019, pet. denied)). As we noted, the secondary definition
would broadly apply “to any interests common to at least two people.” Id.
We examined these definitions in conjunction with the TCPA’s purpose “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.” Id. (quoting Tex. Civ. Prac. &
Rem. Code Ann. § 27.002). We concluded that “[a]pplying the primary definition
of ‘common’ would serve the TCPA’s purpose, whereas defining ‘common’ to
refer to any interests shared by at least two people would not encourage or
safeguard the right to associate freely and would undermine the statute’s purpose
of protecting the right to file meritorious lawsuits.” Id. (emphasis in original).
Applying this conclusion, we noted that Midtown’s claims were premised on
the following “communications”: (1) Midtown’s contract with the Republic
parties, (2) alleged representations by the Republic parties that they would fund
construction and operation of the restaurant, and (3) disagreements about
Midtown’s accounting. Id. at *6. Concluding these communications did not
constitute an exercise of the right of association, we held that “[t]hese
communications concern only a private transaction between private parties, rather
than a matter of ‘common interest’ as that expression is used in the applicable
version of the TCPA.” Id.; see also Bandin v. Free & Sovereign State of Veracruz
de Ignacio de la Llave, 590 S.W.3d 647, 653-54 (Tex. App.—Houston [14th Dist.]
2019, pet. denied) (relying on Kawcak and concluding that claims alleging
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defendants conspired to commit theft or conversion did not implicate the
defendant’s exercise of the right of association);2 Kawcak, 582 S.W.3d at 571, 588
(concluding that the exercise of the right of association was not implicated by
claims that Kawcak and another individual conspired in tortious conduct such as a
breach of fiduciary duty).
Similarly, in Marshall v. Marshall, Nos. 14-08-00094-CV, 14-18-00095-
CV, 2021 WL 208459 (Tex. App.—Houston [14th Dist.] Jan. 21, 2021, no pet. h.)
(mem. op.), we relied on the primary definition of “common” to conclude that
breach of fiduciary duty claims premised on the merger of two private trusts did
not implicate the TCPA’s right of association. See id. at *1-2, *8. Holding that the
TCPA’s definition of the “exercise of the right of association” did “not encompass
all communications in furtherance of a civil conspiracy or to commit tortious acts,”
we noted that applying a broader definition “would thwart a meritorious lawsuit
any time a plaintiff alleges two or more persons jointly committed a tort.” Id. at
*8.
This construction aligns with conclusions reached by several of our sister
courts of appeals, in which they held that the TCPA’s use of “common interests”
requires more than communications made as part of a private transaction. See,
e.g., Segundo Navarro Drilling, Ltd. v. San Roman Ranch Mineral Partners, Ltd.,
612 S.W.3d 489, 493-96 (Tex. App.—San Antonio 2020, pet. denied) (“[l]ike the
Kawcak Court, we conclude that this definition of ‘common’ — one that suggests a
communal or public interest, rather than a private interest shared solely by a select
2
As we noted in Republic Tavern, an argument can be made that this court’s opinion in
Reeves v. Harbor America Central, Inc., __ S.W.3d __, 2020 WL 2026527 (Tex. App.—Houston
[14th Dist.] Apr. 28, 2020, pet. filed), conflicts with our reasoning in Bandin. See Republic
Tavern, 2020 WL 7626253, at *5 n.17. Assuming without deciding that such conflict exists, we
held that “Bandin, as the earlier precedent, would control over later cases that do not distinguish
or purport to apply it, absent a contrary decision by a higher court or this court sitting en banc.”
Id.
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few — is more congruent with both the TCPA as a whole and with our canons of
statutory construction”); Blue Gold Energy Barstow, LLC v. Precision Frac, LLC,
No. 11-19-00238-CV, 2020 WL 1809193, at *6 (Tex. App.—Eastland Apr. 9,
2020, no pet.) (mem. op.) (“the term ‘common interest,’ as used in the TCPA,
means something more than allegedly tortious communications between
individuals in the pursuit of a private business endeavor”); Gaskamp v. WSP USA,
Inc., 596 S.W.3d 457, 476 (Tex. App.—Houston [1st Dist.] 2020, pet. dism’d) (en
banc) (“the proper definition of ‘common’ in the phrase ‘common interests’ is ‘of
or relating to a community at large: public’”; therefore, claims premised on the
misappropriation of trade secrets for a competing business and conspiring to
commit related torts did not fall within this definition); Dyer v. Medoc Health
Servs., LLC, 573 S.W.3d 418, 426-27 (Tex. App.—Dallas 2019, pet. denied)
(citing Kawcak and concluding that, because the text messages underlying the
claims “were private communications related to an alleged conspiracy between two
men and did not involve public or citizen’s participation, it would be ‘illogical’ to
apply the TCPA to those communications”).
Here, Appellants assert Appellees’ conspiracy claim is premised on
communications by Appellants that sought to advance their “common interest”,
i.e., “their joint ownership and joint operation” of SwampCity. Appellees alleged
that Appellants’ communications organized a coordinated effort to damage the
restaurant and its reputation via tortious conduct.
Guided by the precedents discussed above, Appellees’ conspiracy claim
does not implicate communications that promote “common interests” as that
phrase is used in the TCPA’s definition of “right of association.” Rather,
Appellants’ alleged communications related to a private business endeavor (or the
disruption thereof) — an interest shared only by a select few. These
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communications facilitated an alleged conspiracy between four people to commit
tortious acts affecting SwampCity’s operations; they did not involve the public or
the community at large. As such, the communications do not constitute an exercise
of the right of association protected by the TCPA. See Marshall, 2021 WL
208459, at *8; Republic Tavern, 2020 WL 7626253, at *6; and Bandin, 590
S.W.3d at 653-54; see also Segundo Navarro Drilling, Ltd., 612 S.W.3d at 493-96;
Blue Gold Energy Barstow, LLC, 2020 WL 1809193, at *6; Gaskamp, 596 S.W.3d
at 476; and Dyer, 573 S.W.3d at 426-27.
Appellants rely on several cases to support their contention that Appellees’
conspiracy claim involves communications that advanced “common interests” as
that term is used in the TCPA. One of these opinions was withdrawn and
superseded by a case referenced above. See Gaskamp v. WSP USA, Inc., No. 01-
18-00079-CV, 2018 WL 6695810 (Tex. App.—Houston [1st Dist.] Dec. 20, 2018),
withdrawn and superseded by Gaskamp, 596 S.W.3d at 457.
Appellants also cite Elite Auto Body LLC v. Autocraft Bodywerks, Inc., 520
S.W.3d 191 (Tex. App.—Austin 2017, pet. dism’d). There, the plaintiff asserted
claims against the defendants (owners and employees of a competing business) for
trade secret misappropriation, unfair competition, breach of fiduciary duty, and
conspiracy. Id. at 194. Reversing in part the trial court’s denial of the defendants’
TCPA motion to dismiss, the Austin Court of Appeals concluded the plaintiff’s
claims implicated the defendants’ right of association. Id. at 204-07.
But the Austin Court of Appeals did not analyze the phrase “common
interests” as it is used in the TCPA’s definition of “right of association” — rather,
the court’s decision focused on which “communications” fall within the TCPA’s
purview. See id.; see also id. at 206 (concluding “the district court erred in failing
to dismiss [the plaintiff’s] claims to the extent founded on [the defendants’]
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‘communications’”). This decision preceded this court’s opinions in Marshall,
Republic Tavern, and Bandin, all of which focused on the definition of “common
interests” and favorably cited Kawcak’s analysis on this point. See Marshall, 2021
WL 208459, at *8; Republic Tavern, 2020 WL 7626253, at *6; and Bandin, 590
S.W.3d at 649-50. Other courts have distinguished Elite Auto Body on these
grounds. See Segundo Navarro Drilling, Ltd., 612 S.W.3d at 495 (stating that Elite
Auto Body did not “rest on a detailed analysis of the word ‘common’”); Gaskamp,
596 S.W.3d at 471-72 (stating Elite Auto Body “indicated — without in-depth
discussion — that the ‘common interests’ element of the exercise of the right of
association was satisfied by private business interests being advanced through the
tortfeasors’ tortious conduct”); and Kawcak, 582 S.W.3d at 585 (stating Elite Auto
Body did “not address the definition of ‘common’”). Accordingly, Elite Auto Body
does not control our analysis.
We overrule Appellants’ first issue. Because Appellants failed to meet their
initial burden under the TCPA to establish that Appellees’ conspiracy claim is
based on, related to, or in response to Appellants’ exercise of their right of
association, we need not consider their other issues on appeal.
CONCLUSION
We affirm the trial court’s order denying Appellants’ TCPA motion to
dismiss.
/s/ Meagan Hassan
Justice
Panel consists of Justices Bourliot, Hassan, and Poissant.
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