Texas Disposal Systems v. Waste Management, 03-03-00631-CV.

CourtCourt of Appeals of Texas
Citation219 S.W.3d 563
Docket NumberNo. 03-03-00631-CV.,03-03-00631-CV.
PartiesTEXAS DISPOSAL SYSTEMS LANDFILL, INC., Appellant, v. WASTE MANAGEMENT HOLDINGS, INC. (f/k/a Waste Management, Inc.) and Waste Management of Texas, Inc., Appellees.
Decision Date03 April 2007

David H. Donaldson Jr. and James A. Hemphill, Graves, Douherty, Hearon & Moody, PC, Austin, for Appellant.

Charles L. Babcock IV, Jackson Walker, L.L.P., Dallas, Robert M. Roach, Jr., Sean R. Cox, Cook & Roach, LLP, Houston, for Appellee.

Before Chief Justice LAW, Justices B.A. SMITH and PEMBERTON; Justice B.A. SMITH not participating.

OPINION

W. KENNETH LAW, Chief Justice.

We grant appellant's and overrule appellees' motions for further rehearing,1 withdraw our opinion and judgment issued December 29, 2006, and substitute the following in its place.

Appellant Texas Disposal Systems Landfill, Inc. challenges the take-nothing judgment entered against it following a jury trial, contending that the trial court committed charge error regarding issues of defamation per se and presumed damages; that the jury's zero-damages award was against the great weight and preponderance of the evidence; and that the trial court erred in dismissing certain claims on summary judgment, including Texas Disposal's causes of action for defamation, tortious interference, and attempted monopoly/antitrust. Appellee Waste Management2 argues in a cross point that, as to the defamation claims, even if Texas Disposal's issues are sustained on appeal, the take-nothing judgment should be affirmed based on the lack of evidence of actual malice. We will affirm in part and reverse and remand in part.

BACKGROUND

Texas Disposal owns and operates a landfill in southeast Travis County ("the Texas Disposal landfill"). Waste Management is one of Texas Disposal's competitors in the waste removal and landfill services industry serving the Austin and San Antonio markets.

In 1995, Texas Disposal and Waste Management competed against one another for a contract to provide waste removal and landfill services to the City of San Antonio. By May 1995, San Antonio and Texas Disposal had begun bona fide negotiations on a contract for Texas Disposal to assume operations of the city's Starcrest Transfer Station, from which Texas Disposal would haul San Antonio's waste to the Texas Disposal landfill, starting in February 1997. San Antonio's city council passed an ordinance in December 1996 authorizing the city manager to negotiate and execute a contract for Texas Disposal to privately operate the Starcrest Transfer Station in accordance with the terms of the proposed agreement between Texas Disposal and San Antonio, which was attached and incorporated into the ordinance. As of the end of January 1997, however, the parties had not yet executed a final contract.

In November 1996, the City of Austin issued a "request for proposal," seeking bids from companies to provide waste removal and landfill services. Texas Disposal and Waste Management both submitted bids and, as of February 1997, had been selected as the two companies to proceed to Phase II of the bid process for providing the "landfill" and "materials recovery facility and transfer station or landfill" services to the City of Austin.

On January 30, 1997, before either the San Antonio or the Austin contract was finalized, Waste Management caused an "Action Alert" memo to be distributed to environmental and community leaders in Austin, including several members of the Austin City Council. Waste Management hired Don Martin, a consultant, to draft the memo. Martin gathered information from several Waste Management officials, who then approved the memo for publication.3 Martin sent the memo to an Austin environmental advocate to be "broadcast over his fax network" to the designated group. The topic of the Action Alert was San Antonio's proposal to contract with Texas Disposal to assume operations of the Starcrest Transfer Station. The memo warned readers about the increased traffic and environmental problems that would result, questioned the environmental integrity of the Texas Disposal landfill, and urged recipients of the memo to contact public officials in San Antonio and Austin, as well as the San Antonio Express News, to inform them of "your concerns."

In October 1997, Texas Disposal filed suit against Waste Management,4 alleging that Waste Management had routinely attempted to disparage Texas Disposal's reputation in an effort to eliminate competition. Based on such conduct, Texas Disposal claimed that Waste Management was liable for defamation, tortious interference with an existing or prospective contract, and business disparagement. The petition discussed the Action Alert memo as a specific example of improper conduct by Waste Management, which, according to Texas Disposal, caused economic damages by delaying the execution of the San Antonio and Austin waste disposal contracts.5 In addition to compensatory and punitive damages, Texas Disposal sought injunctive relief against Waste Management.

After this initial suit was filed, Waste Management published a series of communications that we will collectively refer to as the "1998 Communications." Waste Management sent a memo to the San Antonio Public Works Department on March 10, 1998, questioning the legality of Texas Disposal operating the Starcrest Transfer Station due to the restrictions in the facility's zoning ordinance and its previously issued permit. Additionally, in May 1998, Waste Management sent an unsigned memo to the San Antonio City Council and the Texas Natural Resource Conservation Commission (TNRCC) urging that the proposed contract with Texas Disposal would result in multiple permit violations. And, on July 14, 1998, Waste Management issued a press release that claimed Texas Disposal had "inspired" a protest demonstration over Austin's landfill and that urged reasons why Texas Disposal should not be selected in Austin's bid process. Texas Disposal amended its petition on July 25, 2000, to include claims based on the 1998 Communications.

Waste Management denied each of the allegations and asserted, as affirmative defenses, that (1) the alleged statements were true and, thus, not defamatory; (2) the statements were privileged communications made by an interested party in petitioning the government about a matter of public concern; and (3) portions of Texas Disposal's claims were time-barred by the statute of limitations. Waste Management also specially excepted that Texas Disposal had failed to plead sufficient facts to support each of its claims, primarily based on a lack of proof concerning causation and damages.

Waste Management moved for partial summary judgment in January 2001, seeking dismissal of Texas Disposal's claims based on the 1998 Communications, which had been added to the petition in 2000, because they were not pled within the applicable one- and two-year statutes of limitations.6 See Tex. Civ. Prac. & Rem. Code Ann. §§ 16.002-.003 (West 2002 & Supp.2006) (limitations periods for defamation, tortious interference, and business disparagement). Texas Disposal responded that the 1998 Communications claims were not time-barred because they related back to the original pleading, which broadly alleged that Waste Management had "routinely" engaged in a pattern of improper conduct that was "ongoing and continuous." See id. § 16.068 (West 1997).

The trial court granted Waste Management's motion for partial summary judgment, holding that Texas Disposal's claims based on the 1998 Communications were new and distinct transactions that did not relate back and were, therefore, barred by the statute of limitations. See id. §§ 16.002-.003, .068. Accordingly, on March 2, 2002, the court dismissed those claims with prejudice.7

Texas Disposal filed a third amended petition in May 2002, adding antitrust claims against Waste Management for its "attempt to monopolize" in violation of Texas Business and Commerce Code section 15.05(b). Texas Disposal claimed that, because Waste Management held more than 45% of the San Antonio market and 38% of the Austin market, its efforts to eliminate competition by disparaging Texas Disposal resulted in a "dangerous probability of achieving monopoly power." See Tex. Bus. & Com.Code Ann. § 15.05(b) (West 2002). Texas Disposal relied in part on the 1998 Communications as support for this claim, which was not limited by a two-year statute of limitations. See id. § 15.25 (West 2002).

In turn, Waste Management sought another motion for partial summary judgment. See Tex.R. Civ. P. 166a(c), (i). For each of Texas Disposal's claims, Waste Management asserted nearly twenty separate grounds for dismissal, including the statute of limitations, the protection afforded to privileged communications in petitioning the government, and that assorted essential elements of Texas Disposal's claims had been conclusively negated and/or lacked any evidentiary support.

Texas Disposal then filed its own motion for partial summary judgment, asking the court to hold as a matter of law that (1) the Action Alert memo was "published," (2) the memo was defamatory and defamatory per se, (3) the statements within and impressions arising from the memo were false, (4) Waste Management knew of this falsity at the time of publication, and (5) a contract existed between Texas Disposal and the City of San Antonio upon which its claim for tortious interference was based.

On March 25, 2003, the trial court signed a "final, corrected order" of summary judgment on both Waste Management's and Texas Disposal's motions; the court granted and denied portions of each party's motion. In the order, the court specifically delineated the grounds for its rulings. In relevant part to this appeal, the trial court's order concluded that:

(1) Texas Disposal's claims based on the 1998 Communications for defamation, tortious interference, and business disparagement were time-barred by the statute of...

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