Klocke v. Watson

• Decision Date: 23 August 2019
• Docket Number: No. 17-11320,17-11320
• Citation: 936 F.3d 240
• Parties: Wayne M. KLOCKE, Independent Administrator of the Estate of Thomas Klocke, Plaintiff - Appellant v. Nicholas Matthew WATSON, Defendant - Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

936 F.3d 240

Wayne M. KLOCKE, Independent Administrator of the Estate of Thomas Klocke, Plaintiff - Appellant

v.Nicholas Matthew WATSON, Defendant - Appellee

No. 17-11320

United States Court of Appeals, Fifth Circuit.

FILED August 23, 2019

REVISED August 29, 2019

Kenneth B. Chaiken, Chaiken & Chaiken, P.C., Plano, TX, Jonathan Tad Suder, Esq., Friedman, Suder & Cooke, P.C., Fort Worth, TX, for Plaintiff-Appellant.

Darren Glenn Gibson, Littler Mendelson, P.C., Austin, TX, for Defendant-Appellee.

Before JONES, BARKSDALE, and WILLETT, Circuit Judges.

EDITH H. JONES, Circuit Judge:

The critical issue in this appeal is whether, or to what extent, the Texas Citizens Participation Act ("TCPA"), Tex. Civ. Prac. & Rem. Code §§ 27.001 - .011, which is a type of anti-SLAPP statute,¹ applies in a diversity suit in federal court. The district court held it applicable as a "substantive" matter and accordingly granted appellee Nicholas Watson’s motion to dismiss and awarded attorney’s fees pursuant to the TCPA. Resolving an issue that has brewed for several years in this circuit, we conclude that the TCPA does not apply to diversity cases in federal court and therefore REVERSE and REMAND for further proceedings.

BACKGROUND

Appellant Wayne Klocke’s son, Thomas, was a student at the University of Texas at Arlington who tragically committed suicide in June 2016 after being refused permission to graduate. Thomas was allegedly the victim of appellee Watson’s false charge of homophobic harassment, for which the University administered its severe punishment after allegedly violating Title IX procedures designed to achieve due process.

As administrator of his son’s estate, Klocke sued the University for Title IX violations and Watson for common law defamation and defamation per se . Watson moved to dismiss the defamation claims under the TCPA.

Klocke responded in a document titled "Plaintiff’s Objection to Defendant Watson’s Motion to Dismiss; in the alternative, Motion for Protective Order and Request for Procedural Clarification from the Court and Brief in Support." The response asserted that the TCPA is inapplicable in federal court, but it did not substantively address Watson’s arguments based on the requirements of the TCPA. The objection noted that the Fifth Circuit had not explicitly held whether the TCPA applied in federal court and asked the district court to clarify "whether and how it will entertain Defendant Watson’s TCPA motion to dismiss in this case ... and what procedures and deadlines will apply." Klocke also requested the district court to clarify whether he must file a reply pursuant to the Northern District of Texas’s Local Rules or at the motion hearing prescribed in the TCPA.² Alternatively, Klocke moved for discovery and further time to respond substantively to the TCPA motion if the court held that the TCPA was applicable.

The district court overruled the objection to applying the TCPA and concluded that Klocke waived any "substantive" TCPA arguments by failing to make them within twenty-one days pursuant to Local Rule 7.1(e). The district court denied his other requests and accordingly granted Watson’s motion to dismiss. Later, the court awarded Watson $25,000 in attorney’s fees, $3,000 in expenses, and a $1.00 sanction, all pursuant to the TCPA. The district court entered a "Final Judgment as to Certain Party."³ Klocke timely appealed.⁴

STANDARD OF REVIEW

This court reviews de novo a decision applying state law in federal court. See Hall v. GE Plastic Pac. PTE Ltd. , 327 F.3d 391, 395 (5th Cir. 2003). The court reviews "the district court’s administrative handling of a case, including its enforcement of the local rules and its own scheduling orders, for abuse of discretion." Macklin v. City of New Orleans , 293 F.3d 237, 240 (5th Cir. 2002). Abuse of discretion is also the test on appeal of a "court’s decision to limit discovery...." Crosby v. La. Health Serv. and Indem. Co. , 647 F.3d 258, 261 (5th Cir. 2011).

DISCUSSION

On appeal, Klocke principally contends that the TCPA’s essentially "procedural" provisions conflict with federal procedural rules and therefore do not apply in federal court. He also argues that the district court erred by enforcing its local rules and not allowing him to respond to Watson’s TCPA motion and by denying him an opportunity to move for discovery under the TCPA.

A. Applying the TCPA in federal court?

The TCPA is an anti-SLAPP (Strategic Litigation Against Public Participation) statute designed 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." Tex. Civ. Prac. & Rem. Code § 27.002. Other states have passed similar anti-SLAPP statutes because they "have expressed concerns over the use (or abuse) of lawsuits that have the purpose or effect of chilling the exercise of First Amendment rights." Henry v. Lake Charles American Press, L.L.C. , 566 F.3d 164, 169 (5th Cir. 2009). In Henry, this court held that Louisiana’s "nominally procedural" anti-SLAPP statute applies in federal court pursuant to the Erie doctrine. Id. at 168–69 ; see LA. CODE CIV. PROC. art. 971. This court has, however, passed several times on deciding whether, or to what extent, the TCPA applies in federal court. Cuba v. Pylant , 814 F.3d 701, 706 & n.6 (5th Cir. 2016) ; but see id. at 719 (Graves, J., dissenting) (arguing that the TCPA cannot apply because the state statute conflicts with the Federal Rules); Block v. Tanenhaus, 867 F.3d 585, 589 n.2 (5th Cir. 2017) (collecting cases). In this appeal, we are required to confront the question directly. And we generally agree with Judge Graves’s conclusion.

Codified in the Texas Civil Practice and Remedies Code, the TCPA effectuates a speedy process for resolving litigation that may impinge on a party’s exercise of the rights to free speech, petition, or association. See Tex. Civ. Prac. & Rem. Code § 27.003(a). Under the statutory burden-shifting framework, if a movant for TCPA relief shows "by a preponderance of the evidence" that the action is based on the movant’s exercise of the listed rights, a court must dismiss the case. Id. at § 27.005(b)(1)–(3). But if the non-movant "establishes by clear and specific evidence a prima facie case for each element of the claim in question," the court may not dismiss. Id. at § 27.005(c). The movant then may show "by a preponderance of the evidence each essential element of a valid defense" to the claim and be entitled to dismissal. Id. at § 27.005(d). Pleadings and affidavits are permissible for evaluating the dismissal motion and responses. Id. at § 27.006(a). Discovery is generally stayed while the motion is pending, id. at § 27.003(c), subject to limited relevant discovery for good cause shown. Id. at § 27.006(b). Specific time limits are prescribed for the filing of the motion, holding a hearing, and ruling on the motion. Id. at § 27.004(a) – (c). Mandatory attorney’s fees and costs are awarded to the movant if the case is dismissed, id. at § 27.009(a)(1), and sanctions may be imposed to deter the party who brought the legal action. Id. at § 27.009(a)(2).

The Erie line of authorities holds that substantive state law must be applied in federal courts in diversity cases like this one, but state procedural law yields to the applicable Federal Rules. Hanna v. Plumer , 380 U.S. 460, 465, 85 S. Ct. 1136, 1141, 14 L.Ed.2d 8 (1965). Determining whether the state law is procedural or substantive may prove elusive. See Cuba, 814 F.3d at 718– 19 (Graves, J., dissenting). Succinctly put, however, "[a] federal court exercising diversity jurisdiction should not apply a state law or rule if (1) a Federal Rule of Civil Procedure ‘answer[s] the same question’ as the state law or rule and (2) the Federal Rule does not violate the Rules Enabling Act." Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328, 1333 (D.C. Cir. 2015) (Kavanaugh, J.) (quoting Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398–99, 130 S. Ct. 1431, 1437, 176 L.Ed.2d 311 (2010) (majority op.)). Courts do not "wade into Erie’s murky waters unless the federal rule is inapplicable or invalid." Shady Grove, 559 U.S. at 398, 130 S. Ct. at 1437.

Relying on Abbas and like decisions, Klocke argues that the TCPA’s burden-shifting framework and heightened evidentiary standards for pretrial dismissal collide with and "answer the same question[s]" as Federal Rules of Civil Procedure 12 and 56. See also Carbone v. Cable News Network, Inc. , 910 F.3d 1345, 1352 (11th Cir. 2018) (W. Pryor, J.); Makaeff v. Trump Univ., LLC , 715 F.3d 254, 275 (9th Cir. 2013) (Kozinski, C.J., concurring). We find most persuasive the reasoning of the D.C. Circuit that Rules 12 and 56, which govern dismissal and summary judgment motions, respectively, answer the same question as the anti-SLAPP statute: what are the circumstances under which a court must dismiss a case before trial? Abbas , 783 F.3d at 1333–34. According to the D.C. Circuit, the Federal Rules and the anti-SLAPP statute conflict because, unlike the former procedures, the D.C. anti-SLAPP provisions require the plaintiff to show "a likelihood of success on the merits." Id. at 1334. "The D.C. Anti-SLAPP Act, in other words, conflicts with the Federal Rules by setting up an additional hurdle a plaintiff must jump over to get to trial." Id. ; but see Godin v. Schencks , 629 F.3d 79, 86–87 (1st Cir. 2010) (holding Maine’s anti-SLAPP law does not conflict with federal rules, because "neither Fed. R. Civ. P. 12(b)(6) nor Fed. R. Civ. P. 56, on a straightforward reading of its language, was meant to control the particular issues under [Maine’s anti-SLAPP statute] ...."); see also Adelson v. Harris, 774 F.3d 803, 809 (2d Cir. 2014) (approving use of Nevada anti-SLAPP law in federal court in part because "immunity" and fee-shifting statutes are substantive under Erie ); United States ex rel. Newsham...