Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc.

• Decision Date: 16 July 2013
• Docket Number: No. 01–12–00990–CV.,01–12–00990–CV.
• Citation: 441 S.W.3d 345
• Parties: The BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., Appellant v. JOHN MOORE SERVICES, INC. and John Moore Renovation, LLC, Appellees.
• Court: Texas Court of Appeals

441 S.W.3d 345

The BETTER BUSINESS BUREAU OF METROPOLITAN HOUSTON, INC., Appellant

v.JOHN MOORE SERVICES, INC. and John Moore Renovation, LLC, Appellees.

No. 01–12–00990–CV.

Court of Appeals of Texas, Houston (1st Dist.).

July 16, 2013.

Jeffrey R. Elkin, Lauren B. Harris, Porter & Hedges, LLP, Houston, TX, for Appellant.

Douglas Pritchett, Jr., Lori Hood, Tamara Madden, Johnson, Trent, West & Taylor, L.L.P., Houston, TX, for Appellees.

Panel consists of Chief Justice RADACK and Justices SHARP and MASSENGALE.

OPINION

MICHAEL MASSENGALE, Justice.

This interlocutory appeal arises from a dispute between the Better Business Bureau of Metropolitan Houston, Inc. and John Moore, Inc. over a business quality rating and the right to display past awards. Asserting that a lawsuit John Moore filed against the Bureau was related to its exercise of free speech, the Bureau filed a motion to dismiss pursuant to the Texas Citizen's Participation Act (TCPA). See Tex. Civ. Prac. & Rem.Code Ann. §§ 27.001 –.011 (West Supp.2012). The trial court denied the motion. We reverse and remand for further proceedings consistent with this opinion.

Background

The Better Business Bureau is a non-profit corporation that seeks to promote ethical business practices, and it espouses a mission of “advancing marketplace trust” by setting standards for trustworthy businesses, encouraging best business practices, promoting business role models, and denouncing substandard marketplace behavior. To these ends, the Bureau rates business in the greater Houston area on a letter-grade scale and publishes information about area businesses on its website. On its website, the Bureau notes that its letter grades represent its “opinion of the business” and that the “grades are not a guarantee of a business's reliability or performance.” The Bureau also invites selected businesses to become “accredited” members by asking them to abide by Bureau-promulgated standards and to pay a membership fee. In exchange, the Bureau offers accredited members the use of the Better Business Bureau seal, a page for the business on the Bureau's website, and various services to help resolve disputes between businesses, such as a mediation program.

John Moore is in the business of providing home repair and maintenance services, such as air conditioner repair, pest control, and plumbing. Before December 2010, John Moore was an accredited business with the Houston Better Business Bureau, and it had received an “A+” rating on the Bureau's website. From 2003 to 2010, John Moore received the Bureau's “Award of Excellence,” which the company displayed on its advertising materials. John Moore's president, Don Valentine, served as Chairman of the Houston Bureau from 2007 to 2008. In late 2010, however, John Moore resigned from the Houston Bureau, complaining about the methodology it used to determine its business ratings. The resignation coincided with the Houston Bureau's decision to revoke John Moore's accreditation in response to numerous consumer complaints. John Moore then informed the Houston Bureau that it moved its business headquarters to the Bryan–College Station area. Because the move of headquarters meant that the Houston Bureau no longer considered John Moore an area business, it changed its letter grade for the company to “NR” for “not rated.”

In 2012, the Houston Bureau learned that John Moore was continuing to display a Houston address on its advertising and that the company's office in Bryan–College Station had no indications of actual business activity. John Moore had also continued to display Better Business Bureau markings, including the Award of Excellence logo, on the company's website, trucks, employee uniforms, and written invoices. After learning of these activities, the Houston Bureau once again considered John Moore as a Houston-area business, and it resumed publication of a business rating on its website. Additionally, the Houston Bureau filed a trademark infringement lawsuit in federal court to challenge John Moore's continued use of the Bureau markings. For its part, John Moore believed it had the right to continue to display the awards because no temporal restrictions on their use were imposed when it originally received the awards. The Houston Bureau gave John Moore an “F” rating for a high number of consumer complaints, the failure to address those complaints, and the company's allegedly misleading use of the Bureau's trademarks.

John Moore then filed this lawsuit, asserting numerous causes of action against the Houston Bureau. The Bureau filed a motion to dismiss pursuant to the TCPA, which applies to legal actions based on, related to, or in response to the exercise of the rights of free speech, petition, and association. See Tex. Civ. Prac. & Rem.Code Ann. § 27.003(a). John Moore responded in support of the viability of only four of its causes of action: defamation, business disparagement, fraud, and tortious interference with business relationships. The trial court held a hearing and timely denied the motion to dismiss. The Bureau then filed this interlocutory appeal.

Analysis

The TCPA provides a procedure for dismissing meritless suits that are based on the defendant's exercise of the rights of free speech, petition, or association as defined within the statute. Tex. Civ. Prac. & Rem.Code Ann. § 27.003. If the legal action is “based on, relates to, or is in response to” the exercise of those constitutional rights, a party may file to dismiss “the legal action.” See id. § 27.003(a). In deciding whether to grant a motion under the TCPA and dismiss the lawsuit, the statute instructs a trial court to “consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based.” Id. § 27.006(a).

I. Appellate jurisdiction

John Moore challenges our appellate jurisdiction to review the trial court's ruling, so we address that as a threshold matter. The parties do not dispute that section 27.008(a) permits an interlocutory appeal when a motion to dismiss is denied by operation of law due to the trial court's failure to rule. See id. § 27.008(a). But the trial court in this case did timely rule on the Houston Bureau's motion. John Moore, relying on the opinion of the Second Court of Appeals in Jennings v. WallBuilder Presentations, Inc., 378 S.W.3d 519, 525 (Tex.App.-Fort Worth 2012, pet. filed), contends that section 27.008 does not provide an interlocutory appeal under these circumstances.

We disagree. This court has recently held, along with several other intermediate courts of appeal, that “section 27.008 permits an interlocutory appeal from the trial court's written order denying a motion to dismiss under the TCPA.” KTRK Television, Inc. v. Robinson, 409 S.W.3d 682, 688 (Tex.App.-Houston [1st Dist.] 2013, no pet. h.) (citing Direct Commercial Funding, Inc. v. Beacon Hill Estates, LLC, No. 14–12–00896–CV, 2013 WL 407029 (Tex.App.-Houston [14th Dist.] Jan. 24, 2013, order); Better Bus. Bureau of Metro. Dallas, Inc. v. BH DFW, INC., 402 S.W.3d 299, 308 (Tex.App.-Dallas 2013, no pet. h.) ; San Jacinto Title Svcs., LLC v. Kingsley Props., LP, –––S.W.3d ––––, ––––, No. 13–12–00352–CV, 2013 WL 1786632, at *4 (Tex.App.-Corpus Christi Apr. 25, 2013, no pet. h.) ). Accordingly, we have interlocutory appellate jurisdiction over this appeal, and thus we address the denial of the Bureau's motion to dismiss.

II. Application of the TCPA

The Bureau argues that dismissal of John Moore's suit was required because it demonstrated by a preponderance of the evidence that the claims are a response to the Bureau's exercise of its right to free speech, and John Moore failed to present clear and specific evidence to support each element of its claims to establish its prima facie case. John Moore disputes these points and also asserts that a business transaction exemption to the statute applies.¹ We address each contention in turn.

A. Exercise of “the right of free speech ”

To obtain dismissal under the TCPA, a defendant must show “by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the party's exercise of the right of free speech; the right to petition; or the right of association.” Tex. Civ. Prac. & Rem.Code Ann. § 27.005(b). We review this determination de novo as an application of law to facts. See Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., No. 01–12–00581–CV, 2013 WL 1867104, at *6 (Tex.App.-Houston [1st Dist.] May 2, 2013, no pet. h.); see also Rehak Creative Servs., Inc. v. Witt, 404 S.W.3d 716, 725 (Tex.App.-Houston [14th Dist.] 2013, no. pet. h.).

The TCPA defines “the exercise of the right of free speech” as “a communication made in connection with a matter of public concern.” Tex. Civ. Prac. & Rem.Code Ann. § 27.001(3). John Moore contends that the statute only applies to speech for the purpose of participation in government, and that the statute does not apply to lawsuits relating to commercial speech.

We review questions of statutory construction de novo. Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex.2010). In interpreting statutes, our primary purpose is to give effect to the legislature's intent by relying on the plain meaning of the text adopted by the legislature, unless a different meaning is supplied by statutory definition or is apparent from the context, or the plain meaning leads to absurd results. Id.

The expressly stated 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. John Moore's interpretation places great weight on the words “and otherwise participate in government” as a limitation on the preceding list of ...