Rehak Creative Servs., Inc. v. Witt

• Citation: 404 S.W.3d 716
• Decision Date: 21 May 2013
• Docket Number: No. 14–12–00658–CV.,14–12–00658–CV.
• Parties: REHAK CREATIVE SERVICES, INC. and Robert Rehak, Appellants v. Ann L. WITT, Ellen Witt, Raymond Witt and Ann Witt Campaign, Appellees.
• Court: Court of Appeals of Texas

404 S.W.3d 716

REHAK CREATIVE SERVICES, INC. and Robert Rehak, Appellants

v.Ann L. WITT, Ellen Witt, Raymond Witt and Ann Witt Campaign, Appellees.

No. 14–12–00658–CV.

Court of Appeals of Texas, Houston (14th Dist.).

May 21, 2013.

Charles Clayton Conrad, Edward S. Hubbard, Patrick E. Gaas, Houston, TX, for Appellants.

Judith A. Meyer, William W. Ogden, Houston, TX, for Appellees.

Panel consists of Chief Justice HEDGES and Justices BOYCE and DONOVAN.

OPINION

WILLIAM J. BOYCE, Justice.

Rehak Creative Services, Inc. and Robert Rehak (collectively, “Rehak”) appeal from a final judgment granting a motion to dismiss in favor of appellees Ann L. Witt, Ellen Witt, Raymond Witt, and the Ann Witt Campaign (collectively, “Witt”). We affirm.

Overview

This appeal focuses on a recently enacted statute called the “Texas Citizens Participation Act,” which is codified in Chapter 27 of the Civil Practices and Remedies Code under the heading “Actions Involving the Exercise of Certain Constitutional Rights.” SeeTex. Civ. Prac. & Rem.Code Ann. §§ 27.001–.011 (Vernon Supp.2012). This statute is an anti-SLAPP law, which is an acronym for “Strategic Lawsuits Against Public Participation.” See generally In re Lipsky, ––– S.W.3d ––––, 2013 WL 1715459, at *1 n. 1 (Tex.App.-Fort Worth 2013, orig. proceeding).

Chapter 27 seeks 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. It does so by establishing a mechanism for early dismissal of lawsuits that threaten the right of free speech, the right to petition, or the right of association. The statute is to be “construed liberally to effectuate its purpose and intent fully.” Id. § 27.011(a).

We must apply this statute to a libel claim and other causes of action asserted in connection with a political campaign for a seat in the Texas Legislature.

Factual Background

Ann L. Witt ran unsuccessfully in the 2012 Republican primary for House District 133. The Ann Witt Campaign was designated as Witt's campaign committee under the Texas Election Code. SeeTex. Elec.Code Ann. § 251.001(13) (Vernon 2010). Raymond Witt served as campaign treasurer. Ellen Witt maintained campaign websites.

Ann Witt's opponent, incumbent Representative Jim Murphy, first was elected to represent House District 133 in 2006 for a term to begin on January 1, 2007. ¹ Murphy served from 1997 through 2006 as president of a “municipal management district” on Houston's west side called the Westchase District. This entity seeks to “promote, develop, encourage, and maintain employment, commerce, economic development, and the public welfare in the commercial areas of municipalities and metropolitan areas of this state.” Tex. Local Gov't Code Ann. § 375.001(b) (Vernon 2005). The Westchase District is a political subdivision of the state. Id. § 375.004(a). Murphy received a state salary as president of the Westchase District.

Members of the Texas Legislature cannot hold “any other office or position of profit under this State.” Tex. Const. art. XVI, § 40(d). Before running for the legislature, Murphy sought an opinion from the Texas Attorney General addressing whether he could serve simultaneously as president of the Westchase District and in the legislature.

Texas Attorney General Greg Abbott issued an opinion concluding that the Texas Constitution prohibits an individual from serving simultaneously as a municipal management district employee and a legislator. See Tex. Att'y Gen. Op. No. GA–386 (2005). The attorney general also opined that a person working as an “independent contractor” for a governmental entity does not hold a “position of profit under this State” Id. The opinion stated: “We conclude that article XVI, section 40(d) of the Texas Constitution does not prohibit a member of the Texas Legislature from also working for compensation as an independent contractor for a municipal management district.” Id. The opinion further stated: “The determination that a person actually works as an independent contractor and not as an employee involves questions of fact and contract interpretation, which cannot be resolved in the opinion process.” Id.

Murphy created a limited liability company called District Management Services, LLC in December 2006. Murphy is the LLC's sole member. Murphy resigned his position with the Westchase District as of December 31, 2006.

Effective January 1, 2007, the Westchase District entered an Administrative and Management Services Agreement with District Management Services, LLC. Each year since 2007, the district and the LLC have entered a similar one-year contract with a January 1 effective date. The LLC performs consulting services under these annual agreements to act as the district's general manager in return for compensation including a fixed monthly fee. Each annual agreement identifies the LLC as an “independent contractor.” The agreements prohibit Murphy from awarding work to, supervising, or approving the work of other contractors.

During the 2012 Republican primary for House District 133, Witt accused Murphy of acting to “sidestep” the Texas Constitution by serving in the legislature while receiving payment as a consultant to the Westchase District via contracts with District Management Services, LLC. Witt leveled this and many other accusations against Murphy on a Witt campaign website called “How to Succeed in Government Without Really Trying.”

The Witt campaign's main website was http:// voteannwitt. com. The main campaign website provided a link to the separate “How to Succeed” website at http:// howto succeed in government. com. The Witt campaign also placed radio advertisements and distributed mailers directing potential voters to the “How to Succeed” website. Versions of the “How to Succeed” website were accessible from mid-April 2012 until June 7, 2012.

The website explains that “ How to Succeed in Business Without Really Trying is a book, broadway musical, and movie about climbing the corporate ladder.” It continues: “The main character, J. Pierrepont Finch, outwardly appears to be a very likeable chap, but really he is using every trick in the book to get ahead at the expense of others.” The website then casts Murphy in the role of Finch: “In Texas government, J. Pierrepont Finch is Jim Murphy: likeable guy, but he's using every trick in the book—really, he could write the book—to make money off of government and further his own political ambition.”

The following statement appears below the website's “How to Succeed” heading and next to a large picture of Murphy: “How Jim Murphy is ripping off taxpayers.” The website states, “For professional politician Jim Murphy, it takes just 6 sleazy steps.”

The website's content changed over time. In one version of the “How to Succeed” website, the six steps are identified as follows.

• “STEP 1: Oversee a Government Body.”

• “STEP 2: Hire yourself as General Manager.”

• “STEP 3: Make $290,000 a year off taxpayers.”

• “STEP 4: Sidestep the Texas Constitution.”

• “STEP 5: Get a second government job.”

• “STEP 6: Reward your supporters.”

In another version, the six steps are identified with somewhat different wording.

• “STEP 1: Help create a new taxing entity.”

• “STEP 2: Hire yourself as its top bureaucrat.”

• “STEP 3: Make $290,000 a year off taxpayers.”

• “STEP 4: Sidestep that pesky Texas Constitution.”

• “STEP 5: Get a second government job.”

• “STEP 6: Reward your supporters with government contracts.”

In these iterations of the “How to Succeed” website, each “step” contains additional text and a link to click on for “MORE INFO.” The following words appear at the bottom of the screen: “Double Dipping. Skirting the Law. Bilking Taxpayers. Rewarding Cronies. It's time to end Jim's run.”

The dispute here focuses primarily on Step 6 and its accompanying text.

One version of the “How to Succeed” website contains this statement under Step 6: “Westchase District has awarded government contracts to the following companies, and the CEOs of these companies have contributed more than $48,000 in cash and services to Jim's campaigns for State Representative. (Copies of these contracts have been requested of the Westchase District.)” The website lists six companies under this text.

The second company listed under Step 6 is an advertising agency named “Rehak Creative Services.” The agency's chief executive officer and sole owner is Robert Rehak. He contributed $3,250 to Murphy's campaign for House District 133 in 2005–2006 and another $3,750 to Murphy's subsequent campaigns through 2011. Rehak's contributions to Murphy's campaigns for four election cycles totaled $7,000.

The website's entry for Rehak Creative Services, Inc. reads as follows: “$9,750 from Robert Rehak, CEO of Rehak Creative Services. Rehak Creative Services received a government contract from the Westchase District to design its Long Range Plan (see p. 55). And the company lists Westchase District as a client.” Three links appear under the second entry: “ Click here for contributions,” “Click here for Westchase Long Range Plan ” and “ Click here for Rehak client list.” According to Rehak's appellate brief, “Readers who followed the links under the statements about Rehak and RCS were directed to a list of Rehak's contributions to Murphy's campaigns since 2005, a copy of a 55–page long-range planning report for the Westchase District produced by RCS, and the trademarked logos of some of RCS' clients from RCS' website.”

A later version of the “How to Succeed” website revised the text referencing Rehak Creative Services, Inc. under Step 6 to state as follows:

Jim Murphy has awarded $1.3 million in Westchase District government contracts to his State Representative campaign contributors.

Westchase...