W. Mktg., Inc. v. AEG Petroleum, LLC

• Decision Date: 06 January 2021
• Docket Number: No. 07-20-00093-CV,07-20-00093-CV
• Citation: 616 S.W.3d 903
• Parties: WESTERN MARKETING, INC. and Todd Pitts, Appellants v. AEG PETROLEUM, LLC, Appellee
• Court: Texas Court of Appeals

616 S.W.3d 903

WESTERN MARKETING, INC. and Todd Pitts, Appellants

v.AEG PETROLEUM, LLC, Appellee

No. 07-20-00093-CV

Court of Appeals of Texas, Amarillo.

January 6, 2021

Stephanie J. James, Jennie C. Knapp, Roger S. Cox, Amarillo, for Appellants Appellant Pitts, Todd.

Bradley C. Weber, Dallas, Mark S. Logsdon, Amarillo, Susan A. Kidwell, Austin, for Appellee.

Penn C. Huston, Jeffrey R. Elkin, for Appellants Western Marketing.

Before QUINN, C.J., and PARKER, and HATCH,¹ JJ.

Brian Quinn, Chief Justice

Interlocutory appeals involving the Texas Citizens Participation Act (TCPA) mimic a game of "whack-a-mole"; as soon as the court disposes of one, another pops up. And each leads down the tortuous winding TCPA mole-hole. The most recent to show its head concerns a suit initiated by AEG Petroleum, LLC, against Western Marketing, Inc. and its employee, Todd Pitts (Western). The former averred a plethora of causes of action against the latter. Each, though, arose from a soured business relationship resulting in Western purportedly engaging in effort to harm AEG's business interests. The effort allegedly ranged from defaming or disparaging AEG and its products to forming a cabal bent on unlawfully restraining its trade. Western moved to dismiss the suit under § 27.001 et seq. of the Texas Civil Practice and Remedies Code. The trial court denied the motion, resulting in the interlocutory appeal now before us. Through it, Pitts and his employer contend that the trial court erred in denying the motion. We reverse and dismiss in part.

The Hole Opens

The standard of review we apply and analytical journey in which we engage were recently discussed in Mesquite Servs., LLC v. Std. E&S, LLC , 610 S.W.3d 548, 554–56 (Tex. App.—Amarillo 2020, no pet.) (mem. op.), and Casey v. Stevens , 601 S.W.3d 919, 922–23 (Tex. App.—Amarillo 2020, no pet). Their reiteration is unnecessary.

Turn One – Does the Act Apply?

The first matter with which we deal is the question of whether AEG's claims are based on, related to, or in response to "a party's exercise of the right of free speech, right to petition, or right of association." TEX. CIV. PRAC. & REM. CODE ANN. § 27.003(a) (West 2020) (permitting a defendant to seek dismissal of a legal action based on, relating to, or responding to a party's exercise of the right of free speech, right to petition, or right of association). That is the key which opens the hole's cover, and Western has the responsibility of initially showing that AEG's suit fits the keyhole. Whether it does begins with AEG's live pleading. While pleadings, affidavits, and evidence proffered to the trial court may be considered, the allegations in one's pleadings depict the nature of the legal action. See Hersh v. Tatum , 526 S.W.3d 462, 467 (Tex. 2017). So, if it is clear from them that the action comes within the TCPA, then the defendant's burden is met. Id. And, the nature of the suit is determined from a "holistic," as opposed to segmented, review of them. See Adams v. Starside Custom Builders, LLC , 547 S.W.3d 890, 897 (Tex. 2018) (stating that the action's nature is "based on a holistic review of the pleadings").

According to Western, AEG's claims arise from or relate to the right to petition because Pitts allegedly uttered "disparaging" remarks about it in an affidavit, which affidavit was executed to assist Chevron U.S.A., Inc. obtain an injunction against AEG. It is both right and wrong. For instance, AEG did mention in its pleading the Chevron suit and Pitts's effort to assist that endeavor by executing the affidavit. So, too did it aver that Pitts uttered falsehoods about AEG in his affidavit. Executing an affidavit as part of litigation has been held to fall within the TCPA's definition of the right to petition. See Beving v. Beadles , 563 S.W.3d 399, 405–06 (Tex. App.—Fort Worth 2018, pet. denied) (concluding that Beving's deposition and affidavit testimony provided in the underlying lawsuit constitute a communication made in a judicial proceeding and implicates an exercise of her right to petition). So, in some respect, in can be said that AEG's suit is in response to the exercise of the right to petition. On the other hand, other allegations within AEG's live pleading speak of objectionable falsehoods uttered to third parties before and after Chevron sued and Pitts executed his affidavit to assist that entity. In AEG's view, they too were slices of the overall pie or scheme baked by Western to disparage and rid itself of a competitor, i.e., AEG. Suing to redress tortious acts occurring before, after, and independent of the Chevron suit hardly constitutes a legal action responding to the right to petition evinced by Chevron's suit and Pitts's attempt to further it. So, again we say that Western is both right and wrong in positing that AEG's suit is in response to the exercise of a right to petition. And, this presents an interesting circumstance.

When a legal action is in response to actions both protected and unprotected under the TCPA, the entire suit is not subject to dismissal; only that part relating or responding to the protected action is. Weller v. MonoCoque Diversified Interests, LLC , No. 03-19-00127-CV, 2020 WL 3582885, at *3–4, 2020 Tex. App. LEXIS 4871, at *12–13 (Tex. App.—Austin July 1, 2020, no pet.) (mem. op.) ; Beving , 563 S.W.3d at 409 ; Walker v. Hartman , 516 S.W.3d 71, 81 (Tex. App.—Beaumont 2017, pet. denied). More importantly, it is the defendant's responsibility to segregate the protected conduct from the unprotected; if it cannot, then its motion to dismiss should be denied. See White Nile Software, Inc. v. Carrington, Coleman, Sloman & Blumenthal, LLP , No. 05-19-00780-CV, 2020 WL 5104966, at *5–6, 2020 Tex. App. LEXIS 7097, at *14–15 (Tex. App.—Dallas Aug. 31, 2020, no pet.) (mem. op.) ; Weller , 2020 WL 3582885, at *3–4, 2020 Tex. App. LEXIS 4871, at *12–13 ; Beving , 563 S.W.3d at 409. In other words, if a particular cause of action arises from or relates to both protected and unprotected conduct and one cannot be segregated from the other, then denying the motion to dismiss that cause is the appropriate course of action. That initially would seem to be the correct course of action here. "Why?" one would ask. Because, according to Western, AEG incorporated each factual allegation averred in the amended petition into each of its causes of action. So, in its view, the Chevron suit and Pitts affidavit were part of each cause of action. But, following that logic would mean that other purported misconduct undertaken by Western and independent of the Chevron suit and Pitts affidavit also comprise each cause of action. So, the appropriate course of action would be to deny dismissal. Oh, were it that we could escape the mole-hole and end our journey by relying on that analysis. Sadly, we cannot for Western invoked another way to keep us underground. It did so by also asserting that AEG's claims were based on, related to, or in response to the exercise of the right of free speech. And, with that, we cannot disagree.

An "exercise of the right of free speech" consists of "a communication made in connection with a matter of public concern." TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(3) (West 2020); Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC , 591 S.W.3d 127, 134 (Tex. 2019). Encompassed within "a matter of public concern" are communications related to "a good, product, or service in the marketplace." TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(7)(E) ; Creative Oil & Gas, LLC , 591 S.W.3d at 134. To fall within the TCPA, the communications must relate to a good, product, or service and "have some relevance to a public audience of potential buyers and sellers." Creative Oil & Gas, LLC , 591 S.W.3d at 134–35.

Referring back to the purported "scheme" initiated by Western, AEG described it as consisting of "entering into agreements with other petroleum product distributors to boycott AEG as a customer" and "disparaging AEG and/or its products to other petroleum product suppliers and AEG customers throughout the Texas Panhandle." One disparaging remark consisted of an allegation about AEG selling "counterfeit bulk lubricant products." It was made to SBJ Services, which entity happened to be a buyer of AEG's products. To another entity, that is, Hansford Supply, Pitts allegedly said such things as 1) AEG was " ‘selling counterfeit product," 2) Western "had trouble in the past with AEG," 3) "AEG are bad news," and 4) "any product that Hansford Supply buys from AEG might not be what [AEG] said it was." Hansford Supply also happened to be a customer of AEG, according to the pleadings.

Similarly, Western purportedly told Chevron that AEG was selling counterfeit products under the Chevron trademark. The statement was made, according to AEG, during a period in which Chevron actually manufactured some of the products AEG sold.

On another occasion, Western, through a supposed intermediary, allegedly approached a different AEG supplier, CITGO. The intermediary allegedly accused AEG of dealing in counterfeit products under CITGO's trademark or logo. Old World and Lubriformance were also told disparaging remarks by Pitts, which remarks concerned AEG products and its means of selling them.

Each of the foregoing averments relate to a good, product, or service of AEG. So too were the utterances said to either customers, suppliers, or potential suppliers of AEG. That they concerned counterfeiting the products of suppliers and selling those counterfeit products to customers makes it rather difficult to deny that the utterances carried some relevance to a public audience of potential buyers and sellers. The same is no less true of the statement told Old World in response to the latter's understanding that AEG was a "retailer with dozens of stores"; that implicated the means by which AEG obtained products from suppliers and sold them to customers. Thus, it can be said the communications fell within the penumbra of TCPA's...