5/1/19 - Insights
HB2730 Passes in the House: Partner Varant Yegparian Outlines Key Takeaways
In passing HB2730, the Texas House has narrowed the scope of the Texas Citizen’s Participation Act — Texas’ Anti-SLAPP, or Strategic Lawsuits Against Public Participation, statute. In doing so, the Texas House has potentially made it more difficult to utilize a legal protocol that is abundantly prevalent in court houses throughout the state. Although the full extent of its impact on litigants will take time to discern, the following presents a preliminary review of the most significant statutory changes along with our assessment of the effect these changes may have on the statute as a whole.
First, HB2730 exempts a list of discovery procedures, motions, and requests for relief that arguably were within the TCPA’s scope. Among the items carved out are: motions to compel discovery, motions seeking a protective order from discovery, the issuance of subpoenas, motions for summary judgment, and motions for the award of sanctions and attorney’s fees. These changes directly affect at least one appeal pending before the Texas Supreme Court. Indeed, the abolition of the statute’s applicability to the issuance of subpoenas could very well moot the appeal in Case No. 18-1154, Dow Jones & Company, Inc. Highland Capital Management, L.P., where it was argued that the TCPA should apply to the issuance of a third-party subpoena.
Second, HB2730 expands the list of statutory exemptions to include: certain actions under the family code; an action seeking a protective order under Chapter 7A of the Code of Criminal Procedure; and actions seeking to enforce a non-competition agreement, non-disclosure agreement, or a non-disparagement agreement.
Third, HB2730 allows a party to nonsuit a legal action and foreclose a TCPA-movant’s ability to obtain attorney’s fees and sanctions despite the dismissal of the underlying lawsuit. This would overturn the holdings of several cases, including, more recently, In re Diogu Law Firm PLLC, 14-18-00878-CV, 2018 WL 4997322, at *1 (Tex. App.—Houston [14th Dist.] Oct. 16, 2018, no pet.) and Duchouquette v. Prestigious Pets, LLC, 05-16-01163-CV, 2017 WL 5109341, at *3 (Tex. App.—Dallas Nov. 6, 2017, no pet.). In these cases, and others, the appellate courts recognized that a TCPA motion to dismiss constituted an affirmative claim for relief that survived the dismissal of the underlying action on which dismissal was sought.
Fourth, HB2730 introduces two changes that attempt to curtail the TCPA’s broad scope. First, HB2730 introduces the term “constitutional” in describing the exercise of a party’s rights to free speech, to petition, and to freely associate. This change is in direct response to the Texas Supreme Court’s holding in Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 892 (Tex. 2018), reh’g denied (June 22, 2018) where the court held the TCPA was not coextensive with the First Amendment but was instead broader in scope. This holding had been cited by numerous appellate courts in broadly construing the statute’s scope. See, e.g., Kawcak v. Antero Res. Corp., 02-18-00301-CV, 2019 WL 761480, at *6 (Tex. App.—Fort Worth Feb. 21, 2019, pet. filed). Second, HB2730 removes the term “relates to” from Section 27.003. Thus, under the bill, Section 27.003 would have the TCPA apply only if “a legal action is based on or is in response to” a party’s exercise of protective rights. Again, removal of the term “relates to” is intended to narrow the statute’s scope.
Of all the changes introduced by HB2730, those introducing the term “constitutional” and removing the “relates to” language are the most important. However, assuming HB2730 passes the Senate, it remains to be seen what effect these changes will have on how the courts apply the TCPA. It is likely that several courts will view these two changes as an instruction from the legislature to reel in the statutory scope and have the TCPA apply to more traditional first amendment endangering actions. However, it is still possible that the broad scope engendered by the term “based on” could still allow a court to construe the statute as it was before. Indeed, those cases broadly construing the statute to apply to cases “factually predicated” on the exercise of protected rights analyzed the terms “based on, relates to, or is in response to.” See, Cavin v. Abbott, 545 S.W.3d 47, 58 (Tex. App.—Austin 2017, no pet.). That two of the three terms survive post-HB2730, could still allow for more of the same. In other words, should the courts view HB2730 as not going far enough to change the terms which have caused such a broad construction of the statute, then reports of the TCPA’s demise may be largely exaggerated.