Lawyers who are keeping an eye on SLAPP litigation will want to review the Texas Supreme Court’s April 15 ruling in Sullivan v. Abraham. In its brief decision, the court provided a little more clarity in this emerging area of litigation that can affect many areas of law, including trade secrets.
In Sullivan, the court held that Texas’ new-ish law against strategic lawsuits against public participation (SLAPP) does not allow a court to reduce the amount of “reasonable” attorneys’ fees to account for “justice and equity.” The plaintiff, who won the underlying action, had sought $71,700 in fees and expenses, but the trial court awarded only $8,000. That decision was upheld on appeal, with the court finding that the trial court had “discretion to award a lesser amount if ‘justice and equity’ so required.”
The Supreme Court, however, disagreed, ruling that the “equitable and just” standard wasn’t part of the Texas Citizens Participation Act, the 2011 anti-SLAPP law the underlying suit invoked. The TCPA simply allows for “reasonable” fees, the high court ruled, and sent it back to the trial court to determine what “reasonable” is in this case.
The lesson here is an important one: the TCPA is a robust tool to protect Texas citizens when they are participating in protected activities, whether that’s exercising free speech, seeking a remedy in court or partaking in the right of association.
In the case of trade secret theft cases, companies will often counter sue, or even file suit against the plaintiff in a separate case, on little more than a hunch that, because a former employee is suing the company, they’re using confidential information, trusting that discovery will – or won’t – bear that suspicion out.
Parties with that thought in mind need to make sure that what they’re suing for isn’t protected activity (i.e. filing a lawsuit) and, if it is, they need to be prepared to explain at the outset of their case that they have “clear and specific” evidence to support their case – even before discovery begins. Otherwise, they risk not only dismissal, but getting SLAPPed with a hefty attorneys’ fees bill.
The high court actually watered down the TCPA in 2015’s In re: Lipsky. In that case, a Texas couple who claimed that fracking contaminated their water well with methane was sued for defamation by Range Resources Corp. The court ruled that Range could not pursue the defamation case because it didn’t show “clear and specific” evidence to establish a prima facie case against the couple.
In its decision, however, the court clarified that circumstantial evidence could be considered “clear and specific” evidence, under the TCPA.
“Circumstantial evidence may be used to prove one’s case-in-chief or to defeat a motion for directed verdict, and so it would be odd to deny its use here to defeat a preliminary motion to dismiss under the TCPA,” the opinion said. “That the statute should create a greater obstacle for the plaintiff to get into the courthouse than to win its case seems nonsensical.”
At just 5 years old, the TCPA is still fairly new, so it’s worth keeping an eye the courts for continued clarity.