Encore Enterprises, Inc. v. Shetty, 05-18-00511-CV, (Tex. App. – Dallas April 29, 2019, no pet. h.)
Shetty was the CFO of Encore Enterprises, Inc. He reported to the Chairman and to the CEO that a transaction did not qualify for tax benefits and that it may lead to criminal liability for tax fraud. He was fired.
Shetty filed a suit for wrongful discharge under the Sabine Pilot exception to Texas at-will employment in Dallas County. Encore filed suit against Shetty in Collin County to enjoin him from disclosing confidential information. Shetty objected to the injunction in which he stated “[i]n business dealings, honest representations are a matter of public concern.” Seizing on that objection, Encore filed a Texas anti-SLAPP, TCPA, motion to dismiss the Dallas County.
Encore argued that “Plaintiff’s alleged communications fall directly within the TCPA and he cannot show proof for a prima facie case; thus, his lawsuit should be dismissed.” Relying on the objection filed in the Collin County lawsuit, Encore stated that Shetty admitted “his speech and lawsuit are a matter of `public concern.’”
The Texas Anti-SLAPP law or TCPA has a three step process. In step one, the movant bears the burden of establishing by a preponderance of the evidence that the nonmovant’s claim is a legal action in response to the movant’s exercise of his right of association, his exercise of his right of free speech or his exercise of his right to petition. §27.003 (a).
The linchpin of the movant’s exercise of the rights defined in the TCPA is a communication. Here the court found that there was no communication protected by the TCPA.
Once the movant has shown that the nonmovant’s legal action is covered by the act, the burden shifts to the nonmovant to demonstrate a prima facie case for each essential element of a cause of action by “clear and specific evidence.” §27.005 (c).
Not reached because the movant failed to show the suit was a legal action.
If the nonmovant meets his burden of establishing a prima facie case for each essential element of a cause of action by “clear and specific evidence”, the court must still grant the motion to dismiss if the movant establishes a valid defense by a “preponderance of evidence”. §27.005 (d).
The court never reached the third step because Encore failed to carry its burden under Step-one.
Conclusion and Disposition
Only communications by the movant are protected by the Texas anti-SLAPP, TCPA, statute.
The linchpin of the movant’s exercise of the rights defined in the TCPA is a communication…(t)hus, the defendant must show the plaintiff’s lawsuit implicates the defendant’s communications that constitute the exercise of one of the statutorily defined rights.
Under the TCPA, a defendant moving for dismissal must show the plaintiff’s “legal action is based on, relates to, or is in response to the [defendant’s] exercise of . . . the right of free speech”—that is, “a communication made in connection with a matter of public concern…” Here, Encore shows only that Shetty’s legal action is based on, relates to, or is in response to Shetty’s communications to Encore.
We conclude that Encore failed to show by a preponderance of the evidence that Shetty’s lawsuit is based on, related to, or in response to Encore’s exercise of the right of free speech, right to petition, or right of association as defined in the TCPA. Therefore, Encore failed to establish the first step in the TCPA analysis.