In a case we first reported in January, 2024, the Texas Supreme Court has ruled that a trial court order granting a TCPA motion to dismiss past the 30-day statutory deadline did not prevent the trial court from revisiting its ruling under the court’s plenary power.
First Sabrepoint Capital Management, L.P., Sabrepoint Capital Partners, LP, Sabrepoint Capital Participation, LP, George Baxter, and Donald Marchiony v. Farmland Partners (No. 23-0634; April 25, 2025). The case arose from a suit filed first in Colorado state court and then removed to federal court. Farmland (FPI), a publicly-traded real estate investment trust, sued five Sabrepoint entities and individuals, alleging that they colluded with a reporter/blogger to publish a false and misleading article about FPI that substantially drove down the value of their stock. Sabrepoint, a Dallas-based hedge fund with a “significant short position” in FPI, FPI alleged, stood to benefit by negative publicity about FPI. Accordingly, FPI alleged, they hired the reporter (who is not a party to the lawsuit) to do a “hit piece” on FPI for an industry website. This so-called “short-and-distort” campaign apparently worked. FPI’s shares lost 39% of their value and further cost FPI other significant business opportunities. FPI alleged intentional and tortious interference with prospective business relations, negligence, deceptive trade practices under Colorado law, civil conspiracy, unjust enrichment, money had and received, business disparagement, and defamation.
Upon removal of the case from Colorado state to federal court, Sabrepoint moved to dismiss for lack of personal jurisdiction. The court granted the motion and dismissed the case. FPI then filed suit in a Dallas County district court. Sabrepoint moved for summary judgment based solely on its collateral estoppel defense. Sabrepoint also filed a TCPA motion to dismiss, which the trial court granted but the court of appeals later ruled was overruled by operation of law. The trial court granted Sabrepoint’s summary judgment motion. FPI appealed. The Dallas Court of Appeals reversed and remanded, holding that Defendants failed to conclusively establish that collateral estoppel barred Plaintiff’s claims. Sabrepoint sought review.
In an opinion by Justice Huddle, the Court agreed with the court of appeals that FPI failed to conclusively establish its collateral estoppel defense. But it reversed on the TCPA issue, holding that the court of appeals erred in holding that the order granting Sabrepoint’s TCPA motion was void. As to the TCPA, the Court applied its decision in In re Panchakarla, 602 S.W.3d 536, 538 (Tex. 2020), holding that “the expiration of the deadline for a trial court to rule on a TCPA motion does not extinguish the court’s plenary power to later reconsider that ruling.” Observing that the trial court’s order granting FPI’s motion to dismiss occurred only five days past the deadline, no final judgment had been issued, and Defendants had not appealed, the Court ruled that “under those circumstances, nothing in the TCPA extinguished the trial court’s plenary power to reconsider the TCPA motion’s merits.” The statute merely provides that “courts ‘must rule’ [on granting or denying a TCPA motion to dismiss] no later than thirty days after the hearing has concluded.” § 27.005(a), CPRC. If the deadline expires without a ruling, the statute deems the motion overruled by operation of law and authorizes an interlocutory appeal. But the statute “nowhere limits the trial court’s authority to revisit that ruling.” Even if the trial court erred in taking an additional five days to rule, Justice Huddle went on, the error was harmless because “the ultimate outcome was the same as if Sabrepoint had filed an interlocutory appeal from the denial by operation of law and succeeded on appeal” and the delay “did not result in an improper judgment.” The Court reversed the court of appeals’ ruling and remanded to the court for consideration of the merits of Sabrepoint’s TCPA motion.
Turning to the collateral estoppel defense, the Court affirmed the court of appeals’ determination that FPI did not conclusively establish the defense. As Justice Huddle pointed out, “[b]ecause collateral estoppel is the basis for the summary judgment motion and a basis for the TCPA motion, the doctrine’s application to this case will be at issue on remand.” In the interest of judicial efficiency, the Court decided the issue, finding that Sabrepoint failed to show that “the fact issue as to which it seeks to estop litigation in Texas is identifical to the one the Colorado court decided.” The basis distinction here was that the Colorado court had to decide whether Sabrepoint’s conduct was sufficient to constitute purposeful availment in Colorado, whereas a Texas court (where personal jurisdiction was not at issue) had to decide whether the alleged conduct constituted “a short-and-distort scheme so as to justify imposing liability.” Though the two issues share some of the same facts, the Court explained, “the issues must be identical.” Because the court of appeals correctly determined that they weren’t, the Court affirmed. To reinforce its holding, the Court pointed out that FPI added two new defendants to the Texas suit (the Sabrepoint fund and general partner), for which Sabrepoint failed to establish privity with the Colorado defendants.
