In a case arising from a news story involving the founder of a telemedicine business to expand his business by seeking contracts with local governments during the COVID-19 pandemic, the Austin Court of Appeals has reversed a trial court order denying the news publisher’s motion to dismiss pursuant to the Texas Citizens Participation Act.
Texas Tribune, Inc., ProPublica, Inc., Vianna Davila, Jeremy Schwartz, and Lexi Churchill v. MRG Medical LLC (No. 03-23-00293-CV; May 22, 2024) stemmed from a September 25, 2020 story in the Tribune and on ProPublica’s website titled “How a local Texas politician helped a serial entrepreneur use COVID-19 to boost his business.” The founder of MRG attempted to peddle a telemedicine app to local governments. When the pandemic broke out, he joined forces with another entrepreneur in an effort to convince county governments to buy Chinese COVID tests acquired by the entrepreneur. One of the more damning things quoted in the article was a statement from a Tribune source who witnessed a conversation between the founder and the Hays County Judge in which they discussed doing the “deal” in less than $50,000 increments so no competitive bidding would be required. Another person present at that conversation was reported as saying that “[o]nce I heard that . . . it was like, dude, you’re going to end up in prison.” MRG sued the media defendants for business disparagement, tortious interference, and civil conspiracy. Defendants moved for TCPA dismissal. The trial court denied the motion. Defendants filed an interlocutory appeal.
In an opinion by Justice Theofanis, the court of appeals reversed and rendered. First, Plaintiff argued that the TCPA did not apply because “no public money was ever spent with [Plaintiff].” The court brushed this aside, since the article involved the connection between two public officials and Plaintiff’s founder about “the [potential] allocation of public funds” allocation of public funds to purchase Plaintiff’s tests (the article likewise raised the issue of the Chinese tests’ reliability). The Court thus determined that “[t]aken as a whole, the article concerns a matter with ‘public relevance beyond the interests of the parties’” (citation omitted). Second, the Court considered whether Plaintiff pleaded a business disparagement claim, which he asserted, or a defamation claim, which the media defendants asserted. The Court again sided with Defendants, holding that the “gravamen” of Plaintiff’s claim was for damage to its general reputation, not the marketability of its telehealth services (Plaintiff claimed that COVID tests were never a product or service, undermining his allegation that the article questioning the accuracy of Chinese tests supported his claim). Because the court determined that Plaintiff’s claim was for defamation, the one-year statute of limitations applied. Plaintiff’s claims, which were filed two years after the publication of the article, were thus time-barred. Defendants thus demonstrated a valid defense and were entitled to dismissal.
