The Dallas Court of Appeals has turned away another attempt to utilize the Texas Citizens Participation Act (TCPA; Chapter 27, CPRC) to avoid accountability for discovery abuses. The case, Felix Sorkin, Individually, General Technologies, Inc., and Precision-Hayes International, Inc. v. P.T. Atlas Manufacturing, L.L.C. (No. 05-21-00657-CV), arose from a series of lawsuits between competitors in the concrete reinforcement industry. In the first lawsuit, brought in 2019, Sorkin, the owner of a holding company that owns both GTI and PHI, sued a former employee in Harris County to enforce a covenant not to compete. After the lawsuit was filed, the employee became employed by PT Atlas, PHI’s competitor. While that lawsuit was pending, Sorkin, PHI, and GTI sued PT Atlas in federal court for patent infringement. As part of that suit, the plaintiffs obtained discovery of PT Atlas’s confidential business contacts under a confidentiality agreement and protective order. The federal case settled, and the case was dismissed in October 2020. The following month, PHI began sending discovery requests in the Harris County lawsuit to PT Atlas’s customers and vendors, although PT Atlas was not a party to the suit. PT Atlas then filed suit in Dallas County, alleging that PHI used confidential information obtained in the federal lawsuit to use discovery requests to harass and intimidate its customers and wreck its business.
PHI filed a TCPA motion to dismiss, asserting that PT Atlas filed the Dallas County lawsuit in response to communications made in the Harris County lawsuit or federal lawsuit. The trial court heard the motion but did not rule by the 30th day, so it was denied by operation of law. PHI brought an interlocutory appeal, arguing that the denial of their motion to dismiss was error because the third-party discovery requests in the Harris County lawsuit constituted communications made in a judicial proceeding, which are covered by the TCPA. The court of appeals disagreed. Citing its own precedent, the court determined that a subpoena seeking information from a third-party is not a “legal action” within the meaning of the TCPA. Otherwise, “the proliferation of motions to dismiss attacking discovery requests, as opposed to the underlying lawsuits and substantive claims that are the TCPA’s core focus, would result in an application of the TCPA that strays from . . . its manifest purpose to secure quick and inexpensive dismissals of meritless ‘legal actions’ that threaten expressive freedoms” [citing Down Jones & Co. v. Highland Capital Management, L.P., 564 S.W.3d 852, 858 (Tex. App.—Dallas 2018, pet. history). Applying that reasoning to another case, Misko v. Johns, 575 S.W.3d 872 (Tex. App.—Dallas 2019, pet. denied), the court held that the Legislature did not intend that “a motion based on conduct within litigation that is ancillary to the substantive claims in the case should fall within the statute’s ‘catch-all provision’ of ‘other judicial proceeding or filing.’” Similar to this case, Misko involved discovery abuses.
Based on this precedent, the court of appeals determined that “discovery abuse is not a right protected by the TCPA.” Although this case is procedurally different from Misko because the alleged discovery abuse occurred in a separatelawsuit to which PT Atlas is not a party, the court of appeals held that the principle is the same.
