The Fort Worth Court of Appeals has affirmed a trial court order denying a motion to dismiss a lawsuit between well-known anti-vaccine organizations and their founders.
Jonathan Stickland and Jackie Schlegel, Texans for Vaccine Freedom, and Texans for Vaccine Choice, PAC v. Jackie Schlegel and Texans for Vaccine Choice (No. 02-22-00281-CV; delivered November 22, 2023) arose from a falling out between founders of Texans for Vaccine Freedom, which for the past several sessions have lobbied for, among other things, an end to vaccine mandates. Texans for Vaccine Freedom, along with its associated PAC, was founded as a 501(c)(4) lobbying organization in 2015. The following year the organizers formed a 501(c)(3) entity to carry out educational activities. Schlegel served as executive director of the (c)(4), worked for the (c)(3), and was appointed to treasurer of the PAC in 2021. Schlegel also served on the boards of directors of the (c)(3) and the (c)(4).
In November 2021 internal problems in the organizations seem to have come to a head. Their directors called a special joint meeting of the boards to work things out. Prior to that meeting, Schlegel initiated a transfer of more than $116,000 from the (c)(4)’s bank account to that of the (c)(3). When the (c)(4)’s office manager noticed the transfer (which amounted to 80% of the organization’s funds), she reported it to Hardy, a co-founder who likewise served on both boards. Hardy instructed the manager to contact Frost and reverse the transfer, which she did. After that, Hardy and the third (c)(4) board member, Welborn, fired Schlegel, accusing her of “criminal activity.” Word of Schlegel’s situation got out in a predictably garbled fashion, leading to much speculation and spreading of (mis)information among anti-vax advocates, donors, and consultants. In the event, the (c)(4) through its counsel offered Schlegel a year’s severance in exchange for nondisclosure and noncompete agreements, as well as her resignation from the (c)(3) board. Schlegel did not take up the offer, so the (c)(4) filed suit against Schlegel and the (c)(3) for injunctive relief, damages for trademark and logo infringement, trade-secrets and common law misappropriation, and tortious interference with prospective business relations. The trial court granted a TRO in part.
Schlegel counterclaimed for declaratory judgment that her removal from the (c)(4)’s board was ineffective and for harmful access by a computer. She then added Stickland as a counter-defendant, alleging defamation based on his allegedly telling a donor that she “stole money” and other similar statements to others. Stickland moved to dismiss Schlegel’s defamation claim under the Texas Citizens Participation Act (Ch. 27, CPRC), and Schlegel filed her own TCPA motion seeking to dismiss the (c)(4)’s claims. The trial court denied the motions.
The court of appeals affirmed in part and reversed in part. The court first took up whether Schlegel’s TCPA motion to dismiss was timely. The statute requires the motion to be made within 60-days of service. Plaintiffs claimed that Schlegel did not timely file her motion because she appeared in the case by her counsel’s presence at the TRO hearing. Thus, when the (c)(4) filed an amended petition on January 31, 2022, Schlegel had until April 1 to file. Schlegel, however, didn’t file until April 12, arguing that her February 11 answer triggered the TCPA deadline. The court of appeals concluded that Schlegel’s appearance at the TRO hearing, which took up issues central to the litigation as a whole, constituted a general appearance in the lawsuit and triggered the 60-day deadline. Schlegel’s motion was thus untimely, and the trial court did not err by denying it. As to the PAC’s TCPA motion to dismiss the (c)(4)’s claims of trademark and logo infringement and tortious interference claims stemming from the “(c)(4)’s right to use its name and logo, the ability to withdraw consent to the PAC’s use of a similar name, and the right to control the PAC” (citations omitted). The (c)(4) presented evidence that “established that its legal action arose from the actions of Schlegel, acting as an officer, acting individually, and acting through [the (c)(3)] and the PAC,” entitling it to recovery for misappropriation of trade secrets and corporate opportunities. Based on this record, the court held that the (c)(4)’s claims fell within § 27.010(a)(5), CPRC, which exempts from the TCPA “a legal action arising from an officer-director, employee-employer, or independent contractor relationship that … seeks recovery for misappropriation of trade secrets or corporate opportunities.”
Turning to Stickland’s TCPA motion to dismiss, the court determined Schlegel failed to present clear and specific evidence that two of the statements Schlegel claimed to be defamatory, a Facebook post and an alleged statement Stickland made to an unnamed third party were defamatory. A third statement, however, in which Stickland told an identified third party that Schlegel stole money, was supported by clear and specific evidence as to the date of the statement and what was said. The court then had to determine whether, as Stickland argued, the statement was “substantially true.” As the court observed, a “publication is not substantially true if, taken as a whole, it is more damaging to the plaintiff’s reputation than a truthful publication would have been. (citation omitted). The publication’s meaning is determined by construing it as a whole in light of the surrounding circumstances based on how a person of ordinary intelligence would perceive it (citation omitted).” Here the court held that “the allegation’s gist was that [the (c)(4)’s] board, alleged that Schlegel had attempted to transfer money from [the (c)(4)] to [the (C)(3)], an entity she controlled, without the legal authority to do so, a statement that is not more damaging (or less true) than the actual statement that she had stolen money from the nonprofit organization.” Stickland thus established the substantial truth of the statement, and the court reversed the trial court’s denial of his TCPA motion and remanded for a determination of attorney’s fees, costs, and potential TCPA sanctions.
This is a very interesting case both because it involves relatively widely known figures in the political arena and organizations currently flexing a lot of muscle at the Capitol. Beyond that, however, the court of appeals’ opinion provides an excellent analysis of how the TCPA applies in a dispute involving entities established for the primary purpose of changing public policy, fundraising, and influencing elections by direct contributions and more indirect means of voter education.
