Texas Anti-SLAPP Law: The Expanding Scope of the Texas Citizen’s Participation Act – Part 3

Originally published by Travis Crabtree.

Go to Part 2 – In Practice

Go to Part 1 – The basics of the Texas Anti-SLAPP law

In part three we are going to deep dive into a specific case that has garnered a lot of attention-Schlumberger v. Rutherford which is currently on appeal to the Houston Court of Appeals (case number 01-14-00776-CV).

Schlumberger sued Rutherford, its former in-house counsel, for allegedly misappropriating intellectual property before leaving for a job with Acacia Research Group.  Schlumberger alleged it had forensic data proving that Rutherford copied filed onto a USB hard driver before removing it from her company laptop.  Rutherford denied it.

In the middle of the case, Schlumberger amended its petition to claim that Rutherford was the source of information for Acacia’s ongoing infringement suit against Schlumberger in federal court.  Schlumberger alleged Rutherford told Acacia to acquire patents she knew Schlumberger was allegedly violating.  In response, Rutherford argued Schlumberger was using the trade secret case as improper discovery tool and leverage in the separate patent infringement case.

Rutherford moved to dismiss Schlumberger’s claims under the TCPA.  She argued she was targeted by Schlumberger because she had exercised her right to association with Acacia, she spoke with Acacia about litigation strategies and for signing off on patent litigation.  Thus, Rutherford argued, Schlumberger’s claim against her was “based on, relates to, or is in response to [her] exercise of the right . . . to petition, or right of association.”

The TCPA defines “exercise of the right of association” to mean “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” Tex. Civ. Prac. & Rem Code § 27.001(2).  The “exercise of the right to petition” is defined with reference to a specified list of communications that have a nexus to participation in government. Id. at § 27.001(2)-(4).

The trial court agreed finding Rutherford properly invoked the TCPA and therefore shifted the burden to Schlumberger to come up with clear and specific prima facie evidence of its trade secret claims.  The trial court found that Schlumberger failed to do so and dismissed the misappropriation, conversion, breach of fiduciary duty and violations of the Texas Theft Liability Act claims leaving only the breach of contract claim.  As a result, the court ordered Schlumberger to pay $350,000 in fees and $250,000 in sanctions.  Schlumberger appealed and Rutherford cross-appealed trying to get the breach of contract claim dismissed on the same TCPA grounds.

On appeal, Schlumberger is arguing the TCPA does not apply to this private commercial dispute citing the purpose of the act is “to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law.” Tex. Civ. Prac. & Rem. Code § 27.002. In the brief Schlumberger argued:

As this Court has recognized however, untethering the TCPA’s “right to petition” and “right of association” provisions from its “larger public purpose” and the “generally recognized parameters of First Amendment protections” leads to an unreasonable and absurd expansion of the statute’s applicability. Cheniere Energy, 2014 WL 5011132, at *6 (noting that if the statute is not read in light of these considerations, “any communication that is part of the decision-making process in an employment dispute—to name just one example—could be used to draw within the TCPA’s summary dismissal procedures private suits implicating only private issues”).

Brief at 43.  Essentially, Schlumberger is arguing that if this ruling is allowed to stand that any communications made in the context of a lawsuit or any tortious interference claim would be subject to the TCPA.  Given the broad definition of the “exercise of the right of association,” it could be argued the TCPA applies to any cause of action that is “based on, relates to, or is in response to a party’s” joining another entity’s employment.

The particular facts of this case may make it the exception and not the new rule.  Schlumberger secured an ex parte temporary restraining order against Rutherford.  After deposing the people who signed the affidavits used by Schlumberger to obtain the restraining order, Rutherford argued the affidavits were misleading. Rutherford also argued that the state trade secret case was a ruse to obtain discovery and retaliate for the patent infringement cases in federal court.  Given the difficult in proving something is a trade secret, however, we may see this tactic more often requiring trade secret claimants to provide clear and specific prima facie evidence of the existence of a trade secret.

The case was argued on May 5, 2015, and it will provide another chance for the courts of appeal to determine the scope of the applicability of the TCPA.

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