On August 23, 2019, the United States Court of Appeals for the Fifth Circuit issued its long-awaited opinion in Klocke v. Watson, 17-11320, 2019 WL 3977545, at *1 (5th Cir. Aug. 23, 2019), holding that the Texas Citizens Participation Act (“TCPA”) does not apply to diversity cases in federal court. This decision settles a split manifested across dozens of cases at the district courts.
By ruling that the TCPA does not apply to diversity cases in federal court, the Fifth Circuit foreclosed an otherwise potent weapon used by defendants throughout Texas in trade secrets litigation. Because of the TCPA’s extremely broad application, defendants in trade secrets cases, for example, often asserted that claims alleging the misappropriation of trade secrets and related causes of action were based on and related to the defendant’s freedom to speak freely on all topics, including the trade secrets at issue, and its freedom to associate with competitors, and therefore such claims should be dismissed under the TCPA. Such arguments are now foreclosed by this ruling, at least in federal court.
Nevertheless, the Fifth Circuit’s holdings in Klocke may be soon revisited, as new provisions of the TCPA went into effect September 1 that repealed and replaced some of the burden-shifting framework that the Fifth Circuit held conflicted with the Federal Rules of Civil Procedure. The statute’s September 1 amendments also dramatically reduce the TCPA’s applicability to trade secret cases regardless of where they are filed.
BackgroundThe TCPA is an anti-SLAPP (Strategic Lawsuit Against Public Participation) statute allowing litigants to seek early dismissal of a lawsuit if the legal action is based on, relates to, or is in response to a party’s exercise of the constitutional right of free speech, right to petition, or right of association. Like other states, Texas enacted the TCPA to address concerns over the increasing use of lawsuits to chill the exercise of First Amendment rights. As it applied up until September 1, a movant was required to show by a preponderance of the evidence that the TCPA applied. If a movant was successful, a non-movant was then required to show by “clear and specific evidence” each element of its prima facie case or face mandatory dismissal, fees, and sanctions. If a movant was successful, a movant could still obtain dismissal fees and sanctions if the movant could show by a preponderance of the evidence each essential element of a valid defense to the non-movant’s claim.
Case FactsThomas Klocke was a student at the University of Texas at Arlington who tragically committed suicide in June 2016 after being refused permission to graduate while the University investigated allegations made by fellow student Nicholas Watson that Klocke harassed Watson based on his sexual orientation. Thomas Klocke’s father, as administrator of his son’s...
