Hayman v. Khan

693 S.W.3d 444

Robert HAYMAN, Appellant

v.Ekram KHAN a/k/a Ekramul Khan, Appellee

NO. 14-20-00745-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed August 1, 2023

On Appeal from the 10th District Court, Galveston County, Texas, Trial Court Cause No. 20CV0554

Karen Beyea-Schroeder, Houston, for Appellee.

Dylan Benjamen Russell, Houston, for Appellant.

Panel consists of Justices Jewell, Bourliot, and Poissant.

OPINION

Frances Bourliot, Justice

In this appeal, we are asked to decide whether the Texas Citizens Participation Act (TCPA) applies to counterclaims that are purportedly based on or in response to certain racist statements directed at appellee at his place of employment and attributed to appellant, the employer. Robert Hayman sued Ekram Khan a/k/a Ekramul Khan for breach of a promissory note. In response, Khan brought numerous counterclaims based on allegations that he was discriminated against because of his race and religion. Hayman moved to dismiss all but one of Khan’s counterclaims under the TCPA claiming that the alleged statements and communications were exercises of free speech. Hayman appeals the trial court’s denial of the motion by operation of law. Concluding that Hayman’s alleged statements and communications were not made in connection with a "matter of public concern" as contemplated by the TCPA, we affirm the trial court’s denial of the motion to dismiss.

Background

Hayman filed this lawsuit for breach of a promissory note, alleging that Khan defaulted by failing to timely pay all sums due. Khan answered Hayman’s lawsuit and brought eighteen counterclaims ¹ alleging that he was previously employed by Hayman and his company and during his employment he was "harassed and discriminated against … because of his Indian descent and Muslim beliefs." Khan alleged that the harassment and discrimination occurred on a daily basis and included:

• Pointing a gun at Khan;

• Stating, "Indians don’t understand things and we should get rid of them";

• Sending disparaging emails about Khan, producing a video mocking him, criticizing his performance, and accusing him of wrongdoing;

• Calling Khan a "vampire machine" and "stupid";

• Criticizing Khan for talking too much and laughing at him during presentations, stating, "[h]e is going to go through every fucking button" and the client "is probably pulling his hair out," and his "kids probably go to sleep so easily," and asking him, "[w]hat the fuck are you talking about?"; and

• Constantly making fun of Khan’s race and religious beliefs.

Khan also alleged that Hayman retaliated against him for complaining of these purported events.

In response, Hayman filed a TCPA motion to dismiss all Khan’s counterclaims except fraud, along with a motion for partial summary judgment on all Khan’s counterclaims. The trial court rendered a take nothing summary judgment on the counterclaims, but the TCPA motion was denied by operation of law. This interlocutory appeal followed.

Standard of Review

[1] We review the trial court’s ruling on a TCPA motion to dismiss de novo. Dallas Morning News v. Hall, 579 S.W.3d 370, 377 (Tex. 2019). Once a motion to dismiss is filed, a burden-shifting mechanism goes into effect. In re Lipsky, 460 S.W.3d 579, 586-87 (Tex. 2015) (orig. proceeding). Our review requires a three-step analysis. Youngkin v. Hines, 546 S.W.3d 675, 679 (Tex. 2018). Initially, the moving party must demonstrate that the legal action is based on or is in response to the movant’s exercise of the right of free speech, to petition, or of association. See Tex. Civ. Prac. & Rem. Code § 27.005(b). If the movant meets its burden, the nonmoving party must establish by clear and specific evidence a prima facie case for each essential element of its claim. See id. § 27.005(c). If the nonmoving party satisfies that requirement, the burden shifts back to the movant to establish an affirmative defense or other ground on which it is entitled to judgment as a matter of law. Id. § 27.005(d). If the movant meets its burden in this third step, the trial court must dismiss the action. See id.

Discussion

[2, 3] As an initial matter, we address Khan’s apparent arguments that (1) Hayman was required to preserve error on his challenge to the trial court’s denial of the TCPA motion by operation of law and (2) the recently amended TCPA should not be applied to the alleged communications and statements.² The denial of a TCPA motion by operation of law is expressly appealable under the statute. Tex. Civ. Prac. & Rem. Code § 27.008(a). Hayman was not required to take any additional steps to appeal after the motion was denied by operation of law. See id.; see also Tex. Civ. Prac. & Rem. Code § 51.014(a)(12) (authorizing interlocutory appeal of order denying TCPA motion to dismiss). Moreover, the prior version of the statute only continues to control cases filed before September 1, 2019.³ In this case, Hayman filed his suit after September 1, 2019. Therefore, the amended act is applicable to this case. We next turn to the issues presented by Hayman.

Hayman challenges the trial court’s denial of his motion to dismiss on the grounds that (1) the TCPA applies because Khan’s claims were based on or in response to the exercise of the right to free speech in connection with a matter of public concern, (2) Khan failed to establish by clear and specific evidence a prima facie case for each essential element of his claims, and (3) the claims are barred by the applicable statutes of limitations.

The TCPA is popularly known as the Texas Anti-SLAPP statute, referring to "Strategic Lawsuits Against Public Participation." Bandin v. Free & Sovereign State of Veracruz de Ignacio de, la Llave, 590 S.W.3d 647, 649 (Tex. App.—Houston [14th Dist.] 2019, pet. filed); Toth v. Sears Home Improvement Prods., Inc., 557 S.W.3d 142, 149 (Tex. App.—Houston [14th Dist.] 2018, no pet.). Despite this moniker, the legislature did not impart the traditional remedies associated with SLAPP suits or use that term in the TCPA. Bandin, 590 S.W.3d at 649.

[4, 5] The TCPA is intended "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 and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury." Tex. Civ. Prac. & Rem. Code § 27.002; Cox Media Grp., LLC v. Joselevitz, 524 S.W.3d 850, 859 (Tex. App.—Houston [14th Dist.] 2017, no pet.). It "protects citizens from retaliatory lawsuits that seek to intimidate or silence them" from exercising their First Amendment freedoms and provides a procedure for the "expedited dismissal of such suits." In re Lipsky, 460 S.W.3d 579, 586 (Tex. 2015). We construe the act liberally to effectuate its purpose and intent fully. ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 899 (Tex. 2017) (per curiam); Bandin, 590 S.W.3d at 650 (citing Tex. Civ. Prac. & Rem. Code § 27.011(b)).

Does the TCPA Apply to Khan’s Counterclaims?

Hayman contends in his first issue that the TCPA applies because Khan’s counterclaims are based on or in response to Hayman’s exercise of his right to free speech. Tex. Civ. Prac. & Rem. Code § 27.005(b). Khan argues that the alleged discriminatory and racist statements were in a private setting where the parties were discussing internal business affairs and that such statements do not fall within the act’s definition of communications made in connection with matters of "public concern." We agree.

[6] To assert a motion to dismiss under the TCPA, Hayman was required to show "by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the party’s exercise of … the right of free speech." Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam) (citing Tex. Civ. Prac. & Rem. Code § 27.005(b)). Under the TCPA, exercise of the right of free speech is defined as a communication made in connection with a matter of public concern. Tex. Civ. Prac. & Rem. Code § 27.001(3). A matter of public concern is a "statement or activity regarding: (A) a public official, public figure, or other person who has drawn substantial public attention due to the person’s official acts, fame, notoriety, or celebrity; (B) a matter of political, social, or other interest to the community; or (C) a subject of concern to the public." Id. § 27.001(7).

We recognize that the applicable definition of "matter of public concern" is narrower now than at the act’s inception. See Vaughn-Riley v. Patterson, No. 05-20-00236-CV, 2020 WL 7053651, at *3 (Tex. App.—Dallas Dec. 2, 2020, no pet.) (mem. op.) (citing S.J. of Tex., 86th Leg., R.S. 2023-24 (May 17, 2019)). Specifically, the Legislature substantively amended the definition of "matter of public concern" in 2019 and deleted the "good, product, or service in the marketplace" and "environmental, economic, or community well-being" language from the definition. See Tex. Civ. Prac. & Rem. Code § 27.001(7); see also Vaughn-Riley, 2020 WL 7053651, at *3 (noting that legislative history of definition of "matter of public concern" reflected legislature’s intent to narrow TCPA’s scope in 2019 amendments).

[7–9] Communications are a matter of public concern when they can "be fairly considered as relating to any matter of political, social or other concern to the community" or when it "is a subject of general interest and of value and concern to the public." Snyder v. Phelps, 562 U.S. 443, 453, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011). "The arguably ‘inappropriate or controversial character of a statement is irrelevant to the question of whether it deals with a matter of public concern.’ " Id. (quoting Rankin v. McPherson, 483 U.S. 378, 387, 107 S.Ct. 2891, 97 L.Ed.2d 315 (1987)). Deciding whether speech is of public or private concern requires us to examine the "content, form, and context" of that speech, "as revealed by the whole record." I...