Union Pac. R.R. Co. v. Chenier

649 S.W.3d 440

UNION PACIFIC RAILROAD COMPANY, Appellant

v.Betty CHENIER, et al., Appellees

NO. 01-21-00073-CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued February 24, 2022

Rehearing Denied February 24, 2022

Debra Tsuchiyama Baker, Earnest W. Wotring, John Muir, David George, Baker * Wotring LLP, JPMorgan Chase tower, 600 Travis St., Ste. 700, Houston, Texas 77002, for Appellant.

Marrick Armstrong, Derrick A. Reed, Stephens Reed & Armstrong, PLLC, 12234 Shadow Creek Parkway, Ste. 1104, Pearland, Texas 77584, for Appellee.

Panel consists of Chief Justice Radack and Justices Landau and Countiss.

Sarah Beth Landau, Justice

Betty Chenier and a dozen other plaintiffs sued Union Pacific Railroad Company for various torts based on or in response to Union Pacific's failure to act. They alleged that Union Pacific failed to adequately warn them about cancer-causing soil and groundwater contaminants from Union Pacific's nearby facilities, causing them property and personal injury damages. Union Pacific sought dismissal of certain claims under the current version of the Texas Citizens Participation Act ("TCPA").¹ The trial court denied Union Pacific's TCPA motion to dismiss, concluding that the dispute failed to invoke TCPA protections. In this interlocutory appeal, Union Pacific challenges the trial court's denial of its TCPA motion.

Because we conclude that the district court did not err in denying Union Pacific's motion to dismiss plaintiffs’ claims under the TCPA, we affirm.²

Background

In this TCPA appeal, the factual background rests on the plaintiffs’ allegations and evidence.³ In February 2020, 13 plaintiffs sued Union Pacific alleging claims for negligence, negligence per se, negligent misrepresentation, fraud, and nuisance. The plaintiffs allege that they are residents of the Fifth Ward and Kashmere Gardens neighborhoods in Houston. Union Pacific is a Delaware corporation authorized to do business in Texas.

Union Pacific and its predecessors maintained their plant operations for over 50 years at a facility in the residential neighborhoods of Kashmere Gardens and the Fifth Ward. Union Pacific first used this facility to treat wood railroad ties with creosote, a toxic chemical.⁴ Union Pacific never removed the creosote waste from the Fifth Ward and Kashmere Gardens neighborhoods after it stopped using creosote because of safety concerns in the 1980s.

In 2014, Union Pacific contacted Fifth Ward and Kashmere Gardens property owners, presented them with restrictive covenants, and asked that they agree to not use their groundwater, reasoning that the "chemicals of concern were managed such that human exposure was prevented and that other groundwater resources were protected."

In April 2019, Union Pacific applied for a permit renewal with the Texas Commission on Environmental Quality (TCEQ).⁵ The TCEQ issued a letter to Union Pacific entitled "4th Technical Notice of Deficiency for Permit Renewal," noting eight deficiencies that subjected the company to a denial of the permit renewal.

Later, the TCEQ requested the Texas Department of Health and Human Services to conduct a cancer cluster survey of the Kashmere Gardens and Fifth Ward neighborhoods. The TCEQ representative explained that creosote and related compounds contaminated the soil and groundwater under more than 100 homes north of Union Pacific's facility. In May 2019, Union Pacific collected groundwater samples and sent them to the TCEQ for testing. The analysis revealed that the groundwater samples contained creosote contaminants, along with other chemicals that "were greater than the acceptable limit."

In August 2019, the TCEQ investigated the occurrence of six types of adult cancers within the Fifth Ward and Kashmere Gardens. The investigation revealed increased occurrences of various cancers. Per the investigation, the toxic chemicals contaminated the soil, air, and water in these neighborhoods and caused property and personal injury damages, including cancer, to the plaintiffs and others.

The essence of plaintiffs’ claims is that Union Pacific was aware of the risks associated with the exposure to creosote and other toxic contaminants and it failed to disclose such risks to the plaintiffs, which caused property damage and personal injuries. The plaintiffs alleged that they sustained damages, including past and future medical expenses, past and future physical impairment, past and future physical pain, and property damage. The plaintiffs sought over $50,000,000 in damages.

Union Pacific removed the case to federal court based on diversity jurisdiction. The plaintiffs moved for leave to amend their complaint and for remand and requested to add defendants who were Texas residents. The federal court granted the plaintiffs’ motion to amend the complaint and remanded the case to state court.

On remand, Union Pacific moved to dismiss the plaintiffs’ property-damage claims for negligence, negligence per se, negligent misrepresentation, and nuisance under the TCPA. It did not move to dismiss the plaintiffs’ fraud claim or any claims for personal injury damages. See TEX. CIV. PRAC. & REM. CODE § 27.010(a)(3), (12) (exempting from dismissal under the TCPA legal actions seeking bodily-injury damages or based on common law fraud). Union Pacific asserted that the plaintiffs’ property-damage claims were based on or in response to Union Pacific's exercise of its right of free speech and right to petition. First, Union Pacific claimed that the claims were based on its free-speech rights it exercised to induce plaintiffs to agree to restrictive covenants. Second, Union Pacific asserted that the plaintiffs’ claims implicated its right to petition based on Union Pacific's communications to the plaintiffs during its TCEQ's permit renewal process.

The trial court denied Union Pacific's TCPA motion to dismiss. Union Pacific appealed, challenging the trial court's denial of its motion. See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12) (authorizing interlocutory appeal of order denying motion to dismiss filed under TCPA Section 27.003).

Dismissal of Claims under the TCPA

A. Standard of review

We review de novo the denial of a TCPA motion to dismiss. Dallas Morning News, Inc. v. Hall , 579 S.W.3d 370, 377 (Tex. 2019) ; Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc. , 441 S.W.3d 345, 353 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). In deciding if dismissal of a legal action is warranted, we consider "the pleadings, evidence a court could consider under Rule 166a, Texas Rules of Civil Procedure, and supporting and opposing affidavits stating the facts on which the liability or defense is based." TEX. CIV. PRAC. & REM. CODE § 27.006(a). "The basis of a legal action is not determined by the defendant's admissions or denials but by the plaintiff's allegations." Hersh , 526 S.W.3d at 467. We review the pleadings and evidence in the light most favorable to the nonmovant. Schimmel v. McGregor , 438 S.W.3d 847, 855–56 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). Whether the TCPA applies is an issue of statutory interpretation that we also review de novo. S & S Emergency Training Sols., Inc. v. Elliott , 564 S.W.3d 843, 847 (Tex. 2018).

B. Applicable law

The TCPA "is a bulwark against retaliatory lawsuits meant to intimidate or silence citizens on matters of public concern." Hall , 579 S.W.3d at 376. The purpose of the TCPA 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 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. It does so by allowing a defendant who claims that a plaintiff has "filed a meritless suit in response to the defendant's proper exercise of a constitutionally protected right to seek dismissal of the underlying action, attorneys’ fees, and sanctions at an early stage in the litigation."

Dolcefino, LLC v. Cypress Creek EMS , 540 S.W.3d 194, 198 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (citing TEX. CIV. PRAC. & REM. CODE § 27.003(a) ). A party may move to dismiss a "legal action" that "is based on or is in response to [that] party's exercise of the right of free speech, right to petition, or right of association." TEX. CIV. PRAC. & REM. CODE § 27.003(a).

A TCPA movant starts the two-step process for the expedited dismissal of such legal actions. In re Lipsky , 460 S.W.3d 579, 586 (Tex. 2015). In the first step, the TCPA movant bears the initial burden of showing by a preponderance of evidence that the suit is based on or in response to its exercise of one of the three First Amendment rights: the right of free speech, right to petition, or right of association. TEX. CIV. PRAC. & REM. CODE § 27.005(b)(1). If the TCPA movant meets this burden of establishing the applicability of the TCPA, then the second step applies and the burden shifts to nonmovant to establish "by clear and specific evidence a prima facie case for each essential element of" its claims. Id. § 27.005(c). The court must deny the TCPA motion if the nonmovant establishes by clear and specific evidence a prima facie case for each essential element of each claim. Id.

C. The TCPA does not apply

Union Pacific's TCPA motion asserts that the plaintiffs’ suit against it is based on or in response to Union Pacific's exercise of its right of free speech and right to petition. The plaintiffs contend that Union Pacific's use of creosote and other toxic chemicals contaminated the soil, air, and water in the Fifth Ward and Kashmere Gardens neighborhoods because Union Pacific "knew or should have known that the creosote plume and other contaminants were a danger to the residents in those neighborhoods." The plaintiffs cite TCEQ's 4th Technical Notice of Deficiency letter in support of the various duties to which Union Pacific was required, but failed, to...