Statute

Texas Citizens Participation Act (TCPA), TEX. CIV. PRAC. & REM. CODE ANN. § 27.001 et. seq.

Case

Glassdoor, Inc. v. Andra Group, LP, 17-0463, (Tex. Jan. 25, 2019)

TEXAS SUPREME COURT DISCUSSES MOOTNESS AND THE TEXAS ANTI-SLAPP, TCPA, LAW

Facts

Glassdoor, Inc., operates a jobs and recruiting website on which users may post, anonymously if they wish, reviews and ratings of their current and former employers. The reviews are available to site users free of charge, but users must agree to the site’s terms and conditions to obtain full access to the site. Glassdoor has no involvement in drafting or editing the reviews its users post.

Ten negative reviews were posted about Andra Group, L. P. – an employer.

Andra filed a Verified Petition Requesting Deposition Before Suit, seeking to depose Glassdoor under Texas Rule of Civil Procedure 202 in order to obtain the reviewers’ identities and account information. Andra averred that it did “not anticipate any claims against Glassdoor” but sought to “investigate potential claims for defamation or business disparagement” against the “anonymous persons or entities who posted false and defamatory statements against Andra on Glassdoor’s website.” Andra further alleged that the likely benefit of allowing Andra to take the requested deposition outweighed the burden or expense. See Tex. R. Civ. P. 202.4(a)(2) (requiring the trial court to order a properly requested pre-suit deposition if it finds that “the likely benefit of allowing” the deposition “outweighs the burden or expense of the procedure”).

Glassdoor filed a motion to dismiss under the Texas anti-SLAPP, TCPA, law. It alleged that the Rule 202 motion is based on, relates to, or is in response to the exercise of free speech. Two of the anonymous posters designated Doe 1 and Doe 2 joined the motion to dismiss. Andra responded to the motion to dismiss by claiming that the TCPA does not apply to Rule 202 proceedings and that even if it does, it had establish the elements of its claim with sufficient factual detail to avoid dismissal. Glassdoor also claimed that the action was time-barred. The trial court denied the TCPA motion to dismiss. It authorized the Rule 202 deposition to proceed. Glassdoor appealed because an order granting a Rule 202 motion that does not anticipate claims against the deponent are final and appealable.

The Texas Anti-SLAPP law or TCPA has a three step process. In step one, the movant bears the burden of establishing by a preponderance of the evidence that the nonmovant’s claim is a legal action in response to the movant’s exercise of his right of association, his exercise of his right of free speech or his exercise of his right to petition. §27.003 (a).

The Supreme Court said that it was asked to decide whether a Rule 202 pre-suit deposition motion was a “legal action” in a Texas anti-slap, TCPA, motion to dismiss. The court said it was not going to decide that question because the underlying claim is moot.

Once the movant has shown that the nonmovant’s legal action is covered by the act, the burden shifts to the nonmovant to demonstrate a prima facie case for each essential element of a cause of action by “clear and specific evidence.” §27.005 (c).

As to the TCPA motion, the court of appeals assumed without deciding that the TCPA can apply to Rule 202 proceedings and held that the trial court did not err in denying the motion because Andra met its evidentiary burden to avoid dismissal under the Act…  The court held that Andra produced clear and specific evidence making out a prima facie case on each element of its claim, explaining that the pertinent “claim” at issue is the Rule 202 request for pre-suit discovery, not the potential claims being investigated (defamation and business disparagement)… In turn, the court held, the only “element” that must be proved under Rule 202 is that the likely benefit of allowing discovery outweighs the burden or expense. (citations omitted.)

If the nonmovant meets his burden of establishing a prima facie case for each essential element of a cause of action by “clear and specific evidence”, the court must still grant the motion to dismiss if the movant establishes a valid defense by a “preponderance of evidence”. §27.005 (d).

We recognize that the statute of limitations is an affirmative defense, and we do not hold that a claim is moot when barred by limitations. Rather, we hold that where the statute of limitations runs on a claim as a matter of law while a Rule 202 petition seeking to investigate that claim is being litigated, the Rule 202 proceeding is rendered moot.

TEXAS SUPREME COURT DISCUSSES MOOTNESS AND THE TEXAS ANTI-SLAPP, TCPA, LAW

The overarching issues presented are whether the trial court (1) erred in denying the TCPA motion and (2) abused its discretion in ordering pre-suit discovery under Rule 202. Before we may reach either of these issues, however, we must determine whether the proceedings are moot. As we have explained, a case becomes moot during the pendency of the litigation “if, since the time of filing, there has ceased to exist a justiciable controversy between the parties-that is, if the issues presented are no longer ‘live,’ or if the parties lack a legally cognizable interest in the outcome.” Heckman v. Williamson County, 369 S.W.3d 137, 162 (Tex. 2012). If a case becomes moot, the court must vacate all previously issued orders and judgments and dismiss the case for want of jurisdiction.

After finding that the issues were moot because of the statutes of limitations, the Texas Supreme Court turned to the issue of attorney’s fees under the Texas anti-SLAPP, TCPA law.

Glassdoor urges that the Rule 202 petition is moot, it argues that its TCPA motion to dismiss the action is not because the motion includes a request for attorney’s fees. We disagree.

We have recognized that a case may become moot as to some claims or issues, but remain “live” as to others. State v. Harper, 562 S.W.3d 1, 6 (Tex. 2018). In Harper, we explained the circumstances under which “a claim for attorney’s fees ‘breathes life’ into a suit that has become moot in all other respects.” Id. at 7 (quoting Camarena v. Tex. Emp’t Comm’n, 754 S.W.2d 149, 151 (Tex. 1988)). We held that when a party seeks attorney’s fees under a prevailing-party statute like the TCPA, the claim for fees remains a live controversy if the party prevailed before the underlying claim became moot. Id. at 7-8. We addressed the merits of the TCPA motion in Harper because, although the trial court had denied the motion, the court of appeals reversed, and the underlying claims became moot while the motion for rehearing was pending in that court. Id. at 8. By contrast, in this case, the trial court denied Glassdoor and Does 1 and 2’s TCPA motion to dismiss, and the court of appeals affirmed that order. Thus, regardless of how we would decide the issue, the TCPA movants were not prevailing parties before the underlying Rule 202 petition became moot. We therefore have no choice but to dismiss the case in its entirety.

What Could Have Been Done

Andra could have filed suit against Doe 1 through 10 before the statutes of limitation ran.

Andra could have filed suit and conducted discovery about those identities, but chose instead to proceed under Rule 202, thereby risking the timeliness of its potential claims. See In re Does 1-10, 242 S.W.3d 805, 814 (Tex. App.- Texarkana 2007, orig. proceeding) (noting that “in most cases involving Internet lawsuits based on libel or breach of contract, the scenario is that suit is brought against a Doe defendant, and the plaintiff at some point early in the proceeding seeks to discover his or her identity . . . through the discovery tools of that forum”).

Conclusion

Because the statute of limitations has conclusively run on the potential claims Andra seeks to investigate under Rule 202, Andra’s petition for pre-suit discovery is moot. Further, because Glassdoor and Does 1 and 2 did not prevail on their TCPA motion to dismiss before the petition was rendered moot, that motion is moot as well. Accordingly, we vacate the judgments of the trial court and court of appeals, and we dismiss the case for want of jurisdiction.

Note:

Motion to dismiss becomes moot when, at the same hearing, the trial court grants a motion for summary judgment involving the same issues. Once the summary judgment is granted, the motion to dismiss becomes moot.  Kennedy v. Harber, 05-17-01217-CV, (Tex. App. – Dallas August 7, 2018, no pet.).