Veronica Rivas-Molloy Justice

On Appeal from the 215th District Court Harris County, Texas Trial Court Case No. 2019-56028

Panel consists of Justices Goodman, Hightower, and Rivas-Molloy.

MEMORANDUM OPINION

Veronica Rivas-Molloy Justice

Appellant Panton Incorporated ("Panton") appeals a final judgment dismissing its claims against appellees Bees360, Inc., Kun Liu a/k/a Andy Mavers, and Xiaoquing Wu pursuant to the Texas Citizens Participation Act ("TCPA"). On appeal, Panton argues the trial court erred in granting appellees' motion to dismiss because (1) appellees did not prove by a preponderance of the evidence that the TCPA applies to Panton's claims, (2) Panton proved its claims are exempted from the TCPA under the commercial speech exemption, (3) Panton established a prima facie case for each essential element of its claims, and (4) the TCPA's application to covenants-not-to-compete is preempted by the exclusivity provision of the Covenant Not to Compete Act. Panton also argues the trial court abused its discretion by (1) denying its request for discovery, (2) excluding portions of Panton's evidence attached to its response to the motion to dismiss, and (3) awarding appellees attorney's fees and sanctions.

We reverse the trial court's judgment dismissing Panton's claims with prejudice and remand for further proceedings.

Background

Panton is a high-tech company founded in 2013 whose "mission is to apply the most advanced AI, Big-Data, Cloud-computation and Drone (ABCD) technologies" for use in processing and streamlining homeowners' roofing insurance claims. It claims to have "innovated technologies to assemble drone flight, image processing, and report delivery into a complete business solution" accessible through mobile devices, which help "speed up the process by which homeowners" can repair their homes while cutting "costs and injuries" and "reducing insurance fraud."

In August 2019, Panton sued its former employees Kun Liu a/k/a Andy Mavers ("Liu") and Xiaoquing Wu ("Wu"), and their new company Bees360, Inc. ("Bees360") for several causes of action stemming from their alleged improper use of Panton's confidential and proprietary information and breach of several agreements. Specifically, Panton sued (1) Liu and Wu for breach of contract, (2) Bees360 for tortious interference with contract by soliciting Liu and Wu away from their Panton employment, and (3) Liu, Wu, and Bees360 ("appellees") for conspiracy and "unfair competition/trade-secret misappropriation." Panton requested actual and exemplary damages as well as attorney's fees. Panton also sought permanent injunctive relief to restrain appellees from directly or indirectly using Panton's confidential trade secrets in violation of Wu's and Liu's contractual obligations. On December 11, 2019, Panton filed its first amended petition asserting the same causes of action against all three appellees.

Panton alleges it hired Liu as its Director of Business Development in January 2016. Liu's employment agreement includes the following provision: "As an employee of Panton, you will be in privy of confidential information, both of Panton and its clients and as such you agree not to disclose such confidential information and abide by the terms set out in the confidentiality agreement with Panton . . ." The agreement also states, "[a]dditionally you covenant and agree that during the term of your employment with Panton and for twenty-four (24) months after the termination thereof, regardless of the reason for the employment termination, you will not, directly, or indirectly perform the same or substantially the same job duties as any of Panton's competitors unless you obtain written consent from the company." Liu also executed a separate confidentiality agreement in which he agreed "to not disclose or make available to any other person or entity, or use for your own personal gain, any Confidential Information, except for such disclosures as required (i) by law or legal process, (ii) in connection with the enforcement of your rights under this Agreement, or (iii) in connection with the defense or settlement of any claim, suit or action brought against" Liu by Panton. Liu further agreed

that when and if the employment relationship with Panton ceases (whether at [his] initiation or Panton's) that [Liu] will as soon as practical deliver to Panton (and not keep in [Liu's] possession, recreate or deliver to anyone else) all Confidential Information as well as all other devices (including any cell phones, pages, communications devices, laptop computers, etc., that Panton has provided to [Liu]) records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, customer or client lists or information, or any other documents or property (including all reproductions of the aforementioned items) belonging to Panton, regardless of whether such items were prepared by [Liu].

Panton alleges that Liu, whom Panton later promoted to Chief Executive Officer of Panton International and elected to serve as a director of that entity, "learned and had access to Panton's confidential material, including the design of its leading technology."

Panton also alleges that it hired appellee Wu as a Senior Data Scientist in March 2017. According to Panton, Wu, who would ultimately become Panton's Chief Operating Officer, was privy to Panton's confidential information and technology by virtue of her employment with Panton. Wu's employment agreement includes the same confidentiality provision and covenant included in Liu's agreement. Wu also executed a separate confidentiality agreement identical to Liu's agreement.

In July 2017, Panton terminated Liu for committing "questionable activity that jeopardized Panton," and Wu for "conduct[ing] improper activities together with Liu." Panton alleges that in their termination letters, Panton reminded Liu and Wu of their respective obligations "regarding Panton's Confidential Information." According to Panton, six months later, in January 2018, Liu and Wu formed Bees360, Inc., a Delaware corporation.

In March 2018, Bees360 applied to do business in Texas, listing Liu and Wu as members of its board of directors. According to Panton, "Bees360 performs and offers the exact technology that Panton was providing to the market." Panton alleges that Liu and Wu disclosed Panton's confidential information and proprietary technology to Bees360, and that Bees360, whom Panton considers to be a "direct competitor," is now using that technology to compete for Panton's existing and potential customers. Panton alleges that Liu and Wu "disclosed, first to themselves and then to Bees360 (both as potential employees and then as employees [of Bees360]) the Confidential Information that they learned while employed for Panton." It also alleges that based on "Bees360's website and other communications aimed at customers and potential customers," including Panton's customers, "the technology used by Bees360 is nothing, but a duplicate of what Panton was and is providing," which Bees360 is "marketing" to Panton's customers.

Liu, Wu, and Bees360 moved to dismiss Panton's claims against them pursuant to the TCPA, which automatically stayed all discovery. Appellees argued that Panton's claims were based on, related to, or filed in response to appellees' exercise of their right of free speech and right of association, namely, the formation and operation of Bees360. Panton filed a response and, in the alternative, a motion to lift the stay of discovery. Appellees replied to Panton's response.

The trial court held a hearing on appellees' motion to dismiss on December 12, 2019. The trial court then entered a series of interlocutory orders including a December 18, 2019 order granting appellees' motion to dismiss, a February 10, 2020 order denying Panton's request for discovery, and a February 11, 2020 order awarding appellees $130,725.87 in attorney's fees through trial, $60,000 in conditional appellate attorney's fees, and ordering Panton to pay $32,681.47 in sanctions. After Panton nonsuited the remaining defendant, Zhuhua Cai, the trial court entered a final judgment on March 10, 2020, incorporating its prior interlocutory orders. Panton then filed a notice of accelerated appeal.

Panton filed a motion for new trial and reconsideration of the final judgment, informing the trial court of the Texas Supreme Court's recent decision in Creative Oil &Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127 (Tex. 2019) (issued December 20, 2019) and this Court's decision in Gaskamp v. WSP USA, Inc., 596 S.W.3d 457 (Tex. App.-Houston [1st Dist.] 2020, pet. dism'd) (en banc) (issued February 20, 2020). The trial court denied Panton's motion.

The Texas Citizens Participation Act

Appellees moved to dismiss Panton's suit under the TCPA. See TEX. CIV. PRAC. &REM. CODE §§ 27.001-.011. Chapter 27 of the Texas Civil Practice and Remedies Code, also known as the Texas Citizens Participation Act, "is a bulwark against retaliatory lawsuits meant to intimidate or silence citizens on matters of public concern." Dall. Morning News, Inc. v. Hall, 579 S.W.3d 370, 376 (Tex. 2019). The act is intended "to identify and summarily dispose of lawsuits designed only to chill First Amendment rights, not to dismiss meritorious lawsuits." In re Lipsky, 460 S.W.3d 579, 589 (Tex. 2015).

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.'" ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (quoting TEX. CIV. PRAC. & REM. CODE § 27.002). To accomplish its primary purpose, the TCPA provides a procedural mechanism under which a party who claims a legal action was filed in response to its exercise of a constitutionally protected right, can seek dismissal of the underlying action, attorney's fees, and sanctions at an early stage in the litigation. See TEX. CIV. PRAC. & REM. CODE §§ 27.003, .005, .009(a); Creative Oil &Gas, LLC, 591 S.W.3d at 132; Gaskamp, 596 S.W.3d at 469-70.

To invoke the protections of the TCPA, the movant must first establish by a preponderance of the evidence that the conduct forming the basis of the legal action filed against the movant falls within the purview of the TCPA. See TEX. CIV. PRAC. &REM. CODE § 27.005(b). The TCPA applies if the plaintiff's "legal action is based on, relates to, or is in response to" the movant's exercise of (1) the right of free speech, (2) the right to petition, or (3) the right of association. Id.; Lipsky, 460 S.W.3d at 586-87. A "legal action" can consist of a petition, counterclaim, single cause of action, or an entire lawsuit. See TEX. CIV. PRAC. &REM. CODE § 27.001(6); Creative Oil & Gas LLC, 591 S.W.3d at 131.

If the movant makes this initial showing, the burden shifts to the nonmovant to establish "by clear and specific evidence a prima facie case for each essential element" of its claims. TEX. CIV. PRAC. &REM. CODE § 27.005(c); Lipsky, 460 S.W.3d at 587. If the nonmovant establishes a prima facie case for each of its claims, then the burden shifts back to the movant to establish, by a preponderance of the evidence, each essential element of a valid defense to the claims. TEX. CIV. PRAC. & REM. CODE § 27.005(d).

A nonmovant can avoid the TCPA's application and its burden-shifting analysis altogether by establishing that one of the TCPA's exemptions applies, such as the commercial speech exemption. See id. § 27.010(b). Under the commercial speech exemption, the TCPA does not apply

to a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product, insurance services, or a commercial transaction in which the intended audience is an actual or potential buyer or customer.

If the trial court grants a TCPA motion to dismiss, it must award the movant court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action "as justice and equity may require." Id. § 27.009(a)(1). The trial court also must award sanctions in an amount "sufficient to deter the party who brought the legal action from bringing similar actions." Id. § 27.009(a)(2).

A. Standard of Review

We review de novo the denial of a TCPA motion to dismiss. Dolcefino v. Cypress Creek EMS, 540 S.W.3d 194, 199 (Tex. App.-Houston [1st Dist.] 2017, no pet.); 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). If resolution of this appeal turns on construction of the TCPA, we review that de novo as well. Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018); Gaskamp, 596 S.W.3d at 470.

In determining whether to grant or deny a TCPA motion to dismiss, the court must consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based. TEX. CIV. PRAC. &REM. CODE § 27.006(a); Lipsky, 460 S.W.3d at 587. In some cases, the relevant evidence may also include live testimony and other documentary evidence. See Batra v. Covenant Health Sys., 562 S.W.3d 696, 707 (Tex. App.-Amarillo 2018, pet. denied); see generally TEX. CIV. PRAC. & REM. CODE § 27.006(b) (stating trial court "may allow specified and limited discovery relevant to the motion" to dismiss). We view the pleadings and evidence in the light most favorable to the nonmovant. Dolcefino, 540 S.W.3d at 199; Porter-Garcia v. Travis Law Firm, P.C., 564 S.W.3d 75, 84 (Tex. App.-Houston [1st Dist.] 2018, pet. denied).

B. Exercise of Right of Association

Appellees argue the TCPA applies to Panton's legal action because the lawsuit is based on, relates to, or is in response to appellees' exercise of their right of association. When Panton filed its suit, the TCPA defined the "exercise of the right of association" as "a communication between individuals who join together to collectively express, promote, pursue, or defend common interests." TEX. CIV. PRAC. &REM. CODE § 27.001(2) (emphasis added). The phrase "common interests" requires more than mere communications to pursue private pecuniary interests. As we held in Gaskamp v. WSP USA, Inc., the phrase "common interests," as used in the pre-amended version of the TCPA, implicates a public component. 596 S.W.3d at 476. Thus, the purported communications underlying the legal action must relate "to a community at large: public" to garner protection under the TCPA. Id.

As Panton does here, in Gaskamp, the plaintiff alleged that some of its former employees had jointly formed a new business venture, misappropriated trade secrets, and conspired to commit related torts to enrich themselves. See id. Because the Gaskamp allegations "involved misappropriating . . . trade secrets and conspiring to commit related torts, benefit[ing] only the five alleged tortfeasors," and there were no allegations that the tortfeasors had "join[ed] together to collectively express, promote, pursue, or defend any public or community interests," we held that the movants failed to establish by a preponderance of the evidence that the nonmovant's suit was based on, related to, or in response to the movants' exercise of the right of association. Id.; see also Awah v. SynergenX Physician Servs., PLLC, No. 01-19-00674-CV, 2021 WL 1537652, at *3, *7 (Tex. App.-Houston [1st Dist.] Apr. 20, 2021, no pet.) (mem. op.) (holding employee failed to establish that former employer's suit for breach of contract, breach of fiduciary duty, and violations of Harmful Access by Computer Act and Texas Uniform Trade Secrets Act was based on, related to, or in response to movants' exercise of right of association for similar reasons).

The same reasoning applies here. Appellees argue that Panton's claims are based on an association of individuals that advances the "common interest" because, "viewed holistically," Panton's claims were made in response to "Liu and Wu's exercise of their right to freely associate by forming and operating Bees360." They claim that their association to form and operate Bees360 advanced a "common interest" because the creation of Bees360 "did not merely advance private business interests; it also served to advance a community interest in scientific and technological development." But the services Bees360 provides, and whether they fall within the purview of scientific and technological development, is not the relevant inquiry. Indeed, if appellees were correct, then the protections of the TCPA would extend to a wide variety of businesses including most, if not all, new high-tech businesses based solely on their relevant industry. Cf. Indus. Waste Sols. LLC v. Summa, No. 01-19-00651-CV, 2020 WL 3456594, at *3 (Tex. App.-Houston [1st Dist.] June 25, 2020, pet. denied) (mem. op.) (stating TCPA "does not purport to insulate defendants from litigation solely because they offer services in the marketplace or are involved in an industry that focuses on health, safety, or environmental wellbeing"); see also Dyer v. Medoc Health Servs., 573 S.W.3d 418, 428 (Tex. App.-Dallas 2019, pet. denied) ("We cannot conclude communications discussing allegedly tortious conduct are tangentially related to a matter of public concern simply because the proprietary and confidential information that was to be misappropriated belonged to a company in the healthcare industry . . ."). Such a result would not further the TCPA's purpose of safeguarding constitutional rights while also protecting the right to pursue meritorious lawsuits. It would instead foreclose meritorious claims against companies involved in the provision of certain services or working within certain industries. See Universal Plant Servs., Inc. v. Dresser-Rand Group, Inc., 571 S.W.3d 346, 357 (Tex. App.-Houston [1st Dist.] 2018, no pet.) ("The TCPA is intended to identify and summarily dispose of lawsuits 'designed only to chill First Amendment rights, not to dismiss meritorious lawsuits.'") (quoting In re Lipsky, 460 S.W.3d at 589).

Panton did not file its suit only because Liu and Wu created Bees360, as appellees contend. Rather, as pleaded, the private communications among appellees forming the basis of Panton's claims relate to the formation of a new business venture, which Panton alleges Liu and Wu created by using and misappropriating its confidential and proprietary information, including Panton's existing technology, and not the purported public interest appellees identify on appeal-the advancement of "scientific and technological development." See Gaskamp, 596 S.W.3d at 476 ("As pleaded by WSP, Appellants' conduct and communications involved in misappropriating WSP's trade secrets and conspiring to commit related torts, benefitted only the five alleged tortfeasors. There are no allegations that the tortfeasors 'join[ed] together to collectively express, promote, pursue, or defend' any public or community interests."). There is thus no allegation implicating a "public or community" interest. Rather, the allegations concern the private interests of the parties in advancing business activities benefiting only those parties involved.

Appellees argue that Gaskamp and several of this Court's later opinions relying on Gaskamp are distinguishable because, unlike in those cases, Panton did not provide sufficient details about the alleged tortious conduct. See generally Gaskamp, 596 S.W.3d at 463 (discussing results of forensic analysis plaintiff performed, including document inappropriately accessed, individual who accessed it, and date and time of access); see also, e.g., Alliant Ins. Servs., Inc. v. USA Sw., Inc., No. 01-19-00682-CV, 2020 WL 5269421, at *6 (Tex. App.-Houston [1st Dist.] Sept. 3, 2020, no pet.) (mem. op.) ("[T]he evidence indicates that Cotuno facilitated the completion of the transaction between Alliant and U.S. Capital."); Rodriguez v. Universal Surgical Assistants, Inc., No. 01-19-00236-CV, 2020 WL 4758426, at *1, *3 (Tex. App.-Houston [1st Dist.] Aug. 18, 2020, pet. denied) (mem. op.) (holding TCPA did not apply to trade secrets claims regarding password protected and proprietary billing methods and processes that were written down in specified notebook left by former employee). Appellees argue Panton did not "plead what information was taken (e.g., cloud-computing processes, artificial-intelligence technology, etc.) how that information was stored (e.g., excel files, emails, etc.), how it was taken (i.e., files, emails, USB devices), or what it was used for (e.g., which specific Panton customers were contacted)." Appellees argue that while the TCPA does not require "a forensic analysis or trove of evidence to support a claim like theft of trade secrets," "the absence of specific factual allegations regarding discreet or identifiable tortious conduct should lead the Court to conclude that conclusory allegations of tortious conduct are merely window-dressing for strategic litigation that impedes the exercise of TCPA-protected rights. If these acts occurred, Panton should have supporting evidence and should have pleaded as much. It did not."

In evaluating a TCPA motion to dismiss, the court must consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defense is based. TEX. CIV. PRAC. &REM. CODE § 27.006(a). Thus, the applicability of the TCPA depends on the facts alleged, not inferences to be drawn from the absence of other facts. To the extent appellees assert Panton has not brought forth evidence supporting its allegations, that issue concerns the second step in the TCPA analysis-whether Panton established "by clear and specific evidence a prima facie case for each essential element" of its claim. Id. § 27.005(c). Unless appellees meet their burden to show by a preponderance of the evidence that the TCPA applies, the burden of proof never shifts to Panton. See id. § 27.005(b).

We hold appellees did not meet their burden of showing by a preponderance of the evidence that Panton's claims are based on, relate to, or are in response to an exercise of their right of association.

C. Exercise of Right of Free Speech

Appellees also argue the TCPA applies to Panton's suit because the lawsuit is based on, relates to, or is in response to the appellees' exercise of their right of free speech. The TCPA defines the "[e]xercise of the right of free speech" as "a communication made in connection with a matter of public concern." Id. § 27.001(3). When this suit was filed, a "matter of public concern" included "an issue related to: (A) health or safety; (B) environmental, economic, or community well-being; (C) the government; (D) a public official or public figure; or (E) a good, product, or service in the marketplace." Id. § 27.001(7); Coleman, 512 S.W.3d at 899.

Although "[t]he TCPA casts a wide net," the statute's scope is not as expansive and far reaching as once thought. Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018). As the Texas Supreme Court explained in Creative Oil & Gas, "not every communication related somehow to one of the broad categories set out in section 27.001(7) always regards a matter of public concern." 591 S.W.3d at 137. Several courts, including this Court, have limited the scope of the TPCA in accordance with Creative Oil & Gas. The seminal opinion from this Court is our en banc opinion in Gaskamp, 596 S.W.3d at 476-77. Both Creative Oil & Gas and Gaskamp are instructive and guide our analysis on whether the communications at issue relate to a matter of public concern.

In Creative Oil &Gas, the lessor of an oil and gas lease sued the lessee in a trespass and trespass-to-try-title action, seeking a ruling that the lease terminated due to cessation of production. 591 S.W.3d at 130. As relevant here, the lessee and operator counterclaimed alleging the lessor had breached the lease and falsely told third-party purchasers of production that the lease had expired and payments on the purchases should stop. Id. The lessor moved to dismiss the counterclaims pursuant to the TCPA arguing its statements to third parties about the lease were an exercise of its right of free speech because they were made in connection with matters of public concern: a good, product, or service in the marketplace.

Rejecting these arguments, the Texas Supreme Court held that the lessor's communications with third parties were not covered by the TCPA because they were private business communications concerning a private contract dispute. Id. at 13437. As the Court explained, the term "good, product, or service in the marketplace" had to be interpreted considering the common meaning of a "matter of public concern," which "commonly refers to matters 'of political, social, or other concern to the community,' as opposed to purely private matters." Id. at 135 (citing Brady v. Klentzman, 515 S.W.3d 878, 884 (Tex. 2017)). Thus, the communication at issue "must have some relevance to a public audience of potential buyers or sellers" for it to relate to a "matter of public concern." Creative Oil & Gas, 591 S.W.3d at 135. Based on this understanding, the Court held that because the alleged communications had "a limited business audience concerning a private contract dispute," they did not relate to a matter of public concern under the TCPA. Id. at 136.

The lessor also argued that its statements to third parties were an exercise of its right of free speech because they were made in connection with another matter of public concern: "economic well-being." Id. at 137. The Court also rejected this argument holding that "[a] private contract dispute affecting only the fortunes of the private parties involved is simply not a 'matter of public concern' under any tenable understanding of those words." Id.

The Court, which acknowledged that it had "previously held that private communications are sometimes covered by the TCPA," also explained the communications in those cases fell within the purview of the TCPA only because they "involved environmental, health, or safety concerns that had public relevance beyond the pecuniary interests of the private parties involved." Id. (citing ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898, 901 (Tex. 2017) (per curiam); Lippincott v. Whisenhunt, 462 S.W.3d 507, 509-10 (Tex. 2015)). It explained that its prior decision in ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895 (Tex. 2017), involved "private statements by movants concerning plaintiff's alleged failure to gauge a storage tank" and thus involved communications "related to a matter of public concern due to 'serious safety and environmental risks.'" Creative Oil & Gas, 591 S.W.3d at 136 (citing Coleman, 512 S.W.3d at 898, 901). Similarly, its prior decision in Lippincott v. Whisenhunt, 462 S.W.3d 507 (Tex. 2015), involved communications related to allegations that a pediatric nurse anesthetist had failed to provide adequate coverage for pediatric cases, administered the wrong narcotic, falsified medical records, and violated the facility's sterile protocol policy, which the Court held "are matters of public concern." Id. at 50910.

Relying in part on Creative Oil &Gas, an en banc panel of this Court held in Gaskamp that communications between former employees relating to the employees' alleged conduct of misappropriating, sharing, and using the plaintiff's trade secrets and conspiring with one another to advance their tortious actions, did not constitute an exercise of the employees' right of free speech because the communications "had no public relevance beyond the pecuniary interests of the private parties." Gaskamp, 596 S.W.3d at 477. We also held that the former employees' communications to solicit and procure business from a third party did not constitute an exercise of the employees' right of free speech because the communications did not have any "relevance to a public audience of buyers or sellers but instead were limited to 'the pecuniary interests of the private parties involved.'" Id. at 479 (quoting Creative Oil &Gas, 591 S.W.3d at 136).

1. Internal Communications

Appellees argue that Panton's lawsuit relates to communications concerning "matters of public concern," because they concern a good, product, or service in the marketplace and health or safety. They contend that their internal communications relating to the formation and operation of Bees360 falls within the purview of the TCPA because Bees360 offers drone-based inspection services to the marketplace that "relate to safety." According to appellees, "drone-based insurance inspection is a safety technology."

The words good, product, or service in the marketplace "do not paradoxically enlarge the concept of 'matters of public concern' to include matters of purely private concern." Creative Oil &Gas, 591 S.W.3d at 135. On the contrary, the "communication must have some relevance to a public audience of potential buyers or sellers." Id.; see also Gaskamp, 596 S.W.3d at 479. As the Court explained in Creative Oil &Gas, a "matter of public concern . . . commonly refers to matters 'of political, social, or other concern to the community,' as opposed to purely private matters." Creative Oil &Gas, 591 S.W.3d at 135 (citing Brady, 515 S.W.3d at 884).

While Bees360's drone-based inspection services are available in the marketplace, appellees' alleged private and internal communications through which they allegedly misappropriated, disclosed, and used Panton's confidential information in breach of Liu's and Wu's contracts with Panton, and in conspiracy to further these tortious acts, had "no public relevance beyond [appellees'] pecuniary interests." Gaskamp, 596 S.W.3d at 477; see also Griffith Techs., Inc. v. Packers Plus Energy Servs., (USA), Inc., No. 01-18-00674-CV, 2020 WL 4354713, at *6 (Tex. App.-Houston [1st Dist.] July 30, 2020, no pet.) (mem. op.) (concluding that plaintiffs' communications regarding development and promotion of competing business enterprise did not have any public relevance "beyond the pecuniary interest of the private parties" and, thus, defendants' counterclaims were not related to plaintiffs' exercise of right of free speech). The type of public concern recognized in other cases, such as dangers posed to the community at large by a product or activity, is not present here. Cf. Adams, 547 S.W.3d at 896 (stating that in "the context of a small residential community . . . any allegation of malfeasance and criminality by the developer . . . likely concerns the well-being of the community as a whole"); Coleman, 512 S.W.3d at 901 (holding allegations concerning plaintiff's "alleged failure to gauge storage tank, a process completed, at least in part, to reduce the potential environmental, health, safety, and economic risks associated with noxious and flammable chemicals overfilling and spilling onto the ground" related to matter of public concern); Lippincott, 462 S.W.3d at 509-10 (holding allegations of improper provision of medical services by pediatric nurse are matters of public concern); Woodhull Ventures 2015, L.P. v. Megatel Homes III, LLC, No. 03-18-00504-CV, 2019 WL 3310509, at *2 (Tex. App.-Austin July 24, 2019, no pet.) (mem. op.) (noting that statements that potentially "undermine the ability to construct safe, stable housing" implicate matters of public concern and therefore "fall within the purview of the TCPA").

Appellees contend that because "drone-based insurance inspection is a safety technology" which "eliminates occupational hazards for field adjusters climbing on roofs" and "promotes workplace safety," their private communications relating to this technology are also a matter of public concern. See TEX. CIV. PRAC. & REM. CODE § 27.001(7)(A) (defining "matter of public concern" as including issues related to "health or safety"). Citing Coleman, appellees argue that "[t]his is more than enough to create the 'tangential relationship' to 'health or safety' required for communications to be 'in connection with a matter of public concern.'" We disagree. Although the services Bees360 provides may relate to safety, the communications among appellees forming the basis of Panton's legal action relate to the formation and operation of a new business venture, Bees360, which Panton alleges is misappropriating its technology and using it to target its customers. That the services Bees360 provides may involve a safety component does not render private communications relevant to the broader public. See Indus. Waste Sols., 2020 WL 3456594, at *3 (stating TCPA "does not purport to insulate defendants from litigation solely because they offer services in the marketplace or are involved in an industry that focuses on health, safety, or environmental wellbeing."); see also Dyer, 573 S.W.3d at 428 ("We cannot conclude communications discussing allegedly tortious conduct are tangentially related to a matter of public concern simply because the proprietary and confidential information that was to be misappropriated belonged to a company in the healthcare industry . . .").

We hold that the private and internal communications among appellees forming the basis of Panton's claims are not subject to the TCPA.

2. Other Communications

In its first amended petition, Panton alleges that "[b]ased on Bees360's website and other communications aimed at customers and potential customers (including Panton's customers), it is clear that the technology used by Bees360 is nothing but a duplicate of what Panton was and is providing." It argues that aside from internal communications, this case also involves Bees360's "communications to others outside the tortfeasor group by posting advertising content on the website and using commercially-oriented information published in customer reports."

In response to Bees360's motion to dismiss, Panton provided screenshots of Bees360's website where Bees360 promotes its drone-inspection services and provides customer testimonials. The website includes a page where prospective customers can input their information to request information about Bees360's particular services. Panton also attached roof measurement reports, damage reports, and full claim estimate reports to its response. The reports, which bear the name "Bees360," include aerial photographs of certain roofs and assessments of the severity of the roof damage. The reports state that the properties were inspected by "Bees360 Drone-Assisted Roof Claim." According to Panton, appellees' "publication of website content and customer reports" was an attempt by Bees360's "to use Panton's confidential material to lure business away from Panton."

Panton's allegations concerning Bees360's website and reports do not fall within the purview of the TCPA. In Gaskamp, we held that communications made by employees to solicit and procure business "do not have relevance to a public audience of buyers or sellers but instead were limited to 'the pecuniary interests of the private parties involved.'" 596 S.W.3d at 479 (citing Creative Oil & Gas, 591 S.W.3d at 136). The same is true here.

The screenshots Panton attached to its response show that Bees360's website communications advertise and promote Bees360's services to potential customers in the insurance and roofing industry. See Creative Oil &Gas, 591 S.W.3d at 135 (stating "matter of public concern. . . commonly refers to matters 'of political, social, or other concern to the community,' as opposed to purely private matters.") (citing Brady, 515 S.W.3d at 884); Gaskamp, 596 S.W.3d at 476 (stating "not every communication related somehow to one of the broad categories set out in section 27.001(7) always regards a matter of public concern") (quoting Creative Oil &Gas, 591 S.W.3d at 136). Similarly, the Bees360's reports attached to Panton's response concern specific properties and contain estimates for roof damage related to those properties. Thus, neither the website nor the reports have any relevance outside "the pecuniary interests" of appellees. See Gaskamp, 596 S.W.3d at 479 (citing Creative Oil &Gas, 591 S.W.3d at 136).

3. Commercial Speech Exemption

Even if appellees had met their burden to establish the TCPA applies to the reports and Bees360's website advertising, the trial court still erred in dismissing Panton's claims because these communications satisfy the TCPA's commercial speech exemption. Under the commercial speech exemption, the TCPA does not apply

to a legal action brought against a person primarily engaged in the business of selling or leasing goods or services, if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product, insurance services, or a commercial transaction in which the intended audience is an actual or potential buyer or customer.

TEX. CIV. PRAC. &REM. CODE § 27.010(b). Thus, in Castleman v. Internet Money Ltd., 546 S.W.3d 684, 688 (Tex. 2018), the Texas Supreme Court held the exemption applies only "when (1) the defendant was primarily engaged in the business of selling or leasing goods [or services], (2) the defendant made the statement or engaged in the conduct on which the claim is based in the defendant's capacity as a seller or lessor of those goods or services, (3) the statement or conduct at issue arose out of a commercial transaction involving the kind of goods or services the defendant provides, and (4) the intended audience of the statement or conduct were actual or potential customers of the defendant for the kind of goods or services the defendant provides." See also Gaskamp, 596 S.W.3d at 479. The party asserting the exemption bears the burden of proving it applies. Id.

Under the first Castleman element, the pleadings show that Bees360 is primarily engaged in the business of selling or leasing goods or services, which Panton identifies as drone-inspection services. See Castleman, 546 S.W.3d at 688. Because Liu and Wu were involved in the founding of Bees360, and both sit on its board of directors or work for the company, it is reasonable to conclude that Liu and Wu were also "primarily engaged" in Bees360's business of providing drone-inspection services. See Hieber v. Percheron Holdings, LLC, 591 S.W.3d 208, 212 (Tex. App.-Houston [14th Dist.] 2019, pet. denied) ("[T]he exemption can apply even though the movant is just an employee."); Rose v. Scientific Mach. &Welding, Inc., No. 03-18-00721-CV, 2019 WL 2588512, at *5 (Tex. App.-Austin June 25, 2019, no pet.) (mem. op.) (concluding that "high-level executive of a company that primarily designs and sells manufactured items to customers is also 'primarily engaged' in that type of business").

The second Castleman element requires that appellees engage in the complained-of conduct in their capacity as sellers of Bees360's services. See Castleman, 546 S.W.3d at 688. To determine whether appellees engaged in the conduct in this capacity, we consider the context in which the conduct was performed. See Rose, 2019 WL 2588512, at *5 (considering context in which statements were made to determine if defendant made them in capacity as seller). Panton alleges appellees solicited Panton's customers in part by advertising Bees360's services on Bees360's website. It also claims Bees360's "publication of website content and customer reports" was an attempt to use Panton's "confidential information to lure business away from Panton." Because the allegations concern Bees360's conduct in marketing its services and securing customers, we conclude Bees360 engaged in the complained-of conduct in its capacity as a seller of its drone inspection services. See Staff Care, Inc. v. Eskridge Enters., No. 05-18-00732-CV, 2019 WL 2121116, at *8 (Tex. App.-Dallas May 15, 2019, no pet.) (mem. op.) (noting that in Castleman, Texas Supreme Court "implied the exemption applies when communications involve business pursuits for oneself or a business stands to profit from the statements at issue"). As noted, because Liu and Wu founded Bees360, sit on its board of directors, and work for the company, it is reasonable to conclude that Liu and Wu were also engaged in the complained-of conduct in their capacity as sellers of their new company's drone-inspection services.

The third Castleman element, requiring that the complained-of statement or conduct arise out of a commercial transaction involving the kind of goods or services the defendant provides, is also satisfied. The screenshots of Bees360's website show appellees were proposing commercial transactions with potential customers in the insurance and roofing industry to sell their services. See Castleman, 546 S.W.3d at 688, 690; see also Giri v. Estep, No. 03-17-00759-CV, 2018 WL 2074652, at *4 (Tex. App.-Austin May 4, 2018, pet. denied) (mem. op.) (noting requirement that statement or conduct at issue "arose out of" commercial transaction means that it "results, issues, or proceeds" from sale or commercial transaction). Similarly, the reports contain aerial pictures of inspected roofs and damage assessments for the specific properties.

We note that the third Castleman element applies even if appellees were unsuccessful in generating business based on the alleged communications. See Rose, 2019 WL 2588512, at *6 (stating "commercial transaction" need not be consummated and can include conduct or statements that merely propose commercial transaction) (quoting Castleman, 546 S.W.3d at 690). Moreover, as alleged in Panton's pleadings, which we must construe in the light most favorable to Panton, appellees allegedly were using Panton's misappropriated confidential information as part of their marketing efforts to siphon off Panton's business for appellees' financial benefit. See HydroChem LLC v. Evoqua Water Techs., LLC, No. 01-19-00770-CV, 2020 WL 7775758, at *4 (Tex. App.-Houston [1st Dist.] Dec. 31, 2020, no pet.) (holding Castleman's third element was satisfied when "the conduct complained of is part of an ongoing effort to sabotage the former employer for the benefit of the new employer and drive future transactions with the acquired customers"); see also Lowfoot, Inc. v. McDavitt Group, LLC, No. 01-18-01117-CV, 2020 WL 1679696, at *6 (Tex. App.-Houston [1st Dist.] Apr. 7, 2020, no pet.) (mem. op.) (holding Castleman's third element was satisfied because former employee was "working for a competitor in breach of a non-compete agreement [and] soliciting Lowfoot's customers and using Lowfoot's confidential information").

The last Castleman element requires that "the intended audience of the statement or conduct [be] actual or potential customers of the defendant for the kind of goods or services the defendant provides." Castleman, 546 S.W.3d at 688. As alleged, appellees were using Bees360 to promote their drone-inspection services and their expertise in the field to existing and potential customers in the insurance and roofing industry and soliciting requests for information from interested buyers. This is enough to satisfy the fourth Castleman element. See Lowfoot, Inc., 2020 WL 1679696, at *6 (holding Castleman's fourth element was satisfied in part because defendant gave product demonstrations of new businesses products "to an entire room of industry members").

Appellees argue the commercial speech exemption does not apply to Panton's claims related to their alleged solicitation of customers, in large part because Panton cannot "show that the intended audience of Liu and Wu's conduct was an actual or potential customer of Panton's." The commercial speech exemption, however, does not require that the intended audience be targeted at the movant's customers. Rather, the fourth Castleman element requires a showing that the "intended audience of the statement or conduct were actual or potential customers of the defendant for the kind of goods or services the defendant provides." Castleman, 546 S.W.3d at 688 (emphasis added).

Appellees also contend that "Castleman requires some measure of specificity in identifying an actual or potential customer" of Panton they allegedly targeted. We disagree. Although the opinions appellees cite for support include such detailed information, appellees have not directed us to any authority requiring a movant to identify a specific actual or potential customer targeted by the nonmovant to satisfy Castleman. Were we to conclude that Castleman requires such specific information, we would in effect be adding a new requirement to the commercial speech exemption and we decline to do so.

We hold that Panton's claims based on allegations that appellees' website advertising and reports use Panton's alleged misappropriated technology or confidential information fall within the commercial speech exemption.

Conclusion

Appellees did not establish by a preponderance of the evidence that Panton's claims are based on, related to, or in response to an exercise of their right of association or right of free speech. As concerns Panton's allegations concerning Bees360's website advertising and customer reports, such communications are exempt from the TCPA under the commercial speech exemption. We reverse the trial court's judgment dismissing Panton's claims with prejudice and remand for further proceedings.