Opinion
NO. 14-19-00543-CV
08-25-2020
ROUND TABLE PHYSICIANS GROUP, PLLC, AND LISA SNYDER, Appellants v. JULIE KILGORE, INDIVIDUALLY AND AS NEXT FRIEND OF XXXX KILGORE, A MINOR, Appellee
On Appeal from the 127th District Court Harris County, Texas
Trial Court Cause No. 2017-27598
CONCURRING AND DISSENTING OPINION
In Castleman v. Internet Money Ltd., the Supreme Court of Texas laid out a four-prong test to determine when the Texas Citizens Participation Act's commercial-speech exemption applies. Today, this court, relying on recent cases from the First Court of Appeals, concludes that the commercial-speech exemption applies to the filing of a notice of lien under Texas Property Code section 55.005(a)(1). Following the First Court's precedent in cases of first impression in this court avoids a split of authority in the law in the ten-county jurisdiction the two courts share, a goal that preserves vertical stare decisis and serves important rule-of-law values. Yet, doing so today would run afoul of binding high-court precedent. Because the First Court's fourth-prong "intended audience" analysis goes against Castleman, this court should not follow the First Court's cases in analyzing that component of the Castleman test. Instead, the court should use the high court's test and conclude that the statute's commercial-speech exemption does not apply. Because the court reaches the opposite conclusion, I respectfully dissent as to the part of the majority opinion that addresses the trial court's ruling on the motion to dismiss under the Texas Citizens Participation Act ("TCPA") filed by appellants Round Table Physicians Group, PLLC and Lisa Snyder (collectively, the "Round Table Parties"). I join in the court's judgment dismissing this appeal for lack of jurisdiction to the extent the Round Table Parties seek to appeal the part of the trial court's order determining the validity of the liens at issue.
546 S.W.3d 684, 688 (Tex. 2018) (per curiam).
See Tex. Prop. Code Ann. § 55.005 (West, Westlaw through 2019 R.S.); Ante at 11-12 (citing Sanders as Next Friend of Ejiofor v. Bansal, No. 01-18-00508-CV, 2019 WL 7341660, at *4 (Tex. App.—Houston [1st Dist.] Dec. 31, 2019, pet. denied) (mem. op.); Schmidt v. Crawford, 584 S.W.3d 640, 654 (Tex. App.—Houston [1st Dist.] 2019, no pet.); and N. Cypress Med. Ctr. Operating Co. GP, LLC v. Norvil, 580 S.W.3d 280, 286 (Tex. App.—Houston [1st Dist.] 2019, pet. denied)).
See Tucker v. Thomas, 405 S.W.3d 694, 715-18 (Tex. App.—Houston [14th Dist.] 2011) (Frost, J., concurring), reversed in part on other grounds, 419 S.W.3d 292 (Tex. 2013).
Identifying the Purpose of the Speech or Conduct
The Round Table Parties assert that Round Table is a person or institution maintaining a facility that provides hospital services in Texas and therefore is a "hospital" for the purposes of Texas Property Code Chapter 55. A hospital has a lien on a claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person. For the lien to attach, the injured individual must be admitted to a hospital not later than 72 hours after the accident. To secure this lien, a hospital must (1) provide notice to the injured individual in accordance with subsection (d) of section 55.005; and (2) file written notice of the lien with the county clerk of the county in which the services were provided before money is paid to an entitled person because of the injury. The resulting lien attaches to the patient's personal-injury claim, as well as to any corresponding judgment or settlement proceeds. By securing a lien under section 55.005, the hospital gains another avenue for obtaining payment from accident victims for medical services provided to treat injuries caused by third parties ("Covered Costs"). The purpose and mechanics of creating this non-consensual statutory lien inform the answer to Castleman's intended-audience inquiry.
See Tex. Prop. Code § 55.001(3) (West, Westlaw through 2019 R.S.).
See Tex. Prop. Code § 55.002(a) (West, Westlaw through 2019 R.S.).
See id.
See id. § 55.005(a) (West, Westlaw through 2019 R.S.).
See id. § 55.003(a) (West, Westlaw through 2019 R.S.).
See id. §§ 55.002, 55.003, 55.005; In re N. Cypress Med. Ctr. Operating Co., Ltd., 559 S.W.3d 128, 131 (Tex. 2018) (orig. proceeding)(holding statute's purpose is to provide hospitals "an additional method of securing payment from accident victims, encouraging their prompt and adequate treatment")
Castleman's Fourth-Prong Inquiry
The majority concludes that the TCPA does not apply because the hospital's notice of lien under section 55.005 amounts to commercial speech and so falls under the TCPA's commercial-speech exemption. The Castleman court interpreted the statutory text as providing that the commercial-speech exemption applies if:
See Tex. Civ. Prac. & Rem. Code § 27.010(b) (West, Westlaw through 2019 R.S.) (stating that 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").
(1) the defendant was primarily engaged in the business of selling or leasing goods or services,The majority agrees that these four required elements must be shown for the commercial-speech exemption to apply. To prevail, appellee Julie Kilgore, individually and as next friend of her minor child, had to prove each element of the claimed exemption by a preponderance of the evidence. She failed to prove at least one of them.
(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.
Castleman, 546 S.W.3d at 688.
See ante at 8-9.
Hieber v. Percheron Holdings, LLC, 591 S.W.3d 208, 211 (Tex. App.—Houston [14th Dist.] 2019, pet. denied).
Commercial speech "proposes a commercial transaction." Thus, to fall within the TCPA's commercial-speech exemption, the intended audience of the speech or conduct must be "actual or potential customers of the defendant for the kind of goods or services the defendant provides."
See Central Hudson Gas and Electric Corp. v. Public Serv. Comm'n, 447 U.S. 557, 562 (1980).
See Castleman, 546 S.W.3d at 688.
Content of the Notice-of-Lien Filing
The written notice of lien that the Round Table Parties filed with the county clerk of Fort Bend County contains language prescribed in Texas Property Code section 55.005(b). That verbiage does not promote the sale of anything; rather, it puts the public on notice of a debt — the Covered Costs. The Round Table Parties' written notice of lien states:
NOTICE IS HEREBY GIVEN pursuant to the terms and provisions of Texas Property Code Chapter 55, wherein Round Table Physicians Group, PLLC located at 8910 Highway 6 S., Houston, TX 77083, which heretofore and now is a facility that provides emergency services in the State of Texas, is entitled to and hereby claims a lien for emergency services rendered on 04/15/2016 (Date Of Services) to Kilgore, Julie (Name Of Injured Person ), whose address is [address listed], for injuries incurred as a result of an accident attributable to the negligent conduct of UNKNOWN (Name Of Person(s)/ Firm/Corp. Alleged To Be Liable, If Known). Said accident occurred on or about 04/15/2016 (Date of Accident), and the above-named
injured individual was admitted to Signature Care Emergency Center within seventy-two (72) hours after said accident.
In accordance with §55.004 of the Texas Property Code, section (c), Signature Care Emergency Center has a lien on the cause of action in the same manner as a hospital. The lien is subject to provisions of this chapter and Round Table Physicians Group may secure and enforce the lien in the manner provided by this chapter. Round Table Physicians Group give [sic] notice of entitlement to and hereby secures a statutory lien under the terms and provisions of the above state Texas statute, as amended, upon any and all claims and/or causes of action the injured individual may have against another person for the individual's injuries.
The intended audience for this nonconsensual, statutory notice-of-lien filing is any member of the public who may be liable to the patient/debtor for the Covered Costs. The patient/debtor is not in that category. The purpose of the lien is not to promote the provision of services but to secure the payment of services rendered. The target audience is not those in need of medical services but those liable or indebted to the injured individual who received them.
The courts that have found the intended-audience element satisfied have likened the medical lien to a claim for reimbursement against the patient and reasoned that the patient is the intended audience. But, the intended audience is precisely where a lien differs from a reimbursement claim.
See E. Tex. Med. Ctr. Athens v. Hernandez, No. 12-17-00333-CV, 2018 WL 2440508, at *4 (Tex. App.—Tyler May 31, 2018, pet. denied) (mem. op.) Sanders, 2019 WL 7341660, at *6; Norvil, 580 S.W.3d at 286; see also Schmidt v. Crawford, 584 S.W.3d 640, 654 (Tex. App.—Houston [1st Dist.] 2019, no pet.) (explaining that hospital lien statute "necessarily makes the injured person a member of the hospital lien's intended audience in order to effectuate its purpose, which is to ensure that the hospital gets paid from any funds that [the patient] may recover from the third party who allegedly made her medical treatment necessary"); Daughters of Charity Health Servs. of Waco v. Linnstaedter, 226 S.W.3d 409, 411 (Tex. 2007) (stating that "a lien against a patient's tort recovery is just as much a claim against the patient as if it were filed against the patient's house, car, or bank account.").
A lien communicates to the public at large one's rights against a debtor; a reimbursement claim communicates to the debtor one's demand to be paid. The legislature intended the lien to function like a television broadcast that goes to the masses and in the process gets to those who stand liable for the Covered Costs. By contrast, a reimbursement claim functions more like a telephone call, made one on one, to an audience of one. A lien filing and a reimbursement claim carry different messages and play to different audiences.
Separate Provision Addressing Communications with Patient/Debtor
To ensure that the patient/debtor receives notice of the lien, the legislature crafted a statutory provision requiring a separate communication to the patient/debtor. Not later than the fifth business day after the date a hospital receives notice from the county clerk that a notice of lien filed under subsection 55.005(a)(2) has been recorded in the county records, the hospital must send a written notice to the injured individual or the injured individual's legal representative, by regular mail, to the individual's last known address, informing the individual that: (1) the lien will attach to any claim the individual may have against another person for the individual's injuries; and (2) the lien does not attach to real property owned by the individual. This communication tells the patient/debtor of the notice-of-lien filing; it does not serve the same function as the notice-of-lien filing. Significantly, Kilgore bases her claims against the Round Table Parties on two notice-of-lien filings under subsection 55.005(a)(2); she does not base her claims on any notices given under subsection 55.005(d).
See id. An emergency medical services provider is not required to provide notice by mail if the emergency medical services provider provides the notice required by subsection (d) to the injured individual or the injured individual's representative at the time emergency medical services are provided and if: (1) the required notice is included on the emergency medical services authorization form in a paper or electronic version in a separate paragraph that is bolded and in at least 14-point type; and (2) except as provided by subsection (f), the notice is signed by the injured individual or the injured individual's representative. Tex. Prop. Code Ann. § 55.005(e).
A notice-of-lien filing under subsection 55.005(a)(2), directed to those who may be liable for the Covered Costs, tells the intended audience that the party filing the notice of lien is claiming a hospital lien in any claim by the patient/debtor against any third-party who may be liable for damages arising from the injury. The section 55.005(d) notice, directed to the patient/debtor, advises that (1) the hospital lien will attach to any claim the patient/debtor may have against another person for the individual's injuries; and (2) the lien does not attach to real property owned by the patient/debtor. Simply put, the notice-of-lien filing and the section 55.005(d) notice are separate communications, carrying discrete messages, to different audiences.
Nothing in the Lien Resembling Commercial Speech
Nothing in the Round Table Parties' words or conduct resembles commercial speech. The statutory lien notice does not promote any good, product, or service in the marketplace. Nor does it propose a commercial transaction. The words cannot fairly be construed as a communication on behalf of a business made with the intent of generating sales. Nor would one reasonably expect to find that type of message in a lien-notice filing, the contents of which the statute prescribes.
Commercial enterprises generally send one kind of message to produce sales and another kind to collect debts. The messages serve different purposes and go to different audiences. Today's broad-sweeping application undercuts the point of the Castleman fourth-prong inquiry — to remove from the scope of the commercial-speech exemption speech and conduct not directed to "actual or potential customers of the defendant for the kind of goods or services the defendant provides."
See Castleman, 546 S.W.3d at 688.
The majority reasons that because a lien against a patient's tort recovery is a claim against the patient, the patient is included within the intended audience of the notice of lien. The Castleman court did not adopt this "included within" standard and this court should not do so today.
Ante, at 11.
See Castleman, 546 S.W.3d at 688.
Even presuming for the sake of argument that the patient/debtor were included in the intended audience of the notice of lien as a member of the general public, that an actual customer happens to fall within the intended audience of the statement or conduct does not mean that the intended audience was the "actual or potential customers of the defendant for the kind of goods or services the defendant provides." The patient/debtor's status as a member of the public at large does not magically transform a notice-of-lien filing that does not propose a commercial transaction into commercial speech. If the intended audience is the public at large, actual or potential customers will be part of it — not because the message is directed to them as actual or potential customers and not because the message proposes a commercial transaction, but because customers comprise a subset of the general public. In the context of today's case, the patient/debtor's status as an actual customer holds no relevance to the medical provider's speech or conduct as a debt collector.
See id.
Under Castleman's analytical framework, the intended audience for the notice-of-lien filing is any third party who may be liable to the patient/debtor for the Covered Costs, not the actual or potential customers of the defendant for the kind of goods or services the defendant provides. Thus, the notice of lien does not satisfy the fourth Castleman requirement. Even under the majority's erroneous "included within the intended audience" legal standard, the debtor/patient, a first-party debtor, does not fall into the category of third parties who may be liable to the patient/debtor for the Covered Costs, and so the debtor/patient would not be "included within" the intended audience.
See id.
In sum, because Kilgore did not show that all four prongs of the Castleman test were satisfied, this court should hold that the TCPA's commercial-speech exemption does not apply in this case.
The Silver Lining
Today's decision to adopt the First Court of Appeals's fourth-prong "intended audience" analysis ensures this court's precedent aligns with that of our esteemed Houston sister court. Parting ways with the First Court would create a split of authority in the ten-county jurisdiction the First and Fourteenth Courts share, an unwelcome event every time it happens. Yet, at times, the better course is to choose the better rule even if it means creating a conflict within the courts' shared jurisdiction. Because the ink is barely dry on the First Court's analysis, released just last year, and because the First Court's reasoning goes against the supreme court's Castleman test, today is one of those times that the better course would be to forgo alignment and adopt the better reasoning. Though the Fourteenth does not do so, the court's decision carries a silver lining of sorts — achieving certainty and predictability in the law within the shared jurisdiction, a welcome event every time it happens.
See In re Platinum Energy Solutions, Inc., 420 S.W.3d 342, 357 (Tex. App.—Houston [14th Dist.] 2014, orig. proceeding) (Frost, C.J., dissenting); Tucker, 405 S.W.3d at 715-18 (Frost, J., concurring).
/s/ Kem Thompson Frost
Chief Justice Panel consists of Chief Justice Frost and Justices Jewell and Spain (Jewell, majority).