Summary
concluding commercial speech exemption applied, in part, because veterinary's emails to certain recipients asking for their help if they were satisfied with his past services arouse out of a commercial transaction involving the services he provided
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NO. 03-17-00759-CV
05-04-2018
Dipak Giri, DVM, Appellant v. Dr. J. Scot Estep, DVM, DACVP, Appellee
FROM THE DISTRICT COURT OF COMAL COUNTY, 433RD JUDICIAL DISTRICT
NO. C2017-1285D , HONORABLE R. BRUCE BOYER, JUDGE PRESIDING MEMORANDUM OPINION
J. Scott Estep, DVM, DACVP, sued Dipak Giri, DVM, for defamation per se. Giri filed a motion to dismiss under the Texas Citizens Participation Act (TCPA). See generally Tex. Civ. Prac. & Rem. Code §§ 27.001-.011. The trial court denied the motion. On appeal, Giri argues that it was error for the trial court to deny his motion because the TCPA requires dismissal of Estep's defamation claim. Because we agree with Estep that his lawsuit is exempted from the TCPA under that act's "commercial speech" exemption, see id. § 27.010(b), we will affirm.
Background
Although the parties vigorously dispute their characterization and effect, the underlying facts are largely undisputed. Estep and Giri are veterinary pathologists. Estep owns Texas Veterinary Pathology LLC (TVP), a central-Texas company that provides veterinary-pathology consultation for veterinarians. From September 2015 through July 2016, Estep and Giri were in a business relationship—the exact nature of which is disputed—that had Giri performing biopsies, cytologies, and necropsies for veterinarians in the Houston area. Giri had to obtain, under Estep's sponsorship, a special license to practice veterinary medicine in Texas from the Texas Board of Veterinary Medical Examiners (Veterinary Board).
Giri ended his business relationship with Estep in July 2016. In the wake of Giri's departure, Estep sent an email to Marilyn Hartman, Director of Licensing & Examination at the Veterinary Board, to voice concerns that Giri had been operating outside of the supervision required by his specialty license. Hartman responded that Giri had applied for and been issued a new special license under a different employer, that the Veterinary Board was "confident that Dr. Giri knew the limitations of his license and he was not working outside of the provisions of his special license," that "Giri followed the proper licensure process," and that Estep had "fulfilled [his] responsibility as his previous employer." Estep continued his email correspondence with Hartman, voicing concerns about whether Giri's new employer would oversee his work properly, and asking questions about matters related to record keeping. Hartman attempted to answer Estep's questions, but ultimately told him the Veterinary Board was not interested in getting further involved in the matter.
During this same general time period, Estep contacted several veterinarians in the Houston area, including the veterinarian who had agreed to be Giri's new special-license sponsor. In his email to Giri's new sponsor, Estep stated
I understand that your group is now sponsoring Dr Giri there in the Houston area. Dr Giri and I worked well together and it was just Thursday that I was informed of his resignation. I promise to you that this email is not meant as a retaliation for Dr Giri but I strongly recommend that you quality control his work. I also recommend that you establish a non-compete contract.In his emails to other Houston-area veterinarians, Estep stated—
As I expect you already know Dr Giri has left employment with [TVP] and assuming that he can maintain his Texas Veterinary licence without my sponsorship of his limited licence to practice, he will be providing service there in the Houston area. It is likely that you have had associate veterinarians do the same to you in the past and understand that it can be a challenging situation. Dr Giri and I had a positive relationship up to the day he announced his resignation on Thursday (14 July) and despite his abuse of my trust I truly hope that he can make things work for him there in Houston. As Dr Giri's sponsor I have regularly reviewed the slides before they were sent to Houston and regularly consulted with him on your cases. TVP has been established for 10 years now and we have a group of 5 pathologists here in San Antonio to review and give second opinions on cases. TVP is still here and can actually read out cases 24-48 hours faster without having to mail them back to Dr Giri. We are a large established group with established relationships with a wide range of specialties and advanced diagnostics. I receive cases every day from all over the United States and I am certain that we can serve as your personal pathology consultants.
In response to the above emails, Giri sent out the following email—the basis for Estep's defamation suit and the subject of this appeal—to several veterinarians in the Houston area:
I am writing this personal letter as I have been attacked and targeted by Dr. Estep with whom I was working without any salary but paying service charges for his company and exp[e]nses to make slides for biopsy and necropsy cases you have sent to me. As you know, [I] developed my business with you through my personal contact and interaction. Dr. Estep claims I have taken all his clients and I was told that he is sending [e]mails to you to convince [you] that you are his clients and mine. He even complained against me to [the] State Veterinary Board. Fortunately, [the] board has replied (please see attached letter). I know you all are extremely busy people dedicated to the clients. If you think you have received good services from me, may I request you to write [the Board] about your opinion about me and your opinion about Dr. Estep [']s letter in a few lines.Estep alleges that this email injured his "reputation and exposed [him] to both personal and professional contempt, ridicule, or financial injury" and "impeached [his] honesty, integrity, or reputation."
After denying Estep's defamation allegations and asserting affirmative defenses, Giri filed a motion to dismiss under the TCPA. In his response to Giri's motion, Estep asserted that his defamation lawsuit against Giri was not subject to dismissal under the TCPA because it falls under the Act's commercial-speech exemption:
Th[e 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.Id. § 27.010(b); see Castelman v. Internet Money Ltd., ___ S.W.3d ___, No. 17-0437, 2018 WL 1975039, at *1 (Tex. Apr. 27, 2018) (per curiam) (describing section 27.010(b) as "the commercial-speech exemption"). Estep further argued that, in the alternative, he had established "clear and direct evidence of each element" of his defamation claim, such that dismissal was not proper. See id. § 27.005(c) (prohibiting trial court from dismissing case where nonmovant "establishes by clear and specific evidence a prima facie case for each essential element of the claim in question").
The trial court held a hearing on Giri's motion to dismiss but did not issue a ruling on the motion. As such, the motion was denied by operation of law. See id. § 27.008(a) (providing that motion to dismiss is overruled by operation of law if not ruled on by 30th day after hearing on motion). This appeal by Giri ensued. See id. § 51.014(a)(12) (authorizing interlocutory appeal from denial of TCPA motion to dismiss).
Discussion
In one issue on appeal, Giri asserts that it was error for the trial court to deny his motion to dismiss because the TCPA requires dismissal of Estep's defamation per se claim. Because Estep's defamation suit against Giri falls under the TCPA's commercial-speech exemption, we disagree.
The TCPA's stated overarching purpose is "to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government" against infringement by meritless lawsuits. See id. § 27.002. The TCPA further directs that it be "construed liberally to effectuate its purpose and intent fully." Id. § 27.011(b). To achieve its professed purposes, the TCPA defines "a suspect class of legal proceedings that are deemed to implicate free expression, making those proceedings subject to a threshold testing of potential merit, and compelling rapid dismissal—and mandatory cost-shifting and sanctions—for any found wanting." Cavin v. Abbott, ___ S.W.3d ___, No. 03-16-00395-CV, 2017 WL 3044583, at *5 (Tex. App.—Austin July 14, 2017, no pet. h.) (citing Tex. Civ. Prac. & Rem. Code §§ 27.001(2)-(4), .003(a), .005(b)-(c), .009(a)).
The suspect class of legal proceedings potentially subject to dismissal under the TCPA are "legal actions"—defined as "a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief," see Tex. Civ. Prac. & Rem. Code § 27.001(6)—that are "based on, relate[] to, or [are] in response to a party's exercise of the right of free speech, right to petition, or right of association," see id. § 27.003(a), as those terms are defined in the TCPA. However, section 27.010 exempts certain types of "legal actions" from the TCPA—and, therefore, from the suspect class of legal proceedings potentially subject to dismissal—including, relevant here:
"[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 a commercial transaction in which the intended audience is an actual or potential buyer or customer." Id. § 27.010(b).Estep asserts, and we agree, that this commercial-speech exemption applies to his defamation suit and, thus, his defamation suit is not subject to dismissal under the TCPA.
Estep, as the party asserting the exemption, bears the burden of establishing the exemption's applicability. See, e.g., Kinney v. BCG Atty. Search, Inc., No. 03-12-00579-CV, 2014 WL 1432012, at *6 (Tex. App.—Austin Apr. 11, 2014, pet. denied) (mem. op.) (recognizing that nonmovant claimant had burden to establish applicability of exemption under TCPA Section 27.010(b) (citing, inter alia, Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 88-89 (Tex. App.—Houston [1st Dist.] 2013, pet. denied))). Here, the parties do not dispute that Estep's defamation suit against Giri is a "legal action" as defined by the TCPA. See Tex. Civ. Prac. & Rem. Code § 27.001(6) ("'Legal action' means a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief."). As such, we need not address this initial requirement of the exemption.
The Texas Supreme Court has recently explained that the commercial-speech exemption applies when
(1) the defendant was primarily engaged in the business of selling or leasing goods, (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.Castelman, 2018 WL 1975039, at *3. Estep, who invoked the exemption in his response to Giri's motion to dismiss Estep's claim against him, amended his petition to affirmatively assert that "Dr. Giri [is] primarily engaged in the business of offering and selling pathology services." Giri does not deny that he is primarily engaged in the business of selling pathology services. Instead, Giri claims on appeal that Estep failed to meet his burden on this element of the exemption because Estep "does not attempt to argue" and "does not contend that Giri is 'primarily engaged'" in the business of selling or leasing goods and services. But, as noted, Estep's amended petition plainly makes this allegation, and the TCPA directs that "[i]n determining whether a legal action should be dismissed . . . , the court shall consider the pleadings." Id. § 27.006(a); see Hersh v. Tatum, 526 S.W.3d 462, 467 (Tex. 2017) (noting, in context of deciding what legal action at issue was based on, that plaintiff's petition alone can be sufficient to show TCPA's applicability). Accordingly, under these circumstances—i.e., an affirmative allegation of the fact at issue and no denial of the allegation—Estep has satisfied this element of the commercial-speech exemption.
Estep emphasizes, and we agree, that the text of Giri's email establishes the second and fourth elements of the exemption, which require that Giri "made the statement or engaged in the conduct on which the claim is based"—i.e., sent the email at issue here—in his "capacity as a seller or lessor of those goods or services"—i.e., in his capacity as a seller of veterinary-pathology services—and that "the intended audience of [Giri's email] were actual or potential customers of [Giri's] for the kind of goods or services that [Giri] provides"—i.e., veterinary-pathology services. See Castleman, 2018 WL 1975039, at *3-4 (describing and explaining elements). The email itself indicates that it was sent to confirmed past customers of Giri to acknowledge those past customer's use of Giri's pathology services: "cases you have sent me"; "[if] you have received good services from me"; and "thank you so much for your business." Further the email contemplates the possibility of future pathology services to the same email recipients: "I look forward to continue [sic] to offer my services."
We likewise agree with Estep that the contents of the email establish the third element of the exemption, which requires that "the statement or conduct at issue"—again, Giri's email—arose out of a commercial transaction involving the kind of goods or services [Giri] provides." Id. For example, the email asks the recipients to write to the Board "about your opinion about [Giri] and your opinion about Dr. Estep's letters" "[i]f you think you have received good services from [Giri.]." (Emphasis added.) Although the TCPA does not define "arises out of," the common and ordinary meaning of "arise" is, in this context, "to result, issue, or proceed." American Heritage Dictionary of the English Language 95 (5th ed. 2011); see Arise, Black's Law Dictionary (10th ed. 2014) ("To originate; to stem (from)"; "To result (from)"); see also, e.g., Texas State Bd. of Exam'rs of Marriage & Family Therapists v. Texas Med. Ass'n, 511 S.W.3d 28, 34-35 (Tex. 2017) (observing that where statute does not define key term, we must apply "common, ordinary meaning unless a contrary meaning is apparent" and that "we typically look first to [the term's] dictionary definition and then consider the term's usage in other statutes, court decision, and similar authorities"). Here, the recipients were selected because of Giri's past, and potentially future, pathology services and, relatedly, Giri asks the recipients for their help if they were satisfied with his past services. Thus, the email "results, issues, or proceeds" from the sale of services or a commercial transaction. Accordingly, and without reaching the merits of Estep's allegations, we hold that Estep's defamation suit against Giri is exempt from dismissal under the TCPA because it falls under the TCPA's commercial-speech exemption. Accordingly, the trial court did not err in denying Giri's TCPA motion to dismiss.
We overrule Giri's sole issue on appeal.
Conclusion
Having overruled Giri's sole issue, we affirm the trial court's order denying Giri's TCPA motion to dismiss.
/s/_________
Jeff Rose, Chief Justice Before Chief Justice Rose, Justices Goodwin and Field Affirmed Filed: May 4, 2018