### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03
- 18
- 00743
- CV

Neurodiagnostic Consultants, LLC d/b/a Synaptic Resources of Austin, LLC,

a Texas Limited Liability Company, Appellant

v. Corey Villalobos, Appellee

FROM THE 353RD DISTR ICT COURT OF TRAVIS COUNTY NO. D
- 1
- GN
- 17
- 004696 , THE HONORABLE GISE LA D. TRIANA, JUDGE PRESIDING

M E M O R A N D U M O P I N I O N

This appeal concerns a defamation claim by Neurodiagnostic Consultants, LLC d/b/a Sy naptic Resources of Austin, LLC (Synaptic) , against Corey Villalobos , a former employee. The claim arose from a comment concerning Synaptic that Villalobos left on a post in a LinkedIn group. Synaptic a lleged that Villalobos falsely accused Synaptic of engaging in criminal activity. The district court dismissed Synaptic’s claim under the Texas Ci tizens Participation Act (TCPA). See Tex. Civ. Prac. & Rem. Code §§ 27.001

– .011 . We will affirm the district court’s order.2 BACKGROUND 1 Synaptic supplies intraoperative neuromonitoring services (IONM) to hospitals, clinics, and surgeons . This means that a technologist , hired and trained by Synaptic , us es specialized equipment to monitor the integrity of a patient’s nervous system during surgery. In January 2015, Synaptic hired Villalobos as a technolo gi st and, one year later, promoted him to a field manager position. Villalobos left Synaptic in September 2016 and immediately b egan working for Traxx, a newly formed competitor of Synaptic. Synaptic subsequently sued Villalobos , Traxx, and several other d efendants . In general, Synaptic alleged that before leaving Synaptic , Villalobos coordinated with Traxx officers and employees to harm Synaptic and benefit Traxx. Villalobos and Jon Schiff, President of Synaptic, both had access to a LinkedIn group call ed “ Surgical Ne urophysiology & Neuromonitoring. ” While th e lawsuit was ongoing, Villalobos commented on a post there from Neuro News. This post was titled “ Medical Board says Austin surgeon t ook neuromonitoring kickbacks

— Growth in neuromonitoring driven

m a inly by crooks. The final blow

- out?” The post linked to an article from the Aus tin American
Statesman title d “Medical board says Austin surgeon took neuromonitoring kickbacks.” The text of the Statesman’s article is not in the record, but Schif f desc ri b ed its contents in a n affidavit: The subject of this article was that the Texas Medical Board had accused a neurosurgeon of misleading patients and violating anti

kickback laws as he referred his patients to a neuromonitoring company in which he had a f in a ncial interest. National Neuromonitoring Services, which is a direct competitor of

1 We draw this description from the allegations in the parties’ live ple adings and the affidavit of Synaptic’s President, Jon Schiff. See Tex. Civ. Prac. & Rem. Code § 27.006(a) (directing courts to “consider the pleadings and supporting and opposing affidavits stating the facts on which the liability or defe nse is based” w he n deci ding whether to grant TCPA dismissal motion ).3 Synaptic, was implicated in the article. The article further stated an anonymous person had sent letters containing allegations against the physician to the board. 2

Vil l a lobos left the fol lowing comment below the Neuro News post : “It’s said that the ‘anonymous’ person is Jon Schiff, president of [S] ynaptic [R] esources. They are equally as dirty [a] company. And do these things to get surgeons to switch to their company

. ”

Synaptic subsequently amended its pleadings to sue Villalobos for defamation

. Specifically, Synaptic alleged Villalobos falsely stated Synaptic “engages in illegal conduct, including providing illegal kickbacks, to develop business.” Villalobos fi led a motion to dismiss that claim under the TCPA. Synaptic filed a response and attached Schiff’s affi davit and a screenshot of the LinkedIn post and Villalobos’ comment

. The district court dismissed the defamation claim, which was then Synaptic’s only rema i ning cause of action. 3 T his appeal ensued. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(12) (authorizing accelerated appeal from interlocutory order denying TCPA motion to dismiss).

TCPA DISMISSAL MECHA NISM The purpose of the TCPA is to “encourag e and sa f eguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law” while still “protect[ing] the rights of a person to file

2 Villalobos does not dispute the accuracy of Schiff’s description of the Statesman’s article.

3 Villalobos and the other defendants had previously filed a motion to dismiss Synaptic’ s claims under the TCPA. While Villalobos’ motion to dismiss the defamation claim w as pending , the district court granted that motion and severed the dismissed claims into a different cause number. This Court disposed of Synaptic’s appeal of that order i n Neurodiagnostic Consul ta nts, LLC v. Nallia , No. 03

- 18

- 00609

- CV, 2019 WL 42312 32 (Tex. App.

— Austin Sept. 6, 2019, no pet. h.) (mem. op.).4

meritorious lawsuits for demo n strable injury.” Id . § 27.002; see id. § 27.001(2)

– (4) (definin g exercise of protected rights). To effectuate this purpose, the Legislature has provided for a special motion to dismiss designed to expedite the dismissal of claims brought to inti midate o r to silence a party’s exercise of the protected rights. ExxonMobil Pipeline Co. v. Coleman , 512 S.W.3d 895, 898 (Tex. 2017) (per curiam).

“Reviewing a TCPA motion to dismiss requires a three

- step analysis.” Youngkin
v. Hines , 54 6 S.W.3d 675, 679 (Tex. 2 0 18). As a threshold matter, the moving party must show by a preponderance of the evidence that the TCPA properly applies to the legal action against it. Tex. Civ. Prac. & Rem. Code § 27.005(b). If the moving party meets that burden, the

nonmo ving party must establish “by clear and specific evidence a prima facie case for each essential element of the claim in question.” Id . § 27.005(c). If the nonmoving party satisfies that requirement, the burden shift backs to the moving party to prove eac h essentia l element of any valid defense by a preponderance of the evidence. Id . § 27.005(d).

In determining whether to dismiss a legal action under the TCPA , courts are to consider, as evidence, “ the pleadings and supporting and opposing affidavits sta ting the fac t s on which the liability or defense is based.” Id. § 27.006(a). We review de novo whether each party carried its assigned burden. Long Canyon Phase II & III Homeowners Ass’n v. Cashion , 517 S.W.3d 212, 217 (Tex. App.

— Austin 2017, no pet.).

ANALYSIS The sole issue on appeal is whether Synaptic carried its burden to establish a prima facie case of defamation by clear and specific evidence. 4 A prima facie case “refers to

4 The parties do not dispute that the TCPA applies to this legal action.5

evidence sufficient as a matter of law to establish a given fact if it is not rebutte d or contradicted.” In re Lipsky , 460 S.W.3d 579, 590 (Tex. 2015) (orig. proceeding). “It is the ‘minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true.’” Id . (quoting In re E.I. DuPont d e Nemours & Co

. , 136 S.W.3d 218, 223 (Tex. 2004) (orig. proceeding) (per curiam)). The TCPA further requires that the nonmoving party meet this burden with evidence that is “clear and specific.” Tex. Civ. Prac. & Rem. Code § 27.005 (c). This means that t he plaintiff c a nnot rely on “general allegations that merely recite the elements of a cause of action” but “must provide enough detail to show the factual basis for its claim.” In re Lipsky , 460 S.W.3d at 59 0

– 9 1; see Bedford v. Spassoff , 520 S.W.3d 901, 904 (Tex. 2017) (p er curiam) ( “Under the [TCPA], more than mere notice pleading is required to establish a plaintiff’s prima fa cie case

. ”)

.

The essential eleme nts of defamation are: (1) publication of a verifiably false
statement of fact , (2) that w as defama tory concerni ng the plaintiff, (3) with the requisite degree of fault regarding the truth of the statem ent, and (4) damages, unless the statement is defamatory
per se . D Magazine Partners, L.P. v. Rosenthal , 529 S.W.3d 429, 434 (Tex. 2017 ). The parties j oin issue ove r whether Synaptic’s claim is for defamation per se, and if not, whether Synaptic provided prima facie evidence of damages. See In re Lipsky , 460 S.W.3d at 596 (explaining that

“ actual damage is not an essential element of [a defamation per s e] claim to w hi ch the TCPA’ s burden of clear and specific evidence might apply ”).
Defamatory Meaning

The threshold question in a defamation action is whether the statement “ is reasonably capable of a defamatory meaning ” when examined “ from the perspectiv e of an6

ordina ry reader in light of the surrounding circumstances. ” Hancock v. Variyam , 400 S.W.3d 59, 66 (Tex. 2013)

. This inquiry is objective and involves two independent steps. Dallas Morning
News v. Tatum , 554 S.W.3d 614, 625 (Tex. 2018 ) , cert. den ied , 139 S. Ct

. 1216 (2019) . The first step is to decide “ whether the meaning the plaintiff alleges is reasonably capable of arising from the text of which the plaintiff complains.” Id. The second is to determine whether that meaning, if reasonably capa ble of arising f rom the text, “is reasonably capable of defaming the plaintiff.”
Id. “ If the statement is not reasonably capable of a defamatory meaning, the statement is not defamatory as a matter of law and the claim fails. ” Hancock , 400 S.W.3d at 66

.

Only objective ly verifiable statements, as opposed to mere statements of opinion, are actionable as defamation. Dallas Symphony Ass’ n v. Reyes , 571 S.W.3d 753, 762 (Tex. 2019)

. Texas follows the common law rule that such statements are defamatory per se or per quod. Ta tum , 554 S.W.3d at 624. “ Defamation per se occurs when a statement is so obviously detrimental to one’ s good name that a jury may presume general damages, such as for loss of reputation or for mental anguish. ” Id. (citing Hancock , 400 S.W .3d at 63

– 64). This presumption enables the plaintiff to recover nominal damages without proof of any specific loss. Brady v. Klentzman , 515 S.W.3d 878, 886 (Tex. 2017)

. On the other hand, “[d]efamation per quod is defamation that is not actionable per se.” In re Li ps ky , 460 S.W.3d at 596. If the statement is defamatory per quod, the plaintiff must plead and prove damages to prevail. Brady , 515 S.W.3d
at 886

. Historically, the common law also used the term “defamation per se” to refer to
defamation th at is “defamat or y by its text alone,” and “defamation per quod” to refer to a statement “ whose defamatory meaning required reference to extrinsic facts .” Tatum , 554 S.W.3d at 625. Because this distinction “is not the same as that between defamation which is actionable7

o f itself and that which r equires proof of special damage, ” the Texas Supreme Court recently introduced the terms “textual defamation” and “extrinsic defamation.” Id. at 626 (citation omitted). Textual defamation occurs “when a statement’ s defamatory me an ing arises from the words of the statement itself, without reference to any extrinsic evidence. ” Id

. In contrast , extrinsic defamation “ occurs when a statement whose textual meaning is innocent becomes defamato ry when considered in light of ‘ other fact s and circumstance s sufficiently expressed before’ or otherwise known to the reader.” Id. (quoting Snider v. Leatherwood , 49 S.W.2d 1107, 1109 (Tex. App.

— Eastland 1932, writ dism’ d w.o.j.) ).

Synaptic argues that it s claim is for textual defa mation because t he defamatory meaning it alleges arises from the text of Villalobos’ comment. Villalobos responds that Synaptic’s claim is for extrinsic defamation because Synaptic must resort to extrinsic facts and circumstances to establish its defamato ry meaning, if a ny. Tatum did not address case law regarding proof of damages but expressly ratified “t he continued usag e of (and distinction between) ‘defamation per se’ and ‘defamation per quod’ as used in relation to special damages.”
Id

. In the cont ext of defamat io n per quod

— defined as defamation that “ is not apparent but is proved by extrinsic evidence showing its injurious meaning ”

— t he Texas Supreme Court has h eld th at actual damages are an essential element of the plaintiff’s claim. See Brady , 51 5 S.W.3d at 88 6 & n.4; see also Adams v. Starside Custom Builders , No. 05

- 15

- 01162

- CV,
2018 WL 6427640, at *13 (Tex. App.

— Dallas Dec. 7, 2018, pet. denied ) (mem. op.) (citing similar precedent from courts of appeal). Applying this precedent, we agree that if Synaptic’s

c laim is for extrinsic defamation, damages are an essential element of its claim. See Adams , 2018 WL 6427640, at *13 (“ Tatum did not impact existing case law requiring proof of actual damages in an extrinsic

- defamation c ase.”).8 Synaptic a rgues that Villa lo bos’ comment impliedly accuses Synaptic of paying kickbacks . In a defamation

- by

- implication case, the defamatory meaning “arises solely from the statement’ s text, but it does so implicitly. ” Tatum , 554 S.W.3d at 627

. Synaptic asserts t hat it is permis s i ble to consult the contents of the Statesman article and the title of the LinkedIn post to establish that meaning because “it has long been held that extrinsic facts may be considered in determining whether a writing is [defamatory] per s e where the extr in sic facts are presumably known to the readers of the statement.” Sprewell v. NYP Holdings , 772 N.Y.S.2d 188, 192 ( N.Y. Sup. Ct. 2003) (internal citations, quotation marks, and brackets omitted). We disagree. Sprewell discusses what Tex as law terms “de fa mation by innuendo.” That concept refers to using “ inducements, colloquialisms, and explanatory circumstances ” to explain the defamatory meaning of a statement. Moore v. Waldrop , 166 S.W.3d 380, 385 (Tex. App.

— Waco 2005, no pet.) ; see V

ice v. Kasprzak , 3 18 S.W.3d 1, 17 (Tex. App.

— Houston [1st Dist.] 2009, pet. denied) (“ Innuendo may be used to explain but not to extend the effect and meaning of the language

. ”). However, “d efamation by implication is not the same thing as defamation by i nnue ndo.” Tatum , 554 S.W.3d at 627 . The difference is the same as that between extrinsic defamation and textual defamation generally: “t he first requires extrinsic evidence, but the second arises solely from a statement’ s text.” Id. If we must resort t o outside facts a nd circumstances known to the reader , such as the title of the LinkedIn post or the co ntents of the Statesman article, to establish the meaning of Villalobos’ comment, Synaptic’s claim is for extrinsic defamation. See id.

With this frame work in mind, w e now address Synaptic ’s allegation. The full text of Villalobos’ comment is: “ It’s said that the ‘anonymous’ pers on is Jon Schiff, president of [S]ynaptic [R] esources. They are equally as dirty [a] company. And do these things to get

sur geons to switc h to their company.” Synaptic all eges that the gist of his comment is that9

Synaptic is a “dirty” company because it paid kickbacks to doctors and engaged in other illegal business practices. See Webster’s Third New International Dictionary 642 (2002) (de fi ning “dirty” as “ marked by moral corruption or by criminality”). A ccusations of a crime or “[r]emarks tha t adversely reflect on a person’ s fitness to conduct his or her business or trade” are both examples of defamation per se. In re Lips ky , 460 S.W.3d a t 596. Villalobos does not explain the meaning of his assertion that Schiff was “the ‘anonymous’ person,” indicate what corporation Synaptic is “dirty” in comparison to , or explain what “things” Synaptic does to
recruit doctors

. Without m ore informatio n, Villalobos’ comment is not capable of any definite meaning except that Villalobos believes Synaptic’s business practices are “dirty.” And w ithout

more details , Villalobos’ general accusation that Synaptic is “dirty” is not a verifiable statem ent of fac t. Se e Reyes , 571 S.W.3d at 762 (reiterating that only statements verifiable as false are actionable as defamation).

Assuming without deciding that Villalobos’ statement that Synaptic is a “dirty”
company necessarily means that Synaptic engages in illegal busin ess practices, it would not be actionable as a remark that adversely reflects on Synaptic’s fitness to engage in its business. To qualify as defamation per se under this category , the statement must affect the plaintiff in some way that is “ pecu liar ly har mful to the plaintiff’ s trade, business, or profession an d not merely upon the plaintiff’ s general characteristics .” In re Lipsky , 460 S.W.3d at 596. “ Disparagement of a general character, equally discreditable to all persons, is not enou gh ” unless the p articular quality disparaged “ is pecul iarly valuable in the plaintiff’ s business or profession .” Hancock , 400 S.W.3d at 67 ( quoting Restatement (Second) of Torts § 573 (1977) cmt. c, e.). Synaptic argues that Villalobos’ comment rises to that level becau se he spec ifically accused it of illegal behavior, thereby injuring its recruitment of doctors in the market for IONM services. But a10

reputation for co nducting business legally is not “peculiarly valuable” to those in the bus iness of provi ding IONM servic es as opposed to those in any other industry

. While Villalobos’ comment might impugn Synaptic’s “general characteristics , ” on its own it does not , as a matter of law, address its business in a peculiarly harmful way. See In re Lipsky , 460 S.W.3d at 596. We conclude Synaptic failed to establish a prima facie case of defamation per se.
Damages Having concluded Villalobos’ statement is not defama tory per se, Synaptic must show it provided prima facie proof of damages to defeat Villalobos’ m otion to d ismiss

. Synaptic argues that, taking the factual assertions in its pleading and attachment as true as we must, there is sufficient circumstantial evidence of damages to establish a prima facie case.

The TCPA allows the nonmoving party to estab lish a prima facie case with circumstantial evidence. Id. at 589. Circumstantial evidence is “ indirect evidence that creates an inference to establish a central fact.” Id. In the context of damages, Synaptic had the burden to produce sufficient evidenc e “ to allow a rati onal inference that some damages naturally flowe d from the defendant’s conduct.” S & S Emergency Training Sols. v. Elliott , 564 S.W.3d 843, 847 (Tex. 201 8); see Deuell v. Texas Right to Life Comm. , 508 S.W.3d 679, 689 (Tex. App.

— Houston [1st Dist.] 2016, pet. denied) (noting that nonmoving party’s burden was “ to adduce evidence supporting a rational inference as to the existence of damages, not the ir amount or constituent parts”). An inference is not rational “if premised on mere suspici on

— ‘ some

sus picion linked to other suspicion produces only more suspicion, which is not the same as some evidence. ’ ” Suarez v. City of Texas City , 465 S.W.3d 623, 634 (Tex. 2015) (quoting Marathon Corp. v. Pitzner , 106 S.W.3d 724, 727

– 28 (Tex. 2003) (per curiam)).11 Sy naptic argues that we can reasonably infer a substantial number of the 2,316 members of the LinkedIn group “ Surgical Ne urophysiology & Neuromonitoring ” “ were

un doubtedly surgeons who use IONM services” and that those persons would not use National
Neuromon itorin g Services in the future a fter seeing the Austin American Statesman article linked in the post . Based on this inference, Synaptic reasons it is “apparent that Villalobos’ statement accusing Synaptic of the same behavior would also turn those potenti al cus tomers from Synaptic.” Assuming the record supports a reasonable inference that members of the LinkedIn group were surgeons using IONM services, there must also be a basis for inferring t hey believed Villalobos’ assertions regardin g Synaptic

. “ Show ing th at the community was aware of and discussed the defamatory statements is not enough; there must be evidence that people believed t he statements and the plaintiff’ s reputation was actually affected. ” Brady , 5 15 S.W.3d
at 887 (citing Burbage v. Burbag e , 447 S.W.3d 249, 261

– 62 (Tex. 2014) ). Noth ing in the record provides a basis for inferring that even a single member of “ Surgical Ne urophysiology
& Neuromonitoring ” believed that Synaptic paid illegal kickbacks or engaged in other ille gal practices

. Sy naptic presented only suspicions regarding the effect of Villalobos’ comment, and unsupported suspicions do not rise to the level of circumstantial evidence. See Suarez , 465 S .W.3d at 634

. We conclude Synaptic failed to establish a prim a facie case of da mages.

We overrule Synaptic’s sole issue on appeal

.
CONCLUSION We affirm the district court’s order

.12 __________________________________________ Edward Smith, Justice Before Chief Justice Rose, Justices Kelly and Smith Affirmed Filed: October 4, 2019