Opinion issued December 30, 2014

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-13-00454-CV

———————————

VELOCITY DATABANK, INC. AND TOM PELATARI D/B/A VELOCITY 

DATABANK, INC., Appellants

V.

SHELL OFFSHORE, INC., SHELL OIL COMPANY, SHELL 

EXPLORATION & PRODUCTION COMPANY, AND FAYE SCHUBERT, 

Appellees

On Appeal from the 295th District Court

Harris County, Texas

Trial Court Case No. 2011-68029

O P I N I O N

This is an appeal from the trial court’s order granting summary judgment in 

favor of Shell Offshore, Inc., Shell Oil Company, Shell Exploration & Production 
2

Company, and Faye Schubert (collectively, “Shell”) on Velocity Databank, Inc. 

and Tom Pelatari d/b/a Velocity Databank, Inc.’s (collectively, “Velocity 

Databank”) claims for defamation and libel. In one issue, Velocity Databank 

contends that the trial court erred in granting Shell’s motion for summary judgment 

because (1) there is no “public record” exception to the application of the 

discovery rule in defamation cases; (2) the “public knowledge” exception to the 

application of the discovery rule in defamation suits is inapplicable in this case; 

and (3) fact issues exist regarding when Velocity Databank knew or, by the 

exercise of reasonable diligence, should have known of the alleged defamation.

We affirm.

Background

Shell operates oil and gas wells on offshore blocks in the Gulf of Mexico 

under lease from the federal government. Velocity Databank sells geophysical 

data to companies in the oil and gas industry. In 1988, Shell and Velocity 

Databank entered into a license agreement under which Velocity Databank allowed 

Shell access to its Gulf of Mexico geophysical data, including velocity surveys.

In December 1998, the United States Minerals Management Service 

(“MMS”)1 began the Historical Well Data Cleanup Project, a project whose 

purpose was to correct, complete, and update the agency’s historical data on all 

 1 At that time, the MMS was the federal agency tasked with managing the mineral 

resources beneath the outer continental shelf of the Gulf of Mexico. 
3

wells drilled on offshore blocks in the Gulf of Mexico region. To that end, MMS 

required operators and leaseholders in the Gulf of Mexico, including Shell, to 

identify a contact person within their organization to facilitate the identification 

and transfer of requested data regarding wells in the region to MMS. MMS then 

loaded the data onto its web-based, publicly accessible geophysical database 

known as the Technical Information Management System, or “TIMS.” TIMS is 

hosted on, and accessible to the public through, the MMS website.

In October 2000, MMS analyst Scott Cranswick contacted Faye Schubert, a 

Shell employee and one of its contacts on the project, to request velocity surveys 

for two offshore Gulf of Mexico wells. On October 19, 2000, Schubert responded 

to Cranswick via email as follows:

Scott,

We have checked our file room for hard copies of the two surveys you 

are looking for.

We have one in the corporate database but this is from velocity 

databank, which you might already have. These velocity DB surveys 

are sometimes not very good as they tend to make up time-depth pairs 

from the horizontal profile instead of the vertical profile.

. . . . 

The bottom line is that we only have the one digital survey and it is 

questionable.

On or about October 19, 2000, MMS posted the velocity survey provided by 

Schubert on TIMS, along with the following notations interspersed among lines of 

data:
4

[S]urvey data is bogus. 10/19/2000 Faye Schubert said this velocity 

survey is from Velocity Databank, Inc. which has dubious value 

because the time/depth pairs were generated by this company using a 

velocity model and likely are not actual check shot. . . . This survey 

was acquired from Velocity Databank, Inc., which means it might be a 

fictitious survey generated from a regional grid of velocity functions 

that were mapped by Velocity Databank who would provide fictitious 

velocity surveys from their com. 

On November 10, 2010, in the process of preparing a document for a sales 

pitch, William Gray, a Velocity Databank consultant, reviewed and downloaded a 

file from TIMS called “velocity function.” While scanning the data, Gray 

discovered the MMS statements regarding Velocity Databank. On November 11, 

2010, Gray sent a letter to Shell seeking an explanation for the “derogatory and 

defamatory public comments about the quality and source of this data and the 

products provided to the oil industry—and to Shell Oil—by Velocity Databank, 

Inc.”

On January 10, 2011, Steve Heying, a Shell staff geoscience specialist, sent 

an email to Pelatari apologizing for releasing the survey without Velocity 

Databank’s consent. Heying, however, concluded:

[I]n regards to Faye defaming Velocity Databank, you can see that her 

actual comments, that accompanied the data, in no way resemble the 

comment published by the MMS. Apparently, someone at the MMS 

chose to editorialize the comments prior to publishing on their 

website. The MMS has since removed both surveys from their 

website.
5

Heying’s email included a zip file attachment of Schubert’s October 19, 2000 

email to Cranswick. After inspecting the attachment, Velocity Databank 

determined that the well survey in question had not originated from Velocity 

Databank.

On November 9, 2011—more than ten years after MMS published the 

statements in question—Velocity Databank sued Shell for defamation and libel and 

pleaded the discovery rule. Shell generally denied the allegations and also pleaded 

several affirmative defenses, including statute of limitations. Shell subsequently 

moved for summary judgment on limitations grounds. On March 1, 2013, the trial 

court granted Shell’s motion. Velocity Databank moved for a new trial; the trial 

court denied its motion on March 24, 2013. Velocity Databank timely filed this 

appeal.

Discussion

A. Standard of Review

We review a trial court’s decision to grant a motion for summary judgment 

de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

Under the traditional summary judgment standard, the movant has the burden to 

show that no genuine issues of material fact exist and that it is entitled to judgment 

as a matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp 

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); Nixon v. Mr. Prop. 
6

Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). In determining whether there are 

disputed issues of material fact, we take as true all evidence favorable to the 

nonmovant and indulge every reasonable inference in the nonmovant’s favor. 

Nixon, 690 S.W.2d at 548–49.

A defendant is entitled to summary judgment on an affirmative defense if it 

conclusively proves all the elements of the affirmative defense. Rhone–Poulenc, 

Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); see also City of Houston v. Clear 

Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Where a defendant seeks 

summary judgment on the basis of limitations, it must (1) conclusively prove when 

the cause of action accrued and, (2) if the plaintiff has pleaded the discovery rule, 

conclusively negate it. KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 

988 S.W.2d 746, 748 (Tex. 1999). If, as here, the summary judgment does not 

specify the grounds on which it was granted, the appealing party must demonstrate 

on appeal that none of the proposed grounds are sufficient to support the judgment. 

Rogers v. Ricane Enter., 772 S.W.2d 76, 79 (Tex. 1989). Because the trial court in 

this case did not specify the ground on which it relied for its ruling, we will affirm 

if any theory advanced by Shell in its summary judgment motion is meritorious. 

See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).

 
7

B. Limitations

In its petition, Velocity Databank alleged defamation, libel per se, and 

defamation per se against Shell. Under Texas law, all of these causes of action are 

subject to a one-year limitations period. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 16.002(a) (Vernon 2002). When the statute of limitations expired depends on 

when Velocity Databank’s cause of action accrued. Generally, a defamation claim 

accrues when the matter is published or circulated. See Newsom v. Brod, 89 

S.W.3d 732, 736 (Tex. App.—Houston [1st Dist.] 2002, no pet.). However, the

discovery rule applies to an action for defamation when a defamatory statement is 

inherently undiscoverable or not a matter of public knowledge. Id.; Wheeler v. 

Methodist Hosp., 95 S.W.3d 628, 636 (Tex. App.—Houston [1st Dist.] 2002, no 

pet.). To be “inherently undiscoverable,” an injury need not be impossible to 

discover, but it must be, by nature, unlikely to be discovered within the prescribed 

limitations period despite due diligence. S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996). 

In such cases, the limitations period begins to run when the plaintiff learns, or 

should have learned, of the existence of the defamatory statement. Childs v. 

Haussecker, 974 S.W.2d 31, 37 (Tex. 1998); Wheeler, 95 S.W.3d at 636–37.

The statute of limitations is applied strictly and the discovery rule is a very 

limited exception. Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 457

(Tex. 1996). Whether the discovery rule applies is a question of law. 
8

Credit Union v. O’Connor, 115 S.W.3d 82, 96 (Tex. App.—San Antonio 2003, 

pet. denied); Steel v. Rhone Poulenc, Inc., 962 S.W.2d 613, 618 (Tex. App.—

Houston [1st Dist.] 1998), aff’d, 997 S.W.2d 217 (Tex. 1999).

Analysis

As the movant seeking summary judgment on limitations grounds, Shell 

bore the burden to prove conclusively the date on which Velocity Databank’s 

cause of action accrued and, because Velocity Databank pleaded the discovery 

rule, to conclusively negate the rule. See Via Net v. TIG Ins. Co., 211 S.W.3d 310, 

313 (Tex. 2006) (per curiam). The record reflects—and the parties do not 

dispute—that MMS first published the offending statements on TIMS on or about 

October 19, 2000. Velocity Databank filed its original petition more than ten years 

later, on November 9, 2011. Thus, barring application of the discovery rule, the 

petition was untimely filed and Shell was entitled to summary judgment.

In its summary judgment motion, Shell argued that Velocity Databank’s 

“invocation of the discovery rule is unavailing for at least three reasons.” First, 

Shell argued that information contained in public records is not “inherently 

undiscoverable.” Second, it contended that the discovery rule does not apply to 

defamation claims based on statements involving “public knowledge,” particularly 

those disseminated by mass media, including the Internet. Third, Shell asserted 
9

that even if the discovery rule did apply to MMS’s statements, Velocity Databank 

failed to exercise reasonable care and diligence in discovering them.

“Public Knowledge” Exception

On appeal, Velocity Databank contends that the “public knowledge” 

exception to application of the discovery rule to defamation claims does not apply 

to this case. Shell argues, however, as it did in the trial court below, that the MMS

statements—maintained on a public database of a federal government agency and 

accessible without charge or subscription by visitors to the agency’s public 

website—are a matter of public knowledge, thus barring application of the 

discovery rule.

In support of their arguments, both parties rely on the Texas Supreme 

Court’s decision in Kelley v. Rinkle, 532 S.W.2d 947 (Tex. 1976). In Kelley, the 

plaintiff sued the defendant for damages caused by the defendant’s filing of a 

report with a credit agency stating that the plaintiff owed the defendant money on a 

past due account. See id. at 947. The trial court granted the defendant’s motion for 

summary judgment on the ground that the plaintiff’s suit was filed more than one 

year after his cause of action accrued and was therefore barred by the statute of 

limitations, and the court of appeals affirmed. See id. Concluding that the 

discovery rule should apply, the supreme court reversed and held that “the period 

of limitations for causes of action for libel of one’s credit reputation by publication 
10

of a defamatory report to a credit agency begins to run when the person defamed 

learns of, or should by reasonable diligence have learned of, the existence of the 

credit report.” Id. at 949. The court then stated, “[w]e would not apply the 

discovery rule where the defamation is made a matter of public knowledge through 

such agencies as newspapers or television broadcasts.” Id.

Velocity Databank contends that Shell’s reliance on the foregoing dicta in 

Kelley to support its argument that the MMS statements published on TIMS are a 

matter of public knowledge is misplaced. Without citing any authority, it argues 

that while newspapers and television broadcasts are “intended to supply the news 

of the day” and are read or listened to by members of the public, “[i]t is extremely 

unlikely that a member of the public would simply sit down and read this

material.” Thus, Velocity Databank concludes, TIMS is not the equivalent of 

“mass media” and its material cannot be considered “public knowledge.” We 

disagree.

As Velocity Databank acknowledges in its brief, the Kelley court’s statement 

that newspapers and television are the types of mediums through which a 

defamatory statement could become public knowledge was merely suggestive.2

 

See id. (“We would not apply the discovery rule where the defamation is made a 

matter of public knowledge through such agencies as newspapers or television 

 2 We also note that Kelley, decided in 1976, predates the advent of the Internet.
11

broadcasts.”) (emphasis added). Indeed, several courts since Kelley have 

recognized that information may become public knowledge through a variety of 

other media. See, e.g., Rhine v. Deaton, 459 F. App’x 421, 422 (5th Cir. 2012) 

(on-line newspaper article); Sorcic v. Int’l Ass’n for Fin. Planning, 814 F. Supp. 

27, 28 (S.D. Tex. 1992) (subscription-only industry newsletter); Holloway v. 

Butler, 662 S.W.2d 688, 693 (Tex. App.—Houston [14th Dist.] 1983, writ ref’d 

n.r.e.) (monthly magazine) (“We will follow the suggestion our supreme court 

made in Kelley . . . and refuse to apply the discovery rule where an allegedly 

defamatory statement is disseminated via the mass media); see also Smith v. Texas, 

No. 2:10-CV-218-J, 2011 WL 2883402, at *7 (N.D. Tex. July 15, 2011) (Texas 

Department of Family and Protective Services on-line database). These cases belie 

Velocity Databank’s assertion that information can only become “public 

knowledge” through media that disseminates “news of the day” to the general 

public. Further, a number of courts have expressly recognized the Internet as a 

mass medium. See, e.g., Hamad v. Ctr. for Jewish Cmty. Studies, 265 F. App’x 

414, 416–17 (5th Cir. 2008) (concluding that Internet is “mass medium” under 

Texas law for purposes of single-publication rule); Serv. Emps. Int’l Union Local 5 

v. Prof’l Janitorial Serv. of Houston, Inc., 415 S.W.3d 387, 394 (Tex. App.—

Houston [1st Dist.] 2013, pet. filed) (“That Internet websites fall within the 
12

broadest of these definitions as an electronic ‘means of mass communication’ is 

clear.”).3

It is also worth noting that Velocity Databank regarded the publication of the 

statements to the MMS website as a public matter before it filed suit. In his 

November 11, 2010 letter to Pelatari, Gray stated that the MMS file to which the 

data and Schubert’s allegedly defamatory statements were posted is “widely used 

in the industry”; he considered Schubert’s quote as “a public slur of [Velocity 

Databank]”; Velocity Databank was “extremely disturbed and angered by the 

comment attached to this data and released to the public in the MMS file”; and he 

awaited Shell’s response “to this employee’s derogatory and defamatory public 

comments.” As Velocity Databank considered the statements to be defamatory 

public comments about the quality of the data it provides to the oil industry before 

it filed suit, it can hardly argue now on appeal that the statements are not public 

knowledge.

Velocity Databank also argues that the defamatory statements are not 

“public knowledge” because the data found on TIMS is meaningless to those 

outside of the industry and is not intended to be read by members of the general 

 3 In its brief, Velocity Databank also asserts that “[t]he summary judgment evidence 

in the present case failed to identify a single member of the public who had 

knowledge of this defamation.” We are not aware of any authority—nor does 

Velocity Databank direct us to any—requiring such a showing in order to 

demonstrate that a defamatory statement is “public knowledge.”
13

public. We find this argument unavailing. Under Texas law, a matter may become 

public knowledge irrespective of whether it is disseminated to a broad or narrow 

audience. In Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011), the Texas 

Supreme Court characterized the prices published in the El Paso Permian Basin 

Index as “[r]eadily accessible and publicly available information.” Id. at 929. As 

Shell notes, a member of the public is no more likely to read the El Paso Permian 

Basin Index than the information on the MMS website, but according to the court 

in Ross, such information is not “inherently undiscoverable” and will not support 

application of the discovery rule. See also Sorcic, 814 F. Supp. at 28 (concluding 

“alleged defamatory material [in subscription-only industry newsletter] was not a 

secret report hidden from view. It was readily available to the public and was 

therefore discoverable.”) (citing Holloway, 662 S.W.2d at 693).

In sum, we conclude that the statements here, published on a website owned 

and maintained by a federal government agency and accessible to the public 

without charge or subscription, are “public knowledge” and are not inherently 

undiscoverable. As such, the discovery rule did not apply to Velocity Databank’s 

defamation claims, and the trial court properly granted Shell’s motion for summary 

judgment on limitations grounds.
14

We overrule Velocity Databank’s sole issue.4

Conclusion

We affirm the judgment of the trial court.

Evelyn V. Keyes

Justice

Panel consists of Justices Keyes, Sharp, and Huddle.

Justice Sharp, dissenting from the judgment.

 4 Velocity Databank also argues that the trial court erred in granting Shell’s 

summary judgment motion because (1) there is no “public record” exception to 

application of the discovery rule in defamation cases, and (2) fact issues exist 

regarding when Velocity Databank knew or, by the exercise of reasonable 

diligence, should have known of the defamation. Because we have determined 

that summary judgment was proper because the defamatory statements are public 

knowledge and, thus, the discovery rule is inapplicable, we need not reach 

Velocity Databank’s two remaining arguments. See TEX. R. APP. P. 47.1.