NO. 01-15-00320-CV 

__________________________________________________________________ 

 IN THE COURT OF APPEALS FOR THE 

FIRST JUDICIAL DISTRICT 

HOUSTON, TEXAS

__________________________________________________________________ 

REVENEW INTERNATIONAL, LLC, Appellant, 

vs. 

PSC INDUSTRIAL OUTSOURCING, LP, Appellee. 

 

On Appeal from the 281st Judicial District Court 

Harris County, Texas 

Trial Court Case No. 2013-59946 

 

APPELLEE’S CORRECTED BRIEF 

AHMAD, ZAVITSANOS, ANAIPAKOS, 

ALAVI & MENSING P.C. 

Todd W. Mensing 

Adam Milasincic 

Edward Goolsby 

1221 McKinney, Suite 3460 

Houston, Texas 77010 

Phone: (713) 655-1101 

Fax: (713) 655-0062 

tmensing@azalaw.com 

amilasincic@azalaw.com 

egoolsby@azalaw.com 

COUNSEL FOR APPELLEE

ORAL ARGUMENT CONDITIONALLY REQUESTED

ACCEPTED

01-15-00320-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

7/20/2015 3:30:14 PM

CHRISTOPHER PRINE

CLERK

 FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 7/20/2015 3:30:14 PM CHRISTOPHER A. PRINE Clerk
i

TABLE OF CONTENTS

Notice of Correction ........................................................................................ 1

I. Statement of the Case ...................................................................................... 1

II. Issues Presented ............................................................................................... 1

III. Statement Regarding Oral Argument .............................................................. 2

IV. Statement of Facts ............................................................................................ 3

A. Revenew accuses PSC of overcharging Exelon by nearly $2 million, 

forcing PSC to either pay Exelon or lose the client. ............................. 3

B. Revenew designs an audit process that is tainted with conflicts of 

interest. .................................................................................................. 4

C. Revenew removes low-dollar invoices from consideration, deletes 

samples that do not meet Revenew’s secretive criteria, and creates 

new samples until Revenew’s executives find one they like. ............... 6

1. Revenew intentionally “cleans up” the data by deleting smalldollar invoices and considering only PSC’s higher-dollar 

invoices. ...................................................................................... 7

2. Revenew further inflates the appearance of overbilling by 

handpicking a sample with even more expensive invoices. ....... 9

3. Revenew discards its original samples—and its own rules—to 

choose smaller samples with still-higher dollar values. ........... 10

D. Revenew convinces Exelon to repudiate its prior billing agreements 

with PSC and multiplies PSC’s resulting “errors” by almost onehundred fold. ....................................................................................... 12

E. After PSC is forced to pay Exelon, Revenew collects its “big fat 

check.” ................................................................................................. 14

F. Judge Matthews twice denies summary judgment, and Revenew then 

brings this interlocutory appeal, claiming that its emails to Exelon 

were somehow “published by the electronic or print media.” ............ 16
ii 

V. Summary of Argument .................................................................................. 16

VI. Arguments and Authorities ............................................................................ 18

A. This Court lacks jurisdiction: The trial court’s order denying 

Revenew’s motion for summary judgment is interlocutory and nonappealable. ........................................................................................... 18

B. Even if the Court were to address Revenew’s merits arguments, the 

order denying summary judgment should be upheld. ......................... 19

1. Revenew’s statements were false. ............................................. 19

a. PSC easily withstands Revenew’s no-evidence challenge.

 ........................................................................................ 19

b. Accusations of overbilling can be wrong; no rule of law 

(or logic) supports Revenew’s argument that, if a 

statement is paired with numbers, that statement can 

never be proven false. ..................................................... 24

2. Revenew exhibited all four variants of malice toward PSC. .... 26

a. Revenew knew its accusations were false or was at least 

reckless about the truth. .................................................. 26

b. Revenew acted with ill will toward PSC and intended to 

interfere with PSC’s economic interests. ........................ 29

3. Revenew fails to prove its affirmative defense of justification.

 ................................................................................................... 31

a. No justification defense is available because Revenew’s 

interference was accomplished by means of independent 

torts. ................................................................................ 31

b. There is, at minimum, a conflict in evidence about 

whether Revenew was acting pursuant to its contract with 

Exelon. ............................................................................ 32

c. Revenew did not exercise its rights in good faith. ......... 34

4. Revenew failed to conclusively prove its privilege defense. .... 35
iii 

Conclusion ............................................................................................................... 38

Certificate of Compliance ........................................................................................ 40

Certificate of Service ............................................................................................... 40

 
iv 

TABLE OF AUTHORITIES

Cases

Am. Nat’l Petro. Co. v. Transcon. Gas Pipe Line Corp., 798 S.W.2d 274 (Tex. 1990)

 .................................................................................................................................. 33 

Bentley v. Bunton, 94 S.W.3d 561 (Tex. 2002) ........................................... 20, 25, 29 

Calhoun v. Chase Manhattan Bank (U.S.A.), N.A., 911 S.W.2d 403 (Tex. App.—

Houston [1st Dist.] 1995, no pet.) ........................................................................... 37 

Daystar Residential, Inc. v. Collmer, 176 S.W.3d 24 (Tex. App.—Houston [1st 

Dist.] 2004, pet. denied) ........................................................................................... 36 

Delta Air Lines, Inc. v. Norris, 949 S.W.2d 422 (Tex. App.—Waco 1997, no pet.) 26 

Ernst & Young, LLP v. Pacific Mut. Life Ins. Co., 51 S.W.3d 573 (Tex. 2001) ....... 34 

Ervin v. Mann Frankfort Stein & Lipp CPAs, L.L.P., 234 S.W.3d 172 (Tex. App.—

San Antonio 2007, no pet.) ....................................................................................... 34 

Fluor Enters., Inc. v. Conex Int’l Corp., 273 S.W.3d 426 (Tex. App.—Beaumont 

2008, pet. denied) ..................................................................................................... 27 

Gaylord Broad. Co., L.P. v. Francis, 7 S.W.3d 279 (Tex. App.—Dallas 1999, no 

pet.) ........................................................................................................ 21, 23, 25, 28 

Gonzalez v. Hearst Corp., 930 S.W.2d 275 (Tex. App.—Houston [14th Dist.] 1996, 

no writ) ..................................................................................................................... 27 

Hansen v. Jackson, No. 13-14-00039-CV, 2014 WL 5794872 (Tex. App.—Corpus 

Christi Nov. 6, 2014, pet. filed) ................................................................................ 28 

Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657 (1989) ....................... 28 

Hearst Corp. v. Skeen, 159 S.W.3d 633 (Tex. 2005) ................................................ 29 

Hipsaver, Inc. v. Kiel, 984 N.E.2d 755 (Mass. 2013) .............................................. 30 

Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762 (Tex. 1987) ................ 19, 26, 31 

Jefferson v. Hackney, 406 U.S. 535 (1972) (Douglas, J., dissenting) ..................... 24 
v 

Kipp v. LYV Aerospace & Defense, 838 F. Supp. 289 (N.D. Tex. 1993) .................. 37 

Main v. Royall, 348 S.W.3d 381 (Tex. App.—Dallas 2011, no pet.) ....................... 19 

Mensa-Wilmot v. Smith Int’l, Inc., 312 S.W.3d 771 (Tex. App.—Houston [1st 

Dist.] 2009, no pet.) ................................................................................................. 29 

Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) ............................................... 25 

Moore & Assoc. v. Metro. Life Ins. Co., 604 S.W.2d 487 (Tex. Civ. App.—Dallas 

1980, no writ) ........................................................................................................... 24 

Newspaper Holdings, Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71 

(Tex. App.—Houston [1st Dist.] 2013, pet. denied) ............................................... 23 

Phillips v. State, 77 S.W.3d 465 (Tex. App.—Houston [1st Dist.] 2002, no pet.) .... 18 

Procter & Gamble Mfg. Co. v. Fisher, 449 U.S. 1115 (1981) (Rehnquist, J., 

dissenting) ................................................................................................................ 24

Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74 (Tex. 2000) ..32, 

34, 35 

Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640 (Tex. 1995) .............. 37 

Scripps Texas Newspapers, L.P. v. Belalcazar, 99 S.W.3d 829 (Tex. App.—Corpus 

Christi 2003, pet. denied) .......................................................................................... 23 

Serv. Emps. Int’l Union Local 5 v. Prof’l Janitorial Serv. of Houston, 415 S.W.3d 

387 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) .................................. 1, 2, 19 

Stearns v. McManis, 543 S.W.2d 659 (Tex. Civ. App.—Houston [1st Dist.] 1976, 

writ dism’d) .............................................................................................................. 30 

Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex. 1989) ...................................... 31 

Sw. Bell Tel. Co. v. Dixon, 575 S.W.2d 596 (Tex. Civ. App.—San Antonio 1978), 

writ dism’d w.o.j., 607 S.W.2d 240 (Tex. 1980) .................................................... 37 

Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000) ................................ 20 

Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931 (Tex. 1991) ................. 34, 36 
vi 

Statutes, Regulations and Treatises

22 TEX. ADMIN. CODE § 501.62 ................................................................................. 5 

RESTATEMENT (SECOND) OF TORTS § 651(2) (1977) ................................................ 36 

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6) ......................................... 2, 16, 18, 19 

Other Authorities

DARRELL HUFF, HOW TO LIE WITH STATISTICS 11 (1954) ...................................... 24 
NOTICE OF CORRECTION

The following Corrected Brief is identical to Appellee’s Brief, which was 

submitted to this Court on June 12, 2015, except that citations have been updated to 

reflect the latest supplemental appellate record. Appellee provides this Corrected 

Brief with updated record citations purely for the convenience of the Court. 

I. STATEMENT OF THE CASE

PSC Industrial Outsourcing, L.P. cleans power plants for Exelon Corporation. 

Revenew International, LLC scrutinizes vendor invoices for Exelon to identify alleged 

overpayments in exchange for a cut of any proceeds recovered. Based on false data of 

its own creation, Revenew told Exelon that (1) PSC systematically violated its deal 

with Exelon and (2) overcharged Exelon by $1,899,213. Exelon believed Revenew 

and demanded payment, forcing PSC to either pay Exelon or lose the account. The 

problem? Revenew lied. 

PSC sued Revenew for business disparagement and tortious interference. Judge 

Sylvia Matthews twice denied Revenew’s motion for summary judgment on those 

claims, and Revenew brought this interlocutory appeal. The appeal can, and should, 

be resolved on purely jurisdictional grounds. 

II. ISSUES PRESENTED

1. Revenew’s statements about PSC appeared only in private emails or 

conversations, never in the news media. Should the Court overrule its past decision in 

Service Employees International Union Local 5 v. Professional Janitorial Services of 

Houston, Inc., 415 S.W.3d 387 (Tex. App.—Houston [1st Dist.] 2013, pet. denied), by 
2 

holding that Revenew is nonetheless entitled to an interlocutory appeal under a statute 

available only to people whose words “appear[ ] in or [are] published by the electronic 

or print media?” TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6). 

2. If the Court concludes that appellate jurisdiction exists over this order 

denying a motion for summary judgment: 

a. Is Revenew entitled to no-evidence summary judgment on the 

issue of whether its disparaging statements were false despite (1) 

PSC’s analysis disproving the statements, (2) Revenew’s admissions 

that some of its statements were “pretty gray,” and (3) expert 

testimony showing how Revenew’s statements were false? 

b. Has Revenew negated all material factual disputes about whether 

Revenew made its accusations knowing they were false, with 

reckless disregard for the truth, with ill will, and with the aim of 

harming PSC? 

c. Regarding the tortious interference claim, has Revenew 

conclusively proven its affirmative defense of justification? 

d. Regarding the business disparagement claim, has Revenew 

conclusively proven its affirmative defense of privilege? 

III. STATEMENT REGARDING ORAL ARGUMENT

Oral argument is not necessary because this Court’s precedent plainly compels 

dismissal for lack of appellate jurisdiction. SEIU Local 5, 415 S.W.3d 387. The 

jurisdictional defect is dispositive and plain to see, meaning that any oral argument—

let alone on the merits—would be inefficient at this premature stage. Nonetheless, 

Revenew seeks oral argument. If the Court grants Revenew’s request, PSC seeks oral 

argument for the sole purpose of responding. 
3 

IV. STATEMENT OF FACTS

A. Revenew accuses PSC of overcharging Exelon by nearly $2 million, 

forcing PSC to either pay Exelon or lose the client. 

PSC provides environmental, industrial, and consulting services. One of PSC’s 

most important customers is Exelon Corporation, a large electric utility. (R. at 827.) 

Until March 2012, Exelon had no issues with PSC’s billing practices and described 

its relationship with PSC as “very good.” (R. at 827, 830.) Then Revenew arrived. 

Revenew performs audits despite having no certification from the American Institute 

of Certified Public Accountants. (R. at 846-47.) 

After a so-called “audit” of PSC, Revenew told Exelon that PSC overcharged 

Exelon by $1,899,213 over a three-year period. (R. at 869-70, 881.) Revenew also 

accused PSC of breaking specific promises to Exelon, claiming, for example, that PSC 

engaged in “excess billing” for certain laborers and double-billing for cancelled jobs. 

(R. at 865-70.) Contrary to Revenew’s portrayal, the truth is that PSC underbilled 

Exelon by $221,426 during the three years covered by the audit. (R. at 827-28, 907-

09; S.R. at 352.)1

 Thanks to Revenew, however, Exelon accepted the false accusations 

of overbilling, forcing PSC to either lose Exelon’s future business or to pay Exelon 

based on Revenew’s accusations. (R. at 917-18.) 

                                                            

1

 Citations to “S.R.” refer to the Second Supplemental Clerk’s Record that was filed with 

the Court on July 17, 2015. 
4 

After PSC had to pay Exelon, Revenew’s founder and CEO, John Birks, 

gloated that “I love it when those tough ones settle and they got a [sic] to write that 

big fat check!” (R. at 924.) Revenew received $187,500 of the money PSC paid to 

Exelon. (R. at 976). What follows are the facts showing how Revenew fabricated the 

accusations of overbilling that led to Revenew’s “big fat check.” 

B. Revenew designs an audit process that is tainted with conflicts of interest. 

Revenew’s brand of audits should not be confused with the meticulous work 

product one expects from “Big Four” accounting firms. Although Revenew’s CEO 

concedes that a legitimate audit firm must be neutral, Revenew’s COO admits that 

Revenew is not neutral. Compare R. at 932 (auditors should be neutral and objective) 

with R. at 950-52 (admitting that Revenew is not neutral). Instead, Revenew goads its 

clients into taking whatever position yields the most money for the client and, by 

extension, for Revenew. (R. at 948-50.) Rather than searching for the objective 

amount of over- or underbilling, Revenew views audits as a forceful means to a 

lucrative end. For instance, Revenew’s CEO encouraged Exelon to treat the PSC audit 

as “a steel hammer with a velvet glove.” (R. at 964.) 

At least 75 percent of Revenew’s audits are performed on a contingent-fee 

basis, with Revenew earning nothing unless substantial billing “errors” are found. 

(R. at 849, 852, 896.) As a result, workplace culture at Revenew is infused with a 
5 

relentless focus on maximizing the appearance of supplier overbillings.2 Managers 

circulate a daily “thermometer” to reflect auditors’ progress in “finding” the preset 

overbillings total that Revenew has identified as its target for the month. (R. at 852-

53.) Revenew even developed a colorful term—“juice”—that it uses to describe 

Revenew’s lucrative slice of the payments that audit targets are forced to make. (R. at 

854-55.) When Revenew employees identify too few billing “errors,” managers 

instruct them to “get it revved up tomorrow and crank up the thermometer.” (S.R. at 

375.) 

And employees have every incentive to comply. All Revenew workers who 

touch an audit from start to finish receive bonuses that turn on the size of the payment 

Revenew receives. (R. at 929-31.) For example, the Revenew employee responsible 

for auditing PSC, earns a base salary of $75,000, but he received a bonus of roughly 

$19,000—equal to 25 percent of his salary—based on the total overbillings he “found” 

in Revenew’s audit of PSC. (See R. at 897-901.) That employee admits he would 

receive no commission for an audit that showed no overbillings. Not surprisingly, 

during his six-and-a-half-year tenure at Revenew, that employee has never conducted 

                                                            

2

 Although Revenew decries the possibility that its contingent-fee structure could incentivize 

employees to inflate audit findings, the American Institute of CPAs disagrees. Certified public 

accountants are ethically barred from performing contingent-fee audits. (R. at 969-70.) Even nonCPA consultants are bound to conduct audits with “integrity and objectivity.” See 22 TEX. ADMIN.

CODE § 501.62 (extending certain AICPA standards to consultants). Notably, a consultant’s duty 

of objectivity “imposes the obligation to be impartial, intellectually honest, and free of conflicts of 

interest.” (R. at 971.) Revenew’s COO concedes that Revenew is not impartial. (R. at 950-52.) 
6 

a single audit in which he concluded that the supplier billed too little or billed properly. 

(R. at 902-03.) 

C. Revenew removes low-dollar invoices from consideration, deletes 

samples that do not meet Revenew’s secretive criteria, and creates new 

samples until Revenew’s executives find one they like. 

Revenew had its eyes on a large payment from PSC before starting the audit. 

Throughout the process, Revenew was counting down to its “good pay day” from 

PSC. (R. at 981.) In fact, Exelon’s “good spend” on PSC was one of the reasons that 

Revenew agreed to perform the audit at all. (R. at 988-92.) Because Revenew had 

audited PSC twice before, Revenew knew that PSC’s contracts involved large-dollar 

projects and complex terms that Revenew could twist into “error” findings. (R. at 988-

92, 1006.) 

The typical Revenew audit results in error findings of $100,000 to $200,000—

and thus contingency fees of just $30,000 to $60,000. (See R. at 953-55.) In this case, 

however, Revenew accused PSC of nearly $2 million in overbillings and reaped 

$187,500 in fees—more than five times Revenew’s typical cut. (R. at 861-69, 976.) 

When the size of Revenew’s fee became clear, Revenew’s CEO, Birks, celebrated his 

good fortune in receiving “that big fat check!” (R. at 924.) 

To create some semblance of credibility for its accusation that PSC overbilled 

Exelon by $1,899,213, Revenew crafted an elaborate matrix based on sampling 

techniques made up by Revenew. (See R. at 1021.) Revenew singled out PSC as the 
7 

target of these sampling methods despite knowing that Exelon expected Revenew to 

“quanti[f]y [alleged overbillings] dollar for dollar” and despite having performed 

dollar-for-dollar audits of every Exelon vendor except PSC. (S.R. at 43.) Before 

starting the audit, Revenew even assured PSC that “extrapolation will not be a major 

piece, we want to quantify dollar for dollar.” (S.R. at 47.) When enticed by Exelon’s 

attractive “spend” on PSC, however, Revenew resorted to “sampling” instead of 

reviewing all invoices. (R. at 1006.) Revenew selected just 90 of PSC’s 8,044 bills, 

found only $31,090 in purported errors, but then told Exelon that PSC had 

overcharged by $1,899,213. (See R. at 861-70; S.R. at 50.) 

1. Revenew intentionally “cleans up” the data by deleting small-dollar 

invoices and considering only PSC’s higher-dollar invoices. 

Revenew’s incentive to falsify results was on display from the outset of the 

PSC audit. Before the audit began, PSC supplied Revenew with a list of all invoices 

for February 2009 to January 2012, ranging in price from $1.19 to $180,731.37. (R. 

at 827; S.R. at 50, 171-74.) Revenew’s first step was to delete from that list all 1,372 

invoices that were worth less than $100. (See R. at 997-1000.) In other words, nearly 

one out of five PSC invoices had no chance of being included in Revenew’s 

purportedly “random” sample. (R. at 997-1000.) 

Not coincidentally, most of the 1,372 invoices that Revenew purposely ignored 

were worth about $65. (S.R. at 50.) In contrast, the invoices that Revenew did consider 

had a mean value exceeding $2,900. (S.R. at 50, 171-74.) By manipulating the sample 
8 

to include only top-dollar invoices, Revenew enabled itself to “find” more expensive 

“errors.” 

Revenew calls this practice of deleting low-dollar invoices its “clean up” 

process. (S.R. at 197-98.) In other words, Revenew requires employees to consider 

the value of each invoice in “cleaning up” data to exclude small-dollar invoices from 

the purportedly random sample. (R. at 999.) Recognizing the implications of this 

evidence, Revenew witnesses offered wildly different explanations about the “clean 

up” process or denied even knowing the term. 

For instance, Mike Nayebpour, who helped Revenew design its sampling 

methods, candidly wrote that Revenew’s “clean up procedures are intended to remove 

. . . items with small dollar amounts at or near zero.” (S.R. at 197.) But Aileen Jamir, 

the Revenew employee responsible for performing the “clean up” process, says that 

Nayebpour’s description is wrong and that she never discards low-dollar invoices. 

(S.R. at 204-06.) Revenew’s information technology director admits that any 

discrepancies between Nayebpour’s descriptions and Revenew’s actual practices 

could suggest suspicious or improper behavior. (S.R. at 193.) Meanwhile, Jamir’s own 

supervisor says that Jamir did omit low-dollar invoices from this very audit. (R. at 

997-1000.) In sum, Revenew’s “clean up” process creates the false appearance of 

overbilling by singling out only the largest invoices for scrutiny and then passing off 
9 

high-dollar “errors” on those bills as representative of all PSC invoices. (R. at 1018-

21.) 

2. Revenew further inflates the appearance of overbilling by 

handpicking a sample with even more expensive invoices. 

Once it discarded all low-value invoices, Revenew was not done manipulating 

the sample of PSC’s invoices. First, Revenew sliced the remaining invoices into three 

categories, one for each line of business that PSC does with Exelon. (R. at 1008.) 

From each of those categories, Revenew chose samples. In describing the samples, 

Revenew represents that the “undisputed evidence in this case is that the invoices were 

chosen randomly.” (R. at 499.) In truth, Revenew’s IT director and corporate 

representative admits that “[t]he final product sample that is produced for auditing is 

not a completely random sample.” (S.R. at 180-82.) That is because Revenew has 

programmed its software to delete any samples that do not satisfy the selection criteria 

that Revenew baked into the software. (S.R. at 180-82.) 

Revenew cloaks its deletion criteria in jargon, claiming that the software merely 

discards samples that do not meet the “z-test” and “chi-squared test” (as opposed to 

choosing samples likelier to yield bigger “errors”). (R. at 187-88.) Yet Revenew’s IT 

director, who picked the samples in this case, cannot explain how either of the 

supposed selection criteria work. (R. at 183-84, 185-86.) And Revenew’s president, 

Kris Westbrook concedes that, whatever these “tests” do, they do not ensure the 
10 

sample is representative of billing errors, which is what Revenew claims to be looking 

for. (R. at 841-42.) 

3. Revenew discards its original samples—and its own rules—to 

choose smaller samples with still-higher dollar values. 

Even after selecting non-random invoice samples using Revenew’s custom 

criteria, Revenew’s executives then threw back the samples they did not like. (R. at 

993-94; S.R. at 209-12.) Revenew first drew 50-invoice samples for the two larger 

categories of PSC business. (R. at 993-94; S.R. at 209-12.) But after seeing the total 

dollar value of those samples, Revenew’s executives threw out those samples and—

contrary to Revenew’s internal rules—created new samples of just 30 invoices apiece. 

(R. at 993-94, 1001-02; S.R. at 213-18.) 

What did Revenew’s executives see in the original samples that caused them to 

be thrown away in favor of smaller ones? Consider the discarded versus ultimatelyused samples for PSC’s “Peco” business segment: 

Original 50-invoice 

sample that Revenew 

threw away 

Smaller 30-invoice 

sample Revenew 

chose to use 

Invoices reviewed 

Average value of 

invoice within 

sample 

50 out of 3,262 

$6,703 

30 out of 3,262 

$7,814 

Population sum of 

all invoices within 

sample 

$335,175 $234,424 
11 

By throwing away the larger sample, Revenew achieved two sleights of hand. 

First, the invoices in the new, smaller sample have a higher average value. (S.R. at 

218, 225.) Because the average invoice value jumped by more than $1,000 in the new 

sample, Revenew set itself up to find more expensive “errors” on each bill reviewed. 

(S.R. at 225.) More expensive bills offer more chances to claim more expensive errors. 

Second, Revenew threw away the sample with the larger population sum. That 

sum is all-important because it is the denominator in Revenew’s extrapolation 

equation. (S.R. at 218.); (see also R. at 500.) (“The formula for the extrapolation factor 

is a simple one: Population Sum ÷ Sample Sum.”). By taking the total value of all 

Peco invoices ($21,148,657) and dividing it by the sum of the original 50-invoice 

sample ($335,175), Revenew arrived at an extrapolation factor of 63.10. (S.R. at 218.) 

In other words, if Revenew found a single $1,000 error, it would multiply that error 

by 63.10 to accuse PSC of overbilling by $63,310. 

But Revenew was not happy with a multiplier of just 63. It wanted a larger 

multiplier, so Revenew’s executives went back to the well for a new sample. (R. at 

993-94, 1001-02; S.R. at 209-12.) In the new sample, the population sum naturally 

dropped to $234,424 because only 30 invoices were reviewed. (R. at 993-94, 1001-

02; S.R. at 209-12.) The result is a smaller denominator. Dividing the value of all 

Peco invoices ($21,148,657) by the sum of the 30-invoice sample ($234,424) yields 

an extrapolation factor of 90.22, rather than the original 63.10. (R. at 993-94, 1001-
12 

02; S.R. at 209-12.) Consequently, Revenew would take the same $1,000 error, for 

example, and use it as the pretense for accusing PSC of $93,220 in overbillings 

instead of the $63,310 that would have resulted from using the original 50-invoice 

sample. This one trick of cutting samples to 30 invoices instead of 50 assured a larger 

extrapolation factor, allowing Revenew to convey the false impression of even more 

overbilling. (R. at 1019-20.) 

Revenew’s selective fishing for larger multipliers was contrary to Revenew’s 

own rules. Because more than 500 invoices were at issue in two of PSC’s business 

segments, Revenew’s “best practice” was to use a 50-invoice sample for each 

segment. (R. at 1001-02; S.R. at 226, 231.) But after seeing the average and 

population values of the 50-invoice samples, Revenew’s Juliana Routzong and Dave 

George twice ordered the creation of smaller samples containing just 30 invoices. 

(S.R. at 234-42.) Routzong did so despite admitting that she believed 50 was the 

correct sample size for at least one of the categories. (R. at 995.) Moreover, 

Revenew’s COO, who oversees the audit process, admits that it was contrary to his 

expectations for Revenew to discard its own best-practice sample sizes. (R. at 956-

58.) 

D. Revenew convinces Exelon to repudiate its prior billing agreements with 

PSC and multiplies PSC’s resulting “errors” by almost one-hundred fold. 

Creating a larger multiplier or “extrapolation factor” is only the first step in a 

Revenew audit. After deciding to multiply each error by 90.22, Revenew had to set 
13 

out in search of errors to multiply. This job belonged to Bill Shoemaker, who was 

tasked with identifying as many “errors” as possible in each sample invoice. (See R. 

at 879, 894-95.) 

In PSC’s ComEd business segment, for example, Shoemaker found three 

instances—out of 8,044 invoices—where he claimed that PSC overbilled for laborers. 

(R. at 865, 869.) This “error” finding is emblematic of Shoemaker’s work. Three 

times, PSC dispatched a three-man work crew in one truck. (R. at 865, 869.) 

According to Shoemaker, the cost of the truck was reflected in the first two workers’ 

hourly rate, meaning that PSC “overbill[ed]” by not awarding a discount for the third 

laborer’s time. (R. at 865, 869.) These three purported “errors” amounted to just 

$2,290, but Shoemaker multiplied them by 70.22 (Revenew’s extrapolation factor for 

the ComEd segment) to accuse PSC of $178,625 in overbillings. (R. at 865, 869-70.) 

Similar examples abound (R. at 861-70), but one proves the point. 

Revenew’s COO admits that some of Revenew’s “error” findings in this audit 

were “pretty gray” and were worth as little as 25 percent of what Revenew told 

Exelon. (S.R. at 244.) On one purported “overbilling” of $233,000, for example, 

Revenew privately conceded that the Exelon-PSC “contract language supports” 

PSC’s position. (S.R. at 246.) Yet Revenew still used that purported overbilling as 

“leverage” for a higher payment from PSC. (S.R. at 246.) 
14 

Importantly, Revenew did not identify pending invoices and convince Exelon 

not to pay them. Instead, Revenew scoured long-ago-paid invoices years after the fact 

to find line items that—with no reference to context or historical practice—it could 

label as “errors.” Before Revenew’s involvement, Exelon had already chosen to pay 

these invoices after passing them through several levels of internal approval. (S.R. at 

262, 265-67.) 

Then Revenew convinced Exelon to repudiate its billing agreements with PSC 

by supplying ammunition that Revenew knew was bogus: alleged contract 

“violations” culled from non-representative samples, which Revenew then inflated by 

nearly one-hundred-fold using extrapolation. (Supra § IV.C.3.) Revenew not only 

“discovered” the errors, it sat in the driver’s seat for the rest of the audit—providing 

behind-the-scenes coaching on how best to “soften up” PSC into paying, ghostwriting Exelon’s demands to PSC, and even sending a Revenew employee to hide in 

a nearby room while Exelon demanded money from PSC. (R. at 884-93.) 

E. After PSC is forced to pay Exelon, Revenew collects its “big fat check.” 

As the audit progressed, Revenew falsely told Exelon that PSC had overbilled 

Exelon by exactly $1,899,213. Exelon accepted Revenew’s representations without 

question, adopting verbatim Revenew’s accusations of overbilling and then sending 

those accusations to PSC along with a demand for payment. Compare R. at 861-70 
15 

(Revenew draft) with S.R. at 247-55 (Exelon copy); see also R. at 881-83 (confirming 

that Exelon simply relays Shoemaker’s drafts to PSC). 

The massive commercial pressure on PSC was well known to Revenew’s CEO. 

Birks used that pressure to “soften” PSC executive Liz Crow in a telephone call, 

telling Crow that PSC “need[s] to move the needle much further north” and that 

“Exelon is not going to back off.” (R. at 964.) Birks then used confidential information 

from Revenew’s past audits of PSC to assure Exelon that PSC would pay a higher 

number to preserve the client relationship. (R. at 964) Birks further encouraged Exelon 

to use a “steel hammer with a velvet glove” by emphasizing the future business that 

PSC stood to do with Exelon. (R. at 964.)

Faced with the clear threat of losing Exelon’s business, PSC had no choice but 

to defuse Revenew’s accusations by paying Exelon $620,000 and declining to collect 

more than $220,000 that Exelon owed for past services. (R. at 709-11, 828.) In turning 

over this money to Exelon, PSC specified that it was making a “customer satisfaction 

payment”—the necessary cost to “continue the amicable relationship that the parties 

enjoy” in the aftermath of the “irreconcilable issues” spawned by Revenew’s audit. 

(R. at 709-10.) In return for forcing this payment, Revenew received $187,500 of the 

money that PSC paid to Exelon. (R. at 976.) 
16 

F. Judge Matthews twice denies summary judgment, and Revenew then 

brings this interlocutory appeal, claiming that its emails to Exelon were 

somehow “published by the electronic or print media.” 

PSC sued Revenew for business disparagement, tortious interference, and 

unjust enrichment. Judge Sylvia Matthews of the 281st Judicial District Court denied 

Revenew’s first motion for summary judgment in May 2014. Revenew did not appeal. 

Revenew moved again for summary judgment in November 2014. On March 18, 

2015, Judge Matthews denied summary judgment as to PSC’s business disparagement 

and tortious interference claims. 

On April 7, Revenew appealed, citing section 51.014(a)(6) of the Texas Civil 

Practice and Remedies Code as its only basis for appellate jurisdiction over an 

interlocutory order. According to Revenew, its statements in the audit were “published 

by the print or electronic media” because the “allegedly libelous statement appeared 

in electronic or print form,” i.e., in a “medium.” (Resp. to Mtn. to Dismiss at 10, 19.) 

On April 15, PSC moved to dismiss this appeal for lack of jurisdiction and to recover 

attorneys’ fees from Revenew for its frivolous invocation of section 51.014(a)(6). 

That motion is pending. 

V. SUMMARY OF ARGUMENT

First and foremost, this Court lacks jurisdiction to hear this appeal because 

Revenew does not satisfy the requirements of section 51.014(a)(6). Specifically, 

Revenew’s disparaging comments never appeared in nor were published by “the 
17 

electronic or print media.” These comments only appeared in private letters, 

conversations, or emails. 

If the Court does decide to rule on the merits of this appeal, Judge Matthews 

was correct in twice denying Revenew’s motion for summary judgment. 

First, PSC provided ample evidence that Revenew’s allegations of PSC 

overbilling Exelon were false. Revenew invented the “errors” by manipulating invoice 

samples, violating its own “best practices,” and taking numerous other steps to inflate 

the appearance of overbilling. 

Second, PSC proved all four types of malice, and proof of even one type defeats 

summary judgment. PSC showed, through a series of admissions from Revenew’s 

own employees, that Revenew knew its statements were false or recklessly 

disregarded their truth. Revenew also harbored ill will towards PSC and sought to 

interfere with PSC’s economic interests because Revenew went out of its way to target 

only PSC (as opposed to Exelon’s other vendors) and maximize the “errors” found to 

capitalize on its contingency-fee fueled audit. 

Third, Revenew failed to conclusively prove its affirmative defense of 

justification. That defense is not available at all because Revenew interfered with the 

PSC-Exelon relationship through independently tortious means: business 

disparagement of PSC and fraudulent or negligent misstatements to Exelon. 

Moreover, Revenew did not comply with the terms of its contract with Exelon, further 
18 

making this defense inapplicable. Furthermore, in light of its defective and tortious 

audit, as discussed above, Revenew failed to act in good faith. 

Fourth, Revenew failed to conclusively prove its affirmative defense of 

privilege for the same reasons it failed to prove justification. Specifically, privilege 

requires Revenew to adhere to the contract with Exelon in order to protect itself from 

liability in a business disparagement case. 

In light of these arguments, the Court should dismiss Revenew’s appeal, or, in 

the alternative, affirm Judge Matthew’s denial of Revenew’s Second Motion for 

Summary Judgment. 

VI. ARGUMENTS AND AUTHORITIES

A. This Court lacks jurisdiction: The trial court’s order denying Revenew’s 

motion for summary judgment is interlocutory and non-appealable. 

PSC will not reargue its entire motion to dismiss in this space. But the 

jurisdictional problem bears repeating. Before addressing the merits, this Court must 

determine its appellate jurisdiction. Phillips v. State, 77 S.W.3d 465, 466 (Tex. App.—

Houston [1st Dist.] 2002, no pet.). Revenew cannot bring this interlocutory appeal 

without showing that it published its disparaging comments in “the electronic or print 

media.” TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6). 

There is no evidence that Revenew said anything about PSC except in private 

letters, emails, and conversations. See PSC’s Reply in Support of Motion to Dismiss 

at 5-7. This Court and others have already rejected Revenew’s fanciful view that, 
19 

merely by putting pen to paper or keystroke to keypad, Revenew published statements 

“in . . . the media.” SEIU Local 5, 415 S.W.3d at 395 (holding that “self-published 

statements in letters to third parties, flyers, handbills, newsletters, website postings, 

press releases, reports, and oral testimony” cannot create jurisdiction under section 

51.014(a)(6)); Main v. Royall, 348 S.W.3d 381, 386-87 (Tex. App.—Dallas 2011, no 

pet.) (declining to hold that “anyone with a computer, typewriter or printer will . . . 

have the right to file an interlocutory appeal”). 

Based on the Court’s controlling opinion in SEIU Local 5, the Court can—and 

should—stop reading here. Without jurisdiction, the merits are moot. 

B. Even if the Court were to address Revenew’s merits arguments, the order 

denying summary judgment should be upheld. 

1. Revenew’s statements were false. 

Judge Matthews was correct in denying Revenew’s motion as to PSC’s 

business disparagement and tortious interference claims, as PSC introduced sufficient 

evidence of falsity and malice. PSC demonstrated Revenew’s statements were false 

and malicious. Moreover, Revenew failed to conclusively prove its affirmative 

defenses of justification or privilege. 

a. PSC easily withstands Revenew’s no-evidence challenge. 

A statement must be false to be disparaging. Hurlbut v. Gulf Atl. Life Ins. Co.,

749 S.W.2d 762, 766 (Tex. 1987). Revenew’s statements about PSC were false. To 

defeat Revenew’s no-evidence motion on this issue, PSC’s burden is not a steep one. 
20 

PSC need only provide more than a scintilla of evidence that Revenew’s statements 

were misleading enough to cast suspicion on PSC. Turner v. KTRK Television, Inc., 

38 S.W.3d 103, 117-18 (Tex. 2000). Among other ways, PSC can prove falsity by 

showing that Revenew omitted material facts or misleadingly juxtaposed others, 

leaving Exelon with a “substantially false impression.” Id. 

Even ignoring PSC’s low burden, voluminous evidence shows that Revenew’s 

statements were false. Revenew accused PSC of overbilling Exelon by $1,899,213 

and of violating its contract with Exelon in numerous ways. (R. at 850, 862-864, 869-

70.) But PSC’s own analysis reflects that, in the aggregate, PSC actually underbilled 

Exelon by at least $221,426 during the years covered by the audit. (R. at 827-28, 

907-08; S.R. at 352.) That evidence alone requires denial of summary judgment. See

Bentley v. Bunton, 94 S.W.3d 561, 587 (Tex. 2002) (“If the evidence is disputed, 

falsity must be determined by the finder of fact.”). 

Revenew’s admissions further prove falsity. Revenew’s employee privately 

identified the “fair” picture of PSC’s overbillings as $535,000, not the $1.9 million 

that Revenew presented to Exelon. (S.R. at 281.) Revenew’s employees also concede 

that some of Revenew’s accusations about PSC were “pretty gray” and that 
21 

Revenew’s “extrapolated total” for one purported overbilling could have been higher 

than the real total. (S.R. at 244-45, 285.)3

Revenew’s president admits that Revenew’s conclusions are only as true as 

the invoice samples that it draws. (R. at 839-40.) As detailed above, Revenew 

purposefully skewed those samples, both in content and size, to falsely accuse PSC of 

rampant overbilling. (Supra § IV.C.) First, Revenew set aside the 1,372 lowest-dollar 

invoices, disregarding nearly 20 percent of PSC’s invoices and thus creating a 

substantially false impression. (Supra § IV.C.1.) Next, Revenew jettisoned its own 

“best practices” to delete purportedly random invoice samples that offered fewer 

opportunities for Revenew to “find” high-dollar errors. (Supra § IV.C.3.) That one 

ruse enabled Revenew to multiple $1 “errors” by 90.22, grossly inflating the 

appearance of overbilling. (R. at 993-94, 1001-02, 1019-20; S.R. at 209-12.) It is 

difficult to imagine a scenario better fitting the phrase “garbage in, garbage out.” 

                                                            

3

 Revenew is correct that one conceivable way to disprove Revenew’s accusations would be 

for PSC to self-audit all 8,044 invoices. But Revenew takes that position to an illogical extreme, 

stating that such a burdensome exercise is the only way for PSC to prove the falsity of Revenew’s 

statements. (App. Br. at 20.) Of course, Revenew cites no authority for its proclamation that “[t]o 

prove actual falsity . . . PSC would have to compare the extrapolated amount with the actual amount 

obtained from a review of each invoice.” (Id.) No such authority exists. To the contrary, Texas courts 

have ruled that it is unnecessary to review each and every data point to determine whether a statement 

is false or substantially true. See Gaylord Broad. Co., L.P. v. Francis, 7 S.W.3d 279, 282, 285-86 

(Tex. App.—Dallas 1999, no pet.) (holding that “evidence exists from which a jury could find that 

some of the statements made were false” instead of requiring plaintiff to re-examine all 9,000 entry 

and exit records upon which defendants’ false statements were based (emphasis added)). The mere 

fact that PSC could prove falsity with one form of evidence does not preclude PSC from proving 

falsity with different evidence—such as Revenew’s own admissions. Revenew’s position that a selfaudit would be the “best” way to prove falsity is nothing more than a jury argument.
22 

Additionally, expert testimony confirms that Revenew reported false results. 

(R. at 1009.) Dr. Charles Cowan was a director of PricewaterhouseCoopers, served as 

chief statistician for three federal agencies, designed surveys for the U.S. Census 

Bureau, and taught statistics courses at three universities. (R. at 1022-23.) By applying 

this expertise and reviewing Revenew’s work, Dr. Cowan concluded that Revenew’s 

accusation of $1,899,213 in overbillings was incorrect. (R. at 1009.) 

First, Revenew’s manipulated invoice samples were far too small to yield any 

true determination of errors. (R. at 1012-13.) If Revenew had actually applied the 

methods that it purported to, it would have needed to review 5,037 invoices, not 90. 

(R. at 1013-14.) Moreover, all of the samples that Revenew used were “upwards 

biased,” meaning they had a higher dollar value relative to the total invoice population. 

(R. at 1019.) If Revenew were really using random samples—instead of falsely 

inflating the appearance of overbilling—there is only a 1.47 percent chance that it 

would have drawn three out of three samples with above-average dollar values. (R. at 

1020.) Finally, Revenew “found” just one invoice out of the 90 sampled that 

reflected an undercharge by PSC. (R. at 1021.) In other words, 98.9 percent of the 

“errors” Revenew found were in one direction—the direction that favored 

Revenew’s bottom line. (R. at 1021.) 

Revenew suggests that, if any overbilling existed, then Revenew’s accusation 

of multi-million-dollar overbilling was no more harmful than an accurate report 
23 

would have been. (App. Br. at 21.) But when the truth is that few or no billing errors 

occurred,4

 painting a picture of systematic errors approaching $2 million is a far cry 

from telling the “substantial truth.” Cf. Newspaper Holdings, Inc. v. Crazy Hotel 

Assisted Living, Ltd., 416 S.W.3d 71, 84–85 (Tex. App.—Houston [1st Dist.] 2013, 

pet. denied) (where water leaks occurred, describing result as “cascade” of water 

was no more damaging than less vivid description would have been). Revenew’s 

own COO confirms that an accusation of overbilling can hurt a company’s reputation. 

(R. at 959.) 

Taken together, PSC’s contrary analysis, Revenew’s admissions, Revenew’s 

rigged audit process, and Dr. Cowan’s expert testimony amount to well more than a 

scintilla of evidence that Revenew’s accusations were false. See, e.g., Scripps Texas 

Newspapers, L.P. v. Belalcazar, 99 S.W.3d 829, 836 (Tex. App.—Corpus Christi 

2003, pet. denied) (finding sufficient evidence of falsity where newspaper accurately 

reported that doctor left sponge in patient’s stomach but failed to mention that patient 

dismissed resulting lawsuit); Gaylord, 7 S.W.3d at 286 (recognizing fact question on 

falsity of reporter’s statement that judge left work early 67 percent of the time because 

judge supplied “evidence that indicates his work habits are considerably better”). 

                                                            

4

 In reality, PSC underbilled Exelon by $221,426. (See R. at 827-28.) 
24 

b. Accusations of overbilling can be wrong; no rule of law (or 

logic) supports Revenew’s argument that, if a statement is 

paired with numbers, that statement can never be proven 

false. 

Citing nothing, Revenew argues that a report of billing errors “cannot, as a 

matter of law, be a statement of fact that can be ‘true’ or ‘false.’” App. Br. at 19. 

Revenew is wrong. See, e.g., Moore & Assoc. v. Metro. Life Ins. Co., 604 S.W.2d 

487, 489 (Tex. Civ. App.—Dallas 1980, no writ) (finding material fact dispute over 

defamation claim arising from insurer’s statement that doctor’s “charges were 

excessive”). It is no secret that extrapolation and related statistical functions can 

be—and often are—twisted to support false conclusions. See generally Procter & 

Gamble Mfg. Co. v. Fisher, 449 U.S. 1115, 1118 (1981) (Rehnquist, J., dissenting) 

(“Disraeli’s familiar statement that ‘there are three kinds of lies: lies, damned lies 

and statistics,’ rings true in this case.”); Jefferson v. Hackney, 406 U.S. 535, 552 

(1972) (Douglas, J., dissenting) (observing that state rerouted money to favored 

recipients “by manipulating a mathematical formula”); DARRELL HUFF, HOW TO LIE 

WITH STATISTICS 11 (1954) (“This book is a sort of primer in ways to use statistics 

to deceive. . . . The crooks already know these tricks; honest men must learn them 

in self-defense.”).

Beyond asserting that extrapolation is sacrosanct, Revenew claims to have 

expressed only “opinions” about overbilling. App. Br. at 19. Yet Revenew nowhere 

acknowledges the Texas Supreme Court’s test for distinguishing between facts and 
25 

opinions. To qualify as protected “opinion,” a statement cannot imply facts that are 

objectively verifiable. Bentley, 94 S.W.3d at 580; Milkovich v. Lorain Journal Co., 

497 U.S. 1, 18–19 (1990) (courts recognize no “wholesale . . . exemption for anything 

which might be labeled ‘opinion’” because, if “a speaker says, ‘In my opinion John 

Jones is a liar,’ he implies a knowledge of facts which lead to the conclusion that 

Jones told an untruth”). 

In Bentley, for instance, a talk show host accused a judge of corruption. Bentley, 

94 S.W.3d. at 566-67. In deciding that the host’s statements were not mere “opinion,” 

the court considered the full context: in making the statement, the host (1) “cited 

specific cases and occurrences,” (2) “pointed to court records and public documents”; 

and (3) “made lengthy investigations and interviewed court employees and others.” 

Id. at 583. Like the defendant in Bentley, Revenew did not simply claim that “in our 

opinion, PSC billed too much.” Revenew instead pointed to a specific 90 invoices (30 

for each of PSC’s audited business segments), 682 line items, and detailed 

spreadsheets to assert PSC had overbilled Exelon by the precise amount of 

$1,899,213. (R. at 869-70.) As a result, Revenew’s accusations of specific overbillings 

were too laced with purported “facts” to qualify as mere opinions. See, e.g., Gaylord, 

7 S.W.3d at 286 (holding that the following statement was not an opinion because it 
26 

implies assertions of fact: “Records suggest Francis leaves the courthouse early 67% 

of the time and works only a half day 50% of the time.”).5

2. Revenew exhibited all four variants of malice toward PSC. 

In business-disparagement cases, malice exists if the defendant knew its 

statement was false, displayed “reckless disregard” for the truth, acted with “ill will,” 

or “intended to interfere in the economic interest of the plaintiff in an unprivileged 

fashion.” Hurlbut, 749 S.W.2d at 766. Any one of these forms of malice is enough to 

warrant trial, and PSC has sufficient evidence to establish all four varieties. 

a. Revenew knew its accusations were false or was at least 

reckless about the truth. 

Revenew told Exelon that PSC overbilled by $1,899,213. (R. at 869-70.) 

Privately, however, Revenew identified the “fair” value of PSC’s alleged overbillings 

as just $535,000. (S.R. at 281-84.) Revenew’s COO admits that Revenew made 

“pretty gray” accusations worth as little as 25 percent of what Revenew claimed. (S.R. 

at 244-45, 285-88.) Revenew even concedes that “it would have been easy to let up 

and say ‘nothing is there’” in its audit of PSC. (S.R. at 289.) Any of these statements 

are sufficient on their own to show that Revenew was, at minimum, reckless about the 

                                                            

5

 Delta Air Lines, Inc. v. Norris, the only case identified by Revenew (App. Br. at 17-19), does 

not hold otherwise. 949 S.W.2d 422, 427 (Tex. App.—Waco 1997, no pet.). In Delta Air Lines, an 

employer said that former employees had “failed to meet [the employer’s] standards,” but the 

employer neither said what those standards were nor how the employees violated the standards. Id. 

Given their vagueness, the employer’s comments were nothing but “nonspecific statements lacking 

a defamatory meaning.” Id. In contrast, Revenew’s statements were specific to the penny and not of 

the vague nature sometimes held to constitute opinion. (R. at 861-70.) 
27 

truth of its accusations. See Fluor Enters., Inc. v. Conex Int’l Corp., 273 S.W.3d 426, 

439 (Tex. App.—Beaumont 2008, pet. denied) (“Reckless disregard is established by 

evidence that the defendant in fact entertained serious doubts as to the truth of the 

statements.”). 

The evidence of Revenew’s reckless or intentional disregard for the truth does 

not stop there. Revenew abandoned its own “best practice” when selecting the PSC 

sample sizes, causing Revenew to magnify purported errors by a factor of 90. (S.R. 

at 225, 231, 238-42.) One of the employees who ordered this slashing of invoice 

samples admits that she believes 50 was the correct sample size, and Revenew’s 

COO admits that such deviation from best practices was against his expectations. 

(R. at 956-58, 1001-02.) 

It makes no difference that some of Revenew’s most damaging admissions 

came after the audit ended. Revenew suggests the Court cannot consider after-the-fact 

admissions to determine Revenew’s mental state during the audit. App. Br. at 24. If 

Revenew were correct, then even deposition and trial testimony could never prove 

malice—simply because any admissions in such testimony are necessarily made long 

after the disparaging statement at issue. Of course, that is not the law. See Gonzalez v. 

Hearst Corp., 930 S.W.2d 275, 283 (Tex. App.—Houston [14th Dist.] 1996, no writ) 

(“Refusal to print a retraction is evidence of an action after the publication, but it can 

lend support to a claim that reckless disregard or knowledge existed at the time of 
28 

publication.”); Gaylord, 7 S.W.3d at 285 (finding malice based on defendant’s afterthe-fact testimony about what she did before making defamatory statement).6

Moreover, Revenew had already received complaints from past customers and 

audit targets about the same methods used in this audit. (See S.R. at 189-92.) Despite 

its knowledge of those complaints, Revenew kept on using the same audit practices, 

never installing any quality-control mechanisms to determine whether the billing 

“errors” relayed to Exelon were legitimate. (R. at 946-47.) Bill Shoemaker—who has 

no legal training, is not an expert in industrial-cleaning contracts like PSC’s, and has 

never worked in the industrial-cleaning sector—found all “errors” on the PSC 

invoices with no oversight from his supervisor. (R. at 876-878, 946-47.) 

Courts routinely infer recklessness from defendants’ “improper[] 

extrapolat[ion] from other evidence” or “obvious reasons to doubt the veracity of the 

informant or the accuracy of his reports.” See Harte-Hanks Commc’ns, Inc. v. 

Connaughton, 491 U.S. 657, 666 (1989); Gaylord, 7 S.W.3d at 285 (finding fact issue 

on malice when reporter misconstrued incomplete data on a judge’s entries and exits 

into the courthouse parking garage). If the facts above are not enough to establish 

                                                            

6

 To support its position, Revenew cites only Hansen v. Jackson, No. 13-14-00039-CV, 2014 

WL 5794872 (Tex. App.—Corpus Christi Nov. 6, 2014, pet. filed). Nothing in Hansen indicates that 

documents dated after the disparaging statements are off limits when assessing malice. In Hansen, 

defendants recommended firing the plaintiff. Months later, they made disparaging comments about 

the plaintiff. Hansen merely holds that the defendants’ earlier desire to fire the plaintiff—by itself—

is no proof that they knew their later statements about him were false. Id. at *10. How Revenew 

twists that holding into a rule that “statements . . . made after the allegedly false [statement] . . . do 

not constitute evidence concerning reckless disregard” is a mystery. See App. Br. at 24.
29 

recklessness, it is difficult to imagine any that do. See Hearst Corp. v. Skeen, 159 

S.W.3d 633, 638 (Tex. 2005) (“[I]nherently improbable assertions and statements 

made on information that is obviously dubious may show actual malice.”); Bentley, 

94 S.W.3d at 591 (holding that sloppy research “contrary to a speaker’s usual 

practice” may demonstrate recklessness to the truth). 

b. Revenew acted with ill will toward PSC and intended to 

interfere with PSC’s economic interests. 

Revenew’s discussion of ill will and intentional interference is notable for one 

thing: its dearth of supporting law. App. Br. at 25-26. Rather than attempting to show 

any entitlement to summary judgment, Revenew merely sets forth a host of jury 

arguments that lay out alternative inferences one could draw from various evidence. 

Id. Such arguments are immaterial to a no-evidence motion like this one. See MensaWilmot v. Smith Int’l, Inc., 312 S.W.3d 771, 781 (Tex. App.—Houston [1st Dist.] 

2009, no pet.) (“We review a no-evidence summary judgment by construing the 

record in the light most favorable to the nonmovant and disregarding all contrary 

evidence and inferences.”). 

In any event, evidence abounds concerning Revenew’s ill will toward PSC. 

For instance, Revenew targeted only PSC—but none of the other Exelon vendors 

that Revenew audited—for specious “extrapolation” techniques. (S.R. at 43-46.) 

Moreover, Revenew viewed PSC as “good juice,” a “good pay day,” and rejoiced 

when PSC had to “write that big fat check!” (R. at 924, 981; S.R. at 292.) Revenew 
30 

also misused confidential information from its past audits of PSC to (1) evaluate 

whether to audit PSC for Exelon and (2) to pressure PSC into paying more money 

to Exelon. (R. at 963-68, 989-90.) These facts far exceed the generic evidence of “ill 

will” that is needed to raise a fact dispute. See, e.g., Stearns v. McManis, 543 S.W.2d 

659, 663 (Tex. Civ. App.—Houston [1st Dist.] 1976, writ dism’d) (finding fact 

question on “ill will” where defendant said he could not get along with plaintiff and 

would quit kennel club if plaintiff was admitted). 

It is equally clear that Revenew intended to interfere with PSC’s economic 

interests. Revenew ordered the creation of bogus samples to inflate the appearance of 

overbillings. (Supra § IV.C.3.). Throughout the audit, Revenew used a “thermometer” 

to keep track of the overbillings attributed to PSC, encouraging employees to “get it 

revved up tomorrow and crank up the thermometer.” (S.R. at 375.) Revenew was 

openly awaiting its “good pay day” from PSC, and the high dollar-value of PSC’s 

account with Exelon was among the reasons that Revenew agreed to perform the 

audit. (R. at R. at 981-82, 990, 992.) In short, Revenew’s accusations of false billing 

had no purpose but to enrich Revenew at the expense of PSC. Such evidence shows 

an intent to harm PSC’s economic interests. See, e.g., Hipsaver, Inc. v. Kiel, 984 

N.E.2d 755, 770-71 (Mass. 2013) (citing RESTATEMENT (SECOND) OF TORTS § 623A 

(1977)) (holding that remarks referring to product as “untested” and manufacturer 
31 

as “the biggest scam artist” showed an intent to interfere).7 Consequently, Revenew’s 

no-evidence motion was properly denied. 

3. Revenew fails to prove its affirmative defense of justification. 

Justification is an affirmative defense to tortious interference, and Revenew 

cannot use the defense to win summary judgment without conclusively proving all 

elements of justification. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex. 

1989). Revenew fails to do so. 

First, Revenew cannot even claim the defense because Revenew’s means of 

interference amount to independent torts, which are never justified. Next, there 

exists—at minimum—a factual dispute about whether Revenew was truly acting 

pursuant to the contract terms that supposedly justified its behavior. Finally, Revenew 

fails to prove that it acted in good faith when carrying out the audit of PSC. 

a. No justification defense is available because Revenew’s 

interference was accomplished by means of independent 

torts. 

As a threshold matter, no justification defense is available to Revenew because 

Revenew’s means of interfering with the PSC-Exelon contact included independent 

torts—business disparagement of PSC and fraudulent or negligent misstatements to 

                                                            

7

 The business disparagement cause of action in Texas is derived from the “injurious 

falsehood” claim described in the Second Restatement. Texas, like many jurisdictions, follows this 

Restatement provision. See Hurlbut, 749 S.W.2d at 766 (citing RESTATEMENT (SECOND) OF TORTS

§ 623A (1977)). Therefore, cases from other jurisdictions applying the same provision offer some 

guidance on what evidence establishes the four variants of malice. 
32 

Exelon. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 81 (Tex. 

2000) (“[I]f the plaintiff pleads and proves methods of interference that are tortious in 

themselves, then the issue of privilege or justification never arises.”); (R. at 7-9; Supra

§ IV.B-C.) In other words, there can be no “justification” defense because Revenew 

interfered using tortious means. Prudential, 29 S.W.3d at 81. Interference that is 

independently tortious is never justified. Id. 

b. There is, at minimum, a conflict in evidence about whether 

Revenew was acting pursuant to its contract with Exelon. 

The only justification that Revenew claims is its right to perform audits under 

its contract with Exelon. App. Br. at 27-31. Rather than attempting to carry its burden 

of proving justification as a matter of law, Revenew only claims that “there is no 

dispute that Revenew was acting pursuant to its own contract with Exelon” when it 

made the disparaging statements. App. Br. at 29. No dispute? 

The Exelon contract does not give Revenew a blank check to conduct audits 

in whatever way Revenew sees fit. Instead, the contract requires Revenew to perform 

an audit (1) “of high quality, free from any defects,” (2) “in accordance with the 

applicable state-of-the-art industry standards and practices,” and (3) in compliance 

with “the practices and professional standards used in well-managed operations 

performing services similar to [the audit].” (S.R. at 308.) Revenew’s president 

admits that Revenew is not acting within its rights under the Exelon contract unless 
33 

it meets all of these benchmarks. (R. at 843-45.) The evidence proves Revenew did 

not. 

For one, Revenew did not comply with the terms requiring an audit of the 

highest quality, and thus was not acting within any legal privilege. As described 

above, Revenew’s sampling practices in this audit were far below industry standards 

and even violated Revenew’s own “best practice.” (Supra § IV.C.) Dr. Cowan has 

testified, in essence, that Revenew’s conduct of this audit was as far from “state-ofthe-art” and “professional” as it is possible to be. (R. at 1021.) (concluding that this 

audit was “completely inconsistent with good statistical practice, and ignores 

statistical and audit convention”). 

Revenew’s contract further requires a “random sample of invoices” from “the 

population of invoices covering the 3-year review period.” (S.R. at 346.) Revenew 

also violated this provision. According to Revenew’s IT director, Revenew’s invoice 

sample was not random. (S.R. at 180-82.) Moreover, Revenew did not draw the 

sample from “the population of invoices covering the 3-year review period.” Instead, 

it drew the sample from an artificially restricted pool that excluded 1,342 low-dollar 

invoices. (Supra § IV.C.1.) By defying its contract with Exelon, Revenew cannot 

claim that same contract as the basis of its justification defense. See Am. Nat’l Petro. 

Co. v. Transcon. Gas Pipe Line Corp., 798 S.W.2d 274, 279 (Tex. 1990) 

(“[Defendant] breached its contract to coerce [Plaintiff and third party] to settle 
34 

outstanding liability claims. Trying to coerce a party into a favorable settlement by 

threats under existing...contracts with third parties is not privileged.”). Just as they 

show Revenew’s lack of compliance with its contract, these facts demonstrate—or at 

least raise a genuine issue of material fact about—Revenew’s lack of justification.8

c. Revenew did not exercise its rights in good faith. 

Even if Revenew had identified any text in the Exelon contract that permits 

Revenew to behave as it did, such text would not entitle Revenew to summary 

judgment on its affirmative defense of justification. According to Revenew, tortious 

interference is always justified as a matter of law so long as the defendant can link its 

actions to some contractual right of its own. App. Br. at 27-31. According to the Texas 

Supreme Court, however, no contract allows Revenew—or anyone else—to “say or 

do anything under the guise of exercising” contractual rights. Prudential, 29 S.W.3d 

at 81. Instead, “the defense of legal justification or excuse only protects good faith

assertions of legal rights.” Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 939 

(Tex. 1991) (emphasis added). 

                                                            

8

 Revenew twists this evidence into an argument that PSC, as a non-party to the RevenewExelon contract, is trying to sue Exelon for malpractice. See App. Br. at 30. Not so. As the party 

rebutting Revenew’s justification defense, PSC merely relies on the Exelon contract to show that 

Revenew’s defense lacks merit. Moreover, it is well-settled that a party not in privity with an auditor 

can sue the auditor for tortious misconduct. Ernst & Young, LLP v. Pacific Mut. Life Ins. Co., 51 

S.W.3d 573, 575–78 (Tex. 2001); Ervin v. Mann Frankfort Stein & Lipp CPAs, L.L.P., 234 S.W.3d 

172, 177 (Tex. App.—San Antonio 2007, no pet.). Revenew’s position—that any intentional tort 

committed behind the façade of an audit cannot give rise to liability to non-clients—is not the law. 

Taken to its logical conclusion, Revenew’s argument would allow it to conduct audits by falsely 

imprisoning suppliers, assaulting its targets into paying, invading its subjects’ privacy, or—as 

alleged here—disparaging suppliers and interfering with suppliers’ customer contracts. 
35 

The Supreme Court’s opinion in Prudential demonstrates why Revenew’s 

motion fails as a matter of law. In that case, Prudential contracted with certain 

hospitals to pay medical bills and enjoyed a contractual right to challenge any bill. 29 

S.W.3d at 81. On behalf of those hospitals, a collection agency billed Prudential for 

hundreds of invoices. Id. at 76. Prudential responded with “sham audits” and false 

accusations against the collection agency. Id. at 81. The agency sued Prudential for 

tortious interference. Despite Prudential’s contractual right to challenge any bill, the 

Supreme Court refused to conclude that Prudential was privileged, as a matter of law, 

to “say or do anything” in furtherance of that right. Id. 

The result should be no different here. Instead of simply performing a 

legitimate audit as its contract with Exelon demands, Revenew took the bad-faith 

steps of (1) making “gray” accusations, (2) telling Revenew that PSC had billed 

almost four times as much as Revenew thought was the “fair” estimate of true 

overbillings, and (3) instructing auditors to intentionally skew the samples, both in 

terms of size and content, of PSC billings to inflate the purported error rate. (S.R. at 

234-37, 244, 281.) Under Prudential, such evidence presents a fact dispute 

concerning Revenew’s justification defense. 29 S.W.3d at 83. 

4. Revenew failed to conclusively prove its privilege defense. 

Just as justification is an affirmative defense to tortious interference, privilege 

is an affirmative defense to business disparagement. See Daystar Residential, Inc. v. 
36 

Collmer, 176 S.W.3d 24, 28-29 (Tex. App.—Houston [1st Dist.] 2004, pet. denied); 

RESTATEMENT (SECOND) OF TORTS § 651(2) (1977) (in business disparagement case, 

the “defendant has the burden of proving, when the issue is properly raised, that the 

publication was absolutely or conditionally privileged.”). Revenew concedes as much. 

App. Br. at 31 (calling privilege an “affirmative defense”). 

PSC and Revenew agree about one thing: “the issue of ‘privilege’ overlaps 

with the issues of justification.” App. Br. at 32. For the same reasons that 

Revenew’s statements were not justified, they are not privileged. In sum, Revenew 

asserts—without citing evidence—that “Revenew did exactly what it was retained 

and entitled to.” Id. But extensive evidence shows that Revenew did not conform 

to its contract with Exelon, as by failing to comply with “applicable state-of-theart industry standards and practices,” not completing an audit “free from any 

defect,” and not choosing a “random sample of invoices” from “the population of 

invoices covering the 3-year review period.” (See supra § IV.B-C.) These facts 

destroy Revenew’s privilege defense or at least prevent Revenew from 

conclusively proving its defense. See Victoria Bank, 811 S.W.2d at 939 (“[T]he 

defense of legal justification or excuse only protects good faith assertions of legal 

rights.”). 

Revenew relies on the Calhoun and Randall’s opinions, but both are 

inapposite. (App. Br. 32.) First, the Calhoun court merely concluded that credit-
37 

reporting agencies enjoy a conditional privilege to share credit reports with 

banks—so long as the agency acts in “good faith.” See Calhoun v. Chase 

Manhattan Bank (U.S.A.), N.A., 911 S.W.2d 403, 408 (Tex. App.—Houston [1st 

Dist.] 1995, no pet.). Revenew’s work has nothing to do with credit reporting, and 

there is a substantial dispute of fact about whether Revenew performed its work in 

“good faith.” (See supra § VI.B.3.c.) Randall’s is even further afield. That opinion 

merely applies a policy-based rule, unique to the employment context, that “[a]ny 

reasonable employer would investigate” reports of “serious wrongdoings” in the 

workplace, making such investigations conditionally privileged. Sw. Bell Tel. Co. 

v. Dixon, 575 S.W.2d 596, 599 (Tex. Civ. App.—San Antonio 1978), writ dism’d 

w.o.j., 607 S.W.2d 240 (Tex. 1980); see also Randall’s Food Markets, Inc. v. 

Johnson, 891 S.W.2d 640, 646 (Tex. 1995) (citing and applying Dixon). Neither of 

those opinions even hints that firms such as Revenew enjoy an absolute privilege 

to falsify data to complete a vendor-invoice audit.9

 

                                                            

9

 Revenew also relies on a federal district court opinion issued 22 years ago. See Kipp v. LYV 

Aerospace & Defense, 838 F. Supp. 289 (N.D. Tex. 1993). In addition to having little persuasive 

value, Kipp turned on a fact missing from this case. The defendant in Kipp had “superior” contractual 

rights to the plaintiff, an at-will employee with no written contract. Id. at 295. As a result of its 

contractual trump card, the defendant was justified in interfering with the plaintiff’s at-will 

employment relationship. Id. Revenew has not alleged—and could not allege—any such “superior” 

right in this case. 
38 

In sum, PSC established numerous fact issues concerning Revenew’s assertion 

of privilege, and Revenew falls far short of conclusively establishing this affirmative 

defense as a matter of law. 

CONCLUSION

 For the reasons above and in its Motion to Dismiss, PSC asks the Court to 

dismiss this appeal, to award damages, costs, and attorneys’ fees for responding to 

this frivolous appeal, and to grant PSC any other relief to which it may be justly 

entitled. 

 

 
39 

Respectfully submitted, 

 

 AHMAD, ZAVITSANOS, ANAIPAKOS, 

 ALAVI & MENSING P.C. 

 

 By: /s/ Todd W. Mensing 

 Todd W. Mensing 

 Texas Bar No. 24013156 

 tmensing@azalaw.com 

 Adam Milasincic 

 Texas Bar No. 24079001 

 amilasincic@azalaw.com 

 Edward Goolsby 

 Texas Bar No. 24092436 

 egoolsby@azalaw.com 

 1221 McKinney, Suite 3460 

 Houston, Texas 77010 

 (713) 655-1101 – Phone 

 (713) 655-0062 – Fax 

ATTORNEYS FOR APPELLEE,

PSC INDUSTRIAL OUTSOURCING, LP 
40 

CERTIFICATE OF COMPLIANCE

I certify that this Response complies with the typeface and word-count 

requirements set forth in the Rules of Appellate Procedure. This Response has been 

prepared, using Microsoft Word, in 14-point Times New Roman font for the text and 

12-point Times New Roman font for any footnotes. This Response contains 9,277 

words, as determined by the word count feature of the word processing program used 

to prepare this document, excluding those portions of the notice exempted by TEX.

R. APP. P. 9.4(i)(1). 

 /s/ Todd W. Mensing 

 Todd W. Mensing 

CERTIFICATE OF SERVICE

 I certify that on July 20, 2015, a true and correct copy of the above and 

foregoing document was served upon the following counsel by electronic service 

through the state-provided EFSP Efile.txcourts.gov: 

 Lauren J. Harrison 

 Lara D. Pringle 

 JONES WALKER LLP 

 1001 Fannin Street, Suite 2450 

 Houston, TX 77002 

 /s/ Todd W. Mensing 

 Todd W. Mensing 

4847-0858-2438, v. 1