Court Opinion

ID: 4520014
Source: CourtListenerOpinion
Date Created: 2020-03-27 07:14:13.350274+00
Date Added: 2024-06-11T11:50:02.428574
License: Public Domain

Opinion issued March 26, 2020.

                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                             NO. 01-19-00409-CV
                           ———————————
 NEWPARK MATS & INTEGRATED SERVICES, LLC AND NEWPARK
               RESOURCES, INC., Appellants
                                       V.
   CAHOON ENTERPRISES, LLC; AUSTIN L. CAHOON; AND MARK
                   CAHOON, Appellees

                   On Appeal from the 133rd District Court
                            Harris County, Texas
                      Trial Court Case No. 2018-90276

                                 OPINION

      Cahoon Enterprises, LLC, Austin L. Cahoon, and Mark Cahoon (collectively,

Cahoon) sued Newpark Mats & Integrated Services, LLC and Newpark Resources,

Inc. (collectively, Newpark) for trade secret misappropriation, violations of the
Texas Theft Liability Act (TTLA),1 breach of contract, tortious interference with an

existing contract, tortious interference with prospective business relations, and

intentional infliction of emotional distress. Newpark filed a motion to dismiss all of

Cahoon’s claims pursuant to the pursuant to the Texas Citizens’ Participation Act

(TCPA).2 The trial court denied the motion with respect to these causes of action.

On appeal, Newpark argues that the trial court erred by denying its motion to dismiss

Cahoon’s lawsuit in its entirety because Newpark demonstrated that the TCPA

applied to all of Cahoon’s claims, Cahoon did not prove that one of the TCPA’s

exemptions applies, Cahoon did not make a prima facie case by clear and specific

evidence, and, even if Cahoon made its prima facie case, the trial court should have

nevertheless dismissed the lawsuit because Newpark established, by a

preponderance of the evidence, each essential element of its affirmative defense of

release. We affirm the trial court’s judgment.

1
      See TEX. CIV. PRAC. & REM. CODE §§ 134.002, .003(a).
2
      See TEX. CIV. PRAC. & REM. CODE §§ 27.001–27.011. The Texas Legislature
      amended certain provisions of the TCPA in 2019. Act of May 17, 2019, 86th Leg.,
      R.S., ch. 378, §§ 1–9, § 12, sec. 27.001, 27.003, 27.005–.007, 27.0075, 27.009–.010
      (to be codified at TEX. CIV. PRAC. & REM. CODE §§ 27.001, 27.003, 27.005–.007,
      27.0075, 27.009–.010). The amendments became effective September 1, 2019. Id.
      at § 11. Because suit was filed before the effective date of the amendments, this case
      is governed by the statute as it existed before the amendments. See id. All our
      citations and analyses are to the TCPA as it existed prior to September 1, 2019,
      unless otherwise noted.

                                            2
                                    Background

      Cahoon Enterprises is a small family-owned business in North Dakota that

provides various trucking, roustabout, and excavation services for the fracking oil

drilling and production activities in Bakken Formation. The company’s founder,

Mark Cahoon, and his son, Austin Cahoon, oversee the company’s operations. The

roustabout services provided by Cahoon Enterprises include, among other things,

mat installation and removal services for the mats that are installed under the sand

boxes that are hauled into oil fields at fracking sites. Newpark manufactures the type

of heavy duty composite matting systems that Cahoon Enterprises installs.

      In May 2017, Newpark hired Cahoon Enterprises as an independent contractor

“to coordinate orders for the rental and installations of [Newport’s] mats for

customers.” The terms of their agreement were memorialized in the Master Service

Agreement executed by the parties. Because Newpark did not have any employees

located in the Bakken Formation at that time, Newpark “relied on Cahoon

Enterprises to essentially manage [Newpark’s] mat rental and installation unit in the

Bakken Formation.”

      In October 2017, Newpark acquired Well Service Group, Inc. (WSG), a

business that provides similar mat-related services to those provided by Cahoon

Enterprises. WSG, which was located in Pennsylvania, did not do business in the

Bakken Formation region of North Dakota at that time.

                                          3
      In May 2018, one of Cahoon Enterprises’ managers, Jose Reyes, resigned to

form a competing business. According to Cahoon, Reyes contacted Newpark after

he left Cahoon Enterprises “to try to get Newpark’s business from Cahoon

Enterprises and to disparage or otherwise sabotage Cahoon Enterprises in doing so.”

      On June 27, 2018, Ken Higley, “a supervisor with WSG in Pennsylvania (now

Newmark),” and another Newpark employee, Robert, visited Cahoon Enterprises’

office in North Dakota “for the stated purpose of taking an inventory of Newpark’s

mats in Cahoon Enterprises’ yard and to audit some of Cahoon Enterprises’ invoices

to Newpark.” The next day, Higley and Robert “showed up to Cahoon Enterprises’

office and told the staff that they needed to list[en up] and that things could be done

the hard way or the easy way. Higley continued and said there were sheriffs and FBI

agents outside of Cahoon Enterprises’ office and [he] was either going to take

[Cahoon Enterprises’] business records, or law enforcement officers would come in

to arrest the staff and seize the paperwork.”

      Higley and Robert collected at least two boxes of Cahoon Enterprises’ original

business records, many of which were unrelated to the work Cahoon Enterprises had

done for Newpark, including records for work that Cahoon Enterprises had done for

other customers and Cahoon Enterprises’ employee personnel files. According to

Higley, Newpark had a “team” of auditors at a nearby location “combing through”

the records. Cahoon further contends that as a result of Newpark taking these original

                                          4
records and not returning them for several weeks, Cahoon Enterprises was not able

to bill its other customers for work performed during this period.

      While Newpark was reviewing Cahoon Enterprises’ records, Higley

“repeatedly told Austin Cahoon that both he and his father, Mark Cahoon, were

being investigated by the FBI for fraud against Newpark, and that ‘if you play your

cards right’ [Cahoon] would avoid criminal prosecution.” Higley also met with

Cahoon Enterprises’ staff during this same period. During one of those meetings,

Higley “stated (in an audio recording made by one of Cahoon Enterprises’

employees) that he was running the show now; that everything was to go through

him now; and that Mark and Austin Cahoon were both being investigated for fraud

and would no longer be in charge of the matting operations.” Higley then began

scheduling jobs using Cahoon Enterprises’ employees and equipment and visiting

job sites, even though he did not have the required safety certifications and training.

Newpark also began hiring some of Cahoon Enterprises’ competitors to install and

remove its mats from work sites in North Dakota.

      At some point during this period, Newpark employees came to Cahoon

Enterprises’ offices to compare Newpark’s billing records with Cahoon Enterprises’

records “to determine if Newpark had billed its clients correctly and to determine

how screwed up their internal records were for the region.” After Newpark’s

personnel had spent hours “going through the paperwork with [Cahoon Enterprises’]

                                          5
secretarial staff, Higley stated, ‘If our [Newpark’s] billing office has billed what this

[referencing a billing spreadsheet] states we billed, we [Newpark] are fucked.’”

      Austin Cahoon alleges that, at some point, Higley had told him that “Newpark

was guilty of over-billing Halliburton and Liberty Frac and that Newpark’s plan was

to use Cahoon Enterprises as a scapegoat to whom Newpark could blame the

over-billing and thereby conceal its breaches of its contracts with these customers.”

Higley also told him and others that “while he had initially thought that Cahoon

Enterprises may actually be to blame for some of the client over-billing, he had come

to realize that the blame rested with Newpark’s billing office in Grand Junction,

which had overbilled customers way outside of their contracts.” Higley also

“admitted (including in an audio recording) that it was wrong of Newpark to try to

withhold monies owed to Cahoon Enterprises to cover damages to its mats that had

been caused by the renters/customers, not Cahoon.”

      Some of Cahoon Enterprises’ office staff quit during this time and Austin

Cahoon had to promise them pay raises to convince them to return to work.

According to Austin Cahoon, Higley helped him convince these staff members to

return “because [Higley] knew that Cahoon Enterprises needed them working for us

at least until some key projects were completed before Higley and Newpark had their

competing business venture established.”

                                           6
      Cahoon alleges that Newpark terminated the MSA soon after it collected

Cahoon Enterprises’ business records and took over management of the company’s

business operations. Newpark then immediately began “directly operating a

competing mat services business for oil drilling activity in the Bakken Formation”

through a company co-owned by Higley which provides the same oilfield roustabout

services as Cahoon Enterprises. Newpark also hired several of Cahoon Enterprises’

employees for the new business.

      Cahoon subsequently sued Newpark for trade secret misappropriation,

violations of the TTLA, defamation, breach of contract, tortious interference with an

existing contract, tortious interference with prospective business relations, and

intentional infliction of emotional distress. In its petition, Cahoon alleged that

Newpark misappropriated its trade secrets in violation of TUTSA.3 Specifically,

Cahoon alleged that Newpark accessed “Cahoon Enterprises’ customer data —

including detailed field tickets, invoices, [and] customer bids/quotes,” and that this

confidential and proprietary information was “accessed, stolen and copied with the

intent to use and disclose this information to others within Newpark to create a

competing business, and [that Newpark] did, in fact, use it to create a competing

business providing mat services to drilling operations in the Bakken Formation.”

According to Cahoon, Newpark “misappropriated Cahoon Enterprises’ trade secrets

3
      See TEX. CIV. PRAC. & REM. CODE §§ 134A.001–.008.

                                          7
with the intent to benefit from the use or disclosure of such information in order to

gain an unfair competitive advantage in the industry. Defendants have used Cahoon

Enterprises’ trade secrets to undercut Cahoon Enterprises with customers, use

Cahoon Enterprises’ processes and methods to provide products and services , and

save themselves the time, effort, and expense it would have cost them to develop

these methods, processes, products, and services on their own.”

      Cahoon further alleged that Newpark violated the TTLA, by “unlawfully

appropriat[ing Cahoon Enterprises’] confidential and proprietary information and

trade secrets without Cahoon Enterprises’ consent, and with the intent to deprive or

take control of this personal property of Cahoon Enterprises.”

      Cahoon also alleged that Newpark defamed Cahoon Enterprises, Austin

Cahoon, and Mark Cahoon, “by publishing false, defamatory statements against

them, including, without limitation, accusations that they were unethical and under

criminal investigation by the FBI.”

      Cahoon alleged that Newpark violated the MSA by, among other things,

“grossly overreaching their inspection and audit rights by outright taking Cahoon

Enterprises’ business records, and failing to pay Cahoon Enterprises for all invoices

and services rendered.” According to Cahoon, Newpark owes Cahoon Enterprises

over $900,000 in unpaid invoices.

                                          8
      With regard to its claim for tortious interference with an existing contract,

Cahoon alleged that “Cahoon Enterprises had valid contracts with clients at the time

[Newpark] stole its business records, defamed [Cahoon], and then started their

competing venture.” According to Cahoon, Newpark “willfully and intentionally

interfered with these contracts, including through misappropriation, reliance and use

of Cahoon Enterprises’ trade secrets and other confidential and proprietary data;

through their defamation of Plaintiffs; and through their breach of [Newpark’s]

contractual duties owed to Cahoon Enterprises.” Cahoon made similar allegations

with respect to its tortious interference with prospective business relations.

Specifically, Cahoon alleged that it “had prospective business relations with existing

and potential clients and others at the time [Newpark] stole Cahoon Enterprises’

business records, defamed [Cahoon], and then started their competing venture.”

Cahoon further contends that Newpark “willfully and intentionally interfered with

these relationships, including through misappropriation, reliance and use of Cahoon

Enterprises’ trade secrets and other confidential and proprietary data; through its

defamation of Plaintiffs; and through its breach of Defendants’ contractual duties

owed to Cahoon Enterprises.” Mark Cahoon and Austin Cahoon also asserted claims

against Newpark for intentional infliction of emotional distress (IIED), which they

later averred were based on the severe emotional distress they suffered as a result of

Newpark’s “destruction” of their family business.

                                          9
      Newpark answered and asserted an affirmative defense of release and a

counterclaim for declaratory judgment. Specifically, Newpark alleged that it entered

into a settlement agreement with Universal Funding Corporation, a factoring

company to whom Cahoon Enterprises had assigned all its accounts receivable and

conferred an irrevocable power of attorney to, among other things, settle claims on

Cahoon Enterprises’ behalf with respect to these accounts. Under the terms of its

agreement with Universal, Newpark agreed to pay Cahoon Enterprises $912,158.08

“in full and final settlement of any and all claims by Cahoon Enterprises and/or

[Universal]” and further agreed to “make this payment to [Universal] pursuant to the

Notification Agreement[,] which provides that ‘payments on any and all invoices

that have not been paid and any in the future be made payable to [Universal] . . .’”

Pursuant to the agreement, Universal, for itself and on behalf of Cahoon Enterprises,

executed a general release that Newpark contends released all of Cahoon’s claims

in the current lawsuit.

      Newpark filed a motion to dismiss Cahoon’s claims pursuant to the TCPA.

Cahoon responded and attached, among other things, affidavits from Austin Cahoon

and Mark Cahoon. Newpark filed a motion to strike objectionable portions of Austin

Cahoon’s affidavit and exhibits attached to his affidavit. The court sustained most

                                         10
of the objections.4 The trial court also granted Newpark’s motion in part and

dismissed Cahoon’s defamation claims, but denied the motion with respect to the

other causes of action.5 This interlocutory appeal followed.

                    Motion to Dismiss Pursuant to the TCPA

      On appeal, Newpark argues that the trial court erred by denying its motion to

dismiss Cahoon’s lawsuit in its entirety because Newpark demonstrated that the

TCPA applied to all of Cahoon’s claims and Cahoon did not prove that one of the

TCPA’s exemptions applies, or make its prima facie case by clear and specific

evidence. Newpark further contends that even if Cahoon made its prima facie case,

the trial court should have nevertheless dismissed Cahoon’s lawsuit because

Newpark established, by a preponderance of the evidence, each essential element of

its affirmative defense of release.

A.    TCPA Statutory Framework

      Chapter 27 of the Texas Civil Practice & Remedies Code, also known as the

Texas Citizens Participation Act, “is a bulwark against retaliatory lawsuits meant to

intimidate or silence citizens on matters of public concern.” Dall. Morning News,

4
      Because the trial court sustained Newpark’s objections, these statements are not part
      of the appellate record and we are not relying upon them for purposes of this appeal.
5
      The trial court’s dismissals Cahoon Enterprises’, Austin’s, and Mark’s defamation
      claims are not subject to interlocutory appeal. See TEX. CIV. PRAC. & REM. CODE
      § 51.014(a)(12) (permitting interlocutory appeal of order that denies TCPA motion
      to dismiss).

                                           11
Inc. v. Hall, 579 S.W.3d 370, 376 (Tex. 2019); see In re Lipsky, 460 S.W.3d 579, 58

(Tex. 2015). The act “is intended to identify and summarily dispose of lawsuits

designed only to chill First Amendment rights, not to dismiss meritorious lawsuits.”

In re Lipsky, 460 S.W.3d at 589.

      The purpose of the TCPA, as stated in Civil Practice and Remedies Code

chapter 27, “is to ‘encourage and safeguard the constitutional rights of persons to

petition, speak freely, associate freely, and otherwise participate in government to

the maximum extent permitted by law and, at the same time, protect the rights of a

person to file meritorious lawsuits for demonstrable injury.’” ExxonMobil Pipeline

Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (per curiam) (quoting TEX. CIV.

PRAC. & REM. CODE § 27.002). The TCPA’s primary vehicle for accomplishing its

stated purpose is a three-step motion-to-dismiss procedure that allows a defendant

who claims that a plaintiff has filed a suit in response to the defendant’s exercise of

a constitutionally protected right to seek dismissal of the underlying action,

attorneys’ fees, and sanctions at an early stage in the litigation. See TEX. CIV. PRAC.

& REM. CODE §§ 27.003(a), .009(a); Creative Oil & Gas, LLC v. Lona Hills Ranch,

LLC, 591 S.W.3d 127, 132 (Tex. 2019); Gaskamp v. WSP USA, Inc., ___ S.W.3d

___, No. 01-18-00079-CV, 2020 WL 826729, at *7–8 (Tex. App.—Houston [1st

Dist.] Feb. 20, 2020, no pet. h.) (en banc).

                                          12
       A defendant invoking the TCPA’s protections by filing a motion to dismiss

must show first by a preponderance of the evidence that the TCPA applies. See TEX.

CIV. PRAC. & REM. CODE § 27.005(b). The TCPA applies if the plaintiff’s “legal

action is based on, relates to, or is in response” to the defendant’s exercise of (1) the

right of free speech; (2) the right to petition; or (3) the right of association. Id.; In re

Lipsky, 460 S.W.3d at 586–87. A “legal action” is “a lawsuit, cause of action,

petition, complaint, cross-claim, or counterclaim or any other judicial pleading or

filing that requests legal or equitable relief.” TEX. CIV. PRAC. & REM. CODE

§ 27.001(6).

       If the defendant makes this initial showing, the burden shifts to the plaintiff to

establish “by clear and specific evidence a prima facie case for each essential

element” of his claim. TEX. CIV. PRAC. & REM. CODE § 27.005(c); In re Lipsky, 460
S.W.3d at 587. If, however, the plaintiff establishes a prima facie case for its claim,

then the burden shifts back to the movant to establish, by a preponderance of the

evidence, each essential element of a valid defense. TEX. CIV. PRAC. & REM. CODE

§ 27.005(d). A plaintiff can avoid the act’s burden-shifting requirements, however,

by showing that one of the TCPA’s exemptions applies, such as the commercial

speech exemption. See id. § 27.010(b).

       If the trial court grants the motion to dismiss, it must award costs, reasonable

attorneys’ fees, and other expenses of defending against the action “as justice and

                                            13
equity may require.” Id. § 27.009(a). The trial court also must sanction the plaintiff

in an amount “sufficient to deter the party who brought the legal action from bringing

similar actions.” Id.6

B.    Standard of Review

      We review de novo the denial of a TCPA motion to dismiss. Dolcefino v.

Cypress Creek EMS, 540 S.W.3d 194, 199 (Tex. App.—Houston [1st Dist.] 2017,

no pet.); Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 441
S.W.3d 345, 353 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). Whether the

TCPA applies to Cahoon’s claims is an issue of statutory interpretation that we also

review de novo. Youngkin v. Hines, 546 S.W.3d 675, 680 (Tex. 2018); Gaskamp,

2020 WL 826729, at *8.

      In determining whether to grant or deny a motion to dismiss, the court must

consider the pleadings and supporting and opposing affidavits stating the facts on

which the liability or defense is based.7 TEX. CIV. PRAC. & REM. CODE § 27.006(a).

We view the pleadings and evidence in the light most favorable to the nonmovant.

Dolcefino, 540 S.W.3d at 199; see Schimmel v. McGregor, 438 S.W.3d 847, 856-57

(Tex. App.—Houston [1st Dist.] 2014, pet. denied).

6
      This portion of the TCPA was amended, effective September 1, 2019. Under the
      amended version of the TCPA, an award of sanctions is optional, not mandatory.
7
      The record before us includes only the unstruck portions of the evidence.

                                          14
C.    Applicability of the TCPA to Cahoon’s Claims

      Newpark argues that the TCPA applies to each of Cahoon’s claims because

each claim is “based on, relates to, or is in response to” Newpark’s exercise of the

right of association and the right of free speech. According to Newpark, all of

Cahoon’s complaints stem from Newpark’s invocation of its contractual audit rights

which “necessarily entailed Newpark engaging in oral and written ‘communications’

. . . that were made ‘in connection with’ Newpark’s investigation of Cahoon’s

fraudulent overbilling.”

      1.     Right of Association

      In it motion to dismiss, Newpark argued that all of Cahoon’s claims were

based on Newpark’s exercise of the right of free association under the TCPA. At the

time the suit was filed, the TCPA defined the “exercise of the right of association”

as “a communication between individuals who join together to collectively express,

promote, pursue, or defend common interests.” TEX. CIV. PRAC. & REM. CODE

§ 27.001(2); see Gaskamp, 2020 WL 826729, at *8.

      Here, Newpark asserts that there are two exercises of associational rights at

issue in this case, namely, the joining together of “Newpark’s managers,

employees, and agents . . . as well as with managers, employees and agents of

overbilled customers and whistleblowing managers, employees, and agents of

Cahoon, itself” in a joint effort to express, promote, and pursue the common

                                        15
interests of “investigating Cahoon’s billing practices and rooting out any fraud” and

“form[ing] a competing business.”

      Newpark relies on this court’s original opinion in Gaskamp in support of its

argument that “allegations that one conspired to misappropriate trade secrets and

form a competing business implicated a cognizable associational right that triggers

the TCPA’s protections.” While Newpark’s appeal has been pending, however, an

en banc panel of this court withdrew the original opinion in Gaskamp and issued a

new opinion in which it reaches the opposite holding. See Gaskamp, 2020 WL
826729, at *1.

      In Gaskamp, the plaintiff sued three former employees for tortious conduct

related to their alleged misappropriation of the plaintiff’s trade secrets and

confidential information. Among other things, the plaintiff alleged that these

employees had used and disclosed its trade secrets and proprietary confidential

information in order to compete with the plaintiff for their own financial gain at a

new company founded by another former employee which offered the same services

provided by the plaintiff. See id. at *3. The plaintiff further alleged that the

employees had used the misappropriated trade secrets to tortiously interfere with its

existing contracts and prospective business relationships. See id. The employees

filed a motion to dismiss pursuant to the TCPA in which they asserted, among other

things, that the plaintiff’s claims were based on, related to, or were in response to

                                         16
their exercise of their right of association. See id. at *4. Specifically, the employees

argued the lawsuit was based on, related to, or were in response their joining together

to collectively express, promote, pursue, or defend a common interest––“their new

business venture.” See id. at *11.

      The en banc court in Gaskamp held that “with respect to the pre-amendment

version of the TCPA, the proper definition of ‘common’ in the phrase ‘common

interests’ is ‘of or relating to a community at large: public.’” See id. at *13. Relying

upon this interpretation, this court determined that the employees did not meet their

burden of showing, by a preponderance of the evidence, that the plaintiff’s suit was

based on, related to, or was in response to an exercise of their right of association

because the conduct and communications at issue, which involved misappropriating

plaintiff’s trade secrets and conspiring to commit related torts, “benefitted only the

five alleged tortfeasors” and there were no “allegations that the tortfeasors ‘join[ed]

together to collectively express, promote, pursue, or defend’ any public or

community interests.” Id.

      As reflected in the pleadings and evidence before us, Newpark’s association

(internally and externally) to express, promote, and pursue a common interest,

namely, to form a competing business, is not a public or community interest; it is a

private interest that benefits only the private parties involved in the intended business

venture. See id. Similarly, based on the evidence and pleadings before us,

                                           17
“investigating Cahoon’s billing practices and rooting out any fraud” is not a public

or community interest because it is based on Cahoon’s invoicing of Newpark for

services provided pursuant to the MSA and Newpark’s investigation and audit of

Cahoon’s records pursuant to that agreement. The allegations in its case reflect that

Newpark’s audit and investigation was based, at least in part, on the fact that

Newpark had been overbilling its customers and it planned to blame Cahoon for the

“over-billing and thereby conceal its breaches of its contracts with these customers.”

It is a private contract dispute between two private parties and the only party who

would benefit from this investigation is Newpark, and possibly the customers

Newpark had overbilled. Furthermore, there is no indication in the record that the

formation of Newpark’s competing mat-instillation business or the investigation of

Cahoon’s billing practices with respect to the MSA involved any manner of public

or citizen participation. Therefore, we hold that Newpark did not meet its burden of

showing, by a preponderance of the evidence, that Cahoon’s suit was based on,

relates to, or is in response to an exercise of Newpark’s right of association. See TEX.

CIV. PRAC. & REM. CODE § 27.005(b).

      2.     Right of Free Speech

      The TCPA defines the “exercise of the right of free speech” as “a

communication made in connection with a matter of public concern.” TEX. CIV.

PRAC. & REM. CODE § 27.001(3). A “communication” includes “the making or

                                          18
submitting of a statement or document in any form or medium, including oral, visual,

written, audiovisual, or electronic.” Id. § 27.001(1). When this suit was filed, a

“matter of public concern” included “an issue related to: (A) health or safety; (B)

environmental, economic, or community well-being; (C) the government; (D) a

public official or public figure; or (E) a good, product, or service in the marketplace.”
Id. § 27.001(7)8; Coleman, 512 S.W.3d at 899. Newpark argues that all of Cahoon’s

claims are “based on, relate[] to, or [are] in response to” one or more

communications that Newpark made in connection with two matters of public

concern: “economic, or community well-being” and “a good, product, or service in

the marketplace.” Id. § 27.001(7)(B), (E).

      The Texas Supreme Court recently explained in Creative Oil & Gas that “not

every communication related somehow to one of the broad categories set out in

section 27.001(7) always regards a matter of public concern.” Creative Oil & Gas,
591 S.W.3d at 137. In that case, the lessor of an oil and gas lease sued the lessee in

a trespass and trespass to try title action, seeking a ruling that the lease was

8
      The current version of the TCPA, which became effective on September 1, 2019,
      defines a “matter of public concern” as “a statement or activity regarding: (A) a
      public official, public figure, or other person who has drawn substantial public
      attention due to the person’s official acts, fame, notoriety, or celebrity; (B) a matter
      of political, social, or other interest to the community; or (C) a subject of concern to
      the public.” TEX. CIV. PRAC. & REM. § 27.001(7). Notably, “environmental,
      economic, or community well-being” and “a good, product, or service in the
      marketplace” are no longer defined as a “matter of public concern.” See TEX. CIV.
      PRAC. & REM. § 27.001(7) (current version).

                                             19
terminated due to cessation of production. Id. at 130. As relevant here, the lessee and

the operator filed counterclaims alleging that the lessor had breached the lease and

had falsely told third-party purchasers of production from the lease that the lease

was expired and that payments on the purchases should stop. Id. The lessor moved

to dismiss the counterclaims pursuant to the TCPA and argued that its statements to

third parties about the lease were an exercise of its right of free speech because these

communications were made in connection with matters of public concern, namely,

economic well-being and a good, product, or service in the marketplace.

      The supreme court, however, rejected these arguments, and held that the

lessor’s communications with third parties were not covered by the TCPA because

they were private business communications regarding a private contract dispute. Id.

at 134–37. As the court explained, the terms “economic well-being” and “a good,

product, or service in the marketplace” had to be interpreted considering the

common meaning of a “matter of public concern,” which does not include “purely

private matters.” Id. at 135. Therefore, the court reasoned, a communication

regarding “a good, product, or service in the marketplace” does not constitute a

matter of public concern unless the communication has “some relevance to a public

audience of potential buyers or sellers.” Id.; see also id. at 136 (stating that there was

no indication in record “that the dispute had any relevance to the broader

marketplace or otherwise could reasonably be characterized as involving public

                                           20
concerns”). The court also rejected the argument that the communications at issue

concerned a matter of public concern, namely, economic well-being, because “[a]

private contract dispute affecting only the fortunes of the private parties involved is

simply not a ‘matter of public concern’ under any tenable understanding of those

words.” Id. at 137.

      Relying in part on Creative Oil & Gas, this court held in Gaskamp that

communications between former employees that related to the employees’ alleged

conduct of misappropriating, sharing, and using the plaintiff’s trade secrets and

conspiring with one another in furtherance of their tortious actions did not constitute

an exercise of their free-speech rights because these communications “had no

potential impact on the wider community or a public audience of potential buyers or

sellers. In short, the communications had no public relevance beyond the pecuniary

interests of the private parties.” Gaskamp, 2020 WL 826729, at *13; see also

Creative Oil & Gas, 591 S.W.3d at 137 (explaining that private “dispute affecting

only the fortunes of the private parties involved is simply not a ‘matter of public

concern’ under any tenable understanding of those words”). This court also held that

communications made by the plaintiff’s former employees in soliciting and

procuring business from a third party also did not constitute an exercise of the

employees’ free-speech rights because these communications did not have any

“relevance to a public audience of buyers or sellers but instead were limited to ‘the

                                          21
pecuniary interests of the private parties involved.” Gaskamp, 2020 WL 826729, at

*15 (quoting Creative Oil & Gas, 591 S.W.3d at 136).

      Newpark contends that its “invocation of its contractual audit rights to

investigate Cahoon’s fraudulent billing practices involved a ‘matter of public

concern’ insofar as it involved: the (1) ‘economic, or community well-being,’ which

is promoted and preserved by the ferreting out of fraud in the marketplace and

community, and (2) ‘a good, product, or service in the marketplace,’ namely,

Cahoon’s mat-installation services.” TEX. CIV. PRAC. & REM. CODE § 27.001(7)(B),

(E). Therefore, Newpark reasons, the TCPA applies to Cahoon’s lawsuit because its

claims are “based on, relate[] to, or [are] in response to” “communications made by

Newpark ‘in connection with’ its investigation and audit.”

      Every communication made in connection with economic or community

well-being, or a good, product, or service in the marketplace, however, does not

necessarily implicate a party’s right to free speech because not every communication

regards a matter of public concern. See generally Creative Oil & Gas, 591 S.W.3d

at 137 (“[N]ot every communication related somehow to one of the broad categories

set out in section 27.001(7) always regards a matter of public concern.”). As

explained in Creative Oil & Gas, “The phrase ‘matter of public concern’ commonly

refers to matters ‘of political, social, or other concern to the community,’ as opposed

to purely private matters.” Id. at 135 (citing Brady v. Klentzman, 515 S.W.3d 878,

                                          22
884 (Tex. 2017)). Thus, the communication must have some relevance to a broader

public audience, as opposed to only the private parties involved. See Creative Oil &

Gas, 591 S.W.3d at 137 (“A private contract dispute affecting only the fortunes of

the private parties involved is simply not a ‘matter of public concern’ under any

tenable understanding of those words.”). The communications at issue here, as

Newpark acknowledges, are related to Cahoon’s alleged fraudulent billing of

Newpark for services Cahoon had provided to Newpark pursuant to the MSA and

Newpark’s audit and investigation into these specific practices, which Newpark

contends are authorized by the MSA. Thus, whether Newpark was communicating

internally or with Cahoon or its employees regarding the accuracy of Cahoon’s

invoices or matters associated with the investigation and audit, these

communications concerned a private business dispute between Cahoon and

Newpark. Newpark’s communications with its customers regarding these billing

practices are also directly related to and concern Newpark’s contractual relationship

with respect to Cahoon, and to a lesser extent, Newpark’s contractual relationships

with those customers. Similarly, the settlement agreement and Newpark’s

communications with Universal regarding that agreement are related to the billing

dispute between Newpark and Cahoon, including the payment of invoices submitted

pursuant to the MSA. As in Creative Oil & Gas, there is no indication in the record

that the dispute between Newpark and Cahoon “had any relevance to the broader

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marketplace or otherwise could reasonably be characterized as involving public

concerns.” Creative Oil & Gas, 591 S.W.3d at 136. The only parties with an interest

in the outcome were Newpark, Cahoon, Universal (as a result of the settlement

agreement) and possibly the customers that Newpark had overbilled. See generally
id. at 136–37.

      Because the communications at issue do not implicate a matter of public

concern, we hold that Newpark did not meet its burden of showing, by a

preponderance of the evidence, that Cahoon’s suit was based on, related to, or was

in response to an exercise of Newpark’s right of free speech. See TEX. CIV. PRAC. &

REM. CODE § 27.005(b).

                                    Conclusion9

      We affirm the trial court’s order.

                                                Russell Lloyd
                                                Justice

Panel consists of Justices Keyes, Lloyd, and Hightower.

9
      Because we are affirming the trial court’s order denying Newpark’s TCPA motion
      to dismiss, we do not need to reach Cahoon’s conditional cross-points. The only
      issue addressed in this opinion in whether Newpark is entitled to the dismissal of
      Cahoon’s claims under the TCPA. The merits of Cahoon’s claims are for further
      consideration in the trial court.
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