Article The Texas Lawbook

Be Careful Where You Seek Pre-Suit Discovery: Appellate Divide on TCPA Deepens

In this article for The Texas Lawbook, partners Jeremy Fielding, Nick Brown and Michael Kalis discuss the applicability of the Texas Citizens Participation Act (TCPA) to pre-suit discovery.

Those seeking pre-suit discovery beware. A major difference exists depending on where you file that can reshape your pre-suit risk/reward landscape.

In Amarillo, Austin and just recently Fort Worth, the party resisting pre-suit discovery under Texas Rule of Civil Procedure 202 can — in the right circumstances — file a motion to dismiss under the Texas Citizens Participation Act requiring the petitioner to meet the TCPA’s evidentiary hurdles or risk paying the other side’s fees and getting sanctioned, all while potentially engaging in a protracted process that spoils the entire purpose of Rule 202 petitions. But both Houston Courts of Appeals have squarely rejected the applicability of the TCPA to pre-suit discovery.

Until the Texas Supreme Court resolves the split, the upshot is that the place where a pre-suit petition for discovery is filed can have a dramatic impact on the outcome.

The Divide

A recent opinion by the Fort Worth Court of Appeals highlights the appellate divide in a lengthy footnote summarizing Texas law. In Texas Equal Access Fund v. Maxwell, the Fort Worth Court cited what has become one of the leading cases on the issue, a decision by the El Paso Court of Appeals, Florez v. Olibas.

The El Paso dispute arose out of a petition to conduct a pre-suit deposition pursuant to Rule 202. The petitioner alleged that he sought to investigate the respondent’s use of a “deceptively similar” business name in the same geographic market for the same type of service (bail bonds). The respondent filed a motion to dismiss under the TCPA on the theory that Rule 202 petitions are “legal actions” within the TCPA’s reach, and the Rule 202 petition in question implicated the TCPA’s right to association by seeking specific information about the respondents’ business relationships and the approval the respondents had received from the county sheriff to operate a bail bond business.

The motion to dismiss was denied by operation of law when the trial court failed to rule on it within 30 days after the hearing, prompting the respondent to file an interlocutory appeal as permitted by the TCPA. The court of appeals reversed the denial of the motion to dismiss. The court first addressed whether Rule 202 petitions constitute “legal actions” within the meaning of the TCPA. The court acknowledged recent precedent from the Houston Courts of Appeals answering that question in the negative on the theory that Rule 202 petitions do not assert substantive causes of action. However, the El Paso court found those decisions inconsistent with the plain language of the TCPA, which defines “legal action” to include a “petition … or any other judicial pleading that requests legal or equitable relief.” Citing authority from the Amarillo, Fort Worth and Austin courts of appeals, the court held that a Rule 202 petition is both a “petition” and a “pleading that requests … equitable relief,” triggering the provisions of the TCPA.

Having found the threshold requirement to bring a TCPA motion satisfied, the court next found the substantive claims in the Rule 202 petition at issue implicated the “right to association” under the pre-2019 version of the statute. The court held that requesting information about a joint venture and association with the sheriff explicitly concerned communications about common interests, satisfying the broad definition of “right to association” then in effect. The court was careful to avoid addressing whether applying the new definition of “right to association” under the amended TCPA (which requires the legal action to relate to a “matter of public concern”) would have yielded the same result.

With these elements met, the court then held the petition at issue failed to make the prima facie case required to obtain a pre-suit deposition under Rule 202. Citing Rule 202’s requirements, the court concluded that, to withstand a TCPA motion, a Rule 202 petitioner must prove that: “(1) allowing a petitioner to take the requested deposition may prevent a failure or delay of justice in an anticipated suit[;] or (2) the likely benefit of allowing the petitioner to take the requested deposition to investigate a potential claim outweighs the burden or expense of the procedure.” The petition at issue, however, contained, at most, conclusory statements on both of these points. And because the petitioner did not attach evidenceor otherwise explain how those elements were satisfied, the petitioner failed to present the minimum quantum of evidence needed to survive a motion to dismiss under the TCPA. The court remanded for an award of appropriate fees and sanctions against the petitioner.

What This Means for Practitioners

The appellate divide on this issue presents a number of lessons that practitioners should keep in mind to avoid potential traps for the unwary.

First, although Texas Rule of Civil Procedure 202 is a powerful tool in a litigator’s arsenal of pre-suit investigation techniques, that tool may be constrained by the TCPA. Although Rule 202 petitions are often seen as low-risk, the recent appellate decisions reaffirms that a weak Rule 202 petition can backfire, potentially resulting in an assessment of attorney’s fees or sanctions. Even if the trial court denies the motion to dismiss under the TCPA, an immediate interlocutory appeal is available. Practitioners should craft their Rule 202 petitions with the TCPA in mind and consider whether the topics which they are seeking to investigate implicate any of the rights under the TCPA.

Second, given the split between the Texas courts of appeals, practitioners should be cognizant of the controlling rule where the Rule 202 petition is filed and, of course, ensure no Texas Supreme Court precedent has altered the legal landscape. The TCPA remains a rapidly evolving area of the law, particularly as post-TCPA-amendment cases are continuing to make their way through the Texas courts of appeals. Although this case involved the pre-amendment statute, significant parts of its reasoning arguably continue to apply following the amendment. 

Finally, practitioners should keep in mind that — even if meritorious — the mere existence of an argument that the TCPA applies can fundamentally alter the economics of filing a Rule 202 petition and risk/reward calculus. One of the main purposes of filing a Rule 202 petition — to quickly investigate a claim without incurring the cost or delay of filing a full lawsuit and seeking discovery — may be hampered if the other side can file and appeal the denial of a TCPA motion. The El Paso case is a perfect illustration. The Rule 202 petition was filed July 24, 2019, and the appeal reversing the trial court’s denial of the TCPA motion issued three years later. While a Rule 202 petition may appear to be a quick-and-inexpensive method of obtaining early discovery, that may not always prove to be the case.

Reprinted with permission from the May 30, 2024 edition of the The Texas Lawbook. All rights reserved. Further duplication without permission is prohibited.