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In re SSCP Management, Inc.

Court of Appeals of Texas, Second District, Fort Worth

April 22, 2019

In re SSCP Management, Inc.; SDharod Enterprises, Inc.; Apple Texas Restaurants, Inc.; Texas Apple, LLC; SRS Real Estate Partners, LLC; and SRS National Net Lease Group, LP, Relators

          Original Proceeding Trial Court No. CV18-1720

          Before Pittman, Birdwell, and Womack, JJ.

          Justice Womack concurs without opinion.

          OPINION

          MARK T. PITTMAN, JUSTICE

         OPINION

         Introduction

         "It's deja vu all over again" as this court journeys on its latest foray through the ever evolving battlefields of the Texas Citizens Participation Act (TCPA).[1] See Yogi Berra, The Yogi Book: I Really Didn't Say Everything I Said! 45 (1999). In our latest quest, we are tasked with exploring the amount of discovery allowed once a motion to dismiss under the TCPA has been filed but not yet ruled upon by the trial court.

         Specifically, in three issues in their petition for writ of mandamus, Relators SSCP Management, Inc. (SSCP); SDharod Enterprises, Inc. (SDharod); Apple Texas Restaurants, Inc. (Apple Texas); Texas Apple, LLC (Texas Apple); SRS Real Estate Partners, LLC (SRS Real Estate); and SRS National Net Lease Group, LP (SRS National) (collectively, Defendants) complain that the trial court abused its discretion when it ordered them to respond to numerous discovery requests during the pendency of their TCPA motions to dismiss. They contend that "good cause" was not shown justifying such discovery, the permitted discovery was not "specified and limited" or "relevant to the motion[s to dismiss]" as required by the TCPA, see Tex. Civ. Prac. & Rem. Code Ann. § 27.006(b), and their appellate remedy is inadequate. Defendants ask us to vacate the trial court's March 1, 2019 Discovery Order allowing Real Party In Interest Sutherland/Palumbo, LLC ("Sutherland") to conduct extensive discovery. Because such expansive discovery runs afoul of the express language of the TCPA, with the reservations stated herein, we conditionally grant relief.

         Background

         I. Shotgun Blasts Are Exchanged: Sutherland Files a Multi-Cause of Action Lawsuit and Defendants Return Fire with Omnibus Motions to Dismiss Under the TCPA.

         After a commercial real-estate transaction went awry, Sutherland filed its original petition against Defendants on November 20, 2018. On January 22, 2019, Sutherland amended its petition seeking money damages with a volley of ten unique causes of action, including breach of contract, fraud, fraud by nondisclosure, fraudulent inducement, fraud in a real-estate transaction, negligent misrepresentation, conspiracy, violations of the Texas Deceptive Trade Practices Act, and common-law and statutory false advertising. Along with the amended petition, Sutherland served Defendants with a bevy of written discovery requests, including:

• Plaintiff's First Set of Interrogatories to Defendant SRS National, containing 13 interrogatories, some of which included multiple subparts;
• Plaintiff's First Set of Interrogatories to Defendant SSCP, containing 23 interrogatories, some of which included multiple subparts;
• Plaintiff's First Request for Production to Defendants SSCP, SDharod, Apple Texas, and Texas Apple, which included 110 requests for production; and
• Plaintiff's First Request for Production to SRS Defendants, which included 87 requests for production to SRS Real Estate and SRS National.

         In response to the amended petition, on January 28, 2019, Defendants returned fire by filing motions to dismiss Sutherland's claims under the dismissal provisions of the TCPA (the TCPA Motions to Dismiss).[2] See Tex. Civ. Prac. & Rem. Code Ann. § 27.003. Defendants contended the lawsuit is subject to dismissal under the TCPA because it affects the exercise of their constitutional rights of freedom of speech and association. The day after Defendants filed their TCPA Motions to Dismiss, Sutherland countered with a motion to conduct discovery (Motion to Conduct Discovery). The Motion to Conduct Discovery did not include any specific discovery requests but attached copies of the comprehensive written discovery served with the amended petition on January 22, 2019, as well as the correspondence from Sutherland's attorney to Defendants' attorneys requesting corporate representative depositions from each Defendant on forty-three distinct deposition topics. The trial court conducted a hearing on the Motion to Conduct Discovery on February 4, 2019, and granted the motion without limitation on February 6, 2019, allowing Sutherland to proceed with its requested discovery.

         II. The Battle Lines are Drawn: Defendants File Their First Petition for Writ of Mandamus.

         Their swords now unsheathed, on February 18, 2019, Defendants filed an emergency motion with the trial court requesting that all discovery be stayed pending the resolution of a petition for writ of mandamus that it intended to file in this court. Two days later, on February 20, 2019, Defendants filed their first petition for writ of mandamus in this court challenging the order on the Motion to Conduct Discovery. The same day, Sutherland filed a response to Defendants' emergency motion to stay in the trial court indicating that it would voluntarily remove or modify some of the previously granted discovery requests (Modified Motion to Conduct Discovery). On February 21, 2019, the trial court granted the emergency motion to stay all discovery pending the resolution of the first petition for writ of mandamus.

         A hearing was conducted on February 27, 2019 on Sutherland's Modified Motion to Conduct Discovery, and on March 1, 2019, the trial court entered an order granting the motion (the Discovery Order). As a result, on that same day, this court dismissed Defendants' first petition for writ of mandamus as moot.

         Although the record before the Court is somewhat muddled, it appears, by a conservative count, that the Discovery Order entered by the trial court on March 1 is only slightly less comprehensive than the original order. It allows Sutherland fifty-nine requests for production from four of the six Defendants, fifty-eight requests for production from two of the six Defendants, eleven interrogatories from SRS Real Estate, seven interrogatories from SSCP, and at least six four-hour depositions from each of Defendants' corporate representatives on the original, unmodified forty-three deposition topics prior to the hearing on the TCPA Motions to Dismiss.

         III. The Battle Continues: Defendants File Their Second ...


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