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Forget About It, Inc. v. Biote Medical, LLC

Court of Appeals of Texas, Fifth District, Dallas

August 13, 2019

FORGET ABOUT IT, INC., GUNTHER MUELLER, DANIEL D. DENEUI, TERRI J. SURESH DENEUI, DUSTIN DENEUI, MICHAEL S. COLE, JANET COLE, SUTHERLAND SOLUTIONS, LLC, MARK P. BURNS, ANDREA C. JONES, NICOLE TURCOTTE, EVEXIAS CAPITAL, LLC, EVEXIAS HEALTH SOLUTIONS, LLC, EVEXIAS HOLDING CO, LLC, EVEXIAS HRT, LLC F/K/A HORMONAL HEALTH AND WELLNESS CENTERS, LLC, EVEXIAS LORDSON, LLC, EVEXIAS LORDSON II, LLC, EVEXIAS MEDICAL CENTERS, PLLC F/K/A TERRI SURESH ANCP, PLLC A/K/A HORMONAL HEALTH WELLNESS & SKIN CENTER A/K/A HORMONAL HEALTH WELLNESS AND AESTHETICS CENTER A/K/A HORMONAL HEALTH & WELLNESS, NILUS, LLC, NORTH AMERICAN CUSTOM LABORATORIES, LLC A/K/A PHARMAKEIO A/K/A FARMAKEIO, MARK STAR AND GET WELL SCOTTSDALE, LLC, Appellants
v.
BIOTE MEDICAL, LLC, Appellee

          On Appeal from the County Court at Law No. 2 Dallas County, Texas Trial Court Cause No. CC-18-01784-B.

          Before Justices Myers, Molberg, [1] and Carlyle

          OPINION

          CORY L. CARLYLE JUSTICE.

         This is an interlocutory appeal from the trial court's order partially denying a motion to dismiss based on the Texas Citizens Participation Act. See Tex. Civ. Prac. & Rem. Code §§ 27.001-.011. In six issues, appellants contend the trial court erred by (1) partially denying their motion to dismiss appellee's counterclaims, because appellants established the TCPA applies and appellee failed to present clear and specific evidence supporting its causes of action, and (2) not ruling on and sustaining appellants' objections to appellee's evidence. Additionally, both sides challenge this court's jurisdiction.

         We conclude (1) both sides' jurisdictional challenges lack merit and (2) appellants failed to carry their burden to establish the TCPA applies. We affirm the portion of the trial court's order partially denying appellants' TCPA motion to dismiss.[2]

         I. Background

         Appellee BioTE Medical, LLC markets and licenses hormone therapy products, including its "BioTE Formula" and "BioTE Software Program," to physicians and clinics and provides those licensees with training and support, including access to its online "proprietary dosing site." Physicians and clinics use BioTE's program to prescribe custom hormone "pellets," which are compounded by pharmacies and then implanted into patients' skin. BioTE's contracted physicians and clinics are "serviced" by BioTE's "physician liaisons," who are independent contractors paid commissions and bonuses based on the amount of business generated. BioTE requires its employees and independent contractors to sign nondisclosure agreements and, in some cases, non-compete agreements.

         Appellant Gunther Mueller is the owner and sole employee of Forget About It, Inc. (collectively, "Mueller"). Mueller became a BioTE independent contractor in October 2012. Approximately five years later, BioTE terminated his contract. In April 2018, Mueller filed this lawsuit, asserting claims for breach of contract and fraud.

         BioTE filed a general denial answer and asserted multiple counterclaims against Mueller and twenty additional "counter-defendants" (collectively, the "FAI Parties" or appellants), all of whom BioTE described as "former BioTE personnel" or "companies which have been formed by the former personnel."[3] BioTE contended the FAI Parties "have misappropriated BioTE's confidential and trade secret information to actively compete against and destroy BioTE's business" and "have established and have participated in the establishment of, companies which have been unlawfully founded and operated to misappropriate BioTE's business, business model, and confidential information."[4]

         On May 11, 2018, the FAI Parties filed a TCPA motion to dismiss BioTE's counterclaims. The FAI Parties asserted (1) "BioTE's legal action is based on, relate[s] to, or are [sic] in response to [the FAI Parties'] exercise of the right to speak freely and to associate freely"; (2) "[a]mong other things raised in the Counterclaims, communications and discussions with the pub[l]ic or medical physicians . . . about medical products and services is a matter of public concern for which free speech is allowed"; and (3) "the other clear thrust of the Counterclaims is to intimidate and punish the Movants for communicating with each other for pursuing and promoting a common interest, including (among other things) new businesses (and to defend themselves against BioTE) and medical products and services."

         The trial court allowed limited discovery pertaining to the TCPA motion. Following that discovery, BioTE filed a response to the TCPA motion in which it asserted, among other things, (1) the FAI Parties had not met their burden to show the TCPA applies; (2) dismissal is precluded by the TCPA's commercial speech exemption; and (3) BioTE met its burden to provide clear and specific evidence of its claims. The evidence attached to BioTE's response included affidavits of BioTE employees, independent contractors, and contracting physicians, excerpts from the FAI Parties' deposition testimony, and copies of various agreements signed by the parties.[5] The FAI Parties objected to portions of that evidence as hearsay, conclusory, speculative, and without foundation.

         On Monday, September 10, 2018, the trial court held a hearing on the TCPA motion. The trial court partially denied and partially granted the motion in an October 10, 2018 order in which it stated it "timely heard this matter pursuant to CPRC §27.004(c)." The FAI Parties timely appealed the portion of the trial court's order regarding the motion's denial. Also, BioTE filed a "cross-notice of appeal."

         II. TCPA motion to dismiss

         The TCPA "protects citizens . . . from retaliatory lawsuits that seek to intimidate or silence them." In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015) (orig. proceeding). The stated purpose of the statute 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." Civ. Prac. & Rem. § 27.002; see also ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex. 2017) (per curiam).

         To effectuate the statute's purpose, the Legislature has provided a procedure to expedite dismissing claims brought to intimidate or to silence a defendant's exercise of the rights protected by the statute. Coleman, 512 S.W.3d at 898; see also Civ. Prac. & Rem. §§ 27.003(a), 27.005(b); Youngkin v. Hines, 546 S.W.3d 675, 679 (Tex. 2018). The movant bears the initial burden of showing by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the movant's exercise of the right of free speech, the right of association, or the right to petition. Civ. Prac. & Rem. § 27.005(b); see also S&S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 847 (Tex. 2018). If the movant makes this showing, the burden shifts to the nonmovant to establish by clear and specific evidence a prima facie case for each essential element of its claims. Civ. Prac. & Rem. § 27.005(c); see Elliott, 564 S.W.3d at 847. Circumstantial evidence is proper for us to consider in a TCPA review. See Lipsky, 460 S.W.3d at 591.

         We review de novo the trial court's ruling on a motion to dismiss under the TCPA. See Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018); Dyer v. Medoc Health Servs., LLC, 573 S.W.3d 418, 424 (Tex. App.-Dallas 2019, pet. denied). "In conducting this review, we consider, in the light most favorable to the nonmovant, the pleadings and any supporting and opposing affidavits stating the facts on which the claim or defense is based." Dyer, 573 S.W.3d at 424; see also Civ. Prac. & Rem. § 27.006(a). Also, the trial court may allow specified and limited discovery relevant to the motion. Civ. Prac. & Rem. § 27.006(b).

         Generally, a hearing on a TCPA motion must be set not later than the 60th day after the date the motion is served. Id. § 27.004(a). "If the court allows discovery under Section 27.006(b), the court may extend the hearing date to allow discovery under that subsection, but in no event shall the hearing occur more than 120 days after the service of the motion." Id. § 27.004(c). The trial court must rule on a TCPA motion not later than the 30th day following the hearing date. Id. ยง 27.005(a). If the trial court does not rule on a TCPA motion in the time prescribed by section 27.005, the motion is considered to have been denied by operation of law and the moving party may ...


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