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Bandin v. Free And Sovereign State of Veracruz De Ignacio De La Llave

Court of Appeals of Texas, Fourteenth District

November 14, 2019

JOSE BANDIN, MONICA BABAYAN, AND 18 SHALLOWFORD PL., LLC, Appellants
v.
FREE AND SOVEREIGN STATE OF VERACRUZ DE IGNACIO DE LA LLAVE, Appellee JOSE BANDIN, MONICA BABAYAN, BANBA OFFICES, LLC, 83 WEST JAGGED RIDGE, LLC, 87 WEST JAGGED RIDGE, LLC, 175 W NEW HARMONY, LLC, 18 GRIFFIN HILL, LLC, 138 BRYCE BRANCH, LLC, 43 SPINNING WHEEL, LLC, AND TERRAVENTURA DEVELOPMENTS LLC, Appellants
v.
FREE AND SOVERIEGN STATE OF VERACRUZ DE IGNACIO DE LA LLAVE, Appellee

          On Appeal from the 295th District Court Harris County, Texas Trial Court Cause No. 2018-06480

          Panel consists of Justices Jewell, Bourliot, and Zimmerer.

          OPINION

          FRANCES BOURLIOT JUSTICE

         In these interlocutory appeals, we are asked to decide whether the Texas Citizens Participation Act (TCPA), which safeguards "the constitutional rights of persons to petition, speak freely, associate freely and otherwise participate in government," applies when two or more people allegedly conspire to convert or unlawfully appropriate property.[1] We conclude that the act, though broad, does not extend that far.

         Appellants Jose Bandin, Monica Babayan, and nine limited liability companies challenge the trial court's denial of their TCPA motions to dismiss. Appellants ask us to hold that the TCPA applies to communications allegedly made among them in furtherance of a conspiracy to conduct unlawful or tortious acts of conversion or theft of property belonging to the Mexican State of Veracruz.[2] We conclude appellants have not shown Veracruz's claims in this case are within the scope of the TCPA. We dismiss the appeals for lack of appellate jurisdiction.

         Background

         The following allegations are set forth in Veracruz's petition. Javier Duarte was the governor of Veracruz. Veracruz contends that Duarte, Bandin, and Babayan conspired to steal millions, possibly billions, of dollars from the state. Appellants and Duarte purportedly engaged in fraudulent transactions to transfer public funds into Texas LLCs created as shell companies to launder the money. Appellants purportedly invested the stolen funds in real estate in and around Houston, Texas.

         Veracruz sued Duarte, Bandin, Babayan, and the Texas LLCs in four separate lawsuits, bringing claims for conversion, theft, and civil conspiracy "to steal and embezzle, and to commit fraud" and seeking a constructive trust and damages. Appellants filed TCPA motions to dismiss in each lawsuit. One motion was filed and heard in the 334th District Court and denied by operation of law. A notice of appeal was filed in that case challenging the 334th District Court's denial of the motion. Another motion to dismiss was filed in the 295th District Court. The 295th District Court consolidated all four cases and denied the three remaining motions to dismiss "as the law of the case" based on the ruling in the 334th District Court.[3] Appellants filed another notice of appeal challenging the 295th District Court's denial of the remaining motions to dismiss and filed a motion to consolidate the two appeals.[4] We did not consolidate the appeals, but they were both submitted to and considered by the same panel.

         Discussion

         The TCPA is known as the Texas Anti-SLAPP statute; "SLAPP" is an acronym for "Strategic Lawsuits Against Public Participation." Toth v. Sears Home Improvement Prods., Inc., 557 S.W.3d 142, 149 (Tex. App.-Houston [14th Dist.] 2018, no pet.); see also Kawcak v. Antero Res. Corp., 582 S.W.3d 566, 571 (Tex. App.-Fort Worth 2019, pet. denied). Despite this moniker, the legislature did not impart the traditional remedies associated with SLAPP suits or use that term in the TCPA. Kawcak, 582 S.W3d at 572 Several courts, including this one, have thoroughly discussed the legislature's incentive to pass the statute, which addresses the harm intended by baseless litigation that suppresses the exercise of First Amendment rights "to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law" See Id. at 571-72; Serafine v. Blunt, 466 S.W.3d 352, 366 (Tex App-Austin 2015, no pet) (op on reh'g) (Pemberton, J, concurring); Jardin v. Marklund, 431 S.W.3d 765, 769 (Tex. App.-Houston [14th Dist.] 2014, no pet.); see also Tex. Civ. Prac. & Rem. Code § 27.002.

         We do not rehash those discussions here, although a synopsis of the statute's purpose is integral to our analysis. The express purpose of the statute is twofold: (1) "to encourage and safeguard the [enumerated] constitutional rights," and (2) to "protect the rights of a person to file meritorious lawsuits for demonstrable injury." Tex. Civ. Prac. & Rem. Code § 27.002; Toth, 557 S.W.3d at 149. The statute establishes a mechanism for expedited summary dismissal of suits that seek to intimidate or silence citizens from exercising their constitutional rights to free speech, of association, and to petition. In re Lipsky, 460 S.W.3d 579, 586 (Tex. 2015); Toth, 557 S.W.3d at 149. A defendant invoking the act's protections must show by a preponderance of the evidence that the plaintiff's legal action is "based on, relates to, or is in response to" the defendant's exercise of one or more of these rights. Lipsky, 460 S.W.3d at 586; Toth, 557 S.W.3d at 149.

         Appellants challenge the trial court's denial of their motions to dismiss on several grounds. In response, Veracruz argues among other things that the TCPA does not apply to its allegations. Appellants contend that the TCPA applies because exercise of the rights to free speech and of association are broadly defined under the statute as involving communications, and conspiracies necessarily involve communications. We address only the TCPA's applicability because that issue is dispositive of these appeals.[5]

         We determine the applicability of the TCPA by a de novo review. See ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 899 (Tex. 2017). We construe the act liberally to effectuate its purpose and intent fully. Tex. Civ. Prac. & Rem. Code § 27.011(b); Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 894 (Tex. 2018) ("The TCPA casts a wide net."). Interpreting the statute has presented challenges to the courts of appeals because of the breadth of its plain language. See Kawcak, 582 S.W.3d at 574. In that regard, although the TCPA's express purpose is to protect constitutional rights, the statute's definitions of those rights do not necessarily "mimic the boundaries of constitutional rights" enumerated in the First Amendment. Id. at 575 (citing Adams, 547 S.W.3d at 892). Thus, we must limit our interpretation of the rights to free speech and of association to the definitions in the statute, and we do not look outside the statute to determine its applicability. See id.

         Both the rights to free speech and of association, as defined in the act, involve communications. The statute defines "communication" as "the making or submitting of a statement or document in any form or medium, including oral, visual, written, audiovisual, or electronic." Tex. Civ. Prac. & Rem. Code § 27.001(1). "Exercise of the right of free speech" is limited under the act to "communication[s] made in connection with a matter of public concern."[6]Id. § 27.001(3); Toth, 557 S.W.3d at 150. Until recently, "[e]xercise of the right of association" was not similarly limited. The act defined that right 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) (amended 2019).[7] Veracruz argues the communications at issue do not involve matters of public concern in Texas because they involve acts committed primarily in Mexico. We focus on whether the claims ...


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