Creative Oil & Gas, LLC and Creative Oil & Gas Operating, LLC, Petitioners,
Lona Hills Ranch, LLC, Respondent
September 19, 2019
Petition for Review from the Court of Appeals for the Third
District of Texas
D. BLACKLOCK JUSTICE.
86th Legislature recently amended the Texas Citizens
Participation Act (TCPA). Act of May 17, 2019, 86th Leg.,
R.S., ch. 378, 2019 Tex. Gen. Laws 684. The prior version of
the statute continues, however, to control cases filed before
September 1, 2019. Id. §§ 11-12, 2019 Tex.
Gen. Laws at 687. This is one such case. It requires
consideration of statutory text that has been repealed but
remains operative, though for a limited time only. The
question is whether the erstwhile version of the TCPA applies
to certain counterclaims alleged in a dispute over an oil and
gas lease. The answer to that question depends on whether
each counterclaim is "based on, relates to, or is in
response to" the "exercise of the right of free
speech" or the "exercise of the right to
petition," as the governing statutory text defines those
concepts. Tex. Civ. Prac. & Rem. Code § 27.003(a).
As explained below, we conclude that the court of appeals
properly dismissed one counterclaim but that the others
should have been allowed to proceed. The judgment of the
court of appeals is affirmed in part and reversed in part,
and the case is remanded to the trial court for further
Lona Hills Ranch, LLC (Ranch) entered into an oil and gas
lease with Petitioner-lessee Creative Oil & Gas, LLC
(Lessee). Petitioner Creative Oil & Gas Operating, LLC
(Operator) was the operator of the only producing well on the
lease. The Ranch sued the Operator in a trespass
and trespass to try title action, seeking a ruling that the
lease was terminated due to cessation of production. The
Lessee intervened, and the Ranch later filed an amended
petition dropping its claims against the Operator and instead
asserting them against the Lessee. The Lessee and the
Operator brought various counterclaims that essentially
amounted to two claims. The first claim was that the Ranch
falsely told third-party purchasers of production from the
lease that the lease was expired and that payments on the
purchases should stop. The second claim was that the Ranch
breached the lease by filing this suit and by bringing an
administrative action in the Railroad Commission seeking a
ruling that the lease had terminated. The second claim asserted
that these adversarial actions breached section 11 of the
lease, which required Lona Hills to give the Lessee notice of
a breach and an opportunity to cure prior to commencing
Ranch filed a TCPA motion to dismiss the counterclaims. As to
the first claim, it argued its statements to third parties
about the lease were an "exercise of the right of free
speech," which the TCPA defines as "a communication
made in connection with a matter of public concern."
Tex. Civ. Prac. & Rem. Code § 27.001(3). As to the
second claim, the Ranch argued that the filing of this suit
and the Railroad Commission action were both an
"exercise of the right to petition," as the TCPA
defines it. See id. § 27.001(4).
motion was denied by operation of law, and the Ranch
appealed. The court of appeals agreed with the Ranch that the
communications to third parties were an "exercise of the
right of free speech" covered by the TCPA. Lona
Hills Ranch, LLC v. Creative Oil & Gas Operating,
LLC, 549 S.W.3d 839 (Tex. App.-Austin 2018, pet.
granted). The court of appeals construed the appellees'
briefing as failing to take direct issue with the Ranch's
contention that its communications with third parties
involved a "matter of public concern." Id.
at 845-46. The court viewed appellees' briefing as
focused on the argument that their counterclaims were
premised on the breach of the notice and cure provision, not
on the communications to third parties. As a result, the
court of appeals did not address the matter-of-public-concern
questions explored below. The court rejected the
appellees' contention that the counterclaims were
premised solely on the alleged breach of the lease. The court
concluded that the counterclaims related to communications
with third parties were premised on the Ranch's
"exercise of the right of free speech" under the
TCPA. Id. at 846-47. Proceeding to whether the
counterclaimants had established a prima facie case
under the TCPA, the court of appeals held that the claims
failed and should have been dismissed because (1) the
Operator was not a party to the lease and could not assert a
breach of that contract, and (2) the Lessee failed to
identify a provision of the lease that was violated.
Id. at 847.
the Operator's counterclaim concerning the filing of this
suit and the Railroad Commission action, the court of appeals
concluded that this claim was in response to the exercise of
the right to petition. Id. at 848. After determining
the TCPA applied, the court held the Operator could not make
out a prima facie breach-of-contract case because it
was not a party to the lease containing the notice and cure
provision. Id. As to the Lessee, the court of
appeals held that this claim did not fall under the TCPA
because it was not "factually predicated" on the
Ranch's right to petition. Id. According to the
court of appeals, the Lessee's claim was not predicated
on the right to petition because the Ranch had contractually
agreed to limit its right to petition under the notice and
cure provision of the lease. Id. Consistent with
these rulings, the court of appeals dismissed all the
Operator's counterclaims and dismissed the Lessee's
counterclaim premised on communications with third parties.
the TCPA,  a party may file a motion to dismiss a
"legal action" that is "based on, relates to,
or is in response to a party's exercise of the right of
free speech [or the] right to petition." Tex. Civ. Prac.
& Rem. Code § 27.003(a). A "legal action"
can consist of an entire lawsuit or a subsidiary action such
as a counterclaim. Id. § 27.001(6).
TCPA uses it, the phrase "'exercise of the right of
free speech' means a communication made in connection
with a matter of public concern." Id. §
27.001(3). "'Communication' includes the making
or submitting of a statement or document in any form or
medium, including oral, visual, written, audiovisual, or
electronic." Id. § 27.001(1). Under
"Matter of public concern" includes an issue
(A) health or safety;
(B) environmental, economic, or community ...