In recent years, States across the country have enacted Citizen Participation Acts, or as they're commonly known, "anti-SLAPP" statutes. The term SLAPP refers to "strategic lawsuits against public participation." Generally, they are meant to provide a defendant with an expedient way to dismiss a meritless lawsuit brought because of some governmental petitioning activity or due to the exercise of free-speech rights. Crucially, the statutes shift the burden to the plaintiff to demonstrate some factual merit to the case and then, assuming the motion to dismiss is successful, mandate an award of attorneys' fees to a defendant.
Trade secrets lawsuits are not thought to be the foreground for anti-SLAPP suits. Still, they broadly implicate associational activity, in that individuals' rights to associate with co-workers or pursue an occupation can be impacted by frivolous lawsuits. In this regard, the interplay between the text of anti-SLAPP statutes and trade secrets claims can generate considerable tension.
Historically, courts have been reluctant to extend anti-SLAPP protection to defendants in trade secrets action. In California, for instance, the Court of Appeal has held that the State's anti-SLAPP law did not include a trade secrets claim because the conduct complained of did not implicate a person's rights of petition or free speech in connection with a public issue.
Illinois, in recent years, has limited its Citizen Participation Act. The Supreme Court, for instance, appeared to add words to the plain language of the statute, effectively requiring defendants to show that an action "solely" was brought in retaliation for protected speech. As a result, lower courts have not necessarily focused on the underlying conduct of the defendants - which should be the focus an anti-SLAPP inquiry - but rather whether the plaintiff had some legitimate intent in bringing the claim.
In that wake, the Texas Court of Appeals last week applied its Texas Citizens Participation Act ("TCPA") in a way that nominally affords trade secrets defendants with additional protection. In Elite Auto Body LLC v. Autocraft Bodywerks, Inc., the court held that the TCPA may enable a trade-secrets defendant to bring an early motion to dismiss. Crucial to the court's ruling was the protection afforded under the statute to individuals "exercise of the right of association." The TCPA defines that to include: "a communication between individuals who join together to collectively express, promote, pursue, or defend common interests."
The court rejected the plaintiff's argument that some constitutional gloss must be applied to the TCPA's definitions, with the opinion providing a fairly stark example of how textualist judges analyze statutory provisions. In other words, the "communications" that form an associational right (for TCPA purposes) need not touch a matter of public concern - because nothing in the statute says that.
The case may be jarring to some plaintiffs who seek redress for legitimately unfair competition. But the TCPA would allow for them to meet their burden of establishing the factual basis for the lawsuit, just at an earlier time than many plaintiffs would prefer. Conversely, it could provide wrongly sued defendants an early means by which to extricate themselves from suit - with a fee award in tow.
Props, of course, to defense counsel for their excellent advocacy here. It's yet another example of how defense attorneys must get creative in stopping opportunistic, competitive litigation by exploring ways to stop abusive discovery and shift legal fees.
Next week, I'll summarize the Ninth Circuit's important decision in United States v. Liew. And then in a few weeks, I'll return with my weekly recap, The Reading List.