KHOU-TV, Inc. and William Langlois Hearst Newspapers (\"Hearst\"), LLC D/B/A Houston Chronicle v. Status Lounge Incorporated ( 2021 )

Reversed and Remanded and Memorandum Opinion filed June 10, 2021.
In The
Fourteenth Court of Appeals
NO. 14-19-00393-CV
KHOU-TV, INC. AND WILLIAM LANGLOIS; HEARST NEWSPAPERS
("HEARST"), LLC D/B/A HOUSTON CHRONICLE, Appellants
V.
STATUS LOUNGE INCORPORATED, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 2016-51529
MEMORANDUM OPINION
In this interlocutory appeal, several media defendants challenge the trial
court’s denial of their motions to dismiss the plaintiff’s claims under the Texas
Citizens Participation Act (TCPA).1 We hold that the plaintiff failed to establish a
prima facie case for its claims of libel and business disparagement because the
1
See Tex. Civ. Prac. & Rem. Code ch. 27; see also In re Lipsky, 460 S.W.3d 579, 584 &
n.1 (Tex. 2015).
plaintiff failed to provide evidence that the defendants’ statements were not
substantially true. Accordingly, the trial court erred by denying the defendants’
motions to dismiss. We reverse the trial court’s order and remand for further
proceedings.
I. BACKGROUND
This case is the second appeal of the trial court’s denial of the defendants’
motions to dismiss under the TCPA. See Hearst Newspapers, LLC v. Status
Lounge Inc., 541 S.W.3d 881 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
The facts are recited in greater detail in that opinion. See id. at 883–87. In short,
this case involves two articles published by different media defendants based on
public reports from the Houston Police Department following a shooting that
occurred near Status Lounge’s bar. KHOU-TV, Inc. and its journalist William
Langlois published one article, and Hearst Newspapers, LLC d/b/a Houston
Chronicle published the other.
In most respects, the articles are substantially similar to the police report.
See id. at 884. However, in its response to the media defendants’ motions to
dismiss, Status Lounge argued that the articles differed meaningfully from what
the police reported. In particular, the police reported that a bandmember got in an
argument with the “owner” of the bar about how long the band was supposed to
play, and then the “manager” of the bar shot the bandmember and fled the location.
Id. The articles, however, stated that the “owner” shot the bandmember. And the
KHOU article stated that the owner was taken into custody, a fact not asserted by
the police. Status Lounge argued that that these two discrepancies were
“distinctions with a difference.” Status Lounge attached a declaration from the
bar’s manager, stating that no owner of Status Lounge was taken into custody.
2
Status Lounge also argued in its response and in a separate motion that the TCPA
was unconstitutional.
The trial court denied the motions to dismiss as untimely and ruled that the
TCPA was constitutional in separate orders. In the prior appeal, this court reversed
the trial court’s order denying the motions as untimely, remanding the case to the
trial court to rule on the merits of the parties’ arguments. Id. at 894. This court
held that it lacked jurisdiction over the trial court’s ruling that the TCPA was
constitutional. See id. This court’s mandate issued in April 2018. About a year
later, the trial court signed a written order stating, among other things:
1. The motions were denied by operation of law under Section
27.008(a) of the TCPA;
2. The legal action relates to the defendants’ right of free speech; and
3. Status Lounge brought forth clear and specific evidence of each
element of its claims for defamation and business disparagement,
including that the defendants’ statements were false.
Within twenty days of the trial court’s signing this order, the defendants filed
notices of appeal.
II. ISSUES AND HOLDINGS
In several issues, the defendants contend that the trial court erred by denying
the TCPA motions because, among other reasons, Status Lounge failed to make a
prima facie showing that the articles were not substantially true when compared to
the police report. Status Lounge responds that this court lacks jurisdiction over the
defendants’ appeal because the motions were denied by operation of law long
before the trial court signed a written order and the defendants filed notices of
appeal. Status Lounge also contends that the trial court’s ruling should be upheld
because the TCPA is unconstitutional. Finally, Status Lounge contends that the
merits of the TCPA motions should be decided on the original papers and denied.
3
We address jurisdiction first, holding that the motions were not denied until
the trial court signed its written order, so the defendants’ notices of appeal were
timely, and this court has jurisdiction. Then, we hold that Status Lounge failed to
meet its burden under the TCPA to show by a preponderance of the evidence that
the articles were not substantially true. Finally, Status Lounge has not shown that
this court’s prior holding regarding appellate jurisdiction to review the
constitutional challenge was clearly erroneous, so we do not reconsider it.
III. JURISDICTION
A trial court must hold a hearing on a TCPA motion to dismiss no later than
120 days after service of the motion. See Tex. Civ. Prac. & Rem. Code
§ 27.004(a), (c). If a trial court does not rule on a TCPA motion to dismiss within
thirty days of the conclusion of a hearing on the motion, the motion is denied by
operation of law, and the moving party may appeal. See id. §§ 27.005(a),
27.008(a), 51.014(a)(12). The moving party must file a notice of appeal within
twenty days of the denial, or else this court lacks jurisdiction over the appeal. See
Komerica Post, LLC v. Jai Sung Byun, No. 14-19-00764-CV, 2021 WL 1804512,
at *3 (Tex. App.—Houston [14th Dist.] May 6, 2021, no pet. h.) (mem. op.); Fell
Clutch, LLC v. Cherokee Black Entm’t Inc., No. 14-19-00577-CV, 2020 WL
372978, at *1 (Tex. App.—Houston [14th Dist.] Jan. 23, 2020, no pet.) (mem. op.).
Here, the trial court signed a written order denying the TCPA motions on the
merits about a year after this court issued its mandate in the first appeal. Status
Lounge contends that the motions, however, were denied by operation of law on
May 13, 2018, thirty days after the issuance of this court’s mandate, and this court
lacks jurisdiction because the defendants did not file a notice of appeal within
twenty days of the implied overrulings.
4
This court remanded the case so the trial court could “rule on the merits of
the parties’ arguments.” Hearst Newspapers, LLC, 541 S.W.3d at 894. This
court’s opinion and mandate did not include a deadline for the trial court to hold a
new hearing on the TCPA motions or issue rulings. Nor does the statute impose a
deadline for holding a hearing on a motion to dismiss after a reversal and remand
by a court of appeals. And, the trial court did not hold a new hearing on the
motion. Accordingly, the motion could not have been denied by operation of law
thirty days after this court’s mandate issued. See Braun v. Gordon, No. 05-17-
00176-CV, 2017 WL 4250235, at *2 (Tex. App.—Dallas Sept. 26, 2017, no pet.)
(mem. op.) (“[T]he 30-day deadline before a motion is deemed denied by operation
of law runs only from the date of the hearing on the motion. But, because no such
hearing was held in these cases, the TCPA motion was not denied by operation of
law.” (quoting Cuba v. Pylant, 814 F.3d 701, 707 (5th Cir. 2016))); accord RPM
Servs. v. Santana, No. 06-19-00035-CV, 2019 WL 4064576, at *2 (Tex. App.—
Texarkana Aug. 29, 2019, pet. denied) (mem. op.); Wightman-Cervantes v.
Hernandez, No. 02-17-00155-CV, 2018 WL 798163, at *3 (Tex. App.—Fort
Worth Feb. 9, 2018, pet. denied) (mem. op.).2
The defendants filed their notices of appeal within twenty days after the trial
court signed a written order denying the TCPA motions, thus invoking this court’s
jurisdiction.
IV. TCPA
To be entitled to dismissal under the TCPA, a defendant has the initial
burden to show by a preponderance of the evidence that the plaintiff’s claim “is
2
For these reasons, we also hold that the trial court erred to the extent it denied the
motions to dismiss in the written order on the basis that the motions had already been denied by
operation of law.
5
based on, relates to, or is in response to” the defendant’s exercise of the right to
petition, association, or free speech. See In re Lipsky, 460 S.W.3d 579, 586 (Tex.
2015); see also Act of May 18, 2011, 82d Leg., R.S., ch. 341, § 2, 2011 Tex. Gen.
Laws 961 (codified as amended at Tex. Civ. Prac. & Rem. Code § 27.005(b)).3 If
the defendant satisfies this initial burden, the burden shifts to the plaintiff to
establish by clear and specific evidence a prima facie case for each essential
element of the claim in question. See ExxonMobil Pipeline Co. v. Coleman, 512
S.W.3d 895, 899 (Tex. 2017). Whether the parties have met their respective
burdens is a question of law that we review de novo. Nunu v. Risk, 612 S.W.3d
645, 660 (Tex. App.—Houston [14th Dist.] 2020, pet. denied) (citing Dall.
Morning News, Inc. v. Hall, 579 S.W.3d 370, 377 (Tex. 2019)).
Here, Status Lounge sued the defendants for libel and business
disparagement. Status Lounge concedes that its claims relate to the defendants’
exercise of the right of free speech. Thus, the defendants have satisfied their initial
burden.
For each claim, Status Lounge has the burden to prove by a preponderance
of the evidence that the defendants’ statements were false, i.e., not substantially
true. See Innovative Block of S. Tex., Ltd. v. Valley Builders Supply, Inc., 603
S.W.3d 409, 417 (Tex. 2020) (business disparagement requires plaintiff to prove
that the statement is false); Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525
S.W.3d 671, 700 (Tex. 2017) (noting that a statement is not actionable for
defamation or business disparagement if the statement is substantially true); KBMT
Operating Co. v. Toledo, 492 S.W.3d 710, 715 (Tex. 2016) (holding that “a private
3
The Legislature amended the TCPA in 2019, but the amendment does not apply to this
case, which was filed before September 1, 2019. See Act of May 17, 2019, 86th Leg., R.S., ch.
378, §§ 3, 11–12, 2019 Tex. Sess. Law Serv. Ch. 378 (West). Any citations to the TCPA in this
opinion are to the version of the statute in effect when Meridian filed suit.
6
individual who sues a media defendant for defamation over a report on official
proceedings of public concern has the burden of proving that the gist of the report
was not substantially true”); see also Choctaw Constr. Servs. LLC v. Rail-Life R.R.
Servs., LLC, 617 S.W.3d 143, 153 (Tex. App.—Houston [1st Dist.] 2020, no pet.);
Basic Capital Mgmt., Inc. v. Dow Jones & Co., 96 S.W.3d 475, 480–81 (Tex.
App.—Austin 2002, no pet.).4
“A statement need not be perfectly true; as long as it is substantially true, it
is not false.” Toledo, 492 S.W.3d at 714. The test for whether a report is
substantially true is “whether the broadcast taken as a whole is more damaging to
the plaintiff’s reputation than a truthful broadcast would have been.” Id. (quotation
omitted). This test requires considering “the broadcast as a whole—its gist to the
ordinary listener—and comparing it to a truthful report.” Id. The gist of an
allegedly defamatory broadcast must be compared to a truthful report of the
official proceedings, not to the actual facts. Id. As part of the plaintiff’s burden to
show lack of substantial truth, the plaintiff must show that the broadcast was not a
fair, true, and impartial account of the proceedings. See id. at 715.
A comparison of the police report to the defendants’ articles shows that the
articles substantially mirror the police report. The two divergences identified by
Status Lounge are (1) the articles state that the “owner” shot the victim, while the
4
Ordinarily, truth is a defense to defamation, so a plaintiff need not prove falsity.
Toledo, 492 S.W.3d at 713. However, the burden of proof on the issue of falsity is shifted to the
plaintiff if the defendant proves that it is a part of the media and the complained-of statements
were an account of official proceedings of public concern. See id. at 714–15. Here, the
defendants have shifted the burden of proof on the issue of falsity by showing that they were part
of the media and the complained-of statements were based on official statements from law
enforcement about a criminal allegation. See, e.g., Deaver v. Desai, 483 S.W.3d 668, 673 (Tex.
App.—Houston [14th Dist.] 2015, no pet.) (“Criminal allegations involve legitimate public
concern.” (quotation omitted)); Goss v. Houston Cmty. Newspapers, 252 S.W.3d 652, 655 (Tex.
App.—Houston [14th Dist.] 2008, no pet.) (“Official statements from law enforcement,
including press releases, trigger application of the privilege.”).
7
police report states that the “manager” shot the victim; and (2) one article states
that the owner was taken into custody, while the police report is silent on the
matter.
These errors in the details do not render the articles substantially untrue
because minor inaccuracies do not amount to falsity so long as the gist or “sting”
of the story is correctly conveyed. See Turner v. KTRK Television, Inc., 38 S.W.3d
103, 115 (Tex. 2000); McIlvain v. Jacobs, 794 S.W.2d 14, 15–16 (Tex. 1990); see
also Herald-Post Publ’g Co. v. Hill, 891 S.W.2d 638, 639 (Tex. 1994) (per
curiam) (newspaper report that witness at trial accused an attorney and his
investigator of threatening her when only the investigator actually made the threat
held substantially true as a matter of law). If there could be any confusion about
the identity of the suspect as the “manager” rather than the “owner,” the same
possibility of confusion existed in the police report, which referred to the “owner”
being the person who got into the argument with the victim and did not clarify that
the “manager” who shot the victim was a different person. See Toledo, 492
S.W.3d at 716 (dismissing defamation claim under TCPA; reasoning that the report
of a medical board’s press release about a pediatrician that engaged in a sexual
relationship with a patient was substantially true although it omitted fact that the
patient was an adult because “if there could have been any confusion over the
broadcast, the same possibility of confusion existed in the Board’s report of its
proceedings,” which did not specify the age of the patient). Although failing to
clarify this fact before printing may show poor research or editing, it does not
demonstrate lack of substantial truth.
Although one of the articles erroneously reported that the owner had been
taken into custody, the gist of the article—that Status Lounge’s representative shot
a band member over a dispute about how long the band would play—remained the
8
same regardless of whether the owner was taken into custody. The ordinary reader
would assume that custody would be the natural result of the owner’s reported
conduct. And, Status Lounge is a business entity, but the statement about being
taken into custody would be understood to refer to a specific yet unnamed person.
A reference to the owner being taken into custody does not attach any more
opprobrium to conduct of Status Lounge, specifically, compared to a report
without the exaggeration. See Collins v. Sunrise Senior Living Mgmt., Inc., No.
01-10-01000-CV, 2012 WL 1067953, at *16 (Tex. App.—Houston [1st Dist.] Mar.
29, 2012, no pet.) (mem. op.) (noting that a “statement is substantially true even if
it greatly exaggerates plaintiff’s misconduct, as long as the average reader would
not attach any more opprobrium to the plaintiff’s conduct merely because of the
exaggeration”); accord Weber v. Fernandez, No. 02-18-00275-CV, 2019 WL
1395796, at *9 (Tex. App.—Fort Worth Mar. 28, 2019, no pet.) (mem. op.); Ruder
v. Jordan, No. 05-14-01265-CV, 2015 WL 4397636, at *3 (Tex. App.—Dallas
July 20, 2015, no pet.) (mem. op.); Entravision Commc’ns Corp. v. Belalcazar, 99
S.W.3d 393, 397 (Tex. App.—Corpus Christi 2003, pet. denied); Collins v. Sunrise
Langston v. Eagle Printing Co., 797 S.W.2d 66, 69–70 (Tex. App.—Waco 1990,
no writ); Finklea v. Jacksonville Daily Progress, 742 S.W.2d 512, 515 (Tex.
App.—Tyler 1987, writ dism’d w.o.j.).
Having compared the defendants’ articles to the police report upon which
they are based, we hold that the articles are substantially true. Therefore, Status
Lounge failed to establish a prima facie case for each element of its claims. The
TCPA requires that Status Lounge’s claims be dismissed. See Tex. Civ. Prac. &
Rem. Code § 27.005.
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V. CONSTITUTIONAL CHALLENGE
Status Lounge asks this court to affirm the denial of the motions to dismiss
because the TCPA is unconstitutional. In the prior appeal, this court ruled that it
lacked jurisdiction to review the trial court’s separate ruling that the TCPA is
constitutional in an interlocutory appeal from the denial of the motions to dismiss.
See Hearst Newspapers, 541 S.W.3d at 894. The original decision of this court is
law of the case and is ordinarily binding absent a showing that the original decision
was clearly erroneous. See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716
(Tex. 2003). Status Lounge does not contend, and has not shown, that this court’s
prior decision regarding jurisdiction was erroneous. Thus, we decline to reconsider
the issue.
VI. CONCLUSION
The trial court erred by denying the defendants’ motions to dismiss under
the TCPA. Accordingly, the trial court’s order denying the motions is reversed.
Consistent with the defendants’ requests, we remand the case to the trial court for
proceedings consistent with this opinion, including dismissal of Status Lounge’s
claims against the defendants and an award to the defendants of attorney’s fees and
other relief authorized by the TCPA. See Tex. Civ. Prac. & Rem. Code
§ 27.009(a); Cox Media Grp., LLC v. Joselevitz, 524 S.W.3d 850, 865 (Tex.
App.—Houston [14th Dist.] 2017, no pet.).
/s/ Ken Wise
Justice
Panel consists of Justices Wise, Zimmerer, and Wilson.
10