Michael Amend and Lowe's Companies, Inc. v. J.C. Penney Corporation, Inc. ( 2020 )

AFFIRMED; Opinion Filed March 31, 2020
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-00723-CV
MICHAEL AMEND AND LOWE’S COMPANIES, INC., Appellants
V.
J.C. PENNEY CORPORATION, INC., Appellee
On Appeal from the 429th Judicial District Court
Collin County, Texas
Trial Court Cause No. 429-00257-2019
MEMORANDUM OPINION
Before Justices Myers, Osborne, and Nowell
Opinion by Justice Myers
Michael Amend and Lowe’s Companies, Inc. appeal the trial court’s denial of
their motion to dismiss the legal claims of J.C. Penney Corporation, Inc. Appellants
contend they were entitled to dismissal of Penney’s claims under the Texas Citizens
Participation Act (TCPA). See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001–.011.1
1
The Texas Legislature amended the TCPA effective September 1, 2019. Those amendments apply to
“an action filed on or after” that date. Act of May 17, 2019, 86th Leg., R.S., ch. 378, § 11, 2019 Tex. Sess.
Law Serv. 684, 687. Because the underlying lawsuit was filed before September 1, 2019, the law in effect
before September 1 applies. See Act of May 21, 2011, 82d Leg., R.S., ch. 341, § 2, 2011 Tex. Gen. Laws
961–64, amended by Act of May 24, 2013, 83d Leg., R.S., ch. 1042, §§ 1–3, 5, 2013 Tex. Gen. Laws 2499–
2500. All citations to the TCPA are to the version before the 2019 amendments took effect.
We conclude the evidence supported finding appellants failed to meet step one of
the TCPA. We affirm the trial court’s order denying appellants’ motion to dismiss.
BACKGROUND
Amend worked for Penney from 2015 to 2018. While there, Amend signed a
Termination Pay Agreement that contained confidentiality, non-competition, and
non-solicitation agreements. The confidentiality agreement prohibited Amend from
disclosing Penney’s confidential information to anyone not employed by Penney or
from using the information to compete against Penney. The non-solicitation
agreement prohibited Amend, while he was employed at Penney and for eighteen
months thereafter, from persuading or inducing Penney’s employees to give up their
positions at Penney. The non-competition agreement prohibited Amend from
working for eighteen months after leaving Penney for a “Competing Business” in a
position involving “the performance of similar duties or oversight responsibilities as
those” he performed at Penney. The agreement defined “Competing Business” as
including any retail business selling goods of the type sold by Penney.
In 2018, Penney eliminated Amend’s position and terminated him. Two
months later, Penney’s CEO, Marvin Ellison, left Penney and became CEO of
Lowe’s. Amend contacted Ellison about working at Lowe’s, and Amend became
Lowe’s President of Online. Amend began working at Lowe’s in December 2018.
Penney filed suit against appellants on January 15, 2019. Penney sued
Amend for breach of contract for violating the Termination Pay Agreement “by
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impermissibly competing with JCP, soliciting JCP’s employees, and/or using or
disclosing JCP’s confidential information without authorization.” Penney sued
Lowe’s for tortious interference with contract alleging Lowe’s induced Amend to
violate the confidentiality, non-solicitation, and non-competition agreements.
Penney seeks damages and injunctive relief.
On January 31, 2019, appellants moved for dismissal of Penney’s claims.
Appellants asserted that Penney’s claims were based on, related to, or in response to
appellants’ exercise of their right of association or free speech. Penney filed a
response to the motion. The trial court held a hearing on appellants’ motion to
dismiss and denied the motion.
TEXAS CITIZENS PARTICIPATION ACT
In their issue on appeal, appellants contend the trial court erred by denying
their motion to dismiss Penney’s legal actions against them.
The TCPA permits a defendant to move for dismissal of a legal action that is
“based on, relates to, or is in response to a party’s exercise of the right of free speech,
right to petition, or right of association.” CIV. PRAC. § 27.003(a). The statute’s
purpose “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.” Id. § 27.002; see In re
Lipsky, 460 S.W.3d 579, 589 (Tex. 2015) (“The TCPA’s purpose is to identify and
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summarily dispose of lawsuits designed only to chill First Amendment rights, not to
dismiss meritorious lawsuits.”).
This summary procedure requires a trial court to dismiss suits, or particular
claims within suits, that demonstrably implicate those statutorily protected rights,
unless the nonmovant makes a prima facie showing that the claims have merit.
Sullivan v. Abraham, 488 S.W.3d 294, 295 (Tex. 2016); see CIV. PRAC. § 27.005(b).
The procedure for the motion to dismiss has three steps. First, the movant
must prove 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 to petition, or the right of association. CIV. PRAC. § 27.005(b). If the movant
does not meet this burden, the motion fails.
Second, if the movant satisfies the first step, the nonmovant must establish by
clear and specific evidence a prima facie case for each essential element of its claim.
Id. § 27.005(c). If the nonmovant fails to meet this burden, the trial court must
dismiss the claim. Id. § 27.005 (b), (c).
Third, if the nonmovant meets its step-two burden and the movant has asserted
a defense, the movant must establish by a preponderance of the evidence each
essential element of a valid defense to the nonmovant’s claims. Id. § 27.005(d).
We review de novo a trial court’s denial of a TCPA dismissal motion,
including whether the TCPA applies to the underlying suit. See Youngkin v. Hines,
546 S.W.3d 675, 680 (Tex. 2018). We consider the pleadings and opposing
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affidavits in the light most favorable to the nonmovant. Dyer v. Medoc Health
Servs., LLC, 573 S.W.3d 418, 424 (Tex. App.—Dallas 2019, pet. denied).
To meet step one, the movant for dismissal must establish a nexus between
the legal action and the movant’s exercise of the protected right. Id. at 428; Grant v.
Pivot Tech. Sols., Ltd., 556 S.W.3d 865, 879 (Tex. App.—Austin 2018, pet. denied).
“[T]o trigger the TCPA’s protection, the ‘legal action’ must be ‘factually predicated
on the alleged conduct that falls within the scope of [the] TCPA’s definition of
‘exercise of the right of free speech,’ petition, or association.’” Dyer, 573 S.W.3d
at 428 (quoting Grant, 566 S.W.3d at 879).
The Communications
Appellants assert that Penney’s claims are based on, related to, or in response
to these communications:
1. Amend allegedly breached the Termination Pay Agreement’s
confidentiality agreement by “using,” i.e., communicating, Penney’s
confidential information;
2. Amend allegedly breached the non-solicitation covenant by
soliciting Penney’s employees;
3. Amend allegedly breached the covenant not to compete by
communicating his acceptance of the position of Lowe’s President of
Online; and
4. Amend allegedly breached the covenant not to compete by acting as
Lowe’s President of Online because the position entails making public
communications to promote Lowe’s and its products.
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Appellants assert that Penney’s allegations against Lowe’s were based on Lowe’s
communications with Amend because Penney alleged Lowe’s “assisted” and
“encouraged” his breach of the agreements.
Exercise of the Right of Association
Appellants assert they met step one of the TCPA because Penney’s claims are
based on, related to, or in response to their exercise of the right of association.
“‘Exercise of the right of association’ means a communication between individuals
who join together to collectively express, promote, pursue, or defend common
interests.” Civ. Prac. § 27.001(2). Exercise of the right of association requires that
the “nature of the communication between individuals who join together must
involve public or citizen’s participation.” Dyer, at 426 (internal quotation marks
omitted).
Appellants argue their communications constituted exercise of the right of
association because they “involve communications in the pursuit of common
interests—Amend’s and Lowe’s mutual gain and the promotion of Lowe’s
products.” Appellants do not explain how the first three allegations involve public
or citizen’s participation, which is necessary for the communications to constitute
the exercise of the right of association. See Dyer, 573 S.W.3d at 426. Therefore,
these claims are not based on, related to, or in response to appellants’ exercise of the
right of association.
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Concerning the fourth allegation, Amend’s public communications promoting
Lowe’s and its products, appellants state, “The communications Amend crafts as
President of Online reach orders of magnitude more of the ‘public’ than those
examples,” citing other cases. Even if public communications supporting a retailer
or its products could constitute public or citizen’s participation, appellants would
still have to produce evidence that Penney’s suit was based on, related to, or in
response to those communications.
Penney sued Amend because he took a position with a “Competing Business”
that involved “similar duties or oversight responsibilities.” Appellants assert that
Amend’s positions at both Penney and Lowe’s involved public statements.
Therefore, they argue, Penney’s suit against appellants for Amend’s performing
similar duties in both positions means the suit is based on, related to, or in response
to Amend’s public communications promoting Lowe’s and its products.
The record, however, contains no evidence that, when viewed in the light most
favorable to Penney, proves Amend’s duties with either Penney or Lowe’s included
making public communications. Penney alleged Amend “was responsible for
developing and implementing JCP’s online strategy, overseeing the operation of
JCP’s online platforms, and leading JCP in its efforts to compete against a host of
competitors in the ever-evolving market of online merchandise sales.” None of these
actions necessarily involved public communications.
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In support of their assertion that Amend made many public communications
about Lowe’s and its products, Appellants cite Amend’s deposition discussing his
job duties at Lowe’s. There, Amend testified he is “responsible for Lowe’s’ website
and app sales,” “responsible for online merchandising,” and responsible for “driving
sales.” In his position, he works with others on “product management,”2
“analytics,”3 “digital technology,” and “strategy and business development,” and he
makes recommendations to other Lowe’s employees about these subjects. The
evidence does not show that these responsibilities necessarily involve public
communications. Instead the responsibilities appear to involve communications
between Amend and other Lowe’s employees. Appellants’ motion to dismiss did
not include any examples of Amend making a public communication. Moreover,
Amend’s communications with other Lowe’s employees about these subjects would
not necessarily involve public or citizen’s participation.
Just as the record does not show Amend’s communications involved public
or citizen’s participation, the record does not show that Lowe’s communications
assisting or encouraging Amend involved public or citizen’s participation.
Having considered the pleadings and opposing affidavits in the light most
favorable to Penney, we conclude appellants failed to prove by a preponderance of
2
Amend testified, “Product management is the function around the prioritization of the capabilities
that you want to implement inside of the mobile app or on the website.”
3
Amend testified, “Analytics is the measurement of customer behavior on the website or in the mobile
app.”
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the evidence that Penney’s lawsuit is based on, related to, or in response to their
exercise of the right of association.
Exercise of the Right of Free Speech
Appellants also assert they met step one of the TCPA because Penney’s claims
are based on, related to, or in response to their exercise of the right of free speech.
The TCPA defines the “exercise of the right of free speech” as “a
communication made in connection with a matter of public concern.” CIV. PRAC. §
27.001(3).
“‘Matters of public concern’ include issues related to: (i) health or safety; (ii)
environmental, economic, or community well-being; (iii) the government; (iv) a
public official or public figure; or (v) a good, product, or service in the marketplace.”
Id. § 27.001(7). “The words ‘good, product, or service in the marketplace’ . . . do
not paradoxically enlarge the concept of ‘matters of public concern’ to include
matters of purely private concern. [T]he ‘in the marketplace’ modifier suggests that
the communication must have some relevance to a public audience of potential
buyers or sellers.” Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d
127, 134 (Tex. 2019).
Although the TCPA sometimes covers private communications, those cases
involve environmental, health, or safety concerns with public relevance beyond the
pecuniary interest of the private parties involved. Id. at 136.
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To prove that Penney’s allegations involve the exercise of the right of free
speech, appellants had to prove their communications were in connection with a
matter of public concern. CIV. PRAC. § 27.001(3). Appellants argue the
communications were in connection with a matter of public concern because they
involved the economic well-being of Lowe’s, Amend, and the employees Amend
solicited, and the communications involved goods, product, or services in the
marketplace.
“The phrase ‘matter of public concern’ commonly refers to matters ‘of
political, social, or other concern to the community,’ as opposed to purely private
matters.” Creative Oil, 591 S.W.3d at 135. Communications about the economic
well-being of private parties are not matters of public concern. Id. at 136 (“These
communications, with a limited business audience concerning a private contract
dispute, do not relate to a matter of public concern under the TCPA.”); id. at 137 (“A
private contract dispute affecting only the fortunes of the private parties involved is
simply not a ‘matter of public concern’ under any tenable understanding of those
words.”). Likewise, for a communication about goods, products, or services in the
marketplace to be connected with a matter of public concern, the communication
“must have some relevance to a wider audience of potential buyers or sellers in the
marketplace, as opposed to communications of relevance only to the parties to a
particular transaction.” Id. at 134.
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Appellants do not cite to, and we have not discovered in the record, evidence
of any communications by appellants connected with goods, products, or services in
the marketplace that “have some relevance to a wider audience of potential buyers
or sellers in the marketplace.” Id. Nor is there any evidence that Penney’s suit is
based on, related to, or in response to such communications.
Having considered the pleadings and opposing affidavits in the light most
favorable to Penney, we conclude appellants failed to prove by a preponderance of
the evidence that Penney’s lawsuit is based on, related to, or in response to
appellants’ exercise of the right of free speech.
We overrule appellants’ issue on appeal.
CONCLUSION
We affirm the trial court’s order denying appellants’ motion to dismiss under
the Texas Citizens Participation Act.
/Lana Myers/
LANA MYERS
JUSTICE
190723F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
MICHAEL AMEND AND LOWE’S On Appeal from the 429th Judicial
COMPANIES, INC., Appellants District Court, Collin County, Texas
Trial Court Cause No. 429-00257-
No. 05-19-00723-CV V. 2019.
Opinion delivered by Justice Myers.
J.C. PENNEY CORPORATION, Justices Osborne and Nowell
INC., Appellee participating.
In accordance with this Court’s opinion of this date, the order of the trial
court denying appellants’ motion to dismiss under the Texas Citizens Participation
Act is AFFIRMED.
It is ORDERED that appellee J.C. PENNEY CORPORATION, INC.
recover its costs of this appeal from appellants MICHAEL AMEND AND
LOWE’S COMPANIES, INC.
Judgment entered this 31st day of March, 2020.
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