Texas Oil and Gas Attorney Blog
In an earlier blog post, we discussed the Texas fracing case that was headed to the Texas Supreme Court for further review. On April 24, 2015, the Texas Supreme Court issued its opinion in In Re Steven Lipsky, and determined that the Texas Citizens Participation Act does not require that courts apply a heightened standard of proof to claims requiring clear and specific evidence.
Background
The Lipskys claimed they could set their drinking water on fire due to the nearby fracing activities of Range Resources. The Lipskys filed suit against Range for contamination of their water well and Range filed a counter-suit against the Lipskys and another party, Alisa Rich, alleging defamation, business disparagement, and civil conspiracy. The Lipskys and Rich filed a special motion under the Texas Citizens Participation Act to dismiss Range’s counter-suit.
The trial court ruled against the Lipskys and Rich by denying their motion to dismiss under the Texas Citizens Participation Act. The Lipskys and Rich appealed and the Court of Appeals determined the Texas Citizens Participation Act required the dismissal of Range’s claims against Lipsky’s wife and Rich but not against Lipsky. Both Range and Lipsky appealed to the Texas Supreme Court.
Discussion
Range argued that the Texas Citizens Participation Act does not require the dismissal of any claims, while Lipsky argued that the Act required the dismissal of the claims against him as well.
The Texas Citizens Participation Act was intended to protect citizens who speak out on public issues from retaliatory lawsuits seeking to intimidate or silence them. The Act allows a defendant to file a special motion in any suit that appears intended to suppress the defendant’s communication on public issues.
The act prescribes a two step process. The burden is initially on the defendant to show by a preponderance of the evidence that the plaintiff’s claim is based on or relates to the defendant’s exercise of the right of free speech, the right to petition or the right of association. When the defendant properly demonstrates that the plaintiff’s claim implicates one of these rights, 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.” Texas Civil Practice & Remedies Code § 27.005(c).
The Texas Supreme Court considered what burden the language “clear and specific evidence” imposes on the plaintiff. Lipsky argued that the phrase “clear and specific evidence” elevates the evidentiary standard and required Range to produce direct evidence of each element of the claim. Range argued that circumstantial evidence and rational inferences may be considered by the court and that the Texas Citizens Participation Act does not impose a higher evidentiary standard than that used by the underlying claims.
Holding
The Texas Supreme Court held that the Texas Citizens Participation Act demands more information about the underlying claim, but does not impose an elevated evidentiary standard nor does it categorically reject circumstantial evidence. The Court noted that all evidentiary standards, including the clear and convincing evidence standard, recognize the relevance of circumstantial evidence.
Clearly, this decision may make it a bit more difficult to succeed on a motion under the Texas Citizens Participation Act. That’s a good thing if the initial claim is frivolous, and a bad thing if it is not. Ultimately, the Court’s decision is fair because it allows circumstantial as well as direct evidence, and it does not place an exaggerated burden of proof on the party opposing the Texas Citizens Participation Act motion.