BancPass, Inc. v. Highway Toll Administration, L.L.C.

863 F.3d 391, 2017 WL 2981020, 2017 U.S. App. LEXIS 12595
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 13, 2017
DocketNo. 16-51073
StatusPublished
Cited by21 cases

This text of 863 F.3d 391 (BancPass, Inc. v. Highway Toll Administration, L.L.C.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BancPass, Inc. v. Highway Toll Administration, L.L.C., 863 F.3d 391, 2017 WL 2981020, 2017 U.S. App. LEXIS 12595 (5th Cir. 2017).

Opinion

STEPHEN A. HIGGINSON, Circuit Judge:

Defendant-Appellant Highway Toll Administration, L.L.C., (“HTA”) appeals the district court’s denial of its summary judgment motion based on Texas’s judicial proceedings privilege. HTA argues that, under Texas law, it is absolutely immune from a defamation action brought by its competitor, Plaintiff-Appellee BancPass, Inc., because the communications at issue were related to judicial proceedings contemplated in good faith. BancPass filed a motion to dismiss the appeal, arguing that this court is without jurisdiction to hear the interlocutory appeal or, alternatively, urging that this court dismiss HTA’s appeal on the ground that HTA forfeited its right to a pre-trial determination of the privilege question. We DENY BancPass’s motion to dismiss and AFFIRM the district court’s denial of HTA’s motion for summary judgment.

I

This interlocutory appeal arises out of litigation between rival companies that specialize in highway toll collection technology. In lieu of cash collection, many state tolling authorities—including the Texas Department of Transportation (TxDOT)—now collect highway tolls either partially or entirely through electronic tolling lanes. This generally is accomplished [395]*395either through use of a “toll tag”—a windshield-mounted transponder that automatically deducts the toll from the owner’s account—or through technology that captures a vehicle’s license plate, allowing the state to bill the vehicle’s registered owner by mail.

HTA is a private company that contracts with -rental-car agencies to manage the billing and payment of electronic highway tolls incurred by their rental cars. HTA registers the license plate numbers of rental cars on its “fleet list” and then pays the tolling authority directly for tolls incurred by those cars. -Although the vehicles remain registered to the rental-car companies, the state tolling authority permits the license plates of designated vehicles to be listed on HTA’s fleet list solely for tolling purposes. When one of the registered rental cars passes through a toll site, the tolling authority bills HTA’s fleet account. HTA then bills the rental car customer for the cost of the customer’s accrued tolls, plus a fee for HTA’s services.

Appellee BancPass is a competing toll services company. In 2014, BancPass began marketing a cellphone application, the “PToll App,” which allows users to photograph their license plates and send those photographs directly to BancPass through the App. BancPass then registers the associated vehicles on its own fleet list. When a covered vehicle passes through a toll site, BancPass pays the tolling authority for the incurred toll and then deducts the cost of the toll from the user’s account. One of the benefits of the PToll App is that it allows rental-car customers to add their rental vehicles’ license plates to BancPass’s fleet list for only the limited pendency of the rental term. By doing so, customers are able to opt out of the default toll-payment systems provided by rental-car companies and thus avoid the associated fees charged by toll servicing companies such as HTA.

In April 2014, BancPass announced that it would officially launch its PToll App at the September 2014 International Bridge, Tunnel, and Turnpike Association’s national conference, the most influential annual conference in the tolling industry. However, after learning that rental-car customers could use the PToll App to pay their incurred tolls, HTA took action to block BancPass’s planned launch.

First, on August 13, 2014, HTA’s CEO sent a letter to TxDOT’s legal counsel expressing the company’s “concern” about BancPass’s efforts to register with TxDOT the license plates of vehicles owned by rental-car agencies and TxDOT’s apparent willingness to prioritize BancPass’s registrations over HTA’s. The letter additionally notified TxDOT that HTA intended to work with “outside counsel to take any and all legal actions necessary to protect [HTA’s] rights under our agreement with TxDOT or Texas Law, and intended] to hold BancPass or its customers responsible with regard to any such actions involving the rental agency vehicles.” HTA did not provide a copy of the létter to Banc-Pass or otherwise communicate to Banc-Pass the concern expressed in the letter.

Second, on September 3, 2014, HTA’s outside counsel sent letters to Google and Apple, two companies that sold the PToll App in their online stores. The two letters, which were entitled “Illegal ‘PToll’ App by BancPass,” demanded that Google and Apple remove the PToll App from their stores, because it allegedly violated each companies’ internal policies and allowed users to “engage in unlawful activities.” The letters accused BancPass and its users of a widé array of illegal conduct. For example, the letters claimed that, by allowing users to upload a photo of a rental car license plate and register that vehicle on [396]*396BancPass’s fleet, the PToll App was requiring its users “to assist -in the violation of state vehicle registration laws by falsely representing—or enabling BancPass to represenfc-r-that the license plate assigned to the vehicle belongs to the user.” The letter claimed:

[T]his action is in violation of the laws of most (if not all) states prohibiting false statements to the State Authorities in conjunction with the registration of a vehicle or license plate'.... By misrepresenting, or assisting BancPass in misrepresenting, that a particular rental car and its license plate aré part of Banc-Pass’s fleet when, in fact, they are not, PToll App users are unwittingly committing a felony.

The letter further warned that the technology would cause a “procedural and financial nightmare” for subsequent users .of the rental vehicles, HTA, rental agencies, and state authorities. HTA’s outside counsel accused Google and Apple of. “facilitating ... tortious conduct,” and warned that, by giving the App “an air of legitimacy,” their sale of the App was “intentionally deceptive and unfairly induce[d] users of the PToll App to participate in BancPass’s unlawful schemes” in violation of California law. While the letters mentioned that BancPass was “intentionally interfering with, the contract between.the Rental Agencies arid drivers,” it did not refer to any tortious interference with HTA’s own contractual relationships, nor did it allude to the possibility that HTA would pursue legal action against BancPass, The letter merely closed with a demand that Google and Apple remove the PToll App from their online stores, based on its illegality. As with the letter to TxDOT, HTA did not provide a copy of these letters to BancPass or otherwise communicate to BancPass the concerns expressed in the letters.

Finally, on September 30, 2014, HTA contacted BancPass directly and threatened legal action unless BancPass agreed to stop marketing the PToll App to rental-car customers. BancPass declined and instead filed suit in October 2014, seeking a declaratory judgment that its app did not tortiously interfere with HTA’s contractual rights. Upon obtaining HTA’s letters to TxDOT, Apple, and Google through discovery,- BancPass amended its complaint' to add a defamation claim based on the content of the three letters.' HTA counterclaimed, seeking a declaratory judgment that the PToll App tortiously interferes with HTA’s current and prospective contracts.

In its summary judgment briefing, HTA argued for the first time that it was entitled to summary judgment on BancPass’s defamation claim, because all three letters were absolutely privileged under Texas law.

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Bluebook (online)
863 F.3d 391, 2017 WL 2981020, 2017 U.S. App. LEXIS 12595, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bancpass-inc-v-highway-toll-administration-llc-ca5-2017.