John Kawcak v. Antero Resources Corporation

Court of Appeals of Texas·Decided February 21, 2019·No. 02-18-00301-CV·Published

Opinion

In the

Court of Appeals

Second Appellate District of Texas at Fort Worth

No. 02-18-00301-CV

JOHN KAWCAK, Appellant V.

ANTERO RESOURCES CORPORATION, Appellee

On Appeal from the 236th District Court Tarrant County, Texas

Trial Court No. 236-298822-18

Before Gabriel, Pittman, and Bassel, JJ.

Opinion by Justice Bassel

OPINION

I. Introduction

This is an interlocutory appeal from the denial of a motion to dismiss relying on the Texas Citizens Participation Act (TCPA or Act). Appellant John Kawcak candidly acknowledges how broadly he interprets the right of association found in the Act. He largely concedes that Appellee Antero Resources Corporation accurately characterizes his position as being that “the TCPA would apply in any case [in which the] plaintiff alleged that the defendant conducted illegal acts through a conspiracy [in] which the co-conspirators ‘associated’ with and communicated with each other.” Adopting this interpretation turns what many believe is a scalpel used to explore whether a lawsuit suppresses the exercise of constitutional rights into a maul that can be wielded against almost any conspiracy claim, theft-of-trade-secrets claim, or tortious-interference claim when that claim involves more than one actor producing the interference.

No one can doubt the power of the TCPA to rock a claimant back on its heels.

Once in the grip of the TCPA, a party may stairstep down increasingly dire consequences that most litigants do not face:

—All discovery is suspended until the trial court rules on the TCPA motion to dismiss (unless the trial court allows specified and limited discovery);

—in an abbreviated time frame, the party bringing the claim must establish a prima facie case for each of its essential elements with clear and specific evidence;

—the parties may file an interlocutory appeal to test the trial court’s ruling on the TCPA motion to dismiss; and

—a final result that may be an order of the trial or appellate court that dismisses the action, bringing the consequences of not only paying the party’s fees to pursue the action, defend against the TCPA motion, and defend or prosecute an appeal but also a mandatory just and equitable award of the court costs, reasonable attorney’s fees, and expenses incurred by the party’s opponent and an award of sanctions.

We cannot agree with Kawcak’s position that the TCPA is so all-encompassing a protection that any party making a conspiracy claim must face the potential of these consequences—though his position is not without support either in the language of the Act or the cases examining that language. The Act, in our view, contains a check on the interpretation that Kawcak advocates: its plain language. Namely, the Act defines “the right of association” as requiring the expression, promotion, pursuit, or defense of “common interests.” Tex. Civ. Prac. & Rem. Code Ann. § 27.001(2). In a matter of first impression, we interpret the word “common” to have a plain meaning that implicates more than the narrow selfish interests of persons who act jointly to commit a tort. Because Kawcak concedes that his interest is shared only by himself and his alleged co-conspirator, we conclude that the TCPA does not apply to this lawsuit and affirm the trial court’s denial of the motion to dismiss.

II. Factual and Procedural Background Plaintiff’s First Amended Petition was the live pleading when Kawcak filed his TCPA motion to dismiss.

The amended petition, in a section titled “Need for Action,” gives the following overview of the suit:

Antero [Resources Corporation] seeks to recover damages from former rogue employee John Kawcak. Kawcak was Antero’s top operational employee and [was] intimately involved in a bribery/kickback scheme with Tommy Robertson and his affiliated companies. Kawcak was Antero’s top operational employee during the relevant time period and was responsible for hiring vendors and supervising and monitoring Antero’s expenditure of hundreds of millions of dollars for operations in West Virginia. The kickback scheme gave the Tommy Robertson companies a monopoly over Antero’s operations and allowed them to avoid any negative consequences due to their demonstrably deficient work.

The factual allegations of the petition claim that Kawcak held the title of Operations Superintendent for Antero in West Virginia. Kawcak’s job duties in that role included selecting which vendor to use in operations, determining the amount to pay the vendor, and supervising overall operations in the “utmost fidelity” to the interests of Antero. Allegedly, Antero executed an internal policy that prohibited Kawcak from taking gifts from a “supplier” of more than a nominal value and prohibited the disclosure of confidential information.

Kawcak allegedly hired companies affiliated with an individual named Tommy Robertson to perform services on Antero’s operations. According to the amended petition, Tommy Robertson had a monopoly over Antero’s West Virginia operations, and the services performed by Robertson or his companies were substandard. During the period that Kawcak hired and retained the Tommy Robertson companies to

provide services, Kawcak allegedly received the free use of an airplane from Robertson and several hundred thousand dollars in payments.

The petition further states:

Tommy Robertson and the Tommy Robertson companies [allegedly]

made those improper payments in exchange for [Kawcak’s] choosing the Tommy Robertson companies to provide goods and services over the goods and services of other vendors; the goods and services of other vendors were higher quality, more cost efficient, and more available when compared to the Tommy Robertson companies.

This allegedly created a situation in which “it took the Tommy Robertson companies roughly twice as long to perform the job, which roughly doubled the costs to Antero because most of the goods and services are billed on a per/day basis.” Kawcak allegedly favored the Tommy Robertson companies by never allowing “a meaningful bidding process” to take place in the hiring of vendors.

Antero also claims that Kawcak allegedly shared confidential pricing information with Robertson. This information was not provided to other vendors, and the Tommy Robertson companies’ possession of the information was “a key component of the Tommy Robertson companies’ scheme.” The scheme allegedly operated so that

[t]he Tommy Robertson companies were able to adjust their prices to ensure that Kawcak had plausible deniability for hiring them despite their substandard work. Reducing the prices did not hurt the Tommy Robertson companies because they still were able to extract huge profits by taking much longer to accomplish a job[—]such as frac plug drillouts[—]than other available vendors. Because the Tommy Robertson companies charged by the day for most goods and services,

the longer they took resulted in Antero paying unnecessary daily rentals.

Such sharing provides no benefit to Antero.

The amended petition lists a number of duties that Kawcak owed to Antero, including acting only in the best interest of Antero, exercising good faith and uncorrupted business judgment, avoiding self-dealing, avoiding the use of his position for personal gain, refusing gifts that violated Antero’s conduct code, and acting with integrity. Kawcak allegedly breached his duties

by knowingly approving incorrect and/or inflated invoices, disclosing Antero’s confidential pricing information to Tommy Robertson, refusing to exercise oversight over the Tommy Robertson companies, and ensuring that Antero used the Tommy Robertson companies instead of far more qualified, proficient[,] and cost-efficient vendors that were available. Antero would not have made any payments to the Tommy Robertson companies had Kawcak not breached the fiduciary duties he owed to Antero.

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John Kawcak v. Antero Resources Corporation, (Tex. Ct. App. 2019).

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