PNC Investment Company, LLC v. Fiamma Statler, LP Fiamma Management Group, LLC, and Frank Zaccanelli, Jr.

• Court: Court of Appeals of Texas
• Decided: September 3, 2020
• Docket: 02-19-00037-CV
• Status: Published

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-19-00037-CV ___________________________

PNC INVESTMENT COMPANY, LLC, Appellant

V.

FIAMMA STATLER, LP; FIAMMA MANAGEMENT GROUP, LLC, AND FRANK ZACCANELLI, JR., Appellees

On Appeal from the 342nd District Court Tarrant County, Texas Trial Court No. 342-294034-17

Before Sudderth, C.J.; Gabriel and Kerr, JJ. Memorandum Opinion by Chief Justice Sudderth MEMORANDUM OPINION

I. Introduction

Appellees Frank Zaccanelli Jr. and Fiamma Statler, LP, joined Mehrdad

Moayedi and some of Moayedi’s business entities in a property redevelopment project

(the Project) 1 financed through a combination of public and private funds. Appellee

Fiamma Management Group, LLC (FMG), a Zaccanelli entity, became the Project’s

omnibus property manager under a contract with the Master Tenant, 1914 Commerce

Leasing, LLC. When the Master Tenant terminated FMG’s contract, Appellees sued

everyone involved in the Project, including Appellant PNC Investment Company,

LLC (PNCIC), the Master Tenant’s investor member.

The trial court denied PNCIC’s Texas Citizens Participation Act (TCPA) 2

motion to dismiss Appellees’ claims against it. In this accelerated interlocutory

appeal, PNCIC argues that the trial court erred because Appellees’ claims are subject

to the TCPA and because Appellees failed to meet their burden to avoid dismissal.

1 The Project involved the development of residential apartments, retail and office space, restaurants, and a hotel at 1914 Commerce Street in Dallas, Texas, in the historic Statler Hotel and Dallas Public Library buildings. 2 The TCPA’s recent amendments became effective September 1, 2019. See Act of May 17, 2019, 86th Leg., R.S., ch. 378, §§ 1–12 (codified at Tex. Civ. Prac. & Rem. Code Ann. §§ 27.001–.010). Because Appellees’ lawsuit was filed before the amendments’ effective date, it is governed by the prior version of the TCPA, and our citations refer to that version.

2 See Tex. Civ. Prac. & Rem. Code Ann. §§ 27.003, 27.008, 51.014(a)(12). We reverse

and remand.

II. Background

In addition to suing PNCIC, Appellees sued the Master Tenant, the Managing

Member, Moayedi, and other companies related to the Project. Appellees grouped

the defendants into three categories: the “Centurion Defendants,”3 the “Fiduciary

Defendants,”4 and the Project’s Financiers.5 According to Appellees’ live pleadings,

the Project’s funding “was to derive from public-private funds, including public

3 Appellees identified the “Centurion Defendants” as Commerce Statler Development, LLC (the property owner); 1914 Commerce Investments, Inc.; Statler Developers, LLC; Centurion American Development Group, LLC; Centurion American Custom Homes, Inc. d/b/a Centurion American Development; Centurion Acquisitions, LP; TriArc Construction, LLC; 1914 Commerce GM, Inc.; Moayedi; the North Texas EB-5 Regional Center, LLC; and Statler 1900 Commerce, LLC. Appellees nonsuited Statler 1900 Commerce, LLC on January 22, 2019, just over a week before the hearing on that defendant’s Rule 91a motion. 4 Appellees identified the “Fiduciary Defendants” as Moayedi; 1914 Commerce GM, Inc.; Statler Developers, LLC; 1914 Commerce Investments, Inc.; and Centurion American (“as the de facto owner and controller of” 1914 Commerce GM, Inc., Statler Developers, LLC, and 1914 Commerce Investments, Inc.). 5 Appellees identified the Project’s Financiers as PNCIC; Jeffries, LLC; A&J Capital Investments, Inc. (the Project’s EB-5 construction loan manager); Henry Global Consulting Group, LLC (a Chinese consulting firm involved in underwriting the Project’s EB-5 loan); and Matthew D. Challis. Challis was a senior vice president with Jeffries’ Municipal Securities Group in Dallas at the time of the bond sale; his home in Tarrant County anchored the case in the venue.

3 financing through federal and state historic tax credits,[6] selling those tax credits to

private lenders, municipal tax increment financing,[7] and foreign investment through

the federally regulated EB-5 program,[8] and some private equity.” The Project was

located in a 269-acre tax increment finance (TIF) district created to promote

redevelopment in downtown Dallas.

6 See 2 Arden H. Rathkopf et al., Rathkopf’s The Law of Zoning and Planning § 19:50 (4th ed. 2020) (explaining that tax credits for historic building rehabilitation “allow for property owners and developers to be reimbursed for rehabilitation expenses by reducing tax liability on a dollar-for-dollar basis, as long as the projects satisfy statutory criteria”). Rehabilitation plans “must be reviewed and approved by the State Historic Preservation Officer and the National Park Service.” Id.; see 26 U.S.C.A. § 47 (explaining federal “rehabilitation” tax credit program for historic buildings); Tex. Tax Code Ann. §§ 171.901–.909 (“Tax Credit for Certified Rehabilitation of Certain Historic Structures”). The National Park Service decides whether to approve the application for historic tax credits, but the Internal Revenue Service oversees the tax credits’ use. 7 See Tex. Tax Code Ann. §§ 311.001–.021 (“Tax Increment Financing Act”); Jamro Ltd. v. City of San Antonio, No. 04-16-00307-CV, 2017 WL 993473, at *1 (Tex. App.—San Antonio Mar. 15, 2017, no pet.) (mem. op.) (describing tax increment financing as a development tool used by municipalities to finance public improvements and infrastructure by leveraging private investment for certain types of development activities). 8 EB-5 capital is a type of foreign investment visa program used in some domestic real estate ventures. Lake v. Cravens, 488 S.W.3d 867, 881 (Tex. App.—Fort Worth 2016, no pet.) (op. on reh’g); see generally 8 U.S.C.A. § 1153(b)(5). It is administered by U.S. Citizenship and Immigration Services (USCIS), and it permits foreign investors to obtain “green cards” by investing funds in a new commercial enterprise that, in turn, deploys the funds to a U.S. business that creates 10 jobs. Great Sw. Reg’l Ctr., LLC v. ACSWD, LP, No. 14-18-00679-CV, 2020 WL 205993, at *1 (Tex. App.—Houston [14th Dist.] Jan. 14, 2020, no pet.) (mem. op.). The process is administered by a regional center approved by USCIS. Id.

4 Appellees alleged that the Project’s Financiers had “taken advantage of poorly-

regulated federal investment programs” and coerced, cajoled, encouraged, helped, or

assisted the Centurion Defendants “to steer the project into a web of fraud and

misappropriation of public-private funds” after the Master Tenant terminated FMG’s

contract when FMG opposed hiring Tri-Arc by:

(1) compelling Moayedi, through the Centurion Defendants, to increase the federally-regulated loan amounts by $10 million at a double-digit interest rate;

(2) selling $41 million of a $46.5 million municipal TIF subsidy “for $26 million in cash to Jeffries through bonds issued by” Wisconsin’s Public Finance Authority in 2016; and

(3) leasing office space in the Project to The Dallas Morning News at half of market value and giving away $15 million in finish-out construction for free, with the “the proceeds of the sale of fraudulently-procured historic tax credits” paid to TriArc, which Appellees described as the Centurion Defendants’ “fledgling construction management firm,” and its subcontractors TerraBridge and Tri-Tex, which Appellees described as “affiliated by common ownership and nepotism.”

Appellees stated that they had notified PNCIC and the other Financiers about

“ongoing irregularities in the construction, contracting, operation, financing, and

budgeting” of the Project, “including unauthorized and unsupported budget increases,

transfers of valuable project assets, wrongful termination of [FMG’s] management

role” on the Project, “and other violations of the Centurion Defendants’ fiduciary

duties to [Appellees] as minority owners,” to no avail. Appellees claimed that they

were stymied in their attempts to sell their minority interests in the Project to third

parties because no one would give them the loan documents for potential purchasers

5 to review and that these documents “prove[d] not only an obligation to con duct due

diligence and oversight, but also the right to control the decisions impacting use of

EB-5 loan proceeds, TIF sale, federal historic tax credits, and the Old Dallas Public

Library lease negotiation and execution.”

Appellees sued the Fiduciary Defendants for breach of fiduciary duty and sued

the Centurion Defendants for fraud, breach of contract, tortious interference, theft,

and conversion. They sued PNCIC for fraud, tortious interference with contract,

conspiracy; for aiding and abetting the fraud of the other Financiers; for aiding and

abetting the Fiduciary Defendants’ breach of fiduciary duty; and for aiding and

abetting the Centurion Defendants’ fraud, theft, and conversion.

PNCIC moved to dismiss Appellees’ claims under the TCPA based on its

exercise of the rights of free speech and association. PNCIC complained that the

lawsuit’s underpinning was “a tussle” between Moayedi and Zaccanelli, that PNCIC

had not been aware of the termination of FMG’s contract “until after the fact and had

nothing to do with it,” that PNCIC had no duty to police Appellees’ relationship with

Moayedi, and that Appellees had sued PNCIC to pressure it into buying out

Zaccanelli. In support of its motion, PNCIC attached a copy of a January 20, 2017

letter to PNCIC from Appellees’ counsel9 and the unsworn declaration of Holly

Jacoby, a PNCIC vice president during the relevant time period.10

9 In the January 20, 2017 letter, Appellees’ counsel told PNCIC that “[t]he only pathway to resolution of any dispute . . . is for PNC[IC] to create a pathway for Mr. 6 To its response to PNCIC’s motion to dismiss,11 Appellees attached

Zaccanelli’s unsworn declaration and two of Jacoby’s depositions, one of which had

been taken pursuant to court-authorized TCPA discovery. At the hearing on

PNCIC’s motion, both parties urged the trial judge to read Jacoby’s depositions.

However, the trial court’s order denying PNCIC’s motion does not reflect that this

evidence was considered; rather, it states only that the trial court considered “the

Motion, the response of [Appellees], PNCIC’s Reply, the pleadings, and the

arguments of counsel.”

Zaccanelli and Fiamma to find a way out of its relationship with Mr. Moayedi” and warned, “If PNC[IC] wishes to avoid further dealings with Mr. Zaccanelli and Fiamma, then Fiamma encourages PNC[IC] . . . to offer solutions that allow[] a third party to purchase Fiamma’s and Mr. Zaccanelli’s interest which is Fiamma’s constitutional right that now is being blocked by PNC[IC]’s inaction.” 10 See Tex. Civ. Prac. & Rem. Code Ann. § 132.001(a) (stating that, with some exceptions not applicable here, an unsworn declaration may be used in lieu of a written sworn declaration, verification, certification, oath, or affidavit required by statute or required by a rule, order, or requirement adopted as provided by law). 11 Appellees complained in their TCPA response and complain in their appellate brief that PNCIC did not move for dismissal on their aiding-and-abetting claims involving theft and conversion. However, in its reply brief in the trial court, PNCIC stated that it had attacked the entire basis for the aiding-and-abetting claim as applicable to all of the theories that Appellees put forth to support it, and we note that the same aiding-and-abetting elements would apply for each of the underlying torts. See, e.g., G & H Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (referencing harmless-error exception in summary judgment practice when omitted cause of action is precluded as a matter of law by other grounds raised in the case).

7 III. Discussion

We review de novo a trial court’s ruling on a TCPA motion. Beving v. Beadles,

563 S.W.3d 399, 404 (Tex. App.—Fort Worth 2018, pet. denied).

The first step in the TCPA’s burden-shifting analysis is for the defendant-

movant to show by a preponderance of the evidence that the plaintiff’s claim 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. See Tex. Civ. Prac. & Rem. Code

Ann. § 27.005(b); Ghrist v. MBH Real Estate LLC, No. 02-17-00411-CV, 2018 WL

3060331, at *1 (Tex. App.—Fort Worth June 21, 2018, no pet.) (mem. op.). If the

movant satisfies its burden, then the nonmovant has to establish “by clear and specific

evidence a prima facie case for each essential element of the claim in question.” Tex.

Civ. Prac. & Rem. Code Ann. § 27.005(c); Ghrist, 2018 WL 3060331, at *1.

In its first issue, PNCIC argues that Appellees’ claims against it for fraud,

tortious interference with contract, conspiracy, and aiding and abetting involve

PNCIC’s rights of speech or of association.12

A. TCPA Right of Free Speech

Under the TCPA, the “exercise of the right of free speech” is defined as “a

communication made in connection with a matter of public concern.” Tex. Civ. Prac.

12 Because we resolve this issue on the free-speech ground, we do not reach the free-association ground. See Tex. R. App. P. 47.1.

8 & Rem. Code Ann. § 27.001(3). “Communication” is defined to include “the making

or submitting of a statement or document in any form or medium, including oral,

visual, written, audiovisual, or electronic.” Id. § 27.001(1). A “matter of public

concern” includes, among other things, an issue related to economic or community

well-being or to the government. Id. § 27.001(7)(B), (C).

A communication made in connection with a matter of public concern must

have public relevance beyond the pecuniary interests of the private parties involved:

“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.” Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127, 136–37

(Tex. 2019). But because we may not narrow the TCPA’s scope by ignoring its plain

language, if an alleged communication has even a tangential relationship to a matter of

public concern, then it meets the TCPA’s requirements, and as long as the

communication involves a public subject, it need not be made in a public form.

ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 900 (Tex. 2017) (per curiam); see

Creative Oil & Gas, LLC, 591 S.W.3d at 135.

In contrast to communications made in connection with matters of public

concern, commercial speech is exempted from the TCPA. Tex. Civ. Prac. & Rem.

Code Ann. § 27.010; Castleman v. Internet Money Ltd., 546 S.W.3d 684, 688 (Tex. 2018)

(per curiam); VetMoves v. Lone Star Veterinarian Mobile Surgical Specialists, PC, No. 02-19-

00340-CV, 2020 WL 1887770, at *3 (Tex. App.—Fort Worth Apr. 16, 2020, no pet.) 9 (mem. op.). Our supreme court has explained that the TCPA commercial speech

exemption applies when

(1) the defendant was primarily engaged in the business of selling or leasing goods [or services], (2) the defendant made the statement or engaged in the conduct on which the claim is based in the defendant’s capacity as a seller or lessor of those goods or services, (3) the statement or conduct at issue arose out of a commercial transaction involving the kind of goods or services the defendant provides, and (4) the intended audience of the statement or conduct were actual or potential customers of the defendant for the kind of goods or services the defendant provides.

Castleman, 546 S.W.3d at 688. The exemption is wholly unnecessary unless the TCPA

applies. Id.

In determining whether the TCPA applies, we first look to the plaintiff’s

allegations; when it is clear from the plaintiff’s pleadings that the action is covered by

the TCPA, the defendant need show no more. Hersh v. Tatum, 526 S.W.3d 462, 467

(Tex. 2017) (“The basis of a legal action is not determined by the defendant’s

admissions or denials but by the plaintiff’s allegations.”).

B. Appellees’ Live Pleadings

Appellees alleged that their suit was based on the misuse of public funds—

federal and state historic tax credits, municipal tax increment financing, and foreign

investment through the federally regulated EB-5 program—“by a private developer at

the behest and assistance of its lenders[,] . . . victimiz[ing] yet another redevelopment

project funded by public money,” and that this “is a case of corporate greed and self-

dealing on a high-profile, publicly-funded construction project in downtown Dallas.” 10 Appellees claimed that PNCIC had not been merely a passive investor but

rather had “assumed an oversight role” on the Project, had “insisted upon and

imposed an Operating Agreement [13] to govern and control the operations of the

[P]roject that required PNCIC’s approval before financial and operations decisions

occurred,” and had then “encouraged or allowed” the hiring of TriArc, TerraBridge,

and Tri-Tex—Moayedi-related companies—after FMG’s contract was wrongfully

terminated. Appellees asserted that PNCIC, in the course and scope of its role as an

investor member making decisions regarding financing, budget, capital, and

operations, had traveled to Dallas to meet with “Moayedi, Centurion, 1914 Commerce

GM, and others” and had “participated in numerous periodic meetings and

conference calls regarding the Project.”

Appellees alleged that PNCIC had pressured the Centurion Defendants to add

more partner equity to the Project’s capital stack to protect its investment after the

budget increase was sought, which had led to a “fraudulent capital call” and then to

the sale of the TIF and to PNCIC’s obtaining additional Federal Historic Tax Credits.

And they alleged that all leases had required PNCIC’s approval and that PNCIC had

insisted—after FMG’s wrongful termination—that the Centurion Defend ants enter

into a below-market, commercially unreasonable, and unprofitable commercial real

13 The agreement between PNCIC and the Master Tenant is the Amended and Restated Master Tenant Operating Agreement (MTOA), which Appellees attached to their live pleadings.

11 estate lease with The Dallas Morning News. Appellees also alleged that PNCIC had

owed them a duty to provide “the information, documents, books and records”

necessary to sell their interest in the Project to third parties.

As to Appellees’ claims against PNCIC for fraud, fraudulent inducement, and

fraud by nondisclosure, they alleged that PNCIC was liable to Fiamma Statler and

Zaccanelli because of “written representations of material fact in the [MTOA]” that

PNCIC then failed to perform, refused to perform, or never intended to perform.

They contended that the representations induced them to invest in the Project and

that PNCIC thus owed them a duty to oversee the Project’s expenditures and leases.

And they asserted that PNCIC had refrained from providing information to them and

that the failures to disclose had devalued their interests in the Project.

Appellees claimed that PNCIC had committed tortious interference with

contract because it had assisted in, participated in, encouraged, or promoted the

wrongful termination of FMG’s contract; that PNCIC had committed conspiracy “to

enact and further the fraudulent scheme to misuse EB-5 loan proceeds by over-

inflation of the [P]roject budget” and other acts involving the TIF funds and The

Dallas Morning News lease; and that because PNCIC had conspired, “the acts, words,

and deeds of each conspirator are the acts, words, and deeds of every Defendant.”

They also claimed that PNCIC was liable for aiding and abetting the fraud of others,

as well as others’ breaches of fiduciary duty, theft, and conversion, claiming that

12 PNCIC had “coerced, cajoled, encouraged, assisted, and/or helped” in accomplishing

these torts.

C. Analysis

Based on the allegations in Appellees’ live pleading, we hold that the TCPA

applies because PNCIC’s communications as alleged by Appellees14 involve a matter

of public concern beyond the pecuniary interests of private parties because the lawsuit

involves communications about a redevelopment project located in a TIF district and

partially funded by public money in the form of federal and state historic tax credits,

municipal tax increment financing, and foreign investment through the federal EB-5

visa program. See Creative Oil, 591 S.W.3d at 136–37; ExxonMobil Pipeline Co., 512

S.W.3d at 900. That is, at every level, the Project was undergirded by the public fisc—

and where the public’s purse goes, so goes the public’s concern. This Project, for

TCPA purposes, was more than a purely private commercial transaction in which the

public had no stake. Cf. Farhat v. Wilson Scott, LLC, No. 02-19-00438-CV, 2020 WL

1949624, at *6 (Tex. App.—Fort Worth Apr. 23, 2020, no pet.) (mem. op.) (affirming

denial of TCPA motion when alleged communications were related to purely private

business transactions); Anders v. Oates, No. 02-19-00116-CV, 2020 WL 1809654, at *7

14 Appellees argued at the hearing and on appeal that their pleadings alleged actions rather than “communications,” and they refer us to Smith v. Crestview NuV, LLC, 565 S.W.3d 793, 798 (Tex. App.—Fort Worth 2018, pet. denied) , in which we held that the TPCA did not apply because the plaintiff did not allege a “communication.” However, unlike the plaintiff in Smith, Appellees based their claims against PNCIC in part on its “written representations” in the MTOA.

13 (Tex. App.—Fort Worth Apr. 9, 2020, no pet.) (mem. op.) (affirming denial of TCPA

motion when alleged communications were unrelated to matters of political, social, or

other community concerns); Garrison Inv. Grp. LP v. Lloyd Jones Capital, LLC, No. 02-

19-00115-CV, 2019 WL 5996979, at *5 (Tex. App.—Fort Worth Nov. 14, 2019, no

pet.) (mem. op.) (affirming denial of TCPA motion when communications underlying

claims were not founded on character of facility’s HUD-insured mortgage).

We sustain this portion of PNCIC’s first issue and do not reach whether the

commercial speech exemption applies or whether Appellees met their burden to show

by clear and specific evidence a prima facie case of each essential element of every

claim they asserted against PNCIC because the trial court’s order denying PNCIC’s

motion and the record reflect that the trial court considered only the motion, the

response, the pleadings, and the arguments but not any of the parties’ evidence on

these matters. See Hersh, 526 S.W.3d at 467 (construing “shall consider the pleadings”

and “by a preponderance of the evidence” to hold that when it is clear from the

plaintiff’s pleadings that an action is covered by the TCPA, a defendant need show no

more); cf. Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890, 897 (Tex. 2018)

(noting that the court’s focus was on the pleadings for the first step of the TCPA

analysis before remanding case to the intermediate court to reach the second step of

the TCPA analysis). Accordingly, we remand this case for the trial court to c onsider

the parties’ TCPA evidence.

14 Before we reverse the trial court’s order, however, we will consider Appellees’

constitutional arguments.

Appellees argued in the trial court and argue on appeal that the “expansive

application of the TCPA violates [their] constitutional rights to trial by jury, access to

open courts, due process, due course of law, protection against vague statutes and

standards, and protection against unconstitutionally high standards.” PNCIC replies

that under established law, the TCPA is not unconstitutional and that “Appellees’ six

separate attempts to evade the TCPA by claiming it is unconstitutional merely

illustrate the complete lack of any facts to support their claims in this case.”

Most of Appellees’ complaints are grounded in due process and pertain to the

TCPA’s discovery limitations, its “clear and specific” evidence requirement, and its

expedited time frame. See Tenet Hosp. Ltd. v. Rivera, 445 S.W.3d 698, 703 (Tex. 2014)

(“In short, an open courts challenge is a due process complaint.”). But they also

complain that the statutory language is unconstitutionally vague because it “fails to

give ordinary parties fair notice of the conduct prohibited[] and is so indefinite that it

encourages arbitrary and discriminatory enforcement by the trial courts.”

To prevail on their “open courts” due process arguments, Appellees had to

raise a fact issue establishing that they did not have a reasonable opportunity to be

heard, see Stockton v. Offenbach, 336 S.W.3d 610, 618 (Tex. 2011); had to show that they

had a cognizable common law cause of action that was being statutorily restricted; and

had to show that the restriction was arbitrary and unreasonable when balanced against 15 the statute’s legislative purpose and basis. See Alpine Indus., Inc. v. Whitlock, 554 S.W.3d

174, 181 (Tex. App.—Fort Worth 2018), aff’d in part, rev’d in part sub nom. Shinogle v.

Whitlock, 596 S.W.3d 772 (Tex. 2020).

In In re Lipsky, the court stated that the TCPA’s purpose is to identify and

summarily dispose of lawsuits designed only to chill First Amendment rights, not to

dismiss meritorious lawsuits, and to accomplish its purpose, it “endorses a summary

process, requiring judicial review of the pleadings and limited evidence.” 460 S.W.3d

579, 589–90 (Tex. 2015) (orig. proceeding). Summary processes are not per se

unconstitutional. See Tex. Civ. Prac. & Rem. Code Ann. § 74.351 (requiring plaintiff

in healthcare liability suit to file expert report or face dismissal), § 128.053 (requiring

plaintiff in lawsuit against a sport shooting range to file expert report or face

dismissal), § 150.002 (requiring plaintiff in professional negligence suit to file

certificate of merit or face dismissal); Alpine Indus., Inc., 554 S.W.3d at 185 (“[T]he

chapter 128 expert report requirement, by itself, does not deprive the Whitlocks of a

jury trial or infringe on their right to equal protection or due process under the law.”);

Rosenthal v. Boyd, No. 03-11-00037-CV, 2013 WL 1876513, at *4 (Tex. App.—Austin

May 1, 2013, no pet.) (mem. op.) (noting that dismissal of healthcare liability claim or

professional negligence claim for failure to file report “means that the plaintiff has

failed to raise fact issues for a jury to decide, which in turn means the plaintiff has no

right to a jury trial”); see also Tex. R. Civ. P. 166a; Lattrell v. Chrysler Corp., 79 S.W.3d

141, 150 (Tex. App.—Texarkana 2002, pet. denied) (“When a party cannot show a 16 material fact issue, there is nothing to submit to a jury, and the grant of summary

judgment to the opposing party does not violate the constitutional right to a jury

trial.”). See generally Parklane Hosiery Co. v. Shore, 439 U.S. 322, 336, 99 S. Ct. 645, 654

(1979) (observing that directed verdict is not unconstitutional under the Seventh

Amendment).

While all discovery in a legal action is generally suspended upon the filing of a

TCPA motion to dismiss, the TCPA allows limited discovery, if properly requested

and upon a showing of good cause. See Tex. Civ. Prac. & Rem. Code Ann.

§§ 27.003(c), .006(b). That is, the provisions staying discovery are tempered by

provisions permitting discovery upon a showing of good cause and operate to “curtail

potentially costly discovery in a possibly meritless case, thus serving the TCPA’s goal

of keeping litigation from being used to chill the exercise of constitutional rights.”

Combined Law Enf’t Ass’n of Tex. v. Sheffield, No. 03-13-00105-CV, 2014 WL 411672, at

*10 (Tex. App.—Austin Jan. 31, 2014, pet. denied) (mem. op.); see Landry’s, Inc. v.

Animal Legal Def. Fund, 566 S.W.3d 41, 68 (Tex. App.—Houston [14th Dist.] 2018,

pet. denied) (“[T]he [TCPA] discovery limitation does not violate the open-courts

provision.”).

Here, Appellees made no showing in the trial court that the TCPA discovery

restrictions are arbitrary and unreasonable as applied to them. To the contrary, the

record reflects that the trial court granted their motion for discovery in response to

PNCIC’s TCPA motion, allowing Appellees to take a second deposition of Jacoby 17 and requiring PNCIC to produce the following documents in connection with her

deposition: (a) a copy of any amendments or supplements to the MTOA that had not

been previously produced and (b) communications in 2016 between PNCIC and the

Moayedi/Centurion Defendants, on which no representat ive or constituent of

Appellees was a recipient, regarding: (i) budget increases, and the reasons for such

budget increases, regarding the construction of the interior finish out of the Statler

Hotel Project in 2016; (ii) 1914 Commerce GM Inc.’s request to PNCIC and

application for additional federal historic tax credits regarding interior finish out of

the Statler Hotel Project in 2016; and (iii) whether the sale of the TIF in August 2016

should occur.

The supreme court has addressed the argument that the TCPA imposes a

higher standard of proof than that required at trial by noting that although the TCPA

initially demands more information about an underlying claim than mere notice-

pleading, it “does not impose an elevated evidentiary standard or cat egorically reject

circumstantial evidence. In short, it does not impose a higher burden of proof than

that required of the plaintiff at trial.” Lipsky, 460 S.W.3d at 591; see also Sheffield, 2014

WL 411672, at *10 (pointing out that a prima facie case “represents the minimum

quantity of evidence necessary to support a rational inference that the allegation of

fact is true” and that the TCPA’s “clear and specific” prima facie standard thus does

not increase the burden of proof or cause it to exceed a prepo nderance of the

evidence). 18 And although Appellees claim that the TCPA’s language is unconstitutionally

vague for failing to give fair notice of prohibited conduct, by its plain language, the

TCPA does not prohibit any conduct. See generally Tex. Civ. Prac. & Rem. Code Ann.

§ 27.003(a) (providing for statutory protection of a party’s exercise of the right of free

speech, right to petition, or right of association); Sheffield, 2014 WL 411672, at *12.

Thus, we conclude that Appellees’ constitutional arguments did not require the trial

court to deny PNCIC’s motion to dismiss.

IV. Conclusion

Having sustained part of PNCIC’s first issue, we reverse the trial court’s order

and remand the case to the trial court to consider the applicability of the TCPA’s

commercial speech exemption and, if the commercial speech exemption does not

apply, whether Appellees produced “clear and specific evidence” to support a prima

facie case for each claim asserted against PNCIC.

/s/ Bonnie Sudderth Bonnie Sudderth Chief Justice

Delivered: September 3, 2020