Sw. Airlines Co. v. Roundpipe, LLC
This text of 375 F. Supp. 3d 687 (Sw. Airlines Co. v. Roundpipe, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
A. JOE FISH, Senior United States District Judge
Before the court is the motion of the defendants Roundpipe, LLC ("Roundpipe"), Chase Roberts ("Roberts"), and Pavel Yurevich ("Yurevich") (collectively, "the defendants") to dismiss counts one and six of the plaintiff Southwest Airline Company ("Southwest")'s complaint pursuant to the Texas Citizens Participation Act ("TCPA") and to dismiss the entirety of Southwest's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Motion to Dismiss (docket entry 23). Also before the court is Southwest's request to dismiss the portions of the defendants' motion to dismiss brought under the TCPA. See Request to Dismiss Defendants' TCPA Ground and Request for Attorney's Fees ("Request to Dismiss") (docket entry 29). In this motion, Southwest also requests that the court grant Southwest the court costs and reasonable attorneys' fees it incurred as a result of having to defend against the defendants' TCPA motion to dismiss. See id. For the reasons stated below, the defendants' motion to dismiss is denied and Southwest's request to dismiss and motion for attorneys' fees is also denied.
I. BACKGROUND
A. Factual Background
As noted above, the plaintiff in this suit is Southwest, a Texas corporation with its *690principal place of business in Dallas, Texas. Complaint (docket entry 1) at 2. Southwest offers and sells its goods and services under and in conjunction with a number of registered trademarks and service marks, including the following: (1) SOUTHWEST AIRLINES®, registration number 1,738,670; (2) SOUTHWEST®, registration number 3,129,737; (3) SOUTHWEST CARGO®, registration number 4,670,508; (4) SWA®, registration number 2,313,710; (5) SOUTHWEST AIRLINES CARGO®, registration number 4,024,786; (6) SWABIZ®, registration number 3,011,430; (7) SWABIZ MEETINGS®, registration number 4,537,010; (8) SWACARGO.COM®, registration number 4,033,508; (9) SOUTHWEST.COM®, registration number 2,623,807; (10) SOUTHWEST VACATIONS®, registration number 4,331,036; (11) the Southwest plane mark, a visual mark consisting of a profile of an airplane that is colored blue on the front and middle body of the plane, as well as the engines of the plane, with color bands of silver, yellow, silver, red, silver, and blue at the rear of the plane, and the colors yellow and red on the vertical ends of the main wings of the airplane, registration number 4,770,643; (12) the Southwest heart mark, a visual mark consisting of a stylized silver heart with blue, red, and yellow bands running diagonally starting from the top left, registration number 4,720,322; and (13) the Southwest word and heart mark, consisting of the word "SOUTHWEST" in blue, positioned to the left of a stylized heart with blue, red, and yellow bands running diagonally starting from the top right, registration number 5,149,729. Id. at 5-6; Additional Attachments to Complaint (docket entry 2), Exhibit A-Exhibit M.
Southwest also maintains a privately-owned computer system, which includes Southwest's website, www.southwest.com, as well as other supporting services. Complaint at 8. Although Southwest makes its websites available to consumers, consumers must agree to the terms and conditions of Southwest's use agreement, which makes clear to consumers that the systems and data displayed on Southwest's websites are proprietary and owned by Southwest. Id. This use agreement is referenced by an interactive link on each page of Southwest's websites, including the pages shown to Southwest customers as they search, select, and purchase flights online. Id. at 9. Additionally, Southwest's use agreement does not permit page-scraping or the use of other automated tools designed to access or monitor Southwest's website, its content, or its underlying fare databases. Id. ; Additional Attachments to Complaint, Exhibit O. In fact, under the section of the use agreement entitled "Restrictions and Prohibited Activities," the agreement states in pertinent part that a customer will not:
(ii) use the Service or Company Information for any commercial purpose, with the exception of authorized Southwest travel agents/agencies;
* * *
(v) harvest any information from the Service;
* * *
(viii) interfere with the proper operation of or any security measure used by the Service;
* * *
(xiv) use any deep-link, page-scrape, robot, crawl, index, spider, click spam, macro programs, Internet agent, or other automatic device, program, algorithm or methodology which does the same things, to use, access, copy, acquire information, generate impressions or clicks, input information, store information, search, generate searches, or monitor *691any portion of the Service or Company information;
(xv) use the Service in any way which depletes web infrastructural resources, slows the transferring or loading of any web page, or interferes with the normal operation of the Sites;
* * *
(xvii) disguise the origin of information transmitted to, from, or through the Service;
(xviii) circumvent any measures implemented by Southwest aimed at preventing violations of the Terms. You may not violate the restrictions in any robot exclusion header; or
(xix) otherwise violate these Terms or any Applicable Additional Terms.
Complaint at 10; Additional Attachments to Complaint, Exhibit O.
The defendants in this case are Roundpipe, Yurevich, and Roberts. Roundpipe is a Utah limited liability company with its principal place of business in Salt Lake City, Utah, whose sole member is Roberts. Complaint at 2. Roberts is a resident of Utah, as well as the programmer who helped design the website at issue in this case, www.SWMonkey.com. Id. ; Memorandum in Support of Defendants' Motion to Dismiss (docket entry 24) at 1. Yurevich is a resident of Washington as well as the person who thought of the idea for www.SWMonkey.com. Complaint at 2; Memorandum in Support of Defendants' Motion to Dismiss at 1. None of the defendants in this case has any rights or ownership interest in Southwest's trademarks, nor are they authorized to use them. Complaint at 7.
This dispute revolves around the website www.SWMonkey.com, created by Yurevich and Roberts and launched through Roundpipe in early November 2017. Memorandum in Support of Defendants' Motion to Dismiss at 1. As noted above, the idea for the website was originally conceived by Yurevich, who knew that Southwest had a policy allowing customers to change their tickets without paying a fee. Id. Yurevich recognized that Southwest's no-fee policy essentially meant that if a customer's ticket was reduced in price after the customer's purchase, the customer could use this policy and exchange his original ticket for the lower-priced ticket, thereby saving the difference in fare. Id. Yurevich also recognized, however, that to take advantage of this policy consumers would have to constantly monitor Southwest's website to determine if their ticket price had dropped. Id.
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A. JOE FISH, Senior United States District Judge
Before the court is the motion of the defendants Roundpipe, LLC ("Roundpipe"), Chase Roberts ("Roberts"), and Pavel Yurevich ("Yurevich") (collectively, "the defendants") to dismiss counts one and six of the plaintiff Southwest Airline Company ("Southwest")'s complaint pursuant to the Texas Citizens Participation Act ("TCPA") and to dismiss the entirety of Southwest's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Motion to Dismiss (docket entry 23). Also before the court is Southwest's request to dismiss the portions of the defendants' motion to dismiss brought under the TCPA. See Request to Dismiss Defendants' TCPA Ground and Request for Attorney's Fees ("Request to Dismiss") (docket entry 29). In this motion, Southwest also requests that the court grant Southwest the court costs and reasonable attorneys' fees it incurred as a result of having to defend against the defendants' TCPA motion to dismiss. See id. For the reasons stated below, the defendants' motion to dismiss is denied and Southwest's request to dismiss and motion for attorneys' fees is also denied.
I. BACKGROUND
A. Factual Background
As noted above, the plaintiff in this suit is Southwest, a Texas corporation with its *690principal place of business in Dallas, Texas. Complaint (docket entry 1) at 2. Southwest offers and sells its goods and services under and in conjunction with a number of registered trademarks and service marks, including the following: (1) SOUTHWEST AIRLINES®, registration number 1,738,670; (2) SOUTHWEST®, registration number 3,129,737; (3) SOUTHWEST CARGO®, registration number 4,670,508; (4) SWA®, registration number 2,313,710; (5) SOUTHWEST AIRLINES CARGO®, registration number 4,024,786; (6) SWABIZ®, registration number 3,011,430; (7) SWABIZ MEETINGS®, registration number 4,537,010; (8) SWACARGO.COM®, registration number 4,033,508; (9) SOUTHWEST.COM®, registration number 2,623,807; (10) SOUTHWEST VACATIONS®, registration number 4,331,036; (11) the Southwest plane mark, a visual mark consisting of a profile of an airplane that is colored blue on the front and middle body of the plane, as well as the engines of the plane, with color bands of silver, yellow, silver, red, silver, and blue at the rear of the plane, and the colors yellow and red on the vertical ends of the main wings of the airplane, registration number 4,770,643; (12) the Southwest heart mark, a visual mark consisting of a stylized silver heart with blue, red, and yellow bands running diagonally starting from the top left, registration number 4,720,322; and (13) the Southwest word and heart mark, consisting of the word "SOUTHWEST" in blue, positioned to the left of a stylized heart with blue, red, and yellow bands running diagonally starting from the top right, registration number 5,149,729. Id. at 5-6; Additional Attachments to Complaint (docket entry 2), Exhibit A-Exhibit M.
Southwest also maintains a privately-owned computer system, which includes Southwest's website, www.southwest.com, as well as other supporting services. Complaint at 8. Although Southwest makes its websites available to consumers, consumers must agree to the terms and conditions of Southwest's use agreement, which makes clear to consumers that the systems and data displayed on Southwest's websites are proprietary and owned by Southwest. Id. This use agreement is referenced by an interactive link on each page of Southwest's websites, including the pages shown to Southwest customers as they search, select, and purchase flights online. Id. at 9. Additionally, Southwest's use agreement does not permit page-scraping or the use of other automated tools designed to access or monitor Southwest's website, its content, or its underlying fare databases. Id. ; Additional Attachments to Complaint, Exhibit O. In fact, under the section of the use agreement entitled "Restrictions and Prohibited Activities," the agreement states in pertinent part that a customer will not:
(ii) use the Service or Company Information for any commercial purpose, with the exception of authorized Southwest travel agents/agencies;
* * *
(v) harvest any information from the Service;
* * *
(viii) interfere with the proper operation of or any security measure used by the Service;
* * *
(xiv) use any deep-link, page-scrape, robot, crawl, index, spider, click spam, macro programs, Internet agent, or other automatic device, program, algorithm or methodology which does the same things, to use, access, copy, acquire information, generate impressions or clicks, input information, store information, search, generate searches, or monitor *691any portion of the Service or Company information;
(xv) use the Service in any way which depletes web infrastructural resources, slows the transferring or loading of any web page, or interferes with the normal operation of the Sites;
* * *
(xvii) disguise the origin of information transmitted to, from, or through the Service;
(xviii) circumvent any measures implemented by Southwest aimed at preventing violations of the Terms. You may not violate the restrictions in any robot exclusion header; or
(xix) otherwise violate these Terms or any Applicable Additional Terms.
Complaint at 10; Additional Attachments to Complaint, Exhibit O.
The defendants in this case are Roundpipe, Yurevich, and Roberts. Roundpipe is a Utah limited liability company with its principal place of business in Salt Lake City, Utah, whose sole member is Roberts. Complaint at 2. Roberts is a resident of Utah, as well as the programmer who helped design the website at issue in this case, www.SWMonkey.com. Id. ; Memorandum in Support of Defendants' Motion to Dismiss (docket entry 24) at 1. Yurevich is a resident of Washington as well as the person who thought of the idea for www.SWMonkey.com. Complaint at 2; Memorandum in Support of Defendants' Motion to Dismiss at 1. None of the defendants in this case has any rights or ownership interest in Southwest's trademarks, nor are they authorized to use them. Complaint at 7.
This dispute revolves around the website www.SWMonkey.com, created by Yurevich and Roberts and launched through Roundpipe in early November 2017. Memorandum in Support of Defendants' Motion to Dismiss at 1. As noted above, the idea for the website was originally conceived by Yurevich, who knew that Southwest had a policy allowing customers to change their tickets without paying a fee. Id. Yurevich recognized that Southwest's no-fee policy essentially meant that if a customer's ticket was reduced in price after the customer's purchase, the customer could use this policy and exchange his original ticket for the lower-priced ticket, thereby saving the difference in fare. Id. Yurevich also recognized, however, that to take advantage of this policy consumers would have to constantly monitor Southwest's website to determine if their ticket price had dropped. Id. To get around this problem Yurevich conceived the idea of providing a price monitoring service in the form of a website which would provide consumers an alert when their ticket price dropped so that they would know when to exchange their tickets to reap savings. Id. Accordingly, Yurevich reached out to Roberts, a programmer who had experience building programs designed to pull data from websites, and the two developed www.SWMonkey.com and launched it in early November, 2017. Id. ; see also Additional Attachments to Complaint, Exhibit S (explaining that to make the website, Yurevich contacted Roberts, "who had experience building scrapers, or programs that pull data from websites.").
The original version of the SWMonkey website operated by scraping information about ticket fares off Southwest's website and using that information to alert customers who signed up through www.SWMonkey.com that their ticket prices had dropped. Complaint at 11; Additional Attachments to Complaint, Exhibit Q (travel blog post explaining that the defendants' website would monitor ticket prices on Southwest's website for customers; the owner of the travel blog informed the defendants that their scraping activities *692would undoubtedly be met with legal action from Southwest); Additional Attachments to Complaint, Exhibit S. The original www.SWMonkey.com website also required consumers pay a three-dollar charge to utilize the automatic price-checking service, provided the customer saved ten dollars or more through using the defendants' website. See Additional Attachments to Complaint, Exhibit R ("There is a $ 3 dollar charge for this service to check your flight price daily and text you if your [f]light decreases in price. You only pay, however, IF they are able to save you $ 10 or more."); Memorandum in Support of Defendants' Motion to Dismiss at 1 ("Roundpipe stood to make three dollars if it saved this customer at least ten dollars.").
Upon its launch, www.SWMonkey.com was met with initial success. On November 6, 2017, www.SWMonkey.com got its first customer. Memorandum in Support of Defendants' Motion to Dismiss at 1. On the same date, a travel blog posted about the defendants' website and promoted the services it offered. Additional Attachments to Complaint, Exhibit Q. Ultimately, about 40 people signed up to use www.SWMonkey.com during its launch. Additional Attachments to Complaint, Exhibit S (blog post explaining that "[a]bout 40 people signed up for the service, which convinced [Yurevich and Roberts] the business was viable."). The momentum generated by the initial success of the defendants' website was slowed, however, as Southwest began to send cease-and-desist letters to the defendants regarding the www.SWMonkey.com website.
First, on November 8, 2017, Southwest sent the defendants a cease-and-desist letter explaining that Southwest had become aware that the defendants' website was using Southwest's proprietary and trademarked names and logos in connection with the defendants' business. Complaint at 7; Memorandum in Support of Defendants' Motion to Dismiss at 1; Additional Attachments to Complaint, Exhibit N. In particular, this letter explained that it constituted a demand for the defendants to stop using, in any way, Southwest's intellectual property without Southwest's consent. Additional Attachments to Complaint, Exhibit N. Moreover, the letter warned that "should you fail to immediately [c]ease and [d]esist, Southwest will vigorously pursue all remedies and actions available, ... and Southwest will seek recoupment of all expenses associated with such actions, including attorneys' fees and costs." Id.
Two days later, on November 10, 2017, Southwest sent the defendants a second cease-and-desist letter. Complaint at 13; Memorandum in Support of Defendants' Motion to Dismiss at 1; Additional Attachments to Complaint, Exhibit T. Unlike the first letter, Southwest's second letter stated that Southwest had become aware that www.SWMonkey.com was violating the terms of Southwest's use agreement by offering third party services not approved by Southwest and by extracting or scraping Southwest's flight and fare information from its servers and websites. Additional Attachments to Complaint, Exhibit T. Accordingly, Southwest's second letter demanded that the defendants stop scraping Southwest's flight and fare information and cease publishing this information on www.SWMonkey.com or elsewhere. Id. This letter also warned that "Southwest may pursue formal legal action to recover damages for and to stop the unauthorized use of its website." Id.
Despite receiving these two letters, the defendants did not shut down their website. Complaint at 14. Southwest thus sent the defendants an additional cease-and-desist email on November 15, 2017. Id. ;
*693Memorandum in Support of Defendants' Motion to Dismiss at 2; Additional Attachments to Complaint, Exhibit U. In pertinent part, the November 15 email expressed that Southwest was "surprised and disappointed" that the defendants continued to maintain their website. Additional Attachments to Complaint, Exhibit U. Much like the previous letters, Southwest also stated in the November 15 letter that it would pursue litigation against the defendants if they failed to comply. Id.
The next day, on November 16, the defendants blogged about receiving Southwest's cease-and-desist letters and linked this blog post on www.SWMonkey.com. Complaint at 14; Memorandum in Support of Defendants' Motion to Dismiss at 2; Additional Attachments to Complaint, Exhibit V. In this post, the defendants catalogued their excitement over creating www.SWMonkey.com as well as their subsequent disappointment caused by receiving multiple cease-and-desist letters from Southwest. Additional Attachments to Complaint, Exhibit V. Additionally, the defendants asserted in this blog post that they did not believe they were using any of Southwest's intellectual property, since the only Southwest image on their website was a public domain image of a Southwest plane. Id. Furthermore, the defendants used this post to attack Southwest's claims that the defendants' automatic scraping of Southwest's website was illegal, arguing that the problem with Southwest's argument is "that they are making this information public. To restrict someone from accessing public information is a violation of our basic rights." Id. The defendants then concluded their post with a reaffirmation that the defendants would continue their website. Id.
Over the next few weeks, the defendants communicated with more travel blogs, prompting several articles to appear online discussing the dispute between Southwest and the defendants. Memorandum in Support of Defendants' Motion to Dismiss at 2; Declaration of Pavel Yurevich (docket entry 24-1) ¶ 6. During this time, counsel for the defendants and counsel for Southwest communicated with each other. Memorandum in Support of Defendants' Motion to Dismiss at 2. Specifically, on November 18, 2017 Southwest's counsel emailed counsel for the defendants, explaining his availability to discuss these issues and demanding that the issues be resolved before November 22, 2017. Id. ; Appendix in Support of Defendants' Motion to Dismiss (docket entry 24-1) at 8. Counsel for the defendants responded quickly, and the lawyers for both parties had a telephone conference on the morning of November 20, 2017. Memorandum in Support of Defendants' Motion to Dismiss at 2. Later that day, Southwest's counsel sent another email stating that Southwest took this issue very seriously and that Southwest would not make a goodwill payment to the defendants to shut down their website. Appendix in Support of Defendants' Motion to Dismiss at 16. In the same email, Southwest's counsel warned counsel for the defendants that "[y]our clients either need to shut down the website or prepare to answer our federal lawsuit." Id.
In response to this email, the defendants disabled their website's functionality on November 21, 2017, and sent an email to Southwest to confirm that they had done so. Memorandum in Support of Defendants' Motion to Dismiss at 3; Appendix in Support of Defendants' Motion to Dismiss at 19. Despite receiving this email, Southwest maintains that the defendants did not stop using their automatic scraping tool on Southwest's website until November 28, 2017. Complaint at 14; Additional Attachments to Complaint, Exhibit W. In any event, because of Southwest's cease-and-desist *694letters. the defendants removed all scraping functionality from their website, effectively ending the defendants' ability to track and monitor Southwest's ticket and fare prices for customers. Memorandum in Support of Defendants' Motion to Dismiss at 3.
Even though the defendants removed the scraping functionality from their website, however, the defendants kept www.SWMonkey.com online as a modified website, which the court will refer to as the disabled site. Complaint at 15; Memorandum in Support of Defendants' Motion to Dismiss at 3. On the disabled site, the defendants included a new "thank you" section, explaining why the website was no longer in operation. Memorandum in Support of Defendants' Motion to Dismiss at 3. Furthermore, the disabled site also included a "Frequently Asked Questions" section, which customers could use to find a link posted by the defendants to another website that contained an open source tool for checking Southwest's flight and fare information individually. Id.
After discovering that the defendants' website was not fully taken down, on November 21, 2017, Southwest sent the defendants an email demanding that the defendants take down their entire website, "including the recently revised FAQ." Memorandum in Support of Defendants' Motion to Dismiss at 3-4; Appendix in Support of Defendants' Motion to Dismiss at 32. The next day, on November 22, Southwest sent its final cease-and-desist letter. Memorandum in Support of Defendants' Motion to Dismiss at 3-4; Response to Defendants' Motion to Dismiss (docket entry 25) at 5; Appendix in Support of Response to Defendants' Motion to Dismiss (docket entry 26) at 111-113. By way of this final letter, Southwest not only reminded the defendants of their original violations, but also alleged the disabled site raised additional issues. Appendix in Support of Response to Defendants' Motion to Dismiss at 111-113. Moreover, Southwest stated that it would pursue formal legal action unless the defendants confirmed in writing each of the following: "(1) [t]heir written agreement to comply with Southwest's Terms [and] Conditions; (2) [t]heir agreement to cease operation of the [w]ebsite and removal of all related information from the internet; (3) [t]heir agreement to notify travel-related websites ... that the [w]ebsite will be removed from the internet for violations of Southwest's Terms and Conditions; (4) [t]heir agreement to cease using Southwest Airlines' trademarks in connection with the [w]ebsite or any related commercial ventures; and (5) [t]heir confirmation that any existing materials containing any of Southwest Airlines' trademarks have been deleted or destroyed[.]" Id. at 113. As a final demand, Southwest required the defendants to provide written confirmation related to all conditions on or before November 27, 2017. Id.
Counsel for the defendants responded to Southwest's final cease-and-desist letter on November 28, a day after the deadline imposed by Southwest. Memorandum in Support of Defendants' Motion to Dismiss at 4; Response to Defendants' Motion to Dismiss at 5; Appendix in Support of Defendants' Motion to Dismiss at 53-55. In this reply, counsel for the defendants explained that: (1) the defendants website had not, and does not, infringe upon Southwest's trademarks; (2) it is unclear how the disabled site can give rise to any causes of action; and (3) the defendants had considered this matter resolved. Id. Additionally, the response submitted by counsel for the defendants also rejected each of the demands Southwest made in its final letter. Id. at 54-55. After receiving this response, Southwest sent back an email once again expressing its disappointment *695and explaining that it planned to pursue litigation. Appendix in Support of Defendants' Motion to Dismiss at 57. The next day, on November 28, 2017, without any further communication with Southwest, the defendants filed a declaratory judgment action in the federal district court for the district of Utah. Response to Defendants' Motion to Dismiss at 1 n. 1, 5.
B. Procedural Background
After issuing multiple warnings that it would file suit, Southwest filed its complaint in this case on January 5, 2018. See Complaint. Months later, on March 6, 2018, the defendants filed their motion to dismiss. See Motion to Dismiss. Southwest filed its response to the defendants' Motion to Dismiss on March 27, 2018. See Response to Defendants' Motion to Dismiss. The defendants filed their reply on April 10, 2018. See Reply to Defendants' Motion to Dismiss ("Reply") (docket entry 27).
Two months later, on June 12, 2018, Southwest filed its request to dismiss the portions of the defendants' motion to dismiss brought under the TCPA as well as its request for attorneys' fees. See Request to Dismiss. The defendants filed their response to this motion on July 3, 2018. See Defendants' Response to Southwest's Request to Dismiss Defendants' TCPA Ground and Request for Attorneys Fees ("Response to Request to Dismiss") (docket entry 30). Southwest did not file a reply in support of its request to dismiss. Additionally, the defendants have not yet filed an answer to Southwest's complaint. Regardless, at this juncture both the defendants' motion to dismiss and Southwest's request to dismiss the defendants' TCPA grounds and request for attorneys' fees are ripe for decision.
II. ANALYSIS
In their motion to dismiss, the defendants urge two separate grounds of dismissal. See Memorandum in Support of Defendants' Motion to Dismiss. First, the defendants seek to dismiss claims one and six of Southwest's complaint pursuant to the TCPA, Texas's anti-SLAPP1 statute. Id. at 5-13. Second, the defendants seek to dismiss the entirety of Southwest's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Id. at 13-24. Finding these grounds of dismissal to be vastly different, the court will analyze each ground separately.
A. Legal Standard
1. TCPA Standard
The TCPA "protects citizens who petition or speak on matters of public concern from retaliatory lawsuits that seek to intimidate or silence them." In re Lipsky,
Generally, a motion to dismiss brought under the TCPA must be filed no later than sixty days after service of the legal action, except where the court has extended the filing deadline upon a showing of good cause.
Importantly, the TCPA also provides that a "court must rule on a motion [to dismiss] under Section 27.003 not later than the 30th day following the date of the hearing on the motion."
To make clear what each party must prove on a motion to dismiss brought under the TCPA, the TCPA establishes a burden-shifting regime. See
*6972. Rule 12(b)(6) Standard
"To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead 'enough facts to state a claim to relief that is plausible on its face.' " In re Katrina Canal Breaches Litigation ,
The Supreme Court has prescribed a "two-pronged approach" to determine whether a complaint fails to state a claim under Rule 12(b)(6). See Ashcroft v. Iqbal ,
B. Application
1. Applicability of the TCPA
The threshold question the court must address is whether Texas's anti-SLAPP law applies to Southwest's first and sixth claims.3 Because the court exercises *698both supplemental and diversity jurisdiction over these claims, see
"The Fifth Circuit has not decided whether the TCPA applies in federal court when a court exercises its diversity or supplemental jurisdiction over state-law claims." N.P.U., Inc. d/b/a NE Plus Ultra v. Wilson Audio Specialties, Inc. ,
Here, Southwest argues that the TCPA is procedural and thus inapplicable in federal court because it conflicts with the Federal Rules of Civil Procedure. Response *699to Defendants' Motion to Dismiss at 7, 14-15. In particular, Southwest contends that the TCPA's basis for dismissal directly conflicts with Federal Rules of Civil Procedure 12 and 56, since the TCPA establishes different procedures and evidentiary standards for pre-trial dismissal of certain suits that infringe upon speech rights protected by the constitution. Id. at 14-15. To support its argument, Southwest relies upon the court's analysis in Rudkin as well as Judge Grave's dissent in Cuba , which both determined that the TCPA was procedural and in conflict with Federal Rules of Civil Procedure 12 and 56. Id. at 7, 14-15 (citing Rudkin ,
The defendants, on the other hand, contend that the TCPA is substantive and thus should be applied in this case. Reply at 1-4. Although the defendants admit that the Fifth Circuit has not determined this issue, they urge the court to adopt the First Circuit's reasoning in Godin v. Schencks ,
After reviewing both parties' positions, and upon careful consideration of the opinions that have already considered this issue, the court concludes that the TCPA is procedural and thus joins those courts that do not apply the TCPA in federal court.
First, the court finds persuasive Judge Grave's dissent in Cuba . There, in evaluating whether the TCPA should apply in Federal Court, Judge Graves explained that:
Applying an Erie analysis, I conclude that the TCPA is procedural and must be ignored. The TCPA is codified in the Texas Civil Practice and Remedies Code, provides for a pre-trial motion to dismiss claims subject to its coverage, establishes time limits for consideration of such motions to dismiss, grants a right to appeal a denial of the motion, and authorizes the award of attorneys' fees if a claim is dismissed. This creates no substantive rule of Texas law; rather, the TCPA is clearly a procedural mechanism for speedy dismissal of a meritless lawsuit that infringes on certain constitutional protections.
Cuba ,
Second, the court is unpersuaded by the defendants' reliance on Godin . There, the First Circuit evaluated Maine's anti-SLAPP statute and concluded that it was substantive because neither Rule 12 nor Rule 56 of the Federal Rules of Civil Procedure were broad enough to cover the same ground as Maine's anti-SLAPP statute. Godin ,
Here, however, the court is not concerned with Maine's anti-SLAPP statute, nor does the court find that the TCPA is identical to the statute at issue in Godin . While the two anti-SLAPP statutes share similar features, the court concludes that Texas's anti-SLAPP statute contains certain elements that place it in direct conflict with Federal Rules of Civil Procedure 12(b)(6) and 56. For instance, the TCPA provides that to survive a TCPA motion to dismiss, a plaintiff must provide "clear and specific" evidence of a prima facie case. Texas Civil Practices & Remedies Code § 27.005. "This mandate requires evidence that is 'unambiguous, sure, or free from doubt,' 'explicit or relating to a particular named thing,' and that 'support[s] a rational interference that the allegation of fact is true.' " Cuba ,
This obviously conflicts with Rule 12. To overcome a Rule 12(b)(6) motion to dismiss, a plaintiff must allege facts sufficient to state a claim that is plausible on its face. Lexington Insurance Co. v. S.H.R.M. Catering Services, Inc. ,567 F.3d 182 , 184 (5th Cir. 2009). "[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable , and that a recovery is very remote and unlikely. " Leal v. McHugh ,731 F.3d 405 , 413 (5th Cir. 2013) (quoting Bell Atlantic Corp. v. Twombly ,550 U.S. 544 , 556,127 S.Ct. 1955 ,167 L.Ed.2d 929 (2007) ) (emphasis added). This is a clear conflict with the TCPA's requirement that the evidence be "unambiguous, sure, or free from doubt."
Cuba ,
More importantly, however, the court has a fundamental disagreement with the Godin court's conclusion that the anti-SLAPP act in question did not cover the same ground as Rules 12(b)(6) and 56. In the court's view, both the anti-SLAPP statute at issue in Godin and the TCPA cover the same ground as Rules 12(b)(6) and 56, because Rules 12(b)(6) and 56 answer the same questions as the anti-SLAPP statutes about the circumstances in which a court must dismiss a case before trial. Abbas ,
Third, the court is not convinced by the defendants' argument that it should apply the TCPA because other district courts within the Fifth Circuit have previously done so. A thorough review of the cases cited by the defendants reveals that a common thread ties them together. That is, the decisions cited by the defendants either applied the TCPA without discussing its applicability in federal court or applied the TCPA based on the Fifth Circuit's decision in Henry v. Lake Charles American Press, L.L.C. ,
Finally, even if the TCPA were substantive and thus applicable in federal *702court, the court agrees with Southwest that the defendants' failure to obtain a hearing on this issue within the statutory 90-day time period would mandate dismissal. As mentioned earlier, "[a]bsent a trial court's extension of the hearing date to allow discovery, the plain language of section 27.004 [of the TCPA] requires a hearing on a motion to dismiss to occur within ninety days." Grubbs v. ATW Investments, Inc. ,
First, the defendants maintain that their failure to schedule a hearing does not warrant denial because the Fifth Circuit's opinion in Cuba establishes that the failure to set a hearing under the TCPA cannot result in the motion having been denied by operation of law. Id. at 1-2. In Cuba , the Fifth Circuit explained that where no hearing was set, a TCPA motion could not be denied by operation of law because the only statutory basis for a deemed denial is explicitly based on the clock's running after a hearing. Cuba ,
Southwest raises two arguments against the defendants' reliance on Cuba , both of which the court finds persuasive. Request to Dismiss at 5-6. First, Southwest explains that the Fifth Circuit's decision in Cuba is unrelated to both the instant action and the San Antonio Court of Appeals' decision in Grubbs . The court agrees with Southwest. In Grubbs , the issue was not whether the movant's failure to set a hearing within the time-period resulted in the motion being denied by operation of law. Grubbs ,
Second, Southwest argues that because the Fifth Circuit's Cuba decision predates the San Antonio Court of Appeals' decision in Grubbs , that Fifth Circuit precedent regarding Erie guesses would require the court to apply Grubbs and deny the defendants' TCPA motion as untimely. Request to Dismiss at 5-6. This court agrees. As pointed out by Southwest, in the absence of an opinion from the state's highest court, the Fifth Circuit has held that federal courts must make an Erie guess, in which the courts defer to *703intermediate state appellate court decisions, unless convinced that the state's highest court would decide otherwise. Id. at 6 (quoting Chaney v. Dreyfus Service Corp. ,
Next, the defendants contend that Grubbs is inapplicable because it dealt with "state-court rules governing the scheduling of hearings, and state procedural rules have no application in federal court." Response to Request to Dismiss at 2. Instead, the defendants insist that Local Rule 7.1(g) controls whether a hearing is required.
Lastly, the defendants contend that they were not required to schedule a hearing, because the TCPA does not specify that the movant must schedule the hearing.
Ultimately, for the reasons stated above, the court finds that the TCPA provides no basis for dismissing Southwest's state law claims. Accordingly, the defendants' motion to dismiss Southwest's first and sixth claims under the TCPA is denied. Furthermore, by denying the defendants' motion to dismiss under the TCPA, the court has mooted Southwest's request to dismiss the defendants' TCPA grounds. Therefore, the court denies as moot Southwest's request to dismiss and motion for attorneys' fees.5
2. Application of Rule 12(b)(6)
Now that the court has dealt with the defendants' TCPA arguments, the court must consider the merits of the remaining sections of the defendants' motion to dismiss. In these sections, the defendants contend that Southwest's entire complaint fails to state a claim upon which relief may be granted and thus should be dismissed under Federal Rule of Civil Procedure 12(b)(6). Memorandum in Support of Defendants' Motion to Dismiss at 13-24. Interestingly, the defendants neither discuss nor provide any analysis as to why Southwest's complaint fails to satisfy the pleading standards set forth in Twombly .
As previously noted, the defendants' main argument as to why Southwest's complaint fails under Rule 12(b)(6) has little to do with any alleged deficiencies in Southwest's complaint. Id. at 13-20. Rather, this argument is in all actuality the defendants' attempt to raise the affirmative defense of contractual estoppel.6 Id. ; Reply at 5-9 (acknowledging that contractual estoppel is raised by the defendants as an affirmative defense). The crux of the defendants' contractual estoppel argument is that the defendants' compliance with Southwest's cease-and-desist letters created a unilateral contract that bound Southwest not to sue the defendants. Memorandum in Support of Defendants' Motion to Dismiss at 13-19. Specifically, the defendants allege that Southwest's repeated cease-and-desist letters constituted offers for the defendants to enter into a unilateral contract with Southwest, since these letters promised the defendants a benefit if they performed. Id. at 14-17 (citing Westinde v. JPMorgan Chase Bank, N.A. , No. 3:13-CV-3576-O,
Southwest, in its response brief, points out multiple problems with the defendants' 12(b)(6) motion to dismiss. Response to Defendants' Motion to Dismiss at 8-14. To start, Southwest explains that *705its complaint readily satisfies the Twombly standard, as well as the pleading standard set forth in Federal Rule of Civil Procedure 8. Id. at 8-10. Next, Southwest correctly urges that the defendants failed to challenge the sufficiency of Southwest's pleadings. Id. at 9. Additionally, Southwest raises three arguments as to why the defendants' contractual estoppel argument fails to support a motion to dismiss. Id. at 10-14. First, Southwest maintains that an affirmative defense is an improper ground upon which to base a Rule 12(b)(6) motion. Id. Specifically, Southwest contends that precedent makes clear that a Rule 12(b)(6) motion requires the court to only look at the pleadings, not affirmative defenses or allegations outside the pleadings. Id. at 11 (citing Spivey v. Robertson ,
In their reply brief, the defendants admit that their contractual estoppel argument is an affirmative defense that relies on matters outside the pleadings. Reply at 6. The defendants argue, however, that the court should apply Rule 12(d) and consider the matters outside the pleadings, thereby converting the defendants' Rule 12(b)(6) motion into a motion for summary judgment under Rule 56. Id. ; see also Federal Rule of Civil Procedure 12(d) ("If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56."). The defendants respond to a number of Southwest's arguments in their reply, too. Reply to Motion to Dismiss at 7-9. First, the defendants respond to Southwest's argument that no contract was created because the defendants did not shut down their website by arguing that the literal reading of Southwest's letters, which demanded the entire website be shutdown, is not the reasonable interpretation of these letters. Id. at 7. Rather, the defendants maintain that "[t]he only reasonable interpretation of Southwest's demand letters was that Southwest was looking for Roundpipe to do two things: not infringe its trademarks and not scrape data from its website." Id. Second, the defendants respond to Southwest's contention that its cease-and-desist letters were not offers by arguing that "the only reasonable interpretation of the many-emails from Southwest's lawyer was that the only way to avoid being sued was to comply with his demands." Id. at 8. Finally, in response to Southwest's argument that the defendants request for a nominal payment was a counter-offer, the defendants maintain that their request for payment is not a counter-offer, and that even if it was, Southwest rejected it and re-tendered its original offer. Id. at 8-9.
After reviewing the parties' arguments, or lack thereof, the court concludes that the defendants' motion to dismiss Southwest's complaint under Rule 12(b)(6) should be denied.
*706When Southwest's factual allegations are taken as true and viewed in the light most favorable to Southwest-as the court is required to do-it is clear that Southwest's complaint states plausible claims for breach of contract, for violations of both the Computer Fraud and Abuse Act ("CFAA") and section 33.02 of the Texas Penal Code ("THACA"), and for unfair competition, trademark infringement, and dilution under the Lanham Act. Specifically, the court concludes that Southwest's complaint states a plausible claim for breach of contract because Southwest's complaint not only identifies the existence of a valid contract (Southwest's use agreement) but it also explains how the defendants' use of automated scraping tools breached the contract and caused damage to Southwest. See, e.g., Sullivan v. Bank of America, N.A. , No. 3:14-CV-3186,
Moreover, the defendants have failed to provide the court with any arguments as to how Southwest's pleading are deficient. See generally Memorandum in Support of Defendants' Motion to Dismiss; Reply. Without any argument as to how Southwest's complaint is flawed or how it fails to state any plausible claim upon which relief can be granted, the court is convinced, for the reasons articulated above, that Southwest's complaint succeeds in stating multiple plausible claims.
Most importantly, however, the court declines the defendants' invitation to consider their contractual estoppel affirmative defense and non-pleading materials. The defendants are correct that if the court, in evaluating the defendants' Rule 12(b)(6) motion, were to consider matters outside of the pleadings, such as the defendants' contractual estoppel argument, Rule 12(d) would require the court to treat their motion to dismiss as a motion for summary judgment. See Federal Rule of Civil Procedure 12(d). Nevertheless, a district court has "complete discretion to determine whether or not to accept any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion." Isquith for and on Behalf of Isquith v. Middle South Utilities, Inc. ,
III. CONCLUSION
For the reasons outlined above, the court DENIES the defendants' motion to dismiss. Additionally, because the court denies the defendants' motion, the court DENIES Southwest's request to dismiss and motion for attorneys' fees as moot.
SO ORDERED.
Related
Cite This Page — Counsel Stack
375 F. Supp. 3d 687, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sw-airlines-co-v-roundpipe-llc-txnd-2019.