by Paul Alan Levy
I blogged back in February about a small-claims act proceeding that a Dallas pet-sitting company called “Prestigious Pets” had filed against a couple named Michelle and Robert Duchouquette over the fact that Michelle Duchouquette had posted a Yelp review presenting some fairly mild criticisms of the company’s policies. The company claimed that the review was both defamatory and a violation of the non-disparagement clause (interestingly, in an email to a TV reporter, the company’s spokesman blamed “assistance from [unnamed] professionals” for the fact that this clause is in its service agreement). The couple had found counsel to file a motion to dismiss under the state’s anti-SLAPP statute, and first the local media, and then some national outlets, reported on the story because it relates to the controversy about whether companies should be able to use non-disparagement clauses to quash honest online criticism and hence skew the data available to consumers in choosing the companies with which they do business. It seemed likely at the time that, wholly apart from whether a non-disparagement clause could be sustained, the defendants would prevail on their anti-SLAPP motion because, as their anti-SLAPP motion explained, only Robert Duchouquette had signed the contract but only Michelle Duchouquette had posted the review, and the review, in turn, was pretty milquetoast and unlikely to be found defamatory.
Soon thereafter, the case took another turn: Prestigious Pets itself retained counsel (presumably, to respond to the anti-SLAPP motion), but instead of just arguing the merits of the lawsuit, it raised the ante by dismissing its small claims proceeding ten days before the scheduled anti-SLAPP hearing and refiling the suit as a claim for up to a million dollars in damages in addition to attorney fees. (The Texas Justice Court then declined to hold a hearing on the anti-SLAPP motion, apparently concluding that the motion had been mooted out by the voluntary dismissal).
The company claims that the relief in its new lawsuit is justified because its business dried up in the face of the publicity about its lawsuit, and it brought new claims against Robert Duchouquette because he had appeared in media interviews where he objected to having been sued in the first place. But at this point, the Duchouquettes were not only defendants in a lawsuit for a potentially bankrupting amount of damages, but they had to consider the significant up-front expense of having to pay their lawyers for the hourly expense of defending themselves against a SLAPP suit – the small claims suit alone had subjected them to a ten thousand dollar legal bill.
The Specifics of the New Lawsuit
The small-claims action claim form was maddeningly vague about what the defamation had been, and the anti-SLAPP motion filed in response to that claim had to shoot in the dark about just what statements in the review had to be defended. There had been a demand letter from the company that raised a number of issues. The new lawsuit, however, specifies one statement from the review in particular: that the company’s assigned pet-sitter had potentially caused serious harm to the couple’s fish by putting too much food in a fish-bowl while the couple were away on vacation for a few days. The complaint alleges that a charge of overfeeding a fish is libel per se because it amounts to the criminal offense of animal cruelty under Texas law (if giving too much food to a pet fish were really a crime, I expect there would be thousands of Texas second-graders facing jail time every year!) As our filing in the case indicates, though, there are photos showing that the fish water became cloudy and that food accumulated at the bottom of the tank, which must have been caused by overfeeding, and apparently overfeeding is a serious issue for this kind of tropical fish. The suit also charges Robert Duchouquette with breach of the non-disparagement clause, not because of Michelle Duchouquette’s original Yelp review, but because of what he said in self-defense after he had been sued.
When a consumer posts non-commercial criticism of a business, from which the author has derived no financial benefit, is faced with defense against litigation over that speech, the might have to lay out tens of thousands of dollars just to avoid having to retract fair criticism not to speak of issuing a groveling apology. No financial benefit from the speech, great financial expense from standing up for the speaker's First Amendment right (and the ability of other consumers to get useful information) — in financial terms, this is a losing proposition for the speaker! Anti-SLAPP laws provide some comfort about getting the legal fees back, but many ordinary people can’t even afford to finance litigation to the point of getting repaid through a fee award. And Texas’ anti-SLAPP law is not yet well-enough ingrained in lawyers’ consciousness, nor the standards well-enough developed, that private practitioners will regularly provide contingent fee defense with confidence in receiving a fee award as, for example, commonly happens in California or, indeed, as many lawyers will do for plaintiffs in civil rights cases, or consumer cases brought under statutes that provide for mandatory awards of attorney fees.
New Anti-SLAPP Motion from New Counsel
Consequently, we decided that simply offering advice to the Duchouquettes’ lawyers about their defense of the litigation was an insufficient contribution to their protection; given the importance of the non-disparagement clause issue, we have entered the case as lead counsel for the Duchouquettes. Last month, we filed an appeal from the refusal to consider the anti-SLAPP motion filed in Justice Court which, under Texas law, is tantamount to an appealable denial of the motion. In that appeal, we hope to get the Duchouquettes’ outlay to their private counsel reimbursed. And today, we filed a renewed anti–SLAPP motion over the newly filed lawsuit. We argue both that the libel claim is unjustified and that the non-disparagement clause is unconscionable under Texas law as overly one-sided and, therefore, is not an enforceable waiver of the Duchouquettes’ First Amendment right to make fair comments about the plaintiff company. We have some counterclaims awaiting under the Texas Deceptive Practices Act but we hope the case will be resolved on a motion to dismiss, avoiding the need to bring such claims.
In several previous cases in which we have represented consumers against companies employing non-disparagement clauses to suppress criticisms, the companies have run abroad and accepted the entry of default judgments which they then defied rather than litigate the legitimacy of their contracts. Prestigious Pets, however, is an on-going Dallas business that cannot simply pull up stakes the way Stacy Makhnevich or Kleargear did. This case, consequently, bears watching because until Congress passes the Consumer Review Freedom Act, it could be our best chance to get one of these clauses declared unenforceable.
We are grateful that three lawyers from the Dallas-based firm of Thompson and Knight (Nicole Williams, Andrew Cookingham and Chris Dachniwsky) have agreed to join us in providing pro bono representation to the Duchouquettes.
These anti-disparagement clause cases are fascinating. Thank you for your important work in this area.
I hope it won’t be necessary, but also consider how Prestigious Pet’s arguments about the scope of the contract might plead them right out of court. They alleged in paragraph 2 that the agreement is “regarding the care of the two dogs,” and that “the Agreement did not mention fish care.” Accordingly, I don’t see how the anti-disparagement clause could reach extra-contractual services.