by Paul Alan Levy
Prestigious Pets, the Dallas-area pet-sitting company that faced a blizzard of public criticism after it invoked a non-disparagement clause as a basis for suing a husband and wife in small claims court after the wife posted over a mildly critical Yelp review of the company’s procedures and the resulting overfeeding a pet fish, has suffered another court reversal. The Dallas Court of Appeals has held that the defendants, Robert and Michelle Duchouquette, are entitled to consideration of their request for financial remedies for the baseless suit that was filed over their speech. The new proceeding will consider both the attorney work in the original proceedings in small claims court, plus the subsequent appellate work stemming from those proceedings.
The company had persuaded Dallas trial judges at two levels of the state court system that dismissal of the small claims action (followed by refiling of the lawsuit in Texas District Court, seeking up to a million dollars in damages) was sufficient to deprive the small claims court of any jurisdiction over the motion that the couple had filed in small claims seeking both dismissal and an award for attorney fees and sanctions pursuant to the Texas Citizens Participation Act. The Texas Justice Court closed its file on the case after the voluntary dismissal, thus implicitly denying the anti-SLAPP motion, and the Dallas County Court at Law refused hear the Duchouquettes' request for de novo reconsideration of the denial of that motion, claiming lack of jurisdiction. But the Dallas Court of Appeals held that, so long as there was some jurisdictional basis for the original small claims, the small claims court had jurisdiction over anti-SLAPP motion, and that jurisdiction could not be defeated by dropping the lawsuit itself
Texas law does not allow libel claims to be brought in small claims courts, but Prestigious Pets’ suit for breach of contract based on the non-disparagement clause was properly within the small claims court’s jurisdiction. Therefore, the TCPA motion was also properly before the small claims court, and hence the county court rejection of the motion was improper.
Prestigious Pets has already paid several thousand dollars in deterrent sanctions for having pursued its defamation and breach of contract claims in Texas district court. The decision dismissing that lawsuit representing the first time a court had passed judgment on the validity of a non-disparagement clause in a form consumer contract, presaging the passage of the Consumer Review Fairness Act a few months later. In that matter, claims for fees were denied on the ground that TCPA fees cannot be awarded for time spent by attorneys working pro bono. The TCPA motion that has now been revived represents an effort to recoup the ten thousand dollars in attorney fees that the Duchouquettes had to pay out of pocket for representation in the small claims court. However, because Public Citizen attorneys, as well as local counsel from Thompson and Knight, were providing pro bono services in getting the County Court ruling overturned, the interpretation of the TCPA as forbidding fee awards for pro bono work is likely to arise in the new proceeding, as well.