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Lawsuit marks new territory for TCPA

On Behalf of | Jun 25, 2019 | Business Torts

British chemical company Venator Materials PLC (Venator) moved to dismiss a series of federal securities class action claims pursuant to the Texas Citizens Participation Act (TCPA). Investors allege Venator misled investors about the impact of a fire at one of its plants in Finland. In response, Venator argues that its statements were made according to its right to free speech on matters of public concern.

By doing so, Venator explores previously unexplored territory under the TCPA.

Understanding the TCPA

Also known as the state’s “anti-SLAPP”1 statute, the Texas Citizens Participation Act gives individuals and organizations facing a retaliatory lawsuit based on their exercise of First Amendment rights a method of quickly resolving the case.

A party may move to dismiss a lawsuit that “is based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association….”2 In general, a hearing on the motion must be set within 60 days of service, and a ruling handed down within 30 days after the hearing.3

The TCPA requires a two-step inquiry. First, “a court shall dismiss a legal action against the moving party if the moving party shows by a preponderance of the evidence that the legal action is based on, relates to, or is in response to the party’s exercise of (1) the right of free speech, (2) the right to petition, or (3) the right of association.”4

If the movant demonstrates that the non-movant’s claims implicate one or more of the protected rights, the burden shifts to the non-movant “to establish ‘by clear and specific evidence a prima facie case for each essential element of the claim in question.'”5

Venator’s unprecedented use of the TCPA

In its motion, Venator argues that the TCPA applies in this case because the company made what it believed to be “true and complete” statements on matters of public concern – the fire, the company’s IPO, and its goods on the market.

What sets the case at hand apart from other anti-SLAPP cases is the fact that Venator is using the TCPA to ask for dismissal of a class-action shareholder lawsuit. Until now, no corporate defendant has moved to dismiss a securities offering case pursuant to the TCPA.

1 SLAPP is an acronym for Strategic Lawsuits Against Participation, a term given to civil claims that attempt to curb a person or organization’s ability to speak, associate or petition freely.

2 Texas Citizens Participation Act § 27.003(a).

3 Texas Citizens Participation Act §27.004 and 27.005.

4 Tex. Civ. Prac. & Rem. Code § 27.005(b)

5 Tex. Civ. Prac. & Rem. Code § 27.005(c)


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