A Texas law firm's SLAPP appeal has been denied by the Fifth Circuit, which found that the firm's ads were not protected under Texas' anti-SLAPP laws.
Anti-SLAPP jurisprudence is still evolving, and this was a new issue for the Fifth Circuit: whether law firm ads disparaging a Texas dentist could escape liability under the Lanham Act through an anti-SLAPP motion.
Here's why this ruling left the Texas firm no longer smiling:
Kool Smiles Attack Ads
NCDR, L.L.C. v. Mauze & Bagby, P.L.L.C. was brought before the Fifth Circuit after the district court denied Mauze & Bagby's anti-SLAPP motion. M&B had filed a motion to dismiss under the Texas Citizen's Participation Act -- which serves as Texas' authority for anti-SLAPP motions.
The TCPA is intended to protect free speech from being chilled by SLAPPs, although it contains an exemption for commercial speech.
M&B was alleged to have violated several provisions of the Lanham Act by engaging in an ad campaign soliciting former patients from NCDR's business, Kool Smiles. The ads strongly implied or accused Kool Smiles of performing unnecessary and harmful dental work on kids for government kickbacks.
On interlocutory appeal, the Fifth Circuit needed to decide whether M&B's ads were protected under the TCPA. Kool Smiles forgot to argue that the TCPA wasn't even applicable in federal court, although other Circuits are dealing with that issue.
Speech Intended for Customers Is Commercial
Since the Fifth Circuit was in Erie territory by attempting to guess what the Texas Supreme Court might do, it had to be very careful in interpreting the TCPA. The court has done this before when interpreting notice requirements for the Texas version of RFRA (see the "Candy Cane Case") with curious results.
Since the Texas Supreme Court hadn't reached the issue yet, the Fifth Circuit looked to a California Supreme Court case, Simpson Strong-Tie v. Gore, which dealt with a very similar anti-SLAPP statute. The NCDR court found the California opinion to be somewhat persuasive, in that it focused on the intended audience of the speech.
Although the law firm in Simpson Strong-Tie was protected within the ambit of California's anti-SLAPP laws, the Fifth Circuit determined that Texas' commercial speech exemption was broader, focusing more on whether the speech was a sales pitch to "an actual or potential customer."
M&B couldn't use anti-SLAPP to escape litigation because they were using the ads to reach potential clients hoping to sue Kool Smiles -- or so the Fifth Circuit guesses the Texas Supreme Court might say.
- Getting the last laugh: Kool Smiles preserves its defamation case (Examiner.com)
- Trump University Anti-SLAPP Case Denied En Banc Rehearing (FindLaw's U.S. Ninth Circuit Blog)
- No Anti-SLAPP, Sherrod Defamation Suit Can Go On, Says 8th Cir. (FindLaw's D.C. Circuit Blog)
- Warner Brothers Retains Superman, Wins Anti-SLAPP Appeal (FindLaw's U.S. Ninth Circuit Blog)