Cheniere Energy, Inc., Charif Souki, Individually, and Greg Rayford, Individually v. Azin Lotfi

Opinion issued October 7, 2014.

In The

Court of Appeals

For The

First District of Texas

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NO. 01-13-00515-CV

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CHENIERE ENERGY, INC., CHARIF SOUKI, INDIVIDUALLY, AND

GREG RAYFORD, INDIVIDUALLY, Appellants

V.

AZIN LOTFI, Appellee

On Appeal from the 151st District Court

Harris County, Texas

Trial Court Case No. 2013-12735

OPINION

Appellants filed a motion for rehearing of our memorandum opinion of June

10, 2014. Their motion for rehearing is overruled. The memorandum opinion of

June 10, 2014, is withdrawn, and the following substitute opinion is issued in its

place.

Azin Lotfi sued her employer, Cheniere Energy, Inc., claiming her

employment was wrongfully terminated. She also sued two of her co-workers,

Charif Souki and Greg Rayford, for tortious interference with her employment at

Cheniere.

In this accelerated appeal, Souki and Rayford challenge the trial court’s

denial of their motion to dismiss the claims against them under Chapter 27 of the

Civil Practice and Remedies Code, which is an anti-SLAPP statute entitled

“Actions Involving the Exercise of Certain Constitutional Rights” and commonly

referred to as the Texas Citizens’ Participation Act (TCPA). See generally TEX.

CIV. PRAC. & REM. CODE ANN. § 27.001–.011 (West Supp. 2014). 1

Souki and Rayford contend that (1) they properly invoked the TCPA by

establishing, by a preponderance of the evidence, that Lotfi’s claims against them

are related to their exercise of the “right of association” and (2) Lotfi failed to

present clear and specific evidence to support each element of her prima facie case

of tortious interference to avoid summary dismissal. We affirm.

1

The TCPA authorizes this interlocutory appeal. See KTRK Television, Inc. v. Robinson,

409 S.W.3d 682 (Tex. App.—Houston [1st Dist.] 2013, pet. denied); San Jacinto Title

Servs. of Corpus Christi, LLC. v. Kingsley Props., LP., No. 13–12–00352–CV, 2013 WL

1786632 (Tex. App.—Corpus Christi Apr. 25, 2013, pet. denied); cf. Direct Commercial

Funding, Inc. v. Beacon Hill Estates, LLC, No. 14–12–00896–CV, 2013 WL 407029

(Tex. App.—Houston [14th Dist.] Jan. 24, 2013, order) (finding jurisdiction over order

granting motion that remained interlocutory due to pending counterclaims).

2

Background

Lotfi, Cheniere’s former assistant general counsel, sued the company for

“breach of contract, fraud, fraud in the inducement, unjust enrichment, and pending

disability discrimination and retaliation claims under chapter 21 of the Texas Labor

Code.” Lotfi claimed that she was fired from Cheniere in retaliation for reporting

improper activities within the company, including unauthorized disclosures of

confidential company information to the son of Cheniere’s CEO and board

chairman. In addition to suing her former employer, Lotfi asserted a tortious

interference claim against Cheniere’s CEO, Charif Souki, and its senior vice

president and general counsel, Greg Rayford.

Souki and Rayford moved to dismiss the tortious interference claim, arguing

that it was a frivolous suit brought in response to their exercise of the “right of

association” as defined in the TCPA. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.001(2) (defining “right of association” as “a communication between

individuals who join together to collectively express, promote, pursue, or defend

common interests.”).

In deciding whether to grant a motion to dismiss under the TCPA, the statute

directs the trial court to “consider the pleadings and supporting and opposing

affidavits stating the facts on which the liability or defense is based.” Id.

§ 27.006(a). Lotfi filed a response to Souki and Rayford’s motion to dismiss, but

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neither side filed affidavits. Thus, based on the pleadings but without any

additional evidence, the trial court denied the Souki and Rayford’s motion to

dismiss. They appeal that order.

The Text and Stated Purpose of the TCPA

The TCPA is an anti-SLAPP law. See Rehak Creative Servs., Inc. v. Witt,

404 S.W.3d 716, 719 (Tex. App.—Houston [14th Dist.] 2013, pet. denied).

“SLAPP” is an acronym for “Strategic Lawsuits Against Public Participation,”

which are suits filed against politically and socially active individuals—not with

the goal of prevailing on the merits but, instead, of chilling those individuals’ First

Amendment activities. See George W. Pring & Penelope Canan, Strategic Lawsuits

Against Public Participation (“SLAPPS”): An Introduction for Bench, Bar and

Bystanders, 12 Bridgeport L. Rev. 937, 938 (1992). Anti-SLAPP statutes have

been enacted in several states over the past two decades to “deter lawsuits . . .

brought primarily to chill the valid exercise” of First Amendment rights. Barron v.

Vanier, 190 S.W.3d 841, 843 (Tex. App.—Fort Worth 2006, no pet.). They do so

by establishing a mechanism for early dismissal of frivolous lawsuits that threaten

the free exercise of First Amendment rights. See Fitzmaurice v. Jones, 417 S.W.3d

627, 629 (Tex. App.—Houston [14th Dist.] 2013, no pet.); Rehak, 404 S.W.3d at

719.

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Section 27.003 of the TCPA contains the dismissal provision Souki and

Rayford seek to invoke:

If a legal action 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, that party may file a motion to dismiss the legal action.

Tex. Civ. Prac. & Rem. Code Ann. § 27.003. The Texas Legislature expressly

stated its purpose for enacting this anti-SLAPP statute:

The purpose of this chapter is to encourage and safeguard the

constitutional rights of persons to petition, speak freely, associate

freely, and otherwise participate in government to the maximum

extent permitted by law and, at the same time, protect the rights of a

person to file meritorious lawsuits for demonstrable injury.

Id. § 27.002. The Legislature defined the rights covered by the statute. See id.

§ 27.001. The “exercise of the right of association” is defined in the TCPA as “a

communication between individuals who join together to collectively express,

promote, pursue, or defend common interests.” Id. § 27.001(2).

Souki and Rayford contend that Lotfi’s tortious interference claim against

them was “based on, relate[d] to, or . . . in response to” their right of association

and was, therefore, subject to summary dismissal. See id. § 27.003. Souki and

Rayford argue that they have met their evidentiary burden, not through affidavit

evidence concerning the substance and purpose of a communication between them

that would qualify as an exercise of the right of association but, instead, by the

mere fact that Lotfi and Rayford held positions as in-house counsel at Cheniere:

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Lotfi’s tortious interference claim against Souki and Rayford is

directly predicated upon the attorney/client communications that took

place between Souki (the client representative) and Rayford (the

attorney). Furthermore, those confidential communications directly

concerned whether to continue to retain Lotfi as one of Cheniere’s

lawyers (i.e., whether to continue to associate with Lotfi). Thus, the

tortious interference claim is necessarily and directly based on, related

to, or in response to Appellants’ exercise of the right of association.

Standard of Review

We consider the parties’ pleadings and affidavits when reviewing a ruling on

a TCPA motion to dismiss. TEX. CIV. PRAC. & REM. CODE ANN. § 27.006(a). Souki

and Rayford bore the initial burden of demonstrating the TCPA’s applicability to

Lotfi’s claim against them. See id. § 27.005(b); Newspaper Holdings, Inc. v. Crazy

Hotel Assisted Living, Ltd., 416 S.W.3d 71, 80 (Tex. App.—Houston [1st Dist.]

2013, pet. denied). They were required to show by a preponderance of the evidence

that Lotfi’s claim was based on, related to, or in response to their exercise of the

right of association. TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b). This inquiry

is a legal question we review de novo. Newspaper Holdings, 416 S.W.3d at 80.

Only if we conclude Souki and Rayford met their burden, do we analyze whether

Lotfi met her burden to establish by “clear and specific evidence” the elements of

her prima facie case against them to avoid dismissal. TEX. CIV. PRAC. & REM.

CODE ANN. § 27.005(c).

Statutory construction is a question of law we review de novo. State v.

Shumake, 199 S.W.3d 279, 284 (Tex. 2006). When construing a statute, our

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objective is to determine and give effect to legislative intent. See Nat’l Liab. &

Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). In determining the

Legislature’s intent, we look to the plain meaning of the statute’s words. Tex. A &

M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840–41 (Tex. 2007). “The plain

meaning of the text is the best expression of legislative intent unless a different

meaning is apparent from the context or the plain meaning leads to absurd or

nonsensical results.” Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011). We

cannot give one provision meaning out of harmony or inconsistent with other

provisions, even if it might be susceptible to such a construction standing alone.

Direct Commercial Funding, Inc. v. Beacon Hill Estates, LLC., No. 14-12-00896-

CV, 2013 WL 407029, at *2 (Tex. App.—Houston [14th Dist.] Jan. 24, 2013,

order). Additionally, we “must not interpret the statute in a manner that renders

any part of the statute meaningless or superfluous.” Columbia Med. Ctr. of Los

Colinas, Inc. v. Hogue, 271 S.W.3d 238, 256 (Tex. 2008).

Souki and Rayford Fail to Meet Their Burden to Obtain Dismissal

The only relevant pleadings included in the appellate record are Lotfi’s

amended verified petition, Souki and Rayford’s motion to dismiss, and Lotfi’s

response. Souki and Rayford chose not to submit affidavits in support of their

motion to dismiss; therefore, their contention that they communicated when joined

together to act in furtherance of a common interest remains unverified. Instead,

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they rely on Lotfi’s pleading to meet their evidentiary burden, pointing us

specifically to paragraphs 9, 10, 11, 15, and 21 of Lotfi’s verified petition. The

facts alleged by Lotfi in these paragraphs are summarized as follows:

• Lotfi started at Cheniere in September 2011 after being

personally recruited by Rayford;

• Lotfi raised violations of Cheniere’s Code of Business Conduct

and Ethics, documentation and accounting irregularities, and

other compliance issues, which lead to her termination in

retaliation;

• the company initially stated it would pay Lotfi the full amount

of company stock owed which, according to Lotfi, was only

possible under the Restricted Stock Grant Agreement if she

were being terminated “without Cause,” then, quickly

thereafter, the termination was revoked;

• Lotfi received “one of the highest” year-end bonuses given to a

non-senior executive in December 2012 and did nothing to

warrant a “for Cause” termination; and

• Souki and Rayford made the decision to terminate Lotfi; they

exacted revenge on her; and the claim that she was fired for

“cause” is false.

Lotfi responds that Souki and Rayford “have not provided any evidence to

establish that the instant lawsuit was filed in response to the exercise of Souki and

Rayford’s First Amendment rights, and clearly they have not met the

preponderance of evidence standard.” In other words, she contends that Souki and

Rayford’s reliance on the factual assertions in her pleading is inadequate to

establish that a communication occurred, that Souki and Rayford were joining

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together to collectively act in a common interest—as is required to meet the

statutory definition of the exercise of the right of association—or, finally, that her

claim relates or is in response to an exercise of the right of association.

Only one of the five factual assertions relied upon by Souki and Rayford

could be read to indicate that a communication occurred. The last assertion is that

Souki and Rayford “made the decision” to terminate Lotfi and, in doing so,

“exacted revenge” on her. It may be that Souki and Rayford’s decision was the

result of (1) “a communication” (2) “between individuals who join together”

(3) for the purpose of expressing, promoting, pursuing, or defending their

“common interests.” See TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(2). But the

record supports alternate conclusions as well. For example, Souki and Rayford

may have had divergent interests in seeking Lotfi’s removal from the company:

Souki arguably could have had a personal interest in dismissing Lotfi given Lotfi’s

allegation that Souki’s son was given confidential company information, whereas

Rayford’s interest in having Lotfi dismissed could have been to further the

financial interests of Cheniere given that dismissal for cause invalidated Lotfi’s

right to merit-based bonus compensation. Without evidence on the matter, the

extent to which Souki and Rayford acted in furtherance of a common interest is

simply unknown.

9

Because we are to view the pleadings and evidence in the light most

favorable to the non-movant, we conclude that the limited assertions in Lotfi’s

pleading fail to meet the movants’ burden of establishing that they had a

communication, they acted in furtherance of a common interest, and that Lotfi’s

claim against them is related to their exercise of the right of association. See

Newspaper Holdings, 416 S.W.3d at 80. Absent affidavit evidence supporting their

contentions, Souki and Rayford have failed to meet their burden to obtain

dismissal.

Evidentiary Burden Cannot be Met by Reliance on Attorney Status

Souki and Rayford attempt to avoid the conclusion that they failed to meet

their evidentiary burden by relying on Rayford’s and Lotfi’s status as attorneys to

bridge the evidentiary gap. They argue that “every court to have considered the

issue has recognized that the constitutionally-protected right of association applies

directly to both a client’s choice of legal counsel to represent and advise it, and a

client’s interactions with its chosen legal counsel.” Souki and Rayford explain their

contention that interaction with legal counsel invokes the right to association as

follows:

[I]t was not necessary for Appellants to offer evidence of the specific

communications between Souki and Rayford. Nor, for that matter,

should a party ever have to disclose the details of what are

indisputably privileged communications between corporate officers

and the corporate general counsel to establish that their

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communications constitute the exercise of the right of association

under the TCPA.

. . .

Because Rayford was the company’s lawyer, the discussions between

him and Souki about Lotfi, and about whether to continue to retain

Lotfi as a lawyer, are classic examples of attorney/client

consultations that constitute the exercise of the right of association.

Moreover, because the discussions and the decision actually

concerned the selection of legal counsel, they independently

constituted the exercise of the right of association . . . .

We do not agree that a bare assertion of counsel involvement can meet Souki

and Rayford’s evidentiary burden to establish that a communication occurred, that

Souki and Rayford were joined together to collectively pursue common interests,

or that Lotfi’s suit was related to their exercise of the right of association. Nor do

we agree that Souki and Rayford can be absolved from meeting their evidentiary

burden by arguing that providing such evidence would also reveal “indisputably

privileged communications.”

Rayford wears two hats at Cheniere: he is both the general counsel and a

senior vice president. Given his dual roles, his view on whether it was in the

company’s interest to retain Lotfi as an employee and any advice he may have

provided on that issue is not, per se, legal advice. See Derek Lisk, When Does the

Texas Attorney-Client Privilege Protect Communications with In-House Counsel?,

68 Tex. B.J. 386, 387 (2005) (“In-house counsel frequently wear more than one

hat, performing other duties in addition to providing legal services.”); see also

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United States v. Davis, 636 F.2d 1028, 1044 (5th Cir. 1981) (attorney who acts as

his client’s business advisor is not acting in legal capacity); In re Tom’s Foods

Inc., 345 B.R. 795, 798–99 (Bankr. M.D. Ga. 2006) (holding that communications

with attorney serving on corporation’s board of directors were seeking business

advice, not legal advice).

Rayford’s status as corporate counsel does not excuse Souki and Rayford

from their burden to prove they had a qualifying communication and joined to

pursue a common interest. If their contention was that their communication

involved a privileged, attorney-client communication, they could have stated so in

an affidavit; yet they failed to provide an affidavit in support of their motion to

dismiss. Cf. 4A West’s Tex. Forms, Commentary, Business Litigation § 24.2.11.60

(2d ed. June 2014) (“Counsel is well-advised to file one or more Affidavit(s) based

on this form to accompany [an] Anti-SLAPP Motion to Dismiss.”); TEX. R. EVID.

503 (lawyer-client privilege); Borden, Inc. v. Valdez, 773 S.W.2d 718, 720–21

(Tex. App.—Corpus Christi 1989, no writ) (“[N]ot all statements and

communications made by a client to an attorney are privileged, and the burden is

on the party resisting discovery to show that the communication was, in fact,

protected by the privilege.”). 2

2

See also Pownell v. Credo Petroleum Corp., No. 09-CV-01540-WYD-KLM, 2011

WL 1045418, at *2 (D. Colo. Mar. 17, 2011) (stating that “the attorney-client

privilege does not protect communications related to business advice”); Baptist

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Without an affidavit to establish either that a qualifying communication

occurred or that a privileged attorney-client communication occurred regarding

Cheniere’s choice of legal counsel, Souki and Rayford’s reliance on Rayford’s

status as general counsel does not meet their evidentiary burden. To hold otherwise

would be to create a presumption that every communication with an in-house

attorney meets the TCPA’s definition of the “exercise of the right of association”

and any claim “related to” such communications is subject to summary dismissal.

TEX. CIV. PRAC. & REM. CODE ANN. § 27.001(2). Accepting that the TCPA has

such a broad reach would (1) require us to ignore the TCPA provision specifically

requiring evidence in support of a motion to dismiss and (2) be contrary to the

explicitly stated purpose of the statute, namely, to balance the protection of First

Amendment rights against the right all individuals have to file lawsuits to redress

their injuries. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.005(b), 27.002;

Direct Commercial Funding, 2013 WL 407029, at *2 (rejecting statutory

construction that causes provision to be out of harmony or inconsistent with other

provisions); Columbia Med. Ctr. of Los Colinas, 271 S.W.3d at 256.

Health v. BancorpSouth Ins. Servs., Inc., 270 F.R.D. 268, 276 (N.D. Miss. 2010)

(stating that, for questions of privilege in a corporate setting, “the critical inquiry

is whether any particular communication facilitated the rendition of predominantly

legal advice or services to the client”); In re Tom’s Foods Inc., 345 B.R. 795, 798

(Bankr. M.D. Ga. 2006) (holding that communications seeking business advice

were not protected by attorney-client privilege); see also Restatement (Third) of

Law Governing Lawyers § 68 (2000) (requiring a communication to be “for the

purpose of obtaining or providing legal assistance” to invoke the attorney-client

privilege).

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Indeed, Lotfi’s lawsuit against Cheniere, Souki, and Rayford does not in any

way implicate the Legislature’s express declaration of the purpose of this statute:

to protect “the constitutional rights of persons to petition, speak freely, associate

freely, and otherwise participate in government . . . .” TEX. CIV. PRAC. & REM.

CODE ANN. § 27.002; see Jardin v. Marklund, 431 S.W.3d 765, 770–73 (Tex.

App.—Houston [14th Dist.] 2014, no pet.) (stating that TCPA’s legislative history,

purpose, language, and context all support conclusion that “exercise of the right of

association” as defined by TCPA requires that communication concern public

interest and does not apply to private communications); but see Combined Law

Enforcement Ass’ns of Tex. v. Sheffield, No. 03-13-00105-CV, 2014 WL 411672,

at *2 n.1 (Tex. App.—Austin Jan. 31, 2014, pet. filed) (mem. op.) (stating that text

of TCPA does not limit its scope).

We agree that the terms “citizen” and “participation” contemplate a larger

public purpose. Further, the stated purpose of the statute indicates a requirement of

some nexus between the communication used to invoke the TCPA and the

generally recognized parameters of First Amendment protections. Otherwise, any

communication that is part of the decision-making process in an employment

dispute—to name just one example—could be used to draw within the TPCA’s

summary dismissal procedures private suits implicating only private issues. Cf.

Pickens v. Cordia, 433 S.W.3d 179, 184–85 (Tex. App.—Dallas 2014, no pet.)

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(holding that TCPA protection of “exercise of the right of free speech” did not

apply to suit over content of appellant’s blog, on which he made allegedly

disparaging comments about his family members, because those communications

were not matter of public concern).

Because Souki and Rayford failed to meet their burden of establishing, by a

preponderance of the evidence, that their communications fell within the statutory

definition of exercise of the right of association, the trial court did not err in

denying their motion to dismiss.

Given our conclusion that Souki and Rayford failed to meet their evidentiary

burden, we do not reach Souki and Rayford’s second issue regarding whether Lotfi

established a prima facie case of tortious interference.

Conclusion

Because Souki and Rayford failed to meet their evidentiary burden, the trial

court did not err in denying their motion to dismiss under the TCPA. We affirm.

Harvey Brown

Justice

Panel consists of Justices Jennings, Sharp, and Brown.

Justice Jennings, joining the majority opinion and concurring separately.

Justice Sharp, joining the majority opinion and the concurrence.

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