Opinion
No. 02-05-315-CV
Delivered: October 19, 2006.
Appeal from the 17th District Court of Tarrant County.
Panel A: CAYCE, C.J.; LIVINGSTON and McCOY, JJ.
OPINION
I. Introduction
In this interlocutory appeal, Astoria Industries of Iowa, Inc. (Astoria) appeals from the trial court's denial of its motions for summary judgment on SNF, Inc. d/b/a Brand FX Body Company's (Brand FX's) claims for business disparagement and false advertising, among other causes of action. Astoria contends that we have jurisdiction over this appeal under section 51.014(a)(6) of the civil practice and remedies code because its motions for summary judgment were based in whole or in part on a claim or defense arising under the First Amendment. Astoria also complains that the trial court improperly denied its summary judgment motions. Brand FX disagrees that we have jurisdiction over the appeal and urges us to dismiss it. We hold that we have jurisdiction over part, but not all, of the appeal under section 51.014(a)(6). We affirm in part and dismiss in part.
See TEX. CIV. PRAC. REM. CODE ANN. § 51.014(a)(6) (Vernon Supp. 2006).
II. Background Facts and Procedural History
Astoria and Brand FX are business competitors. They manufacture and sell fiberglass utility and service bodies and toppers for commercial vehicles. Brand FX's topper utilizes a stair-step roof line that Brand FX claims is unique and brand-distinguishing. Initially, Astoria's only topper design had a rounded or domed roof line. In late 2002, however, Astoria developed a topper with a stair-step design virtually identical to Brand FX's topper for Cook's Pest Control. Astoria's chief engineer, Randy Thole, acknowledged that Astoria developed the stair-step design topper for Cook's Pest Control as similar to Brand FX's design as possible.
"Utility" and "service" bodies are interchangeable terms. A utility body is a storage compartment that runs alongside the bed of a commercial truck. A topper is a structure that covers the bed of a commercial truck.
Brand FX contends that Astoria switched to the stair-step topper design to take Cook's Pest Control's business from Brand FX by offering the topper for over $1000 less than the price that Brand FX charged. Brand FX further contends that Astoria used illegal methods to design its stair-step topper, including "nefariously" obtaining Brand FX's design drawings and using a Brand FX topper to assist Astoria in making the mold for its replica topper.
Thereafter, in February 2003, Astoria began running a "DARE TO COMPARE" advertisement in an industry trade journal (the Advertisement). The Advertisement ran ten times over the course of fourteen months. The Advertisement begins, "When choosing fiberglass utility bodies, Astoria Industries of Iowa should be your supplier!" Then the Advertisement compares "High Quality Astoria Bodies vs. Low Quality Brand X Bodies." Regarding the latter, the Advertisement states, (1) "No Engineering and built with sub-standard materials"; (2) "Short term cost with long term expenses"; (3) "Built to their standard"; and (4) "1-year warranty."
Brand FX contends that Astoria's reference to "Brand X Bodies" is a poorly-disguised reference to Brand FX's business name of Brand FX Body Company. Brand FX further contends that three of the statements in the Advertisement are statements of fact that are demonstrably false: (1) "No Engineering and built with sub-standard materials"; (2) "Short term cost with long term expenses"; and (3) "Built to their standard." Brand FX also asserts that Astoria knew the statements were false when it ran the ad, or at least failed to perform any sort of investigation regarding the truthfulness of the statements.
In late May 2003, Brand FX notified Astoria of Brand FX's belief that the Advertisement was defamatory and asked Astoria to stop running it. Astoria continued to run the Advertisement through April 2004.
As a result of Astoria's conduct, Brand FX sued Astoria for business disparagement and defamation per se, false advertising under the Lanham Act, tortious interference with prospective relations, trade dress infringement, unfair competition, common law misappropriation, and trade secret misappropriation. In five motions, Astoria moved for traditional and/or no-evidence summary judgments on Brand FX's business disparagement, trade dress infringement, false advertising, tortious interference, unfair competition, and common-law misappropriation claims. After a hearing, the trial court denied the motions in a single order. This appeal followed.
See 15 U.S.C.A. § 1125(a)(1)(B) (West 1998) ("Any person who, . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.").
Astoria did not move for summary judgment on Brand FX's claims for defamation per se and trade secret misappropriation.
III. Jurisdiction A. Availability of Interlocutory Appeal
Because an order denying a motion for summary judgment is interlocutory and generally not appealable, we must first determine whether we have jurisdiction over this appeal.
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996).
Astoria contends that the trial court's order is appealable under section 51.014(a)(6) of the civil practice and remedies code because Astoria's no-evidence motion for summary judgment on Brand FX's business disparagement and false advertising claims is based on a claim or defense arising under the Free Speech Clauses of the First Amendment and article I, section 8 of the Texas Constitution. Section 51.014(a)(6) provides that a person may appeal an interlocutory order that denies a motion for summary judgment that is based in whole or in part upon a claim against or a defense by . . . a person whose communication appears in or is published by the electronic or print media, arising under the free speech or free press clause of the First Amendment to the United States Constitution, or Article I, Section 8, of the Texas Constitution[.]
Brand FX asserts that the trial court's order in this case is not reviewable by interlocutory appeal under section 51.014(a)(6) because the First Amendment is not an element of its business disparagement claim and Astoria did not raise it as a defense; therefore, Astoria's motion for summary judgment is not based in whole or in part on the First Amendment. We disagree.
Brand FX does not assert that the First Amendment is not an element of its false advertising claim.
To prevail on a business disparagement claim, a plaintiff must establish that (1) the defendant published disparaging information about the plaintiff that is false, (2) with malice, (3) without privilege, (4) that resulted in special damages to the plaintiff. A business disparagement claim is similar in many respects to a defamation claim. Both involve the imposition of liability for injury sustained through publications to third parties of a false statement affecting the plaintiff. Further, both require a determination of whether the publication at issue is speech protected by the First Amendment and article I, section 8 of the Texas Constitution — such as an opinion or the truth — or whether it is a false, defamatory statement of fact and therefore actionable.
Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003).
Id. To maintain a defamation cause of action, the plaintiff must prove that the defendant (1) published a statement; (2) that was defamatory concerning the plaintiff; (3) while acting with either actual malice, if the plaintiff was a public official or public figure, or negligence, if the plaintiff was a private individual, regarding the truth of the statement. WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998), cert. denied, 526 U.S. 1051 (1999).
Hurlbut v. Gulf Atlantic Life Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987).
See Carr v. Brasher, 776 S.W.2d 567, 570 (Tex. 1989) (holding that "[a]ll assertions of opinion are protected by the first amendment . . . and article I, section 8," but false statements of fact are not).
There is, however, at least one notable difference between the two claims. The plaintiff asserting a business disparagement claim has the burden of proving the falsity of the statement as part of its cause of action, whereas the common law presumes the defamatory statement to be false, and truth is an affirmative defense to a defamation claim. Thus, whether a publication is a protected expression of opinion or an actionable statement of fact is a question of law that is subsumed within the first element of a business disparagement claim.
Hurlbut, 749 S.W.2d at 766; see TEX. CIV. PRAC. REM. CODE ANN. § 73.005 (Vernon 2005) (providing that truth is a defense to a defamation action).
Carr, 776 S.W.2d at 570. LaRue v. Chief Oil Gas, L.L.C., 167 S.W.3d 866 (Tex.App.-Fort Worth 2005, no pet.), on which Brand FX relies, does not support Brand FX's argument that the First Amendment is not included in the elements of a business disparagement claim. In that case, we merely held that the defendant was not entitled to a no-evidence summary judgment on the duty element of the plaintiff's negligence claim because the defendant had not challenged that element in its no-evidence motion Id. at 874-75.
In its no-evidence motion for summary judgment, Astoria expressly argued that it was entitled to summary judgment on Brand FX's business disparagement and false advertising claims because there was no evidence that the statements in the Advertisement were false, disparaging statements of fact rather than mere statements of opinion protected by the federal and state Free Speech Clauses. Specifically, Astoria argued,
Astoria is entitled to summary judgment as a matter of law on BFX's claims for business disparagement, false advertising under the Lanham Act, and tortious interference with prospective business relations for the following reasons:
1. Astoria's statements in its advertisement were nondefamatory statements, or in the alternative, statements of opinion protected under the First Amendment of the United States Constitution and Tex. Const. Art. I, § 8 of the Texas Constitution.
. . . .
B. Business disparagement claim.
Astoria is entitled to summary judgment on BFX's claim because there is no evidence giving rise to a fact question as to the following elements necessary to establish business disparagement:
a. Publication of false and disparaging information about the plaintiff;
. . . .
With regard to the published information, BFX must present competent, admissible evidence that the advertising or any other statements made the basis of this suit were false, defamatory statements of fact about BFX. Statements of opinion are not actionable because opinions are protected by the First Amendment of the United States Constitution and Art. I, § 8 of the Texas Constitution.
. . . .
D. Lanham Act false advertising claims.
Astoria is entitled to summary judgment on BFX's false advertising claims under the Lanham Act because there is no evidence giving rise to a fact question as to each of the following elements:
(1) A false or misleading statement of fact about a product;
. . . .
The first element requires . . . a showing of misleading statements of fact. . . . Statements of opinion are not actionable under the Lanham Act.
As with a business disparagement claim, the plaintiff asserting a false advertising claim under the Lanham Act has the burden of proving that the defendant made a false statement of fact — not of general opinion — about the plaintiff's product. Logan v. Burgers Ozark Country Cured Hams, Inc., 263 F.3d 447, 462 (5th Cir. 2001); Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495-96 (5th Cir. 2000), cert. denied, 532 U.S. 920 (2001). We discuss the elements of a Lanham Act false advertising claim in greater detail in section IV(C), below.
As with a business disparagement claim, the plaintiff asserting a false advertising claim under the Lanham Act has the burden of proving that the defendant made a false statement of fact — not of general opinion — about the plaintiff's product. Logan v. Burgers Ozark Country Cured Hams, Inc., 263 F.3d 447, 462 (5th Cir. 2001); Pizza Hut, Inc. v. Papa John's Int'l, Inc., 227 F.3d 489, 495-96 (5th Cir. 2000), cert. denied, 532 U.S. 920 (2001). We discuss the elements of a Lanham Act false advertising claim in greater detail in section IV(C), below.
Because Astoria's motion for summary judgment is based in part upon a claim arising under the Free Speech Clauses of the federal and state constitutions, we hold that the trial court's order denying that part of the motion is appealable under section 51.014(a)(6).
In light of our holding that the First Amendment is subsumed within the first element of a business disparagement claim and a Lanham Act false advertising claim, we need not consider Brand FX's argument that an affirmative defense is not the proper subject of a no-evidence summary judgment motion.
B. Scope of Our Jurisdiction
Brand FX further contends that, even if we conclude that Astoria's summary judgment motions were based in part on the First Amendment, our appellate jurisdiction is limited to reviewing the portion of the trial court's order related to the First Amendment and does not extend to the part of the trial court's order that does not implicate free speech. We agree.
There is a split of authority in the courts of appeals regarding the scope of our jurisdiction over an order denying a motion for summary judgment that is based only in part on the Free Speech Clauses. Compare KTRK Television, Inc. v. Fowkes, 981 S.W.2d 779, 787 (Tex.App.-Houston [1st Dist.] 1998, pet. denied) (holding that courts of appeals have jurisdiction under section 51.014(a)(6) to review only the portion of the order denying summary judgment on free speech grounds), disapproved on other grounds, Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000), and Nat'l Union Fire Ins. Co. v. Ins. Co. of Am., 955 S.W.2d 120, 125-26 (Tex.App.-Houston [14th Dist.] 1997) (same), aff'd on other grounds sub nom. Keck, Mahin Cate v. Nat'l Union Fire Ins. Co., 20 S.W.3d 692 (Tex. 2000), with Cox Tex. Newspapers, L.P. v. Wootten, 59 S.W.3d 717, 720-21 (Tex.App.-Austin 2001, pet. denied); Am. Broadcasting Cos. v. Gill, 6 S.W.3d 19, 26-27 (Tex.App.-San Antonio 1999, pet. denied), disapproved on other grounds, Turner v. KTRK Television, Inc., 38 S.W.3d 103 (Tex. 2000), and Delta Air Lines, Inc. v. Norris, 949 S.W.2d 422, 429 (Tex.App.-Waco 1997, writ denied) (all holding that courts of appeals have jurisdiction under 51.014(a)(6) to review the entire order denying summary judgment, including claims or defenses that do not arise under the Free Speech Clauses).
To determine the scope of our jurisdiction, we look to the legislature's intent in enacting section 51.014(a)(6). Unless a statute is ambiguous, we discern that intent from the language of the statute itself. We cannot construe a statutory provision to lead to an absurd result if the provision is subject to another more reasonable interpretation. Further, we consider the provisions of a statute as a whole and not in isolation.
Continental Cas. Co. v. Downs, 81 S.W.3d 803, 805 (Tex. 2002); Nat'l Liab. Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (2000).
The parties do not assert that section 51.014(a)(6) is ambiguous.
Downs, 81 S.W.3d at 805; see TEX. GOV'T CODE ANN. § 311.011(a) (Vernon 2005) ("Words and phrases shall be read in context and construed according to the rules of grammar and common usage."); id. § 312.002(a) (providing that words shall be given their ordinary meaning).
C H Nationwide, Inc. v. Thompson, 903 S.W.2d 315, 322 n. 5 (Tex. 1994), abrogated on other grounds, Battaglia v. Alexander, 177 S.W.3d 893 (Tex. 2005); Sharp v. House of Lloyd, Inc., 815 S.W.2d 245, 249 (Tex. 1991).
Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex. 2001).
The pertinent language of section 51.014(a)(6) provides that "[a] person may appeal from an interlocutory order . . . that . . . denies a motion for summary judgment that is based in whole or in part upon a claim . . . or defense . . . arising under the free speech . . . clause." A plain reading of this language evidences clear legislative intent that a party seeking summary judgment on free speech grounds be entitled to appeal a trial court's denial of this relief. This language does not, however, evidence legislative intent to allow an interlocutory appeal from summary judgment rulings on other grounds in the motion. Thus, our interlocutory jurisdiction is limited to reviewing the merits of Astoria's free speech grounds for summary judgment and does not extend to the trial court's rulings on Astoria's other grounds for relief.
See Nat'l Union Fire Ins. Co., 955 S.W.2d at 125-26.
This interpretation of section 51.014(a)(6) is consistent with the way courts have construed similar subsections of this statute. For instance, section 51.014(a)(5) provides that "[a] person may appeal from an interlocutory order . . . that . . . denies a motion for summary judgment that is based on an assertion of immunity by an individual who is an officer or employee of the state." Courts have construed this subsection to mean that only the part of an order denying summary judgment based on official immunity is reviewable by interlocutory appeal, even if the order denies summary judgment on other grounds as well. Likewise, section 51.014(a)(8) provides that "[a] person may appeal from an interlocutory order . . . that . . . grants or denies a plea to the jurisdiction by a governmental unit." Courts have construed this subsection to mean that only the part of an order granting or denying a plea to the jurisdiction is reviewable by interlocutory appeal, even if the trial court's order also denies other relief.
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(a)(5) (Vernon Supp. 2006).
See Tex. State Technical Coll. v. Cressman, 172 S.W.3d 61, 64-65 (Tex.App.-Waco 2005, pet. denied) (holding that the scope of its jurisdiction under section 51.014(a)(5) was limited to review of the trial court's denial of summary judgment on appellants' official immunity defense and did not extend to their contention that appellees had failed to state a claim for illegal eavesdropping); City of Alamo v. Holton, 934 S.W.2d 833, 836 (Tex.App.-Corpus Christi 1996, no writ) (holding that its interlocutory jurisdiction under section 51.014(a)(5) was limited to reviewing the merits of the city's official immunity defense and did not extend to the city's sovereign immunity defense); Boozier v. Hambrick, 846 S.W.2d 593, 596 (Tex.App.-Houston [1st Dist.] 1993, no writ) (holding that the appellate court had jurisdiction under section 51.014(a)(5) to review denial of summary judgment based on the movant's official immunity defense, but not on the movant's defenses of truth, privilege, estoppel, and no interference with contract).
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(a)(8) (Vernon Supp. 2006).
See Ware v. Miller, 82 S.W.3d 795, 800 (Tex.App.-Amarillo 2002, pet. denied) (holding that it had jurisdiction over trial court's order denying defendants' plea to the jurisdiction based on official immunity but not based on their challenges to plaintiff's standing made in their individual capacities); Montgomery County v. Fuqua, 22 S.W.3d 662, 664 (Tex.App.-Beaumont 2000, pet. denied) (exercising jurisdiction over the appeal from the trial court's order denying defendant's motion to dismiss based on a plea to the jurisdiction but not based on the statute of limitations); City of El Campo v. Rubio, 980 S.W.2d 943, 944, 949 (Tex.App.-Corpus Christi 1998, pet. dism'd w.o.j.) (exercising jurisdiction over the part of the trial court's order denying a plea to the jurisdiction and motion for summary judgment based on official immunity, but not over the part denying summary judgment on plaintiff's negligence and intentional infliction of emotional distress claims).
It is well settled that an order denying a motion for summary judgment is not appealable unless a statute explicitly provides appellate jurisdiction. To construe section 51.014(a)(6) as permitting interlocutory appeal of any and all issues raised in a motion for summary judgment that is based in part on the Free Speech Clauses would, however, allow a party to circumvent this restriction and would render meaningless the provisions of section 51.014 that limit interlocutory appeals to the matters enumerated in the statute. We may not construe a statute in any manner that fails to give effect to all the provisions the legislature enacted or that reduces any provision to mere surplusage.
Stary v. DeBord, 967 S.W.2d 352, 352-53 (Tex. 1998); Cincinnati Life Ins. Co., 927 S.W.2d at 625. An interlocutory order that is explicitly appealable under section 51.014 may not be used as a vehicle for carrying other nonappealable interlocutory orders to the appellate court. See Kaplan v. Tiffany Dev. Corp., 69 S.W.3d 212, 217 (Tex.App.-Corpus Christi 2001, no pet.); City of Arlington v. Tex. Elec. Serv. Co., 540 S.W.2d 580, 582 (Tex.Civ.App.-Fort Worth 1976, writ ref'd n.r.e.).
Astoria's reliance on In re B.L.D. as authority for its assertion that we have jurisdiction over the entire order is misplaced. See 113 S.W.3d 340, 349 (Tex. 2003) (holding that an appellate court generally will decide constitutional questions only when it cannot resolve issues on nonconstitutional grounds), cert. denied, 541 U.S. 945 (2004). B.L.D. is inapposite; the appellate court in that case had jurisdiction to review the trial court's entire order because it was final.
Mobil Oil Corp. v. Shores, 128 S.W.3d 718, 725 (Tex.App.-Fort Worth 2004, no pet.).
For these reasons, we hold that only the portion of the trial court's order denying summary judgment based on free speech grounds is appealable by interlocutory appeal under section 51.014(a)(6). Therefore, we do not address the complaints raised in Astoria's first through seventh and ninth issues.
We now turn to the merits of Astoria's appealable complaints.
IV. No-Evidence Summary Judgment Based on Free Speech Clauses
In its eighth issue, Astoria contends that the trial court improperly denied Astoria's motion for a no-evidence summary judgment on Brand FX's business disparagement claim and its false advertising claim under the Lanham Act because Brand FX failed to produce evidence that the statements in the Advertisement were false statements of fact rather than nonactionable statements of opinion.
A. Standard of Review
After an adequate time for discovery, the party without the burden of proof may, without presenting evidence, move for summary judgment on the ground that there is no evidence to support an essential element of the nonmovant's claim or defense. The motion must specifically state the elements for which there is no evidence. The trial court must grant the motion unless the nonmovant produces summary judgment evidence that raises a genuine issue of material fact. If the nonmovant brings forward more than a scintilla of probative evidence that raises a genuine issue of material fact, then a no-evidence summary judgment is not proper.
Id.; Johnson v. Brewer Pritchard, P.C., 73 S.W.3d 193, 207 (Tex. 2002).
See TEX. R. CIV. P. 166a(i) cmt.; Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002).
Moore v. K Mart Corp., 981 S.W.2d 266, 269 (Tex.App.-San Antonio 1998, pet. denied).
B. Business Disparagement
As we discussed in section III(A), to prevail on a business disparagement claim, a plaintiff must establish that (1) the defendant published disparaging information about the plaintiff that is false, (2) with malice, (3) without privilege, (4) that resulted in special damages to the plaintiff. To establish the first element of this claim, the plaintiff must prove that the publication at issue is a false, defamatory statement of fact rather than a statement of opinion or the truth, both of which are protected by the First Amendment and article I, section 8 of the Texas Constitution.
Forbes Inc., 124 S.W.3d at 170.
See Carr, 776 S.W.2d at 570; Hurlbut, 749 S.W.2d at 766.
A defamatory statement is one that tends to injure a person's reputation, thereby exposing the person to public hatred, contempt, ridicule, or financial injury, or to impeach his honesty, integrity, virtue, or reputation. The statement must be directed at the plaintiff. It is not, however, necessary that the plaintiff be named in the publication if those who knew and were acquainted with the plaintiff could have reasonably understood from reading the publication that it referred to the plaintiff.
TEX. CIV. PRAC. REM. CODE ANN. § 73.001 (Vernon 2005); Hardwick v. Houston Lighting Power Co., 881 S.W.2d 195, 197 (Tex.App.-Corpus Christi 1994, writ dism'd w.o.j.).
Newspapers, Inc. v. Matthews, 161 Tex. 284, 339 S.W.2d 890, 893 (1960).
Id. at 894; Allied Mktg. Group, Inc. v. Paramount Pictures Corp., 111 S.W.3d 168, 175 (Tex.App.-Eastland 2003, pet. denied).
An allegedly defamatory publication should be construed as a whole in light of the surrounding circumstances based upon how a person of ordinary intelligence would perceive it. The appropriate inquiry is objective, not subjective. Thus, the question is not whether some readers were misled, but whether the hypothetical reasonable reader would be. Further, whether a statement is one of fact or opinion depends on whether it can be verified and on the context in which it was made. If the statement was asserted as a fact that can be proven true or false, it is a statement of fact, not opinion. Finally, whether a statement is one of fact or opinion and whether the words used are reasonably capable of the defamatory meaning the plaintiff attributes to them are initially questions of law for the court to decide. But if a publication is of ambiguous or doubtful import, the jury must determine its meaning.
Turner, 38 S.W.3d at 114.
New Times, Inc. v. Isaacks, 146 S.W.3d 144, 157 (Tex. 2004), cert. denied, 125 S. Ct. 2557 (2005).
Id.
Bentley v. Bunton, 94 S.W.3d 561, 583 (Tex. 2002), cert. denied, 126 S. Ct. 1476 (2006).
See id. at 581-82 nn. 50-51 ("While [a] word may be merely epithetic in the context of amorphous criticism, it may also be used as a statement of fact that can be proved true or false.") (citations omitted).
Turner, 38 S.W.3d at 114; Carr, 776 S.W.2d at 570. We need not address Brand FX's argument that a party cannot move for a no-evidence summary judgment on a question of law, because these inquiries are factually based and therefore are not purely legal issues. A plaintiff ultimately must prove that the defendant published false, disparaging information about the plaintiff, see Forbes Inc., 124 S.W.3d at 170, but whether the words used in a publication are reasonably capable of defamatory meaning is initially a question of law for the court to decide. See Turner, 38 S.W.3d at 114. Compare Harrill v. A.J.'s Wrecker Serv., Inc., 27 S.W.3d 191, 194 (Tex.App.-Dallas 2000, pet. dism'd w.o.j.) (holding that the question of whether the plaintiff's claim was preempted by federal law, which did not turn on any inadequacy in the plaintiff's evidence, was a purely legal issue and not the proper subject of a no-evidence summary judgment motion).
Turner, 38 S.W.3d at 114.
In this case, Astoria concedes that affidavit evidence from Brand FX's customers may create a fact issue regarding whether the statements in the Advertisement were directed at Brand FX, but it argues that the statements are not statements of fact or, in the alternative, are not literally false. Consequently, we turn to the content of the statements themselves.
See Allied Mktg. Group, 111 S.W.3d at 175; Diaz v. Rankin, 777 S.W.2d 496, 499-500 (Tex.App.-Corpus Christi 1989, no writ) (both holding that evidence that one person reasonably recognized the alleged defamatory statement as referring to the plaintiff was sufficient to defeat summary judgment).
The Advertisement asserts, among other things, that "High Quality Astoria Bodies" are "Engineered and built with quality materials to be long lasting and durable," but "Low Quality Brand X Bodies" have "No engineering and [are] built with sub-standard materials."
Astoria argues that the "No engineering" statement is "nothing more than rhetorical hyperbole" and that it is simply inconceivable that readers of a trade journal about utility and telecommunication service vehicles would ever believe that a product could be manufactured without resort to at least some engineering principles. We agree with Astoria that a reasonable reader of ordinary intelligence would not be misled into believing that Brand FX's utility bodies and toppers have no engineering whatsoever, but would instead interpret the statement as a general assertion regarding the superiority of Astoria's products.
We disagree, however, with Astoria's contention that the "built with sub-standard materials" statement is a nonactionable assertion of opinion. Although there may be some contexts in which reference to a product as "substandard" is mere opinion, this is not one of them. The types of materials Brand FX uses, as well as their quality and durability when compared to the materials used by Astoria and other manufacturers, are facts that can be verified. Further, the statement is juxtaposed against a statement that Astoria's products are built with quality materials to be long lasting and durable. Thus, given its context and verifiability, a reader of ordinary intelligence could perceive this statement as one of fact: that the materials Brand FX uses in manufacturing its utility bodies and toppers are of lesser quality than those typically used in the industry and, unlike Astoria's products, are not durable and will not last very long. Therefore, we hold that the Advertisement's statement that Brand FX's products are "built with sub-standard materials" is not mere opinion but is a statement of fact.
Further, Brand FX put on evidence that the statement is false. Finley's affidavit lists the materials used in Brand FX's manufacturing process and explains why they are not substandard:
Brand FX only uses quality materials to build its fiberglass truck bodies. The major materials used in the manufacturing process are polyester resin, polyester gel coat, fiberglass chop strand mat, gun roving, steel and aluminum. Brand FX uses PVC foams of different density and thickness and coremat polyester mat as its core for the truck bodies. All materials used are above accepted industry standard quality. Brand FX does not use any used, damaged or surplus materials. All of the materials used by brand FX have to pass quality control.
This affidavit testimony is more than a scintilla of evidence and is therefore sufficient to raise a fact issue regarding whether Astoria published disparaging information about Brand FX that is false. Accordingly, the trial court properly denied Astoria's motion for a no-evidence summary judgment on Brand FX's business disparagement claim based on free speech grounds.
See Forbes Inc., 124 S.W.3d at 170. We address Astoria's objections to Finley's affidavit in section V.
See Sw. Elec. Power Co., 73 S.W.3d at 215; Moore, 981 S.W.2d at 269.
C. False Advertising
Next, we consider Astoria's complaint that it was entitled to a no-evidence summary judgment on Brand FX's Lanham Act false advertising claim.
To establish a prima facie case of liability for false advertising under the Lanham Act, the plaintiff must show that (1) the defendant made a false statement of fact about its product in a commercial advertisement; (2) the statement actually deceived or has a tendency to deceive a substantial segment of its audience; (3) the deception is likely to influence a purchasing decision; (4) the defendant caused the false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result.
Logan, 263 F.3d at 462; Pizza Hut, Inc., 227 F.3d at 495.
To be actionable under the Lanham Act, a statement in an advertisement must be one of fact, not general opinion. Bald assertions of superiority or general statements of opinion cannot form the basis of Lanham Act liability. A statement of fact states a "specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact." It is one that "admits of being adjudged true or false in a way that . . . admits of empirical verification."
Pizza Hut, Inc., 227 F.3d at 495-96.
Id. at 496.
Id. (quoting Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th Cir. 1999)).
Presidio Enters., Inc. v. Warner Bros. Distrib. Corp., 784 F.2d 674, 679 (5th Cir. 1986).
The plaintiff must prove that the statement of fact is either literally false or that it is likely to mislead and confuse others. If the statement is shown to be literally false, the plaintiff is not required to show the second and third elements — that the statement misled customers and likely influenced their purchasing decisions. Rather, "[i]n such a circumstance, the court will assume that the statements actually misled consumers." On the other hand, if the statement is either ambiguous or true but misleading, the plaintiff must present evidence that consumers were actually deceived by the statement.
Pizza Hut, Inc., 227 F.3d at 495.
Logan, 263 F.3d at 462 (quoting Pizza Hut, Inc., 227 F.3d at 497).
Pizza Hut, Inc., 227 F.3d at 497. A plaintiff seeking to recover monetary damages must show that a substantial number of consumers were actually misled by the advertisements. Id.
Astoria contends that there is no evidence that the "Built with sub-standard materials" statement is a literally false statement under the Lanham Act. We have held, however, that this statement is capable of being reasonably interpreted as a statement of objective fact and that Finley's affidavit is sufficient to raise a fact issue concerning whether the statement is false. Therefore, the trial court properly denied Astoria's motion for a no-evidence summary judgment on Brand FX's Lanham Act false advertising claim based on free speech grounds. We overrule Astoria's eighth issue.
V. Objections to Finley's Affidavit
In its tenth issue, Astoria complains that the trial court improperly overruled Astoria's objections to Finley's affidavit. Astoria asserts that Finley was not competent to testify as an expert, that his testimony would not be helpful to a jury, and that the testimony is not based on a reliable foundation. Astoria further asserts that Finley's affidavit testimony regarding whether the materials Brand FX uses to manufacture its products are of "accepted industry standard quality" is subjective and conclusory.
To be competent summary judgment evidence, an affidavit must show affirmatively that the facts sought to be proven therein would be admissible in evidence at a conventional trial and that the affiant is competent to testify to the matters stated. If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise. The expert's affidavit must be based on a reliable foundation. Whether the expert's affidavit testimony is competent summary judgment evidence is a matter committed to the trial court's discretion.
TEX. R. CIV. P. 166a(f); Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996).
TEX. R. EVID. 702; E.I. du Pont de Nemours Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995).
E.I. du Pont de Nemours Co., 923 S.W.2d at 556.
United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997).
In this case, Finley stated in his affidavit that he had been in the utility and service truck body industry for thirty-six years and had owned several companies that were in the business of manufacturing and selling fiberglass truck bodies. Finley further stated that he was the owner and vice president of Brand FX. Thus, Finley was qualified by his skill and experience to testify as an expert regarding the quality of the materials Brand FX and other companies used to manufacture utility bodies. Further, the average person is unfamiliar with the types and quality of such materials; therefore, Finley's testimony would assist the court, and the jury, respectively, in determining whether the statement in the Advertisement that Brand FX's products are "built with sub-standard materials" is reasonably capable of defamatory meaning and actually false. Moreover, Finley's affidavit provides a reliable foundation for his opinion that the "built with sub-standard materials" statement is false. The affidavit details the materials Brand FX uses in the manufacturing process and states that they are above accepted industry standard because they must pass quality control and are not used, damaged, or surplus materials. These averments are sufficiently clear and could have been readily controverted. Accordingly, we hold that the trial court did not abuse its discretion by denying Astoria's objections to Finley's affidavit testimony. We overrule Astoria's tenth issue.
A plaintiff ultimately must prove that the defendant published false, disparaging information about the plaintiff, see Forbes Inc., 124 S.W.3d at 170, but whether the words used in a publication are reasonably capable of defamatory meaning is initially a question of law for the court to decide. See Turner, 38 S.W.3d at 114.
See TEX. R. CIV. P. 166a(c) (providing that expert testimony from an interested witness is competent summary judgment evidence if it is clear, positive, direct, otherwise credible and free from inconsistencies, and could have been readily controverted) ; Ryland Group, Inc., 924 S.W.2d at 122 (stating that conclusory affidavits are not enough to raise a fact issue because they are not credible or susceptible to being readily controverted).
See United Blood Servs., 938 S.W.2d at 30.
VI. Conclusion
Having concluded that we have jurisdiction to review by interlocutory appeal only Astoria's grounds for summary judgment based on the Free Speech Clauses, we dismiss Astoria's first through seventh and ninth issues on appeal. We affirm the trial court's order denying Astoria summary judgment on Brand FX's business disparagement and false advertising claims based on the Free Speech Clauses.
See Kaplan, 69 S.W.3d at 217; Markel v. World Flight, Inc., 938 S.W.2d 74, 78, 81 (Tex.App.-San Antonio 1996, no writ); Prodeco Exploration, Inc. v. Ware, 684 S.W.2d 199, 201 (Tex.App.-Houston [1st Dist.] 1984, no writ) (all addressing the parts of the respective appeals over which they had jurisdiction and dismissing the remainder of the appeals for want of jurisdiction).