DALLAS (Legal Newsline) - A law firm accused of conspiring with a company’s enemies to undermine a rail terminal project in West Texas succeeded in partly dismissing the claims against it by citing a law designed to protect citizens against lawsuits over their public participation in controversial issues.
Centurion Logistics sued its former lawyer Jules Brenner and his firm Strasburger & Price last year, accusing them of conspiring with its partners-turned-competitors in a proposed terminal near Pecos to serve oil and gas producers in the Permian Basin. A Texas appeals court agreed that most of the claims were barred by the Texas Citizens Participation Act, which protects “petitions” and communications related to judicial proceedings. But the appeals court allowed claims alleging breach of fiduciary duty to proceed.
Marc Marrocco, Tony Albanese and John Calce formed Centurion Logistics in September 2013 and the following year hired Brennan to represent it. The company negotiated a memorandum of understanding with Union Pacific Railroad in June 2014 and later Calce introduced the other two to James Ballengee, with whom they formed a joint venture called Centurion Pecos Terminal.
Brennan represented Centurion Logistics in all the transactions but Marocco and Albanese soon became suspicious Ballengee and Calce were working a separate rail deal and trying to strip Centurion Logistics of its assets.
The two sides attempted to work out their differences but failed and in June 2016 Centurion Logistics sued the both of them, with Ballengee and Calce firing back with a countersuit. A court threw out Centurion Logistics’ claims and the two sides settled the countersuit in July 2019.
Two months later, Centurion Logistics sued its former lawyers for claims including breach of fiduciary duty, accusing them of “fanning the flames” of the dispute and helping Ballengee and Calce form competing firms. Strasburger & Price moved to dismiss that lawsuit, saying it was barred by the TCPA.
The trial court dismissed the entire case, agreeing it involved actions protected under the TCPA. The law is most commonly invoked by activists to dismiss lawsuits over their participation in public debate, but broadly covers communications associated with legal actions. Such laws are also called anti-SLAPP acts, for Strategic Lawsuit Against Public Participation.
The Fifth District Court of Appeals in Dallas agreed the TCPA applied, but only in part. It dismissed claims Brennan hid his involvement in the underlying lawsuit, which was supposed to be handled by his colleagues at Strasburger & Price, and that he shared confidential information with Centurion Logistics’ opponents. Those all fell within the protection for judicial “communications” under the TCPA, the court ruled.
But the appeals court reversed the trial court’s blanket dismissal of claims, saying Centurion Logistics could continue to sue its former lawyers over actions unrelated to the underlying lawsuit. Those include claims Strasburger & Price helped Ballenngee and Calce form competing entities between 2016 and 2018, helped them buy land adjacent to the proposed rail terminal site and allegedly advised them in a plan to divest Centurion Logistics of its assets.
“The bare fact that the Underlying Lawsuit was pending while appellants were allegedly committing this conduct does not demonstrate that any communications involved in the conduct were `in or pertaining to’ the Underlying Lawsuit or any other judicial proceeding,” the appeals court concluded.