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The Dallas Morning News Wins Defamation Case at Texas Supreme Court

In a complete victory for The Dallas Morning News, the Texas Supreme Court has rejected a defamation lawsuit brought by the owners of a compounding-pharmacy business.

Overturning rulings from the state trial court and intermediate appeals court, the high court held in a published opinion issued on May 10 that the lawsuit should have been dismissed under the Texas Citizens Participation Act (the state’s anti-SLAPP statute).

In its opinion, the Texas Supreme Court ruled that plaintiffs Lewis and Richard Hall could not establish that articles covering a federal health care fraud investigation of their companies, RXpress Pharmacies and Xpress Compounding, were false. The Court further ruled that The News’ reporting of legal proceedings involving the companies is statutorily protected.

The underlying dispute revolves around several articles The News published in early 2016 about several criminal investigations and civil lawsuits involving the compounding industry generally and RXpress specifically.

The Halls sued for libel, claiming that they were not under investigation and that The News’ reporting was false. Seeking dismissal under the TCPA, The News argued that the search warrant conclusively established RXpress was under investigation, that the articles were substantially true, and that The News reporting of third-party allegations in civil lawsuits was both true and privileged.

The trial court and the Fort Worth Court of Appeals both rejected The News’ motion to dismiss, prompting an appeal to the Texas Supreme Court. V&E partner Tom Leatherbury presented oral arguments on behalf of The News on December 6, 2018.

Siding with The News, the Texas Supreme Court reversed and remanded the case to the state trial court for dismissal pursuant to the TCPA, which provides for a mandatory award of reasonable fees and costs and a discretionary award of sanctions.

To view the Court’s opinion, click here.

The V&E team included partner Tom Leatherbury, counsel Marc Fuller and senior associates Margaret Terwey and Kimberly McCoy.

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