Astros invoke First Amendment-style law in defense against sign-stealing suit

HOUSTON, TX - OCTOBER 29:  A general view of Minute Maid Park during batting practice prior to Game 5 of the 2017 World Series between the Los Angeles Dodgers and the Houston Astros on Sunday, October 29, 2017 in Houston, Texas. (Photo by Rob Tringali/MLB via Getty Images)
By Daniel Kaplan
Jul 18, 2020

The Houston Astros have deployed several legal defenses against lawsuits brought by aggrieved season-ticket holders angry over the sign-stealing scandal. But one of the team’s arguments is likely to surprise: that a First Amendment-inspired Texas law, designed in part to protect the media from lawsuits, also insulates the Astros. In fact, the team contends that because it issued press releases on the scandal, which then became the subject of several news stories, the First Amendment-related law nullifies the litigation against the team.

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A key element of the lawsuit is the ticket holders’ contention that the team’s pre-scandal statements, press releases and marketing that touted the club’s success and hard work induced them to buy their ducats. The plaintiffs allege that those communications are therefore fraudulent. But the team contends that such messaging is protected by the Texas Citizens Participation Act (TCPA), which the state passed to enable media and others to speak, write and associate without fear of retaliatory lawsuits. These types of legislation are also known as anti-SLAPP (Strategic Lawsuit Against Public Participation) laws. Commercial speech is exempted, but the Astros maintain what they communicated is a matter of public interest.

“(The plaintiffs’) claims expressly are based on Astros press releases,” the team’s outside counsel, Bryce Callahan of Yetter Coleman LLP, said at a court hearing Friday. “And, of course, press releases, by definition, are designed to communicate information about events to the public and to promote journalistic works. Press releases are given to the press. So the press will cover them and write articles about it. And in fact, that’s exactly what has happened throughout the underlying issues of this case, whether that’s the sign-stealing scandal, whether that’s the specific press releases that we’ve talked about here.”

In a filing made the day before Friday’s hearing, Anita Sehgal, the team’s senior vice president for marketing and communications, wrote: “The Astros issued these press releases to assist journalists in gathering information for the creation and dissemination of journalistic work and also to promote press coverage in articles, newspapers, websites, magazines, social media platforms, and television or radio programs … (they) were not made by the Astros in any capacity as sellers or lessors of goods and services, did not arise out of commercial transactions for the Astros’ sale or lease of goods or services, and the intended audience of those press releases were journalists and the general public.”

Counsel for the ticket holders Friday blasted the team’s position, terming it “absurd and nonsensical.”

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“They were promoting their own commercial venture,” said Marion Reilly of Hilliard Martinez Gonzales, LLP.  “They weren’t promoting art, drama, journalism, literature, music, political or other artistic work. Cheating to the Astros was a strategic business decision. It was designed to increase revenue, and it was designed to increase the brand value. Again, simply because journalists later wrote about the Astros cheating doesn’t mean that the Astros promoted that journalist’s work.”

The Harris County District Court judge hearing the case, Robert Schaffer, said little during the nearly hourlong argument but did at one point strongly question the Astros. When their counsel, Callahan, tried to disabuse the argument that his position would eliminate all fraud lawsuits if a company simply issued a press release, Schaffer interrupted and said, “Hold on. That’s exactly my thought as well. So any kind of case would get this exemption?”

And earlier, Schaffer asked, “What are the communications involved here that implicate a person’s right to free speech, assemble and petition on matters of public concern?

“You’re saying, you’re saying because of the way I marketed T-shirts and jerseys, that is a communication made in connection with a matter of public concern,” he said, quizzing the Astros’ counsel.

Callahan replied that the communications covered more than merchandise, but also statements about sign stealing, player and manager interviews and other releases.

The Astros also contend that the plaintiffs don’t have standing to sue because their tickets are a revocable license that does not create a fiduciary duty. The plaintiffs argue that they’re suing over fraudulent marketing and communications they are suing over, the team said, which is why it invoked the TCPA.

“You know, it’s hardly up for dispute that Astros baseball, specifically the sign-stealing scandal, is a matter of public concern,” Callahan said.

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Reilly countered that the act protected media organizations, not baseball teams.

“The Astros are not the media, and the TCPA amendments protect the media,” she said. “The person or entity invoking the provision has to be part of the media, where they have to be engaged in the journalism business, such as a newspaper, magazine, news website or broadcaster. … Again, the Astros are not engaged in the journalism business, and they’re not the media. They’re a major league baseball club that ultimately hopes that the media will generally promote their business.”

Callahan countered the TCPA does not extend just to the media.

The law “does not apply only to traditional media companies,” he said. “The idea that the Astros themselves have to be a newspaper or a TV station to take advantage … is simply not supported by the text.”

When Reilly began addressing the legislative history of the TCPA to prove it should apply only to media companies, Schaffer indicated he’d had enough. He said he will rule on the arguments, as well as on whether the plaintiffs have legal standing, by Aug. 16. He ruled out any discovery until he decides whether to dismiss the case.

Hours later, Reilly’s firm filed a motion asking the judge to allow them to depose Sehgal, the Astros’ marketing executive.

“Plaintiffs seek discovery in the form of depositions (or alternatively, written discovery), to determine whether the sworn statements from Anita Seghal (sic) — in her capacity as the Senior Vice President, Marketing & communications, for Houston Astros, LLC (“Astros”) — supports the Astros Defendants’ legal contentions, arguments, and positions set forth in their conflicting motions,” according to the filing.

(Photo: Rob Tringali / MLB via Getty Images)

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