Promising Special Exception for Unfair-Competition Case

Footnote 3 in the Dallas Court of Appeals’ recent en banc majority opinion from Steward Health Care System v. Saidara suggests a promising special exception in cases with general allegations about unfair competition:

Appellants do not specify the branch of “unfair competition” they allege. See, e.g., James E. Hudson, III, A Survey of the Texas Unfair-Competition Tort of Common-Law Misappropriation, 50 BAYLOR L. REV. 921, 924–26 (1989) (noting Texas common law recognizes three branches of unfair competition: palming off, trade-secret misappropriation, and common-law misappropriation); RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 40 cmt. a (AM. LAW INST. 1995) (stating that unfair competition includes torts for misappropriation, infringement, unjust enrichment, and breach of confidence, but not breach of contract, breach of the duty of loyalty owed by an employee or other agent, or breach of confidence not involving a trade secret). Rather, they generally refer to their claim as “Unfair Competition” and contend that “by misleading Steward with their misrepresentations that Prospect intended to buy the assets of Southwest General and thereby inducing Steward to make Southwest General’s most sensitive business information available to Prospect senior executives and ultimately all of Prospect, Prospect and Saidara have engaged in conduct that is contrary to honest practices in commercial matters.”

How to trespass

Reviewing the sometimes-confusing law surrounding Texas’s “trespass to try title” cause of action, Brumley v. McDuff reasoned: “In substance and effect, the Brumleys sued for title to the disputed property. In describing their claim as an ‘action to quiet title,’ the Brumleys did not nullify the substance of their adverse possession allegations. A suit that seeks to resolve a title dispute is, in effect, an action in trespass to try title, whatever its form. Much as a party does not turn a trespass-to-try-title dispute into a declaratory-judgment action through artful pleading, a party does not forfeit its trespass-to-try title-action by inartfully naming it.” No. 19-0365 (Feb. 5, 2021) (footnotes omitted).

Rule 91a and defenses

“[Tex. R. Civ. P.] 91a limits a court’s factual inquiry to the plaintiff’s pleadings but does not so limit the court’s legal inquiry. In deciding a Rule 91a motion, a court may consider the defendant’s pleadings if doing so is necessary to make the legal determination of whether an affirmative defense is properly before the court. . . . Rule 91a permits motions to dismiss based on affirmative defenses [here, attorney immunity] ‘if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought.'” Bethel v. Quilling, Selander, No.18-0595 (Feb. 21, 2020).