Precedent-Setting Case, Texas Judge Finds Non-Disparagement Clause Unenforceable
Win! In Precedent-Setting Case, Judge Finds Non-Disparagement Clause Unenforceable; Case Dismissed in Dallas Pet-Sitting Suit
Warning to Other Companies: Don’t Use Non-Disparagement Clauses to Silence Consumers
A Texas state court rightfully has dismissed a lawsuit against a Texas couple who was being sued for criticizing a Dallas pet-sitting business on Yelp. Public Citizen believes that this is the first case involving a non-disparagement clause in a consumer contract in which a court has held the clause unenforceable.
The judge for the 160th District Court of Dallas County dismissed both a libel claim and a non-disparagement clause claim and held that the couple – Robert and Michelle Duchouquette – would be awarded attorney fees as well as sanctions to deter future such lawsuits.
“Seeking to silence negative criticism, the owners of Prestigious Pets may well have put their whole company on the line,” said Paul Alan Levy, the Public Citizen attorney handling the case. “Not only did the company lose business when customers were disgusted over the non-disparagement lawsuit, it now is responsible to pay attorney fees and sanctions. This case should serve as a warning to other companies.”
The story began in October 2015, when the Duchouquettes hired Prestigious Pets to watch their two dogs and a fish while they were on vacation. After being dissatisfied with her experience with the company, Michelle wrote a one-star review on Yelp explaining that she didn’t like the fact that she could not reach the pet sitter directly when problems arose. She also wrote that the fish bowl water appeared cloudy, suggesting that the fish was overfed.
Prestigious Pets then brought a small claims lawsuit against the Duchouquettes, alleging that the review was defamatory and that the posting and subsequent statements to media violated a non-disparagement clause in the fine print of its standard contract. The couple filed an anti-SLAPP motion, seeking to have the suit dismissed because it chilled free speech while lacking a sound legal or factual basis. The company dismissed its small claims proceeding and sued in state district court alleging that the broader media attention resulting from the lawsuit had hurt the company’s business. The company also sought an award of up to one million dollars in damages.
Public Citizen entered the case on behalf of the couple, filing both an appeal from the implicit denial of the anti-SLAPP motion in small claims court and a new anti-SLAPP motion in the Texas district court. The appeal in the County Court, which seeks to recover the roughly $10,000 that the Duchouquettes had to spend for their private counsel in the small claims court, is still pending.
“I am thankful to have a ruling that supports our right to free speech. We should all have the opportunity to express our opinions without the fear of a lawsuit,” said Michelle Duchouquette. “We are so grateful for the attorneys who have supported us through the case. It took lots of hours and many smart minds spending too much time talking about Gordy the betta fish. Thank goodness they did not lose sight of the real issue: the threats posed by non-disparagement clauses to our right to free speech.”
Nicole Williams, Andrew Cookingham and Christopher Dachniwsky from the Dallas firm of Thompson and Knight are co-counsel.