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Counsel Fees, Sanctions Nixed in Anti-SLAPP Action Against Website Operator

A Texas appeals court has overturned $150,000 in sanctions, remanded for reconsideration an award of $375,383 in attorney fees, and vacated nonmonetary sanctions imposed by the trial judge on the operator of website purportedly aimed at stamping online bullying and other more lurid practices. A three-judge panel of the Court of Appeals for the Second District said the sanctions levied against plaintiff James McGibney were unreasonable, and that nonmonetary sanctions are not permitted under the Texas Citizens Participation Act (TCPA). The court also said the counsel fees awarded to defendant Neal Rauhauser were unreasonable, but suggested that some fees could be awarded on remand. Tarrant County District Court Judge Donald Cosby originally had imposed $1 million in sanctions against McGibney, but reversed himself after McGibney filed a motion for reconsideration. But Second District Chief Judge Bonnie Sudderth, on the appeal, said Cosby still overstepped his authority. "[T]he trial court abused its discretion by awarding an unreasonable amount of attorney's fees and non-monetary sanctions, when the TCPA does not authorize them, and by improperly conditioning the ... fee award," Sudderth wrote. Judges Bill Meier and Kerry Fitzgerald joined in the ruling, which was released on April 19. In 2016, Cosby hit McGibney and California-based company ViaView Inc. with the original order granting Rauhauser’s motion for attorney fees and sanctions. McGibney and ViaView sued 10 defendants in February 2014, alleging defamation and negligence, and accusing defendant Thomas Retzlaff of creating online aliases to stalk and harass the plaintiffs. Retzlaff, of Arizona, no longer is a party the lawsuit. McGibney and ViaView claim to operate websites, chiefly BullyVille.com, that help victims of "revenge porn" postings, where private images or videos are posted without the subjects' consent. The plaintiffs claimed that the defendants made false allegations on Twitter about McGibney. According to media reports at the time, the suit also accused Retzlaff of “posting death threats, making terroristic threats, [and] cyberstalking,” and that he was “involved with several ‘revenge porn’ sites." In his original ruling, Cosby concluded that the plaintiffs sued Rauhauser “willfully and maliciously to injure” him and deter him from exercising his constitutional right to “truthfully criticize plaintiffs.” “Plaintiffs engaged in aggravating misconduct by willfully and intentionally harassing … both Rauhauser and Rauhauser’s attorney, the objective of which was to punish the exercise of Rauhauser’s constitutional rights in the past, deter the exercise of Rauhauser’s constitutional rights in the future, and impair Rauhauser’s ability to retain legal counsel in defense of plaintiffs’ baseless claims,” Cosby said. Strategic lawsuits against public participation are filed to stifle free speech and other civil rights. Sanctions are mandatory under the TCPA, Texas’ anti-SLAPP law. At the time of Cosby's original ruling, the $1 million sanction was believed to be the largest anti-SLAPP sanction ever awarded in the 29 states that have a version of the law, according to Rauhauser's lawyer, Jeffrey Dorrell. In addition to the monetary sanctions, Cosby ordered McGibney to give Rauhauser several domain names that incorporated Rauhauser's name, media reports said. Cosby also ordered McGibney to post apologies to Rauhauser and Dorrell on his websites for 365 days. Dorrell, of Houston's Hanszen Laporte, said he would appeal the April 19 ruling to the Texas Supreme Court. "We disagree with the court's decision," he said. "We have options." McGibney's attorney, Denton solo Evan Stone, applauded the ruling. "Justice was done," he said. "The court saw this case for what it was."