hands tied with rope
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Mauze & Bagby and its two name partners, George Mauze and James Bagby, will still have to defend themselves against an advertising defamation claim, according to a decision issued March 11 by the U.S. Court of Appeals for the Fifth Circuit.

In NCDR LLC v. Mauze & Bagby, a three-judge panel affirmed a trial court’s ruling that had denied the Houston law firm’s motion to dismiss. The firm and the two partners are defendants in a suit brought by NCDR LLC, KS2 TX PC and Dentistry of Brownsville PC. The three entities do business as Kool Smiles, operating dental clinics nationwide.

According to the 21-page Fifth Circuit opinion, Kool Smiles, which the Fifth Circuit uses to refer collectively to the plaintiffs, provides care “primarily to economically disadvantaged children.” And M&B, which the Fifth Circuit uses collectively to refer to all three defendants, “engaged in an advertising campaign soliciting former Kool Smiles patients to represent.”

The opinion states that “M&B contends that Kool Smiles has been the subject of multiple media reports and government investigations regarding allegations of Medicaid fraud and bad medical provision.” As part of an advertising campaign, the opinion states, “M&B ran television, radio, and internet advertisements, and developed a website that strongly implied, or even accused, Kool Smiles of performing unnecessary, and at times harmful, dental work on children to obtain government reimbursements”—published statements that led to Kool Smiles’ defamation claim against the law firm.

But after the Kool Smiles plaintiffs filed the defamation claim against the firm and two partners, the opinion continues, the defendants responded with a motion to dismiss based on the Texas Citizen’s Participation Act, also called Texas’ anti-SLAPP (strategic lawsuits against public participation) statute.

A district court determined that “M&B’s speech fell within a commercial speech exemption” to Texas’s anti-SLAPP statute, according to the Fifth Circuit ruling. The Fifth Circuit agreed in the opinion, which Judge Edward C. Prado wrote, joined by Senior Judge Carolyn Dineen King and Chief Judge Carl E. Stewart.

“Ultimately, we conclude that the Supreme Court of Texas would most likely hold that M&B’s ads and other client solicitation are exempted from the TCPA’s protection because M&B’s speech arose from the sale of services where the intended audience was an actual or potential customer,” Prado wrote.

Kimberly Keller of Keller Stolarczyk in Boerne, who represents the partners and the firm, did not return a call seeking comment, nor did either of her lawyer-clients. Darren McCarty, a partner in Alston & Bird in Dallas, who represents the Kool Smiles plaintiffs, also did not return a call.