Astros owner can proceed with lawsuit vs. McLane
Court sides with Crane in his bid for trial in sports network dispute
The Texas Supreme Court ruled Friday that Astros owner Jim Crane can proceed with a 2013 lawsuit against former Astros owner Drayton McLane. The suit stems from Crane’s purchase of the failed Comcast SportsNet Houston regional sports network from McLane in 2011.
The court by a 7-2 margin ruled that McLane did not enjoy the protection of the Texas Citizens Participation Act in his negotiations with Crane’s Houston Baseball Partners group for the sale of the Astros and the ballclub’s stake in CSN Houston.
The TCPA allows a judge to dismiss a case in which one of the parties is exercising the right of free speech, right to petition or right of association regarding discussions about a public figure or entity.
The case shuffled for years between state and federal courts before a Houston district court declined McLane’s motion to dismiss the case in 2019. That ruling was upheld by the 14th Court of Appeals in 2021 and by the Supreme Court on Friday.
Attorney Chip Babcock, who represents McLane, said the option of asking the Supreme Court was “actively under consideration.” He said he was disappointed that the court adopted what he described as a narrow interpretation of the TCPA that could have a chilling effect on media outlets and other avenues of public discussion.
The Astros had no immediate comment on the decision, which will return the decadeold case to a Harris County district court for trial.
McLane, then-Rockets owner Leslie Alexander and Comcast combined to form the CSN Houston partnership before McLane sold his interest along with the ballclub to Crane’s Houston Baseball Partners group in 2011. McLane’s 46.5 percent interest in CSN Houston was valued at $332 million and thus accounted for more than half Crane’s purchase price of $615 million.
Crane claimed in his lawsuit that McLane and Comcast defrauded him by incorrectly describing the network’s financial prospects. CSN Houston was unable to achieve widespread carriage by cable and satellite and was placed into involuntary Chapter 11 bankruptcy in 2014. The original suit asked for Crane’s group to be paid for losses from alleged breaches of the group’s purchase agreement.
It subsequently was purchased by AT&T and DirecTV for $1,000 and relaunched in 2014 as AT&T SportsNet Southwest. The Astros and Rockets in the process lost tens of mil
lions of dollars in unpaid rights fees along with their network equity.
In its ruling, delivered by Justice Debra Lehrmann, the Texas Supreme Court ruled that discussions among McLane, Crane and Comcast did not constitute protected speech under the Texas Citizens Protection Act because they were not “made in connection with a matter
of public concern” as defined by the act.
“The principal issue … is whether (the TCPA) applies to this dispute between private parties to a private business transaction that later generated public interest,” the majority opinion said. “… We hold that the Act does not apply.”
Chief Justice Nathan Hecht dissented, citing the court’s “myopia” in limiting the scope of protected speech under the TCPA.
Noting the court’s description of the McLaneCrane dispute as “a garden-variety fraud and breach-of-contract dispute between a private buyer and a private seller,” Hecht said the transaction was a matter of public interest that had “the City of Houston sitting on the edge of its seat” awaiting the outcome of sales talks.
Justice Jimmy Blacklock also dissented, noting that the Astros’ value has increased fourfold since Crane purchased the team.
“From today’s perspective, the allegation that Mr. Crane and his investors suffered damages when they purchased the Astros is difficult to take seriously,” Blacklock wrote. “… They should be thanking the defendants — not suing them.”
Babcock said the court’s narrow interpretation of the TCPA could have severe implications for media coverage and other discussions on matters of public interest.
“It’s a disaster for, for the media and for people who speak on matters of public concern,” Babcock said. “In every defamation case, the burden of proof will be affected if in Texas there is a narrow view on what is the matter of public concern. … This opinion will be used against the media on who’s got the burden of proof.
“Neither side argued the matter of public concern issue because it was so clear that the Astros conceded they were a public figure and waived that argument,” he added. “I’m disappointed and surprised that the court based its decision on that.”
Comcast initially was a defendant along with McLane but was dropped from the lawsuit when the company and Crane settled their legal issues last year.
In another twist of the complicated TV saga, the Astros and Rockets are expected to regain ownership of AT&T SportsNet Southwest later this year from its current owner, Warner Bros. Discovery.