The Texas Supreme Court has ruled in favor of The Dallas Morning News and staff writer Kevin Krause in a libel lawsuit brought by a North Texas drug-compounding business and its founders.
The state’s high court unanimously reversed a judgment by a Fort Worth appeals court and said The News published stories that accurately quoted court documents and didn’t report that the pharmacies were “actually guilty of anything.”
The justices directed the trial court to dismiss the case and award legal fees to The News.
The lawsuit was filed in March 2016 by RXpress Pharmacies and Xpress Compounding, owned by Fort Worth pharmacist Lewis Hall and his son Richard Hall. In Parker County District Court, they sought $50 million in damages for what they said were libelous and defamatory statements in The News’ stories that harmed their business and reputations.
The stories by Krause quoted court filings that accused the pharmacy of paying illegal kickbacks to physicians for writing prescriptions and said that it was the subject of a federal health care fraud investigation. RXpress insisted that it was not under federal investigation.
“We pursued this story in good faith and with an eye towards the public interest,” said Mike Wilson, editor of The Dallas Morning News. “The court agreed that our reporting was based on court filings and strong, thorough sourcing.”
Since the lawsuit was filed, Richard Hall was indicted in federal court, where his case is pending, and others involved in the business have been charged. Lewis Hall has not been charged.
However, the Supreme Court didn’t rely on subsequent developments in making its decision.
“We won without the benefit of what happened since the lawsuit was first filed,” said The News’ attorney, Tom Leatherbury of Vinson & Elkins. “The plaintiffs didn’t prove that anything in the articles was false.”
Attorneys for RXpress, John Shaw and Robert Myers, haven’t responded to a request for comment.
The Supreme Court decision said The News’ reporting was a fact-based account of court proceedings.
“Media outlets that accurately report allegations made by a third party about matters of public concern can assert the truth as a defense,” the Supreme Court decision said.
What’s important from a broader First Amendment perspective, Leatherbury said, is that “a newspaper can’t be sued for reporting accurately on court proceedings.”