First Sabrepoint Capital Management, L.P., Sabrepoint Capital Partners, L.P., Sabrepoint Capital Participation, L.P., George Baxter, and Donald Marchiony v. Farmland Partners Inc.

Supreme Court of Texas
══════════
No. 23-0634
══════════

First Sabrepoint Capital Management, L.P., Sabrepoint Capital
Partners, L.P., Sabrepoint Capital Participation, L.P.,
George Baxter, and Donald Marchiony,
Petitioners,

v.

Farmland Partners Inc.,
Respondent

═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fifth District of Texas
═══════════════════════════════════════

Argued January 16, 2025

JUSTICE HUDDLE delivered the opinion of the Court.

A Colorado real estate investment trust sued a Texas hedge fund
and its employees for damages caused by an allegedly defamatory article
published under a pseudonym. After those claims were dismissed in
Colorado federal court for lack of personal jurisdiction, the trust sued in
Texas state court. The defendants did not challenge personal
jurisdiction here but instead moved to dismiss under the Texas Citizens
Participation Act (TCPA) and for summary judgment based on collateral
estoppel. The trial court granted both motions, but the court of appeals
reversed, holding (1) the trial court lacked authority to grant the TCPA
motion after it was overruled by operation of law and (2) the defendants
failed to conclusively establish that collateral estoppel barred the
claims. We agree with the court of appeals that the defendants were not
entitled to summary judgment on their collateral estoppel defense. But
the court of appeals erred in holding that the order granting the TCPA
motion was void. We therefore reverse and remand for the court of
appeals to address the TCPA motion on its merits.
I. Background
First Sabrepoint Capital Management, L.P. is a hedge fund with
its principal place of business in Dallas. In February 2018, First
Sabrepoint entered into an agreement with QKM, L.L.C., an
independent advisory firm owned by David Quinton Mathews. In
exchange for a $9,500 monthly fee, QKM agreed to conduct investment
research and advisory services for First Sabrepoint.
Several months later, a senior analyst at First Sabrepoint,
Donald Marchiony, sent Mathews an email about Farmland Partners
Inc. (FPI). FPI is a publicly traded real estate investment trust that
acquires agricultural land across North America and is headquartered
in Colorado. Marchiony’s email attached a slide deck with information
on FPI’s value and business operations. He described the attachment
as a “new idea” on which he and Mathews could collaborate “if there’s
something juicy.” Marchiony told Mathews that First Sabrepoint held a

2
relatively small short position1 on FPI’s stock but “unless we have a
catalyst [we] probably won’t do too much higher than that.”
Mathews began researching FPI’s financial condition and
communicated his findings to additional First Sabrepoint employees,
including George Baxter, First Sabrepoint’s CEO. Mathews eventually
wrote an article about FPI under his pseudonym “Rota Fortunae” for the
financial blog “Seeking Alpha.” The article painted a bleak picture of
FPI’s business, noting it faced a “significant risk of insolvency.”
Shortly before the article was published, Mathews hired a Dallas
attorney, Matthew Mitzner, to send a letter informing FPI of the
article’s impending publication and offering FPI an opportunity to
comment. FPI did not respond within Mitzner’s 24-hour deadline, and
the article was published on Seeking Alpha the following day. On the
day the article was published, FPI issued a press release denying some
of the article’s statements. Yet within one day of the article’s
publication, FPI’s stock price dropped 39%. FPI released another public
statement rebutting the article’s assertions, including that the company
was nearly insolvent.
Later that month, FPI sued Mathews—identified initially only by
his pseudonym—in Colorado state court. FPI alleged that the Seeking
Alpha article contained false statements and was published as part of a

1 “Shorting” a stock is a technique in which an investor, expecting a

stock price to decline, borrows and then sells shares of a stock intending to
purchase them later for a lower price. Key Points About Regulation SHO, U.S.
SEC. & EXCH. COMM’N (May 31, 2022), https://www.sec.gov/investor/pubs/
regsho.htm?os=i&ref=app.

3
“short and distort” scheme2 in which false information is disseminated
to generate profits for short sellers. The suit was removed, and FPI
amended its complaint to add First Sabrepoint, Baxter, and Marchiony
as defendants, alleging that they conspired with Mathews to manipulate
securities markets to help First Sabrepoint profit from its short position
on FPI’s stock. FPI alleged it and its shareholders suffered financial and
reputational harm as a result, including the loss of prospective business
relations.
First Sabrepoint, Baxter, and Marchiony moved to dismiss under
Federal Rule of Civil Procedure 12(b)(2). In response, FPI contended
that the defendants had purposefully directed their activities toward
Colorado by publishing Mathews’s article and by sending Mitzner’s
letter to FPI in Colorado two days before publication. The district court
concluded neither of these acts supported the exercise of personal
jurisdiction and granted the Rule 12(b)(2) motion. Farmland Partners
Inc. v. Rota Fortunae, No. 1:18-CV-02351-RBJ, 2021 WL 765362, at *7,
*12 (D. Colo. Feb. 26, 2021). In explaining its reasoning, the district
court noted that although FPI presented evidence that the defendants
knew Mathews previously had published articles under the pseudonym
“Rota Fortunae” on Seeking Alpha, there was no evidence that the First
Sabrepoint defendants knew about this article “until after it was
published.” Id. at *6. The court concluded that the evidence at most

2 A “short and distort” scheme is intended to cause a selloff to benefit

short sellers. It is accomplished by spreading false or misleading information
about a publicly traded company. Matthew B. Schneider, Coming Up Short:
Using Short-Seller Reports to Plead Loss Causation in Securities Class Actions,
124 COLUM. L. REV. 1485, 1505 (2024).

4
supported “a reasonable inference that Sabrepoint knew . . . it was
possible Quinton Mathews would publish an article about FPI.” Id.
at *7.3 Yet, in its view, this was not enough to establish purposeful
availment:
Sabrepoint’s knowledge that Mr. Mathews might publish
an article about FPI is insufficient to establish that
Sabrepoint purposely directed its activities at Colorado. In
sum, there is nothing in the record to support an inference
that the Seeking Alpha article is attributable to
Sabrepoint. Thus, the article on its own cannot establish
that Sabrepoint purposely directed its activity at
[Colorado].
Id. The court also concluded there was no evidence that the First
Sabrepoint defendants had any involvement with hiring Mitzner or
instructing him to send the letter to FPI. Id. at *7–8. The court further
rejected FPI’s arguments that personal jurisdiction was proper under an
agency or conspiracy theory. Id. at *8–12.
Following dismissal in Colorado, FPI sued in Texas state court,
asserting similar claims against First Sabrepoint, Baxter, and
Marchiony. FPI also added two new defendants: Sabrepoint Capital
Partners, LP (a separate fund that FPI alleges acted through First
Sabrepoint) and Sabrepoint Capital Participation, LP (the general
partner of Sabrepoint Capital Partners).4 Unless clarity requires
otherwise, we will refer to all five defendants collectively as

3 The Colorado court’s order used “Sabrepoint” to refer collectively to all

three defendants: First Sabrepoint, Baxter, and Marchiony. Id. at *1.
4 FPI earlier sued in the Northern District of Texas, but that action was

dismissed because the presence of Sabrepoint Capital Partners defeated
diversity jurisdiction.

5
“Sabrepoint.” FPI alleged six claims against Sabrepoint: (1) intentional
and tortious interference with prospective business relations/advantage
and/or negligence; (2) deceptive trade practice in violation of the
Colorado Consumer Protection Act; (3) civil conspiracy; (4) unjust
enrichment/money had and received; (5) disparagement/business
disparagement; and (6) defamation.
Sabrepoint answered and asserted collateral estoppel as an
affirmative defense. It then moved for summary judgment on that basis,
arguing that the Texas suit was based on the same underlying factual
issue decided in Sabrepoint’s favor by the Colorado court: Sabrepoint’s
“lack of involvement with the allegedly defamatory article.” FPI
responded that collateral estoppel was inapplicable because the
Colorado federal court’s dismissal order adjudicated a jurisdictional
question, not the merits. FPI also argued that the Colorado order did
not address all the claims at issue in Texas and its analysis of
Sabrepoint’s potential ties to the article was not “essential” to the
Colorado judgment.
In addition to seeking summary judgment, Sabrepoint moved to
dismiss FPI’s claims under the TCPA. It argued that the TCPA applied
to those claims and FPI failed to establish a prima facie case by clear
and specific evidence. See TEX. CIV. PRAC. & REM. CODE §§ 27.003(a) (“If
a legal action is based on or is in response to a party’s exercise of the
right of free speech, . . . that party may file a motion to dismiss the legal
action.”), .005(c) (prohibiting a court from dismissing a legal action if the
claimant “establishes by clear and specific evidence a prima facie case
for each essential element of the claim in question”). Sabrepoint later

6
supplemented its TCPA motion to add another ground for dismissal:
that it established its collateral estoppel defense as a matter of law. See
id. § 27.005(d). The court heard the TCPA motion on November 12,
2021, but did not rule within the thirty-day deadline the statute
prescribes. See id. § 27.005(a) (requiring the trial court to rule within
thirty days after the hearing); id. § 27.008(a) (providing that the motion
is denied by operation of law if the trial court does not rule within that
time period). Rather, on December 17, thirty-five days after the hearing
on the TCPA motion, it granted both the TCPA motion and the motion
for summary judgment.
FPI appealed. The court of appeals initially questioned its
jurisdiction over the appeal, noting that the December 17 order granting
the TCPA motion did not address attorney’s fees, see id. § 27.009(a)(1)
(requiring the court to award a successful movant court costs and
reasonable attorney’s fees), and therefore may not constitute a final
judgment. 703 S.W.3d 123, 129 & n.12 (Tex. App.—Dallas 2023). After
the parties briefed the jurisdictional question, the court of appeals
concluded the TCPA motion, which was overruled by operation of law
thirty days after the hearing, could not be granted thereafter. Id. at 129.
Having decided that the portion of the order granting the TCPA motion
was void, the court of appeals determined it would review only the trial
court’s grant of summary judgment. Id.
Following the court of appeals’ order to this effect, the parties
limited their briefing and argument to the summary judgment ruling,
which was based on collateral estoppel. Sabrepoint argued that the
Colorado court’s order dismissing FPI’s suit determined that Sabrepoint

7
had no involvement at all in the Seeking Alpha article and this
determination barred FPI’s claims in Texas. The court of appeals
disagreed and reversed the trial court’s judgment. Id. at 136. According
to the court of appeals, the Colorado court considered only whether it
could exercise personal jurisdiction over Sabrepoint, which was not at
issue in this case because personal jurisdiction in Texas is unchallenged.
Id. at 134–35. Therefore, the issue in the prior case was not the identical
issue presented here, and the Colorado judgment was not preclusive. Id.
Additionally, the court noted that FPI’s claims against the two new
defendants were never litigated in Colorado, leaving “no possibility of
an inconsistent determination of the same ultimate issue.” Id. at 135.
Sabrepoint petitioned for review, which we granted.
II. The trial court did not commit reversible error
by granting the TCPA motion.
The Legislature enacted the TCPA to protect against “retaliatory
lawsuits meant to intimidate or silence citizens on matters of public
concern.” Dall. Morning News, Inc. v. Hall, 579 S.W.3d 370, 376 (Tex.
2019). The statute’s express purpose is “to encourage and safeguard the
constitutional rights of persons to petition, speak freely, associate freely,
and otherwise participate in government to the maximum extent
permitted by law and, at the same time, protect the rights of a person to
file meritorious lawsuits for demonstrable injury.” TEX. CIV.
PRAC. & REM. CODE § 27.002. The TCPA itself explicitly directs courts
to construe the statute “liberally to effectuate its purpose and intent
fully.” Id. § 27.011(b). When, as here, we consider issues of statutory

8
interpretation, our review is de novo. Morath v. Lampasas Indep. Sch.
Dist., 686 S.W.3d 725, 734 (Tex. 2024).
The TCPA provides for “early dismissal” of claims to which it
applies. Greer v. Abraham, 489 S.W.3d 440, 442 (Tex. 2016). A
defendant may file a motion to dismiss within sixty days after the
lawsuit’s service. TEX. CIV. PRAC. & REM. CODE § 27.003(b). Discovery
is stayed (with limited exceptions), id. § 27.003(c), and the trial court
must hold a hearing within sixty days after the motion is served, unless
there is good cause or the parties agree to an extension, but in no event
later than ninety days after service of the motion, id. § 27.004(a). The
TCPA then imposes a deadline by which the trial court must rule:
The court must rule on a motion under Section 27.003 not
later than the 30th day following the date the hearing on
the motion concludes.
Id. § 27.005(a). If the court does not rule within thirty days of the
hearing, “the motion is considered to have been denied by operation of
law and the moving party may appeal.” Id. § 27.008(a). We have
described this procedure generally as a “special motion for . . . expedited
consideration.” In re Lipsky, 460 S.W.3d 579, 584 (Tex. 2015).5
This Court recently held that the expiration of the deadline for a
trial court to rule on a TCPA motion does not extinguish the court’s

5 An appeal from the trial court’s order (or failure to rule) is similarly

expedited. TEX. CIV. PRAC. & REM. CODE § 27.008(b). The notice of appeal
must be filed within twenty days of the trial court’s order. See TEX. R. APP.
P. 26.1(b) (“[I]n an accelerated appeal, the notice of appeal must be filed within
20 days after the judgment or order is signed . . . .”); TEX. R. APP. P. 28.1(a)
(“[A]ppeals required by statute to be accelerated or expedited . . . are
accelerated appeals.”).

9
plenary power to later reconsider that ruling. In In re Panchakarla, the
trial court granted a TCPA motion within the thirty-day period following
the hearing, dismissing the plaintiff’s claims. 602 S.W.3d 536, 538 (Tex.
2020). The plaintiff filed a motion for reconsideration and new trial,
which the court granted over two months later, vacating its initial order
and denying the TCPA motion. Id. at 538–39. We held that the trial
court did not abuse its discretion in vacating its order granting the
TCPA motion. Id. at 541. We noted that “the TCPA is silent about a
trial court’s authority to reconsider either a timely issued ruling
granting a TCPA motion to dismiss or a timely order denying such a
motion when no interlocutory appeal is pending.” Id. at 540. And we
observed that this Court has “long recognized that trial courts retain
plenary power over their judgments until they become final.” Id. at 539.
As a general matter, a trial court also “retains continuing control over
interlocutory orders and has the power to set those orders aside any time
before a final judgment is [rendered].” Id. at 539–40 (alteration in
original) (quoting Fruehauf Corp. v. Carrillo, 848 S.W.2d 83, 84 (Tex.
1993)). We thus concluded that “nothing in the statutory scheme [of the
TCPA] prohibits trial courts from vacating their own orders when they
otherwise have plenary power to do so.” Id. at 541.
Consistent with Panchakarla, we conclude that the court of
appeals erred by declaring void the trial court’s order granting
Sabrepoint’s TCPA motion to dismiss. The trial court’s ruling on
Sabrepoint’s TCPA motion came only five days after the expiration of
Section 27.005(a)’s deadline to rule. At that time, no final judgment was
in place, and Sabrepoint had not appealed. As we recognized in

10
Panchakarla, under those circumstances, nothing in the TCPA
extinguished the trial court’s plenary power to reconsider the TCPA
motion’s merits. Id.
Sabrepoint does not challenge Panchakarla’s holding; instead, it
argues that Panchakarla is distinguishable because it involved
reconsideration of an order that timely granted a TCPA motion. We are
not persuaded. We see no reason to apply a different rule simply
because the initial order in Panchakarla was one the trial court
expressly made as opposed to one made by operation of law. Cf. TEX. R.
CIV. P. 329b(e) (providing that trial courts have plenary power to grant
a new trial for thirty days after a motion for new trial has been denied
“either by a written and signed order or by operation of law”). Nor does
it matter that, on reconsideration, the trial court in Panchakarla denied
the motion, whereas the trial court in this case reconsidered and granted
the motion.
The text of the TCPA does not require a different result. The
TCPA’s command is that courts “must rule” no later than thirty days
after the hearing has concluded. TEX. CIV. PRAC. & REM. CODE
§ 27.005(a). But as we noted in Panchakarla, the statute nowhere limits
the trial court’s authority to revisit that ruling. 602 S.W.3d at 540–41.
Instead, the statute provides a simple consequence for a trial court’s
failure to timely rule: the motion is overruled by operation of law and
the movant may appeal. TEX. CIV. PRAC. & REM. CODE § 27.008(a).
We do not suggest that the trial court committed no error by
granting the TCPA motion outside Section 27.005(a)’s thirty-day
window. But because the trial court’s ruling occurred within the time

11
during which Sabrepoint could have appealed the denial of its motion by
operation of law and stayed all proceedings, we conclude that any error
in failing to rule by the thirty-day deadline was harmless. See TEX. R.
APP. P. 44.1(a) (“No judgment may be reversed on appeal on the ground
that the trial court made an error of law unless the court of appeals
concludes that the error complained of . . . probably caused the rendition
of an improper judgment . . . .”); see also In re J.N., 670 S.W.3d 614, 618
(Tex. 2023) (“As a general rule, ‘[n]o [civil] judgment may be reversed on
appeal on the ground that the trial court made an error of law unless’
that error was harmful.” (alterations in original) (quoting TEX. R. APP.
P. 44.1(a))). In granting the motion when it did, the ultimate outcome
was the same as if Sabrepoint had filed an interlocutory appeal from the
denial by operation of law and succeeded on appeal. Provided the trial
court’s ruling on the TCPA motion was correct on the merits (an issue
we do not decide), granting the motion within the time to appeal from
the denial by operation of law did not result in an improper judgment.
See Lorusso v. Members Mut. Ins. Co., 603 S.W.2d 818, 819–20 (Tex.
1980) (explaining that the harmless error rule “establishes a sound and
common sense policy of not reversing a judgment unless the error or
errors can be said to have contributed in a substantial way to bring
about the adverse judgment”); see also Walker v. Owens, 492 S.W.3d 787,
790–91 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (holding that a
trial court committed harmless error in granting defendant’s motion to
dismiss outside of the deadline in Rule of Civil Procedure 91a, as
Rule 91a “does not contain any sanction for non-compliance with the
forty-five day deadline” despite its mandatory language); cf. Beavers v.

12
Beavers, 675 S.W.2d 296, 300 (Tex. App.—Dallas 1984, no writ)
(concluding that a trial court’s failure to file findings of fact and
conclusions of law within prescribed time limits was harmless error).
This conclusion aligns with the TCPA’s objective, which is to
encourage expedient litigation for parties whose rights the lawsuit
threatens. Lipsky, 460 S.W.3d at 584. To achieve that end, the
Legislature expressly provided for an immediate right to appeal when a
TCPA motion is denied by operation of law.6 TEX. CIV. PRAC. & REM.
CODE § 27.008(b). Rather than force a TCPA movant to file a
time-consuming interlocutory appeal from a denial by operation of law
(and stay all trial court proceedings), judicial economy and the objectives
of the TCPA are served by allowing the trial court to reverse that ruling
within the window in which the movant could have filed an interlocutory
appeal. We hold that, while a trial court errs by granting a TCPA motion
after the expiration of Section 27.005(a)’s thirty-day window, the error
is harmless and does not warrant reversal if made within the
twenty-day period in which the movant could have filed a notice of
appeal from the motion’s denial by operation of law. See TEX. R. APP.
P. 44.1(a).
The court of appeals erroneously held that the portion of the trial
court’s order granting Sabrepoint’s TCPA motion to dismiss was void. It
therefore did not address the motion’s merits. We reverse that portion
of the court of appeals’ judgment and remand to that court to address in

6 While the TCPA permits an interlocutory appeal from the denial of a

motion to dismiss, see TEX. CIV. PRAC. & REM. CODE § 51.014(a)(12), there is
no provision for an interlocutory appeal from the granting of such a motion.

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the first instance the merits of FPI’s appeal from the order dismissing
its claims under the TCPA, which the court of appeals instructed the
parties not to brief.7
III. Summary judgment on collateral estoppel was improper.
While the court of appeals erred by declaring void the trial court’s
order granting Sabrepoint’s TCPA motion, it correctly reversed the trial
court’s order granting Sabrepoint’s motion for summary judgment based
on collateral estoppel. Because collateral estoppel is the basis for the
summary judgment motion and a basis for the TCPA motion, the
doctrine’s application to this case will be at issue on remand.
Accordingly, in the interest of judicial efficiency, we will address its
application here. See Royston, Rayzor, Vickery, & Williams, LLP v.
Lopez, 467 S.W.3d 494, 499 (Tex. 2015) (“[I]n the interest of judicial
economy we also consider [petitioner’s] other potentially dispositive
issues instead of remanding them to the court of appeals.”).
“We review summary judgments de novo, taking as true all
evidence favorable to the nonmovant, and indulging every reasonable
inference and resolving any doubts in the nonmovant’s favor.” Weekley
Homes, LLC v. Paniagua, 691 S.W.3d 911, 915 (Tex. 2024) (quoting
Barbara Techs. Corp. v. State Farm Lloyds, 589 S.W.3d 806, 811 (Tex.
2019)). To establish entitlement to summary judgment based on an
affirmative defense—like collateral estoppel—the defendant must

7 While FPI’s appeal was pending, the trial court signed an order
awarding Sabrepoint attorney’s fees under the TCPA and stated that this order
“resolves disputes of all remaining issues and claims and is final and
appealable.” FPI amended its notice of appeal to include this order, so there is
no question about the court of appeals’ jurisdiction over the appeal.

14
conclusively establish each element of its affirmative defense.
Draughon v. Johnson, 631 S.W.3d 81, 87–88 (Tex. 2021). The
nonmovant must then present evidence raising a fact issue. Centeq
Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). We review
issues of collateral estoppel de novo because collateral estoppel’s
application “is a question of law.” Reynolds v. Quantlab Trading
Partners US, LP, 608 S.W.3d 549, 557 (Tex. App.—Houston [14th Dist.]
2020, no pet.).
Collateral estoppel, also known as issue preclusion, bars parties
from relitigating identical issues of fact or law in multiple lawsuits. Van
Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex.
1985); see also Quinney Elec., Inc. v. Kondos Ent., Inc., 988 S.W.2d 212,
213 (Tex. 1999) (“[T]he basic function of collateral estoppel [is] to
prevent a party from relitigating an issue that the party previously
litigated and lost.”). By focusing on the issues being litigated instead of
entire claims, collateral estoppel is “more narrow” in scope than the
related doctrine of res judicata or claim preclusion. Van Dyke, 697
S.W.2d at 384. Specifically, collateral estoppel prevents the same
“ultimate issue of fact” from being litigated in more than one suit.
Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex. 1984). In
so doing, collateral estoppel promotes judicial efficiency, protects parties
from multiple lawsuits, and prevents inconsistent judgments. In re
USAA Gen. Indem. Co., 629 S.W.3d 878, 883 (Tex. 2021).

15
A party must establish several elements to prevail under the
doctrine of collateral estoppel.8 First, the party asserting the defense
must show that the issue as to which it seeks to estop relitigation is the
identical issue litigated in the other case. Getty Oil Co. v. Ins. Co. of N.
Am., 845 S.W.2d 794, 802 (Tex. 1992); see also Johnson & Higgins of
Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 521 (Tex. 1998)
(holding that “the issue decided in the first action must be . . . identical
to the issue in the pending action” for collateral estoppel to apply); Sysco
Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 802 (Tex. 1994) (requiring
“proper[] identifi[cation]” of the issue as to which the party seeks to estop
relitigation). When, as here, this element is in dispute, courts must
carefully analyze the ultimate issues to be proven—i.e., the factual
issues and “essential elements of the claims”—being asserted in the
different actions. Ctr. Equities, Inc. v. Tingley, 106 S.W.3d 143, 153
(Tex. App.—Austin 2003, no pet.); see also Tex. Dep’t of Pub. Safety v.
Petta, 44 S.W.3d 575, 577 (Tex. 2001) (holding that collateral estoppel
bars claims when “the facts necessary to establish [those] claims” are
“the same facts” found in a previous case). The party asserting the
defense bears the burden to “map” the previous findings onto the claims
asserted, demonstrating how the findings and issues actually litigated
in the first action will be determinative of the claims asserted in the

8 The elements required to establish collateral estoppel under Texas law

mirror those of federal law. See John G. & Marie Stella Kenedy Mem’l Found.
v. Dewhurst, 90 S.W.3d 268, 288 (Tex. 2002) (“As for whether collateral
estoppel—the preclusive effect of the federal case on litigation of issues in the
present case—is governed by federal or state law, we have previously
concluded that both are the same.”).

16
second action. In re Calvert, 913 F.3d 697, 701 (7th Cir. 2019); see also
Trapnell, 890 S.W.2d at 802 (holding that the defendants “had the
burden of pointing out the issue they wished to be estopped”).
Next, the party seeking the application of collateral estoppel must
demonstrate that the facts in the current suit “were fully and fairly
litigated” in the earlier action. Trapnell, 890 S.W.2d at 801. To
determine this question, we often consider three procedural matters:
“(1) whether the parties were fully heard, (2) that the court supported
its decision with a reasoned opinion, and (3) that the decision was
subject to appeal or was in fact reviewed on appeal.” Mower v. Boyer,
811 S.W.2d 560, 562 (Tex. 1991).
Third, a party asserting the defense must establish that the same
facts “were essential to the judgment” in the first suit. Trapnell, 890
S.W.2d at 801. A fact issue is considered essential and an “ultimate
issue” if the factual determinations “are necessary to form the basis of a
judgment.” Tarter v. Metro. Sav. & Loan Ass’n, 744 S.W.2d 926, 928
(Tex. 1988).
Lastly, the parties must have been “cast as adversaries in the first
action.” Trapnell, 890 S.W.2d at 801. Mutuality of parties is not
necessary, though, as it is only required “that the party against whom
the plea of collateral estoppel is being asserted be a party or in privity
with a party in the prior litigation.” Eagle Props., Ltd. v. Scharbauer,
807 S.W.2d 714, 721 (Tex. 1990); see also Trapnell, 890 S.W.2d at 802
(“[I]t is only necessary that the party against whom the [collateral
estoppel] doctrine is asserted was a party or in privity with a party in
the first action.” (emphasis omitted)).

17
We agree with the court of appeals that Sabrepoint failed to
conclusively establish the affirmative defense of collateral estoppel
because it did not establish that the fact issue as to which it seeks to
estop litigation in Texas is identical to one the Colorado court decided.
See Ayre v. J.D. Bucky Allshouse, P.C., 942 S.W.2d 24, 28 (Tex. App.—
Houston [14th Dist.] 1996, writ denied) (“Collateral estoppel requires
that the issue decided in the first action be identical to the issue in the
pending action.”). Sabrepoint needed to establish that the Colorado
court’s factual determination—that Sabrepoint’s alleged conduct related
to the Seeking Alpha article was insufficient to amount to purposeful
availment in Colorado—is identical to the question posed in the Texas
litigation: whether Sabrepoint was sufficiently “involved” in the alleged
short-and-distort scheme so as to justify imposing liability. See
Johnson & Higgins, 962 S.W.2d at 523 (holding that collateral estoppel
was improper “because the issue decided in [a previous] federal action
[wa]s not identical to the issue” litigated in a subsequent state action).
The Colorado court’s findings suggest the issues, while related,
are distinct. In granting the Rule 12(b)(2) motion, the Colorado district
court observed that FPI’s evidence supported a “reasonable inference
that Sabrepoint knew that, by hiring [Mathews] to research FPI, it was
possible [Mathews] would publish an article about FPI as Rota
Fortunae.” Farmland Partners Inc., 2021 WL 765362, at *7. It
concluded this “foreseeability” that the article may be published was
“insufficient to establish an intentional action for purposeful direction”
at Colorado, as the purposeful-availment doctrine requires. Id.
Sabrepoint correctly points out that the Colorado and Texas actions

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share a focus on Sabrepoint’s “involvement” with the Seeking Alpha
article. But whether the factual issues in the two suits overlap or bear
similarities is not the relevant inquiry; the issues must be identical. See
John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d
268, 288–89 (Tex. 2002) (holding that collateral estoppel did not
preclude litigation of issues in a second suit that were not identical to
issues in the first action).
Here, the court of appeals correctly concluded that Sabrepoint did
not conclusively establish that the Colorado court’s finding is “identical”
to any issue that will determine whether FPI may prevail on the claims
it has raised in Texas. Sabrepoint complains that the court of appeals’
analysis was too simplistic. In Sabrepoint’s view, the court of appeals
held, as a categorical matter, that a fact determined in the context of a
jurisdictional question may never have preclusive effect in a case in
which the same factual issue arises in the context of a merits question.
But that is not what the court of appeals held. The mere fact that the
Colorado court’s determination was jurisdictional is not what prevents
its finding regarding Sabrepoint’s insufficient “involvement” from
having preclusive effect in the Texas suit. Instead, we conclude that
summary judgment based on collateral estoppel was improper because
Sabrepoint did not conclusively establish how the facts decided in
Colorado regarding lack of targeting for purposes of purposeful
availment necessarily dispose of FPI’s claims in Texas. Put differently,
Sabrepoint failed to conclusively establish that the Colorado court’s
factual determinations are identical to findings that would preclude
liability on the part of Sabrepoint under FPI’s theory that Sabrepoint

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“intended, knew, recklessly disregarded, and/or should have known”
that Mathews would publish an article about FPI. Cf. State & Cnty.
Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 697 (Tex. 2001) (concluding
that collateral estoppel barred a plaintiff’s claims for which the issues
were “identical” to those in a previous action).
In particular, Sabrepoint’s trial court briefing did not conclusively
demonstrate that the Colorado court’s findings—which acknowledged
that Sabrepoint might have known it was possible Mathews would
publish the article—precluded defamation liability on the part of
Sabrepoint, which hired Mathews and assisted him in conducting the
research on FPI out of which the article arose. See Roe v. Patterson, 707
S.W.3d 94, 99 (Tex. 2025) (stating that a plaintiff must show that the
defendant “intended or knew that the defamatory statements . . . would
be published”); id. at 98–99 (noting that the Restatement allows for
defamation liability if “a reasonable person would recognize that an act
creates an unreasonable risk that the defamatory matter will be
communicated to a third person” (quoting RESTATEMENT (SECOND) OF
TORTS § 577 cmt. k (AM. L. INST. 1977))). The same can be said for other
tort claims that FPI asserts, including tortious interference with
prospective business relations and disparagement. See
Richardson-Eagle, Inc. v. William M. Mercer, Inc., 213 S.W.3d 469, 474
(Tex. App.—Houston [1st Dist.] 2006, pet. denied) (“The classic
proximate-cause tests for cause-in-fact and foreseeability apply to
claims of tortious interference.”). In short, the ultimate issue in the
Colorado order concerned only whether Sabrepoint’s conduct—or
“involvement”—was purposefully directed at Colorado, and Sabrepoint

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failed to demonstrate, conclusively, that—and how—the Colorado
court’s “involvement” findings necessarily preclude liability under each
of FPI’s claims in Texas. Draughon, 631 S.W.3d at 87–88.
The addition of two new defendants in FPI’s Texas suit is also
relevant. As the court of appeals noted, the presence of new parties
further demonstrates that the Colorado and Texas issues are not
identical. 703 S.W.3d at 135. As the Sabrepoint fund and general
partner were not sued in the Colorado action, there was no possibility
that the Colorado district court determined their respective
“involvement” in the article’s publication. Sabrepoint argues that these
entities are in privity with the Colorado defendants such that the new
defendants could only be held liable through the Colorado defendants’
actions. See Wilhite v. Adams, 640 S.W.2d 875, 876 (Tex. 1982) (“Under
a plea of collateral estoppel, essential issues of fact . . . are binding in a
subsequent action between the same parties and those who stand in
privity with them.”). But that passing contention was also not
conclusively established. See Benson v. Wanda Petroleum Co., 468
S.W.2d 361, 363 (Tex. 1971) (noting that “determination of who are
privies requires careful examination into the circumstances of each case
as it arises”). We conclude that Sabrepoint has not conclusively
established that the fund and general partner share an “identity of
interest” with the Colorado defendants such that they are privies of one
another. See id. This was an independent basis to reverse the summary
judgment as to the defendants who were not parties to the Colorado suit.

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IV. Conclusion
The court of appeals correctly held, on the summary judgment
record before it, that the trial court erred in determining that collateral
estoppel bars FPI’s suit against Sabrepoint in Texas as a matter of law.
We affirm this portion of the appellate court’s judgment. But the court
of appeals erred in declaring void the portion of the trial court’s order
that granted Sabrepoint’s motion to dismiss under the TCPA. We
therefore reverse that portion of the court of appeals’ judgment and
remand to that court to consider the merits of FPI’s appeal from that
order.

Rebeca A. Huddle
Justice

OPINION DELIVERED: April 25, 2025

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