TX: Dallas Morning News article that target of SW was “under investigation” was substantially true for libel purposes

The News published a story that Rxpress was under investigation for health care fraud because a search warrant was issued for its records. Actually, Halsey was under investigation, and the search warrant sought the company’s communications with him. The article was substantially true for libel purpose and the Texas Citizens Participation Act, to protect free speech without retaliation. Dallas Morning News v. Hall, 2019 Tex. LEXIS 444 (May 10, 2019):

We first consider whether the search warrant helps Rxpress prove falsity. According to Rxpress, the Halsey search warrant is clear and specific evidence that it was not “under investigation.” Rxpress insists that as the search warrant was directed at and generally concerns Halsey, who has never been employed by Rxpress, it shows Halsey was under investigation—not Rxpress. But the News responds that the warrant expressly sought communications between Halsey on the one hand and, on the other, the Halls “and any other associate of Rxpress.” The sought-after communications concerned “insurance reimbursements” and anything that might “show or demonstrate connections or relationships … within Rxpress.”

Although the search warrant, which concerned possible violations of federal healthcare fraud laws, was directed at Halsey, it expressly focused on obtaining information about Rxpress. By its own terms, the warrant sought all communications among Halsey, the Halls, and other Rxpress owners and associates that related either to payments made by Rxpress or to aspects of Rxpress’s “ownership, control, responsibility, direction, [and] authorization.” The court of appeals concluded the warrant did not establish Rxpress was under investigation—a holding we do not reach today. But even if the court of appeals were correct, we struggle to see how a search warrant seeking documents and communications on Rxpress’s owners and operations, in the context of an inquiry into possible healthcare fraud, is clear and specific evidence that Rxpress was not “under investigation.”

. . .

Even if the search warrant does not establish by a preponderance of the evidence that Rxpress was “under investigation,” as the court of appeals held, Rxpress fails to establish a prima facie case that the News’s reporting was not substantially true.

One doesn’t have to be an alleged criminal to be the target of a search warrant. Zurcher v. Stanford Daily (1978). Just a holder of potential evidence is enough.