Gil Ramirez Group, L.L.C. v. Houston Indep ( 2019 )

Case: 17-20542 Document: 00514875687 Page: 1 Date Filed: 03/15/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 17-20542 March 15, 2019
Lyle W. Cayce
THE GIL RAMIREZ GROUP, L.L.C.; GIL RAMIREZ, JR., Clerk
Plaintiffs - Appellees
v.
LAWRENCE MARSHALL; MARSHALL & ASSOCIATES; JOYCE MOSS
CLAY; JM CLAY AND ASSOCIATES; FORT BEND MECHANICAL,
LIMITED; FBM MANAGEMENT, L.L.C.; DAVID L. MEDFORD,
Defendants - Appellants
Appeals from the United States District Court
for the Southern District of Texas
USDC No. 4:10-CV-4872
Before WIENER, SOUTHWICK, and COSTA, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:*
The plaintiff is a contractor who claimed a school district employee
accepted bribes in exchange for contracts and thereby harmed the plaintiff’s
business. The plaintiff prevailed at trial. The defendants appeal the denial of
their motions for judgment as a matter of law or a new trial. We AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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FACTUAL AND PROCEDURAL BACKGROUND
This case previously reached us after a summary judgment, which led to
a partial reversal and remand. Our opinion detailed the factual background.
Gil Ramirez Grp., L.L.C. v. Hous. Indep. Sch. Dist. (Gil Ramirez I), 786 F.3d
400 (5th Cir. 2015). We import here a shorter statement of the case from the
district court’s opinion on remand:
This case involves multiple claims for relief based on an
alleged bribery scheme to procure construction contracts. In 2010,
Plaintiffs Gil Ramirez Jr. and The Gil Ramirez Group, LLC
(“GRG”) filed this action against Houston Independent School
District (“HISD” or “the District”), former trustee Lawrence
Marshall and his consulting company, alleged coconspirator Joyce
Moss Clay and her consulting company, and two of GRG’s
competitors and their respective owners.
....
The alleged bribery scheme at the heart of this action
concerns HISD’s job-order contract (“JOC”) program . . . GRG
alleges in particular a pay-to-play scheme in which . . . vendors
hired Joyce Moss Clay and her company . . . as a consultant; Ms.
Clay then paid Mr. Marshall a portion of the consulting fee; and
Mr. Marshall provided favorable treatment to those who hired Ms.
Clay. Defendants RHJ-JOC (“RHJ”) and Fort Bend Mechanical
(“FBM”), two companies competing for and ultimately awarded
JOC contracts, hired Ms. Clay. Plaintiff contends that Mr.
Ramirez’s refusal to participate in this scheme harmed GRG’s
business, both in the reduction in assignments under [its] 2008
JOC contract, and in GRG’s nonselection as vendor for the 2010
JOC program.
....
[After six years of litigation the district court] held a 14-day
trial that included live and deposition testimony from 28
witnesses. The jury found Defendants liable for tortious
interference with prospective business relations, civil conspiracy,
and RICO violations, and awarded actual and exemplary damages.
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The district court entered a final judgment providing that the Gil
Ramirez Group (“GRG”) would recover $676,667 in actual damages from all
defendants, jointly and severally. It further awarded GRG punitive damages
as follows: $1,400,000 from Lawrence Marshall and his company Marshall and
Associates (“Marshall” or the “Marshall Defendants”); $500,000 from Joyce
Moss Clay and her company JM Clay and Associates (the “Clay Defendants”);
and $500,000 from David Medford, Fort Bend Mechanical, Ltd., and FBM
Management, L.L.C. (the “Medford Defendants”). 1
The district court denied the defendants’ motions for judgment as a
matter of law or for a new trial. The defendants timely appealed.
DISCUSSION
I. RICO Arguments
The defendants devoted much of their briefing to the jury’s verdict on the
plaintiffs’ RICO claim. The jury awarded damages to GRG on both its tortious
interference and its RICO claims. The district court then applied “Texas’s one
satisfaction rule, which requires the prevailing party to elect between the
alternative claims for purposes of recovery.” Malvino v. Delluniversita, 840
F.3d 223, 233 (5th Cir. 2016). GRG elected to recover solely on the tortious
interference claim. So long as “the election of remedies theory applies in this
case, the issue of whether” the unelected award “was proper is moot.” Am.
Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321, 341 (5th Cir. 2008).
Since we see no basis to disturb the jury’s tortious interference award,
the various RICO-specific arguments pressed by the defendants are moot.
1It also awarded $1,000,000 in punitive damages against Eva Jackson and her
company RHJ-JOC, Inc. Those defendants did not appeal.
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II. Motion for Judgment as a Matter of Law
The Marshall Defendants moved for judgment as a matter of law at the
close of evidence and timely renewed the motion after the verdict. Judgment
as a matter of law is proper when “there is no legally sufficient evidentiary
basis for a reasonable jury to have found for that party with respect to that
issue.” Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229, 235 (5th Cir.
2001) (quoting Ford v. Cimarron Ins. Co., 230 F.3d 828, 830 (5th Cir. 2000)).
Our standard of review is de novo but “with respect to a jury verdict is
especially deferential.” Id. (quoting Brown v. Bryon Cnty., Okla., 219 F.3d 450,
456 (5th Cir. 2000)). Because of the significant role of juries, a “judgment as a
matter of law should not be granted unless the facts and inferences point ‘so
strongly and overwhelmingly in the movant’s favor that reasonable jurors
could not reach a contrary conclusion.’” Id. (quoting Omnitech Int’l, Inc. v.
Clorox Co., 11 F.3d 1316, 1322 (5th Cir. 1994)).
The Clay Defendants timely moved to join in Marshall’s motion for
judgment as a matter of law and later in his renewed motion for judgment as
a matter of law, or in the alternative, a new trial. Continuing with their efforts
to embrace the other party’s filings, the Clay Defendants filed a Rule 28(i)
letter in this court to adopt Marshall’s brief “in so far as the arguments are
consistent and applicable to the parties.” It is improper, though, for an
appellant to “adopt by reference fact-specific challenges” to a verdict. United
States v. Morgan, 117 F.3d 849, 853 (5th Cir. 1997). The Clay Defendants’
effort to adopt Marshall’s statutory defenses or the challenges to the sufficiency
of the evidence fail, but we find to be valid the adoption of Marshall’s legal
arguments concerning impossibility, his evidentiary objections, and his
challenge to the jury instructions. See United States v. Alix, 86 F.3d 429, 434
n.2 (5th Cir. 1996).
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Determining what issues the Medford Defendants properly brought to
us takes a few steps. They neither made their own motion nor did they join
Marshall’s motion for judgment as a matter of law at the close of evidence. The
Medford Defendants also failed to “avail themselves of Federal Rule of Civil
Procedure 50(b)” after the verdict. Ortiz v. Jordan, 562 U.S. 180, 189 (2011).
“Absent such a motion . . . an appellate court is ‘powerless’ to review the
sufficiency of the evidence after trial.” Id. (quoting Unitherm Food Sys., Inc.
v. Swift–Eckrich, Inc., 546 U.S. 394, 405 (2006)).
The Medford Defendants did move to join Marshall’s Rule 50(b) motion,
but it was untimely because the need to file within 28 days “after entry of
judgment is jurisdictional, and may not be extended.” U.S. Leather, Inc. v.
H & W P’ship, 60 F.3d 222, 225 (5th Cir. 1995). Accordingly, we “are without
power to review” their arguments on appeal related to the sufficiency of the
evidence for the jury’s verdict on proximate cause and damages. McLendon v.
Big Lots Stores, Inc., 749 F.3d 373, 375 n.2 (5th Cir. 2014).
A. Statutory Defenses
Marshall asserts statutory defenses that are available only to those
acting as employees of the school district. 2 We held in the prior appeal, though,
that Marshall was not acting as an employee and was not entitled to immunity
under either the Texas Tort Claims Act (TTCA) or the Texas Education Code.
Gil Ramirez I, 786 F.3d at 415-17.
The part of our prior decision that Marshall challenges is when we held
that even though the Texas Education Code’s definition of employee explicitly
applied to school board trustees like him, the associated immunity was limited
to an act “incident to or within the scope of the duties of the employee’s position
2 The defenses are that he is entitled to immunity under the Texas Tort Claims Act
and the Texas Education Code, that GRG failed to satisfy the exhaustion requirement of the
Texas Education Code, and that the Texas Education Code provides a cap on damages.
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of employment and that involves the exercise of judgment or discretion on the
part of the employee.” Id. at 417 (emphasis omitted) (quoting TEX. EDU. CODE.
§ 22.0511). We concluded that “bribery and peddling influence are not within
the scope of a trustee’s duty.” Id.
Marshall urges us to set aside our prior decision. This circuit, though,
has a “firm rule that one panel cannot disregard the precedent set by a prior
panel even though it perceives error in the precedent.” United States v. 162.20
Acres of Land, More or Less, Situated in Clay Cnty., Miss., 733 F.2d 377, 379
(5th Cir. 1984). This “rule is no less immutable when the matter determined
by the prior panel is the interpretation of state law” and it is “no less binding
on subsequent panels than are prior interpretations of federal law.” F.D.I.C.
v. Abraham, 137 F.3d 264, 268 (5th Cir. 1998).
We are nonetheless required to change our prior interpretation of state
law when a “subsequent state court decision or statutory amendment . . .
makes this Court’s prior decision clearly wrong.” Broussard v. S. Pac. Transp.
Co., 665 F.2d 1387, 1389 (5th Cir. 1982) (en banc) (parentheses omitted). The
phrase “clearly wrong” means “at a minimum, a contrary ruling squarely on
point is required.” Abraham, 137 F.3d at 269.
Marshall relies on a 2017 Texas Supreme Court opinion to say this court
in the 2015 appeal was clearly wrong to conclude that immunity would not
apply when the school employee was involved in bribery and peddling
influence. See Laverie v. Wetherbe, 517 S.W.3d 748, 753 (Tex. 2017). We will
take a look. In that case, a college professor sued a colleague for defamation
after being passed over for a deanship and a professorship, alleging the
colleague made false statements in response to inquiries from the faculty
member overseeing the job searches. Id. at 751. The plaintiff acknowledged
that the defendant outwardly “acted within the scope of her employment” but
argued that to be entitled to immunity she was required to “furnish conclusive
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evidence she was ‘serving any purpose of her employer, as opposed to
furthering her own purposes only.’” Id. at 752.
The Texas Supreme Court rejected this argument. It held that the TTCA
“calls for an objective assessment of whether the employee was doing her job
when she committed an alleged tort, not her state of mind when she was doing
it.” Id. at 753. It explained there may still be a “connection between the
employee’s job duties and the alleged tortious conduct . . . even if the employee
performs negligently or is motivated by ulterior motives or personal animus so
long as the conduct itself was pursuant to her job responsibilities.” Id.
In Marshall’s view, Laverie stands for the proposition that “it is improper
for a court to consider an employee’s self-serving motivations when
determining whether the employee’s actions were within the scope of his
employment duties.” Marshall then reasons that the district court instructed
the jury it could not find him liable unless it determined he had “engaged in
an official act,” and that after the Supreme Court’s decision in McDonnell v.
United States, 136 S. Ct. 2355 (2016), the only “official acts” presented to the
jury were his votes as a trustee. Marshall concludes that even “defiling his
position” by “accept[ing] bribes in exchange for advancing the interests of
certain contractors” cannot be “wholly outside the legitimate scope of a
trustee’s duties.” Gil Ramirez I, 786 F.3d at 417.
The district court sensibly rejected this argument. It noted that “Ms.
Laverie was not on the receiving end of a bribe.” This simple but significant
distinction, by itself, makes it difficult for Laverie to constitute a “contrary
ruling squarely on point.” The district court also found Laverie distinguishable
because Marshall’s conduct at issue was “not exclusively his vote — one of the
possible ‘official actions’ found by the jury — but also his other actions in the
alleged pay-to-play scheme.” This observation correctly grasps a distinction
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Marshall’s arguments obscure: the essence of bribery is not an official act itself
but the agreement to trade it for money.
“An agreement is the paradigmatic example of a corrupt quid pro quo . . .
and typically results from negotiations about the ‘price,’ i.e., how much bribe
money is needed to purchase a specific official action.” United States v.
McGregor, 879 F. Supp. 2d 1308, 1317 (M.D. Ala. 2012). It is this sort of
conduct that was clearly beyond the scope of Marshall’s employment.
We earlier held “bribery and peddling influence are not within the scope
of a trustee’s duty.” Gil Ramirez I, 786 F.3d at 417. Laverie held that an
employee’s actions within the scope of her employment remained within that
scope even if the employee was “motivated by ulterior motives or personal
animus.” Laverie, 517 S.W.3d at 752-53. There is no inherent tension in
viewing office politics as distinct from pay-to-play corruption. All of Marshall’s
statutory defenses are foreclosed by our prior decision that bribery was not
within the scope of his trustee duties.
B. Qualified Immunity
Marshall also argues the jury erred in finding he was not protected by
qualified immunity. He argues that the state of the law was unclear after
McDonnell, and thus it could not have been “clearly established” which specific
acts might be illegal.
The district court was unpersuaded by these arguments because GRG’s
“theory of the case — which the jury appeared to accept — is that Mr. Marshall
granted favors (including his vote to award JOC contracts) in exchange for a
bribe” and “McDonnell does not leave room for an official to vote in a certain
way in exchange for a bribe.” We agree. The Supreme Court was quite clear
that the acceptance of bribes in exchange for votes or the exertion of pressure
to obtain other officials’ votes continues to be unprotected by the First
Amendment. McDonnell, 136 S. Ct. at 2370-72.
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C. Legal Impossibility
Marshall argues there could not be proximate cause for the tortious
interference claim as a matter of law because GRG’s 2008 contract was void,
and even if it was not void, because a party cannot tortiously interfere with its
own contract.
Marshall contends that the GRG contract was “void because it violated
the competitive bidding requirements” of the Texas Education Code. TXU
Energy Retail Co. L.L.C. v. Fort Bend Indep. Sch. Dist., 472 S.W.3d 462, 464
(Tex. App.—Dallas 2015, no pet.). Under Texas law, “a void contract cannot
serve as the basis for a tortious interference [with an existing contract] claim.”
Jetall Cos. v. Four Seasons Food Distribs., 474 S.W.3d 780, 784 (Tex. App.—
Houston [14th Dist.] 2014, no pet.). GRG’s claim, though, was for tortious
interference with prospective business relations, which does not require the
existence of a contract. See Coinmach Corp. v. Aspenwood Apartment Corp.,
417 S.W.3d 909, 923 (Tex. 2013); In re Burzynski, 989 F.2d 733, 739 (5th Cir.
1993).
The district court found that the “evidence at trial showed” that GRG
had “a reasonable chance” of obtaining additional jobs “during the 2008
contract window.” This remains true regardless of whether “that contract was
later found void.”
Marshall also argues, for the first time on appeal, the affirmative defense
that GRG’s tortious interference claim was a “legal impossibility” because “a
party cannot interfere with its own contract.” We do not address this point
because it was waived by the failure to raise it in the district court. Any
“arguments not raised before the district court are waived and will not be
considered on appeal unless the party can demonstrate extraordinary
circumstances.” Lofton v. McNeil Consumer & Specialty Pharm., 672 F.3d 372,
380-81 (5th Cir. 2012) (citation omitted). This is not an extraordinary instance
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in which a failure to consider a “purely legal issue . . . will result in a
miscarriage of justice.” Heritage Bank v. Redcom Labs., Inc., 250 F.3d 319, 326
(5th Cir. 2001).
D. Proximate Cause
Marshall asserts more generally that there was insufficient evidence his
actions were the proximate cause of GRG’s damages. The district court listed
examples of GRG’s “affirmative evidence to support the jury’s finding of
proximate cause, even if the Court or another fact finder might have reached
a different verdict.” It is a fair summary, fully supporting “that the facts and
inferences from the evidence do not point so strongly and overwhelmingly
against the verdict that reasonable persons could not disagree.” Flowers, 247
F.3d at 237.
III. Evidentiary Rulings
“This court reviews evidentiary rulings for abuse of discretion.” U.S.
Bank Nat’l Ass’n v. Verizon Commc’ns, Inc., 761 F.3d 409, 430 (5th Cir. 2014).
“A trial court abuses its discretion when its ruling is based on an erroneous
view of the law or a clearly erroneous assessment of the evidence.” Bocanegra
v. Vicmar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003).
A. Hearsay of Ricardo Aguirre
Marshall contends that the district court erroneously admitted hearsay
when it allowed the plaintiff to testify that Ricardo Aguirre told him that
Aguirre needed to bribe Marshall to continue receiving business. The district
court rejected Marshall’s argument on three separate grounds: that the
testimony satisfied the statement against interest exception in Federal Rule of
Evidence 804(b)(3)(A), that the testimony satisfied the unavailability exception
of Rule 804(a)(5)(B), and that the testimony was not hearsay because it was a
statement by a party opponent under Rules 801(d)(2)(D) and (E). The district
court’s reasoning is sound. Marshall fails to meaningfully address any of it on
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appeal. The district court did not abuse its discretion by allowing the
testimony.
B. Expert Testimony
Marshall also takes issue with the district court’s decision to allow
testimony on damages from GRG’s expert witness, Ransom Cornish, because
Cornish lacked experience with government procurements. 3
Marshall’s argument, though, fails to identify error because Cornish was
not testifying about the procurement process but about the calculation of
economic loss. He “did not need particular expertise in . . . procurement[] to
help the jury understand [loss calculation] concepts and terms.” Wellogix, Inc.
v. Accenture, L.L.P., 716 F.3d 867, 881-82 (5th Cir. 2013).
IV. Jury Instructions
A trial court’s determinations as to which instructions to propound to
jurors are reviewed for an abuse of the court’s broad discretion. Eastman
Chem. Co. v. Plastipure, Inc., 775 F.3d 230, 240 (5th Cir. 2014). Reversible
error does not arise merely because of imperfections in the charge. We will
uphold the instructions if the charge “in general correctly instructs the jury,
and any injury resulting from the erroneous instruction is harmless.” Rogers
v. Eagle Offshore Drilling Servs., Inc., 764 F.2d 300, 303 (5th Cir. 1985).
Some of the objections were not preserved, meaning we review for plain
error. “To meet this standard, a party must show: ‘(1) that an error occurred;
(2) that the error was plain, which means clear or obvious; (3) the plain error
must affect substantial rights; and (4) not correcting the error would seriously
affect the fairness, integrity, or public reputation of judicial proceedings.’”
3 Marshall’s objection was preserved because he raised it at trial and in his renewed
motion for judgment as a matter of law. The Medford Defendants also argue this point on
appeal, though they did not object at trial.
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Taita Chem. Co. v. Westlake Styrene, LP, 351 F.3d 663, 668 (5th Cir. 2003)
(quoting Branch–Hines v. Hebert, 939 F.2d 1311, 1319 (5th Cir. 1991)).
A. Proportionate Fault Instruction
Marshall objects to the failure to give a proportionate responsibility
instruction on the tortious interference claim, arguing it was justified by
evidence of GRG’s poor performance under the 2008 contract. A proportionate
responsibility instruction under Texas law requires jurors to assign a
percentage of responsibility for any contribution by the plaintiff to the harm;
recovery is barred if a claimant’s responsibility is more than 50 percent. TEX.
CIV. PRAC. & REM. CODE. §§ 33.001-017.
In its denial of the renewed Rule 50 motion, the district court held that
evidence of GRG’s performance issues was relevant to proximate cause but not
to responsibility for the tortious interference itself. Due to “other language in
the instruction,” the court determined the requested “instruction on
proportionate responsibility for damages related to this claim would have
created unnecessary confusion.”
We conclude that proportionate responsibility was adequately addressed
by the district court’s other instructions. The jury was instructed that should
it find “that Plaintiff would have experienced the same . . . [losses] regardless
of the actions of the Defendants, [it] must find against Plaintiff on this issue.”
The jury was required to calculate damages based only on “profits that Plaintiff
lost as a natural, probable, and foreseeable consequence of the interference
with the business relation.”
We view jury instructions as a whole, and if they “are comprehensive,
balanced, fundamentally accurate, and not likely to confuse or mislead the
jury, the charge will be deemed adequate.” Nat’l Union Fire Ins. Co. of
Pittsburgh v. Cagle, 68 F.3d 905, 909 (5th Cir. 1995) (quoting Scheib v.
Williams-McWilliams Co., 628 F.2d 509, 511 (5th Cir. 1980)). The additional
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instruction requested here may well have created confusion, not provided
clarity. The district court did not abuse its discretion by refusing to give the
proportionate responsibility instruction.
B. Punitive Damages Instruction
On appeal, Marshall makes several arguments about the district court’s
punitive damages instruction. The first is that GRG’s pleadings did not
adequately raise issues of malice or willful, wanton conduct. The district court
reasoned that GRG’s complaint “described an intentional and criminal bribery
scheme” and that this “suffices to allege of malicious, willful or wanton
conduct.” We agree.
The following arguments about that instruction are also made: the
district court should have defined the term “clear and convincing evidence”;
the district court provided an incorrect definition of “malice”; and the district
court provided a standard of “reckless indifference” unsupported by Texas law.
Those objections, though, were not preserved because they were not made with
particularity at the jury charge conference. See Taita Chem. Co., 351 F.3d at
668-69. We also find no plain error, as any error in these definitions would not
affect Marshall’s substantial rights.
Marshall also argues that the ratio of punitive to compensatory damages
violates due process. The argument, though, is premised on an imbalance after
we order a remittitur or vacate the compensatory damages entirely. Since we
are not taking that course, there is no due process concern.
V. Motion for New Trial
The standard of review for a denial of a motion for a new trial is “more
deferential than our review of the denial of a motion for a judgment as a matter
of law.” Hidden Oaks Ltd. v. City of Austin, 138 F.3d 1036, 1049 (5th Cir.
1998). “In light of our previous holding that the district court correctly
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denied . . . judgment as a matter of law,” we find it was not an abuse of
discretion to deny the motion for a new trial. Id.AFFIRMED.
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