McCann v. Texas City Refining, Inc. , 984 F.2d 667 ( 1993 )

United States Court of Appeals,
Fifth Circuit.
No. 91-2538.
Jo Ann McCANN and Blanche Christine Hickman, Plaintiffs,
Blanche Christine Hickman, (Linard Vergil Hickman, as Independent Executor of the estate of
appellee, Blanche Christine Hickman, for Substitution in Place and Stead of Appellee Blanche
Christine Hickman, deceased), Plaintiff-Appellee, Cross-Appellant,
Jo Ann McCann, Plaintiff-Appellant, Cross-Appellee,
v.
TEXAS CITY REFINING, INC., et al., Defendants-Appellees,
Hill Petroleum, Inc., Defendant-Appellant, Cross-Appellee,
Agway, Inc., et al., Defendants-Appellees, Cross-Appellants.
March 1, 1993.
Appeals from the United States District Court for the Southern District of Texas.
Before POLITZ, Chief Judge, and JOHNSON and JOLLY, Circuit Judges.
PER CURIAM:
In the summer of 1989, Blanche Hickman and Jo Ann McCann lost their jobs. Hickman and
McCann had been working at a refinery owned by Texas City Refining, Inc. (TCR).1 When that
refinery was sold to Hill Petroleum, Inc. (Hill), Hickman and McCann were not offered jobs by the
new owners. Subsequently Hickman and McCann sued Hill, TCR, and TCR's parent corporations
(collectively Agway) for violations of the Age Discrimination in Employment Act (ADEA), 29 U.S.C.
§§ 621-634. At trial, the jury found that Hill was guilty of willful age discrimination against Hickman;
however, the jury found that McCann had not been a victim of age discrimination.
Hill now appeals the judgment entered by the district court pursuant to the jury's finding of
willful discrimination against Hickman. Hickman cross-appeals the district court's denial of
prejudgment interest on the award of backpay. McCann cross-appeals the district court's dismissal
1
Texas City Refining, Inc. (TCR) is a subsidiary of Agway Petroleum Corporation, Agway,
Inc., and Southern States Cooperative.
of TCR and Agway pursuant to a Rule 12(b)(6) motion. As for Hill's appeal, this Court remands the
case for a new trial limited to the issue of whether Hill's discrimination against Hickman was willful.
As to the issues raised by Hickman and McCann, we hold that the district court did not err either in
denying Hickman prejudgment interest on the award of backpay or in holding that McCann's
complaint failed to state a cause of action against TCR and Agway.
I. FACTS AND PROCEDURAL HISTORY
On June 30, 1988, Hill Petroleum purchased and took over the refining facility owned by TCR
in Texas City, Texas. Hill restructured the work force and hired back approximately 300 of the 450
employees of TCR. All positions filled by Hill were staffed with former TCR employees. As a part
of this restructuring, Hickman was laid off and her position as shift clerk was filled by younger
employees, and McCann's position as a confidential secretary and personnel administrator was
eliminated. Both Hickman and McCann had been long-time employees of TCR and were within the
protected class of the ADEA.2
Both Hickman and McCann filed suit against Hill, TCR, and Agway, alleging that the
defendants had violated the ADEA and had conspired to deprive the plaintiffs of their civil rights in
violation of 42 U.S.C. § 1985(3). The plaintiffs later dismissed their § 1985 action. After concluding
that the remaining ADEA claims failed to state a cause of action against TCR and Agway, the district
court dismissed those defendants. The plaintiffs later filed several motions to amend their complaint
to add a pendant state-law claim of "tortious interference with employment contract" against TCR
and Agway. The district court, however, denied the motions to amend, concluding that the amended
complaints were subject to dismissal in the same manner as the original complaint.
Eventually the case went to trial against Hill alone. After the completion of the plaintiffs'
case, Hill moved for a directed verdict3 on the grounds that the plaintiffs had not shown intentional
2
The provisions of the ADEA protect individuals who are at least 40 years of age. 29 U.S.C. §
631(a). At the time Hill purchased the refinery, Hickman was 64 and McCann was 53.
3
Effective December 1, 1991, Rule 50 of the Federal Rules of Civil Procedure was amended.
Under the new Rule 50 the familiar "motion for directed verdict" and "motion for JNOV" are now
called "motions for judgment as a matter of law." The trial in this case took place before the
effective date of that amendment.
discrimination by Hill.4 However, contrary t o the assertions in the defendant's briefs before this
Court, the Record shows that Hill did not specifically move for a directed verdict on the issue of
willfulness. Also, the record shows that Hill failed to renew its motion for a directed verdict at the
4
The actual objection made by Hill was as follows:
Mr. Smith [Counsel for Hill]: We have a motion for Judgment at the close of the
plaintiffs' case. Based on the case of [Thornbrough v. Columbus & G.R.R., 760
F.2d 633 (5th Cir.1985) ] and [Williams v. General Motors Corp., 656 F.2d 120
(5th Cir. Unit B Sept. 1981), cert. denied, 455 U.S. 943, 102 S. Ct. 1439, 71
L. Ed. 2d 655 (1982) ], both Fifth Circuit cases, your Honor, each of these cases
require, in addition to the standard Title Seven and AD[E]A test, that the plaintiffs
in this case produce evidence, circumstantial or direct, in which the fact finder
might conclude their employer intended to discriminate on the basis of age.
....
Mrs. Hickman said that she thought that they [Hill] had told her that she
couldn't work there anymore. Now, Mr. Snodgrass testified as a part of the
plaintiffs' case, without being qualified as an adverse witness—the plaintiff has
adopted his testimony—that he believed that she did not want a job. He testified
that she was a good person. There has been no proof offered that is pretext. It is
not a pretext. It was offered as a part of the plaintiffs' case.
Your Honor, we would submit that neither of the plaintiffs have met the
test required under the Williams test to proceed to a jury with this case. And we
are entitled to a judgment.
The cases cited by Hill, Thornbrough and Williams, deal with the elements of an
ADEA plaintiff's prima facie case in the context of a general reduction in an employer's
workforce. In the ordinary ADEA case, one of the required elements of a plaintiff's prima
facie case is that the plaintiff was replaced by a younger employee. See McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 1824, 36 L. Ed. 2d 668
(1973); Price v. Maryland Casualty Co., 561 F.2d 609, 612 (5th Cir.1977). This type of
showing is impossible in a typical workforce reduction case since the plaintiff's position
has been eliminated. Thornbrough, 760 F.2d at 642. This Circuit has therefore
established a different standard for workforce reduction cases. Under this standard, a
plaintiff must (1) satisfy the standing requirements of the statute, (2) show that he was
qualified to assume another position, and (3) produce evidence from which a factfinder
might reasonably conclude that the employer intended to discriminate in reaching the
decision at issue. Uffelman v. Lone Star Steel Co., 863 F.2d 404, 407 (5th Cir.), cert.
denied, 490 U.S. 1098, 109 S. Ct. 2448, 104 L. Ed. 2d 1003 (1989).
Obviously Hill's motion was not a model of clarity. Still, we think the motion
adequately informed the plaintiffs and the district court that Hill was challenging the
sufficiency of the plaintiffs' prima facie case, especially given this Court's lenient approach
to the specific grounds requirement for motions for directed verdict and JNOV. See DBI
Servs., Inc. v. Amerada Hess Corp., 907 F.2d 506, 598 n. 1 (5th Cir.1990) ("While the
motion for judgment n.o.v. may have been more specific, it certainly created no
surprise."). However, as discussed below, this motion cannot possibly be read as an
objection to the sufficiency of the plaintiffs' evidence of willfulness.
close of all of the evidence.
The jury subsequently returned a verdict in favor of Hickman, finding that Hill failed to hire
Hickman because of her age. But the jury failed to find a violation with regard to Hill's non-retention
of McCann. The jury found that Hickman suffered damages of $63,000 in lost backpay. In addition,
the jury determined that Hill's conduct with regard to Hickman constituted a willful violation of the
act. The ADEA provides for an award of liquidated damages in the case of willful discrimination.
29 U.S.C. § 626(b). Therefore, based upon the jury's finding, the district court imposed a statutory
penalty of liquidated damages in the amount of $63,000.5 In its final order, the district court denied
Hickman prejudgment interest on the damage award.
II. DISCUSSION
A. Hill Petroleum's Appeal
Hill purports to raise two different issues before this Court. First, Hill argues that the
evidence was insufficient to support the jury finding of willful discrimination, and second, Hill argues
that the district court erroneously denied Hill's motions for directed verdict and for judgment
notwithstanding the verdict on the issue of willfulness. In reality, these two arguments present only
one issue. Reviewing a denial of a motion for directed verdict made at the end of trial and reviewing
the sufficiency of the evidence are one and the same thing. Dickinson v. Auto Center Mfg. Co., 733
F.2d 1092, 1102 (5th Cir.1983); Murphy v. Georgia-Pacific Corp., 628 F.2d 862, 868 n. 13 (5th
Cir.1980). Under either of Hill's arguments, the only question before this Court is whether there is
"a lack of substantial evidence to support a jury verdict." Dickinson, 733 F.2d at 1102.
What Hill has neglected to mention, either in briefs or at oral argument, is that a motion for
a directed verdict on the issue of willfulness was not made at the conclusion of all the evidence in this
trial. At the close of the plaintiffs' case, Hill did move for judgment on the ground that the plaintiffs
had not shown that Hill intended to violate the ADEA. See supra note 4. That motion, however,
was not renewed at the conclusion of all evidence. Hill's failure to renew it s motion for directed
5
Under 29 U.S.C. § 216(b), liquidated damages are awarded in an amount equal to the total
unpaid wages.
verdict has two severe consequences. First, the earlier motion for directed verdict cannot be the basis
for a challenge before this Court to the sufficiency of the plaintiffs' evidence. It is well-established
law that the sufficiency of the evidence is not reviewable on appeal unless a motion for directed
verdict was made in the trial court at the conclusion of all the evidence. Hall v. Crown Zellerbach
Corp., 715 F.2d 983, 986 (5th Cir.1983); CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL
PRACTICE AND PROCEDURE 593 (1971). By introducing its own evidence and failing to renew the
motion for directed verdict after all the evidence was in, Hill waived any objection to the sufficiency
of the plaintiffs' prima facie case. McCabe & Steen Constr. Co. v. Wilson, 209 U.S. 275, 276, 28
S. Ct. 558, 559, 52 L. Ed. 788 (1908); Hernandez v. Employers Mut. Liab. Ins. Co., 346 F.2d 154,
155 (5th Cir.1965); 5A JEREMY C. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 50.05[1] (2d ed.
1992).
Second, Hill's earlier motion cannot serve as a predicate for a motion for judgment
notwithstanding the verdict. Whatever the merits of Hill's substantive argument, it is well established
that a party waives the right to challenge the sufficiency of the evidence with a JNOV unless a motion
for directed verdict is made or renewed at the close of all evidence. FED.R.CIV.P. 50(b); Scheib v.
Williams-McWilliams Co., 628 F.2d 509, 512 (5th Cir.1980). The district court should not have
even considered Hill's motion for JNOV. Scheib, 628 F.2d at 511 n. 1.
In the past, this Court has been willing to excuse certain "de minimis" departures from
technical compliance with Rule 50(b). See, e.g., Davis v. First Nat'l Bank, 976 F.2d 944, 948-49 (5th
Cir.1992); Merwine v. Board of Trustees, 754 F.2d 631, 634-35 (5th Cir.), cert. denied, 474 U.S.
823, 106 S. Ct. 76, 88 L. Ed. 2d 62 (1985); Bohrer v. Hanes Corp., 715 F.2d 213, 216-17 (5th
Cir.1983), cert. denied, 465 U.S. 1026, 104 S. Ct. 1284, 79 L. Ed. 2d 687 (1984). This Court has
repeatedly emphasized that the application of Rule 50(b) " "should be examined in the light of the
accomplishment of [its] particular purpose[s] as well as in the general context of securing a fair trial
for all concerned in the quest for truth.' " Merwine, 754 F.2d at 634 (quoting Bohrer, 715 F.2d at
217) (alterations in original). In each case where we have excused noncompliance with Rule 50(b),
this Court has concluded that the purposes of the rule had been satisfied. In each case, the trial court
had reserved a ruling on an earlier motion for directed verdict (made at the close of the plaintiff's
evidence); the defendant called no more than two witnesses before closing; only a few minutes
elapsed between the motion for directed verdict and the conclusion of all the evidence; and the
plaintiff introduced no rebuttal evidence. Davis, 976 F.2d at 948-49; Merwin, 754 F.2d at 634-35;
Bohrer, 715 F.2d at 217.
In the instant case, however, the situation was very different. The district court did not
reserve a ruling on Hill's motion for directed verdict; instead the court flatly denied the motion. Also,
Hill introduced numerous witnesses after the close of the plaintiff's case. In fact, Hill's evidence took
up over a full day—nearly one-third of the three and a half day trial. Neither the district court nor
the plaintiffs could have been aware that Hill continued to challenge the sufficiency of the plaintiffs'
prima facie case. Here we are not faced with a "de minimis" departure but rather a complete failure
to follow the requirements of Rule 50(b). While it is true that this Circuit approaches such questions
of technical compliance with a "liberal spirit," see Davis, 976 F.2d at 948, we are not wi lling to
rewrite the Federal Rules of Civil Procedure.
Nevertheless, even if this Court were willing to take such a drastic step and overlook Hill's
failure to renew its motion for directed verdict, it still would not change our holding in this case. The
ADEA establishes a two-tiered system of damages. Trans World Airlines, Inc. v. Thurston, 469 U.S.
111, 128, 105 S. Ct. 613, 625, 83 L. Ed. 2d 523 (1985); see John E. Charland, Willfulness, Good
Faith, and the Quagmire of Liquidated Damages Under the Age Discrimination in Employment Act,
13 J.Corp.L. 573 (1988). A showing of an ADEA violation entitles the plaintiff to recover
compensatory damages. 29 U.S.C. § 626(b). Once basic liability under the ADEA has been
established, a finding that the violation was willful entitles the plaintiff to an award of liquidated
damages. Id.
In the instant case, at the close of the plaintiffs' evidence Hill moved for judgment on the
grounds that the plaintiffs had presented insufficient evidence to show intentional discrimination by
Hill. In other words, Hill argued that the plaintiffs had not proven a vio lation of the ADEA as
required under the first tier of the ADEA's liability scheme. See supra note 4. Hill now attempts to
challenge the sufficiency of the plaintiffs' evidence of a willful violation of the ADEA, the second tier
of the statutory liability scheme. Rule 50(a) requires a motion for a directed verdict to state the
specific grounds6 for granting the motion. See Woods v. Sammisa Co., 873 F.2d 842, 853 (5th
Cir.1989). A party may not base a motion for JNOV on a ground that was not included in a prior
motion for a directed verdict. 5A MOORE'S FEDERAL PRACTICE, supra, ¶ 50.08. Yet at no point did
Hill specifically object to the sufficiency of the plaintiffs' evidence on the issue of willfulness. The
question of liability under the ADEA is completely separate from the question of willfulness. To
establish liability under the ADEA, a plaintiff must show only that he is within the protected class of
the ADEA and the defendant discharged, refused to hire, or otherwise discriminated against the
plaintiff with respect to compensation, terms, conditions, or privileges of employment, because of the
plaintiff's age. 29 U.S.C. § 623(a)(1). In contrast, a showing of willfulness requires proof that the
defendant "either knew or showed reckless disregard for the matter of whether its conduct was
prohibited by the ADEA." Ramirez v. Allright Parking El Paso, Inc., 970 F.2d 1372, 1378 (5th
Cir.1992) (quoting Burns v. Texas City Ref., Inc., 890 F.2d 747, 751 (5th Cir.1989)). "It would be
a constitutionally impermissible re-examination of the jury's verdict for the district court [or this
Court] to enter judgment n.o.v. on a ground not raised in the motion for directed verdict." Sulmeyer
v. Coca Cola Co., 515 F.2d 835, 846 n. 17 (5th Cir.1975), cert. denied, 424 U.S. 934, 96 S. Ct. 1148,
47 L. Ed. 2d 341 (1976). Because proof of liability under the ADEA requires completely different
evidence than proof of willfulness, Hill's motion for judgment was simply not specific enough to allow
Hill to challenge the sufficiency of the plaintiffs' proof of willfulness on appeal.
Since Hill did not actually move for a directed verdict on the issue of willfulness at the close
of all the evidence—and consequently was not entitled to move for a JNOV o n the issue—Hill's
objection to the sufficiency of the plaintiffs' evidence on willfulness is being raised for the first time
on appeal. It is the unwavering rule in this Circuit that issues raised for the first time on appeal are
reviewed only for plain error. Shipman v. Central Gulf Lines, Inc., 709 F.2d 383, 388 (5th
6
Rule 50(a)'s "specific grounds" requirement serves both to make the trial court aware of the
movant's position and to give the opposing party an opportunity to mend its case. Hall, 715 F.2d
at 986.
Cir.1983). In other words, this Court will reverse o nly if the judgment complained of results in a
"manifest miscarriage of justice." Coughlin v. Capitol Cement Co., 571 F.2d 290, 297 (5th
Cir.1978). Thus, the question before this Court is not whether there was substantial evidence to
support the jury verdict, but whether there was any evidence to support the jury verdict. Id. Even
if no evidence supports the verdict, this Court lacks the power to enter judgment for the appellant.
Instead, appellate relief is limited to ordering a new trial. Hinojosa v. City of Terrell, 834 F.2d 1223,
1228 (5th Cir.1988), cert. denied, 493 U.S. 822, 110 S. Ct. 80, 107 L. Ed. 2d 46 (1989); Gorsalitz
v. Olin Mathieson Chem. Corp., 429 F.2d 1033, 1038 (5th Cir.1970), cert. denied, 407 U.S. 921,
92 S. Ct. 2463, 32 L. Ed. 2d 807 (1972); see 5A MOORE'S FEDERAL PRACTICE, supra, ¶ 50.05[1].
In order to establish willfulness, Hickman had the burden of proving that Hill "either knew
or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA."
Ramirez, 970 F.2d at 1378. Our review of the record fails to reveal any evidence that could satisfy
Hickman's burden on this issue. Although the plain error exception is only applied in the exceptional
case, we must conclude that this is such a case. But because Hill's relief is sorely limited by its failure
to move for a directed verdict on this issue, we cannot render judgment for Hill. Instead, we remand
this case for a new trial limited to the issue of whether Hill's ADEA violation was willful.
B. Hickman's Cross-Appeal
Hickman argues that the district court erred in denying prejudgment interest on the award
of backpay. This issue—whether prejudgment interest is proper when a court awards liquidated
damages to a plaintiff in an ADEA suit—is one this Court intended to settle in Burns v. Texas City
Refining, Inc., 890 F.2d 747 (5th Cir.1989). Upon reexamining the Burns opinion, however, we are
constrained to admit that our earlier decision may have been less than precise. What the Court
intended to say in Burns, and what we reemphasize today, is that this Circuit follows the Seventh
Circuit's approach to prejudgment interest in ADEA cases. See Coston v. Plitt Theatres, Inc., 831
F.2d 1321, 1336 (7th Cir.1987), vacated on other grounds, 486 U.S. 1020, 108 S. Ct. 1990, 100
L. Ed. 2d 223 (1988). In an ADEA case where liquidated damages are awarded, a court may not
award prejudgment interest on either the backpay or the liquidated damage award. Any language in
Burns that suggests otherwise is disapproved. In the instant case, because liquidated damages were
awarded, the district court did not err in refusing to award Hickman prejudgment interest.
C. McCann's Cross-Appeal
McCann appeals the district court's dismissal of TCR and Agway pursuant to a Rule 12(b)(6)
motion. A district court's ruling on a 12(b)(6) motion is subject to de novo review. Barrientos v.
Reliance Standard Life Ins. Co., 911 F.2d 1115, 1116 (5th Cir.1990), cert. denied, --- U.S. ----, 111
S. Ct. 795, 112 L. Ed. 2d 857 (1991). This Court will affirm an order granting a 12(b)(6) motion to
dismiss "only if it appears that no relief could be granted under any set of facts that could be proven
consistent with the allegations." Id.
McCann's original complaint asserted two causes of action against TCR and Agway: first,
that the defendant s violated the terms of the ADEA; and second, that the defendants violated 42
U.S.C. § 1985(3) by conspiring to discriminate against McCann because of her age. McCann
voluntarily dismissed the § 1985 conspiracy claim, leaving only the ADEA cause of action. The
ADEA makes it unlawful for any employer "to fail or refuse to hire or to discharge any individual or
otherwise discriminate against any individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual's age." 29 U.S.C. § 623(a)(1). McCann's
complaint fails to allege any actions by TCR or Agway that would violate the ADEA. TCR was the
former employer of McCann. However, it cannot be said that TCR discharged McCann because of
her age; TCR sold the refinery and discharged everyone. In reality, the sole act of discrimination
asserted by McCann's complaint was Hill's refusal to hire her.7 Although it is true that courts will
bend over backwards to avoid granting a 12(b)(6) motion to dismiss, here McCann simply did not
allege any facts that could possibly support her ADEA claim against TCR and Agway.
Even if her original complaint was subject to dismissal, McCann argues that her amended
complaint successfully stated a state-law cause of action against these defendants. In this amended
7
Both in the complaint and in briefs filed before this Court, McCann also argues that TCR and
Agway "conspired" with Hill to deny her employment based upon her age. Whatever the other
deficiencies of this claim, the simple fact is that the ADEA itself contains no provision prohibiting
conspiracies of this sort.
complaint, McCann alleged that TCR and Agway "tortiously interfered" with McCann's employment
contract. There is some disagreement among the parties as to whether the district court actually
considered this amended complaint. This disagreement is irrelevant, however, because the amended
complaint also fails to state a cause of action against TCR and Agway.
Texas law does recognize a cause of action for tortious interference with an employment
contract. See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex.1989). The first element of
such a claim, however, is the existence of an employment contract. Champion v. Wright, 740 S.W.2d
848, 853 (Tex.Ct.App.1987). McCann's proposed amended complaint does not allege that McCann
was ever hired by Hill. It should be obvious to all that TCR and Agway could not possibly have
interfered with an employment contract that never existed. Therefore, since McCann's proposed
amended complaint also failed to state a claim against TCR or Agway, it was not error for the district
court to refuse to allow McCann to amend her complaint.
III. CONCLUSION
For the reasons stated, we remand this case for a new trial limited to the question of whether
Hill's discrimination against Hickman was willful. Additionally, we hold that the district court did not
err in denying Hickman prejudgment interest on the award of backpay or in holding that McCann's
complaint failed to state a cause of action against TCR and Agway. Accordingly, those portions of
the district court's judgment are affirmed.