United States District Court, S.D. Texas, Houston Division
THE GIL RAMIREZ GROUP, L.L.C. and GIL RAMIREZ, JR., Plaintiffs,
HOUSTON INDEPENDENT SCHOOL DISTRICT, LAWRENCE MARSHALL, EVA JACKSON and RHJ-JOC, INC., Defendants.
MEMORANDUM & ORDER ON DEFENDANTS' RENEWED
MOTION FOR JUDGMENT AS A MATTER OF LAW
P. ELLISON, UNITED STATES DISTRICT JUDGE
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,
(“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. After six years of litigation, this
Court held a 14-day jury trial, in which the jury issued a
verdict for Plaintiff, awarding actual and exemplary
damages. The Defendants request that the Court
overturn the jury's verdict as a matter of law or,
alternatively, grant a new trial. (Doc. Nos. 504, 505 and
516.) The Court finds that either form of relief would be
inappropriate and contrary to law.
Fifth Circuit ably described the factual background of this
case, and the Court need not repeat it in detail. See Gil
Ramirez Grp., L.L.C. v. Houston Indep. Sch. Dist., 786
F.3d 400, 404-08 (5th Cir. 2015).
alleged bribery scheme at the heart of this action concerns
HISD's job-order contract (“JOC”) program,
through which HISD procures some of its construction and
facilities services. The HISD Board of Trustees receives
recommendations regarding vendors, and the Board then votes
on whether to offer JOC contracts to the suggested vendors.
GRG was selected as a JOC vendor in 2008 but not in 2010. Mr.
Ramirez, the owner of GRG, alleges that he and his company
were punished for refusing to participate in the corruption
scheme of Lawrence Marshall, former president of the HISD
Board of Trustees. GRG alleges in particular a pay-to-play
scheme in which: potential and selected JOC vendors hired
Joyce Moss Clay and her company, JM Clay and Associates 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 the 2008 JOC contract, and in GRG's
nonselection as vendor for the 2010 JOC program.
2010, Plaintiff brought an array of federal and state law
claims against the defendants named above. After rulings by
both this Court and the Fifth Circuit, the remaining
defendants are: Lawrence Marshall and his consulting company
(“Marshall Defendants”); Joyce Moss Clay and JM
Clay and Associates (“Clay Defendants”); FBM and
its owner David “Pete” Medford (“Medford
Defendants”); and RHJ and its owner Eva Jackson
(“Jackson Defendants”). The claims include: (1)
violations of the Racketeer Influenced Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1962; and (2)
state law claims for tortious interference with prospective
business relations and civil conspiracy.
October and November 2016, this 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. (Doc. No. 480.)
before the Court are Defendant Lawrence Marshall's
Renewed Motion for Judgement as a Matter of Law and,
alternatively, Motion for a New Trial (“motion”
or “Defendants' motion”) (Doc. No. 505); the
Clay Defendants' motion to join Mr. Marshall's motion
(Doc. No. 504); and the Medford Defendants' motion to
join Mr. Marshall's motion (Doc. No. 516).
MOTION FOR JOINDER
Marshall timely filed his motion on February 23, 2017. That
same day, the Clay Defendants filed a notice of joinder to
Mr. Marshall's motion. (Doc. No. 504.) The Medford
Defendants filed a notice of joinder to Mr. Marshall's
motion on March 28, 2017. (Doc. No. 516.) Plaintiff argues
that the Clay and Medford Defendants failed to comply with
the particularity requirements under Federal Rules of Civil
Procedure 7 and 59. Plaintiff also points out that the
Medford Defendants filed their notice of joinder late.
maintains that the Clay Defendants' motion for joinder
lacks particularity because it does not specify the Clay
Defendants' reasons for a new trial. See Fed. R.
Civ. P. 7(b)(1)(B) (“motion must . . . state with
particularity the grounds for seeking the order”). The
Clay Defendants state only their intention to join Mr.
Marshall's motion, and add that there was no evidence
that Ms. Clay bribed anyone or committed illegal acts. (Doc.
No. 504.) Appellate courts have found that co-appellants in
criminal cases may adopt by reference a part of another's
brief, but “the arguments must actually be transferable
from the proponent's to the adopter's case.”
United States v. Ramirez-Rivera, 800 F.3d 1, 12 n.1
(1st Cir. 2015) (quoting United States v. Brown, 669
F.3d 10, 16 n.5 (1st Cir.2012)). Many of Mr. Marshall's
arguments would be applicable to the Clay Defendants, but not
all. The Court of Appeals for the D.C. Circuit has held that
“adoption by reference is permitted only to the extent
we can readily apply the proponent's arguments to the
adopter's case, ” finding that purely legal
arguments can readily be adopted whereas fact-specific ones
cannot. United States v. Straker, 800 F.3d 570, 594
n.5 (D.C. Cir. 2015). The Court allows the Clay Defendants to
adopt Mr. Marshall's legal arguments, and thus
grants the Clay Defendants' motion to join Mr.
Marshall's motion. (Doc. No. 504.)
objects to the Medford Defendants' motion for joinder on
the basis of untimeliness. A motion filed under Rule 59 must
be filed within 28 days from the entry of judgment.
Fed.R.Civ.P. 59(b). The Court may not extend that deadline.
Fed.R.Civ.P. 6(b)(2). See also U.S. Leather, Inc. v. H
& W P'ship, 60 F.3d 222, 225 (5th Cir. 1995)
(“The requirement that post-trial motions be filed
within the relevant . . . period after entry of judgment is
jurisdictional, and may not be extended by a waiver of the
parties or by a rule of the district court.”). Because
the Medford Defendants filed their motion for joinder late,
the Court lacks jurisdiction over it and must deny the
motion. (Doc. No. 516.) Despite this ruling, the Court will
address arguments raised by Mr. Marshall that also affect the
RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW AND MOTION FOR
A NEW TRIAL
Federal Rule of Civil Procedure 50, a motion for judgment as
a matter of law may be granted if a trial court finds that a
“reasonable jury would not have a legally sufficient
evidentiary basis to find for the party on that issue.”
Fed.R.Civ.P. 50(a)(1). In ruling on the renewed motion for
judgment as a matter of law, the court may: “(1) allow
judgment on the verdict, if the jury returned a verdict; (2)
order a new trial; or (3) direct the entry of judgment as a
matter of law.” Fed.R.Civ.P. 50(b).
Rule of Civil Procedure 59 states that a court may, on
motion, grant a new trial after a jury trial “for any
reason for which a new trial has heretofore been granted in
an action at law in federal court.” Fed.R.Civ.P.
59(a)(1)(A). A court may grant a new trial if it finds that
the “verdict is against the weight of the evidence, the
damages awarded are excessive, the trial was unfair, or
prejudicial error was committed in its course.”
Smith v. Transworld Drilling Co., 773 F.2d 610, 613
(5th Cir. 1985) (internal citations omitted). See
also Beckham v. La. Dock Co., L.L.C., 124
Fed.Appx. 268, 270 (5th Cir.2005); Vackar v. Sentry
Supply Inc., No. CIV.A. H-12-3716, 2015 WL 338616, at *2
(S.D. Tex. Jan. 26, 2015). “[T]he burden of showing
harmful error rests on the party seeking the new
trial.” Streber v. Hunter, 221 F.3d 701, 736
(5th Cir. 2000). In determining whether to grant a motion for
new trial, the court must view the evidence “in a light
most favorable to the jury's verdict.” Dawson
v. Wal-Mart Stores, Inc., 978 F.2d 205, 208 (5th Cir.
Evidence of Proximate Cause
first argue that that there is no evidence that their actions
proximately caused any injury to Plaintiff. Specifically,
they contend that the evidence does not show that Mr.
Marshall influenced or interfered with: the addition of RHJ
as a JOC participant in 2008; the decision not to renew the
2008 JOC vendor contracts, including Plaintiff's
contract; or the decision not to select GRG as a JOC vendor
in the 2010 procurement process. (Doc. No. 505 at 2-13.)
party moves for a new trial on evidentiary grounds, a new
trial should not be granted unless “the verdict is
against the great weight of the evidence.” Pryor v.
Trane Co., 138 F.3d 1024, 1026 (5th Cir. 1998). There is
no legally sufficient evidentiary basis when
“‘the facts and inferences point so strongly and
overwhelmingly in favor of one party that the Court believes
that reasonable men could not arrive at a contrary
verdict.'” Rubinstein v. Adm'rs of the
Tulane Educ. Fund, 218 F.3d 392, 401 (5th Cir. 2000)
(quoting Boeing Co. v. Shipman, 411 F.2d 365, 374
(5th Cir. 1969)).
point to many instances in the testimony when HISD
administrators stated that they had no contact with Mr.
Marshall about which contractors to consider or recommend.
(See Eaglin Trial Tr. 2 at 36, 42-43; Lindsay Trial
Tr. at 13-16, 33; Garrett Trial Tr. at 41; Marshall Trial Tr.
at 90-91; Eastman Trial Tr. at 165-66; Grier Trial Tr. at
64-66, 111; Grier Deposition Tr. at 11-12, 18-19.) They also
maintain that Mr. Marshall was one of several Board members,
and his vote alone could not and did not change the outcome
of any contract selection decision. Furthermore, GRG placed
so low (10 out of 13) in the 2010 JOC procurement rankings
that it was not close to renewing its contract, regardless of
Mr. Marshall's conduct.
counters that Mr. Marshall had ample opportunity to exert
pressure over administrators and other Board members.
(See Abe Saavedra Deposition Tr. at 39-40; Watson
Deposition Tr.; Pottinger Trial Tr. at 25; Marshall Trial Tr.
at 155.) Plaintiff cites testimony suggesting that Mr.
Marshall actually exerted that pressure: he asked
administrators to help RHJ, facilitated RHJ's award of a
2008 JOC contract, and expected payments via Ms. Clay from
JOC vendors who wanted jobs. (See Abe Saavedra
Deposition Tr. at 39-40; Medford Recording Tr. at 63-64;
Pottinger Trial Tr. at 25; Marshall Trial Tr. at 100; Ramirez
Trial Tr. 1 at 241; Ramirez Trial Tr. 2 at 10, 12, 36.) Mr.
Marshall-albeit along with other Board members-voted to
approve certain JOC vendors, including firms that had hired
Ms. Clay, and against the renewal of contracts with the
vendors selected in 2008. (See Medford Trial Tr. at
120, 154-55.) Plaintiff also calls into question the validity
of the rankings before the 2010 procurement process, as the
criteria was largely subjective and easy to manipulate.
(See Medford Recording Tr. at 81; Eaglin Trial Tr. 1
at 140; Kashani Trial Tr. at 12, 30, 91-92.) After
considering all the evidence, the jury found Mr. Marshall
liable on all the claims against him. To reach this verdict,
the jury must have found that Mr. Marshall proximately caused
Plaintiff's injuries, as required by the jury charge.
(Doc. No. 480 at 12-13.)
motion for a new trial should not be granted if the verdict
is against “merely against the preponderance of the
evidence.” Dresser-Rand Co. v. Virtual Automation
Inc., 361 F.3d 831, 838-39 (5th Cir. 2004) (citing
Dahlen v. Gulf Crews, Inc., 281 F.3d 487, 497 (5th
Cir.2002)). When there is an “abundance of fact
and expert testimony on each side, the relative credibility
of these witnesses must be important to the outcome of the
case.” Beckham v. Louisiana Dock Co., 124 F.
App'x 268, 272 (5th Cir. 2005) (citing Polanco v.
City of Austin, 78 F.3d 968 (5th Cir.1996)). See
also Reeves v. Gen. Foods Corp., 682 F.2d 515, 519 (5th
Cir. 1982) (“it is the function of the jury as the
traditional finder of the facts, and not the Court, to weigh
conflicting evidence and inferences and determine the
credibility of witnesses”); Martin v.
Chesebrough-Pond's, Inc., 614 F.2d 498, 500 (5th
Cir. 1980) (uphold jury's verdict if supported by
rational basis); Lowe v. Pate Stevedoring Co., 558
F.2d 769, 772 (5th Cir. 1977) (jury weighs conflicting
evidence and inferences, and determines witness credibility);
Torrence v. Union Barge Line Corp., 408 F.2d 873,
875 (5th Cir. 1969) (same). The case law strongly encourages
a court to defer to the findings of the jury.
said, to prevail at trial, “it is not enough for the
jury to disbelieve the defendant's testimony. Rather, the
plaintiff must offer clear and convincing affirmative
proof to support a recovery.” Dollar v.
Georgia-Pac. Corp., 59 F.3d 1242, 1995 WL 1242, at *2
(5th Cir. 1995) (citing Casso v. Brand, 776 S.W.2d
551, 558 (Tex.1989)) (emphasis in original). See also
United States v. Slone, 601 F.2d 800, 804 (5th Cir.
1979). Plaintiff provided 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.
The jury deliberated for two days, weighing the evidence of
more than two dozen witnesses. The Court respects the
Tortious Interference With Prospective Business
jury found for Plaintiff and against all Defendants on the
claim for tortious interference with prospective business
relations (hereinafter “tortious interference”).
(Doc. No. 480 at 15.) Defendants contest this finding as a
matter of law, on two grounds. First, they argue that
Plaintiff lacked the requisite foundation for a tortious
interference claim because the contract that originally
awarded a JOC bid to GRG in 2008 was invalid. Second,
Plaintiff failed to exhaust all administrative remedies and
was not exempted from the exhaustion requirement.
Validity and Relevance of the 2008 JOC Contract
argue that Plaintiff cannot prevail on a tortious
interference claim because the 2008 JOC contract (awarded to
GRG) was void, due to HISD's failure to comply with the
Texas Education Code requirements in the 2008 JOC procurement
process. Defendants' proposed jury charge included a
question on whether the 2008 JOC contract was void, but the
Court did not include such an instruction. (Doc. No. 473 at
33-34; Doc. No. 480.)
responds with several arguments. First, the Fifth Circuit
found that the tortious interference claim could proceed even
if the 2008 JOC contract was awarded for reasons other than
the Texas Education Code criteria. Second, because the claim
regards prospective business relations, it does not
hinge on the validity of the 2008 JOC contract under state
law. Third, the evidence at trial failed to establish that
the 2008 JOC contract was void. (Doc. No. 519 at 8-11.)
Court finds Plaintiff's second argument persuasive.
Plaintiff maintains the validity of the contract is
irrelevant because this claim regards interference with
prospective business relations.
“To prevail on a claim for tortious interference with
prospective business relations, the plaintiff must establish
that (1) there was a reasonable probability that the
plaintiff would have entered into a business relationship
with a third party; (2) the defendant either acted with a
conscious desire to prevent the relationship from occurring
or knew the interference was certain or substantially certain
to occur as a result of the conduct; (3) the defendant's
conduct was independently tortious or unlawful; (4) the
interference proximately caused the plaintiff injury; and (5)
the plaintiff suffered actual damage or loss as a
result.” Coinmach Corp. v. Aspenwood Apartment
Corp., 417 S.W.3d 909, 923 (Tex. 2013) (internal
citations omitted). See also In re Burzynski, 989
F.2d 733, 739 (5th Cir. 1993). Plaintiff points out that,
unlike a claim for tortious interference with a contract,
there is no element requiring the existence of a contract.
Cf. Cuba v. Pylant, 814 F.3d 701, 717 (5th Cir.
2016) (first element is “a contract subject to
clear that a tortious interference with a prospective
contract claim does not require an existing contract.
However, Defendants argue that Plaintiff could only obtain
jobs based on the 2008 JOC contract; if that contract was
void, then Plaintiff had no claim to any jobs stemming from
it. Defendants cite TXU Energy Retail Co. L.L.C. v. Fort
Bend Indep. Sch. Dist., in which the Texas Supreme Court
held that a contract was void because it violated the
competitive bidding requirements under the Texas Education
Code, and that a contractor could not enforce the waiver of
immunity in the (now void) contract. 472 S.W.3d 462 (Tex.
App.-Dallas 2015). The Court finds TXU Energy
distinguishable because, in that case, the plaintiff wanted
to enforce a term within the contract. Here, GRG needs to
show only that it had a reasonable chance of entering the
business relationship. The evidence at trial showed that it
did have a chance. Although GRG was eligible for jobs only
because of the 2008 JOC contract, Plaintiff never contended
that it was entitled to any of those jobs. Even if that
contract were later found void, during the 2008 contract
window, GRG still had that reasonable expectation that it
would receive jobs. Despite Defendants' well-reasoned
arguments, the Court upholds the jury's finding that
Defendants interfered with Plaintiff's prospective
Exhaustion of Remedies
Marshall next argues that Plaintiff cannot prevail on its
state tort claim because GRG did not exhaust administrative
remedies. The Texas Education Code § 22.0514 requires,
prior to the filing of a lawsuit against a professional
employee of a school district, exhaustion of the remedies
provided by the school district. It is undisputed that
Plaintiff did not exhaust administrative remedies before
filing this suit against Mr. Marshall. The parties discuss
three possible exceptions to the exhaustion requirement: when
exhaustion would have been futile; when the acts challenged
were outside the scope of employment; and when the acts were
“clearly illegal.” See Ogletree v. Glen Rose
Indep. Sch. Dist., 314 S.W.3d 450, 454 (Tex. App.-Waco
2010) (“Futility is a recognized exception to the
exhaustion of administrative remedies requirement.”);
Melendez v. Houston Indep. Sch. Dist., 418 S.W.3d
701, 710 (Tex. App.- Houston [14th Dist.] 2013) (recognizing
exception to exhaustion requirement for claims that involve
parties acting outside the scope of their employment);
Texas Air Control Bd. v. Travis Cty., 502 S.W.2d
213, 216 (Tex. Civ. App.-Austin 1973) (principle of
exhaustion of administrative remedies sometimes relaxed in
cases where action is clearly illegal).
Court did not present the jury with a question on whether
exhaustion would have been futile. The parties disagree as to
whether the evidence presented at trial could support such a
finding. (Doc. No. 505 at 16-19; Doc. No. 519 at 12-17; Doc.
No. 525 at 2-5.) This disagreement is irrelevant to the
Court's holding, as the Court did not rely on
Plaintiff's futility argument in determining that
Plaintiff could proceed with its claim.
the Court holds that exhaustion was unnecessary because Mr.
Marshall's conduct fell outside of the scope of his
employment. The Fifth Circuit already determined that the
conduct alleged against Mr. Marshall did not fall within the
scope of his duties as a trustee. The Court of Appeals
stated: “bribery and peddling influence are not within
the scope of a trustee's duty. He was allegedly defiling
his position and wholly outside the legitimate scope of a
trustee's duties if he accepted bribes in exchange for
advancing the interests of certain contractors.”
Gil Ramirez, 786 F.3d at 417.
argue that the Fifth Circuit erred in finding that Mr.
Marshall's alleged conduct fell outside of the scope of
his employment. They turn to Laverie v. Wetherbe, in
which the Texas Supreme Court held that the scope of
employment analysis “remains fundamentally
objective” and that “subjective intent is [not] a
necessary component of the scope-of- employment
analysis.” 517 S.W.3d 748, 753 (Tex. 2017). The parties
disagree on the proper interpretation of Laverie.
According to Plaintiff, “Laverie merely stands
for the proposition that where the alleged tortious acts fall
entirely within an official's job duties, courts need not
probe the employee's subjective intent to analyze whether
the acts were within the scope of employment.” (Doc.
No. 525 at 6.) Defendants, on the other hand, argue that
“because Laverie forbids inquiry into a
governmental employee's subjective motivations, the fact
that GRG alleges that Marshall's actions-including his
official act of voting-are criminal is immaterial to the
analysis of his entitlement to dismissal of his civil tort
claim under Texas law.” (Doc. No. 526 at 5.) According
to Defendants, even if Mr. Marshall cast his vote in the
shadow of a bribe, the act of voting fell within the scope of
Court instructed the jury that, to find Mr. Marshall liable
for tortious interference, it must find that he had committed
an “official act.” (Doc. No. 480 at 12.) To
explain the term “official act, ” the jury
instruction quoted language from McDonnell v.
United States, 136 S.Ct. 2355, 2358 (2016). Defendants
conclude that, because the jury found that Mr. Marshall
committed an official act, his conduct was “incident
to, and squarely within, the scope of his duties as a
trustee.” (Doc. No. 526 at 4.) Given this, the
exemption to the exhaustion requirement would not apply.
Court rejects Defendants' argument because
Laverie is distinguishable from this case. Unlike in
Laverie, Mr. Marshall's conduct in question is
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. In contrast, the
Laverie plaintiff based his defamation claim solely
on Ms. Laverie's statements about him as a job applicant.
The Texas Supreme Court held that Ms. Laverie's job
duties as senior associate dean and member of university job
search committee included sharing her knowledge about the
plaintiff. Ms. Laverie's personal motivations for
providing unfavorable information were irrelevant to the
determination of whether or not she performed her duties.
See Laverie, 517 S.W.3d at 754-55. Her statements,
even if defamatory, were made entirely as part of her role on
the university's search committee. Even more importantly,
Ms. Laverie was not on the receiving end of a bribe, an act
that would fall beyond the scope of her duties.
Laverie, other courts that have recognized immunity
for public employees have found that all of the alleged
tortious conduct fell within the scope of an employee's
duties. See, e.g., McFadden v. Olesky, 517 S.W.3d
287 (Tex. App.-Austin 2017, pet. denied) (police meeting,
talking to another official, or organizing an event (or
agreeing to do officers acted within scope of employment when
preparing arrest affidavit, even if information supplied was
false). For example, in Rosencrans v. Altschuler,
161 S.W.3d 517 (Tex. App.- Eastland 2004), the court found
that a school employee was immune from claims of assault-Mr.
Altshuler had allegedly covered the plaintiff's mouth
with his hand to prevent her from speaking during a business
meeting. The court held that Mr. Altshuler's choice to
silence his colleague in this way was incident to or within
his scope of duties as a school district employee and
involved discretion or judgment, as permitted by the Texas
Education Code. Id. at 521. Rosencrans
exemplifies an expansive reading of the “scope of
employment, ” but it does not change the outcome of the
instant case. No part of Mr. Marshall's acceptance of
bribes is incidental to his duties as a trustee. Although ...