Bellows v. Amoco Oil Co, TX

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

___________________

No. 96-40051

MARTIN BELLOWS, Individually and

on Behalf of Phillips Industrial

Constructors, Inc.,

Plaintiff-Appellee,

versus

AMOCO OIL COMPANY; ET AL,

Defendants,

AMOCO OIL COMPANY, TEXAS

CITY REFINERY,

Defendant-Appellant.

________________________________________________

Appeal from the United States District Court for the

Southern District of Texas

________________________________________________

July 16, 1997

Before GARWOOD, WIENER and DEMOSS, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiffs Martin J. Bellow1 (Bellow) and Phillips Industrial

Constructors, Inc. (PICI), a Texas corporation, brought this

lawsuit against defendant Amoco Oil Company, Texas City refinery

(Amoco), alleging that Amoco discriminated against them on the

basis of their race by terminating, modifying, or changing their

right to contract in violation of 42 U.S.C. § 1981. A jury

1

Bellow’s name was misspelled (“Bellows”) in the original

pleadings and, consequently, in the caption of the case as well.

This caption misspelling was never corrected below.

returned a verdict in favor of Bellow, awarding him $50,000 in

“subjective damages” and $225,000 in punitive damages. We reverse.

Facts and Proceedings Below

Bellow, an African-American, began working in the construction

business in 1970, working primarily in Texas City, Texas, and the

surrounding Gulf Coast area specializing in civil construction and

equipment operations. In 1974, Bellow met Harold Phillips

(Phillips), a Caucasian, while they both worked for the same

construction company. They instantly became friends, and over the

next several years Bellow and Phillips continued to work together,

first at the M.W. Kellogg Company, then at Byrd Construction, and

later at Callie Construction.

In the summer of 1978, Phillips left Callie Construction and,

with his wife, formed his own construction firm, PICI, a

corporation organized under Texas law. During the first six months

of its operation, PICI had difficulty obtaining construction work.2

In early 1979, Phillips learned that Amoco was seeking qualified

minority-owned construction firms to perform maintenance and

construction work at its Texas City refinery. To take advantage of

this opportunity, Phillips approached Bellow in March 1979 and

offered him a 51% ownership interest in PICI. Bellow accepted the

offer and became the president of PICI, while Phillips became

PICI’s vice-president and general manager, owning 49% of the

2

During those six months, PICI managed to secure only two

small construction jobs valued at less than $20,000.

2

corporation’s stock.3 On March 3, 1979, Bellow and Phillips wrote

a letter to Amoco informing it of PICI’s new status as a minority-

owned construction firm. Soon thereafter, PICI began receiving

general maintenance and construction work from Amoco.

Beginning in 1979, and lasting throughout the 1980s, PICI’s

business relationship with Amoco flourished. During this time,

almost all of PICI’s business involved work from Amoco’s refinery.

PICI performed a variety of civil construction and related

maintenance work for Amoco, producing several millions of dollars

in annual gross revenues for PICI (the amended complaint alleges

that PICI’s gross receipts from the Amoco refinery totaled over 32

million dollars from January 1985 through June 1994). Bellow

worked primarily in the field as a superintendent overseeing the

work of PICI crews at the refinery, while Phillips was responsible

mainly for the day-to-day administrative duties at the office.

PICI’s decade of prosperity came to an end, however. Sometime

during the mid-1980s, Amoco began reevaluating its use of

contractors and suppliers at the Texas City refinery. At one

point, over 3,000 contractors and suppliers performed work for the

refinery. In an effort to improve its monitoring of contractors

and increase its efficiency, Amoco decided to reduce the number of

contractors through “contract consolidation.” Under this

consolidation process, Amoco decided to use a single, primary

3

Bellow acquired 5,100 shares of the stock and Phillips

retained 4,900 shares. Because Phillips had already invested

$9,000 in the corporation, Bellow agreed to work for six months

without pay in exchange for the 5,100 shares of stock.

3

contractor to perform most of the construction and related

maintenance work that its own personnel could not handle.4 In

1989, Amoco began informing its construction contractors, including

PICI, that it would begin using Brown & Root Industrial Services

(BRIS) as its primary outside maintenance contractor.5 Under its

new contract consolidation policy, construction jobs would first be

assigned to Amoco personnel. If Amoco personnel were unavailable,

the job would be assigned to BRIS. If BRIS did not have the

personnel available or lacked the expertise for a particular job,

Amoco’s Contracts group would either bid the job to outside

contractors6 or hire a contractor under a cost-plus contract.7

4

According to Richard Evans, vice-president of refining and

engineering at Amoco, Amoco’s competitors at the time had already

moved in the direction of using a single contractor.

5

It was undisputed that none of the individual defendants in

this case had a hand in Amoco’s contract consolidation decision or

the decision to hire BRIS as the new primary contractor. Also,

Bellow conceded at trial that Amoco’s decision to utilize BRIS as

the primary outside general maintenance contractor was not

motivated by racial animus.

6

At Amoco, two groups worked directly with outside contractors

such as PICI. The Contracts Administration group (Contracts group)

in the purchasing department was responsible for awarding contracts

to outside contractors, including the selection of contractors,

providing the terms of the contract, and authorizing payment to

contractors. The other group was the Plant Support and Contracting

group (PS&C group) in the maintenance department. The PS&C group

was responsible for monitoring all construction and maintenance

contractors while they performed their work, and for scheduling and

initiating to the Contracts group all requests for construction and

maintenance services.

7

There were three methods by which Amoco retained services of

a construction and maintenance contractor like PICI. The first

method was by a “cost-plus” contract. Cost-plus contracts were

generally awarded for a particular, specific job or assignment

without bidding. The second method was by competitive bidding.

However, to avoid overlap of charges for services rendered on cost-

4

Beginning in 1990, PICI and other general maintenance

contractors experienced a dramatic decline in their general

maintenance work.8 Because Amoco personnel and BRIS consumed the

bulk of Amoco’s maintenance jobs, little work was left over for

PICI and other maintenance contractors. In 1991, PICI’s work load

decreased even further when Amoco decided not to renew PICI’s

service agreements——the primary source of PICI’s work.9 From 1991

to 1994, PICI performed whatever cost-plus work it could obtain.

PICI was invited to bid on several jobs when it did not have any

cost-plus contract work in the refinery; however, PICI was rarely

a successful bidder, as its bids were usually too high. PICI’s

annual gross revenues from Amoco work dropped from approximately

$3.5 million in 1990 to $209,537 in 1994 and $0 for the first half

of 1995.10

plus jobs, companies currently performing cost-plus contract work

were not allowed to bid on jobs. Because PICI preferred to do

cost-plus work, they seldom performed bid work. The third method

for retaining a contractor was with a year-to-year labor contract.

PICI had several service agreements with Amoco, including a general

maintenance contract, a refinery labor crew contract, a

contaminated soil agreement, and an outside lot mowing contract.

8

Of these contractors, only PICI was a minority-owned firm.

9

See note 7, supra. The PICI service agreements that were

canceled included a general maintenance contract, a refinery labor

agreement, a contaminated soil agreement, and an outside lot mowing

contract. Bellow conceded at trial that Amoco’s decisions not to

renew PICI’s contracts in 1991 were made for reasons unrelated to

Bellow’s race. According to Bellow, “my complaint is not that they

canceled our contract. My complaint is the way they treated us

when we did work in [the refinery].”

10

PICI completed its final cost-plus contracts sometime in

April 1994, and neither Bellow nor PICI performed any work for

Amoco after April 1994.

5

At around the same time that Amoco implemented its new

contract consolidation policy, Bellow started to notice that Amoco

was treating him in a manner which he believed to be

discriminatory. Specifically, Bellow believed that Jerry Jordan

(Jordan), an Amoco employee who worked as a supervisor both with

the Contracts group and the PS&C group, was on a mission to “run

him out of the refinery” solely because Bellow was African-

American.11 The specific incidents of racial discrimination

attributed to Jordan include the following: (1) in 1989, Jordan

told Phillips that he believed Bellow made too much money as a

field superintendent; (2) in 1989, Bellow learned from Phillips,

who in turn had been so informed by Albert De Los Santos (De Los

Santos), another Amoco contractor, that Jordan had told De Los

Santos “Albert, whenever you drive a white Cadillac or a Lincoln

[like Bellow’s wife], I’ll stop doing business with you because you

done made too much money”; (3) in 1990, when Bellow complained to

Jordan about racist comments made by Sherman McNown (McNown), an

Amoco Turnaround Superintendent, Jordan told Bellow that he could

not do anything because he (Jordan) was prejudiced against African-

Americans;12 (4) between 1991 and 1994, when Jordan was supervisor

of the PS&C group, Emmanuel Moore (Moore), a contracts specialist

with the Amoco purchasing department, received complaints from

11

Jordan worked as a contract specialist with the Contracts

group from 1987 to 1990. From October 1990 to September 1991, he

was the supervisor of the Contracts group. In September 1991, he

became the supervisor of the PS&C group.

12

Apparently, McNown and another Amoco employee, Dewey Bailey,

called Bellow a “nigger” on one occasion.

6

Amoco job representatives that Jordan was treating PICI differently

because of Bellow’s race; (5) in 1993, Jordan told Melvin Hagler

(Hagler), an Amoco job representative, at a job representatives

meeting to make sure PICI workers left the refinery as soon as they

finished their jobs; (6) in 1993 or 1994, Hagler told Bellow that

Jordan did not like him and that “Jerry is going to get you”; (7)

in 1994, Hagler told Bellow that he overheard Jordan telling

another job representative, Howard Luster (Luster), that he

(Jordan) would “run [Bellow’s] nigger ass off”; and (8) on March

17, 1994, Jordan canceled a job that had been assigned to PICI

earlier that morning.13

On September 7, 1994, Bellow filed this lawsuit, “individually

and on behalf of” PICI, in the district court below asserting

claims against Amoco and Jordan under 42 U.S.C. §§ 1981 and

1985(3),14 as well as under Texas law for tortious interference with

13

According to Jordan, he canceled the job after he had

determined that an Amoco crew would soon complete another job and

would be available to take the job assigned to PICI. A few days

after Jordan canceled PICI’s job, Bellow filed with the Equal

Employment Opportunity Commission (EEOC) a charge of discrimination

against Amoco. The EEOC dismissed the complaint after it learned

that Bellow was not an employee of Amoco.

14

Section 1981 provides in relevant part:

Ҥ 1981. Equal rights under the law

(a) Statement of equal rights

All persons within the jurisdiction of the United

States shall have the same right in every State and

Territory to make and enforce contracts, to sue, be

parties, give evidence, and to the full and equal benefit

of all laws and proceedings for the security of persons

and property as is enjoyed by white citizens, and shall

be subject to like punishment, pains, penalties, taxes,

7

the right to contract and intentional infliction of emotional

distress. On January 11, 1995, an amended complaint was filed

adding PICI as a separate plaintiff, so that the plaintiffs became

Bellow and PICI,15 and adding Sherman McNown, Dewey Bailey, and

Larry Blow16 as defendants. Under their section 1981 claims,

licenses, and exactions of every kind, and to no other.

(b) ‘Make and enforce contracts’ defined

For purposes of this section, the term ‘make and

enforce contracts’ includes the making, performance,

modification, and termination of contracts, and the

enjoyment of all benefits, privileges, terms, and

conditions of the contractual relationship.” 42 U.S.C.

§ 1981.

Section 1985(3) provides in relevant part:

Ҥ 1985. Conspiracy to interfere with civil rights

...

(3) Depriving persons of rights or privileges

If two or more persons in any State or Territory

conspire, or go in disguise on the highway or on the

premises of another, for the purpose of depriving, either

directly or indirectly, any person or class of persons of

the equal protection of the laws, or of equal privileges

and immunities under the laws . . . in any case of

conspiracy set forth in this section, if one or more

persons engaged therein do, or cause to be done, any act

in furtherance of the object of such conspiracy, whereby

another is injured in his person or property, or deprived

of having and exercising any right or privilege of a

citizen of the United States, the party so injured or

deprived may have an action for the recovery of damages,

occasioned by such injury or deprivation, against any one

or more of the conspirators.” 42 U.S.C. § 1985(3).

15

Although the amended complaint added PICI as a separate party

plaintiff, the caption of the case was never changed in the court

record to reflect this amendment.

16

Larry Blow (Blow) is a supervisor with the building and

maintenance department at Amoco. Bellow alleged that Blow, under

Jordan’s instructions, told Bellow that PICI did not have a

contract on a particular job when, in fact, it did have a contract.

8

plaintiffs Bellow and PICI alleged that Amoco modified, changed, or

terminated PICI’s contracts with Amoco and Bellow’s contract with

PICI. Bellow never contracted with Amoco personally, and he did

not bring a section 1981 claim against Amoco for interference with

his contractual rights with Amoco.

Thereafter, and before the case was submitted to the jury, the

court dismissed plaintiffs’ section 1985(3) claims, their section

1981 claims against the individual defendants, and their state law

claims against all defendants. The only claims submitted to the

jury were plaintiffs’ section 1981 claims against Amoco. The jury

found that Amoco did not discriminate against PICI on the basis of

its race by interfering with its right to contract with Amoco. The

jury did find, however, that Amoco discriminated against Bellow

because of his race “in terminating, modifying or changing Martin

Bellow’s right to contract with Phillips Industrial Constructors,

Inc.,” and awarded Bellow $50,000 in “subjective damages” and

$225,000 in punitive damages.17 Amoco timely filed its notice of

appeal to this Court.18

Discussion

I.

On appeal, Amoco contends that the district court erred in

17

Plaintiffs filed a motion for an award of attorneys’ fees.

The district court stayed consideration of the attorneys’ fees

application pending final resolution of the case on appeal.

18

Neither PICI nor Bellow has appealed the judgment in favor

of Amoco on PICI’s claims against it or the judgment in favor of

Amoco on all of Bellow’s other claims (his claims other than his

section 1981 claim against Amoco for interfering with his asserted

contract, or right to contract, with PICI) against Amoco.

9

denying Amoco’s motion for judgment as a matter of law because

Bellow never had a contract with PICI and, therefore, Amoco could

not have possibly interfered with Bellow’s right to contract with

PICI; even if Bellow did have a contract with PICI, there is no

evidence that Amoco terminated, modified, or changed that contract;

and the evidence is insufficient to support the jury’s conclusion

that Amoco intentionally discriminated against Bellow on the basis

of his race. Amoco also argues that the evidence does not

sufficiently support the $50,000 in “subjective damages” and

$225,000 in punitive damages.

We review de novo the denial of Amoco’s motion for judgment as

a matter of law, applying the same standards as those applied by

the trial court. Canutillo Independent School Dist. v. Leija, 101

F.3d 393, 396 (5th Cir. 1996). We review factual issues for the

presence of substantial evidence supporting the verdict and legal

issues de novo. Heller Financial, Inc. v. Grammco Computer Sales,

Inc., 71 F.3d 518, 523 (5th Cir. 1996). A motion for judgment as

a matter of law should be granted by the trial court if, after

considering all the evidence in the light and with all reasonable

inferences most favorable to the party opposed to the motion, the

facts and inferences point so strongly and overwhelmingly in favor

of one party that the court concludes that reasonable jurors could

not arrive at a contrary verdict.19 Boeing Co. v. Shipman, 411 F.2d

365, 374 (5th Cir. 1969), overruled on other grounds, Gautreaux v.

19

Amoco timely moved for judgment as a matter of law at the

close of the plaintiffs’ case-in-chief and at the close of all the

evidence.

10

Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en banc).

II.

Section 1981 provides that “[a]ll persons within the

jurisdiction of the United States shall have the same right in

every State and Territory to make and enforce contracts . . . as is

enjoyed by white citizens.” 42 U.S.C. § 1981(a). The phrase “make

and enforce contracts” is defined to include “the making,

performance, modification, and termination of contracts, and the

enjoyment of all benefits, privileges, terms, and conditions of the

contractual relationship.”20 42 U.S.C. § 1981(b).

To prevail under section 1981, the plaintiff must prove a

prima facie case of intentional discrimination. Wallace v. Texas

Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996). The plaintiff may

establish a prima facie case by direct evidence or, more commonly,

by circumstantial evidence of discriminatory motive. Harrington v.

Harris, 108 F.3d 598, 606 (5th Cir. 1997); Wallace, 80 F.3d at

1047-48. To establish a section 1981 claim, the plaintiff must

show that (1) he or she is a member of a racial minority; (2) the

defendant had an intent to discriminate on the basis of race; and

(3) the discrimination concerned one or more of the activities

enumerated in the statute; in this case, the making and enforcing

20

In Patterson v. McLean Credit Union, 109 S.Ct. 2363 (1989),

the Supreme Court held that post-contract formation allegations of

racially discriminatory conduct were not actionable under section

1981, as section 1981 only governs racial discrimination in the

“making” of contracts and the right to “enforce” the contract. Id.

at 2372-74. Through the Civil Rights Act of 1991, enacted November

21, 1991, Congress expanded section 1981 to include post-contract

formation claims.

11

of a contract.21 See Green v. State Bar of Texas, 27 F.3d 1083,

1086 (5th Cir. 1994).

III.

As a threshold matter, we observe that this Court has not yet

decided whether a plaintiff has a cause of action under section

1981 against a third party for interference with the plaintiff’s

right to make and enforce contracts. Indeed, on at least one prior

occasion we have suggested that such a claim may not be covered by

section 1981. See Green, 27 F.3d at 1086-87 (explaining that the

plaintiff failed to state a claim under section 1981, as he did not

“complain that [defendant] refused to contract with him or that

[it] somehow impeded his right to enforce a contract in either the

courts or nonjudicial avenues,” but merely alleged “that the

defendant refused to honor a third-party contract he had with his

clients”). Thus, we express some doubt as to whether Bellow has,

in the first instance, presented a cognizable claim under section

1981.

Bellow contends that we held in Faraca v. Clements, 506 F.2d

956 (5th Cir. 1975), that third party interference claims are

actionable under section 1981. We do not read Faraca so broadly.

In Faraca, the plaintiffs successfully sued the director of the

Georgia Retardation Center under section 1981, alleging that the

director refused to hire Faraca, a Caucasian, because his wife was

African-American. On appeal, we affirmed the judgment, concluding

21

Of course, as an African-American, Bellow is a racial

minority covered by section 1981.

12

that the director could be held personally liable under section

1981 for interfering with the plaintiffs’ right to contract with

their prospective employer, the State of Georgia. The director in

Faraca was only nominally a third party. In substance, because he

was acting on behalf of the state when he decided not to hire

Faraca——thus making his hiring decision indistinguishable from that

of the state——the director and the state were essentially one and

the same. Cf. Al-Khazraji v. Saint Francis College, 784 F.2d 505,

518 (3d Cir. 1986) (holding that plaintiff could bring section 1981

claim against individual members of tenure committee for denying

plaintiff tenure if individuals were personally involved in the

discrimination and if they intentionally caused the college to

violate plaintiff’s right to contract), aff’d on other grounds, 107

S.Ct. 2022 (1987). Conversely, Amoco never had any such

relationship with PICI or Bellow. Amoco exercised no control and

had no authority over the contracting decisions of PICI or Bellow.

Unlike the situation in Faraca, where the third party and

prospective contracting party were the same party, Amoco is

separate and distinct from PICI, Bellow’s contracting party. Since

Faraca, this Court has not offered any opinion as to whether all

third party interference claims are actionable under section 1981,

and we decline to rule on this issue today.22

Instead, we leave for another day the resolution of that issue

22

At least one other circuit has also expressly declined to

rule on this issue. See Jordan v. Campbell-Taggart, Inc., 902 F.2d

28 (tab.), No. 87-3595, 1990 WL 51819, at *2-*3 (4th Cir. April 17,

1990).

13

because even assuming, arguendo, that Bellow’s claim falls within

the ambit of section 1981, Bellow nevertheless is not entitled to

any recovery because he has failed to satisfy the third element of

his section 1981 claim——that is, that the discrimination concerned

one or more of the activities enumerated in the statute.

Specifically, even assuming that the evidence justifies a finding

that Bellow had some unspecified character of implied contractual

relationship with PICI, there is clearly no evidence that Amoco

ever modified, changed, or terminated that relationship or Bellow’s

right to contract with PICI.

Although we assume, for purposes of this appeal, that Bellow

had some undefined character of implied contract with PICI, we note

that the record is conspicuously devoid of any evidence of any

express contract between Bellow and PICI.23 At trial, Bellow

produced no document and presented no testimony evidencing the

terms, provisions, or conditions of any contractual relationship

between him and PICI.

Bellow’s mere ownership interest in and position as president

of PICI does not, in and of itself, suffice to establish a

contractual relationship. Although Bellow, by virtue of his

position as president of PICI, assumed certain legal obligations to

his company under state law, see, e.g., Gearhart Industries, Inc.

v. Smith Intern., Inc., 741 F.2d 707, 719-21 (5th Cir. 1984), these

obligations arose from his fiduciary relationship with PICI, not

23

Bellow has never alleged that he personally had or sought to

have any contractual relationship with Amoco; he has alleged only

that he had a contract with PICI.

14

from any contractual relationship. See generally F.D.I.C. v.

Dawson, 4 F.3d 1303, 1307 (5th Cir. 1993) (distinguishing between

breach of fiduciary duty claim and breach of contract claim for

statute of limitations purposes), cert. denied, 114 S.Ct. 2673

(1994); accord Kansa Reinsurance Co., Ltd. v. Congressional

Mortgage Corp. of Texas, 20 F.3d 1362, 1374 (5th Cir. 1994).

Although we do not doubt that a president of a corporation can (and

perhaps usually does) have an employment contract with the

corporation, in this case, where the president also happens to be

the 51% owner of the company, and the company’s executive vice

president owns the other 49%, and where there is no evidence of any

express contract of any kind (written or oral) between the

corporation and the president, it may not simply be assumed that

such a contract existed. Bellow has cited no authority, nor has

our own research revealed any, suggesting that an individual’s

status as majority shareholder and president of a corporation,

without more, gives rise to a contractual relationship between the

individual and the corporation.

Bellow argues that he was paid on an hourly basis which,

according to him, conclusively proves that he had an employment

contract with PICI. The record flatly contradicts Bellow’s

assertion, as the evidence shows that he was not paid by the hour,

but rather was paid a fixed weekly salary. Bellow presented no

evidence indicating that he received an hourly wage, nor did he

establish what his hourly pay was or whether PICI docked his pay

for time missed. Indeed, the evidence shows that Bellow exercised

15

considerable discretion over his salary, as he and Phillips jointly

decided how much they were paid and how much of a bonus they would

receive in any given year. Although Bellow occasionally received

overtime pay for working after hours and on weekends, Bellow

presented no evidence at trial describing how much he was paid per

hour for overtime work (or how this was determined).

IV.

Even assuming, arguendo, that Bellow did in fact have a

contract with PICI which Amoco could have interfered with, Bellow

would still be unable to recover any damages because he has failed

to present any evidence that Amoco did in fact interfere with the

contract. There is no evidence that Bellow’s relationship with

PICI, contractual or otherwise, was in any way changed, modified,

altered, terminated, or otherwise affected by any of Amoco’s

actions. Nor is there any evidence that PICI ever failed or

refused to honor or comply with any request by Bellow to PICI for

it to enter into any contract with Bellow. Instead, what the

record does show is that Bellow remained at all times the 51% owner

and president of PICI before, during, and after the alleged

discriminatory conduct by Amoco.24 See, e.g., Police Ass’n of New

Orleans v. City of New Orleans, 100 F.3d 1159, 1170-71 (5th Cir.

1996) (explaining that “[i]n deciding whether a change of position

rises to the level of a new and distinct relation [under section

1981], the court must compare the employee’s current duties,

24

Indeed, the amended complaint alleges that Bellow is the

“President and Chief Executive Officer” of PICI.

16

salary, and benefits with those incident to the new position”);

Harris v. Associates Corp. of North America, 917 F.2d 195, 197-98

(5th Cir. 1990) (same); see generally Morris v. Office Max, Inc.,

89 F.3d 411, 414 (7th Cir. 1996) (stating that “[a] claim for

interference with the right to make and enforce a contract must

allege the actual loss of a contract interest”).

In support of his contention that Amoco interfered with his

asserted contract with PICI, Bellow directs this Court’s attention

to the July 1989 incident where Jordan expressed concerns about

Bellow’s excessive compensation to Phillips and suggested that

Bellow spend less time at the Amoco refinery. As the record shows,

although Phillips and Bellow discussed the possibility of having

Bellow spend more time in the office, they ultimately decided that

Bellow would remain in his capacity as field superintendent on

Amoco jobs. That Bellow continued to supervise workers in the

field, despite Jordan’s recommendation, demonstrates not only that

Bellow’s relationship with PICI remained unchanged, but also

indicates that Amoco could not, even had it wanted to, interfere

with Bellow’s relationship (or contract, if any) with PICI.

Certainly, there is no evidence showing otherwise.

Bellow also points to his decrease in income as evidence of

Amoco’s asserted contractual interference. While it may true that

Bellow’s income suffered after Amoco allegedly interfered with his

asserted contractual relationship with PICI, this loss of income

was not a result of any change in his relationship or status with

PICI——as he continued to be PICI’s 51% owner, president, and chief

17

executive officer——but rather was caused by the fact that PICI no

longer received the same high volume of work from Amoco. Bellow

performed less work and received a smaller income not because of

any decision by PICI to reduce his hours or to cut his salary, but

because PICI received less work from Amoco. As PICI had less work,

it necessarily follows that Bellow, PICI’s president and majority

owner, also would have less work and, hence, less income.25

Although Bellow may not have made as much money as he did when PICI

received large volumes of work from Amoco on a consistent basis,

there is no evidence that once Amoco’s asserted discriminatory

endeavor began and PICI’s annual revenues plummeted, that PICI

reduced Bellow’s weekly salary while requiring him to work the same

number of hours, that PICI stopped measuring his overtime pay based

on extra hours worked, or that PICI in any other way modified or

changed his compensation structure. And, as mentioned above,

Bellow at all times remained PICI’s 51% owner and president.

Stripped of its veneer, Bellow’s argument, in essence, is that

Amoco interfered with his right to contract with PICI by

interfering with PICI’s contracts or ability to contract with

Amoco. The obvious problem Bellow faces with this argument, of

course, is that the jury found that Amoco did not interfere with

PICI’s contracts, or ability to contract, with Amoco on the basis

25

Moreover, the district court specifically instructed the

jury, without objection by Bellow, that Bellow could not recover

any damages “for lost income, wages or other earnings” caused by

Amoco’s alleged discrimination.

18

of race.26

Moreover, because Bellow’s claim against Amoco is merely

derivative of PICI’s cause of action, Bellow has no individual

section 1981 claim against Amoco. In this regard, we find our

decision in Searcy v. Houston Lighting & Power Co., 907 F.2d 562

(5th Cir.), cert. denied, 111 S.Ct. 438 (1990), dispositive. In

Searcy, the president/sole shareholder of an energy resource firm

that produced and supplied natural gas sued various utility

companies for refusing to enter into long-term natural gas supply

contracts with the energy firm. The plaintiff and his company each

sued the utility companies under section 1981. We held that the

plaintiff could not bring his individual section 1981 claim because

the discrimination could only be asserted to invade the legal

rights of the corporation and not the rights of the plaintiff, the

company’s sole shareholder. Id. at 565.

Similarly, in this case the legal right that Bellow asserts

Amoco violated——that is, the right to contract free from racial

discrimination——is indistinguishable from PICI’s right to contract

under section 1981. The Amoco work that Bellow lost which

purportedly gave rise to Bellow’s section 1981 claim was the exact

same Amoco work that PICI lost. Indeed, Bellow has not alleged,

nor does the record reflect, any violation of his contract rights

or rights to contract that differs from the violations claimed by

PICI against Amoco. See, e.g., Gregory v. Mitchell, 634 F.2d 199,

202 (5th Cir. 1981) (holding that shareholders in bank could not

26

And, Bellow does not challenge this finding.

19

maintain section 1983 action in respect to treatment of bank as

only the bank suffered any cognizable injury); Schaffer v.

Universal Rundle Corp., 397 F.2d 893, 896 (5th Cir. 1968)

(explaining that a “stockholder’s rights are merely derivative and

can be asserted only through the corporation” and that this “rule

is applicable in cases where the individual is the sole

shareholder”). Thus, because Bellow suffered no violation of his

contract rights or rights to contract which differs from the

violations claimed by PICI, we conclude that Bellow has no

individual cause of action under section 1981 against Amoco.27 See

Flynn v. Merrick, 881 F.2d 446, 449-50 (7th Cir. 1989) (holding

that individual stockholders and debenture holders could not bring

suit under 42 U.S.C. § 1983 for damages suffered by the

corporation); Cates v. International Tel. & Tel. Corp., 756 F.2d

1161, 1181-83 (5th Cir. 1985) (holding that partner had no

individual cause of action for breach of contract, interference

with partnership business, loss of value of partnership interest,

loss of income, salary or bonus, and damage to reputation and

prospective business advantage suffered by partnership); Stevens v.

Lowder, 643 F.2d 1078, 1080 (5th Cir. 1981) (holding that bank’s

shareholders could not recover for fraud, breach of confidential

relationship, and conspiracy against purchasers of bank’s assets

27

Although Bellow claimed that he sustained emotional damages

that were different from PICI’s economic damages, his emotional

damages result from the same violation that gave rise to PICI’s

economic damages——Amoco’s alleged violation of PICI’s right to

contract. Bellow does not have an individual claim for an alleged

violation by Amoco of PICI’s section 1981 rights, whether or not

Bellow suffered emotional damage as a result thereof.

20

because diminution in value of bank’s stock was insufficient direct

harm to shareholders); Erlich v. Glasner, 418 F.2d 226, 228 (9th

Cir. 1969) (holding that stockholder, who was president and general

manager of corporation, could not maintain individual action under

section 1983).

Conclusion

We hold that Bellow is not entitled to recover any damages

under section 1981. Even if Bellow did have some undefined,

implied contractual relationship with PICI, nothing in the record

supports the jury’s conclusion that Amoco in any way altered,

modified, or terminated any of his rights thereunder or to contract

with PICI.28 For these reasons, the judgment below is REVERSED and

judgment is here RENDERED for Amoco.

REVERSED and RENDERED

28

Moreover, we question whether Bellow was entitled to an award

of “subjective” damages. In particular, we do not believe that

Bellow’s testimony that Amoco’s alleged discriminatory acts caused

him to feel “less than a man” and “ruined his reputation as a man,”

without more, sufficiently supports the award of emotional damages.

Nor is there any other evidence supporting such an award. See,

e.g., Patterson v. P.H.P. Healthcare Corp., 90 F.3d 927, 938-39

(5th Cir. 1996) (reversing $40,000 award for emotional distress

under section 1981 where only evidence of emotional distress was

plaintiff’s own testimony that he felt “frustrated” and “real bad”;

that his work environment was “unbearable” and was “tearing my

self-esteem down”; and that he felt “angry” and “paranoid” because

his supervisor referred to him as a “porch monkey” or “nigger”),

cert. denied, 117 S.Ct. 767 (1997). Bellow did not testify about

any physical harm or injuries, nor did he testify about any stress,

emotional pain, or other similar conditions.

However, we need not reach the merits of this issue. Nor do

we need to address Amoco’s contention that the evidence fails to

support the jury’s finding of intentional racial discrimination and

award of $225,000 in punitive damages.

21