North Mississippi Communications, Inc., and Pamela McPhail Ivy v. Douglas W. Jones, Desoto County Board of Supervisor

JOHN R. BROWN, Circuit Judge:

This free-speech case comes before this court for the third time. It all started when the owners of the

North Mississippi Times

brought suit against the DeSoto County Board, alleging that, in violation of the First Amendment, the Board withheld county advertising in retaliation for the

Times’

publication of negative stories about the Board. Because of this court’s actions on earlier appeals, the sole issue now before this court is whether the district court properly applied

Mt.

Healthy’s

1

burden-shifting analysis to the

Times

§ 1983 claim.

2

We conclude that it did not. We reverse in favor of the

Times

and remand for further findings.

Because the long series of events leading up to this dispute have been thoroughly examined in this court’s two earlier opinions, we see no need to recite them in detail yet another time.

3

Briefly, the

Times

is a weekly newspaper in DeSoto County, owned by North Mississippi Communications, Inc. The DeSoto County Board was responsible for awarding by bid the county’s general legal advertising, which consisted of county board proceedings and legal notices. The advertising had gone largely to the

Times

before 1976. In 1976, both the

Times

and the

Olive Branch Tribune,

another much smaller, weekly county newspaper, bid for the right to publish county advertising. For the first time, the Board required the newspapers to submit their circulation lists for review. Although the

Times

won the bid for publication of the Board proceedings, the Board determined that it would place legal notices in either paper at its discretion.

4

The district court found that in 1976, the

Times

and

Tribune

received approximately the same number of legal notices. From mid-1977 forward, however, the evidence at trial clearly showed that the Board opted to give almost all its legal notice business to the

Tribune.

In 1977, the

Times

received 41 notices through June 30 and none thereafter; and the

Tribune

received 73 during the first half of 1977 and 113 in the second half. In 1978, the

Times

received only 14 legal notices, while the

Tribune

received 291.

It is undisputed that from 1975 forward, the

Times

published highly critical articles and letters about the Board’s questionable activities. The

Times

claimed that the Board withheld county advertising in retaliation for the Board’s negative publications in violation of the

Times’

First Amendment rights. Admittedly, the Board’s placement of legal notices was discretionary. The

Times,

however, did not assert breach of contract, but instead a § 1983 constitutional violation. Indeed, the district court

*654

wholeheartedly agreed with the premise that if the Board withheld legal notice business in retaliation for the

Times’

publication of critical articles, the Board has violated the

Times

’ civil rights under the First Amendment.

Round I: NMCI I

With respect to the

Times’

§ 1983 claim, the district court found only that the Board’s withholding of county legal advertisements did not threaten to put the

Times

out of business. On appeal, we held that this finding did not dispatch the

Times’

§ 1983 claim and remanded this claim to the district court for further findings. Specifically, in

NMCI I,

we directed that the district court determine whether the Board denied some or all of its legal advertising to the

Times

in retaliation for the

Times’

critical news stories and editorials.

5

The court, without a jury, conducted a “second trial”

6

and again found in favor of the Board, concluding that “even though a pri-ma facie case of a constitutional violation was presented in the plaintiffs case in chief, the rebuttal evidence of the Board was just as persuasive that other legitimate reasons existed for favoring the

Tribune

over the Times.’’

7

The court ultimately held: “There is a possibility that the Board wished to retaliate against the

Times

for its editorial positions ... however, the court cannot say that the evidence preponderates toward that finding. The other reasons for favoring the

Tribune

heretofore described appear just as probable.”

8

If At First You Don’t Succeed; Try, Try Again: NMCI II

The

Times

again appealed, claiming that the failure to apply the

Mt. Healthy

burden-shifting analysis to their § 1983 claim constituted reversible error. Because this claim involved a purely legal question, we justifiably considered it in

NMCI II,

even though the

Times

had raised it for the first time on its second appeal.

9

Mt. Healthy

involved the alleged refusal to re-employ a public school teacher because of the teacher’s exercise of his free-speech rights. This case gave birth to the two-step burden-shifting rule, which has now become standard fare in discrimination cases. The Supreme Court held that (i) the plaintiff must first show that his constitutionally protected conduct was a substantial or motivating factor in the defendant’s decision; and (ii) if the plaintiff carries this burden, the burden shifts to the defendant to prove by a preponderance of the evidence that it would have made the same decision even in the absence of the protected conduct.

We are keenly aware that

Mt. Healthy

has never before been applied to a set of facts involving the denial of public patronage. Nevertheless, this court in

NMCI II

saw no reason why

Mt. Healthy

should not be applied in this context and remanded this case to the district court for the second time for further findings as required by

Mt. Healthy.

We reject the district court’s assessment that the application is a strained one. To the contrary,

Mt. Healthy’s

rule is broad enough potentially to lend itself to a wide variety of fact patterns.

NMCI III

Upon remand, the district court, conscientiously, but reluctantly, heeding our mandate to apply the

Mt. Healthy

burden-shifting analysis, again held for the Board, asserting reasons why

Mt. Healthy

could

*655

not work here.

10

Without hearing any additional evidence, the court first held that the

Times

did not meet its burden under prong one of

Mt. Healthy.

Second, even assuming the

Times

satisfied

Mt. Healthy’s

first prong, the court concluded that reasons other than retaliation motivated the Board to switch its advertising from the

Times

to the

Tribune.

We hold that the district court erred on both counts.

a. Mt. Healthy’s First Prong

The district court found that the

Times,

under the first prong of

Mt. Healthy,

failed to show that retaliation was a motivating factor in the Board’s denial of county business:

[T]he placing of patronage business by the Board between two newspapers in the county was possibly a mixed motive act; however, the plaintiff has not proven by credible and probative evidence as it is required to do that the placing of some ads with the

Tribune

was the result of the

Times’

criticisms of the Board.

11

Because this court in

NMCI II

previously determined that the

Times’

sufficiently proved that retaliation was a motivating factor, the district court’s finding clearly disregards our previous mandate and thus violates the law of the case doctrine.

In

NMCI II,

our primary concern was whether the application of the

Mt. Healthy

burden-shifting analysis was appropriate for this case. Although we recognized in

NMCI II

that the district court did not expressly find that the

Times

had proved retaliation was a motivating factor,

12

we also highlighted the fact that the lower court failed to find that retaliation was not a factor in the Board’s decision.

13

Despite the absence of this finding by the district court, we nevertheless, in light of the evidence presented on timing, hostility and admissions relating to motivation for the Board’s conduct,

14

went on to hold that any other conclusion would be clearly erroneous. We decided that the record evidence established the motivating factor inquiry; without this, there would be no occasion for us to remand in order to consider

Mt. Healthy.

This court’s ultimate

NMCI II

decision to remand to apply

Mt. Healthy

to this case necessarily carried with it the determination that, at the very least, this was a mixed-motives case and that the

Times

had satisfied its burden under prong one of

Mt. Healthy.

In other words, if we had not first found that the

Times

adequately proved that retaliation was a motivating factor, this court would have never instructed the lower court to apply

Mt. Healthy.

*656

The law of the case doctrine dictates that a prior decision of this court will be followed without re-examination, both on the remand to the district court and on subsequent appeals to this court,

15

unless (i) the evidence on a subsequent trial was substantially different, (ii) controlling authority has since made a contrary decision of the lav/ applicable to such issues, or (iii) the decision was clearly erroneous and would work manifest injustice.

16

Because of our previous holding in

NMCI II,

the district court’s subsequent contrary finding violates the law of the case doctrine. None of the exceptions to the rule afford relief: (i) new or different evidence was not introduced, since the district court did not conduct a third trial; (ii) the Board has not cited, nor are we otherwise aware of, any decisions by other courts rejecting

Mt. Healthy

since our mandate in

NMCI II;

and (iii) the Board has not sufficiently convinced us that our prior decision results in manifest injustice. We therefore hold that the district courts’ finding is contrary to our decision and violates the law of the case doctrine.

b. Second Prong of Mt. Healthy

Under our mandate, the burden shifted to the Board to show that it would have withdrawn its legal notice business from the

Times

even in the absence of the

Times’

unconstitutional retaliation. Because of its erroneous interpretation of

NMCI II,

the district court devoted little, if any, attention to the second question of whether the Board would have made the same decision to shift its business to the

Tribune

in the absence of the unconstitutional retaliation. The closest the district court came to finding that the Board met its burden was its following reasoning:

It is clear that the Board proved in rebuttal that it would have given the

bulk

of its legal ads to the

Tribune

anyway, regardless of the protected conduct of the

Times,

because of the two broken bid agreements by the

Times

stating that no business from the county would be sought and suggesting the business should go to the

Tribune.

[Emphasis added.]

17

? now give this question the close scrutiny it deserves. The district court’s assessment that the Board “would have given the

bulk

of its legal ads to the

Tribune

anyway, regardless of the protected conduct of the

Times

” is not sufficient to satisfy

Mt. Healthy.

The district court implicitly determined that the Board need only show that a “bulk” of the legal notices would have been denied to the

Times

notwithstanding its unconstitutional retaliation. We disagree.

Mt. Healthy

instead requires that the Board prove that

none

of the county advertising was withheld from the

Times

in retaliation for its critical publications.

The Board complains that it can not possibly “prove by a preponderance of the evidence that

each

of the 252 advertisements would have been awarded to the

Tribune

even in the absence of the criticisms of the

Times,”

adopting the district court’s view that “[s]uch a Herculean task would be an impossible burden to meet and be manifestly unjust.”

18

Despite the potential difficulty of determining whether any of the 252 advertisements were denied to the

Times

on the basis of retaliation, we cannot escape the conclusion that the trial court’s finding rests upon an erroneous view of

Mt. Healthy.

The Board’s denial of publication of just one county legal notice based upon the

Times

'unconstitutional retaliation constitutes a violation of the First Amendment.

We reiterate the United States Supreme Court’s mandate that in a mixed-motives case, the defendant may not prevail “by offering a legitimate and sufficient reason

*657

for its decision if that reason did not motivate it at the time of the decision;” nor may it prevail “by merely showing that at the time of the decision it was motivated only in part by a legitimate reason.”

19

The defendant is required to make this showing by a preponderance of the evidence.

20

The district court failed to apply this test to the award of each and every advertisement.

When a trial court has made a fact finding upon an erroneous view of the law, the factual determination loses all vitality, requiring a remand.

21

Because the

Times

is entitled to a determination of how many ads it lost due to the Board’s unconstitutional retaliation (and the

Mount Healthy

burden is on the Board), we regretfully remand this case for the fourth time in order that the trial court find exactly which advertisements, if any, were the subject of the Board’s retaliation.

Accordingly, we reverse and remand this case to the district court for the following limited purposes: 1) to find whether the Board established by a preponderance of the evidence that each and every ad would have been awarded to the

Tribune

regardless of the

Times’

protected conduct; if not, then to further find 2) the specific ads withheld as a result of the protected conduct; 3) damages with respect to the withheld advertising; and 4) reasonable attorneys’ fees for the

Times.

REVERSED and REMANDED.

1

.

Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle,

429 U.S. 274 , 97 S.Ct. 568 , 50 L.Ed.2d 471 (1977).

2

. The

Times

initially alleged violations of sections 1 and 2 of the Sherman Act and state-law tort claims, as well as civil rights claims under 42 U.S.C. § 1983 . The district court granted a directed verdict in favor of the Board and dismissed all of the rimas’claims. In

North Mississippi Communications, Inc. v. Jones,

792 F.2d 1330 (5th Cir.1986)

(NMCI I),

we affirmed the court’s dismissal of the anti-trust claims and remanded for further findings with respect to the Times’ § 1983 claim. The district court again found for the Board, and the

Times

appealed. On appeal, we remanded that the court review the

Times’

§ 1983 claim in light of

Mt. Healthy.

3

.

See

792 F.2d 1330 (5th Cir.1986)

(NMCI

I); 874 F.2d 1064 (5th Cir.1989)

(NMCI II).

4

. Unhappy with this result, the

Times

brought a separate suit in April, 1976 in state court to enjoin the Board from publishing any county notices in the

Tribune,

alleging that the

Tribune

was not qualified to publish legal notices because of its small circulation. The

Times’

claim was rejected by the state court and no appeal of this decision was sought.

5

.

NMCI I,

792 F.2d at 1337 .

6

. Since a directed verdict was awarded to the Board after the presentation of the

Times’

case in the first bench trial, the second trial began with the presentation of the Board’s defense. The court heard oral arguments from both sides as well.

7

.

North Mississippi Communications, Inc. v. DeSoto County,

681 F.Supp. 1185, 1188 (N.D.Miss.1988).

8

.

Id.

at 1189 .

9

.

See Matter of HECI Exploration Co.,

862 F.2d 513 , 518 & n. 7 (5th Cir.1988) and

United States v. D.K.G. Appaloosas, Inc.,

829 F.2d 532, 537-38 (5th Cir.1987), for the proposition that an issue raised for the first time on appeal will not be considered unless it is a purely legal issue and the refusal to consider it would result in a miscarriage of justice.

10

. Both the Board and the trial judge exhaust much effort in attempting to persuade us that

Mt. Healthy's

burden-shifting rule simply will not work in this case. Appellee’s Brief at 19-20. The district court urges that the rule is unique to cases involving termination of employment or refusal to rehire, arguing that these cases are "a one-time act for purposes of the

Mt. Healthy

analysis,” that "the facts in this case involve literally dozens of acts stretching over a four to five year period," and further that “[t]o analyze each of the many decisions made as to which newspaper each ad would be placed in would rival some of the twelve Herculean labors.”

North Mississippi,

No. DC81-220-B-O (N.D.Miss. June 25, 1990).

11

.

Id.

This finding by the district court seems to contradict its earlier conclusion following the second trial. There the district court held that a prima facie case of a constitutional violation was presented in the plaintiffs case in chief.

North Mississippi,

681 F.Supp. at 1188 .

12

.

NMCI II,

874 F.2d at 1068 .

13

.

Id.

at n. 1.

14

.

Id.

at 1068. As to hostility, in

North Mississippi,

681 F.Supp. at 1188 , the trial court found that some of the supervisors felt anger toward the editor of the

Times

for the highly critical stories and editorials published about them. Further, the court stated that “there is a possibility that the Board wished to retaliate against the

Times

for its editorial positions. Such a feeling certainly would not be surprising considering the circumstances,_”

Id.

at 1189 .

Second, the evidence with respect to timing showed that articles were published about the Board from 1975 forward. In 1976, the

Times

and

Tribune

received an equal share of the county business. Prior to this time, the

Times

received all of the business. From 1977 forward, the Board allocated approximately 72% of its business to the

Tribune

and only 28% to the

Times.

15

.

Dickinson v. Auto Ctr. Mfr. Co.,

733 F.2d 1092, 1096 (5th Cir.1983).

16

.

Schexnider v. McDermott Int'l, Inc.,

868 F.2d 717, 718-19 (5th Cir.1989);

Dickinson,

at 1096 n. 3. (quoting

White v. Murtha,

377 F.2d 428 , 431-32 (5th Cir.1967)).

17

.

North Mississippi,

No. DC81-220-B-O (N.D.Miss. June 25, 1990).

18

. Appellee’s Brief at 19-20.

19

.

Price Waterhouse v. Hopkins,

490 U.S. 228, 248 , 109 S.Ct. 1775, 1789 , 104 L.Ed.2d 268, 289 (1989).

20

.

Id.

21

.

See Pullman-Standard v. Swint,

456 U.S. 273, 291 , 102 S.Ct. 1781, 1791 , 72 L.Ed.2d 66, 81 (1982).