UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SHERIF SAAD; NOOSHIN SOOZANGAR, 

Plaintiffs-Appellants,

and

DAVID C. GRIGGS; ADEL ALALFEY;

OSSAMA NAGY; SHAGUFLA AZAD,

Plaintiffs,

v.

THE BALTIMORE LIFE INSURANCE

COMPANY; LIFE OF MARYLAND,

INCORPORATED,

Defendants-Appellees,  No. 01-2081

and

L. JOHN PEARSON; WILLIAM

VIGLIOTTE, Vice President of

Underwriting; GRAY RAY, Vice

President for Career Marketing;

MORRIE R. CLARK, Senior

Underwriter; DAVID S. SACHS;

DAMIAN A. SALVI,

Defendants.

THE MARYLAND INSURANCE

COMMISSION,

Movant. 

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Andre M. Davis, District Judge.

(CA-96-3673-AMD)

Argued: April 2, 2002

Decided: September 26, 2002
Before MOTZ, Circuit Judge, Walter K. STAPLETON,

Senior Circuit Judge of the United States Court of Appeals

for the Third Circuit, sitting by designation, and

W. Craig BROADWATER, United States District Judge

for the Northern District of West Virginia,

sitting by designation.

Reversed in part, affirmed in part, and remanded by unpublished

opinion. Judge Broadwater wrote the opinion, in which Judge Motz

and Senior Judge Stapleton joined. 

COUNSEL

ARGUED: Carmen L. Rivera Matos, Doylestown, Pennsylvania, for

Appellants. Stanley Mazaroff, VENABLE, BAETJER & HOWARD,

L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF: George W.

Hermina, John W. Hermina, HERMINA LAW GROUP, Laurel,

Maryland, for Appellants. Christine P. D’Elicio, VENABLE, BAETJER & HOWARD, L.L.P., Baltimore, Maryland, for Appellees. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

BROADWATER, District Judge: 

Plaintiffs Sherif Saad and Nooshin Soozangar appeal the district

court’s grant of defendant Baltimore Life Insurance Company’s

motion for judgment as a matter of law. We reverse. 

I.

Although legal residents, the plaintiffs Sherif Saad and Nooshin

Soozangar are not United States citizens. Plaintiff Saad is a citizen of

2 SAAD v. BALTIMORE LIFE INSURANCE COMPANY
Egypt. During the time in question, he served as the medical director

for the Kuwaiti Embassy to the United States. Saad is also a legal resident of the United States. 

Plaintiff Soozangar is an Iranian citizen. She came to the United

States in 1991. Soozangar is a legal resident pursuant to her marriage

to a United States citizen. 

In December 1994, Saad and Soozangar applied for universal life

insurance policies from Baltimore Life. Following the submission of

their applications, Baltimore Life representatives contacted the plaintiffs by telephone. The representatives asked both plaintiffs if they

were citizens of the United States. Shortly after these telephone calls,

the plaintiffs both received letters from Baltimore Life stating that

their applications were rejected. The stated basis for both rejections

was "(s)ince it is company policy not to issue coverage on people who

are not United States citizens." J.A. at 387, 388, 1304 and 1755. 

Following these rejections, the plaintiffs and others in 1996 filed

suit against Baltimore Life alleging violations of 42 U.S.C. § 1981.

After discovery, the district court granted summary judgment for Baltimore Life. Nagy v. Baltimore Life Ins. Co., 49 F.Supp.2d 822 (D.

Md. 1999). In an unpublished per curiam opinion, this Court reversed

the district court’s decision with respect to the alienage discrimination

claims. Nagy v. Baltimore Life Ins. Co., 215 F.3d 1320, 2002 WL

718391, *6 (4th Cir. 2000 (Md.)). The Nagy court noted that Baltimore Life’s contention that it "only denied life insurance policies

based on applicants’ place of citizenship, not applicants’ noncitizenship" were "arguments properly resolved by a trier of fact, not

a district court or appellate court on summary judgment." Id. at *6

n.2. In affirming summary judgment on the racial discrimination

claim, this Court remanded the case with instructions to proceed to

trial on the alienage claims. 

Upon remand, the case went to trial. The plaintiffs presented the

deposition testimony of Morrie Clark, a senior underwriter for Baltimore Life. The plaintiffs also examined William Vigliotte, the Vice

President of Underwriting. Most of their testimony was presented earlier in support of the prior summary judgment motions. 

SAAD v. BALTIMORE LIFE INSURANCE COMPANY 3
Clark stated that the signature on the letters was not his but that a

number of clerks in his office were authorized to sign his name.

Assuming he made the denial of coverage, Clark could not recall the

specific details. Clark did admit that he was aware that the rejection

letter contained language denying coverage to non-United States citizens. However, Clark could not recall a particular policy that covered

sending rejection letters or any specific instance under him that an

applicant was denied coverage because they were not United States

citizens. 

William Vigliotte, as Baltimore Life’s Vice President of Underwriting, set the policy on accepting risks. Vigliotte admitted that Baltimore Life did have a policy denying coverage to non-United States

citizens, but he stated it was loosely enforced. He said that Baltimore

Life hired Adel Alalfey to sell insurance to people of Middle Eastern

decent. However, Alalfey’s contacts with individuals employed by the

Kuwaiti Embassy caused Vigliotte concern due to the unstable nature

of the region after the Gulf War. 

In the trial, new evidence came out during Vigliotte’s testimony.

He stated that the two internal Baltimore Life e-mails sent out under

the name "Morrie Clark" were, in fact, sent by Clark. J.A. at 1595-96.

These e-mails report the rejection of Saad and Soozangar’s applications, stating as a reason the Baltimore Life policy on denying coverage to non-citizens. Vigliotte also agreed that the rejection "letters are

signed by Morrie Clark." J.A. at 1595. 

The district court next refused the plaintiffs’ request to introduce

the deposition of Mark W. Hastings, a former General Counsel of

Baltimore Life. J.A. 1230-36 and 1427-28. The plaintiffs proferred

Hastings’ testimony as evidence for punitive damages because Hastings reportedly informed Baltimore Life that its non-citizen policy

violated federal law. J.A. 1232. The district court refused to allow

Hastings’ testimony as plaintiffs’ counsel did not know what date

Hastings gave his advice. 

At the conclusion of the plaintiffs’ case, the district court granted

judgment as a matter of law in dismissing the liability claims against

Baltimore Life and granting Baltimore Life’s motion for dismissal of

the "economical and emotional damages." J.A. 1859. The district

4 SAAD v. BALTIMORE LIFE INSURANCE COMPANY
court wrote in its order that "judgment is entered in favor of defendant

against plaintiffs; and in the alternative, if judgment in favor of defendant is found upon appeal to be erroneous, then this judgment shall

be deemed to be entered in favor of plaintiffs . . . for the sum of One

($1.00) Dollar each, for a total of Two ($2.00) Dollars nominal damages only." J.A. 1857. The order also incorporated by reference its

earlier ruling that the plaintiffs had not presented sufficient evidence

to support an award of punitive damages. J.A. 1230-31. 

Saad and Soozangar appeal these rulings and also whether the district court improperly denied their motion in limine as to a market

conduct exam. Finally, the appellants request assignment to a different district judge if the case is remanded. 

II.

When an appellate court decides a rule of law, that decision must

continue to govern the same issues in subsequent stages in the same

case unless "(1) a subsequent trial produces substantially different

evidence, (2) controlling authority has since made a contrary decision

of law applicable to the issue, or (3) the prior decision was clearly

erroneous and would work a manifest injustice." Columbus-America

Discovery Group v. Atlantic Mutual Insurance Co., 203 F.3d 291 at

304 (4th Cir. 2000) (internal citations omitted). In this case, the Nagy

Court reviewed the record presented at summary judgment and determined that "these two plaintiffs met their burden of producing direct

evidence of discrimination on the basis of alienage." Nagy at *6.

There appears to be no new "substantial" evidence introduced at trial,

or any new precedent, to compel a departure from this ruling. 

However, the district court concluded that there was new testimony

from Clark at trial, which was "unimpeached," and which established

as a matter of law that Clark did not write this letter. Baltimore Life

made this same argument in support of its motion for summary judgment. J.A. 90 n.4. As well, the litigants introduced substantially similar evidence on this point at summary judgment and at trial. The

following testimony from Clark was proffered in support of summary

judgment: (1) the signature on the letters was not his; (2) he did not

recall sending the letters out or asking anyone to write them for him;

and (3) although he "assumed" that the decision to deny coverage to

SAAD v. BALTIMORE LIFE INSURANCE COMPANY 5
both Saad and Soozangar was his, he could not recall why coverage

was denied in either case. J.A. 296, 1467, 590-92. 

At trial, both sides confined themselves almost entirely to deposition transcript excerpts submitted at the summary judgment stage.

Baltimore Life introduced only one new section of Clark’s transcript

in which he stated that no one at Baltimore Life "made him aware"

that Soozangar’s application was being rejected, and that "the first

time [he] recall[ed] seeing the name" was on the day before his deposition. J.A. 1509. This testimony appears not to be a new detail or a

new point. The summary judgment record contained Clark’s testimony that no one "working for Baltimore Life Insurance Company

ever made [him] aware that an individual or individuals were being

declined coverage because they are not United States Citizens." J.A.

90 n.4. 

With respect to Vigliotte, none of his testimony represented a

material departure from the summary judgment record. Counsel for

Baltimore Life argues that Vigliotte introduced new evidence when

he testified "that . . . Baltimore Life never had any policy to refuse

persons who were not United States Citizens of life insurance solely

because of their citizenship," and instead made "rational inquiries

about citizenship for the purpose of determining whether it was likely

that they would travel abroad." That explanation was in the summary

judgment record and was described in detail in the district court’s

memorandum opinion in support of summary judgment. J.A. 1667-68.

Baltimore Life also notes that Vigliotte testified at trial that he never

approved or saw the letter. However, similar statements were introduced in his deposition and are present in the summary judgment

record. J.A. 497-99. 

Saad and Soozangar do not allege that Vigliotte himself authored

or read the letters. They argue that (1) Vigliotte made statements indicating an anti-foreigner bias (e.g., re: hostages); (2) Vigliotte believed

that the practice of not writing coverage on non-U.S. citizens was

"widespread"; and (3) Vigliotte admitted in an affidavit that Baltimore Life adopted such a policy. J.A. 48, 164. At trial, Vigliotte conceded the first two points. J.A. 1518 (Kuwait); 1523 (widespread).

With respect to the third, Vigliotte repeated testimony available in the

summary judgment record that Baltimore Life did not, in fact, have

6 SAAD v. BALTIMORE LIFE INSURANCE COMPANY
a policy of rejecting non-U.S. citizens. He asserts he was guilty of

nothing more than a poor choice of words in the first affidavit, which

was produced for different purposes. Saad and Soozangar impeached

his testimony with the first affidavit. J.A. 1540-44. 

Section 1981 bars discrimination on the basis of race and ethnicity,

or lack of citizenship. Duane v. GEICO, 784 F. Supp. 1209, 1216 (D.

Md. 1992), aff’d, 37 F.3d 1036 (4th Cir. 1994). It "does not provide

protection," however, "for individuals discriminated against on the

basis of national origin." Id. (citing Al-Khazraji, 481 U.S. at 613). 

To prevail under § 1981, a plaintiff must prove that such discrimination was intentional, and led to the deprivation of one of the rights

enumerated therein. See Spriggs v. Diamond Auto Glass, 165 F.3d

1015, 1018 (4th Cir. 1999). How the proof proceeds depends on the

evidence proffered by the plaintiff. Where the plaintiff cannot produce direct evidence of discriminatory intent, the familiar framework

of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), applies.

See Patterson v. McLean Credit Union, 491 U.S. 164, 186 (1989)

(Claims under 1981 are analyzed in the same manner as claims under

Title VII or the ADEA). After a plaintiff satisfies the "modest"

requirements of the prima facie case, the defendant must produce a

nondiscriminatory reason for the challenged action, after which the

burden returns to the plaintiff to prove that the defendant’s "proffered

non-racial reason . . . was, in reality, a pretext for a racially motivated

decision." Fuller v. Phipps, 67 F.3d 1137, 1141 (4th Cir. 1995). In

contrast, if a plaintiff can present sufficiently direct evidence of discrimination, he or she qualifies for the "more advantageous standards

of liability applicable in mixed-motive cases." Id. at 1141. 

In this case, Baltimore Life contends that Vigliotte is the relevant

decision-maker and that Saad and Soozangar must prove that he

intentionally discriminated against them. Baltimore Life relies on Fuller v. Phipps, 67 F.3d 1137, 1142 (4th Cir. 1995) (stating that the burden of persuasion shifts if plaintiff presents "direct evidence that

decision-makers placed substantial negative reliance on an illegitimate criterion"). This argument appears to be based on the letters,

which state that Baltimore Life has a "policy" of denying coverage to

non-citizens, and on the apparently uncontested fact that only Vigliotte, not Clark, was entitled to establish any such policy. 

SAAD v. BALTIMORE LIFE INSURANCE COMPANY 7
The plaintiffs argue the relevant decision-maker in this case is

Clark, a Senior Underwriter who was undisputedly authorized to act

for the company in accepting or denying applications. Since the letters were sent out over his signature, Clark arguably denied the application because he believed that such a policy existed. 

Thus, although this Court is reversing the district court’s grant of

judgment as a matter of law on liability, this is not to say that judgment should be entered in favor of the plaintiffs. Simply, the plaintiffs

have submitted enough evidence to require the defendant to meet its

burden or send the case to the jury for a finding of fact. 

III.

Neither Saad nor Soozangar is entitled to the face value of the policies as both are still alive. Nor did they introduce evidence of any

other economic damages at trial. Upon her denial, Soozangar immediately obtained insurance from Peoples Life, and she sought and

obtained insurance from Baltimore Life in 1996. She did not proffer

any evidence of economic damages from the denial. 

Saad contends that he had economic damages because he lost an

investment opportunity. He concedes, however, that he elected to put

his money in a savings account instead of "investing" in another life

insurance policy. Consequently, he has failed in his duty to mitigate.

Fariss v. Lynchburg Foundry, 769 F.2d 958, 966-67 (4th Cir. 1985).

It is clear that the evidence presented on emotional damages is

insufficient to sustain a large award. Our decision to vacate the district court’s alternative order is not meant in any way to suggest that

the evidence presented in this trial was adequate to support a substantial award of compensatory damages for emotional injury. Although

"a plaintiff’s testimony, standing alone, may support" an award of

compensatory damages, claims of injury based solely on testimony

must be "scrupulous[ly] analyzed." Price v. City of Charlotte, 93 F.3d

1241, 1251 (4th Cir. 1996). As the Price court explained, 

the testimony must establish that the plaintiff suffered

demonstrable emotional distress, which must be sufficiently

8 SAAD v. BALTIMORE LIFE INSURANCE COMPANY
articulated; neither conclusory statements that the plaintiff

suffered emotional distress nor the mere fact that a constitutional violation occurred supports an award of compensatory

damages. 

Id. at 1254 (emphasis added). Thus, claims of "depression" do not by

themselves support an award. In assessing such testimony, a court

must consider the context of the claims, including the nature of the

conduct allegedly causing the injury and any other losses to the plaintiff, such as the esteem of his or her peers, income, physical function.

Id. at 1254-55. 

In this case, Saad and Soozangar’s testimony, if believed, describes

an injury of uncertain intensity. Soozangar asserts that she was "unhappy" and "so upset," and states that she just "couldn’t be productive" at work and "would sit and watch the TV." J.A. 1355. Saad and

his wife state that he lost some sleep, that his appetite was affected

and that he was not as "interested as usual" in playing with his children or going out. J.A. 1607-08. Neither Saad nor Soozangar went to

a doctor or counselor, or describe any physical ailments. 

More significant is factual background on which this testimony

was given. Soozangar obtained new life insurance within two weeks

and she testified that when she received the insurance "then I feel better . . . I know it was nothing wrong with me." J.A. 1355. There is

no reason to believe that Saad was unable to obtain substitute coverage, and in fact, his wife did obtain an annuity. Moreover, Baltimore

Life took corrective action before this litigation commenced, contacting both plaintiffs and inviting them to reapply. Finally, any discrimination by Baltimore Life did not deprive Saad or Soozangar of an

ongoing relationship or settled expectations. In contrast to an eviction

or employment practice, Saad and Soozangar were not faced with the

loss of their residence, longstanding relationships or job skills. As this

Court noted in Hetzel v. County of Prince William, 89 F.3d 169 (4th

Cir. 1996), awards of more than $25,000.00 in compensatory damages for intangible injuries commonly involve "plaintiffs that either

were the victims of invidious discrimination, suffered serious — often

permanent — physical injuries, or were discharged and had difficulty

finding alternative employment." Id. at 172. While we will not speculate on the evidence that will be presented upon retrial, we note that

SAAD v. BALTIMORE LIFE INSURANCE COMPANY 9
it would have to be substantially different than that presented already

to support any substantial award for emotional damages. 

IV.

Early in the trial, the district court informed the parties that it

would not submit the question of punitive damages to the jury. The

court explained its reasoning most fully when it stated that: "from

December of 1994 through the Spring of 1995 an insurance company

in America could not reasonably have believed, notwithstanding

Duane v. GEICO, (referring to 37 F.3d 1036 (4th Cir. 1994)), that a

resident alien in America had a federally-protected right to an insurance policy." J.A. 1231. Duane v. GEICO, a Fourth Circuit case, was

published in October 1994 and held that a non-citizen had stated a

claim against GEICO when he alleged that the company had refused

to sell him an insurance policy because of his non-citizen status. 

Two cases, Kolstad v. American Dental Assm., 527 U.S. 526

(1999), and Lowery v. Circuit City Stores, Inc., 206 F.3d 431 (4th Cir.

2000), provide clear guidance as to the proper standards in a § 1981

punitive damages case. In Kolstad, the Supreme Court "flatly rejected

the notion" that punitive damages are available only in cases of "egregious misconduct." Lowery, 206 F.3d at 441 (citing Kolstad, 119 S.

Ct. at 2124). Rather, the statute requires "malice" or "reckless indifference" to a federally protected right. Thus, in cases where a federal

right is at stake, the crucial questions "pertain to the [defendant’s]

knowledge that it might be acting in violation of federal law." Kolstad, 119 S. Ct. at 2124. To answer these questions, a defendant’s

actual knowledge is relevant. Id.; see also Lowery at 443 (determining, "individually," the level of relevant legal knowledge for each of

the two defendants). 

This rule suggests two considerations relevant to this case. First,

while the novelty or public knowledge of a legal theory is surely relevant to the punitive damages inquiry, such generalized factors cannot

defeat proof that the relevant decision-makers had relevant knowledge. At present, there is no direct evidence that Baltimore Life knew

of the relevant federal right. 

Second, in assessing the novelty of Duane v. GEICO it is noted that

the decision-makers in this case were underwriters for an insurance

10 SAAD v. BALTIMORE LIFE INSURANCE COMPANY
company. To prevail against the punitive damages claim, Baltimore

Life must contend that its underwriters were unaware of controlling

Fourth Circuit precedent touching directly on legal rules governing

issuance of insurance policies. It would appear to be problematic to

hold that an insurance company’s ignorance of such precedents is not,

at least, reckless. This is more applicable in light of Vigliotte’s testimony that insurers routinely consider citizenship in deciding whether

to issue policies. Even if plaintiffs prevail on liability, punitive damages will be available only if Baltimore Life is shown to have had

actual knowledge that its denials of plaintiffs’ applications violated

§ 1981 or to have acted with reckless indifference to whether those

denials constituted such violations. 

V.

The plaintiffs also challenge two of the district court’s evidentiary

rulings. First, the district court refused to admit the deposition testimony of Baltimore Life’s former associate general counsel, Mark W.

Hastings. Second, the district court admitted the Maryland Insurance

Administration market conduct exam. Only upon a finding that the

trial judge abused its discretion should an appellate court reverse a

trial judge’s evidentiary rulings. Martin v. Deiriggi, 985 F.2d 129,

137 (4th Cir. 1993). We find that the district court did not abuse its

discretion as to both evidentiary rulings. 

Saad and Soozangar proffered Hastings’ testimony as evidence on

the punitive damages issue. J.A. 1230. Because the district court

believed that there was "no basis . . . whatsoever to award punitive

damages in this case," it ruled that his testimony was inadmissable.

See id.

Counsel for Saad and Soozangar argued that Hastings’ testimony

could rebut the court’s presumption about what Baltimore Life could

have believed, because Hastings allegedly informed Baltimore Life

that its policy violated federal law. This proffer apparently gave the

district court cause to reconsider because the district court then asked

counsel when Hastings gave this alleged advice. J.A. 1233. Saad and

Soozangar conceded that they had not obtained an exact date, and the

court restated its refusal to allow Hastings’ testimony. Id. 

SAAD v. BALTIMORE LIFE INSURANCE COMPANY 11
The lack of a date is sufficient to uphold the district court’s decision under the abuse of discretion standard. If Hastings gave his

advise after the relevant decisions were made, his testimony could

surely be more prejudicial than probative. Moreover, Hastings’ testimony does not concede the existence of any policy or even any causal

relationship. Hastings was not asked the reason for denials of insurance coverage to non-U.S. citizens, in this question, nor did he give

a reason in answer to any of the questions. 

The district court did not err in denying Saad’s motions in limine

regarding the market conduct exam. Saad and Soozangar objected to

the introduction of a Market Conduct Exam conducted on Baltimore

Life by the Maryland Insurance Commissioner and also to Baltimore

Life’s references to the Swiss Re Life and Health Life Guide. J.A.

886-88, 1838-50, 860-72, 172-77. Admitting this evidence was not an

abuse of discretion. 

VI.

We have carefully considered the plaintiffs’ request for assignment

to a different district court upon remand. After thorough review of the

record, we conclude that such relief is not warranted. We are confident that on remand the experienced district judge will faithfully follow our mandate. 

VII.

We reverse the district court’s judgment as a matter of law as to

liability, compensatory damages, and punitive damages. We affirm

the district court’s evidentiary ruling and deny assignment to a new

judge. 

REVERSED IN PART, AFFIRMED

IN PART, AND REMANDED

12 SAAD v. BALTIMORE LIFE INSURANCE COMPANY