IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-50235

ERIC M. SANDERS,

Plaintiff - Appellant

v.

HAROLD H. FLANDERS,

Defendant - Appellee

Appeal from the United States District Court

for the Western District of Texas

USDC No. 1:10-CV-192

Before WIENER, HAYNES, and HIGGINSON, Circuit Judges.

PER CURIAM:* 

Plaintiff-Appellant Eric Sanders appeals the district court’s grant of a 

judgment as a matter of law in favor of Defendant-Appellee Harold Flanders. 

Sanders retained Flanders to prepare and file various patent applications with 

the United States Patent and Trademark Office (“PTO”). Unsatisfied with 

Flanders’s work, Sanders sued Flanders, asserting various Texas state-law 

claims. Because Sanders failed to present legally sufficient evidence of a 

necessary element of each of his claims (damages), we AFFIRM.

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 22, 2014

Lyle W. Cayce

Clerk

 

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I. Factual and Procedural Background

Flanders prepared numerous patent applications over a period of several 

years regarding Sanders’s invention of an effervescent mouthwash tablet and 

filed them with the PTO on Sanders’s behalf. None of these applications was

approved. After discovering that he no longer had any applications pending

and alleging that Flanders had misrepresented the status of the applications,

Sanders sued Flanders claiming: (1) legal malpractice and professional 

negligence; (2) common-law fraud; (3) negligent misrepresentation; (4) breach 

of fiduciary duty; and (5) gross negligence. In connection with these claims, 

Sanders alleged that he suffered damages in the form of lost profits, out-ofpocket expenses, and attorney’s fees. In his filings in the district court, 

Sanders asserted that the conduct underlying, and the damages caused by,

each of the causes of action were the same.

With respect to lost-profit damages, Sanders testified at trial that he lost

potential investors as a result of Flanders’s conduct. Sanders also generally 

testified as to the existence of a pro forma model developed by potential 

investors and a case study performed by university students that evaluated 

the viability of a business model based on his invention. Sanders did not testify 

as to the substance of the pro forma model or viability study; he asserts that 

he was barred from doing so when the district court sustained Flanders’s 

hearsay objections to such evidence.

Sanders also testified that he had out-of-pocket costs that were “roughly” 

$40,000–$50,000, but he did not provide any additional evidence apart from 

this vague testimony to support this claim. With respect to attorney’s fees, 

Sanders testified that he paid Flanders’s fees in the amount of $10,000–

$15,000, but could not produce any evidence to support his claim that he paid 

such fees. Flanders testified that Sanders only had paid him approximately 

$3,800.

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After Sanders rested his case, Flanders moved for judgment as a matter 

of law under Federal Rule of Civil Procedure 50(a). The district court granted 

the motion, holding that Sanders failed to present legally sufficient evidence of

causation and damages. Sanders appealed to the United States Court of 

Appeals for the Federal Circuit, which transferred the appeal to us based on 

Gunn v. Minton, 133 S. Ct. 1059 (2013).

II. Jurisdiction

While the Federal Circuit has exclusive jurisdiction over claims arising 

under federal patent law, see 28 U.S.C. § 1295(a), state-law malpractice claims 

based on underlying patent issues “rarely, if ever, arise under federal patent 

law.” Gunn, 133 S. Ct. at 1065; see also MDS (Canada) Inc. v. Rad Source 

Techs., Inc., 720 F.3d 833, 841–43 (11th Cir. 2013) (applying Gunn to conclude 

that the Federal Circuit did not have exclusive jurisdiction to consider an 

appeal of a breach of contract action that required the resolution of a claim of 

patent infringement). Similar to the Court’s analysis in Gunn, Sanders’s 

claims—while important to the present litigants—do not carry the level of 

significance with respect to federal patent law to establish jurisdiction

exclusively in the Federal Circuit.1 See Gunn, 133 S. Ct. at 1067 (explaining 

that state legal-malpractice claims generally involve hypothetical, backwardlooking questions that “will not change the real-world result of the prior federal 

1 Although Gunn involved only a legal-malpractice claim, the fact that Sanders raises

other claims in addition to his legal-malpractice theory is not a material difference. By 

Sanders’s own assertions, all of his claims present the type of hypothetical, backward-looking 

questions that do not implicate significant matters of federal patent law such that exclusive 

jurisdiction lies in the Federal Circuit. See USPPS, Ltd. v. Avery Dennison Corp., 541 F. 

App’x 386, 390 (5th Cir. 2013) (unpublished) (observing that a party’s claims for fraud and 

breach of fiduciary duty, rather than malpractice, did not command a different result than 

that in Gunn because this difference “does not cause the underlying hypothetical patent 

issues to be of substantial importance to the federal system as a whole, as required for 

exclusive federal jurisdiction under Gunn”).

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patent litigation”). Therefore, we have appellate jurisdiction over this diversity 

action. See 28 U.S.C. §§ 1291, 1332. 

III. Discussion

We review a district court’s ruling on a motion for judgment as a matter 

of law de novo. E. Tex. Med. Ctr. Reg’l Healthcare Sys. v. Lexington Ins. Co., 

575 F.3d 520, 525 (5th Cir. 2009). A judgment as a matter of law “is 

appropriate when ‘a party has been fully heard on an issue during a jury trial 

and the court finds that a reasonable jury would not have a legally sufficient 

evidentiary basis to find for the party on that issue.’” Id. (quoting FED. R. CIV.

P. 50(a)(1)). In a diversity case, we apply the substantive law of the forum 

state. Holt v. State Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir. 2010). 

To prevail on any of his five claims, Sanders had to demonstrate, inter 

alia, that Flanders’s conduct caused damages, a point he does not contest.2 It 

is well settled that damages cannot be established merely through speculation 

or conjecture. Tate v. Goins, Underkofler, Crawford & Langdon, 24 S.W.3d 

627, 635 (Tex. App.—Dallas 2000, pet. denied) (explaining that “[r]emote 

damages, or those damages that are purely conjectural, speculative, or 

contingent, are too uncertain to be ascertained and cannot be recovered”). 

Granting a judgment as a matter of law with respect to damages, the district 

court concluded that “Sanders’s damages testimony was too speculative as to 

lost investors and lost profits, and unsubstantiated by competent proof as to 

out-of-pocket expenses and legal fees, to be recoverable.” Because we agree 

2 See Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004) (legal 

malpractice); Fed. Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991) 

(negligent misrepresentation); Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 

S.W.3d 416, 429 (Tex. App.—Austin 2009, no pet.) (breach of fiduciary duty); Newman v. 

Tropical Visions, Inc., 891 S.W.2d 713, 721 (Tex. App.—San Antonio 1994, no writ) (gross 

negligence); Airborne Freight Corp., Inc. v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 296 (Tex. 

App.—El Paso 1992, no writ) (common-law fraud).

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and affirm the district court’s grant of Flanders’s Rule 50(a) motion on this 

basis, we need not address whether Sanders presented sufficient evidence with 

respect to the element of causation—an alternative ground on which the 

district court granted relief.

A. Lost Profits

A lack of profit history will not render a plaintiff unable to secure lostprofit damages; however, a plaintiff must establish his damages through

“competent evidence with reasonable certainty.” Helena Chem. Co. v. Wilkins, 

47 S.W.3d 486, 504 (Tex. 2001); see also Hiller v. Mfrs. Prod. Research Grp. of 

N. Am., Inc., 59 F.3d 1514, 1521–23 (5th Cir. 1995). The amount of lost profits

sought need not be exact, but it cannot be uncertain or speculative. Wilkins, 

47 S.W.3d at 505; Tex. Instruments, Inc. v. Teletron Energy Mgmt., 877 S.W.2d 

276, 279 (Tex. 1994); see also Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 

649 (Tex. 1994) (“[T]he injured party must do more than show that they 

suffered some lost profits.”); Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 

84 (Tex. 1992) (“As a minimum, opinions or estimates of lost profits must be 

based on objective facts, figures, or data from which the amount of lost profits 

can be ascertained.”). 

Sanders’s counsel acknowledged at oral argument that Sanders did not 

present competent evidence at trial with respect to the calculation of lost-profit 

damages, arguing instead that such evidence would have been presented had 

it not been for the district court’s erroneous hearsay rulings.3 A party alleging 

3 To the extent Sanders argues in his briefs that competent evidence had been 

presented, such evidence was far too speculative. Specifically, as the only potential evidence 

of lost-profit damages, Sanders’s testimony did not contain any specific amount of lost profits

or describe any means by which lost profits could be calculated. See Szczepanik, 883 S.W.2d 

at 648–50 (explaining the need to present evidence of how lost-profit damages were calculated

and stating that showing that accounts were lost is insufficient). Indeed, similar to the 

situation in Holt where a plaintiff’s bare assertion that he had lost contracts did not 

demonstrate lost profits with reasonable certainty, Sanders’s assertion that he lost potential 

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error based on a district court’s exclusion of evidence must have made an offer 

of proof at trial that informs the court of its substance, unless the substance of 

the evidence is apparent from the record. See FED. R. CIV. P. 103(a). Sanders’s 

counsel admitted during oral argument that Sanders did not make any offer of 

proof concerning the lost-profit evidence that he would have otherwise 

presented but for the district court’s hearsay ruling. Further, it is not apparent 

from the record that the substance of the excluded evidence—namely, 

Sanders’s testimony concerning his interactions with investors and the 

calculations of business losses and valuations—would have allowed him to 

establish lost-profit damages with reasonable certainty. On this record, we 

cannot conclude that the district court erred in holding that Sanders presented 

insufficient evidence of lost profits.4 See United States v. John, 597 F.3d 263, 

276 (5th Cir. 2010) (explaining that in the absence of a proffer, an appellant 

cannot prevail on a direct challenge to the district court’s hearsay ruling).

B. Out-of-Pocket Expenses 

Sanders “estimated” that he spent $40,000–$50,0005 in out-of-pocket 

expenses. However, apart from this vague, general statement, he provided no 

accompanying figures, data, or explanation as to how he calculated this 

amount of damages. He further provided no evidence to establish that he had 

investors falls far short of establishing a reasonable certainty of lost profits. See Holt, 835 

S.W.2d at 87. 

4 Because of this conclusion, we need not address whether Sanders’s mere passing 

reference to his hearsay argument in his brief constituted waiver of this issue. See Douglas 

W. ex rel. Jason D.W. v. Hous. Indep. Sch. Dist., 158 F.3d 205, 210 n.4 (5th Cir. 1998) 

(“[F]ailure to provide any legal or factual analysis of an issue on appeal waives that issue.”).

5 It is not even clear what the $40,000–$50,000 estimate of “out of pocket” expenses 

includes given this exchange at trial: “Q: So sum total of the fees you paid Mr. Flanders, the 

cost of this litigation, your own out-of-pocket for travel costs associated with the – this 

product, just the out-of-pockets, you would estimate at what number? Sanders: Forty to 50-

(sic) thousand.”

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actually paid this amount of money. As a result, the district court did not err 

in concluding that he presented an “unsubstantiated estimate” and failed to 

present competent evidence with respect to his out-of-pocket damages because 

the passing comments concerning his losses were “mere speculation or 

conjecture.” See Tate, 24 S.W.3d at 635; see also Coastal Transp. Co. v. Crown 

Cent. Petroleum Corp., 136 S.W.3d 227, 232 (Tex. 2004) (“Opinion testimony 

that is conclusory or speculative is not relevant evidence.”); Finley Oilwell 

Serv., Inc. v. Retamco Operating, Inc., 248 S.W.3d 314, 323–24 (Tex. App.—

San Antonio 2007, pet. denied) (evidence of damages was legally insufficient 

where opinion testimony as to actual damages was conclusory).

C. Attorney’s Fees 

Similarly, Sanders presented no evidence to support his estimate that he 

paid $10,000–$15,000 to Flanders in legal fees.6 Further, Sanders has failed 

to establish a legal basis to justify recovery of the approximately $3,800 that

Flanders acknowledges receiving. Specifically, a legal-malpractice plaintiff 

may recover damages for attorney’s fees he paid in an underlying matter if the 

fees were proximately caused by the negligent conduct of the defendant 

attorney. See, e.g., Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. & 

Research Corp., 299 S.W.3d 106, 122 (Tex. 2009). Sanders presents no

argument or evidence, however, that any of the attorney’s fees he seeks to 

recover were incurred by him as a result of having to respond to or correct 

Flanders’s allegedly negligent conduct. In addition, while a plaintiff may 

recover attorney’s fees when the attorney’s negligence rendered his services of 

6 In the trial court, Sanders asserted that his damages were the same for the various 

theories of recovery and never sought “disgorgement” of fees as a remedy. On appeal, 

Sanders’s arguments concerning the recovery of attorney’s fees focus only on his legalmalpractice theory, and he therefore has waived any argument that such fees could be 

disgorged under a breach-of-fiduciary-duty claim. See Bailey v. Shell W. E&P, Inc., 609 F.3d 

710, 722 (5th Cir. 2010) (“Issues not briefed on appeal are waived.”).

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no value, Sanders acknowledged at trial that Flanders had performed at least 

some quality work for him. See Judwin Props. v. Griggs & Harrison, 911 

S.W.2d 498, 507 (Tex. App.—Houston [1st Dist.] 1995, no writ) (“Recovery of 

fees paid to an attorney may be appropriate [in a legal-malpractice claim] when 

his or her negligence rendered the services of no value.”). Having failed to 

provide any evidence that the fees either were incurred in repairing Flanders’s

allegedly negligent conduct or paid in exchange for services of no value, 

Sanders did not present legally sufficient evidence to allow him to recover 

attorney’s fees. 

IV. Conclusion

Because Sanders failed to present legally sufficient evidence of damages, 

the district court correctly granted judgment as a matter of law in favor of 

Flanders. 

AFFIRMED.

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