* 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.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-50619

Summary Calendar

JERRY A. GARZES, 

Plaintiff-Appellee,

v.

MANUEL R. LOPEZ; CONNIE PRADO,

Defendants-Appellants.

Appeal from the United States District Court

for the Western District of Texas

USDC No. 5:02-CV-1131 

Before STEWART, OWEN, and SOUTHWICK, Circuit Judges.

PER CURIAM:*

Defendants-Appellees Manuel R. Lopez and Connie Prado (“Defendants”)

appeal the district court’s denial of their motion for summary judgment on

Plaintiff-Appellant Jerry A. Garzes’s § 1983 First Amendment retaliation and

conspiracy claims. Concluding that Garzes lacks standing to pursue his asserted

claims, we vacate the district court’s denial ofthe motion for summary judgment

and remand with instructions to dismiss.

United States Court of Appeals

Fifth Circuit

F I L E D

June 9, 2008

Charles R. Fulbruge III

Clerk
No. 07-50619

1 Garzes also sued the District and two other individual trustees. The District Court

granted summary judgment to these defendants and dismissed the claims against them.

Garzes has not appealed that decision.

2

I.

Prior to June 2002, the South San Antonio Independent School District

(“District”) had a contract with Agapito Flores and his company, Alamo

Insurance Group, Inc. (“Alamo”), to provide insurance services to employees of

the District. Plaintiff Jerry Garzes is a licensed independent insurance agent

in San Antonio, Texas, who was authorized to sell insurance on behalf of Flores

and Alamo. Garzes was not an employee of the District and had no direct

contractual relationship with the District. Nonetheless, as a result of his

affiliation with Alamo he derived significant income from commissions based on

his sales to District employees. On June 11, 2002, after the newly-elected Board

of Trustees took office, they convened a special meeting of the Board. At that

meeting, a majority of the Board voted to terminate the District’s then-existing

contract with Alamo and Flores. In place of Alamo, the Board chose Bernard

Donegan Insurance Agency as its new agent.

On November 27, 2002, Garzes filed this lawsuit, alleging that Defendants

prompted the Board of Trustees to take these actions in order to punish Garzes

for supporting rival candidates in previous Board elections.1 He contended that

the termination of the District’s contract with Alamo caused him to lose a

significant amount of potential commissions. Garzes argued that he is entitled

to damages because the Board’s action of June 11, 2002, amounted to an adverse

governmental action directed against him in retaliation for his exercise of

protected First Amendment Rights.

Defendants filed a motion for summary judgment on the basis of qualified

immunity, which the district court denied. Defendants then filed this

interlocutory appeal.
No. 07-50619

3

II.

Although Defendants did not clearly challenge Garzes’s standing to assert

a First Amendment retaliation claim based on the District’s termination of the

Alamo contract, this Court must raise any perceived jurisdictional issue sua

sponte. See Henderson v. Stalder, 287 F.3d 374, 379 n.5 (5th Cir. 2002). Our

review of this appeal raised the question of whether Garzes’s injury from the

contracttermination was sufficiently directto confer standing and we requested

the parties to submit supplemental briefing regarding this issue.

Standing, at its “irreducible constitutional minimum,” requires plaintiffs

“to demonstrate: they have suffered an ‘injury in fact;’ the injury is ‘fairly

traceable’ to the defendant’s actions; and the injury will ‘likely . . . be redressed

by a favorable decision.” Public Citizen, Inc. v. Bomer, 274 F.3d 212, 217 (5th

Cir. 2001) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61(1992)).

“An injury in fact [is] an invasion of a legally protected interest which is (a)

concrete and particularized, and (b) actual or imminent, not conjectural or

hypothetical.” Lujan, 504 U.S. at 560. 

Generally, courts refuse to recognize standing based on economic harm

that is merely a consequence of an injury suffered by another party. For

example, corporate shareholders, officers, and employees may not pursue

personal claims that are based on alleged misconduct towards the corporation

unless they are able to show some “direct” harm to themselves. See, e.g., Pagan

v. Calderon, 448 F.3d 16, 28-30 (1st Cir. 2006). Recently, in an unpublished

decision, we relied on this principle in concluding that an employee of an

independent contractor lacked standing to bring a § 1983 First Amendment

retaliation suit against a municipality based on the termination of the contract

between the municipality and the independent contractor. See Duran v. City of

Corpus Christi, 240 F. App’x. 639 (5th Cir. 2007).
No. 07-50619

4

The facts of Duran are strikingly similar to the present case. In that case,

Entrust had a contract to provide third-party claims administration in

connection with the city’s health insurance program. 240 Fed. Appx. at 640.

Under a separate agreement with Entrust, the plaintiff Duran served as a

“coordinator” to resolve all problems arising under Entrust’s contract with the

city. During the course of the contract, a dispute arose over the payment of a

certain claim and Duran contacted the local newspaper regarding the dispute.

Id. At the expiration of the Entrust contract, the city did not renew the contract

with Entrust, and Duran filed a § 1983 suit alleging that the city decided not to

renew Entrust’s contract because of his protected speech. Id. This Court

concluded that Duran lacked standing to assert a First Amendment retaliation

claim based on the city’s nonrenewal of the Entrust contract. Id. at 641. The

Court noted that only Entrust had a contractual relationship with the city;

Duran’s contract was with Entrust, not the city. Thus, “his putative injury

(potential loss of future fee payments from Entrust if the Contract had been

renewed) is at best only derivative of Entrust’s putative injury from nonrenewal

of the Contract.” Id. at 642. The Court found it irrelevant that it was allegedly

Duran’s conduct that had precipitated the nonrenewal of the contract because

“when a government actor discriminates against a corporation based on a

protected trait of a corporate agent, it is the corporation – and only the

corporation – that has standing to seek redress.” Id. at 643 (citing Pagan v.

Calderon, 448 F.3d 16, 30 (1st Cir. 2006). 

Although Duran is non-precedential, the factual and legal similarities

between that case and the present case render it persuasive. Garzes, in his

supplemental brief, conclusorily deems the case distinguishable, but provides no

legal analysis explaining why this is so. Garzes asserts that here, in contrast to

Duran, the retaliatory action was directed at Garzes because “he was directly

replaced as the employee disability service agent.” In support of this contention,
No. 07-50619

5

Garzes directs the Court to two documents contained in the record: (1) a letter

from the Superintendent stating that the Bernard Donegan Insurance Agency

is now the Agent of Record on the disability insurance policy; and, (2) the

minutes from the June 11, 2002 Board meeting. Neither document references

Garzes, and the minutes from the Board meeting show only that the Board

terminated the contract with Flores and Alamo Insurance Group. 

On the other hand, Defendants point out that, just like in Duran, Garzes

has failed to establish that he had any employment relationship with the

District. Instead, Garzes’s only contractual relationship was with Flores and

Alamo Insurance Group. Therefore, Defendants argue, Garzes’s claims are “at

best” derivative from Flores and Alamo’s injury and were no more than putative

injuries, depriving Garzes of standing.

We agree with Defendants that any injury suffered by Garzes is

insufficiently direct to confer standing. The reasoning put forth by the panel in

Duran applies equally to bar Garzes’s standing. Here, as in Duran, “only the

corporation . . . has standing to seek redress,” 240 Fed. App’x at 643 (citing

Pagan, 48 F.3d at 30), and Garzes does not have standing to bring a First

Amendment retaliation or conspiracy claim against the District based on its

termination of the Alamo contract.

III.

For the reasons set forth above, Garzes lacks standing to maintain this

action. We therefore VACATE the district court’s denial of Defendants’ motion

for summary judgment and REMAND with instructions to the district court to

dismiss this action.