### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 13-10028

DEVON ENTERPRISES, L.L.C., doing business as Alliance Bus Charters, Plaintiff-Appellant
v. ARLINGTON INDEPENDENT SCHOOL DISTRICT, Defendant-Appellee

Appeal from the United States District Court f or the Northern District of Texas USDC 4:11-CV-671

Before DAVIS, JONES, and BENAVIDES, Circuit Judges. EDITH H. JONES, Circuit Judge: * D evon Enterprises, L.L.C. challenges t h e district co u rt ’ s gr a n t o f s u m m ary judgment for the Arling t o n , T exas Independent S chool District on its 11 U.S.C. § 525(a) and T e x . Educ. C ode § 44.031(b) claims. Because there is a genuine issue of material fact whether the school district rejected the vendor’s bid solely because of the vendor’s bankruptcy, we REVERSE and R E MAND for further proceedings. U n i t e d S t a te s C o u rt o f A p p e al s F i f t h C i rc u i t 

### F I L E D October 8, 2013 Ly l e W . Cay ce Clerk

* Purs uant to 5 T H C I R

. R

. 47. 5, the court has d eterm ined that this op inion should not be p ublis hed and is not p reced ent excep t und er the lim ited circum s tances s et forth in 5 T H C I R

. R. 47. 5. 4. Case: 13-10028 Document: 00512400295 Page: 1 Date Filed: 10/08/2013No. 13-10028 I. BACKGROUND Devon Enterprises, L.L.C., doing business as Alliance Bus Charters (“Alliance”), was an approved charter bus operator for the Arli n gt o n , Texas Independent S chool District (“AISD”). AISD became a ware of several incidents in which Alliance p u t s tudents’ safety at risk, including: an injury accident; a b u s f i r e ; and the breakdown of a bus and substitute by Alliance of anothe r company, u napproved by AISD, for the remainde r o f t h e trip. AISD a lso had trouble obtaining ce r t i f i cates of insurance f

rom Alliance. Alliance filed a Chapter 11 bankruptcy petition in October 2010. AISD o pened t h e bid for the 2010-2011 charter bus carrier contract shortly thereafter. During the bid review period, Alliance a nd AISD personnel discussed student safety concerns, culminating in an email from AISD Purchasing D irector Betty Knox (“Knox”) informing Alliance that i t would n ot be recommended for a contract. This email stated: “[a]s per o ur discussion with you, the slightest risk to stud e n t safety is not negotiable” (“Knox Email”). In November 2010, AISD did n o t a pprove Alliance as a charter bus c arrier for AISD for the 2010-2011 school year. In December 2010, Cindy P o w e ll (“Powell”), the Associate Superintendent of F i n a n c e for AISD, sent an email to J erry McCullough (“McCullough”), t he Superintendent a t the t ime, stating that Powell “confirmed with Betty Kn o x th a t [Alliance] was the company that [AISD] did not a ward a bid to f or charter b u s services because they are c u r r e n t l y in bankruptcy” (“Powell Email”). In the

summer o f 2011, however, AISD a pproved Alliance as a carrier for the 2011-2012 school year and awarded Alliance the p rimary contract for large bus transport. Alliance’s complaint asserts that AI S D i m permissibly failed to approve Alliance as a listed c arrier for the 2010-201 1 s chool year, thus discriminating against Alliance solely because i t had recently filed for bankruptcy in violation of 11 U.S.C. § 525(a) and T ex. Educ. Code § 44.031(b). The district c ourt found the P o w e l l E mail t o b e “in the nature o f a stray remark.” No. 4 :11-CV-671-A,

2 Case: 13-10028 Document: 00512400295 Page: 2 Date Filed: 10/08/2013No. 13-10028

2012 WL 6 200229, at * 5 (N.D. Tex. Dec. 11, 2012). The district court granted AISD’s motion for summary judgment, dismissed a ll of Alliance’s claims, and awarded costs to AISD. Id. Alliance timely appealed. II. DISCUSSION We review de novo a district court’s grant of a motion f o r s u m m ary judgment. Equal Opportunity Comm’n v. WC&M Enters. , 496 F

. 3d 3 93, 397-98 (5th Cir. 2007). A party is entitled to summary j udgment only if “the pleadings, depositions, answers to interrogatories, and admissions on f il e , t o g e th e r w ith the affidavits, if any, show t hat there is no genuine issue as t o any material fact and t h a t the moving party is entitled to judgment as a matter o f law.” Id. ( c i t i n g Fed. R. Civ. P

. 56(c)). A genuine issue of material fact exists w hen the evidence is s uch t h at, viewing the record as a whole, a rational trier of fact could return

a verdict for the non-moving p arty. Dediol v. Best Chevrolet, Inc. , 655 F.3d 435, 439 (5th Cir. 2011). In reviewing a summary judgment motion, the court must “refrain from m aking credibility determinations or weighing the evidence” and must view the facts in t he light mos t f a vorable to the non-moving party and draw all reasonable inferences in its favor. WC&M Enters. , 496 F.3d at 398. Alliance’s p rimary contention is t h at AISD violated Section 5 25(a) of the Bankruptcy Code w h e n it rejected the company’s bid because of its bankruptcy filing. Alliance contends that the district court e r r e d i n c o ncluding that AISD clearly established that its decision was based on other f actors. S ection 525(a) of the Code states: [A] governmental u nit may not

. . . refuse to renew a l icense, permit, charter franchise, or other similar grant to,

. . . discriminate with respect to such a grant against,

. . . or discriminate with respect to employment against, a person that i s or ha s b een a debtor under this title or a b a n krupt or a d ebtor under the Bankruptcy Act,

. . . solely because such bankrupt or debtor is or has b een a d ebtor under this title or a bankrupt or debtor under the Bankruptcy Act, . . .

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11 U.S.C. § 5 25(a) ( e m p hasis added). The plaintiff has the burden to prove a discriminatory p urpose. In In re Exquisito Services , the court adopted a narrow reading of 11 U .S.C. § 525(a)’s use of the term “solely,” explaining that the “prohibition does not e xtend so far as to prohibit e xaminati o n of the factors surrounding the bankruptcy, the imposition of f inancial responsibility rules if they are not imposed only on former bankrupts, o r t h e e xamination of prospective f

inancial condition or managerial ability.” 823 F.2d 151, 153-54 (5th Cir. 1987) (i n t e r n a l citations omitted). To defend against a summary judgment, the p laintiff m u s t p roduce some evidence that a d e cision was made and that the f

iling o f a b ankruptcy was the s ole reason for the decision. Everett v. La k e Martin Area United Way , 46 F. Supp. 2 d 1233, 1237 (M.D. Ala. 1999). As an initi a l m a t t e r, Alliance argues t h at the district court erred in classifying the P owell Email as a “stray remark” and excluding it from evidence. We agree. In t he email, Powell “confirmed with Betty Knox t h at [Alliance] was the company that [AISD] did not award a bid to for charter bus services because they are currently in bankruptcy.” The email was written by a person i nvolved in the decisionmaking c hain at a time reasonably near the decisive events. It is relevant evidence b ecause, without further e xplanation, it m akes AISD’s alleged discrimination more or less l ikely and is of consequence in determining whether AISD d enied Alli a n c e ’ s bid solely because of Alliance’s bankruptcy. See F e d. R. Evid. 401. AISD p rovides no c ompelling reason why the Powell E m a i l is not admissible. 1 See id . 402. Accordingly, the Powell Email is admissible.

1 The d is trict court ad op ted the s tray- rem ark analys is w e have of ten ap p lied in Title VII d is crim ination cas es . We have not ap p lied t h i s a n a l y s i s in the context of Section 525 d is crim ination, and in f a ct, in Russel l v . M

cKi nney , w e noted the lim its of the s tray- rem ark analys is o u tlined by Brow n v . CSC Logi c, Inc. , 82 F

. 3d 651 ( 5th Cir. 1996)

. Russel l , 235 F

. 3d 219 ( 5th Cir. 2000)

. We need not d eterm ine w hether this analys is m ay be extend ed to Section 525 dis crim ination cas es , as the Pow ell Em ail is clearly relevant to AISD ’s d ecis ion. 4 Case: 13-10028 Document: 00512400295 Page: 4 Date Filed: 10/08/2013No. 13-10028

Alliance and AISD present conflicting evidence o f AISD’s motivation for rejecting Alliance’ s b i d

. AISD presented evidence that Alliance h ad safety problems preceding the b id review period at issue, including a fire, a n a ccident, and a break-down, as well as evidence that Alliance f ailed to provide AISD with required certificates of insurance. AISD a lso o f fered the Knox E mail, which stated: “[a]s per o ur discussion with you, the slightest risk to student safety i s not negotiable.” O n the other hand, th e P o w ell E mail suggests that AISD rejected Alliance’s bid beca u s e the company f iled for bankruptcy, and Alliance disputes the safety-related concerns expressed b y AISD, p a rticularly in light of the c harter contract’s renewal only a year later. I n sum, Alliance has produced
some, albeit weak, evidence that Alliance’s b ankruptcy filing w as the sole reason for the decisi o n . W e d o not pass on the credibility o f the evidence; r a ther, we conclude only that a g enuine i s s u e o f material fact exists to survive summary judgment. See Dediol , 655 F.3d at 439. Finally, Alliance claims that AISD did not adhere to the gui d e l i n e s for school district contracts under Tex. Educ. C o d e § 44.031(b). Section 4 4.031(b) provides several considerations for school districts when determining to whom to award a contract, and districts “ha[ve] the discretion to apply one, some, or all of those criteria.” R

. G.V. Vending v. Weslaco Indep. Sch. Dist. , 995 S.W.2d 897, 899 (Tex. App.–Corpus Christi 1999, no pet.). The district court may reconsider

on remand whether Section 4 4.031(b) is implicated if the f actfinder determines that AISD rejected Alliance’s bid solely because of Alliance’s b ankruptcy filing. III. CONCLUSION For the reasons discussed above, we R E VE R S E and REMAND for proceedings in accordance herewith.

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