IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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

for the Northern District of Texas

USDC 4:11-CV-671

Before DAVIS, JONES, and BENAVIDES, Circuit Judges.

EDITH H. JONES, Circuit Judge:*

Devon Enterprises, L.L.C. challenges the district court’s grant of summary

judgment for the Arlington, Texas Independent School District on its

11 U.S.C. § 525(a) and Tex. Educ. Code § 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 REMAND for

further proceedings.

United States Court of Appeals

Fifth Circuit

F I L E D

October 8, 2013

Lyle W. Cayce

Clerk

* 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.

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No. 13-10028

I. BACKGROUND

Devon Enterprises, L.L.C., doing business as Alliance Bus Charters

(“Alliance”), was an approved charter bus operator for the Arlington, Texas

Independent School District (“AISD”). AISD became aware of several incidents

in which Alliance put students’ safety at risk, including: an injury accident; a

bus fire; and the breakdown of a bus and substitute by Alliance of another

company, unapproved by AISD, for the remainder of the trip. AISD also had

trouble obtaining certificates of insurance from Alliance. Alliance filed a

Chapter 11 bankruptcy petition in October 2010. AISD opened the bid for the

2010-2011 charter bus carrier contract shortly thereafter. During the bid review

period, Alliance and AISD personnel discussed student safety concerns,

culminating in an email from AISD Purchasing Director Betty Knox (“Knox”)

informing Alliance that it would not be recommended for a contract. This email

stated: “[a]s per our discussion with you, the slightest risk to student safety is

not negotiable” (“Knox Email”). In November 2010, AISD did not approve

Alliance as a charter bus carrier for AISD for the 2010-2011 school year. In

December 2010, Cindy Powell (“Powell”), the Associate Superintendent of

Finance for AISD, sent an email to Jerry McCullough (“McCullough”), the

Superintendent at the time, stating that Powell “confirmed with Betty Knox that

[Alliance] was the company that [AISD] did not award a bid to for charter bus

services because they are currently in bankruptcy” (“Powell Email”). In the

summer of 2011, however, AISD approved Alliance as a carrier for the 2011-2012

school year and awarded Alliance the primary contract for large bus transport.

Alliance’s complaint asserts that AISD impermissibly failed to approve

Alliance as a listed carrier for the 2010-2011 school year, thus discriminating

against Alliance solely because it had recently filed for bankruptcy in violation

of 11 U.S.C. § 525(a) and Tex. Educ. Code § 44.031(b). The district court found

the Powell Email to be “in the nature of a stray remark.” No. 4:11-CV-671-A,

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2012 WL 6200229, at *5 (N.D. Tex. Dec. 11, 2012). The district court granted

AISD’s motion for summary judgment, dismissed all 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 for summary

judgment. Equal Opportunity Comm’n v. WC&M Enters., 496 F.3d 393, 397-98

(5th Cir. 2007). A party is entitled to summary judgment only if “the pleadings,

depositions, answers to interrogatories, and admissions on file,together with the

affidavits, if any, show that there is no genuine issue as to any material fact and

that the moving party is entitled to judgment as a matter of law.” Id. (citing

Fed. R. Civ. P. 56(c)). A genuine issue of material fact exists when the evidence

is such that, viewing the record as a whole, a rational trier of fact could return

a verdict for the non-moving party. Dediol v. Best Chevrolet, Inc., 655 F.3d 435,

439 (5th Cir. 2011). In reviewing a summary judgment motion, the court must

“refrain from making credibility determinations or weighing the evidence” and

must view the facts in the light most favorable to the non-moving party and

draw all reasonable inferences in its favor. WC&M Enters., 496 F.3d at 398.

Alliance’s primary contention is that AISD violated Section 525(a) of the

Bankruptcy Code when it rejected the company’s bid because of its bankruptcy

filing. Alliance contends that the district court erred in concluding that AISD

clearly established that its decision was based on other factors. Section 525(a)

of the Code states: 

[A] governmental unit may not . . . refuse to renew a license, 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 is or has been a debtor under

this title or a bankrupt or a debtor under the Bankruptcy Act, . . .

solely because such bankrupt or debtor is or has been a debtor under

this title or a bankrupt or debtor under the Bankruptcy Act, . . .

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11 U.S.C. § 525(a) (emphasis added). The plaintiff has the burden to prove a

discriminatory purpose. 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 extend so far as to prohibit examination of the factors

surrounding the bankruptcy, the imposition of financial responsibility rules if

they are not imposed only on former bankrupts, or the examination of

prospective financial condition or managerial ability.” 823 F.2d 151, 153-54

(5th Cir. 1987) (internal citations omitted). To defend against a summary

judgment, the plaintiff must produce some evidence that a decision was made

and that the filing of a bankruptcy was the sole reason for the decision. 

Everett v. Lake Martin Area United Way, 46 F. Supp. 2d 1233, 1237

(M.D. Ala. 1999). 

As an initial matter, Alliance argues that the district court erred in

classifying the Powell Email as a “stray remark” and excluding it from evidence. 

We agree. In the email, Powell “confirmed with Betty Knox that [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 involved

in the decisionmaking chain at a time reasonably near the decisive events. It is

relevant evidence because, without further explanation, it makes AISD’s alleged

discrimination more or less likely and is of consequence in determining whether

AISD denied Alliance’s bid solely because of Alliance’s bankruptcy. See

Fed. R. Evid. 401. AISD provides no compelling reason why the Powell Email

is not admissible.1 See id. 402. Accordingly, the Powell Email is admissible.

1 The district court adopted the stray-remark analysis we have often applied in Title

VII discrimination cases. We have not applied this analysis in the context of Section 525

discrimination, and in fact, in Russell v. McKinney, we noted the limits of the stray-remark

analysis outlined by Brown v. CSC Logic, Inc., 82 F.3d 651 (5th Cir. 1996). Russell,

235 F.3d 219 (5th Cir. 2000). We need not determine whether this analysis may be extended

to Section 525 discrimination cases, as the Powell Email is clearly relevant to AISD’s decision.

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Alliance and AISD present conflicting evidence of AISD’s motivation for

rejecting Alliance’s bid. AISD presented evidence that Alliance had safety

problems preceding the bid review period at issue, including a fire, an accident,

and a break-down, as well as evidence that Alliance failed to provide AISD with

required certificates of insurance. AISD also offered the Knox Email, which

stated: “[a]s per our discussion with you, the slightest risk to student safety is

not negotiable.” On the other hand, the Powell Email suggests that AISD

rejected Alliance’s bid because the company filed for bankruptcy, and Alliance

disputes the safety-related concerns expressed by AISD, particularly in light of

the charter contract’s renewal only a year later. In sum, Alliance has produced

some, albeit weak, evidence that Alliance’s bankruptcy filing was the sole reason

for the decision. We do not pass on the credibility of the evidence; rather, we

conclude only that a genuine issue of material fact exists to survive summary

judgment. See Dediol, 655 F.3d at 439. 

Finally, Alliance claims that AISD did not adhere to the guidelines for

school district contracts under Tex. Educ. Code § 44.031(b). Section 44.031(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 44.031(b) is implicated if the factfinder determines

that AISD rejected Alliance’s bid solely because of Alliance’s bankruptcy filing. 

III. CONCLUSION

For the reasons discussed above, we REVERSE and REMAND for

proceedings in accordance herewith.

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