Court Opinion

ID: 18759
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:18:15+00
Date Added: 2024-06-11T08:47:01.832628
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

              _______________________________________

                            No. 99-50050
                          Summary Calendar
              _______________________________________

YONOK WARSON; ET AL,

                                            Plaintiffs,

YONOK WARSON and WILLIAM K. KIM,

                                            Plaintiffs-Appellants,

                              versus

THE WALT DISNEY CO.,INC., ROBERT S. OGDEN, JR.,
TRADEMARK FACTS, INC., JOHN M. CONE, SHIREEN
I. BACON, HILDA C. GALVAN, STRASBURGER & PRICE,
L.L.P., CHRISTOPHER J. CROSS, KENNETH M. BATES,
and BATES INVESTIGATION, INC.,

                                            Defendants-Appellees.

         _________________________________________________

            Appeal from the United States District Court
                  for the Western District of Texas
                             (97-CV-229)
         _________________________________________________

                          August 26, 1999

Before POLITZ, WIENER, and BENAVIDES, Circuit Judges.

Per Curiam*

     This is an appeal from the dismissal of a suit seeking

recovery on several theories grounded in inconvenience and stress

associated with defending (successfully) a prior copyright and

     *
       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this opinion should not be published and is not precedent except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.

                                   1
trademark     action    in    which    Defendant-Appellee           The    Walt   Disney

Company, Inc. (“Disney”) sued Plaintiffs-Appellants Yonok Warson,

William     Kim      (“Warson”        and     “Kim”         or,   collectively,       the

“Plaintiffs”),       and     others    for        selling    counterfeit     copies   of

Disney’s merchandise.          In a bench trial of the earlier suit, the

district court held that Disney had failed to prove that the

Plaintiffs     and    others    had     sold       any   counterfeit      merchandise.1

Agreeing with all dispositions of the district court in this case,

we affirm.

                                             I.

                              Facts and Proceedings

     Warson and Kim brought the instant action against Disney and

other Defendants-Appellees (entities and individuals involved in

the earlier lawsuit as attorneys, investigators, and the like)

(“Disney et al.”), seeking recovery under 42 U.S.C. §§ 1981, 1982,

1983,   and    1985.         They     also    sought        recovery   for   malicious

prosecution, abuse of process, negligence and gross negligence,

filing of     frivolous       lawsuits,       and     invasion    of   privacy.       The

district court in the instant lawsuit granted summary judgment to

Disney et al. on all claims.           The Plaintiffs ask us to reverse that

summary judgment and also challenge the district court’s denial of

their Motions for Reconsideration, under Fed. R. Civ. P. 59(e), and

for Relief from Order, under Fed. R. Civ. P. 60(b).

                                             II.

    1
      The court awarded costs and attorney fees to the defendants
in that underlying action; however, Warson and Kim appeared pro se
in the first lawsuit and thus did not recover attorney fees.

                                              2
                                           Analysis

     As        a   threshold       matter,       we   affirm   the     district    court’s

statement of the appropriate standard for considering a motion for

summary judgment. The movant has the initial burden of showing the

absence of a genuine issue of material fact, and once the movant

satisfies that burden, the non-movant must point to affirmative

evidence, beyond the pleadings, to establish a genuine issue for

trial.2        We review the district court’s grant of summary judgment

de novo.

     As for Warson and Kim’s constitutional claims, we find no

genuine issue of material fact.                       To establish a section 1981

violation, a plaintiff must show that (1) he is a member of a

racial        minority,      and     (2)        the   defendant       (a)   intentionally

discriminated against the plaintiff on the basis of race, and (b)

interfered with one of the activities enumerated in the statute,

here, contract rights.3             The district court based its ruling on the

absence of evidence of interference with contract.                          We never reach

the question whether Warson and Kim’s proffered evidence4 would

create        a    genuine    issue        of     material     fact    as    to   contract

interference:         Those claims fall because the Plaintiffs failed to

     2
             Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986).
         3
             Green v. State Bar of Tex., 27 F.3d 1083, 1086 (5th Cir.
1994).
     4
       In arguing that a genuine issue of fact exists, Warson and
Kim point to their own deposition testimony. Warson initially said
she did not understand the question and then denied any
interference. Kim asserted that his ability to enter contracts was
impaired by the underlying lawsuit and described routine business
interruptions associated with defending the suit.

                                                 3
present any evidence that would create a genuine issue of fact on

the intent-to-discriminate element.                The record does indicate that

Warson and Kim are Korean Americans but does not contain any

evidence,        either     direct      or       circumstantial,       of     Disney’s

discriminatory intent.             The Plaintiffs repeatedly allege both in

their pretrial pleadings and in their appellate brief, that Disney

“singled them out” because they were foreign, but they provide no

evidence creating an issue of fact.                 More importantly, we cannot

even begin to contemplate the policy implications of entertaining

a constitutional case whenever legal process interferes with a

litigant’s business.         We reject the suggestion that the ambit of

section 1981 is broad enough to encompass such a cause of action.

        The section 1982 claim similarly fails for lack of proof of

discriminatory       intent.         Moreover,      Warson     and    Kim   have     not

identified any interference with property right, which is the

gravamen of a section 1982 claim.5

        As for their section 1983 claim, Warson and Kim have not

demonstrated       any    action    taken    “under    color    of”   state    law    as

required by that statute.             The prosecution of a private lawsuit

solely by private actors does not satisfy the “under color of”

requirement.6

        In the absence of civil rights violations under any of these

statutes, there can be no conspiracy to violate such rights.                         And

    5
      Cf. College Sav. Bank v. Florida Prepaid Postsecondary Educ.
Expense Bd., 119 S. Ct. 2219, 2224 (1999) (affirming that activity
of doing business is not a property right).
        6
            Dahl v. Akin, 630 F.2d 277, 281 (5th Cir. 1980).

                                             4
without a conspiracy, there can be no viable claim under section

1985.

     We also reject the Plaintiffs’ alternative argument, advanced

for the first time in their appellate brief, that even if they have

not shown a disputed issue of material fact on the constitutional

claims, they should be permitted to proceed past the summary stage

to have an opportunity to argue for an “expansion of the purview of

the law.”        Any legal argument Warson and Kim may have to that

effect appropriately would have to be presented first to the

district court and then to this Court, but never to a jury.      This

contention affords no basis for reversing the summary judgment.

     As for the Plaintiffs’ remaining theories of recovery, we

perceive no error in the rulings of the district court dismissing

all counts of the complaint; neither is anything to be gained by

writing separately other than to address briefly the Plaintiffs’

additional arguments on appeal.7        In analyzing Warson and Kim’s

claim for malicious prosecution, the district court focused on the

“special injury”8 requirement, which Texas courts have defined as

interference with person or property.9     Warson and Kim concede that

    7
        We find no error in the district court’s construing Warson
and Kim’s claims for abuse of process, gross negligence, and
negligence as mere reiterations of their claim for malicious
prosecution.   Also, with no further discussion, we affirm the
dismissal of Warson and Kim’s claim for invasion of privacy for the
reasons given by the district court.
        8
            Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 207 (Tex.
1996).
     9
            Id. at 208-09.

                                    5
they suffered no special injury in the strict sense10 but argue for

an extension of the law based on their unique circumstances.                   They

assert    that   they   suffered    “special    injury”      because    they   are

foreign-born, non-native speakers of English who lack knowledge of

the law and who were sued by a large corporation possessing

extensive legal expertise and resources.            We reject the suggestion

that the tort of malicious prosecution includes a “thin skull rule”

which would liberally allow claims for particularly vulnerable or

unwitting defendants. In any event, despite the disadvantages that

Warson    and    Kim    suggest    about    their    legal     and     linguistic

shortcomings, we cannot overlook the fact that they nevertheless

prevailed in the underlying lawsuit.           This case provides no basis

for reinterpreting or extending Texas law.

     We also find no error in the district court’s construing

Warson and Kim’s claim for “filing frivolous lawsuits” as a Federal

Rule 11 motion for sanctions.              The Plaintiffs assert that the

district court erred in failing to address the specific statutory

language of “the Texas code.”          Only now, for the first time on

appeal, do Warson and Kim refer specifically to the “Texas Civil

Practices & Remedies Code, § 9.00 et seq.”            We presume from their

general citation and the elements of the claim listed by the

Plaintiffs in their Original Petition, that they intended to direct

     10
        In their appellate brief, the Plaintiffs “acknowledge they
suffered no loss of freedom or impoundment of property and these
are usually necessary for a charge of malicious prosecution in
Texas.”

                                       6
the court’s attention to § 9.01111 which is substantially the same

as Federal Rule 11(b)(1).12        Concluding that the district court did

not err in analyzing this claim as the equivalent of a motion under

Federal Rule 11, we also affirm the court’s legal conclusion that

its inherent power to sanction does not extend to conduct occurring

in another tribunal.13 Warson and Kim’s “filing frivolous lawsuits”

claim pertains to Disney’s conduct during the first lawsuit,

conducted in a different division of the district court —— one that

has now awarded Warson and Kim costs for the burdens of that

litigation.

     Finally, Warson and Kim appeal the district court’s denial of

their post-judgment Motion for Reconsideration, under Fed. R. Civ.

P. 59(e), and Motion for Relief from Order, under Fed. R. Civ. P.

60(b).        The decision to deny such relief is reviewed under the

abuse of discretion standard.14              Regarding the motion under Rule

59(e)        (entitled   “Motion   to   Alter    or   Amend   Judgment”),   the

Plaintiffs cite no authority to support their asserted grounds on

which a court may grant such a motion; they merely re-cycle their

arguments against the original summary judgment motion.              Regarding

         11
         TEX. CIV. PRAC. & REM. CODE ANN. § 9.011 (West Supp. 1999)
(regarding claims brought in bad faith, for purpose of harassment,
or for improper purpose such as to cause delay or increase cost of
litigation).
        12
       FED. R. CIV. P. 11(b)(1) (“[claim] is not being brought for
any improper purpose, such as to harass or to cause unnecessary
delay or needless increase in the cost of litigation”).
     13
             In re Case, 937 F.2d 1014, 1023-24 (5th Cir. 1991).
        14
       Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 353 (5th
Cir. 1993).

                                         7
the Motion for Relief from Order under Rule 60(b), Warson and Kim

fail to show surprise or excusable neglect; neither do they point

to any new evidence that was previously unobtainable despite the

exercise of due diligence.      In fact, they admit that some of the

evidence was available but that they decided not to submit it as a

trial tactic or as a misunderstanding of their burden in responding

to a motion for summary judgment.           They do not show that the

judgment on Defendants-Appellees’ motion for summary judgment was

unfairly obtained or provide any other reason justifying relief

from operation of the judgment.15        Warson and Kim provide no new

grounds for granting their rather extraordinary remedial motions

other than pleading for “substantial justice” in light of their

purportedly inferior litigating position and their claim of an

interest in “exhausting” all methods of relief available at the

trial court level.     On the instant facts, we find those interests

do not outweigh the court’s interest in finality.16       The district

court did not abuse its discretion in denying the post-judgment

motions.

                                  III.

                               Conclusion

     Based on our de novo review of the district court’s Memorandum

Opinion and Order in light of the facts revealed by the summary

judgment record and the legal arguments advanced in the appellate

briefs of counsel, we conclude that the district court’s grant of

     15
          FED. R. CIV. P. 60(b)(1)-(3),(6).
     16
          Edward H. Bohlin Co., 6 F.3d at 355, 356.

                                   8
summary judgment in favor of Disney et al. dismissing Warson and

Kim’s action, should be affirmed, essentially for the reasons set

forth in the thorough and well-crafted opinion of that court.   In

addition, we affirm the district court’s denial of Warson and Kim’s

Motion for Reconsideration and Motion for Relief from Order.

AFFIRMED.

                                9
                        SCREENER MEMORANDUM

To:               Judge Wiener

From:             EAW

Date:             August 6, 1999

Case:             Warson v. The Walt Disney Co.

                  No. 99-50050

Appeal from:      Western District of Texas (Briones, J.)

Recommendation:   Affirm by P.C.

Summary:          Plaintiffs in the instant action were 2 of 28

                  defendants in a previous lawsuit brought by

                  Disney      for      copyright       and      trademark

                  infringement.        In   the    earlier      case,   the

                  district court (Sparks, J.) in a bench trial,

                  found that Disney failed to prove that the

                  defendants sold counterfeit merchandise and

                  entered     a     judgment      on   behalf     of    the

                  defendants, awarding costs and attorney fees.

                  After winning the first case, Plaintiffs in

                  this action seek remedies on various legal

                                  10
                     theories    for   having      to   defend    the   earlier

                     suit.       Central     to     all    the     claims   is

                     Plaintiffs’ assertion that they are Korean-

                     Americans with limited resources and limited

                     knowledge    of   legal    process     who    were   taken

                     advantage of by Disney’s corporate power and

                     money.   The district court in the instant case

                     granted Defendants’ (Disney et al.) motions

                     for summary judgment.

Issues on appeal:

1.   Whether Plaintiffs established a genuine issue of material

     fact regarding Defendants’ interference with contract under

     section 1981.   (No.)

2.   Whether Plaintiffs stated a cause of action for violation of

     sections 1982, 1983, and 1985.        (No.)

3.   Whether Plaintiffs established a genuine issue of material

     fact on invasion of privacy.      (No.)

4.   Whether Plaintiffs established a genuine issue of material

     fact on malicious prosecution.        (No.)

     a.   Whether the district court properly construed Plaintiffs’

                                  11
            actions for abuse of process, negligence, and gross

            negligence as claims for malicious prosecution which the

            court denied.   (Yes.)

       b.   Whether the district court properly construed Plaintiffs’

            action for filing frivolous lawsuits as a Rule 11 claim

            for sanctions which the court denied.          (Yes.)

5.     Whether the district court abused its discretion in denying

       Plaintiffs’ 59(e) Motion for Reconsideration and Rule 60(b)

       Motion for Relief from Judgment.       (No.)

                                 DISCUSSION

       This appeal comes after protracted pre-trial litigation, with

many    supplemental   filings    and     requests    to   be   re-heard   and

reconsidered, in which Plaintiffs-Appellants Warson and Kim sought

damages on various theories for inconvenience and stress they

suffered in defending an earlier lawsuit that they won.             Warson and

Kim failed, with regard to all claims, to establish a genuine issue

of material fact and seem to have confused their burden of pleading

with their Celotex burden of coming forward with evidence in

response to a motion for summary judgment. In addition, Warson and

Kim misunderstand the role of the jury as a finder of fact, and

request to proceed past the summary adjudication phase in order to

“expand the purview” of certain legal theories or to allow a jury

                                     12
to decide the proper way to construe their claims.                 In addition to

granting summary judgment correctly, the district court did not

abuse its discretion in denying Warson and Kim’s post-judgment

Motions for “Reconsideration” and for “Relief from Judgment.”

Constitutional Claims:

     Warson and Kim bring claims under sections 1981, 1982, 1983,

and 1985, none of which have merit.               The essence of the section

1981 claim is that Warson and Kim, owners of t-shirt shops in

Texas, lost business or the ability to enter contracts because of

the stress, expense, and travel associated with defending the first

lawsuit.    Aside from the inappropriateness of the legal theory and

the policy implications of allowing a constitutional case whenever

legal process interferes with business, Warson and Kim do not

create a genuine issue of material fact regarding interference with

contract.    Warson and Kim point to their own deposition testimony

to show disputed facts on this claim.                 Warson, when asked about

interference       with   contract,   at      first   did   not   understand   the

question but       then   denied   any     such   interference.        Kim   stated

affirmatively that he lost many contracts but did not elaborate.

Even if Kim’s statement —— looking at the facts in a light most

favorable to the Plaintiffs —— could create a question of fact, Kim

and Warson offer no evidence of Defendants’ discriminatory intent

which element is also necessary for a section 1981 claim.                    Warson

and Kim make repeated assertions in both their pretrial pleadings

and in     their    appellate   brief      that   Disney    “singled    them   out”

because they were foreign but provide no evidence creating an issue

                                         13
of fact.

     The section 1982 claim similarly fails due to the absence of

evidence of discriminatory intent. Moreover, Kim and Warson do not

identify   any    property   right        with   which   they   experienced

interference, which is the gravamen of a section 1982 claim.            The

section 1983 claim fails because there was no action “under color

of” state law —— the filing of a private lawsuit will not satisfy

that element.    The section 1985 claim, conspiracy to violate civil

rights, is derivative of finding some alleged right violated, which

Warson and Kim did not demonstrate.              As to the constitutional

claims generally, Warson and Kim as much as admit that all the

elements of the claims may not be met, but ask that the court

reverse the grant of summary judgment so they may argue to extend

the law.   Any legal argument Warson and Kim may have to that effect

appropriately should have been presented the district court or this

court, not to a jury, thus there is no basis for reversing the

summary judgment.

State Law Claims:

     In support of the invasion of privacy claim, Warson and Kim

claim a Disney investigator obtained a credit report on Warson.

Disney clarifies (without any evidentiary support) that they never

requested or obtained a personal credit report on Warson, but

rather obtained publically filed information regarding ownership of

Warson’s business, which is not be invasion of privacy.                 The

district court, even accepting that a personal credit report was

obtained, dismissed the claim on the ground that Warson and Kim

                                     14
failed to present evidence or discussion of how investigation of a

readily available credit report is an “intrusion” that would be

“highly offensive to a reasonable person.” Warson and Kim, without

elaboration, assert there is a jury question on what is “highly

offensive.”     There is no discussion regarding how Kim could have

standing to bring this claim, whatever the factual particulars.

       As to the malicious prosecution claim, the district court held

that Warson and Kim did not show “special injury,” as required by

state law.    According to the Texas standard, “special injury” must

be legal restraint on a person or on his ability to dispose of

property.    Warson and Kim admit they suffered no special injury in

that   strict   sense    (and   Texas    construes          claims   for    malicious

prosecution narrowly), but argue for an extension of the law based

on their unique circumstances.          Warson and Kim argue they suffered

“special injury” because of the fact that they are foreign-born,

non-native speakers of English who lack knowledge of the law and

were up against a “big guy,” Disney, which possessed extensive

resources and expertise.        To adopt such an expansive view of the

“special    injury”     requirement,     courts       would    have    to    allow   a

malicious prosecution claim whenever a big corporate interest sues

an   unsophisticated     defendant.          I   do   not    find    that   malicious

prosecution contemplates this sort of “thin skull” rule —— a

plaintiff should not be exposed to greater liability for malicious

prosecution just because the defendant is particularly vulnerable

or unwitting.    In any event, whatever Warson and Kim assert about

their legal and linguistic ineptness, they nevertheless prevailed

                                        15
in the first lawsuit.         I see no basis for expanding Texas law.

      The district court in a twenty-page Memorandum Order addressed

each of Kim and Warson’s additional claims and provided state law

support for construing the claims of abuse of process, negligence,

and gross      negligence,     as   mere    restatements        of     the    claim    for

malicious prosecution.         I found no error with those conclusions.

      The district court, with regard to the claim of “filing

frivolous      lawsuits,”     construed        it   as   a   Rule    11      motion   for

sanctions.      Warson and Kim, on appeal, argue that the court failed

to   address    the   Texas    statutory       language      regarding       “frivolous

lawsuits” in dismissing that claim. Warson and Kim refer generally

to section “9.00 et seq” of the Texas Civil Practices and Remedies

Code in support of the claim.              There is a provision at § 9.011

which includes the elements Warson and Kim describe.                         The section

is   entitled    “Signing     of    Pleadings”       and     mirrors      Federal     Rule

11(b)(1) in language and purpose, therefore the district court did

not err in analyzing Kim and Warson’s rather vague claim as a Rule

11 motion.      In fact, the Texas statute is actually narrower than

Rule 11, as it requires bad faith, purpose to harrass, or other

improper purpose, whereas Rule 11 may support sanctions merely for

failure to investigate claims adequately. In support of the merits

of the “frivolous lawsuit” claim, Warson and Kim pointed to the

district    court     order   in    the    earlier       lawsuit     which    discussed

Disney’s inadequate investigation and shoddy evidence.                        Warson and

Kim also intimated that Disney repeatedly has conducted this sort

of harassing litigation against foreign business owners.                              Even

                                          16
accepting    Warson   and      Kim’s        characterization     of   Disney’s

investigation and motivation in the earlier action, Kim and Warson

already were awarded costs (even if not attorney fees, as they

appeared pro se) for their defense in the first suit and, as the

court in the second suit noted, a court’s inherent power to

sanction does not extend to conduct occurring in another tribunal.

Therefore, the court did not err in refusing to grant the Rule 11

motion.

Post-Judgment Motions:

     I find no abuse of discretion in the district court’s refusal

to grant Warson and Kim’s Motions for Reconsideration and for

Relief    from   Judgment.       As     to     the   so-called    Motion     for

Reconsideration    under     Federal    Rule    of   Civil   Procedure     59(e)

(actually entitled “Motion to Alter or Amend Judgment” in the

Rules), Warson and Kim cited no authority in support of the grounds

on which a court may grant such a motion but merely reasserted

their arguments against the original motion for summary judgment.

As to the Motion for Relief from Judgment under Federal Rule 60(b),

Warson and Kim did not show surprise or excusable neglect; they did

not point to any new evidence that was previously unobtainable

despite the exercise of due diligence —— in fact, they admit that

some of the evidence was available but that they decided not to

submit it earlier in the litigation as a tactical decision; they

did not show that the judgment on Defendant’s motion for summary

judgment was unfairly obtained.               Warson and Kim have no new

arguments for granting either rather extraordinary remedial motion

                                       17
other than pleading for “substantial justice” in light of their

assertively inferior litigating position and claiming an interest

in “exhausting” all methods of relief available at the trial court

level.   Courts, however, interpret such motions narrowly to deter

“sloppy practices” during litigation, and the district court did

not abuse its discretion in refusing to grant the motions.

                                18
19