Court Opinion

ID: 13943
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:31:18+00
Date Added: 2024-06-11T15:04:01.861592
License: Public Domain

UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit

                             No. 97-40414
                           Summary Calendar

               EDWARD C. MANGE, HDLH ENTERPRISES, INC.,
                                              Plaintiffs-Appellants,

                                VERSUS

                      COMMERCIAL METALS COMPANY,
                                                   Defendant-Appellee.

          Appeal from the United States District Court
               For the Southern District of Texas
                          (C-96-CV-123)
                        January 12, 1998

Before REYNALDO G. GARZA, STEWART, and PARKER, Circuit Judges.

PER CURIAM:*

     This case comes from a decision of the United States

District Court for the Southern District of Texas, Judge Janis

Graham Jack, presiding, granting summary judgment in favor of the

Defendant-Appellee, Commercial Metals Company (“CMC”).      Upon

review of the briefs, motions, and record on file, we find no

reversible error or abuse of discretion on the part of the

     *
      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this opinion should not be published and is not precedent except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.
district court, and we therefore AFFIRM the decision of the

district court.

                             Background

     On July 11, 1995, Edward Mange (“Mange”) and HDLH

Enterprises, Inc. (“HDLH”), the Plaintiff-Appellants (hereafter

collectively referred to as “HDLH”, including counsel for the

Plaintiff-Appellees), instituted an adversary proceeding in

United States Bankruptcy Court for the Southern District of Texas

against Commercial Metals Company (“CMC”) and Reynolds Metals

Company (“RMC”).    Reynolds was dismissed after a settlement in

October of 1995.    On February 14, 1996, upon motions of the

parties, the bankruptcy court recommended that this case be

transferred to the United States District Court for the Southern

District of Texas, Corpus Christi Division.    This transfer

recommendation was adopted by the district court on March 18,

1996.

     HDLH claimed that CMC’s activities between 1986 and 1992

violated Sections One and Two of the Sherman Antitrust Act.     15

U.S.C. §1 and §2.    HDLH also claimed that CMC violated Section

Seven of the Clayton Act, and that HDLH also made state civil

conspiracy claims against CMC.    15 U.S.C. §18.   HDLH claimed that

CMC engaged in predatory pricing practices in order to destroy

HDLH and create a local monopoly in the business of scrap metal

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recycling and resale, a business in which HDLH and CMC were

competitors.   The case went before Judge Janis Graham Jack.     On

March 12, 1997, Judge Jack granted summary judgment in favor of

CMC on all counts.   HDLH timely appealed, and the matter now lies

before this Circuit.

                         Standard of Review

     This Court reviews a trial court’s evidentiary rulings under

the manifest error standard of review.    Skotak v. Tenneco Resins,

Inc., 953 F.2d 909, 916 (5th Cir. 1991), cert. denied, 506 U.S.
832 (1992); Christophersen v. Allied-Signal Corp., 939 F.2d 1106,

1109 (5th Cir. 1991)(en banc), cert. denied, 503 U.S. 912 (1992).

With the record defined, the trial court’s summary judgment is

reviewed de novo.    Skotak, 953 F.2d at 916.   If the exclusion is

upheld, the second level inquiry regarding the decision for

summary judgment becomes academic.    Christophersen, 939 F.2d at

1109.   The standard of review for a denial of a continuance under

Rule 56(f) of the Federal Rules of Civil Procedure is abuse of

discretion.    Cormier v. Pennzoil Expl. & Prod. Co., 969 F.2d
1559, 1561 (5th Cir. 1991).

                              Analysis

     The central issue in this matter is the exclusion of

evidence which HDLH received from Walter Briones (“Briones”).

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This evidence (the “Briones Evidence”) was excluded by Judge Jack

from the case.   HDLH states that the Briones Evidence is key to

their case, and without the Briones Evidence, they have no case.

In fact, they conceded the Sherman Act claims of their case

because they knew that they could not prove them without the

Briones Evidence (HDLH calls this concession a result of

“judicial duress” and not a true concession).   CMC basically

agrees that the Briones Evidence is the key to HDLH’s case.     We

agree as well.   Without the Briones Evidence, HDLH has no case,

and, as the standard of review cited states, if the exclusion is

proper, the second part of the analysis becomes academic.    The

central matter, then, for the purposes of deciding whether

summary judgment was proper, is the decision as to whether the

Briones Evidence was properly excluded.

     We hold that the Briones Evidence was properly excluded.      As

stated, we give a large amount of deference to the trial court in

its decisions regarding the admissibility of evidence, and will

reverse only if there is an abuse of discretion which led to a

manifest error in judgment.   No such abuse or error exists here.

     Judge Jack based her decision on several factors.   First,

Judge Jack had great concerns about the fact that Briones was

paid $50,000 for this evidence.   Further, Judge Jack was

concerned with the fact that HDLH gave different explanations at

different times for this payment, which was paid in

installments.    At one point, HDLH claimed that this payment was

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made because it was less expensive than paying for Briones to

copy the documents, a claim which was later admitted to be

untrue, and an estimate for the cost of copying was never made.

This payment was made before the Briones Evidence was even seen

by HDLH.    HDLH claims that this was done because they feared that

Briones would destroy the evidence, and that this was, in a

sense, payment of blackmail.    HDLH does not bring in evidence to

back its claims (including its claim that Mange thought Briones

was a convicted felon, a fact easily proven or disproven), and in

the end we are left with little more than allegations.    Further,

no attempt was made to subpoena the Briones Evidence, an option

which would be both inexpensive and cover any real concerns about

destruction of evidence.    Judge Jack stated that the fact that

HDLH gave different (and contradictory) reasons at different

points regarding the events surrounding its acquisition of the

Briones Evidence was central to her decision to exclude the

evidence.   We do not consider this to be manifest error, and in

fact, is quite reasonable, given the situation.    If a judge

believes that a party has not been forthright regarding the

acquisition of certain evidence, it is reasonable for the judge

to exclude that evidence.

     Also, HDLH signed a non-prosecution agreement with Briones

just before the suit against CMC was filed, creating a certain

smell of collusion in the air (which is rather ironic, given that

HDLH was accusing CMC of colluding with Briones).    Further, the

                                  5
documents in the Briones Evidence were mixed and reshuffled while

in the hands of HDLH to such an extent that when the documents

where produced to CMC, they were in a different format and

organization than when HDLH acquired them.    There was no

assurance that the records produced were a complete, unaltered

set of the documents originally received by HDLH, and Briones

himself could not authenticate the documents in a later

deposition.   These factors, coupled with Judge Jack’s belief that

the Briones Evidence would be more prejudicial than probative,

support Judge Jack’s decision to exclude the Briones Evidence.

     The Rule 56(f) issue is related to the Briones Evidence, in

that the request for continuance was made in response to the

exclusion of the Briones Evidence.    FED.R.CIV.P. 56(f).    This

motion was essentially a motion to start over.    It appears that

HDLH did not review the documents proffered by CMC with

appropriate diligence during the original discovery period,

focused too much of its attention on the Briones Evidence, and

did not meet the district court’s deadlines regarding expert

witnesses.    While this is unfortunate for HDLH, it is necessary

for trial court judges to set specific deadlines for discovery

and have those deadlines met, or else litigation would drag on

forever.   In fact, the district court warned the parties early on

in the discovery process that continuances would not be

forthcoming if based on a party’s failure to obtain discovery.

Judge Jack did not give HDLH a “Death Penalty” in regard to the

                                  6
gathering of evidence.    HDLH should have gotten its act together

during the normal discovery period, and the fact that they relied

on the Briones Evidence to such an extent that its exclusion

destroyed their case is an error on their part, not on the part

of Judge Jack.     We therefore affirm her decision not to grant

the continuance.

     Also, HDLH claims that Judge Jack’s decision to grant

summary judgment was based on a mistaken interpretation of

standing for the purposes of Sherman Act litigation.    There is no

evidence of that in the her decision.    She made it clear that her

decision was based on the inability of HDLH to prove its case to

the degree necessary to overcome summary judgment.    The only

mention of standing is in regard to the Section One claim, and

this statement does not go into any real detail regarding whether

or not she considered the “raising rival’s costs” theory of

standing.   At any rate, the one mention of standing is not

dispositive of any issue (the Section One claim dismissal is

clearly based on a HDLH’s inability to prove the elements of the

claim), and does not constitute reversible error.

     Last, as a procedural matter, CMC states that under Rule 103

of the Federal Rules of Evidence, HDLH should have made an offer

of proof in order to preserve the issue of the exclusion of the

Briones Evidence for appeal.   FED.R.EVID. 103(a).   HDLH states

that they did not do so because Judge Jack stated that the issue

of the Briones Evidence was not to be discussed in regard to

                                  7
summary judgment again.   While it is true that Judge Jack was

clear on this matter, this did not relieve them of an obligation

to at least make a motion for an offer of proof.   We have no

reason to believe that simply making a motion would lead to such

grave consequences for HDLH’s counsel that their responsibility

to make such motions is eliminated.   While in practice, given the

rest of this decision, the Rule 103 issue is largely a moot

point, it is a matter which deserved commentary.

     Another matter in this appeal regards Paul Bartlett

(“Bartlett”), one of HDLH’s attorneys at an earlier stage in this

litigation.   Bartlett, aside from representing HDLH, was also

serving as an expert witness against CMC in another case.     Judge

Jack believed this would constitute a potential conflict of

interest, and was concerned that confidential information from

these proceedings (which were under a strict protective order)

could be seen by Bartlett.   She asked Bartlett to choose between

the cases, and he chose to step down as counsel for HDLH in this

case.   HDLH claims that this was harmful to them, due to

Bartlett’s expertise in antitrust law.   HDLH makes no showing of

specific harm due to Bartlett’s withdrawal, and HDLH could easily

have retained other antitrust counsel during this period.     Judge

Jack was correct in her view that a conflict of interest could

occur, and that it was possible that Bartlett would be exposed to

information he should not be exposed to.   Her decision was

proper.

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                            Conclusion

     Judge Jack’s actions in this case did not constitute abuse

of discretion or manifest error, and were not arbitrary or

unreasonable.   We therefore AFFIRM the decision of the district

court.

                                                         AFFIRMED.

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