Court Opinion

ID: 2741078
Source: CourtListenerOpinion
Date Created: 2014-10-09 14:00:35.270332+00
Date Added: 2024-06-11T10:59:49.401734
License: Public Domain

13-4891-cv(L); 14-206-cv(XAP)
Weber v. Tada
                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 9th day of October, two thousand fourteen.

PRESENT: BARRINGTON D. PARKER,
         GERARD E. LYNCH,
         SUSAN L. CARNEY,
                        Circuit Judges.
———————————————————————

JOHN J. WEBER,
          Plaintiff-Counter-Defendant-Appellant-
          Cross-Appellee,

                                v.                              No.    13-4891-cv(L)
                                                                       14-206-cv(XAP)
HIROAKI TADA, FUJIFILM MEDICAL SYSTEMS
USA INC.,
          Defendants-Counter-Claimants-Appellees,

FUJIFILM HOLDINGS AMERICA CORPORATION,
FUJIFILM CORPORATION,
          Defendants-Counter-Claimants-Appellees-
          Cross-Appellants.*

———————————————————————

APPEARING FOR APPELLANT/                     LORAINE M. CORTESE-COSTA, Durant
CROSS-APPELLEE:                              Nichols, Houston, Hodgson & Cortese-Costa,

         *
       The Clerk is respectfully directed to amend the official caption in this case to
conform with the caption above.
                                          P.C., Bridgeport, CT.

APPEARING FOR APPELLEES/                  PATRICK W. SHEA (Marc E. Bernstein, on the
CROSS-APPELLANTS:                         brief), Paul Hastings LLP, New York, NY.

       Appeals from the United States District Court for the District of Connecticut (Janet

Bond Arterton, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED IN PART and

REVERSED IN PART.

       Plaintiff-appellant John J. Weber (“Weber”) appeals from a judgment entered after

trial of his claims against his former employer, defendant-appellee FUJIFILM Medical

Systems USA, Inc. (“FMSU”), and against defendants-appellees Hiroaki Tada (“Tada”),

FUJIFILM Holdings America Corporation (“HLUS”), and FUJIFILM Corporation

(“FUJIFILM”). HLUS and FUJIFILM cross-appeal the district court’s denial of their

Fed. R. Civ. P. Rule 50(b) motion for judgment as a matter of law. We presume the

parties’ familiarity with the underlying facts and procedural history of this case, which we

reference only as necessary to explain our decision.

       1.     Damages for Tortious Interference and Defendants’ Cross-Appeal1

       Weber first argues that the district court erred in refusing to award him damages

       1
        We review a district court’s decision whether to award damages for abuse of
discretion and any factual findings for clear error. Serricchio v. Wachovia Sec. LLC, 658
F.3d 169, 191 (2d Cir. 2011). We review the court’s denial of defendants’ motion for
judgment as a matter of law de novo. Izzarelli v. R.J. Reynolds Tobacco Co., 731 F.3d
164, 167 (2d Cir. 2013).

                                             2
for lost wages in connection with his claims of tortious interference with contract and

tortious interference with business expectancy. The jury returned a verdict for Weber on

these claims, but awarded him $0 in economic damages. Nevertheless, because “actual

loss” is an element of tortious interference under Connecticut law, Weber argues that the

jury actually did find that he suffered economic damages, despite the absence of any such

finding on the verdict sheet. Therefore, he contends, the district court was collaterally

estopped from finding that defendants’ tortious interference did not proximately cause

lost wages.

       We need not decide this question because defendants are correct that any award for

tortious interference is foreclosed by our decision in Boulevard Associates v. Sovereign

Hotels, Inc., 72 F.3d 1029 (2d Cir. 1995). In Boulevard Associates, we reversed a

judgment against a parent corporation for tortious interference with the contract of its

wholly-owned subsidiary, applying Connecticut caselaw holding that “generally there can

be no tortious interference of contract by someone who is directly or indirectly a party to

the contract.” Id. at 1035 (internal quotation marks omitted). Since a parent corporation

has “significant unity of interest” with its subsidiary, we held, the parent cannot be

considered a third party capable of “interfering” with its own company’s contracts. Id. at

1036 (internal quotation marks omitted). We noted two possible exceptions to this

general rule: namely, where a parent corporation has an “‘improper motive’” or employs

“‘improper means’” to induce its subsidiary to breach a contract, such behavior “may be

sufficiently egregious to cross the line and become tortious.” Id. at 1037, quoting Blake

                                              3
v. Levy, 191 Conn. 257, 262 (1983).

       Here, HLUS and FUJIFILM moved for summary judgment on the tortious

interference claims prior to trial on the ground that, as FMSU’s parent corporations, they

could not be held liable for tortious interference with its employment contract with

Weber. The district court denied summary judgment in light of Weber’s allegation that

he was terminated based on discriminatory animus, which the court held could be a type

of improper motive recognized in Boulevard Associates. We need not decide whether

this ruling was correct, however, because at the end of the trial, the jury rejected the

discrimination claims and found that Weber had not established discriminatory animus as

a motive for his termination. HLUS and FUJIFILM then renewed their argument in a

Rule 50(b) motion for judgment as a matter of law.2 The district court denied the motion,

finding that tortious interference could still be maintained under the “improper means”

exception, because defendants “falsely designat[ed Weber’s] termination with the

damaging label ‘for cause’ just to avoid the financial obligations to pay severance for a

without-cause termination.” (Special App’x 104.)

       That ruling was error. We made clear in Boulevard Associates that any improper

means must be directed at the breaching party, not at the victim of the breach. See id. at

1037 (“Tortious interference with contract requires the use of improper means to induce a

       2
        Weber argues that defendants waived this argument by not raising it in a Rule
50(a) motion at the close of the evidence. We disagree. Given that the district court
predicated its denial of summary judgment on this claim on the possibility that the jury
could find discriminatory motive, defendants had no occasion or need to present the
argument made here until the jury reached its verdict on the discrimination claims.

                                              4
party to breach the agreement; thus, [the parent corporation’s] actions had to intimidate

[the subsidiary] rather than [plaintiff].”). Here, there is no contention that HLUS and

FUJIFILM fraudulently induced FMSU or Tada to breach the employment contract. To

the contrary, Weber’s allegation all along has been that upon taking over leadership of

FMSU, Tada colluded with the parent companies to terminate him.3 Nor is the motive of

avoiding financial obligations improper. See id. at 1038 (noting that “a desire to protect

the financial interests” of the corporation is not an improper motive). Accordingly,

neither exception to the general rule that parent corporations cannot interfere with the

contracts of their subsidiaries applies here.

       The jury found that defendants breached their contract with Weber and that he

therefore was entitled to compensatory damages in the amount of one year’s severance

pay. Under Connecticut law and our precedent, no additional tort was committed. As

this case is governed squarely by our decision in Boulevard Associates, we reverse the

district court’s denial of defendants’ motion for judgment as a matter of law on the

tortious interference claims, and hence do not reach Weber’s argument about the measure

of damages on these claims.

       2.     Admission of After-Acquired Evidence of Weber’s Misconduct4

       3
        Although Weber alleges his reply brief that HLUS and FUJIFILM “engaged in a
plan to harass Mr. Tada,” the evidence he cites demonstrates nothing more than the parent
companies directing FMSU to terminate Weber for cause and does not come close to
meeting the standard of egregious conduct discussed in Boulevard Associates.
       4
        We review the district court’s evidentiary rulings for abuse of discretion. United
States v. Curley, 639 F.3d 50, 56 (2d Cir. 2011).

                                                5
       Weber next argues that the district court erred in admitting evidence of his alleged

misconduct at FMSU, including payments to an FMSU employee, Louise Collins, after

she had left the company; the provision of interest-free loans to employees; and certain

irregularities with a financing agreement between FMSU, a bank, and a consultant (the

“Auric/Ostrowsky financing arrangement”). Defendants initially sought to assert

counterclaims against Weber based on this alleged misconduct. The district court denied

supplemental jurisdiction over those counterclaims, and defendants pursued them in state

court. Defendants then sought to admit this evidence as “after-acquired” evidence,

meaning that they were unaware of it when they terminated Weber. The district court

held that insofar as defendants were unaware of Weber’s misconduct, they could not rely

on evidence of that misconduct to establish a non-discriminatory motive for his

termination. However, the court admitted the evidence for two limited purposes: first, to

show that defendants’ purported non-discriminatory reason for terminating Weber – his

mismanagement of FMSU – was true, and second, as a defense to his breach of contract

claim, specifically to show that Weber materially breached the contract first.

       While the federal trial was ongoing, a New York court granted Weber summary

judgment against defendants’ counterclaims. The New York court held that defendants

were aware of Weber’s payments to Collins and the interest-free loans to other

employees, and either explicitly approved of or acquiesced to them. With respect to the

Auric/Ostrowsky financing arrangement, the state court held that the Business Judgment

Rule protected Weber from liability for any irregularities. Following the New York

                                             6
decision, Weber renewed his objection to the admission of this evidence in the federal

district court. The court precluded any further testimony about the Collins payments, but

continued to allow testimony about the Auric/Ostrowsky financing arrangement. Weber

argues that this was error because it failed to give collateral estoppel effect to the New

York decision.

       Weber’s argument overstates the holding of the New York court. In concluding

that Weber’s actions with respect to the Auric/Ostrowsky financing arrangement were

protected by the Business Judgment Rule, the state court did not find that defendants

knew of the irregularities in the arrangement and approved them. Defendants were

therefore not estopped from arguing that the after-acquired evidence of Weber’s role in

the arrangement confirmed their suspicions that he mismanaged FMSU’s finances. See

Gant ex rel. Gant v. Wallingford Bd. of Educ., 195 F.3d 134, 147 n.17 (2d Cir. 1999).

With respect to the Collins payments, the district court precluded further testimony about

them after the New York court rendered its decision. Finally, Weber points to only two

instances of testimony about the interest-free loans, both of which occurred before the

New York decision. Any error in allowing these brief mentions of the interest-free loans

within a four-week trial was harmless. Accordingly, we find no basis for reversal in

connection with the challenged evidentiary rulings.

                                              7
       3.      Jury Instruction on the FCN Treaty5

       Weber next argues that the district court erred in instructing the jury on the

application of the Friendship, Commerce, and Navigation Treaty between the United

States and Japan (“the FCN Treaty”). The FCN Treaty permits each party “to engage,

within the territories of the other Party, . . . executive personnel . . . of their choice.”

Treaty of Friendship, Commerce and Navigation, U.S.-Japan, art. VIII(1), Apr. 2, 1953, 4

U.S.T. 2063. Courts have interpreted the treaty to permit Japanese companies to prefer

their citizens to Americans in executive positions in their offices here. See Fortino v.

Quasar Co., a Div. of Matsushita Elec. Corp. of Am., 950 F.2d 389, 391 (7th Cir. 1991);

see also Papaila v. Uniden Am. Corp., 51 F.3d 54, 55 (5th Cir. 1995). But

“discrimination in favor of foreign executives given a special status by virtue of [the]

treaty . . . is not equivalent to discrimination on the basis of national origin,” which is

prohibited by Title VII. Fortino, 950 F.2d at 392.

       The district court instructed the jury that citizenship and national origin were

distinct, and explained that the FCN Treaty protected discrimination based on citizenship,

but not discrimination based on national origin. Therefore, the court instructed, “[I]f you

find that Mr. Weber has proven by a preponderance of the evidence that his national

origin, as distinguished from his citizenship, was a motivating factor in defendants’

       5
       We review challenges to jury instructions de novo, reviewing the instruction as a
whole. Boyce v. Soundview Tech. Grp., Inc., 464 F.3d 376, 390 (2d Cir. 2006).

                                                8
decision to terminate him . . . Mr. Weber will have prevailed on his [discrimination]

claims.” (Special App’x 69-70.) Weber argues that the court erred, however, in not

instructing the jury that (1) the burden was on defendants to prove that Japanese

citizenship was a bona fide occupational qualification for his position, and (2) that U.S.

subsidiaries of foreign corporations are American companies and therefore are not

protected by the FCN Treaty.

       We need not address this argument because the district court’s instruction

adequately stated the law applicable in this case. Title VII forbids discrimination based

on national origin, not based on citizenship. See Espinoza v. Farah Mfg. Co., 414 U.S.
86, 89-91 (1973). Whether or not the FCN Treaty offered protection to defendants for

citizenship-based discrimination was therefore irrelevant. The district court carefully

explained the distinction between citizenship and national origin to the jury, curing any

potential for confusion about the application of the treaty. Moreover, the instruction that

Weber argues he should have gotten would not have made any difference. The court’s

instruction made clear that the treaty did not protect defendants against Weber’s claim of

national origin discrimination, which was the form of discrimination charged in the

complaint and prohibited by Title VII. With or without his proposed additional

instruction, Weber could prevail on his Title VII claim only if the jury found that

defendants fired him based on national origin. We accordingly find no error in the district

court’s instruction.

                                             9
       4.     Summary Judgment Claims6

              a.     Race discrimination claim

       Weber argues that the district court erred in granting summary judgment to

defendants on his race discrimination claim. Preliminarily, Weber is correct that he may

assert a claim of racial discrimination as a Caucasian under 42 U.S.C. § 1981. See

McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 287 (1976). Nevertheless, the

district court correctly granted summary judgment because Weber could point to no

evidence that would establish a genuine issue of material fact as to whether defendants

terminated him because of his race. See Celotex Corp v. Catrett, 477 U.S. 317, 325

(1986). Before this Court, Weber cites his affidavit, which states only that he is

American and Caucasian and that defendants hired two individuals who were Japanese,

neither of whom replaced Weber. Since no rational juror could infer from this evidence

that Weber was terminated because of his race (as opposed to his national origin), the

grant of summary judgment was proper. See Mario v. P&C Food Mkts., Inc., 313 F.3d
758, 767 (2d Cir. 2002).7

       6
       We review the district court’s grant of summary judgment de novo.
Mathirampuzha v. Potter, 548 F.3d 70, 74 (2d Cir. 2008).
       7
        We need not address Weber’s dubious contention that “American” constitutes a
“race,” see St. Francis Coll. v. Al-Khazraji, 481 U.S. 604, 614 (1987) (Brennan, J.,
concurring) (“[D]iscrimination based on birthplace alone is insufficient to state a claim
under § 1981.” (emphasis in original)); see also Jews for Jesus, Inc. v. Jewish Cmty.
Relations Council of N.Y., Inc., 968 F.2d 286, 292 (2d Cir. 1992) (“[A] racially diverse
society . . . cannot, by definition, constitute a racial class or, consequently, maintain a
claim [under § 1981].”), because any race discrimination claim predicated on the fact that

                                             10
              b.     Excess benefit claims

       Finally, Weber argues that he is owed money from an excess benefit retirement

plan that FMSU established in 1994. Defendants point to a 2006 document that states,

“Pursuant to the Unanimous Written Consent of the Company’s Board of Directors . . .

the Plan is terminated with respect to all earned and vested amounts that were allocated to

each Participant’s Account . . . [and] each Grandfathered Account shall be distributed in a

single cash sum as soon as practicable.” (Joint App’x 270.) The record reflects that

Weber was paid $449,486.24 on February 16, 2007, and that this sum represented the

earned and vested amount that was in his retirement account as of December 31, 2004.

(Joint App’x 224, 315.) Defendants also provide evidence that on September 5, 2007,

Weber signed a form electing “that the entire vested amount in my Plan Account be

distributed to me in a single sum payment (less applicable tax withholdings) in January

2008” and that he thereafter was paid $26,307.45 in connection with that election. (Joint

App’x 226, 315.) Though Weber continues to insist that he is owed more money from the

1994 Plan, he fails adequately to explain the evidentiary basis for that contention in his

brief. We thus have no reason to disturb the district court’s award of summary judgment

on that claim. See Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010).

       We have considered all of Weber’s remaining arguments and find them to be

Weber was racially “American” would merely duplicate his national origin discrimination
claim, which was rejected by the jury.

                                             11
without merit. For the foregoing reasons the judgment of the district court is

REVERSED as to the tortious interference claims, AFFIRMED in all other respects, and

REMANDED with instructions to enter judgment for the defendants on the tortious

interference claims.

                                   FOR THE COURT:
                                   CATHERINE O’HAGAN WOLFE, Clerk of Court

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