Court Opinion

ID: 4664199
Source: CourtListenerOpinion
Date Created: 2021-03-02 19:00:28.025576+00
Date Added: 2024-06-11T08:02:34.747099
License: Public Domain

Case: 17-50340   Document: 00515762755    Page: 1   Date Filed: 03/02/2021

                          REVISED March 2, 2021

          IN THE UNITED STATES COURT OF APPEALS
                   FOR THE FIFTH CIRCUIT
                                                                 United States Court of Appeals
                                                                          Fifth Circuit

                                    No. 17-50340                        FILED
                                                                 February 26, 2021
                                                                   Lyle W. Cayce
WICKFIRE, L.L.C.,                                                       Clerk

              Plaintiff–Appellee,

v.

LAURA WOODRUFF; TRIMAX MEDIA, L.L.C.,

              Defendants–Appellants,

v.

WREI, INCORPORATED; JOSH WEST,

              Defendants–Third Party Plaintiffs–Appellants,

v.

JONATHAN CURTIS BROWN; CHESTER LEE HALL,

              Third Party Defendants–Appellees.

                  Appeal from the United States District Court
                       for the Western District of Texas
                             USDC No. 1:14-CV-34

Before OWEN, Chief Judge, and DENNIS and SOUTHWICK, Circuit Judges.
PRISCILLA R. OWEN, Chief Judge:
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                                   No. 17-50340
      TriMax Media, L.L.C. appeals a jury verdict in favor of WickFire, L.L.C.,
challenging subject matter jurisdiction and the sufficiency of the evidence. We
affirm the judgment in part and reverse in part.
                                         I
      WickFire, L.L.C. and TriMax Media, L.L.C. are competitors “in the pay-
for-performance search engine marketing business,” a form of internet
marketing. 1 Advertisers such as WickFire and TriMax Media partner with
merchants on advertising campaigns.           In addition to contracting with
merchants directly, advertisers often connect with merchants through
intermediary, affiliate networks that have relationships with thousands of
merchants. Search engines like Google conduct auctions in which advertisers
can bid for the right to place merchant-specific advertisements alongside
particular search terms (for Google, these are called “AdWords auctions”).
Advertisers pay search engines on a cost-per-click basis, meaning they pay the
search engine every time a user clicks on one of their advertisements. If the
user thereafter makes a purchase on the merchant’s site, the merchant pays a
commission to the advertiser.
      A series of disputes arose between WickFire and TriMax Media. In
response, WickFire filed suit against TriMax Media, Laura Woodruff (TriMax
Media’s owner), Josh West (TriMax Media’s director of business development),
and WREI (a company owned by West) (collectively, TriMax).                WickFire
asserted a violation of § 43(a) of the Lanham Act, tortious interference with
existing   contracts,   tortious   interference     with    prospective   economic
relationships, and civil conspiracy.
      First, WickFire alleged that TriMax committed “click fraud” by

      1Wickfire, LLC v. Woodruff, No. A-14-CA-00034-SS, 2017 WL 1149075, at *1 (W.D.
Tex. Mar. 23, 2017).
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repeatedly clicking on WickFire’s advertisements without any intention of
making purchases.              Practically speaking, click fraud drives up WickFire’s
costs—which as noted, are based on the number of clicks per advertisement—
without any corresponding increase in revenue. Second, WickFire alleged that
TriMax created false advertisements that were made to appear as though they
belonged to WickFire. WickFire asserted that advertisements included the
mark of, and links and references to TheCoupon.co, a WickFire website
designed      to “aggregate[] coupons for . . . online retailers.”               Other
advertisements contained WickFire’s unique tracking number (606880), which
merchants use to identify the source of particular advertisements. According
to WickFire, the advertisements “violated merchant [and] affiliate network[]
terms and conditions,” thereby interfering with WickFire’s contractual
relationships with these entities.
      In response to WickFire’s claims, TriMax filed their own counterclaims
against WickFire and its cofounders Jonathan Brown and Chet Hall. TriMax
alleged tortious interference with existing contracts. First, TriMax alleged
WickFire engaged in predatory bidding during Google AdWords auctions. The
alleged predatory bidding involved WickFire’s indirect advertising model,
whereby WickFire would link customers not directly to a merchant’s website,
but to TheCoupon.co (or, when originally testing whether the TheCoupon.co
was a worthwhile venture, to WebCrawler.com, a public website). 2 TriMax
alleged WickFire would place these indirect advertisements directly below
TriMax advertisements and then bid aggressively during Google AdWords
auctions to drive up the cost-per-click TriMax would pay for their advertising
space. 3 Once TriMax could no longer compete for the space, WickFire would

      2   See id. at *2 n.4.
      3 Id.
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purchase the space at auction for a reduced price. 4 Second, TriMax alleged
WickFire had paid “kickbacks to agents to push merchants to terminate” their
affiliations with TriMax. WickFire, Brown, and Hall raised a justification
defense to TriMax’s claim.
      The district court held a trial on the merits. The jury awarded WickFire
$1,984,000 in damages on its tortious interference with existing contracts
claim and $334,000 in damages on its tortious interference with prospective
business relations claim. With respect to WickFire’s Lanham Act claim, the
jury found that TriMax “misrepresent[ed] [WickFire] as the source of
advertisements by placing advertisements containing identifying information
distinctive of [WickFire] in a manner that was likely to cause confusion,” but
it did not award any damages.       The jury also found that TriMax Media,
Woodruff, West, and WREI were all “part of a conspiracy that damaged
[WickFire].” With respect to TriMax’s claim for tortious interference with
existing contracts, the jury found that WickFire, Hall, and Brown
“intentionally interfere[d] with one or more of TriMax’s contracts” but “ha[d] a
colorable right to” do so.
      TriMax contested the jury’s verdict in a written motion for judgment as
a matter of law and a new trial. The district court denied both motions and
entered judgment in accordance with the jury’s verdict. TriMax appealed.
                                       II
      We first consider whether the district court had jurisdiction to entertain
WickFire’s claims. For the first time in this multi-year litigation, TriMax asks
this court to dismiss WickFire’s claims for lack of subject matter jurisdiction.
TriMax contends that subject matter jurisdiction does not exist over WickFire’s
Lanham Act claim and that consequently there is no basis to exercise

      4 Id.
                                       4
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supplemental jurisdiction pursuant to 28 U.S.C. § 1367(a) over WickFire’s
state-law tort claims.
       Federal courts have jurisdiction over a claim brought under a federal
statute unless the claim “clearly appears to be immaterial and made solely for
the purpose of obtaining jurisdiction” or “is wholly insubstantial and
frivolous.” 5   These exceptions “are narrowly drawn.” 6              A claim is wholly
insubstantial and frivolous if it is foreclosed by previous decisions of the
Supreme Court. 7 The Court’s previous decisions foreclose a claim when the
“unsoundness”       of   the   claim    “so   clearly   results     from   the   previous
decisions . . . as to foreclose the subject and leave no room for the inference that
the questions sought to be raised can be the subject of controversy.” 8
“[P]revious decisions that merely render claims of doubtful or questionable
merit” do not preclude federal jurisdiction. 9
       TriMax first alleges WickFire’s Lanham Act claim is foreclosed by the
Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film
Corp. 10 In Dastar, Fox Film Corporation (Fox) was assigned the copyright to
the Crusade in Europe (Crusade) television series but did not renew that
copyright when it expired. 11 Years later, the Dastar Corporation (Dastar)
obtained publicly available tapes of the series, edited them to make a new
series entitled World War II Campaigns in Europe (Campaigns), and then sold
Campaigns to consumers without any reference to the original series. 12 Fox

       5Bell v. Hood, 327 U.S. 678, 682-83 (1946).
       6Williamson v. Tucker, 645 F.2d 404, 416 (5th Cir. 1981).
      7 See Hagans v. Lavine, 415 U.S. 528, 543 (1974) (citing Oneida Indian Nation v.

County of Oneida, 414 U.S. 661, 666-67 (1974)).
      8 Id. at 538 (quoting Ex Parte Poresky, 290 U.S. 30, 32 (1933)).
      9 Id.
      10 539 U.S. 23 (2003).
      11 Id. at 25-26.
      12 See id. at 26-27.

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and several Crusade distributors sued Dastar for violation of § 43(a) of the
Lanham Act, 13 which prohibits a person from making, “in connection with any
goods or services,” a “false designation of origin, false or misleading description
of fact, or false or misleading representation of fact, which . . . is likely to cause
confusion . . . as to the origin, sponsorship, or approval of his or her goods,
services, or commercial activities.” 14 Fox and the plaintiff-distributors alleged
that by selling Campaigns without any reference to the Crusade series, Dastar
had made a “false designation of origin, false or misleading description of fact,
or false or misleading representation of fact, which [was] likely to cause
confusion . . . as to the origin [of Campaigns].” 15
      Whether Fox asserted a valid Lanham Act claim against Dastar turned
on which entity constituted the “origin” of a particular “good” for purposes of
the Act. 16 “If ‘origin’ refer[red] only to the manufacturer or producer of the
physical ‘good[]’ that [was] made available to the public[,] Dastar was the
origin,” and Fox’s Lanham Act claim would accordingly fail. 17 But if “‘origin’
include[d] the creator of the underlying work,” Fox’s Lanham Act claim had
possible merit. 18 In deciding which interpretation was correct, the Court relied
on the interplay between copyright and patent law on the one hand, and federal
trademark law on the other. 19
      Copyright and patent law, the Court indicated, serve markedly different
functions than federal trademark law. The former are intended to “protect
originality or creativity,” whereas the latter is not. 20             That is, “[f]ederal

      13 See id. at 27.
      14 15 U.S.C. § 1125(a)(1)(A).
      15 Dastar, 539 U.S. at 31 (internal quotation marks omitted) (quoting § 1125(a)(1)(A)).
      16 See id.
      17 Id. (emphasis added).
      18 Id. (emphasis added).
      19 See id. at 33-34, 37.
      20 Id. at 37.

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trademark law ‘has no necessary relation to invention or discovery.’” 21 It is
instead concerned with “preventing competitors from copying ‘a source-
identifying mark’” in a way that harms the various consumers who rely on the
mark and the manufacturer who owns the mark. 22 It protects the genuineness
of goods or services, ensuring, inter alia, that consumers are not deceived into
purchasing inferior products and that a manufacturer’s goodwill is not
exploited or infringed upon by its competitors. 23
       The Court concluded that the term “origin of goods” as used in the
Lanham Act “refer[red] to the producer of the tangible goods that [were] offered
for sale, and not to the author of any idea, concept, or communication embodied
in those goods.” 24 Accordingly, Fox—the putative “entity that originated the
ideas or communications” embodied in Dastar’s film—could not sue Dastar for
violating the Lanham Act merely because Dastar had not provided Fox
attribution for those original ideas and communications. 25                    To the extent
protections for those interests exist, they lie in the law of copyright, not the law
of trademarks. 26
       We understand Dastar to stand for the general proposition that one
cannot shoehorn what essentially amounts to a putative patent violation or a

       21 Id. at 34 (quoting In re Trade–Mark Cases, 100 U.S. 82, 94 (1879)).
       22 Id. (noting that trademark law, “by preventing competitors from copying ‘a source-
identifying mark,’ ‘reduce[s] the customer’s costs of shopping and making purchasing
decisions,’ and ‘helps assure a producer that it (and not an imitating competitor) will reap
the financial, reputation-related rewards associated with a desirable product” (alterations in
original) (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 163-64 (1995))).
       23 See id. at 32 (“Section 43(a) of the Lanham Act prohibits actions like trademark

infringement that deceive consumers and impair a producer’s goodwill. It forbids, for
example, the Coca–Cola Company’s passing off its product as Pepsi–Cola or reverse passing
off Pepsi–Cola as its product.”).
       24 Id. at 37 (emphasis added).
       25 See id. at 32, 38; see also id. at 27 (describing Fox’s allegations “that Dastar’s sale

of Campaigns ‘without proper credit’ to the Crusade television series constitute[d] ‘reverse
passing off’ in violation of § 43(a) of the Lanham Act” (emphasis added) (footnote omitted)).
       26 See id. at 37.

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putative copyright violation into a Lanham Act claim. 27 In other words, there
is no cause of action for violating the Lanham Act merely because the “good”
at issue incorporates the plaintiff’s ideas, concepts, writings, or the like. In
this way, Dastar addressed, as TriMax asserts, a “false authorship” claim. Fox
was essentially alleging Dastar had plagiarized the Crusade series. 28 In filing
suit, Fox was seeking to rectify Dastar’s putative failure to credit Fox for its
original ideas. 29 But because the suit did not seek to protect the interests that
prompted the passage of the Lanham Act, Fox’s claim failed. 30
       The case at bar presents a different situation than that addressed in
Dastar.     WickFire has alleged that TriMax created false advertisements
appearing to have originated with WickFire in order to, inter alia, harm
WickFire’s reputational interests in this industry. WickFire is not alleging
TriMax wrongfully incorporated WickFire’s ideas or concepts into TriMax’s
advertisements. That is, WickFire is not concerned with protecting an original
idea or its creative thought, as Fox was attempting to do in Dastar. Instead,
WickFire is interested in protecting the genuineness of its brand. We cannot
say, based on Dastar, that WickFire’s claim is frivolous. 31
       TriMax’s second argument as to why the district court lacked jurisdiction
to entertain WickFire’s federal claim is that neither WickFire’s unique

       27  See Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 149 (5th Cir. 2004) (per curiam)
(“The [Dastar] Court concluded that claims of false authorship and reverse passing off, when
raised to protect an author’s interest in the intellectual content of communicative products,
were not actionable under § 43(a) and should instead be pursued under copyright law.”
(emphasis added)); accord Gensler v. Strabala, 764 F.3d 735, 737 (7th Cir. 2014) (“Dastar
held that a copyright can’t be extended by using the Lanham Act.”).
        28 Dastar, 539 U.S. at 36 (describing Fox’s “reading . . . of the Lanham Act as creating

a cause of action for, in effect, plagiarism”).
        29 See id. at 27.
        30 See id. at 37.
        31 Cf. Gen. Universal Sys., Inc., 379 F.3d at 149 (concluding Dastar foreclosed the

plaintiff’s Lanham Act claim because the plaintiff was alleging the defendant had “copied the
ideas, concepts, structures, and sequences embodied in [the plaintiff’s] copyrighted work”).
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numerical identifier nor the links or references to TheCoupon.co are entitled
to protection under the Lanham Act.                  But these arguments principally
challenge the merits of WickFire’s claim—that is, whether WickFire can
prevail in its cause of action. They do not effectively challenge the jurisdiction
of the district court. 32 Generally, district courts have “jurisdiction if ‘the right
of the [plaintiff] to recover under [his or her] complaint will be sustained if the
Constitution and laws of the United States are given one construction and will
be defeated if they are given another.’” 33 In other words, the claim need only
be “colorable” to invoke federal question jurisdiction. 34
       Here, WickFire alleged that TriMax created fraudulent advertisements
intended to deceive WickFire’s customers into thinking the advertisements
were created by WickFire. Whether WickFire could have prevailed under that
theory turned in part on whether WickFire had a protectable mark. 35 But
WickFire need not have conclusively demonstrated the existence of a
protectable mark to invoke “arising under” jurisdiction. Novel as its claim may
be, nothing suggests WickFire’s legal theory is so insubstantial or frivolous as
to affect the district court’s authority to decide this case. 36 We thus conclude

       32  See Fragumar Corp., N.V. v. Dunlap, 685 F.2d 127, 128 (5th Cir. 1982) (“Federal
jurisdiction is determined not by the ultimate evidence but by the well-pleaded allegations of
the complaint.” (citing Little York Gold Washing & Water Co. v. Keyes, 96 U.S. 199, 201-02
(1877))).
        33 Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635, 643 (2002) (quoting

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998)).
        34 Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006) (“A plaintiff properly invokes

§ 1331 jurisdiction when she pleads a colorable claim ‘arising under’ the Constitution or laws
of the United States.” (citing Bell v. Hood, 327 U.S. 678, 681-85 (1946))).
        35 See Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 235-36 (5th Cir. 2010)

(noting that to prevail under § 43(a), “[t]he plaintiff must first ‘establish ownership in a
legally protectible mark, and second, . . . show infringement by demonstrating a likelihood of
confusion’” (quoting Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v. Smack
Apparel Co., 550 F.3d 465, 474 (5th Cir. 2008))).
        36 See Verizon, 535 U.S. at 643 (indicating that subject matter jurisdiction is affected

if “the claim ‘clearly appears to be immaterial and made solely for the purpose of obtaining
jurisdiction or where such a claim is wholly insubstantial and frivolous’” (quoting Steel Co.,
                                               9
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the district court had jurisdiction over WickFire’s Lanham Act claim and,
accordingly, pendent jurisdiction over each of WickFire’s state-law tort
claims. 37
                                               III
       On the merits, TriMax argues they were entitled to judgment as a matter
of law on each of WickFire’s claims, as well as the justification defense raised
in response to TriMax’s counterclaim. “Only when ‘a reasonable jury would
not have a legally sufficient evidentiary basis to find for the party on [a
particular] issue’ is judgment as a matter of law appropriate.” 38 In making
that determination, we “draw all reasonable inferences and resolve all
credibility determinations in the light most favorable to the nonmoving
party.” 39
                                               A
       As to the Lanham Act claim, we need not decide whether the evidence
offered was sufficient as a matter of law. The judgment in this case, although
acknowledging that TriMax had violated § 43(a) of the Act, did not award
WickFire damages as to this claim.                   Consequently, any argument that
WickFire offered insufficient evidence regarding this claim is moot. Nor does
the fact that WickFire seeks attorney fees under the Lanham Act affect this
conclusion.       It is true that the Lanham Act permits, under certain
523 U.S. at 89)); see also U.S. Patent & Trademark Office v. Booking.com B.V., 140 S. Ct.
2298, 2301 (2020) (concluding that even “term[s] styled ‘generic.com’” can, in certain
circumstances, “be eligible for federal trademark registration”).
       37 See 28 U.S.C. § 1367(a).
       38 Ill. Tool Works, Inc. v. Rust-Oleum Corp., 955 F.3d 512, 514 (5th Cir. 2020) (quoting

FED. R. CIV. P. 50(a)); see Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229, 235 (5th Cir.
2001) (“A motion for judgment as a matter of law . . . in an action tried by jury is a challenge
to the legal sufficiency of the evidence supporting the jury’s verdict.” (quoting Ford v.
Cimarron Ins. Co., 230 F.3d 828, 830 (5th Cir. 2000))).
       39 Cowart v. Erwin, 837 F.3d 444, 450 (5th Cir. 2016) (quoting Heck v. Triche, 775 F.3d
265, 273 (5th Cir. 2014)).
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circumstances, district courts to award “reasonable attorney fees to the
prevailing party.” 40 But as we recently noted in Alliance for Good Government
v. Coalition for Better Government, “a prevailing party [for Lanham Act
purposes] is ‘a party in whose favor judgment is rendered’ or ‘one who has been
awarded some relief by the court.’” 41 Here, the jury found that there were no
damages, and WickFire therefore cannot be a prevailing party under the
Lanham Act. We need not consider TriMax’s contentions that the evidence as
to WickFire’s Lanham Act claim was insufficient as a matter of law. 42
                                             B
       Next, we consider TriMax’s contentions that the evidence introduced at
trial was not legally sufficient to support the judgment as to WickFire’s tort
claims or WickFire’s and its founders’ justification defense. Because each of
these contentions is grounded in state law, we “refer to state law for the kind
of evidence that must be produced to support a verdict.” 43
                                              1
       To prevail at trial on its tortious interference with contractual relations
claim, WickFire needed to present sufficient proof of the following: “(1) an
existing contract subject to interference, (2) a willful and intentional act of
interference with the contract, (3) that proximately caused the plaintiff’s
injury, and (4) caused actual damages or loss.” 44 At the close of WickFire’s
case, TriMax challenged the proof offered as to each element in an adequate,
albeit generic, Rule 50(a) motion. TriMax renewed that motion after the jury

       40  15 U.S.C. § 1117(a) (emphasis added).
       41  919 F.3d 291, 295 n.16 (5th Cir. 2019) (quoting Kiva Kitchen & Bath Inc. v. Capital
Distrib., Inc., 319 F. App’x 316, 322 (5th Cir. 2009)).
        42 See Miller v. Travis County, 953 F.3d 817, 822 (5th Cir. 2020).
        43 Wackman v. Rubsamen, 602 F.3d 391, 400 (5th Cir. 2010) (quoting Hamburger v.

State Farm Mut. Auto. Ins. Co., 361 F.3d 875, 884 (5th Cir. 2004)).
        44 Prudential Ins. Co. of Am. v. Fin. Rev. Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000)

(citing ACS Invs, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997)).
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returned its verdict, and before this court again argues the claim was infirm
as a matter of law. Reviewing de novo, we agree. 45
       Our review of Texas law 46 indicates that to prevail on an interference
claim, the plaintiff must “present evidence that some obligatory provision of a
contract [was] breached.” 47 Intermediate appellate courts in Texas have, on
occasion, suggested an actual breach is not required.                      Relying on those
decisions, our own court in Cuba v. Pylant noted the following: “Although it
does not appear that an actual breach must occur, the defendant must have
intended to induce a breach (even if unsuccessful), thereby making
performance more difficult in some way that injured the plaintiff.” 48
       But since Cuba was issued, the Supreme Court of Texas appears to have
clarified the law in this area. In El Paso Healthcare System, Ltd. v. Murphy,
the Supreme Court of Texas stated the following: “To prevail on a claim for
tortious interference with an existing contract, [the plaintiff must] present
evidence that [the defendant] induced [the plaintiff’s co-contracting party] to
‘breach the contract,’ and thus interfered with [the plaintiff’s] ‘legal rights
under the . . . contract.’” 49 This unequivocal language leaves little doubt that
a breach must result from the defendant’s conduct in order for the plaintiff to

       45  Heck v. Triche, 775 F.3d 265, 272 (5th Cir. 2014) (“We review de novo the district
court’s denial of a motion for judgment as a matter of law, applying the same standard as the
district court.” (quoting Foradori v. Harris, 523 F.3d 477, 485 (5th Cir. 2008))); see also Logan
v. Burgers Ozark Country Cured Hams Inc., 263 F.3d 447, 457 (5th Cir. 2001) (“We decline to
adopt an unduly burdensome view of Rule 50 that would require litigants to detail every
aspect of a case where . . . a general, all[-]encompassing statement will suffice.”).
        46 See El Paso Healthcare Sys., Ltd. v. Murphy, 518 S.W.3d 412, 421-22 (Tex. 2017).
        47 Walker v. Beaumont Indep. Sch. Dist., 938 F.3d 724, 749 (5th Cir. 2019) (quoting

Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Servs., Inc., 441 S.W.3d 345, 361
(Tex. App.—Houston [1st Dist.] 2013, pet. denied)).
        48 814 F.3d 701, 717 (5th Cir. 2016) (citing Fluor Enters., Inc. v. Conex Int’l Corp., 273
S.W.3d 426, 443 (Tex. App.—Beaumont 2008, pet. denied)).
        49 518 S.W.3d at 421-22 (first quoting Holloway v. Skinner, 898 S.W.2d 793, 794-95

(Tex. 1995); and then quoting Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d
276, 288 (Tex. 1998)).
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prevail. To induce commonly connotes not merely attempts at interference, but
actual interference. 50         Accordingly, without sufficient proof that the
defendant’s conduct resulted in “some obligatory provision of a contract
ha[ving] been breached,” the plaintiff’s tortious interference claim is infirm as
a matter of law. 51
       WickFire offered no such proof. As discussed earlier, WickFire connects
with merchants in one of two ways. First, WickFire directly contracts with
merchants who are seeking advertising services. These individual, merchant-
to-advertiser contracts contain terms and conditions requiring WickFire’s
advertisements to meet certain standards that are specific to each agreement.
In addition to these merchant-to-advertiser contracts, WickFire also connects
with merchants en masse through affiliate networks.                      WickFire likewise
maintains contractual relationships with these intermediary affiliate networks
that require WickFire’s advertisements to meet certain standards. At trial,
WickFire argued that TriMax tortiously interfered with both types of
agreements—those it maintained with individual merchants and those it
maintained with intermediary affiliate networks. 52

       50     See     Induce,     MERRIAM–WEBSTER,          https://www.merriam-webster.com
/dictionary/induce (last visited Feb. 24, 2021) (defining induce to mean either “to move by
persuasion or influence” or “to call forth or bring about by influence or stimulation”).
        51 Walker, 938 F.3d at 749 (quoting Better Bus. Bureau, 441 S.W.3d at 361); see Duncan

v. Hindy, 590 S.W.3d 713, 726-28, 729 (Tex. App.—Eastland 2019, pet. denied) (affirming
summary judgment as to a tortious interference claim because the plaintiff offered
insufficient proof that a breach resulted from the defendant’s conduct); see also Duradril,
L.L.C. v. Dynomax Drilling Tools, Inc., 516 S.W.3d 147, 168 (Tex. App.—Houston [14th Dist.]
2017, no pet.) (“[T]o establish the element of a willful and intentional act of interference, the
plaintiff must produce evidence that the defendant was a more-than-willing participant and
knowingly induced one of the contracting parties to breach its obligations under the contract.
To do so, the plaintiff must present evidence that an obligatory provision of the contract was
breached.” (emphasis added) (internal citations omitted)).
        52 See Wickfire, LLC v. Woodruff, No. A-14-CA-00034-SS, 2017 WL 1149075, at *3

(W.D. Tex. Mar. 23, 2017) (noting that “Wickfire offered evidence regarding its merchant and
affiliate network contracts and their corresponding terms and conditions”).
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                                     No. 17-50340
      In support of its claim, WickFire unquestionably offered sufficient proof
that TriMax intended to influence WickFire’s relationships with both
individual merchants and the various intermediary affiliate networks with
whom        WickFire   contracted.     Nevertheless,   WickFire    fell   short     of
demonstrating that either it or any of its co-contracting parties breached their
respective obligations to one another as a result of TriMax’s conduct. TriMax’s
advertisements may have made it appear as though WickFire breached its
obligations.     But there is no indication WickFire actually breached its
contractual obligations as a result of TriMax’s conduct. Nor is there any
indication WickFire’s various co-contracting parties failed to comply with their
respective contractual obligations as a result of TriMax’s conduct.           Hall
testified in conclusory terms that some merchants ceased their affiliations with
WickFire as a result of TriMax’s conduct. But without pointing to specific
contractual terms that were supposedly breached, a factfinder could only
speculate as to whether this conduct in fact amounted to a breach of an
underlying contractual term.
      WickFire’s claim is analogous to the tortious interference claim
considered by the Supreme Court of Texas in El Paso Healthcare System.
There, Murphy, the nurse-plaintiff, “worked as an independent practitioner
under contract with West Texas OB Anesthesia in El Paso.” 53 West Texas OB
maintained a contractual relationship with El Paso Healthcare’s Las Palmas
Medical Center whereby it would provide medical staff to the medical center
when needed. 54         “Las Palmas would request staffing for particular
assignments, and West Texas OB would offer those shifts to Murphy and its
other contractors.” 55 A dispute occurred between Murphy and a physician at

       53 518 S.W.3d at 414.
       54 See id.
       55 Id.

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Las Palmas that prompted Las Palmas to conduct an investigation. 56 Las
Palmas asked that Murphy not to be assigned to the medical center during the
pendency of the investigation. 57
      Thereafter, Murphy sued Las Palmas for tortious interference, claiming
“that [Las Palmas had] interfered with her business relationship with West
Texas OB by requesting that [she] not be scheduled at Las Palmas while it
conducted its investigation.” 58        The Supreme Court of Texas ultimately
reversed a jury verdict in Murphy’s favor. 59 The court’s analysis turned on the
fact that “[n]either Las Palmas nor West Texas OB were required to offer
Murphy any assignments, and she was not required to accept any assignments
that were offered.” 60 “To prevail on a claim for tortious interference with an
existing contract,” the court noted, “Murphy had to present evidence that [Las
Palmas] induced West Texas OB to ‘breach the contract,’ and thus interfered
with Murphy’s ‘legal rights under the . . . contract.’” 61 In Murphy’s case, “an
obligation to provide employment was not a term of Murphy’s existing contract
with West Texas OB.” 62        Murphy’s contract called for payment when she
worked, but it did not require West Texas OB “to schedule Murphy at Las
Palmas, or indeed at any hospital.” 63 Because Las Palmas’s actions had not
interfered with Murphy’s contract, Murphy’s tortious interference claim failed
as a matter of law. 64

      56 See id. at 415, 420.
      57 See id.
      58 Id. at 420.
      59 See id. at 421.
      60 Id. at 414.
      61 Id. at 421-22 (internal citations omitted) (first quoting Holloway v. Skinner, 898
S.W.2d 793, 794-95 (Tex. 1995); and then quoting Associated Indem. Corp. v. CAT
Contracting, Inc., 964 S.W.2d 276, 288 (Tex. 1998)).
      62 Id. at 422.
      63 Id.
      64 See id.

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                                        No. 17-50340
       Like Murphy, WickFire produced evidence that a third party had a
deleterious financial effect on its bottom line. But as was the case in El Paso
Healthcare System, the record here fails to indicate that WickFire’s damages
occurred because a co-contracting party breached its agreement with WickFire.
The record in this case is devoid of any indication that either an individual
merchant or an affiliate network breached a contractual obligation as a result
of TriMax’s conduct. To the extent an individual merchant or an affiliate
network ceased relying on WickFire for its advertising services because of
TriMax’s conduct, there is no evidence that these entities were contractually
required to place advertisements with WickFire. Because there is no evidence
TriMax’s conduct in fact induced any entity to breach an agreement with
WickFire, WickFire’s tortious interference with contractual relations claim
fails as a matter of law. 65
                                               2
       Next, we consider the evidence offered in support of WickFire’s tortious
interference with prospective business relations claim. This claim required
proof of the following five elements:
       (1) there was a reasonable probability that the plaintiff would have
       entered into a business relationship with a third party; (2) the
       defendant either acted with a conscious desire to prevent the
       relationship from occurring or knew the interference was certain
       or substantially certain to occur as a result of the conduct; (3) the
       defendant’s conduct was independently tortious or unlawful;
       (4) the interference proximately caused the plaintiff injury; and
       (5) the plaintiff suffered actual damage or loss as a result. 66

       65   Our conclusion should not be misunderstood as an endorsement of TriMax’s
conduct. Nor should it be taken as a suggestion that WickFire could never have held TriMax
liable in tort for this type of conduct. Rather, our conclusion is simply that WickFire’s failure
to demonstrate specific breaches as a result of TriMax’s conduct precludes a finding of
liability as to this claim.
         66 Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013)

(first citing Wal–Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001); and then citing
Bradford v. Vento, 48 S.W.3d 749, 757 (Tex. 2001)).
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                                      No. 17-50340
Before the district court, TriMax challenged the sufficiency of the evidence as
to each element in both its Rule 50(a) and Rule 50(b) motions. On appeal,
TriMax challenges the sufficiency of the evidence as to a number of these
elements. We pretermit discussion of all but one. Reviewing de novo, 67 we
conclude that the evidence of WickFire’s actual damages is insufficient as a
matter of law.
       To recover lost profits under Texas law, a party “must do more than show
that [it] suffered some lost profits”—it must show the amount of profits lost “by
competent evidence with reasonable certainty.” 68                    “What constitutes
reasonably certain evidence of lost profits is a fact intensive determination.” 69
“At a minimum, opinions or estimates of lost profits must be based on objective
facts, figures, or data from which the amount of lost profits may be
ascertained.” 70 However, “it is not necessary to produce in court the documents
supporting the opinions or estimates.” 71 Although there are a number of valid
methods for measuring lost profits, “once a party has chosen a particular
method for measuring [its] lost profits, [the party] must provide a complete
calculation.” 72   “[U]ncertainty as to the fact of legal damages is fatal to
recovery, but uncertainty as to the amount will not defeat recovery.” 73
       WickFire’s damages theory for this claim was grounded in the assertions
that TriMax’s tortious conduct delayed the development of TheCoupon.co
website by six months and that WickFire lost $334,000 in profits because of

       67 See Heck v. Triche, 775 F.3d 265, 272-73 (5th Cir. 2014).
       68  Szczepanik v. First S. Tr. Co., 883 S.W.2d 648, 649 (Tex. 1994) (citing Tex.
Instruments v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994)).
       69 Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992).
       70 Szczepanik, 883 S.W.2d at 649 (citing Holt Atherton, 835 S.W.2d at 84).
       71 Holt Atherton, 835 S.W.2d at 84.
       72 Id. at 85.
       73 Phillips v. Carlton Energy Grp., LLC, 475 S.W.3d 265, 280 (Tex. 2015) (quoting Sw.

Battery Corp. v. Owen, 115 S.W.2d 1097, 1099 (Tex. 1938)).
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                                       No. 17-50340
that delay. When WickFire’s damages expert was asked how he calculated
that dollar figure, the expert said that he had “quantified those damages by
calculating the amount of profits that [WickFire] lost because of the six-month
delay.” He did not testify as to how he performed that calculation, nor did he
point to any data concerning the business generated by TheCoupon.co. This
evidence is threadbare and conclusory. We accordingly conclude that WickFire
failed to provide a complete calculation showing it lost $334,000 in profits due
to TriMax’s conduct.
       Nor has WickFire presented “legally sufficient evidence to prove a lesser,
ascertainable amount of lost profits with reasonable certainty.” 74 WickFire
provided no method at all for calculating the profits lost due to the delay in
launching TheCoupon.co. Consequently, the evidence provided by WickFire is
not sufficient to prove with reasonable certainty that WickFire lost any profits
because of the delay in the launch of this website. Although there is evidence
in the record that TheCoupon.co was ultimately profitable, that evidence alone
does not prove with reasonable certainty that WickFire lost profits due to
TriMax’s conduct. Because the evidence of damages is insufficient as a matter
of law, we reverse the judgment as it concerns this claim. 75
                                               3
       We turn now to the civil conspiracy claim.                 The elements of a civil
conspiracy under Texas law are as follows:
       (1) a combination of two or more persons; (2) the persons seek to
       accomplish an object or course of action; (3) the persons reach a
       meeting of the minds on the object or course of action; (4) one or
       more unlawful, overt acts are taken in pursuance of the object or

       74  ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 877 (Tex. 2010) (concluding
that the plaintiff did not provide sufficient evidence to support “the amount of damages
awarded by the trial court” but did proffer adequate evidence to prove a lesser amount).
        75 Phillips, 475 S.W.3d at 280 (noting that “uncertainty as to the fact of legal damages

is fatal to recovery” (quoting Sw. Battery Corp, 115 S.W.2d at 1099)).
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                                       No. 17-50340
       course of action; and (5) damages occur as a proximate result. 76
But the Supreme Court of Texas has repeatedly emphasized that “civil
conspiracy [is] a ‘derivative tort,’ meaning it depends on some underlying tort
or other illegal act.” 77 The court’s “use of the word ‘derivative’ in this context
means a civil conspiracy claim is connected to the underlying tort and survives
or fails alongside it.” 78 Here, each of WickFire’s underlying claims failed.79
Consequently, the judgment as to this claim must be reversed.
                                              4
       Lastly, we consider TriMax’s interference with existing contracts claim,
specifically the sufficiency of the evidence offered in support of WickFire’s,
Hall’s, and Brown’s justification defense. TriMax challenged the sufficiency of
the evidence as to this defense in its Rule 50(a) motion. However, they did not
move for judgment as a matter of law on this issue under Rule 50(b), instead
seeking relief pursuant to Rule 59. In at least one unpublished opinion, we
concluded a litigant’s sufficiency-of-the-evidence arguments were preserved for
appeal in these circumstances. 80 But we need not decide whether the same
result should attach here. Even assuming TriMax’s arguments are entitled to
de novo review, there was sufficient evidence to support the jury’s verdict.
       Under Texas law, “the affirmative defense of justification can be based
on the exercise of . . . a good-faith claim to a colorable legal right, even though

       76  First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 222 (Tex.
2017) (citing Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005)).
        77 Agar Corp. v. Electro Circuits Int’l, LLC, 580 S.W.3d 136, 140-41 (Tex. 2019) (first

citing Chu v. Hong, 249 S.W.3d 441, 444 (Tex. 2008); and then citing Tilton v. Marshall, 925
S.W.2d 672, 681 (Tex. 1996)).
        78 Id. (citing NME Hosps., Inc. v. Rennels, 994 S.W.2d 142, 148 (Tex. 1999)).
        79 See id. at 142 (“Civil conspiracy requires an underlying tort that has caused

damages.” (citing Tilton, 925 S.W.2d at 681)).
        80 See Groden v. Allen, 279 F. App’x 290, 292-93 (5th Cir. 2008) (per curiam).

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                                       No. 17-50340
that claim ultimately proves to be mistaken.” 81               Here, we see nothing to
indicate WickFire’s putative “kickbacks” or its bidding practices were illegal or
tortious, which would, under Texas law, preclude the defense as a matter of
law. 82 The jury also heard ample evidence to support its verdict.
       WickFire      presented      testimony      that     Google     conducts    thorough
investigations of alleged wrongdoing; that WickFire had been investigated for
allegedly problematic bidding practices in the past; and that WickFire had
never been told that its practices were problematic or unethical. There is
likewise evidence in the record suggesting Google recommended merchants
work with WickFire and evidence that Google made WickFire one of its
“premier partner[s].” Of course, Google is not the “ultimate arbiter” of what
conduct is legal or illegal. Likewise, Google’s investigations may have only
considered       whether        WickFire’s        bidding      practices      relating        to
WebCrawler.com—not TheCoupon.co—were within Google’s standards. But
the evidence taken in the light most favorable to WickFire supports the
conclusion that WickFire believed itself to be operating within the bounds of
the law during Google’s auctions.
       We note that it is not clear whether the jury’s verdict was premised on
alleged kickbacks or alleged predatory bidding. But in light of our conclusion
that at least one of WickFire’s justification-defense theories was supported by
sufficient evidence, we need not consider WickFire’s alternative justification
theory, namely that the putative “kickbacks” were actually a proper business
development strategy. Even assuming WickFire did not present sufficient
evidence to support this alternative defense, the verdict must stand. We “trust

       81  Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 697 (Tex. 2017)
(citing Prudential Ins. Co. of Am. v. Fin. Rev. Servs., Inc., 29 S.W.3d 74, 80 (Tex. 2000)).
        82 See id. (“The defense does not apply when the interference is by illegal or tortious

means, such as misrepresentation or fraud.” (citing Prudential, 29 S.W.3d at 81)).
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                                          No. 17-50340
the jury to have sorted the factually supported from the [allegedly]
unsupported.” 83 Accordingly, TriMax is not entitled to judgment as a matter
of law on WickFire’s justification defense.
                                      *        *         *
       TriMax’s motion to dismiss is DENIED. The district court’s judgment is
REVERSED as to WickFire’s tortious interference claims and its civil
conspiracy claim. The judgment is AFFIRMED in all other respects. The case
is REMANDED for further proceedings consistent with this opinion.

       83Nester v. Textron, Inc., 888 F.3d 151, 160 (5th Cir. 2018) (noting that “a jury verdict
may be sustained even though not all the theories on which it was submitted had sufficient
evidentiary support” (quoting Prestenbach v. Rains, 4 F.3d 358, 361 n.2 (5th Cir. 1993))).
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