Court Opinion

ID: 47625
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:26:49+00
Date Added: 2024-06-11T17:18:05.096409
License: Public Domain

United States Court of Appeals
                                                              Fifth Circuit
                    REVISED DECEMBER 14, 2006
              IN THE UNITED STATES COURT OF APPEALS    FILED
                      FOR THE FIFTH CIRCUIT         November 22, 2006

                                                    Charles R. Fulbruge III
                                                            Clerk
                           No. 05-41213

FIBER SYSTEMS INTERNATIONAL INC

               Plaintiff - Counter Defendant - Appellant - Cross-
               Appellee

     v.

DANIEL ROEHRS; MICHAEL FLOWER; THOMAS HAZELTON; RICK HOBBS;
KIERAN MCGRATH; APPLIED OPTICAL SYSTEMS, INC., OPTECONN G.P.,
INC., AND OPTECONN, L.P., D/B/A OPTICAL CABLING SYSTEMS

               Defendants - Counter Claimants - Appellees -
               Cross-Appellants

          Appeal from the United States District Court
           for the Eastern District of Texas, Sherman

Before KING, GARWOOD, and JOLLY, Circuit Judges.

KING, Circuit Judge:

     Fiber Systems International, Inc. appeals (1) the district

court’s entry of a take-nothing judgment on the company’s claim

for damages under the Computer Fraud and Abuse Act, 18 U.S.C.

§ 1030, (2) the district court’s grant of partial summary

judgment dismissing the company’s claim for injunctive relief

under the Act, and (3) the district court’s denial of judgment as

a matter of law and a new trial on the defamation counterclaim

                                  1
raised by Daniel Roehrs, Michael Flower, Thomas Hazelton, Rick

Hobbs, and Kieran McGrath (collectively, the “individual

defendants”).    Defendants conditionally cross-appeal (1) the

district court’s grant of partial summary judgment dismissing

defendants’ counterclaim for defamation of Applied Optical

Systems, Inc., Opteconn G.P., Inc., and Opteconn, L.P., d/b/a

Optical Cabling Systems (collectively, the “corporate

defendants”) and (2) the district court’s judgment as a matter of

law denying defendants’ claim that Fiber Systems International

defamed the individual defendants through statements in e-mails

and letters.    For the reasons that follow, we AFFIRM in part,

REVERSE in part, VACATE in part, and REMAND for further

proceedings.

                I.   FACTUAL AND PROCEDURAL BACKGROUND

     The claims at issue in this appeal arose from the final days

of the struggle for control over Fiber Systems International,

Inc. (“FSI”), a company that manufactures harsh-environment

fiber-optic connectors for military use.    The principal opponents

in this conflict are brothers--Michael Roehrs, who was at that

time part of the group that had a majority ownership of FSI, and

defendant Daniel Roehrs, who was part of the minority group of

shareholders.    Daniel Roehrs and the other individual defendants,

all of whom served as officers and directors of FSI, initiated

litigation in 2001 to determine ownership of the company.    The

                                   2
lawsuit settled in August 2003 with an agreement allowing Michael

Roehrs to buy out the minority owners’ stake in the company.

When the transaction closed on December 8-9, 2003, the individual

defendants’ employment was terminated and Michael Roehrs took

control as Executive Chairman.

     In the 2004 suit on appeal here, FSI alleged that defendants

violated the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C.

§ 1030, as they left the company.    Specifically, FSI asserted

that during their departure the defendants “knowingly and

intentionally accessed, deleted, downloaded, copied, took, and

stole FSI’s confidential business and proprietary information and

trade secrets, without authorization, from FSI’s computers,”

misappropriated and stole FSI’s computer equipment, and used and

disseminated the wrongfully obtained information through the new

companies that they formed:   Daniel Roehrs, Thomas Hazelton, and

Michael Flower through Applied Optical Systems, Inc. (“AOS”) and

Rick Hobbs and Kieran McGrath through Opteconn G.P., Inc.

(“Opteconn”) and Opteconn, L.P., d/b/a Optical Cabling Systems

(“OCS”).   FSI sought damages and injunctive relief under

§ 1030(a)(4), (a)(5), and (g) of the CFAA to compensate for the

cost of data recovery and to prevent the defendants from

continuing to use and disseminate FSI’s trade secrets.

     Defendants filed a defamation counterclaim alleging that FSI

falsely accused them of being thieves.    They relied on several

documents in which FSI allegedly accused the defendants of, inter

                                 3
alia, stealing its intellectual property, as well as deposition

testimony showing that FSI accused the individual defendants of

being thieves or stealing FSI’s intellectual property.

     Defendants later moved for partial summary judgment on FSI’s

claim for injunctive relief, arguing that FSI failed to establish

the prerequisites for such relief because there was no evidence

that any of the defendants were currently accessing FSI’s

computers or threatening access in the future.1   FSI moved for

partial summary judgment on the corporate defendants’

counterclaim, arguing that the evidence was insufficient to show

that the corporate defendants were defamed.   The district court

granted both motions.

     In March 2005, the case proceeded to a jury trial on the

remaining claims.   At the conclusion of the evidence, the

district court submitted FSI’s claims under § 1030(a)(4) and

(a)(5) of the CFAA to the jury, but submitted only three

statements to the jury on defendants’ defamation counterclaim:     a

police report filed by FSI alleging that defendants had committed

theft and statements made by FSI to two companies accusing

defendants of being thieves.

     With regard to FSI’s claims, the jury found that none of the

individual defendants violated § 1030(a)(5) but that three

defendants--Daniel Roehrs, Thomas Hazelton, and Rick Hobbs--

     1
        Defendants also moved for summary judgment on FSI’s
entire CFAA claim, which the district court denied.

                                 4
violated § 1030(a)(4), entitling FSI to $36,000 in total damages.

However, the district court entered a take-nothing judgment,

holding that § 1030 does not create a civil cause of action for

violations of subsection (a)(4).

     As to defendants’ counterclaims, the jury found that FSI

maliciously accused all five individual defendants of being

thieves in its statements to the two companies but that the

police report was not filed with actual malice.   Based on the two

defamatory statements, the jury awarded the individual defendants

$100,000 each in compensatory damages and $1,000,000 each in

punitive damages.   Because Texas law places a cap on punitive

damage awards, the district court reduced the punitive damages to

$200,000 for each defendant.

     After the jury verdict, FSI filed a renewed motion for

judgment as a matter of law and, in the alternative, for a new

trial.   The district court denied this motion, and FSI timely

filed a notice of appeal.

                            II.   DISCUSSION

     In this appeal, FSI challenges the district court’s holding

that § 1030 of the CFAA does not create a civil cause of action

for subsection (a)(4), as well as the court’s grant of summary

judgment dismissing FSI’s CFAA claims for injunctive relief.     FSI

also contends that the district court erred in denying judgment

as a matter of law because the jury’s defamation verdict was

                                    5
based on evidence that was never admitted for substantive use and

the statements allegedly made by FSI were nondefamatory.

Finally, FSI argues that the district court erred in denying a

new trial because the jury verdict contained inconsistencies and

the district court improperly admitted evidence of nondefamatory

statements, which prejudiced the jury’s defamation findings.

     Defendants conditionally cross-appeal the district court’s

grant of summary judgment dismissing the defamation claims that

were based on statements against the corporate defendants,

arguing that the statements should have been submitted to the

jury as substantive evidence of defamation.     Defendants also

conditionally cross-appeal the district court’s decision not to

submit those statements to the jury as additional instances in

which FSI defamed the individual defendants.2

     In the analysis that follows, questions of law are reviewed

de novo.    See Af-Cap, Inc. v. Republic of Congo, 462 F.3d 417,

423 (5th Cir. 2006).

A.   FSI’s CFAA Claims

     1.    Civil Liability Under § 1030(a)(4)

     Despite the jury’s finding that Daniel Roehrs, Thomas

Hazelton, and Rick Hobbs violated § 1030(a)(4) of the CFAA,

     2
        Defendants stated that they only wished to pursue these
cross-appeals in the event that this court does not affirm the
district court’s final judgment. Because we do not, the cross-
appeals are considered in this discussion.

                                  6
entitling FSI to damages totaling $36,000, the district court

held that the CFAA does not create a civil cause of action for

violations of § 1030(a)(4), and it entered a take-nothing

judgment on the claim. FSI appeals, alleging that civil claims

for violations of § 1030(a)(4) can be brought under § 1030(g) and

that the jury found the elements necessary for entry of judgment

on FSI’s behalf.   We agree.

     The CFAA criminalizes various fraudulent or damaging

activities related to the use of computers.   Two of its

provisions were before the jury in this case.    Section 1030(a)(4)

prohibits the “knowing[] . . . access[ of] a protected computer

without authorization,” with intent to defraud, if “such conduct

furthers the intended fraud and [the violator] obtains anything

of value.”   18 U.S.C. § 1030(a)(4).   Section 1030(a)(5) punishes

those who cause damage to a protected computer, either through

the knowing transmission of a program, information, code, or

command, or through intentional, unauthorized computer access.

     Civil actions are authorized for some, but not all,

violations of § 1030's substantive provisions.   Section 1030(g)

provides:

            Any person who suffers damage or loss by
            reason of a violation of this section may
            maintain a civil action against the violator
            to obtain compensatory damages and injunctive
            relief or other equitable relief.     A civil
            action for a violation of this section may be
            brought only if the conduct involves 1 of the
            factors set forth in clause (i), (ii), (iii),
            (iv), or (v) of subsection (a)(5)(B) . . . .

                                  7
Based on its reading of § 1030(g), the district court held that

the section does not create a civil action for violations of

§ 1030(a)(4).   Similarly, defendants argue that the explicit

terms of § 1030(g) only authorize civil actions for violations of

§ 1030(a)(5).

     However, this interpretation is at odds with the language of

the statute, which plainly allows such an action to proceed.3

Section 1030(g) extends the ability to bring a civil action to

any person suffering damage or loss under “this section,” which

refers to § 1030 as a whole, as subsection (g) does not proscribe

any conduct itself.   And although § 1030(g) refers to subsection

(a)(5)(B), the statute does not limit civil suits to violations

of § 1030(a)(5).   Indeed, if Congress intended to limit civil

actions in this manner, it could have simply provided that civil

actions may only be brought for violations of subsection (a)(5).

     Instead, the statute provides that a claim brought under any

of the subsections of § 1030 must involve one of the factors

listed in the numbered clauses of subsection (a)(5)(B).   These

factors are:

          (i) loss to 1 or more persons during any
          1-year period (and, for purposes of an
          investigation,    prosecution,    or    other
          proceeding brought by the United States only,

     3
        In cases involving statutory construction, the plain
language of the statute is conclusive unless Congress clearly
expressed a contrary intent. Burlington N. & Santa Fe Ry. Co. v.
Poole Chem. Co., 419 F.3d 355, 362 (5th Cir. 2005).

                                 8
          loss resulting from a related course of
          conduct affecting 1 or more other protected
          computers) aggregating at least $5,000 in
          value;

          (ii) the modification or impairment, or
          potential modification or impairment, of the
          medical examination, diagnosis, treatment, or
          care of 1 or more individuals;

          (iii) physical injury to any person;

          (iv) a threat to public health or safety; or

          (v) damage affecting a computer system used by
          or for a government entity in furtherance of
          the   administration   of  justice,   national
          defense, or national security . . . .

18 U.S.C. § 1030(a)(5)(B).   Accordingly, a civil action may be

maintained under § 1030(a)(4) of the CFAA if the violative

conduct involves any one of these factors.4   Our interpretation

is consistent with that of other circuits that have addressed

this question.   See P.C. Yonkers, Inc. v. Celebrations the Party

& Seasonal Superstore, LLC, 428 F.3d 504, 512 (3d Cir. 2005) (“We

do not read section 1030(g)'s language that the claim must

involve one or more of the numbered subsections of subsection

(a)(5)(B) as limiting relief to claims that are entirely based

only on subsection (a)(5), but, rather, as requiring that claims

brought under other sections must meet, in addition, one of the

five numbered (a)(5)(B) ‘tests.’”); Theofel v. Farey-Jones, 359
F.3d 1066, 1078 n.5 (9th Cir. 2004) (“[S]ubsection (g) applies to

     4
        Thus, for a civil action involving a violation of
subsection (a)(4), the requirements of subsection (a)(5)(A) need
not be met.

                                 9
any violation of ‘this section’ and, while the offense must

involve one of the five factors in (a)(5)(B), it need not be one

of the three offenses in (a)(5)(A).”).

     Nonetheless, defendants argue that even if a civil cause of

action may be maintained under § 1030(a)(4) when one of the

§ 1030(a)(5)(B) factors is established, the jury instructions for

FSI’s § 1030(a)(4) claim do not mention any of those factors.

Only the first factor from § 1030(a)(5)(B) is at issue here,

requiring loss during any 1-year period that aggregates to at

least $5,000 in value.

     We review jury instructions for abuse of discretion when the

instructions were properly objected to in the district court.

See United States v. Freeman, 434 F.3d 369, 377 (5th Cir. 2005).

But when the challenging party failed to preserve the error

below, the instructions are reviewed for plain error.   Positive

Black Talk Inc. v. Cash Money Records Inc., 394 F.3d 357, 368

(5th Cir. 2004).   To avoid plain error review, a specific

objection must have been made on the ground raised on appeal,

rather than a general objection to the instructions as a whole or

an objection on a different ground.   See id.; United States v.

Fuchs, 467 F.3d 889, 500 (5th Cir. 2006).   Defendants objected to

the § 1030(a)(4) instructions on the ground that “there is no

civil cause of action under (a)(4) of the CFAA,” but did not

object on the ground that the jury was not instructed on the loss

element, and accordingly this challenge is subject to plain error

                                10
review.

     “In reviewing jury instructions for plain error, we are

exceedingly deferential to the trial court.”   Tompkins v. Cyr,

202 F.3d 770, 784 (5th Cir. 2000).   For defendants to prevail

under the plain error standard, they must show that (1) an error

occurred; (2) the error was plain, which means clear or obvious;

(3) the plain error affects substantial rights; and (4) failing

to correct the error would seriously impact the fairness,

integrity, or public reputation of judicial proceedings.

Septimus v. Univ. of Houston, 399 F.3d 601, 607 (5th Cir. 2005).

     In determining whether a particular jury instruction was

erroneous, we must consider the instructions as a whole.    Russell

v. Plano Bank & Trust, 130 F.3d 715, 721 (5th Cir. 1997).

Although the jury charge failed to specifically instruct the jury

to find one of the § 1030(a)(5)(B) factors as a prerequisite to

civil liability under § 1030(a)(4), the damages instruction

required the jury to determine the amount of loss caused by the

CFAA violation.   Following this instruction, the jury found that

the three defendants’ violations of § 1030(a)(4) caused FSI loss

totaling $36,000, which far exceeds the $5,000 loss requirement.

Despite defendants’ argument that the “loss” found in the damages

instruction is somehow different from the substantive element of

“loss” within § 1030(a)(5)(B)(i), the damages instruction defined

                                11
“loss” exactly as defined in § 1030.5   The damages instruction

also required the jury to find that the loss was “proximately

caused by the conduct” that violated § 1030(a)(4), which was more

than enough to satisfy the § 1030(g) requirement that the

violative conduct “involve” one of the § 1030(a)(5)(B) factors.

And even if this aspect of the instructions was erroneous, the

jury’s damages finding shows that no substantial rights were

affected, as the jury would have found the $5,000 minimum met if

instructed properly.

     Further, although the damages instruction erroneously failed

to require a finding that the $5,000 minimum loss occurred during

a one-year period, the time element was inherent in the jury’s

finding, demonstrating that no substantial rights were affected.

Of the damages alleged by FSI, defendants only identify $26,000,

incurred by the efforts of a data recovery expert, as including

some charges that derived from more than a year after the time of

the CFAA violation.    But § 1030(a)(5)(B)(i) does not require that

the loss only occur within a year of the CFAA violation; rather,

it requires that the loss aggregate to $5,000 “during any 1-year

period.”   18 U.S.C. § 1030(a)(5)(B)(i) (emphasis added).   As

     5
        As the jury instructions and § 1030 provide, “the term
‘loss’ means any reasonable cost to any victim, including the
cost of responding to an offense, conducting a damage assessment,
and restoring the data, program, system, or information to its
condition prior to the offense, and any revenue lost, cost
incurred, or other consequential damages incurred because of
interruption of service.” 18 U.S.C. § 1030(e)(11).

                                 12
defendants acknowledge, the data recovery expert first became

involved in November 2004, and his $26,000 fee included work

through January 2005, all of which took place well within a one-

year span.   Regardless, the jury found $36,000 in loss, which at

a minimum must have included $10,000 in loss associated with

FSI’s original data recovery efforts, all of which took place

within a one-year span itself.    Accordingly, the district court’s

failure to instruct the jury that it must find a loss of $5,000

during a one-year period was inconsequential.

     2.   Injunctive Relief

     FSI also appeals the district court’s summary judgment

dismissal of FSI’s claim for injunctive relief under the CFAA.

The district court held that injunctive relief was unavailable to

FSI because the CFAA only allows an injunction to prevent ongoing

or future unauthorized access to FSI’s computers, neither of

which is shown here.   FSI responds that it is threatened with

present and future harm from defendants’ possession and use of

trade secrets stolen by defendants through the acts that violated

§ 1030(a)(4) and that an injunction should be available under the

CFAA to remedy such a harm.

     We need not address the question of whether an injunction

may issue against the use of the information obtained through a

past violation of § 1030(a)(4).    Although the jury found that

defendants violated § 1030(a)(4), which required a finding that

                                  13
the defendants obtained something of value through their unlawful

computer access, the jury also found that FSI falsely accused

defendants of being thieves.    Thus, the value obtained by

defendants could not have included stolen trade secrets.

     “[T]he scope of injunctive relief is dictated by the extent

of the violation established,” and an injunction must be narrowly

tailored to remedy the specific action necessitating the

injunction.    John Doe #1 v. Veneman, 380 F.3d 807, 818 (5th Cir.

2004) (citing Califano v. Yamasaki, 442 U.S. 682, 702 (1979));

Valley v. Rapides Parish Sch. Bd., 646 F.2d 925, 942 (5th Cir.

May 1981).    Because the jury determined that defendants did not

steal trade secrets through the acts that violated § 1030(a)(4),

the requested injunction would be improper under the CFAA.6

B.   FSI’s Motion for Judgment as a Matter of Law

     FSI also appeals the district court’s denial of judgment as

a matter of law, arguing that the evidence upon which the jury’s

defamation verdict was based could not be considered as

substantive evidence of defamation.    FSI further contends that

even if the evidence is considered substantively, it was

insufficient to support a claim of defamation per se.

     6
        FSI has also failed to show any other irreparable harm
that would result from a failure to grant an injunction. To
obtain an injunction, FSI must establish “(1) success on the
merits; (2) that a failure to grant the injunction will result in
irreparable injury; (3) that said injury outweighs any damage
that the injunction will cause the opposing party; and (4) that
the injunction will not disserve the public interest.” VRC LLC
v. City of Dallas, 460 F.3d 607, 611 (5th Cir. 2006).

                                 14
     We review a district court’s ruling on a motion for judgment

as a matter of law de novo.      Delano-Pyle v. Victoria County, 302
F.3d 567, 572 (5th Cir. 2002).     Under this standard, all evidence

is viewed “in the light and with all reasonable inferences most

favorable to the party opposed to the motion.”      Id. (quoting

Resolution Trust Corp. v. Cramer, 6 F.3d 1102, 1109 (5th Cir.

1993)).   This court will not reverse the district court’s denial

of the motion “unless a party has been fully heard on an issue

and there is no legally sufficient evidentiary basis for a

reasonable jury to find for that party on that issue.”      Id.

(quoting Ellis v. Weasler Eng’g, Inc., 258 F.3d 326, 337 (5th

Cir. 2001)).

     1.   Substantive Evidence

     Under the Federal Rules of Civil Procedure, depositions may

be used to “contradict[] or impeach[] the testimony of deponent

as a witness, or for any other purpose permitted by the Federal

Rules of Evidence.”   FED. R. CIV. P. 32(a)(1).   One of these other

purposes is the use of a witness’s prior inconsistent statements

from a deposition as substantive evidence. FED. R. EVID.

801(d)(1)(A); Gower v. Cohn, 643 F.2d 1146, 1153 n.11 (5th Cir.

May 1981).   Conceding that Michael Roehrs’s video deposition was

admissible under these rules for both substantive and impeachment

purposes, FSI contends that the defendants only actually used the

deposition to impeach Michael Roehrs during cross-examination,

                                   15
not as substantive evidence.   According to FSI, this rendered the

jury unable to consider the deposition as evidence of defamation

under Gower v. Cohn, 643 F.2d at 1153 n.11.

     Gower recognized that “materials once admitted for

impeachment [do not necessarily] also become substantive

evidence” and held that the deposition evidence of prior

inconsistent statements in that case was only offered to impeach.

Id. at 1153 n.11.   However, Gower involved a situation in which

both the district judge and the offering party clearly believed

that the evidence was being used only to impeach, and in which

the relevant jury charge “only instructed the jury that [the]

statements could be used as impeachment tools.”   Id.   Unlike

Gower, the district judge in this case believed that “defendants

used the prior inconsistent statements not merely to impeach, but

also to prove that FSI had in fact defamed them,” and the jury

instructions provided that “[i]n determining whether any fact has

been proved . . . [the jury] may, unless otherwise instructed,

consider the testimony of all witnesses,” which includes a

witness’s video deposition testimony.7

     7
        This instruction was not tempered, as FSI claims, by a
subsequent provision in the jury instructions that, “[i]n
determining the weight to give to the testimony of a witness,”
the jury should consider “whether there was evidence that at some
other time the witness said or did something . . . that was
different from the testimony the witness gave” during trial.
This latter instruction merely provides that the jury may
consider prior inconsistent statements for the purpose of
impeachment, not that the jury may consider such statements only
for that purpose. In contrast, the instruction in Gower “only

                                16
     Because the deposition testimony was accepted as both

impeachment and substantive evidence by the district judge and

submitted to the jury for both purposes, FSI can only challenge

the propriety of that decision.    Yet, as discussed above, the

testimony was admissible as substantive evidence under Rule

801(d)(1)(A).    Further, FSI failed to object to the jury

instructions or request an instruction limiting the jury’s

consideration of the testimony to impeachment purposes.      FSI had

the burden of requesting such an instruction, and its undisputed

failure to do so renders the jury instructions susceptible only

to a challenge for plain error.     See FED. R. EVID. 105; Savoie v.

Otto Candies, Inc., 692 F.2d 363, 370 (5th Cir. 1982); United

States v. Booty, 621 F.2d 1291, 1298-99 (5th Cir. 1980).      As the

deposition testimony was actually admissible for substantive use,

no plain error exists.     See Booty, 621 F.2d at 1299; United

States v. Leslie, 542 F.2d 285, 289 (5th Cir. 1976).

2.   Defamation Per Se

     Defamation is a false statement about a person, published to

a third party, without legal excuse, which damages the person’s

reputation.     Moore v. Waldrop, 166 S.W.3d 380, 384 (Tex. App.--

instructed the jury that [prior inconsistent] statements could be
used as impeachment tools,” preventing the consideration of those
statements as substantive evidence. Gower, 643 F.2d at 1153
n.11. Gower’s reliance on United States v. Dennis, 625 F.2d 782,
796 n.7 (8th Cir. 1980), which denied substantive status for
statements that jury instructions deemed “were to be used for
impeachment only,” confirms that Gower’s holding on this point
was based on a more limited instruction than is present here.

                                  17
Waco 2005, no pet.).    In a claim for defamation per se, “[t]he

words are so obviously hurtful that they require no proof that

they caused injury in order for them to be actionable.”8

Columbia Valley Reg’l Med. Ctr. v. Bannert, 112 S.W.3d 193, 199

(Tex. App.--Corpus Christi 2003, no pet.).    “For a defamatory

oral statement to constitute slander per se, it must fall within

one of four categories:    (1) imputation of a crime, (2)

imputation of a loathsome disease, (3) injury to a person’s

office, business, profession, or calling, and (4) imputation of

sexual misconduct.”     Gray v. HEB Food Store No. 4, 941 S.W.2d
327, 329 (Tex. App.--Corpus Christi 1997, writ denied).     The

first category, which is at issue here, is met by a statement

that “unambiguously and falsely imputes criminal conduct to” a

party.    Id.   FSI argues that its allegedly defamatory statements

did not unambiguously impute criminal conduct and were not false.

     The evidence of FSI’s defamatory remarks was provided by the

testimony of Michael Roehrs, who spoke of statements that he made

on FSI’s behalf to Neil Wilkin at Optical Cable Corporation and

statements that FSI employee Mike Dabrowski made to Lockheed

Martin.    On cross-examination, after Michael Roehrs was asked

whether he had told Neil Wilkin that the defendants were thieves

or had stolen property, Roehrs answered that he told Neil Wilkin

“that there has been misappropriation . . . of intellectual

     8
        In contrast, a claim for defamation per quod requires
proof of actual damages. Moore, 166 S.W.3d at 384.

                                  18
property” but denied calling them thieves.         Defendants’ counsel

then played the following video deposition testimony from Michael

Roehrs:

           Q. Any other customers or vendors you know of
           that Fiber Systems has said to them the
           defendants [are] thieves or have stolen
           property?

           A.   Ne[i]l       Wilkin    with   Optical     Cable
           Corporation.

           Q.   All right.    Who told him that?

           A.   I did.

Also, after Michael Roehrs denied that Mike Dabrowski told a

Lockheed Martin employee that defendants were thieves,

defendants’ counsel played the following video deposition

testimony from Roehrs:

           Q. Has FSI told anybody at Lockheed Martin
           that the defendants are thieves?

           A. I think Mike Dabrowski, moreover, has let
           them   know    that   there   has    been  a
           misappropriation of intellectual property.

           Q.   By these defendants?

           A.   Yes.

           . . . .

           Q.    And he was authorized        to   make   these
           comments by Fiber Systems?

           A.   Absolutely.

     FSI first argues that this testimony does not show

statements that are defamatory per se because they do not impute

a crime.   FSI acknowledges the extensive precedent holding that a

                                      19
false accusation of theft is defamatory per se, but argues that

the recent Texas Court of Appeals decision in Moore v. Waldrop

establishes that statements like those made here are

nondefamatory because they merely involve terms of general

disparagement.

     Moore dealt with the defamatory nature of the statement,

“You don’t want to hire him, he’s a crook.” 166 S.W.3d at 383.

The court held that standing alone, the word “crook” was merely a

term of general disparagement, and did not impute a specific

crime.    Id. at 384; see also Billington v. Houston Fire & Cas.

Ins. Co., 226 S.W.2d 494, 496 (Tex. Civ. App.--Fort Worth 1950,

no writ)) (holding that the use of the words “liar” and “crook”

were nondefamatory because they were used only as opprobrious

terms).    The district court here distinguished Moore by observing

that the word “crook” differs from “thief” because the latter

“much more directly imputes a crime than the word ‘crook,’” and

the court illustrated the point by quoting multiple,

nondefamatory dictionary definitions for the word “crook.”      FSI

challenges this conclusion by pointing to an alternative

definition of “crook” as “a person who steals or cheats, swindler

or thief,” WEBSTER’S NEW WORLD DICTIONARY 330 (3d college ed. 1991),

and by quoting several arcane, nondefamatory definitions of the

word “thief,” including its meanings as a “kind of wild bee said

to rob hives” and an “excrescence in the snuff of a candle.”       See

17 THE OXFORD ENGLISH DICTIONARY 934-35 (J.A. Simpson & E.S.C. Weiner

                                  20
eds., 2d ed. 1989).   Accordingly, FSI argues that the word

“crook” is no different than the word “thief,” and the outcome

here should be the same as in Moore.

     We need not resolve a battle of dictionary definitions in

this appeal.   Texas case law firmly establishes that falsely

accusing someone of stealing or calling someone a “thief”

constitutes defamation per se.   See, e.g., Bennett v. Computer

Assocs. Int’l, Inc., 932 S.W.2d 197, 200 (Tex. App.--Amarillo

1996, writ denied) (“One who falsely imputes to another the crime

of theft commits slander per se. . . . Falsely calling someone a

‘crook’ or ‘thief’ or falsely accusing him of stealing property

falls within the parameters of slander per se . . . .”); see also

Glenn v. Gidel, 496 S.W.2d 692, 697-98 (Tex. Civ. App.--Amarillo

1973, no writ); Anderson v. Alcus, 42 S.W.2d 294, 296 (Tex. Civ.

App.--Beaumont 1931, no writ).   In contrast, as recognized in

Moore, Texas courts have determined that the term “crook” does

not inherently have the same defamatory content.   See, e.g.,

Moore, 166 S.W.3d at 384; Billington, 226 S.W.2d at 496; Arant v.

Jaffe, 436 S.W.2d 169, 177-78 (Tex. Civ. App.--Dallas 1968, no

writ).   But when the word “crook” is used in a context imputing

theft, it is also defamatory per se.   See Bennett, 932 S.W.2d at

200 (holding that “[f]alsely calling someone a ‘crook’” was

defamatory per se where the defendant called the plaintiff “a

‘thief’ and a ‘crook’ who had stolen . . . computer software”).

     While it is similarly possible that a false allegation of

                                 21
theft could be made in a context that renders it nondefamatory,

such a situation is not presented here.    To affirm the district

court’s decision, it is sufficient that “the words used [were]

reasonably capable of a defamatory meaning.”    Musser v. Smith

Protective Servs., Inc., 723 S.W.2d 653, 654-55 (Tex. 1987).      “In

answering this question, the court must construe [each] statement

as a whole in light of surrounding circumstances based upon how a

person of ordinary intelligence would perceive the entire

statement.”9   Gray, 941 S.W.2d at 329.   “The surrounding

circumstances are the setting in which the alleged slanderous

statement is spoken, consisting of the context of the statement

and the common meaning attached to the statement.”    Moore, 166
S.W.3d at 386.   “Only when the court determines the language is

ambiguous or of doubtful import should the jury then determine

the statement’s meaning and the effect the statement’s

     9
        Although FSI agrees that courts must look to the
surrounding circumstances in determining whether a statement is
defamatory per se, FSI also argues that courts cannot look to the
factual context of statements without turning such a claim into
one for defamation per quod, which requires proof of actual
damages, because courts cannot consider innuendo in a defamation
per se claim. Innuendo refers to “extrinsic evidence used to
prove a statement’s defamatory nature” and “includes the aid of
inducements, colloquialisms, and explanatory circumstances.”
Moore, 166 S.W.3d at 385.
     However, Moore also points out that “[c]onsidering the
surrounding circumstances does not necessarily require the use of
extrinsic evidence,” as courts must consider the context in which
the statement was made and the common meaning of the statement.
Id. As discussed above, FSI’s statements were defamatory per se
under these considerations, and extrinsic evidence need not be
considered.

                                22
publication has on an ordinary reader.”        Musser, 723 S.W.2d at

655.

       Here, deposition evidence showed that Michael Roehrs told

Neil Wilkin that defendants were thieves or had stolen

property,10 which directly imputes specific crimes under Texas

law.11      See TEX. PEN. CODE ANN. § 31.03 (Vernon 2005) (punishing

theft of property); Id. § 31.05 (Vernon 2005) (punishing theft of

trade secrets); see also Gray, 941 S.W.2d at 329 (determining

that an accusation of shoplifting was slanderous per se because

shoplifting was punishable under the Texas Penal Code).          As the

defamation cases discussed above illustrate, the common meaning

of FSI’s statements imputed the crime of theft.        And the

surrounding circumstances present no factors that would alter the

meaning of the statements, particularly considering the evidence

in the light most favorable to the defendants.        In fact, Michael

Roehrs described in his live testimony that the statement to Neil

Wilkin was made in the context of a discussion about the

       10
        FSI contends that Michael Roehrs’s deposition statement
was insufficient evidence of defamation because he responded to
the ambiguous question of whether FSI had communicated that
“defendants [are] thieves or have stolen property.” However,
both alternatives are equally defamatory, in that they both
impute the commission of the crime of theft.
       11
       FSI’s briefs only focus on whether the word “thief” is
defamatory after Moore, leaving unaddressed whether Mike
Dabrowski’s statement that defendants “misappropriat[ed] . . .
intellectual property” constituted defamation. We note, however,
that Texas law defines a thief as, in part, someone who
“unlawfully appropriates property.” TEX. PEN. CODE ANN § 31.03
(Vernon 2005).

                                     23
misappropriation of FSI’s property by defendants, which supports

the conclusion that the accusation of theft imputed that crime.

     Nonetheless, FSI argues that from the context of the

ongoing, heated controversy between FSI and the defendants, no

person of ordinary intelligence could believe that FSI’s

statements were anything more than rhetorical outbursts of an

angry and frustrated business owner, much less a real accusation

of theft.   FSI relies on the Supreme Court’s opinion in Greenbelt

Co-Op Publishing Association v. Bresler, 398 U.S. 6, 13-14

(1970), which held that an accusation of blackmail during a

heated city council debate was mere rhetorical hyperbole because

the word, in context, clearly referred to the unreasonableness of

legal negotiating proposals discussed at the debate rather than

the actual crime of blackmail.12    But unlike Greenbelt, the

circumstances here only bolster the conclusion that Michael

     12
       FSI also cites state court cases from California,
Georgia, and Connecticut to support this argument, but all
involved a context that made the theft accusation nondefamatory.
See Rosenauer v. Scherer, 88 Cal. App. 4th 260, 280 (Cal. App. 3d
Dist. 2001) (involving a context that showed that the defendant
was criticizing the plaintiff’s political position rather than
accusing the plaintiff of the crime of theft); Mathis v. Cannon,
573 S.E.2d 376, 382-83 (Ga. 2002) (holding that a theft
accusation, in context, referred only to the “ongoing debate
about [a] garbage disposal dispute,” rather than an actual
criminal act); Yakavicke v. Valentukevicius, 80 A. 94, 96 (Conn.
1911) (holding from the context of the theft accusation that the
statement would be interpreted as conveying “that the plaintiff
had cheated the club,” not that the plaintiff had actually stolen
from the club). Unlike these cases, the context of FSI’s theft
allegations does not reveal anything from which a person of
ordinary intelligence would derive a noncriminal implication.

                                   24
Roehrs was referring to the commission of a crime.   The

accusation of theft, in context, did not refer to activities

readily identifiable to the listener as innocuous, as in

Greenbelt, but instead referred to the defendants’ alleged

misappropriation of FSI’s intellectual property.   The mere fact

that an accusation arose from a heated controversy does not strip

the statement of its defamatory content where a person of

ordinary intelligence would nonetheless interpret the statement

to impute a crime.

     Finally, FSI argues that the statements made by FSI were

true.   “The truth of a statement is a defense to a claim for

defamation.”   Gustafson v. City of Austin, 110 S.W.3d 652, 656

(Tex. App.--Austin 2003, pet. denied).   This defense “does not

require proof that the alleged defamatory statement is literally

true in every detail; substantial truth is sufficient.”     Id.   FSI

argues that its statements were substantially true because the

jury found that three of the defendants violated 18 U.S.C. §

1030(a)(4) and that FSI’s report to the Allen Police Department

was made without actual malice.

     However, the jury specifically found that FSI’s theft

allegations were not substantially true.   At most, the jury

findings would be inconsistent, requiring a new trial.     Willard

v. The John Hayward, 577 F.2d 1009, 1011 (5th Cir. 1978).      Thus,

FSI’s argument is properly addressed in connection with its

argument that the district court should have granted a new trial

                                  25
based on inconsistent jury findings, which is discussed later in

this opinion.   For purposes of the district court’s denial of

FSI’s motion for judgment as a matter of law, the only question

is whether the jury had a legally sufficient basis for finding

that the allegations were not substantially true, and we are

satisfied that defendants’ testimony provided such a basis.

C.   Defendants’ Cross-Appeal

     Defendants raise in their cross-appeal two issues related to

the district court’s treatment of several documents that

allegedly show additional defamatory statements by FSI.    First,

defendants argue that the district court incorrectly granted

summary judgment dismissing their claims that FSI defamed the

corporate defendants in the documents.    Second, defendants

contend that the district court erred by failing to submit those

documents to the jury as additional instances of defamation

against the individual defendants, which was equivalent to

judgment as a matter of law for FSI on those issues.    See

Turlington v. Phillips Petroleum Co., 795 F.2d 434, 444 (5th Cir.

1986) (“The district court below failed to submit this issue to

the jury, in effect granting [the opposing party] a directed

verdict on that theory of recovery.”).

     The documents at issue are e-mails and letters sent by FSI

employees or agents to various parties.    Exhibit 34 is a February

2004 e-mail from Michael Roehrs accusing either his mother or

                                26
Daniel Roehrs of “supporting child molesters.”    Exhibit 60, which

is a January 2004 letter from the new FSI management team to

business associates after the transition in power, notified the

recipients of the change and asked for their assurance that they

“will not manufacture any proprietary FSI parts or utilize FSI

design features for any non-FSI personnel or former FSI

employees.”   The letter also asked the recipients to let FSI know

immediately if contacted by former FSI employees.   Exhibit 61 is

an October 2004 letter from FSI’s attorneys to the Defense Supply

Center in Columbus, Ohio (the “DSCC”), which said that “certain

confidential and proprietary information and trade secrets . . .

of FSI have been misappropriated and stolen by Applied Optical

Systems.”   The letter then asked that the DSCC “refrain from

releasing any information submitted by AOS . . . in order to

protect FSI’s trade secrets and confidential proprietary

information which have been wrongfully taken by certain

individuals at AOS and unlawfully distributed.”

     In Exhibit 74, an October 2004 e-mail to officials of the

DSCC, Michael Roehrs wrote that “The Minority Group (Now known as

Applied Optical Systems and/or Optical Cabling Systems) have

begun using our intellectual property and trade secrets and are

entering the market.”   The e-mail also stated that “they have

provided stolen proprietary information to” the DSCC and that

“they are using the government as a tool to launder our

proprietary information and trade secrets.”   Finally, Exhibits

                                27
90-92 were letters from FSI’s lawyers to three companies stating

that “FSI asserts and has reason to believe that these companies

are in possession of and/or have acquired FSI’s confidential

proprietary and business information and trade secrets.    FSI also

believes that one or more of these companies are using,

benefiting from, and/or disseminating FSI’s confidential

proprietary and business information and trade secrets.”

     The district court held that the documents were not capable

of defamatory meaning because they did not “make[] any specific

allegations that the entities stole FSI proprietary information

or knew it to be stolen, or directly accuse[] the corporate

defendants of wrongdoing.”   The court determined that only

Exhibit 74 was even arguably defamatory, but that the e-mail “was

intended to update the [DSCC] on a good-faith dispute between FSI

and the corporate defendants about whether the information the

corporate defendants were submitting was FSI proprietary

information.”   Accordingly, the court determined that Exhibit 74

was mere “hyperbolic language” alerting the DSCC “that the

information the corporate defendants submitted was the subject of

litigation between the two parties and stat[ing] FSI’s theory of

the case, albeit in somewhat stronger terms than its pleadings.”

     As we discussed previously, the district court’s role was to

construe each statement in light of the surrounding circumstances

to determine how the statement would be perceived by a person of

ordinary intelligence.   Gray, 941 S.W.2d at 329.   If this inquiry

                                28
shows that a statement falsely and unambiguously imputes criminal

conduct, it is defamatory per se.      Gray, 941 S.W.2d at 329.   If

the statement is ambiguous or cannot be fully understood without

the use of extrinsic evidence, the statement is not defamatory

per se, and extrinsic evidence can be considered only under a

defamation per quod theory.    Moore, 166 S.W.3d at 386.

     Here, the district court properly held that two of the

documents were not capable of defamatory meaning towards the

corporate defendants.    Exhibit 34, in which Michael Roehrs

accuses his mother or Daniel Roehrs of “supporting child

molesters,” does not mention the corporate defendants at all.

Exhibit 60, in which FSI notified business associates of the

change in management, contains no statements that could impute

any crime, merely asking the recipients not to manufacture FSI

parts or use FSI features for former employees.

     However, Exhibits 61 and 74 are reasonably capable of

defamatory meaning, and in some respects are almost identical to

the defamatory statements that the district court ultimately

submitted to the jury.    Exhibit 61, sent by FSI’s attorneys to

the DSCC, stated that AOS “misappropriated and stole[]” FSI’s

trade secrets, and that FSI’s trade secrets were “unlawfully

distributed” by AOS to the DSCC.      These statements plainly impute

a crime, and their context, which encourages the letter’s

recipient to refrain from releasing information submitted to them

by AOS, supports the defamatory nature of the statements.

                                 29
Further, Exhibit 74, an e-mail from Michael Roehrs to the DSCC,

accused AOS and OCS of “provid[ing] stolen proprietary

information” to the DSCC, and stated that these acts were done to

“launder [FSI’s] proprietary information and trade secrets.”

Texas law criminalizes the knowing and unconsented

“communicat[ion] or transmi[ssion of] a trade secret,”    TEX. PEN.

CODE ANN. § 31.05(b), and despite the district court’s belief that

the e-mail was merely intended to update the DSCC as to the

litigation at issue here, the statements alleging transmission of

stolen trade secrets went beyond such a purpose.

     Accordingly, the district court erred in granting summary

judgment on the corporate defendants’ defamation claims based on

Exhibits 61 and 74.    The allegedly defamatory statements in

Exhibits 90-92 present a closer question, and the district court

should reconsider its decision on those exhibits in light of this

opinion.13

     However, the district court properly refused to submit any

of these documents to the jury as substantive evidence of

defamation of the individual defendants.    “For a defamatory

statement to be actionable, it must refer to an ascertainable

person.”     Robertson v. Sw. Bell Yellow Pages, Inc., 190 S.W.3d
13
        In its order on the summary judgment motions, the
district court noted that the doctrine of absolute privilege
“very likely applies to the attorney letters here,” and that a
fact issue remained as to whether the privilege was available for
the e-mails sent by Michael Roehrs. This issue was not raised on
appeal, and we express no opinion on the matter.

                                  30
899, 902 (Tex. App.--Dallas 2006, no pet.).    A person is

ascertainable “if he is named in the statement or if those who

know the person would understand that the statement was referring

to the person.”   Ledig v. Duke Energy Corp., 193 S.W.3d 167, 180

(Tex. App.--Houston [1st Dist.] 2006, no pet.).    Further, “a

member of a group has no cause of action for a defamatory

statement directed to some or less than all of the group when

there is nothing to single out the plaintiff.”     Eskew v.

Plantation Foods, Inc., 905 S.W.2d 461, 462 (Tex. App.--Waco

1995, no writ).   Whether a party is ascertainable is a question

of law for the court, but is submitted to the jury if the

language is ambiguous or of doubtful import.     Ledig, 193 S.W.3d

at 180.

     Defendants first argue that Exhibit 61 was directed not only

at AOS, but the individual defendants as well.    However, the

language of the letter attributes criminal action to AOS, not to

the individuals who work for AOS, and is incapable of defamatory

meaning against the individual defendants.     See Ledig, 193 S.W.3d

at 180 (holding that statements about a company’s actions did not

defame a member of the company’s senior management).     The letter

does refer to information “wrongfully taken by certain

individuals at AOS,” but nothing identifies any particular

individual defendant.14   Similarly, Exhibit 74 refers to “[t]he

     14
        The defendants argue that Michael Roehrs’s testimony
admits that the references to the corporate defendants in several

                                 31
Minority Group (Now known as Applied Optical Systems and/or

Optical Cabling Systems)” and alleges current criminal behavior.

Although the letter references a past designation of the

individuals as a group of minority owners in FSI, the context of

the letter--which refers to that group’s present status as AOS

and OCS and alleges present crimes--shows that the crimes are

only attributed to the named companies.   Further, Exhibits 90-92

make no reference at all to any of the individual defendants,

mentioning only the acts of the corporate defendants.

     Defendants also point to Exhibit 57, which alleges that

“[c]ertain individuals have admitted under oath that they

violated” the CFAA, but the exhibit does not identify any

particular individuals.   Finally, Exhibit 34 may accuse Daniel

Roehrs of “supporting child molesters,” but defendants fail to

identify any crime that such an allegation imputes.

D.   FSI’s Motion for a New Trial

     Accompanying FSI’s post-verdict motion for judgment as a

matter of law, the company moved in the alternative for a new

trial.   In this appeal, FSI challenges the district court’s

denial of a new trial, alleging that the jury verdict contained

inconsistent answers to the special interrogatories and that the

jury finding on defamation was improperly influenced by the

of the documents were intended to encompass all defendants.
However, the question is not whether the speaker intended to
identify a person, but rather whether the words would be
understood in such a way by those who know the person.

                                32
spillover prejudice of inadmissible evidence.    “We review a

district court’s ruling on a motion for new trial for abuse of

discretion.”    Int’l Ins. Co. v. RSR Corp., 426 F.3d 281, 300 (5th

Cir. 2005).    This court also gives “great deference to the

district court ruling when it has denied the new trial motion and

upheld the jury’s verdict.”    Id.

1.   Inconsistent Jury Findings

     “If the jury gives inconsistent answers to special

interrogatories, the case must be remanded for a new trial.”

Willard v. The John Hayward, 577 F.2d 1009, 1011 (5th Cir. 1978).

In determining whether answers are inconsistent, we look to

“whether the answers may fairly be said to represent a logical

and probable decision on the relevant issues as submitted.”     FDIC

v. Fid. & Deposit Co., 45 F.3d 969, 977 (5th Cir. 1995) (citation

omitted).   A jury’s answers “should be considered inconsistent,

however, only if there is no way to reconcile them.”    Willard,
577 F.2d at 1011.    This court makes “a concerted effort to

reconcile apparent inconsistencies in answers to special verdicts

if at all possible.”    Ellis v. Weasler Eng’g Inc., 258 F.3d 326,

343 (5th Cir. 2001).

     FSI argues that two different jury findings contradict the

jury determination that FSI falsely and maliciously accused

defendants of being thieves.    First, FSI contends that the jury

finding that three of the defendants violated 18 U.S.C.

                                  33
§ 1030(a)(4) is equivalent to a finding that those defendants

were thieves.    Second, FSI argues that the jury’s determination

that FSI filed the police report of computer theft without malice

establishes that FSI’s accusations that defendants stole the

intellectual property on those computers were made without malice

as well.

     However, each of these findings can be reconciled.     First,

the finding that three defendants violated § 1030(a)(4) did not

necessarily establish that the defendants were thieves.     Section

1030(a)(4) deals with unlawful access of computer systems to

further fraud.   18 U.S.C. § 1030(a)(4).    Although the jury found

that three defendants violated this section, and that their

unlawful access caused a loss to FSI totaling $36,000, the

determination did not require a finding that the defendants stole

trade secrets or anything else.    Section 1030(a)(4) does require

a finding that the violator obtained something of value by means

of the unlawful access, but the value need not be a trade secret

or even something that was stolen.     The jury could have found

that the value obtained by defendants inhered in the temporary

use or possession of computer hardware,15 as FSI suggested in its

     15
        Section 1030(a)(4) provides an exception where there is
no liability if “the object of the fraud and the thing obtained
consists only of the use of the computer and the value of such
use is not more than $5,000 in any 1-year period.” Here, the
jury could have found an object of fraud beyond the use of the
computer.

                                  34
closing arguments,16 or some other value that was obtained

without theft.

     Additionally, the finding that FSI did not act with actual

malice in filing the police report of computer theft does not

establish, as FSI claims, that the report of theft was true or

that later statements were made without malice as well.     As the

jury was instructed, “actual malice means that the party making

the publication acted with actual knowledge that it was false or

with reckless disregard of whether it was false or not.”

Accordingly, the jury finding on the police report does not mean

that the jury believed that the allegations of theft were

actually true, but merely that FSI believed it was true to the

extent necessary to avoid liability.     Further, the jury could

have determined that FSI sincerely believed when the police

report was filed that the defendants stole computer equipment,

but recklessly disregarded the truth when FSI accused defendants

of stealing the company’s intellectual property in statements

made two months later.     The statements are therefore easily

reconcilable.

2.   Spillover Prejudice

     16
        On the element that the defendants “intended to obtain
something of value,” FSI’s counsel argued in part that defendants
“took hardware worth more than $5,000.” Although FSI was
suggesting that defendants stole the hardware, the jury could
have believed the three defendants’ testimony that any hardware
in their possession was intended to be, and was in fact, returned
to FSI.

                                  35
     In United States v. Edwards, 303 F.3d 606, 639 (5th Cir.

2002), this court considered whether evidentiary “spillover from

invalid claims can be a basis for granting a new trial.”    We

stated that to make such a claim, a party must “[a]t a minimum .

. . show that [it has] experienced some prejudice as a result of

the joinder of invalid . . . claims, i.e., that otherwise

inadmissible evidence was admitted to prove the invalid

claims.”17   Id. at 640.   FSI argues in this appeal that the

jury’s defamation findings were improperly prejudiced by other

allegedly defamatory statements that were admitted by the

district court and submitted to the jury even though the court

held that they were nondefamatory as a matter of law.

Defendants, in addition to arguing that the evidence was not

prejudicial, contend that FSI did not properly preserve a

spillover prejudice argument, only raising relevance objections

to the evidence when introduced at trial.

     Unlike Edwards and similar spillover prejudice cases from

other circuits, this is not a situation where one of several

claims was held invalid and the reviewing court must determine

whether evidence properly admitted for the invalid claim had a

prejudicial effect on the jury’s determination of the other

     17
        Noting that such an argument had never been addressed by
this court, the Edwards court acknowledged only “that perhaps a
grant of a new trial might be appropriate in some cases of
‘retroactive misjoinder’” before rejecting the spillover
argument.

                                  36
claims.18   Rather, this appeal involves evidence that was

admitted by the district court, over FSI’s objections, for the

valid defamation claims discussed in the previous section, and

there is no need to discuss cases that apply a standard prejudice

inquiry to unique procedural circumstances.19   The relatively

straightforward question here--preserved for appeal by FSI’s

relevance objections--is whether the district court abused its

discretion in admitting the evidence as relevant.20   See United

     18
        Cases in other circuits discussing “spillover prejudice”
have involved evidence that was properly admitted for a claim
that was later held to be invalid. See, e.g., United States v.
Cross, 308 F.3d 308, 317 (3d Cir. 2002) (“[P]rejudicial spillover
may occur . . . [w]hen a defendant is convicted on two counts
involving different offenses at a single trial and an appellate
court reverses his conviction on one of them . . . .”); United
States v. Rooney, 37 F.3d 847, 855 (2d Cir. 1994) (“When an
appellate court reverses some but not all counts of a multicount
conviction, the court must determine if prejudicial spillover
from evidence introduced in support of the reversed count
requires the remaining convictions to be upset.”). This court in
Edwards similarly acknowledged that “spillover from invalid
claims” might be a viable basis for granting a new trial when
that spillover would be inadmissible to establish the remaining
claims and where prejudice exists. Edwards, 303 F.3d at 641.
     19
        It is irrelevant whether, as FSI contends, the evidence
was also intended by defendants to serve as substantive evidence
of independent acts of defamation. The record does not reflect
that the district court ever limited the jury’s consideration of
the evidence to these independent acts, and the district court
confirmed in its denial of FSI’s motion for a new trial that the
evidence was admitted as relevant to show malice for the three
allegedly defamatory statements submitted to the jury.
     20
        Under Federal Rule of Evidence 403, “evidence may be
excluded if its probative value is substantially outweighed by
the danger of unfair prejudice.” The district court has “broad
discretion to weigh the relevance, probative value, and prejudice
of the evidence in determining its admissibility under Rule 403,”
which will not be disturbed without abuse of discretion. United

                                 37
States v. Hicks, 389 F.3d 514, 522 (5th Cir. 2004).    Even if the

district court improperly admitted the evidence, we will not

reverse if the error was harmless.21    Id.

     The evidence at issue here consists of the same documents

involved in defendants’ cross-appeal.    The district court

determined in its order on the motion for a new trial that the

statements in the e-mails and letters, “while perhaps not

defamatory on their face, were relevant to the question of

whether FSI defamed the defendants,” specifically on the question

of malice because “much of this evidence illustrated the

States v. Allard, 464 F.3d 529, 534 (5th Cir. 2006). The only
document that FSI objected to on this ground, as opposed to
relevance, is Exhibit 34, the e-mail in which Michael Roehrs
stated that Daniel Roehrs or his mother were “supporting child
molesters.” However, we find no reason to believe that the
prejudice of this or any of the documents outweighed their
probative nature with regard to actual malice.
     21
        This inquiry involves considerations similar to those
that courts have undertaken in spillover prejudice cases. In
Cross, for example, the Third Circuit first looked to “whether
any of the evidence used to prove the reversed count would have
been inadmissible to prove the remaining count.” 308 F.3d at
317. If the evidence would have been admissible, there was no
prejudice, and a new trial was not warranted. Id. at 318. If
the evidence would not have been admissible, the court then
determined whether the error was harmless or highly prejudicial.
Id.; see also Edwards, 303 F.3d at 640 (recognizing that at a
minimum, such a claim must establish that the evidence was
inadmissible and prejudicial). In Rooney, the Second Circuit
looked to several factors bearing on prejudice, including whether
the evidence would tend to have affected the jury’s decision,
whether the evidence was admissible on the remaining count,
whether the two counts were so dissimilar as to permit the
inference that the jurors kept the evidence separate in their
minds, and whether the admissible evidence on the remaining count
was strong enough that the chance of spillover prejudice was
minimized. 37 F.3d at 855-56.

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circumstances surrounding the parties’ dispute, as well as FSI’s

recklessness about the truth of its allegations.”

     FSI’s sole argument against this holding is to suggest the

unsupported proposition that nondefamatory statements cannot be

probative of actual malice in a defamation per se case.    However,

this court has established that “a court or jury may infer actual

malice from objective circumstantial evidence.”     Brown v.

Petrolite Corp., 965 F.2d 38, 47 (5th Cir. 1992); see also Harte-

Hanks Commc’ns, Inc. v. Connaughton, 491 U.S 657, 668 (1989);

Zerangue v. TSP Newspapers, Inc., 814 F.2d 1066, 1070 (5th Cir.

1987).    The evidence can show “negligence, motive, and intent

such that an accumulation of the evidence and appropriate

inferences supports the existence of actual malice.”     Brown, 965
F.2d at 47 (quoting Bose Corp. v. Consumers Union of United

States, Inc., 692 F.3d 189, 196 (1st Cir. 1982)).

     Accordingly, the district court did not abuse its discretion

in admitting the statements at issue as evidence relevant to the

malice inquiry.22   All of the statements were consistent with

defendants’ malice argument that the defamation claims were part

of “an unbelievable smear campaign” involving “a calculated and

relentless attempt by [FSI] that will go to any lengths to

     22
        This holding is unaffected by our determination for
defendants’ cross-appeal that the documents did not defame the
individual defendants, as the documents remain relevant to
determining FSI’s motive and intent underlying the statements
submitted for jury evaluation.

                                 39
destroy [defendants] completely.”     Although not admitted as

substantive evidence of defamation, the documents illustrated the

circumstances in which the defamatory statements were made and

the state of mind of the FSI employees who made them, and were

thus relevant evidence from which actual malice could be

inferred.   Finally, the jury instructions limited the jury’s

purview to three specific statements, and there is little

likelihood that the jury was confused by the additional evidence.

                         III.   CONCLUSION

     For the foregoing reasons, we AFFIRM the district court’s

denial of FSI’s motion for judgment as a matter of law and, in

the alternative, for a new trial, as well as the district court’s

grant of judgment as a matter of law on defendants’ claim that

the individual defendants were defamed in e-mails and letters,

REVERSE the district court’s grant of partial summary judgment on

defendants’ defamation counterclaim with regard to the corporate

defendants, VACATE the district court’s entry of a take-nothing

judgment on FSI’s § 1030(a)(4) claim, and REMAND this case for

entry of judgment on the jury’s § 1030(a)(4) verdict and for

further proceedings consistent with this opinion.     Each party

shall bear its own costs.

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