Court Opinion

ID: 1024853
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:40:09.146385+00
Date Added: 2024-06-11T12:27:33.197566
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                                No. 06-2070

DAG PETROLEUM SUPPLIERS, L.L.C.,

                                                  Plaintiff - Appellant,

           versus

BP   P.L.C.;  BP     PRODUCTS     NORTH   AMERICA,
INCORPORATED,

                                                  Defendant - Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. James C. Cacheris, Senior
District Judge. (1:05-cv-01323)

Argued:   December 5, 2007                    Decided:   January 23, 2008

Before TRAXLER, DUNCAN, Circuit Judges; and James P. JONES, Chief
United States District Judge for the Western District of Virginia,
sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Roy Theodore Englert, Jr., ROBBINS, RUSSELL, ENGLERT,
ORSECK, UNTEREINER & SAUBER, L.L.P., Washington, D.C., for
Appellant.   Richard Cartier Godfrey, KIRKLAND & ELLIS, L.L.P.,
Chicago, Illinois, for Appellee. ON BRIEF: Michael Joseph, Patrick
O. Cavanaugh, William R. Martin, Alex Blanton, BLANK ROME, L.L.P.,
Washington, D.C.; Geoffrey P. Gitner, Washington, D.C.; Noah A.
Messing, ROBBINS, RUSSELL, ENGLERT, ORSECK, UNTEREINER & SAUBER,
L.L.P., Washington, D.C., for Appellant.        Craig C. Reilly,
RICHARDS, MCGETTIGAN, REILLY & WEST, P.C., Alexandria, Virginia;
Andrew B. Bloomer, Donna M. Welch, Matthew T. Regan, KIRKLAND &
ELLIS, L.L.P., Chicago, Illinois, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

      DAG Petroleum Suppliers, L.L.C. (“DAG”) and its Chairman and

majority owner, Eyob “Joe” Mamo (“Mamo”), an African American,

allege that BP Products North America Inc. (“BPPNA”) and its parent

company, BP P.L.C., (collectively “BP”) discriminated against DAG

on account of Mamo’s race when BPPNA, after conducting a lengthy

auction, selected two non-minority owned businesses to purchase 182

of   its   “BP”   gasoline   service   stations    in    the   Washington     and

Baltimore    metropolitan     areas.       DAG   further   claims      that   its

elimination from the auction was the culmination of an elaborate

business conspiracy between BP and Eastern Petroleum Corporation

(“Eastern”), one of the winning bidders, aimed at injuring DAG by

denying it the “once-in-a-lifetime opportunity” to acquire a large

number of valuable stations in its home territory.                  The district

court granted summary judgment in favor of BP on both DAG’s

discrimination claims under 42 U.S.C. §§ 1981 and 1982 and its

business    conspiracy   claim   under     Virginia     Code   §§    18.2-499   -

18.2-500.    For the reasons that follow, we affirm.

                                       I

      As we are reviewing a grant of summary judgment, we recite the

facts in the light most favorable to DAG.          See Williams v. Staples,

Inc., 372 F.3d 662, 667 (4th Cir. 2004).                In March 2005, BPPNA

released a Confidential Information Memorandum (“CIM”) to a select

                                       3
group of petroleum jobbers,1 inviting them to participate in an

auction to purchase a number of its service stations.                  DAG was

among the invitees.

     The CIM grouped the service stations into seven packages

labeled A through G, and encouraged each invited company to submit

a first-round bid on one, all, or any combination of the packages

that the company desired to purchase.             The CIM also required each

bid to include or comment upon several different items.                  Among

these mandatory items were (1) the cash price offered, (2) the

number of gallons of petroleum that the bidder was willing to

commit to purchasing from BPPNA going forward, if any (the “volume

commitment”), and (3) any material concerns that the bidder had

with the commercial terms set forth in the prospective Sale and

Purchase   Contract     Term   Sheet.       The   CIM   further   informed   the

invitees   that   the   existing   dealer-operator        of   each   auctioned

service station “w[ould] be given a first right of refusal to

purchase BP[PNA]’s interest in that site on the same basis as

BP[PNA] would be willing to accept for that site within the

[auction] process.”       J.A. 821.     BPPNA also “expressly reserve[d]

the right, at any time and in any respect, and without giving

reasons therefor, to amend or terminate these procedures, to

terminate discussions with any or all interested parties, to reject

     1
      Petroleum jobbers, or marketers, essentially act as middlemen
between companies who refine petroleum products and those that
process or market such products at retail.

                                        4
any or all proposals, or to negotiate with any party with respect

to a transaction.”   J.A. 822.

     After evaluating the first-round bids and “other commercial

factors,” BPPNA selected thirteen companies for the final bidding

round to be conducted in June 2005.        J.A. 822.   The finalist-

companies most relevant to this appeal are DAG--the only minority-

owned auction participant2--and Eastern.

     DAG submitted its “final” bid on June 20, 2005.          This bid

offered $86.9 million for packages A through D, $93.8 million for

A through E, and $117 million for A through G.   J.A. 1088.    It also

included a non-solicited bid, offering more cash if BPPNA would

forego the dealer-operator right of first refusal.     J.A. 1090.

     Eastern submitted its final bid on June 21, 2005.         The bid

included a separate cash offer for each package A through G, and an

offer for the entire group of packages--adding a 10% premium to the

sum of the individual offers if Eastern were awarded the entire

group.   Totaling the pertinent bids, Eastern offered $99.8 million

for packages A through D, $112.6 million for packages A through E,

and $167.9 million for packages A through G--including the 10%

premium.    J.A. 864-65.   As to the volume commitment, Eastern

indicated that it “ha[d] committed to 10 additional BP stations

[over the following two years] that [we]re projected to deliver

     2
      At the time of the auction DAG was the only African-American
owned petroleum jobber in the United States.

                                 5
more than 30 million gallons annually and plan[ned] to develop at

least 5 new BP stations annually thereafter.”            J.A. 865.     Eastern

emphasized its “significant historical investments in BP branded

development projects” and the success it had in the past as a BPPNA

“jobber.”      J.A. 865.    Of noted importance to BPPNA, Eastern’s bid

also included a plan for facilitating the dealer-operators’ rights

of first refusal in which Eastern would assist any dealer-operator

who chose to exercise such right in obtaining financing.

       According to BPPNA, and undisputed by DAG, on approximately

June 27, 2005, BPPNA informed Eastern of its advancement to the

“final      negotiating    round”   (subsequent    to   the   “final   bidding

round”).     BPPNA also indicated that it was considering selling the

Washington group (packages A through D) and the Baltimore group

(packages E through G) to separate bidders.              The following day,

Eastern informed BPPNA that it intended to negotiate only for the

Washington group. The contents of Eastern’s offer at that time are

disputed.      Although BPPNA contends that Eastern then agreed to

maintain the 10% price premium, setting its cash offer to $110.8

million for A through D and $125.1 million for A through E, and

made   an    oral   commitment   to   purchasing   90   million   gallons   of

petroleum volume over the next five years, we are obliged to accept

DAG’s claim that the 10% premium for packages A through D and A

through E and the 90 million gallon volume commitment were not

agreed to by Eastern on this date or any date prior to DAG’s final

                                       6
elimination from the auction.3

      The following week, BPPNA informed DAG that it had been

eliminated from further participation in the auction on the ground

that its June 20th bid offered far less economic and strategic

value than Eastern’s bid. BPPNA nevertheless allowed DAG to submit

an additional “final” bid for consideration on July 6, 2005.               In

the July 6th bid, DAG increased its cash offer to $110 million for

packages A through D, $118.5 million for A through E, and $150

million for A through G, and no longer opposed the dealer-operator

right of first refusal.      DAG also committed to the purchase of a

volume of 17.2 million gallons of petroleum.          DAG supplemented its

bid with an unsolicited offer to contribute additional capital to

equipment improvements at the stations and to assist BPPNA with

environmental clean-up going forward.

      On July 13, 2005, BPPNA informed DAG and Mamo that it still

considered DAG’s bid inferior to at least one other company’s offer

and   that,   therefore,   DAG   had   again   been   eliminated   from   the

auction.      Mamo then requested a third opportunity to submit a

      3
      In support of this claim, DAG points to the lack of any
documentation “memorializing” these figures and also cites an
internal BPPNA document created on July 15th which lists Eastern's
cash bid as only $112.6 million for packages A through E, the price
without the “premium.” J.A. 859. This same document, however,
lists another bidder, “Alliance,” not DAG or Eastern, as the “Top
Bidder,” and memorializes Eastern’s 90 million gallon volume
commitment.   Id.   DAG also points to a July 12th document from
Eastern's bankers to Eastern referencing the $112.6 million bid
amount. J.A. 914. We analyze DAG’s claim accepting its version of
the facts as true.

                                       7
“final” bid, and on July 15th informed BPPNA by phone that DAG was

willing to raise its offer to $117 million for packages A through

D, and to $127.1 million for packages A through E.               This bid, if

accepted, would have slightly exceeded the cash amount of Eastern’s

final bid, including the 10% premium.        BPPNA, however, declined to

consider DAG’s bid, purportedly because the bidding rounds had

already ended, the bid was not in writing, it did not comment on

each of the required items, and it was not submitted to the BPPNA

project manager as specified in the CIM.

     BPPNA then began negotiations with Eastern for packages A

through D and a portion of E, and instructed two other companies,

Carroll   Independent    Fuel   Company    (“Carroll”)     and    Lehigh   Gas

Corporation (“Lehigh”), to provide their best, final offers for

packages E through G.     BPPNA eventually entered into Purchase and

Sale Agreements with Eastern and Carroll, selling the Washington

group and a portion of package E to Eastern and the remainder of

the Baltimore group to Carroll, for a cash amount totaling $156.8

million. Eastern’s 10% price premium is reflected in this purchase

price.    BPPNA   and   Eastern   also    entered   into   separate    supply

contracts in which Eastern committed to purchase 101 million

gallons of petroleum from BPPNA.

     Mamo and DAG subsequently brought suit against BP in the

United States District Court for the Eastern District of Virginia,

alleging that DAG’s elimination from the auction was the result of

                                    8
race discrimination, in violation of 42 U.S.C. §§ 1981 and 1982.

After discovery, DAG amended its complaint to include a business

conspiracy claim under Virginia Code §§ 18.2-499 - 18.2-500.

     The district court granted summary judgment in favor of BP on

all counts.4    The court first rejected DAG's discrimination claims

finding that DAG failed to show, as both § 1981 and § 1982 require,

that BPPNA's proferred reasons for rejecting its bid were a pretext

for race discrimination.     Specifically, the court found that (1)

“BPPNA offered the contract to a more lucrative, more advantageous

offer than DAG's Final Bid”; (2) “DAG provide[d] no evidence of

BPPNA's alleged bad-faith manipulation of Eastern's bid”; and (3)

“DAG provide[d] no evidence of racial animus or any evidence at all

that BPPNA's decision was motivated by the race of DAG's CEO.”

J.A. 472.      Next, the district court granted summary judgment on

DAG's business conspiracy claim, finding that DAG “provided no

evidence of an agreement or an intent to injure, both of which are

required to establish a business conspiracy” under Virginia law.

J.A. 478.   DAG filed a timely appeal.

     4
      The court first granted summary judgment on DAG’s claims
against BPPNA. Then, since “DAG's claims of discrimination and
conspiracy against BP p.l.c. [we]re derived solely from BPPNA's
relationship to BP p.l.c. as its parent corporation,” the district
court found that summary judgment was also proper for the same
claims of discrimination and conspiracy against BP p.l.c. J.A.
479. We, too, find DAG’s claims against BP p.l.c. to be contingent
on BPPNA’s liability.    Therefore, we will analyze these claims
simultaneously and refer to BPPNA and BP p.l.c. collectively
throughout our analysis as “BP.”

                                  9
                                 II

     DAG first asserts that summary judgment was inappropriate on

its race discrimination claims because genuine issues of material

fact exist as to whether BP, in eliminating DAG from the auction

and instead selling the service stations to non-minority owned

companies, interfered with DAG's right to contract and right to

purchase property in violation of 42 U.S.C. §§ 1981 and 1982.

     We review the district court’s grant of summary judgment de

novo, drawing all reasonable inferences in favor of DAG, the

non-moving party. See Williams, 372 F.3d at 667. Summary judgment

is appropriate when the evidence demonstrates that no genuine issue

of material fact exists and that the moving party is entitled to

judgment as a matter of law.   See Fed. R. Civ. P. 56(c).     A genuine

issue does not exist unless there is sufficient evidence on which

a reasonable jury could return a verdict in favor of the non-moving

party.   Cox v. County of Prince William, 249 F.3d 295, 299 (4th

Cir. 2001).    If, therefore, the evidence favoring the non-moving

party is “merely colorable, or is not significantly probative,

summary judgment may be [properly] granted.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 249-50 (1986).

     Section 1981, in relevant part, grants all persons within the

jurisdiction of the United States “the same right . . . to make and

enforce contracts . . . as is enjoyed by white citizens.”             42

U.S.C.   §   1981   (a).   Section    1982   likewise   prohibits   race

                                 10
discrimination in the purchase and sale of goods by providing that

“[a]ll citizens . . . shall have the same right, . . . as is

enjoyed by white citizens to inherit, purchase, lease, sell, hold,

and convey real and personal property.”          42 U.S.C. § 1982.        To

succeed   on   a   claim   under   either   section,    a   plaintiff   must

demonstrate that the defendant intended to discriminate on the

basis of race.     See Denny v. Elizabeth Arden Salons, Inc., 456 F.3d

427, 434 (4th Cir. 2006).     Where, as here, the plaintiff is unable

to present direct evidence of discriminatory intent, its claims are

subject   to    the   burden-shifting     McDonnell    Douglas   analytical

framework.     See Williams, 372 F.3d at 667; McDonnell Douglas Corp.

v. Green, 411 U.S. 792, 802-5 (1973).

     Under this framework, to avert summary judgment, a plaintiff

must first establish a prima facie case of discrimination.              Id.

If the plaintiff can so establish, the burden shifts to the

defendant to articulate a legitimate, non-discriminatory reason for

its actions.    Hawkins v. PepsiCo, Inc., 203 F.3d 274, 278 (4th Cir.

2000).    Once the defendant has done so, the plaintiff must then

offer sufficient evidence upon which a reasonable jury could find,

by a preponderance of the evidence, that the defendant's proffered

reason was not its true reason, but was instead a pretext for race

discrimination.       Reeves v. Sanderson Plumbing Prods., Inc., 530

U.S. 133, 143 (2000).      If the plaintiff can satisfy this burden by

proving the defendant’s stated reason unworthy of credence, summary

                                     11
judgment is inappropriate as the trier of fact may then properly

infer the ultimate fact of intentional discrimination. Id. at 147.

                                      A

     We now apply the McDonnell Douglas framework to DAG’s claims

to assess the propriety of the district court’s grant of summary

judgment.    First, we determine whether DAG has established a prima

facie case of discrimination.

     The Fourth Circuit has not yet had an opportunity to determine

the proper elements of a prima facie case in the public bidding

context.    Heeding the Supreme Court’s admonition in Texas Dep’t of

Cmty. Affairs v. Burdine that demonstrating a prima facie case

should “not [be] onerous,”       450 U.S. 248, 253 (1981), the district

court applied the four-part test developed by the Eleventh Circuit

in Brown v. American Honda Motor Co., 939 F.2d 946, 949 (11th Cir.

1991).      The   American    Honda   test      requires   the   plaintiff    to

demonstrate that: (1) it is a member of a protected class; (2) it

submitted a bid which met the requirements for the available

contract; (3) the bid was ultimately rejected; and (4) the contract

was awarded to an individual or entity who is not a member of a

protected class.     Id.     This test closely comports with the prima

facie test regularly applied by this court in other causes of

action   alleging    discrimination        in   the   purchase   of   goods   or

services.     See e.g., Williams, 372 F.3d at 667 (requiring the

                                      12
plaintiff to establish, when alleging discrimination by a chain of

retail stores, that: “(1) he is a member of a protected class; (2)

he   sought   to    enter   into    a   contractual     relationship       with   the

defendant; (3) he met the defendant's ordinary requirements to pay

for and to receive goods or services ordinarily provided by the

defendant to other similarly situated customers; and (4) he was

denied the opportunity to contract for goods or services that was

otherwise afforded to white customers.”).               Despite this congruity

and the Supreme Court’s guidance, BP urges us to adopt the more

burdensome test set out by the First Circuit in T&S Services

Associates, Inc. v. Crenson, 666 F.2d 722, 725 (1st Cir. 1981),

which   differs     from    the   American      Honda   test   by   requiring     the

plaintiff to demonstrate, under the third prong, that its bid was

“significantly more advantageous” than the bid that was ultimately

selected.     Id.

      Because, as we will discuss infra, DAG’s discrimination claims

clearly   fail      under   the    final    step   of   the    McDonnell    Douglas

framework, we leave it to another day to determine the proper

contours of a prima facie case in the bidding context.                Instead, we

assume, as the district court found, that DAG has established such

a case, and proceed to the next phase of the analysis.

                                           13
                                          B

      Assuming      that    DAG   has   made   out    a    prima    facie         case    and

therefore established a “legally mandatory, rebuttable presumption”

of unlawful discrimination, the burden shifts to BP to assert a

nondiscriminatory          explanation   for   DAG’s        elimination           from    the

auction.      See Lettieri v. Equant Inc., 478 F.3d 640, 648 (4th Cir.

2007) (internal quotations omitted).                 BP has met this burden by

proffering evidence that it eliminated DAG in favor of other

companies whose bids offered BP more economic and strategic value.

Specifically, BP asserts that (1) the cash amount offered by the

other companies was substantially higher than that offered by DAG;

(2) the volume of petroleum which DAG would commit to purchasing

was significantly less than the volume commitment of those selected

for   final    negotiation;       (3)   Eastern,     the    company      to       which    BP

afforded      the   Washington      group,     was        already   in        a    similar

relationship with BP as an existing “jobber”; and (4) DAG opposed

the right of first refusal that BP required be included in the

contract, while the winning bidders, Eastern and Carroll, offered

plans to facilitate this right.

                                         14
                                         C

     DAG acknowledges, as it must, that with these reasons BP has

successfully caused the burden to shift back to DAG, such that DAG

must now show that BP’s proffered explanation is a pretext for race

discrimination.       As    DAG   also       recognizes,   in    this    context,

“[p]retext is a lie” or cover-up, not merely a mistake.                  Price v.

Thompson,   380    F.3d    209,   214    n.1    (4th   Cir.     2001)   (internal

quotations omitted).       Therefore, evidence that BP “erroneously or

even purposely misapplied [its own] policy,” will not suffice to

overcome summary judgment.        See Dugan v. Albemarle County School

Bd., 293 F.3d 716, 722 (4th Cir. 2002).            Neither will unsupported

“assertions of discrimination in and of themselves [be sufficient]

to counter unrebutted evidence of legitimate, nondiscriminatory

reasons” for BP’s decision to choose other bidders.                Id.    Rather,

DAG must show that BP fabricated its stated reason to establish

pretext.

     DAG fails to carry its burden.               Instead, in an effort to

survive summary judgment, DAG attempts to create several factual

disputes concerning the terms of the winning bids, and also to urge

that “[a] jury could conclude that DAG's bid was superior to the

winning bid.”     Appellant's Br. at 21.         In particular, DAG contends

that a jury could deduce that its July 6th bid was the most

lucrative offer on the table when it was eliminated from the

auction on July 13th, if the jury found that (1) Eastern did not

                                        15
offer the 10% premium which DAG admits that Eastern ultimately

paid; (2) Eastern did not offer the volume commitment which was

also included in the eventual agreement; and (3) BP improperly

afforded DAG little or no credit for its unilateral offer to

replace old equipment and assist BP with environmental clean-up.

DAG also asserts that a jury could conclude that BP improperly

ignored DAG’s July 15th bid.    This bid, too, DAG contends, could be

found higher than that which Eastern and Carroll ultimately paid if

the trier of fact, again, excludes Eastern's 10% premium, does not

consider or value Eastern's volume commitment, and subtracts $10.5

million from Eastern's bid for an insurance subsidy that DAG claims

BP paid Eastern in a “side deal.”

     DAG’s labyrinthine argument misconceives both the standard for

summary judgment and the burden it carries under step three of the

McDonnell Douglas framework. DAG’s argument is comprised solely of

inferential leaps and speculative conclusions as to what a jury

might find. “Mere speculation,” however, cannot create a genuine

factual dispute, nor can “the building of one inference upon

another.”    Cox, 249 F.3d at 300.

     DAG’s   argument   is   further    unavailing   because   an   alleged

factual dispute cannot “defeat a properly supported motion for

summary judgment, unless the disputed fact is one that might affect

the outcome of the litigation.”          JKC Holding Co. LLC v. Wash.

Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).           Even if

                                   16
a jury were to view DAG’s bid as superior, this would suggest

nothing more than the possibility that BP made an unsound business

decision.     A showing of pretext, as DAG recognizes, requires more.

As we have previously concluded, it is not within our province to

decide whether the decisions of companies like BP are “wise, fair,

or   even     correct,”      so    long     as    they   are   predicated   on   non-

discriminatory reasons. Dugan, 293 F.3d at 722 (quoting DeJarnette

v. Corning Inc., 133 F.3d 293, 299 (4th Cir. 1998)).                        DAG must

provide sufficient evidence for a jury to find not that DAG’s bid

could be considered superior, but that BP did conclude as much and

rejected      DAG's    bid     nonetheless.          See   id.     The   collage   of

evidentiary pieces that DAG has assembled in support of its claim,

even when viewed in the light most favorable to it, fail to make

this showing.         As no reasonable jury could conclude on the record

before us that BP’s legitimate reasons for eliminating DAG from the

auction were a pretext for race discrimination, summary judgment

against DAG on its claims under § 1981 and § 1982 was proper.

                                            III

      DAG also contends that summary judgment should have been

denied   on    its     claim      against    BP    under   the   Virginia   Business

Conspiracy Act.         See Va. Code Ann. §§ 18.2-499 - 18.2-500.                  In

pertinent part, section 18.2-499 permits recovery where “[a]ny two

or more persons . . . combine, associate, agree, mutually undertake

                                             17
or   concert   together    for     the    purpose     of   (i)   willfully        and

maliciously injuring another in his reputation, trade, business or

profession by any means whatever.” Section 18.2-500 provides civil

damages for such action.      In order to sustain a claim under these

sections, DAG must prove by clear and convincing evidence that: (1)

BP agreed or conspired with another party or parties; (2) the

conspirators acted with legal malice, that is, acted intentionally,

purposefully,   and   without      lawful     justification;          and   (3)   the

intentional actions of the conspirators proximately caused injury

to DAG.   See Simmons v. Miller, 544 S.E.2d 666, 676-77 (Va. 2001).

       DAG alleges, in essence, that rather than simply exercising

its right to sell the service stations to Eastern or any other

company in the first instance, BP set out to injure DAG by inviting

it to participate in a fraudulent auction, feigning the acceptance

and consideration of several of its bids, and advancing it to the

final bidding rounds before unfairly eliminating it from the

concocted auction.    In the course of so doing, according to DAG, BP

conspired with Eastern to leak insider information to Eastern and

manipulate its bid in several respects, all in an effort to ensure

that   Eastern’s   bid    looked    superior     to    DAG’s     so    that   DAG’s

elimination could appear justified. This claim, too, is completely

devoid of coherent evidentiary support.             DAG fails to present any

evidence either of a conspiracy between BP and Eastern or legal

malice on behalf of either company. Therefore, any injury that DAG

                                         18
may have suffered is not actionable under the Virginia Business

Conspiracy Act.

                               IV

     For the foregoing reasons, the judgment of the district court

is

                                                        AFFIRMED.

                               19