Court Opinion

ID: 36006
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:35:26+00
Date Added: 2024-06-11T17:14:48.794564
License: Public Domain

United States Court of Appeals
                                                                   Fifth Circuit
                                                                F I L E D
              IN THE UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT                     August 10, 2004
                     _______________________
                                                            Charles R. Fulbruge III
                           No. 03-50419                             Clerk
                     _______________________

                      FLUORINE ON CALL LTD

      Plaintiff - Counter Defendant - Appellee - Appellant

                                  v.

                    FLUOROGAS LIMITED, ET AL.

                           Defendants

                        FLUOROGAS LIMITED

       Defendant - Counter Claimant - Appellant - Appellee

                                  and

              THE BOC GROUP, INC; THE BOC GROUP PLC

               Defendants - Appellants - Appellees

                                  v.

              FREDERICK J SIEGELE; STEPHEN SIEGELE

     Third Party Defendants - Counter Defendants - Appellees

                                  and

                      APPLIED MATERIALS INC

                Third Party Plaintiff - Appellee

                       --------------------
          Appeals from the United States District Court
                for the Western District of Texas
                       --------------------

Before DAVIS, PRADO and PICKERING,      Circuit Judges.

EDWARD C. PRADO, Circuit Judge:

     This case arises from a “Memorandum of Understanding”

                                   1
between Fluorogas Limited (“Fluorogas”) and Fluorine on Call,

Ltd. (“FOC”). Flourogas is a small English company that develops

and manufactures fluorine generators.   It was owned by Graham

Hodgson, who was also its president.    FOC is a Texas company that

began with two brothers, Frederick and Stephen Siegele.     The

Siegeles sought to enter what they viewed as the potential market

for on-site fluorine generators for use in the semiconductor

industry.

     This potential market arises from the need to clean

manufacturing equipment.   Some of the equipment used in the

semiconductor manufacturing process involves “chemical vapor

deposition,” also called CVD.    The process involves spraying

chemicals onto silicon wafers while those wafers are inside a

chamber.    Over time, this chamber becomes contaminated and needs

cleaning.   Generally, chambers are cleaned with nitrogen

trifluoride (or NF3) gas, which presents certain environmental

hazards and can be expensive.   Because of these problems,

companies have looked for alternatives to NF3.    One of these

potential alternatives is fluorine gas (or F2).    Yet Fluorine has

its own problems – in particular, it is extremely dangerous and

difficult to handle.

     Fluorogas manufactures fluorine generators for other uses.

Using Fluorogas’s technology for the semiconductor manufacturing

process would require, as even the Siegeles have admitted, a

“quantum leap in technology.”   Fluorogas discussed the

                                  2
possibility of providing generators for semiconductor

manufacturing with some other companies, but those discussions

did not lead to anything concrete.    Nevertheless, one of the

other companies provided Applied Materials (“Applied”) with a

quote for fluorine generators based on Fluorogas’s technology.

     After examining the potential market for on-site fluorine

generators as well as potential sources, the Siegeles contacted

Fluorogas.    Interested in obtaining a license to Fluorogas’s

technology, the Siegeles began negotiating with Hodgson in the

summer of 2000.    Eventually, these negotiations led to a

Memorandum of Understanding (“MOU”), which Hodgson and Frederick

Siegele signed in a country club in the Florida Keys on August

11, 2000.    The MOU was a handwritten document drafted by

Frederick Siegele over the course of a weekend.    Fluorogas

contends that the parties planned to eventually replace the MOU

with a more formal contract; in September 2000, Frederick Siegele

wrote a letter agreeing with that contention.

     The MOU granted FOC “the exclusive worldwide right to

manufacture and supply Fluorine generators based on FG Background

Technology (as defined below) where such generators are to be

used in the Chemical Vapor Deposition (“CVD”) process, excluding

etch applications.”    In return, FOC agreed to pay royalties based

on its revenues; if FOC failed to make those royalty payments,

its license would become non-exclusive once Fluorogas provided

notice.   Fluorogas also granted FOC some non-exclusive rights to

                                  3
Fluorogas’s technology: “the non-exclusive worldwide right to

manufacture and supply Fluorine generators based on FG Background

Technology where such generators are to be used in the

Semiconductor Industry, including the etch applications.”      The

MOU contained no express duration term.

     After the parties signed the MOU, FOC purchased a Fluorogas

test generator to sell to Applied.   According to Applied, it

could not use this test generator for its business; rather, it

used the generator to assist in determining whether on-site

fluorine generation might be commercially viable.

     Sometime thereafter, Applied employees had various

conversations directly with Fluorogas.    Although the nature of

the conversations is somewhat disputed, it appears that these

conversations involved, at least, the possibility of Applied

investing in Fluorogas.1   FOC contends that the discussions also

suggested that Applied deal directly with Fluorogas.2    FOC

contended that these conversations violated the MOU and so sued

Fluorogas.   In January 2001, FOC dismissed this first suit

without prejudice.

     On February 23, 2001, Fluorogas’s lawyers sent FOC a letter,

which forms the basis of much of this case.    After first stating

     1
      Fluorogas and FOC disagree about whether they discussed an
investment during the initial negotiations.
     2
      Around the same time, Applied discussed purchasing another
generator from FOC, but these discussions went nowhere.

                                 4
that it was not sure that the MOU bound it, Fluorogas stated:

     For the avoidance of any possible doubt we must make it
     clear that this letter is formal notice of termination
     of the relationship sought to be realised under the
     Memorandum of Understanding, and accordingly, and to
     the extent that the Memorandum of Agreement imposed any
     obligation on our client, any and all such obligations
     are now at an end.

     After receiving this letter, FOC sued Fluorogas again in

Texas state court on March 8, 2001; Fluorogas removed the case,

based on diversity, to the Western District of Texas.    FOC later

added Applied as a defendant, bringing claims for tortious

interference with contract and conspiracy against it.

     In September 2001, while this case was pending, The BOC

Group plc, a publicly-held British company, purchased all of

Fluorogas’s stock for $4.5 million, plus contingent money

depending on sales of fluorine generators.    The BOC Group

(through BOC Edwards, a division of BOC Group’s American

subsidiary) first contacted Fluorogas on March 2, 2001, seven

days after Fluorogas terminated the MOU.3    The purpose of this

contact was to discuss working together to develop fluorine

generators for on-site CVD cleaning.   On September 26, 2001, The

BOC Group plc purchased all of Fluorogas’s stock.    Fluorogas

     3
      At various points FOC disputes this, but presents no
evidence that the first contact occurred before the termination
letter. Its only evidence is that someone’s original deposition
testimony had an incorrect date and an argument that the contact
in early March was suspicious. BOC began discussing on-site
fluorine generators with Applied in January 2001, but all the
evidence indicates that Applied suggested that BOC use 3M’s
technology, not Fluorogas’s.

                                5
continues to sell fluorine generators for work unrelated to

semiconductor use and sells fluorine cells to BOC Edwards for BOC

Edwards to develop for semiconductor use.    BOC has yet to make a

profit from semiconductor fluorine use, having only placed two

test units with customers.   After this acquisition, FOC amended

its complaint to add claims for tortious interference,

conspiracy, and derivative liability against The BOC Group plc

and its American subsidiary, The BOC Group, Inc. (collectively

“BOC”).

     On December 16, 2002, following referral to a magistrate

judge, the district court granted summary judgment in Applied’s

favor on all of FOC’s claims against it.    The district court also

granted summary judgment in BOC’s favor on the tortious

interference and conspiracy claims.

     The remaining claims went to trial, where the jury found for

FOC on its breach of contract and fraud claims against Fluorogas

and also found BOC derivatively liable.    The jury awarded

$120,000,000 for “loss of income producing asset” damages,

$170,000 in reliance damages, and $12 million in punitive

damages.   The district court entered judgment for these awards,

plus prejudgment interest, costs, and $24,199,037.45 in

attorney’s fees.   Thus, the total judgment exceeded $170 million.

Fluorogas and BOC moved for judgment as a matter of law, for a

new trial, and for remittitur.   The district court denied these

motions.   Fluorogas, BOC, and FOC filed notices of appeal.

                                 6
Fluorogas’s and BOC’s Appeal

Standard of Review

     Fluorogas and BOC appeal the district court’s denial of

their motions for judgment as a matter of law, a decision we

review de novo.    Arguello v. Conoco, Inc., 330 F.3d 355, 357 (5th

Cir. 2003).   In a jury case, a motion for judgment as a matter of

law challenges the sufficiency of the evidence supporting the

verdict.   Id.   To review the sufficiency, we consider the entire

trial record in the light most favorable to the nonmovant,

drawing reasonable inferences in its favor.    Id.   “An issue is

properly submitted to the jury where there is a conflict in

substantial evidence – ‘evidence of such quality and weight that

reasonable and fair-minded men in the exercise of impartial

judgment might reach different conclusions.’” Id. at 357-58

(quoting Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.

1969) (en banc), overruled on other grounds, Gautreaux v.

Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en banc)).

Was the MOU Terminable At Will?

     Initially, Fluorogas contends that the MOU contained no

duration term and therefore was terminable at will.    The district

court concluded that the MOU was terminable at will, but that it

also contained an implied reasonable term.    Thus, the district

court instructed the jury that “the court has determined that

although the MOU lacks a definite term of duration, it should,

                                  7
nonetheless, be allowed to proceed for a reasonable amount of

time.    You, the jury, must now determine from a preponderance of

the evidence what was a reasonable term of duration for the MOU.”

The jury answered that the MOU contained a 5-year reasonable term

and awarded damages for termination before that term had expired.

     We have previously held that contracts with indefinite

length are terminable at will:

     Under Texas law, when a contract "contemplate[s]
     continuing performance (or successive performances) and
     ... [is] indefinite in duration," it may be terminated
     at the will of either party.   Moreover, "this circuit
     ... does not favor perpetual contracts" and "presumes
     that [any such] contract is terminable at will."

Trient Partners I, Ltd. v. Blockuster Entm’t Corp., 83 F.3d 704,

708 (5th Cir. 1996)(citations omitted); see also Clear Lake City

Water Auth. v. Clear Lake Util. Co., 549 S.W.2d 385, 390 (Tex.

1977).    Although the contract in Trient specifically stated that

it was indefinite in duration, the case did not suggest that this

rule only applied to contracts with an express indefinite term.

FOC cites no Texas cases to challenge this principle, but instead

attempts to escape its reach.

     Thus, while acknowledging this rule, FOC asserts that the

MOU is not terminable at will.   Initially, FOC challenges the

conclusion that the MOU lacks a duration term.   FOC argues that

the contract is not indefinite because it continued in effect so

long as FOC continued to pay royalties.   Conversely, FOC

contends, the MOU terminated when FOC stopped paying those

                                  8
royalties.   As support, FOC cites language from a Texas Supreme

Court case, “[w]ords which fix an ascertainable fact or event, by

which the terms of a contract’s duration can be determined, make

the contract definite and certain in that particular.” City of

Big Spring v. Bd. of Control, 404 S.W.2d 810, 815 (Tex. 1966).

In Big Spring, the city contracted to provide water to a nearby

state-run hospital at a certain rate; by its terms the agreement

“continue[d] in full force and effect [a]nd [was] not subject to

being revoked as long as the State of Texas shall in good faith

maintain and operate said hospital.”       Id.   In light of this

provision, the court concluded that the contract was not

indefinite and thus not terminable at will.        Id.

     Here, the MOU’s language is not so conditional, providing:

“If FOC fails to make such payment as disclosed in Table One,

FOC’s license upon [Flurogas] providing written notice to FOC,

shall hereafter be non-exclusive.”       This provision resembles a

remedy, not a duration term.    We have reached similar conclusions

in other cases.   For example, using the Iowa version of the

U.C.C.,4 we determined that a provision in an exclusive

distribution contract permitting termination if either party

defaulted did not remove it from the general rule that indefinite

     4
      The Delta court   noted that   the relevant U.C.C. provision
“is a codification of   the common   law rule that unless otherwise
stated, a contract is   terminable   at will upon reasonable notice.”
Delta Servs. & Equip.   Co v. Ryko   Mfg. Co., 908 F.2d 7, 10 (5th
Cir. 1990).

                                     9
contracts are terminable at will.    Delta Servs. & Equip. Inc. v.

Ryko Mfg. Co., 908 F.2d 7, 9 (5th Cir. 1990).5    The contract in

Trient, too, contained terms providing that the contract

terminated upon various forms of breach or default.    Trient, 83
F.3d at 709.   Yet Trient’s contract remained terminable at will.

Id.   There, the court held that the default and breach provisions

“are not the kind of determinable events that transform a

contract of indefinite duration into one of definite duration,”

in part because they simply state a fundamental principle of

contract law: a material breach may terminate a contract.     Id.6

      Additionally, despite FOC’s attempts to universalize Big

Spring, we have held that its holding is limited; the case

involves specific problems of government entities providing

governmental functions.   Trient, 83 F.3d at 710.   Big Spring

“simply carves out an exception to the general rule of law

      5
      The Delta court distinguished Besco, Inc.   v. Alpha Portland
Cement Co., 619 F.2d 447 (5th Cir. 1980), where   a contract
expressly indicated that the right to terminate   would be based
solely on a failure to sell a certain amount of   product or the
unavailability of materials. Delta, 908 F.2d at   9.
      6
      FOC’s citation to Rolling Lands Investments, L.C. v.
Northwest Airport Management, L.P., 111 S.W.3d 187 (Tex. App. –
Texarkana 2003, pet. denied), does not change this result. In
Rolling Lands, an agreement for access rights to an airport ended
when, among other things, the airport closed or its operations
stopped. Id. at 197. This is distinguishable from the situation
here, where one party could unilaterally terminate (or, rather,
turn an exclusive right into an non-exclusive one) by not paying
royalties.

                                10
governing indefinite duration contracts in Texas.”      Id. at 711.

     FOC also analogizes the license to habendum clauses in oil

and gas leases.   Because habendum clauses, which define a mineral

estate’s duration, last indefinitely until a condition is

reached, “a typical Texas lease that lasts ‘as long as oil or gas

is produced’ automatically terminates if actual production

permanently ceases during the secondary term.”      Anadarko

Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex. 2002).     But

habendum clauses exist in a distinguishable context and serve a

different purpose: “[a] Texas mineral lease grants a fee simple

determinable to the lessee.   Consequently, the lessee's mineral

estate may continue indefinitely, as long as the lessee uses the

land for its intended purpose.”     Id. (citations omitted).   FOC’s

exclusive license differs significantly from a fee simple in a

mineral estate, and FOC has not cited any case outside the oil-

and-gas context where habendum clause principles have been

applied or where analogies to habendum clauses have been drawn.

We, too, decline to draw such an analogy.

     Finally, FOC cites University Computing Co. v. Leader Corp.,

371 F. Supp. 86 (N.D. Tex. 1974).      In Leader, the parties entered

into a settlement agreement that contained various obligations of

definite duration.   The agreement also provided, in three

different places, that one party (Leader) could use the other

party’s software “for an indefinite period of time.”      Id. at 87.

                                  11
The court determined that, despite its indefinite duration, the

contract was not terminable at will.    Id. at 89.   Unlike other

cases where the contract imposed substantial obligations on the

parties, “Leader’s non-exclusive right to the use of the Results’

systems does not impose any obligations on UCC for an indefinite

period of time.”    Id. at 88 (emphasis in original).    The court

also noted that the parties clearly “did not intend to create an

agreement terminable at the will of either party.”      Id.   This

case is distinguishable from Leader in terms of context and

obligations.   In Leader, the former defendant in a lawsuit was

attempting to cancel a settlement agreement made two days before

trial.   Id.   But more importantly, unlike in Leader, the

exclusive license imposed significant obligations on Fluorogas.

     Thus, FOC’s arguments that the MOU should fall outside of

the general rule are unconvincing.    The MOU is an indefinite

length contract, and therefore terminable at will.      FOC contends

that it would generally be unfair for a licensor to be able to

terminate at any time for any reason.    For that reason, courts

often read a reasonable term into otherwise terminable indefinite

contracts.

Should a reasonable term be implied?

     The Texas Supreme Court has recognized that, in certain

circumstances, a reasonable time should be read into an otherwise

terminable-at-will contract:

                                 12
       We are not unmindful of the fact that in dealing with
       exclusive franchise or distributorship agreements,
       which are indefinite in duration and which contemplate
       the expenditure of substantial sums of money or other
       investments by one of the parties preparatory to or in
       accordance with his performance under the contract, the
       courts often imply a term of reasonable duration during
       which time the agreement is not terminable at will.

       Clear Lake, 549 S.W.2d at 391 (citations omitted).   The

specifics of such an implied term remain somewhat unclear.    For

example, the Clear Lake passage describes implying a reasonable

term as something that courts “often” do, not as a requirement.7

And the court in Clear Lake did not have to decide whether to

imply this term into the particular contract.    Id.   Similarly, in

Trient, we did not determine whether a reasonable duration should

be read in (or what that duration should be) because it concluded

that any reasonable term had already passed.    Trient, 83 F.3d at

711.

       Fluorogas argues that FOC has not established one of the

requirements for implying a reasonable term because it failed to

present evidence that it had spent substantial sums of money.

Clear Lake and Trient both indicate that a contract’s

       7
      Texas courts have carved out one clear exception to
implying a reasonable duration term. This exception notes that
government entities cannot enter contracts that limit their
governmental powers. The contract in Clear Lake served that
purpose; therefore the court would not read a reasonable term
into it. Clear Lake, 549 S.W.2d at 392.   See also City of Corpus
Christi v. Taylor, 126 S.W.3d 712, 722-23 (Tex. App. – Corpus
Christi 2004, no pet. h.) (applying Clear Lake to a similar
contract).

                                 13
contemplation of a party’s substantial expenditure is a

prerequisite for reading in a reasonable duration contract term.

Trient, 83 F.3d at 704; Clear Lake, 549 S.W.2d at 391.    Fluorogas

argues that the district court improperly deprived it of a jury

finding on this issue by instructing the jury that this contract

fit within the exception, rather than asking the jury whether FOC

had expended a substantial sum of money.

     Fluorogas specifically argues that FOC did not lease any

office space, built no manufacturing facilities, made no royalty

payments, hired no employees, and paid no salaries before the

termination.   In fact, Fluorogas argues, FOC made a profit during

the six months the MOU was in effect: it paid $130,000 for the

Fluorogas generator, which it sold to Applied for $222,000.    In

response, FOC cites testimony by Frederick Siegele that he spent

$200,000 in expenses8 and argues that it “invested six months of

time exclusively working under the MOU.”   FOC also contends that

it “used its goodwill to introduce Fluorogas’s technology to

Applied.”   These expenditures of other investments, namely time

and goodwill, justify the imposition of a reasonable term.    In

sum, the district court did not err in concluding that the MOU

     8
       According to Fluorogas, this amount includes the amount
FOC paid to Fluorogas for the generator it sold at a profit (and
therefore was essentially reimbursed for this amount) and
reimbursement for Hodgson’s trip to Florida, which FOC had agreed
to pay before entering the MOU. Fluorogas also contends that the
$200,000 includes tax on the profit it made off the generator.
FOC does not challenge any of these characterizations of the
alleged $200,000.

                                14
contemplated that FOC would expend a substantial sum of money in

fulfilling its obligations and that, thus, a reasonable term

should be implied into the MOU.9

Did FOC establish the elements of its fraud claim?

     Fluorogas further argues that the district court should have

granted its motion for judgment as a matter of law because FOC

failed to present evidence of each element of its fraud claims.

     Under Texas law, a fraud claim includes the following

elements:

     (1) a material representation was made; (2) it was
     false when made; (3) the speaker either knew it was
     false, or made it without knowledge of its truth; (4)
     the speaker made it with the intent that it should be
     acted upon; (5) the party acted in reliance; and (6)
     the party was injured as a result.

Coffel v. Stryker Corp., 284 F.3d 625, 631 (5th Cir. 2002)

(citing Formosa Plastics Corp. USA v. Presidio Eng'rs &

Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)).    To show fraud

based on a promise of future performance, a plaintiff must also

show that the person making the promise had no intention of

performing at the time he made the promise.   Id.    Failure to

perform a contract, however, is not evidence of fraud.     Formosa

Plastics, 960 S.W.2d at 48.

     FOC’s fraud allegations are not very specific.    FOC contends

that Fluorogas made the following fraudulent representations:

     9
      Neither party challenges the jury’s finding that five years
was a reasonable term for the MOU.

                               15
     (1) Fluorogas failured to inform FOC of its
     interpretation of the contract: “Hodgson never informed
     FOC that he believed he could cancel the MOU at any
     time, although that is exactly what he intended to do
     as early as December of 2000;”

     (2) While negotiating and signing the MOU, Hodgson
     represented that he intended to give FOC access to
     Fluorogas’ licensed technology, while never intending
     to do so;

     (3) Hodgson said that his dealings were aboveboard;

     (4) Hodgson “repeatedly confirmed Fluorogas’s
     commitment to the MOU” while having secret meetings
     with Applied; and

     (5) While discussing the settlement of the first
     lawsuit, Hodgson never told FOC that he would terminate
     the MOU.

     FOC further alleges that it relied on these representations,

specifically by:

     (A)   entering into the MOU;
     (B)   hiring Robert Jackson as its vice president;
     (C)   incurring expenses;
     (D)   showing Fluoroga’s technology to their business
           contacts; and
     (E)   dropping the first lawsuit.

     In support of these allegations, Stephen Siegele testified

that he never would have taken any of the above actions had he

known that “Fluorogas believed that it was not bound by the MOU,

believed it could cancel at any time, never intended to give FOC

access to the background technology or intended to act in a way

that was inconsistent with its representations to FOC.”

     Many of FOC’s allegations of fraud are problematic.     For

example, FOC complains about Hodgson’s failure to tell it about

secret meetings with Applied, but failure to disclose can only be

                                16
fraud if there is a duty to disclose.    Trustees of NW Laundry &

Dry Cleaners Health & Welfare Trust v. Burzynski, 27 F.3d 153,

157 (5th Cir. 1994).   FOC’s claim based on failure to disclose is

deficient because FOC has not pleaded or argued any exception

that would have given Fluorogas a duty to disclose.

     In addition, FOC has no injury that can be attributed to the

alleged fraudulent representations.   FOC never paid Robert

Jackson a salary, and it dismissed its first lawsuit without

prejudice.   As for the claim that Fluorogas never intended to

provide access when it entered into the contract, no connection

exists between this particular aspect of the MOU and any of FOC’s

purported reliance or damages: FOC’s damages were based solely on

the value of the exclusive right.

     Thus, the only fraud claim that remains is the fraudulent

inducement claim – that Fluorogas entered the MOU never intending

to comply with it.   And for this, FOC only presents evidence that

Hodgson testified that he believed he could terminate at any time

and that by December 2000, he intended to terminate.   Even viewed

in FOC’s favor, this is not evidence that Hodgson entered the

contract without intending to perform.   Therefore, the district

court erred in denying Fluorogas’s and BOC’s motion for judgment

as a matter of law on FOC’s fraud claim.   Because the punitive

damages were based on this fraud claim, the award of punitive

                                17
damages cannot stand.10

Did FOC establish its lost-asset damages?

     The jury awarded FOC $170,000 in reliance damages and $120

million in “loss of income-producing asset” damages.11        Fluorogas

challenges the calculation of the lost asset damages, arguing

that FOC did not prove them with reasonable certainty.

General standard – lost asset

     FOC based its lost asset theory on a Second Circuit case,

Schonfeld v. Hilliard, 218 F.3d 164 (2d Cir. 2000).12        In

Schonfeld, the Second Circuit determined that the plaintiff could

recover, as consequential damages, the value of the asset (in

that case, broadcast contracts) it lost because of the

defendant’s breach.     The lost value measure of damages is the

“market value of the asset at the time of breach – not the lost

profits that the asset could have produced in the future.”        Id.

     10
      Under Texas law, punitive damages are not available for
breach of contract. Bellefonte Underwriters Ins. Co. v. Brown,
704 S.W.2d 742, 745 (Tex. 1986).
     11
          FOC dropped its request for lost profit damages.
     12
      Neither side has cited any Texas cases in which this
damage theory was used. FOC indicates that Aboud v.
Schlichtmeier, 6 S.W.3d 742 (Tex. App. – Corpus Christi 1999, no
pet.) contained a similar analysis of “lost opportunities.”
However, the points of error in Aboud indicate that it concerned
lost profits, although one of the experts phrased this as the
present value of the lost business opportunities. Moreover, we
have referred to Aboud as a case in which a Texas court permitted
a plaintiff to recover lost profits. Burkhart Grob Luft und
Raumfahrt GmbH & Co. KG v. E-Sys., Inc., 257 F.3d 461, 467 (5th
Cir. 2001).

                                   18
at 176.       This amount is connected to “a buyer’s projections of

what income he could derive from the asset in the future.”                 Id.

In describing the measure, the Second Circuit quoted Dobbs Law of

Remedies: “Market value damages are ‘based on future profits as

estimated by potential buyers who form the ‘market’ and ‘reflect

the buyer’s discount for the fact that the profits would be

postponed and . . . uncertain.’”             Id. (quoting DAN B. DOBBS, DOBBS

LAW   OF   REMEDIES § 3.3(7) (1993)).    The court noted “[t]he same kind

of market-value proof is sometimes required to prove general

damages to prove ‘hybrid’ damages for the loss of an income-

producing asset.       But the two remain analytically distinct.”           Id.

at 176-77.

           Schonfeld itself examined the difference.         In Schonfeld,

the Second Circuit first concluded that the plaintiff’s lost

profit damages were too speculative to recover.              Id. at 173.    But

the court noted that “[t]he market value of an income-producing

asset is inherently less speculative than lost profits because it

is determined at a single point in time.             It represents what a

buyer is willing to pay for the chance to earn the speculative

profits.”       Id. at 177.   The Schonfeld court discussed several

methods for determining the market value in the absence of a

standardized market or exchange: “experts may give their opinion

of the asset’s value; and evidence of sales of comparable assets

may be introduced.”        Id. at 178.       Still, the court noted, “it is

                                        19
well-established that a recent sale price for the subject asset,

negotiated by parties at arm’s length, is the ‘best evidence’ of

its market value.”     Id at 178.   Eventually, the court concluded

that evidence of the price that a buyer had been willing to pay

for the contracts, along with expert testimony, could provide

sufficient evidence of the contracts’ market value.      Id. at 183.

     In short, under Schonfeld, the market value is determined by

considering what a hypothetical buyer would pay for the chance to

earn future profits.    And the best evidence of this value is an

actual sale of the asset.

     FOC relied on expert testimony to calculate the value of

its lost asset – the exclusive license.     FOC’s expert, Walter

Bratic, provided a damage estimate of $130 million.     Bratic

reached this amount by using two different lost-profit models

based on various projections, including some from BOC.     Bratic

used an 11-year reasonable contract period for these

calculations,13 and then discounted that stream of future profits

to present value.

     Yet Bratic did not analyze what a buyer would have paid for

the chance to make these profits, as Shonfeld requires.

Schonfeld, 218 F.3d at 177.    In fact, Bractic testified:

     Q:   You’ve done no analysis whatsoever of what a
     willing buyer would be willing to pay for the MOU on

     13
      The jury concluded that the reasonable term was five
years, not eleven.

                                    20
     February 23rd 2001; is that correct?
     A:   Well -no. I haven’t done an analysis of what a
     willing buyer, willing seller would have paid for the
     MOU on the date it was canceled.

     Thus, Bratic did not do any of the calculations that

distinguish a lost asset damage model from a straightforward

lost-profits one.    Instead, he calculated the value based solely

on expected future profits.    Because of this, the record contains

no evidence of the market value of the exclusive license.

     Although FOC argues that “magic words” should not be

required, the issue here is not one of magic words, but of the

expert’s method.    The only evidence of damages – Bractic’s

testimony – reflects a speculative lost-profit analysis and fails

to show any evidence of the fundamental aspect of its own damage

theory.   For that reason, we reverse the $120 million award of

lost asset damages.14

BOC’s Derivative Liability

     The jury found two bases for derivative liability against

the BOC entities.    First, it determined that Fluorogas acted as

the alter ego of The BOC Group plc, its parent corporation.

Second, it found that Fluorogas, The BOC Group plc, and The BOC

Group, Inc. were operating as a single business enterprise.

Based on these findings, the district court entered a judgment

holding Flurogas, The BOC Group plc, and The BOC Group, Inc.

     14
      Fluorogas and BOC did not challenge the award of $170,000
in reliance damages.

                                 21
jointly and severally liable for the entire amount of damages.

     As noted, FOC proceeded under two distinct theories of

derivative liability under Texas law – alter ego (against BOC

Group plc) and single business enterprise (against BOC Group plc

and The BOC Group, Inc.).    Under the alter ego theory, “where a

corporation is organized and operated as a mere tool or business

conduit of another corporation,” the first corporation’s wrongful

acts are properly attributed to the controlling corporation.

Menetti v. Chavers, 974 S.W.2d 168, 173 (Tex. App. – San Antonio

1998, no pet.).   The single business enterprise theory imposes

derivative liability in a slightly different context: “when

corporations are not operated as separate entities but rather

integrate their resources to achieve a common business purpose,

each constituent corporation may be held liable for debts

incurred in pursuit of that business purpose.”     Paramount

Petroleum Corp. v. Taylor Rental Ctr., 712 S.W.2d 534, 536 (Tex.

App. – Houston [14th Dist.] 1986, writ ref’d n.r.e.).

     Both theories, therefore, presume that the corporations are

unified at the time of the wrongful act.15     It is illogical, for

     15
         See United States v. Wallace, 961 F. Supp. 969, 979 (N.D.
Tex. 1996) (“Under general corporate law principles, the relevant
inquiry into the control issue focuses on the relationship
between the parent and the subsidiary at the time the acts
complained of took place.”) (citing Craig v. Johns-Manville
Corp., 1987 WL 10191,(E.D.Penn. Mar. 31, 1988; W. FLETCHER,
CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS, Sec. 43.10, at 490; Wm.
Passalacqua Builders v. Resnick Developers, 933 F.2d 131, 138
(2nd Cir. 1991); Radaszewski By Radaszewski v. Telecom Corp., 981

                                 22
example, to hold a parent liable for controlling another

corporation’s debts when it had no control at the time the debts

were incurred.   So, “[i]n alter ego cases, the unfairness

consists, not in fraud, but in the fact that the dominant

shareholder or parent entity, because it controls the subservient

company, is the party responsible for creating the subservient's

debts.”   Riquelme Valdes v. Leisure Res. Group, Inc., 810 F.2d
1345, 1353 (5th Cir. 1987).16   Thus, BOC argues that it could not

be liable under either theory because it had no relationship with

Fluorogas at the time Fluorogas terminated the MOU.   FOC does not

seriously challenge this principle and only cites cases involving

fraudulent transfers to avoid a debt, not alter ego or single

business enterprise.17

     Instead, BOC argues that Fluorogas has, since February 23,

2001, continuously breached its obligations under the MOU.

Because this breach continued after BOC’s acquisition of

F.2d 305, 306 (8th Cir. 1992)).
     16
      Riquelme Valdes was decided under earlier Texas law, which
did not require any showing of fraud to pierce the corporate
veil. The Texas legislature amended earlier law by passing
Article 2.21 of the Texas Business Corporation Act, which added
an actual fraud requirement. TEX. BUS. CORP. ACT art. 2.21(A)(2)
(Vernon 2003). The addition of the fraud requirement, however,
does not alter the fundamental reasoning behind alter ego
derivative liability – that the dominant corporation is actually
creating the debts.
     17
      At trial and on appeal, FOC only proceeded under alter ego
and single business enterprise theories. It did not plead or
prove fraudulent transfer.

                                  23
Fluorogas, FOC contends, BOC is derivatively liable under both

theories.   FOC argues that Fluorogas and BOC has continued to

deny it access to the technology and that Fluorogas and BOC had a

duty to refrain from directly marketing or selling fluorine

generators for CVD processes to potential customers.    FOC further

maintains that Fluorogas and BOC violated this duty by “embarking

on a campaign to market and sell that technology directly to the

semiconductor industry.”    In so doing, FOC characterizes the

February 23, 2001 letter, which it elsewhere calls a breach, as

nothing more than a “repudiation.”

     Regardless of the general validity of the continuing

violation theory, it is important to note two things about this

case.   First, the jury was asked whether “Fluorogas failed to

comply with the MOU by terminating or attempting to terminate the

MOU on February 23, 2001, before the expiration of the reasonable

term.” (Emphasis added.)    This question, and one about harm “from

Fluorogas’s failure to comply with the MOU by terminating or

attempting to terminate the MOU,” were the only jury questions

about breach of contract.    Thus, the jury did not consider any

breach after February 23, 2001, much less any breach based on a

post-acquisition marketing campaign.    Second, the district court

instructed the jury to calculate damages as of February 23, 2001.

     Despite this, FOC contends that it did not have to accept

the repudiation and may still demand continued performance.      As

support, FOC cites cases about anticipatory breach and

                                 24
repudiation, such as Murray v. Crest Construction, Inc., 900
S.W.2d 342, 344 (Tex. 1995).   In Murray, the court stated “[w]e

have long recognized the rule of anticipatory breach: the

repudiation of a contract before the time of performance has

arrived amounts to a tender of breach of the entire contract and

allows the injured party to immediately pursue an action for

damages.”   Id. at 344.   As suggested by that passage, the

repudiation in Murray was anticipatory, occurring before any

performance was due: “Crest repudiated the Beaumont settlement

agreement by informing Murray that it would not perform on the

promissory note when its performance became due.”    Id.   This is

not the case here; FOC had obtained the exclusive license and

then Fluorogas terminated the license.   Although the duration of

the contract had not run, there was nothing anticipatory about

this termination, even if it was a breach.

     Even so, FOC has sued for total breach of contract damages,

and has not sued based on any theory of anticipatory breach or

continuing breach.   FOC’s citation to Brighton Homes, Inc. v.

McAdams, 737 S.W.2d 340 (Tex. App. – Houston [14th Dist.] 1987,

writ ref’d n.r.e.), only emphasizes this problem.    FOC cites

Brighton Homes for the idea that a plaintiff’s damage amount

cannot be restricted to the amount caused by the very first

breach when later instances of breach also cause property damage.

Brighton Homes was a Deceptive Trade Practices Act suit involving

                                 25
failure to build a house in a workmanlike manner.      Id. at 341.

The builder challenged the amount of damages, arguing that only

damage incurred the very first moment of breach was recoverable.

Id. at 342-43.   The court disagreed.   Id. at 343.    The builder’s

failure to repair was continuing, and the purchaser could recover

for all the damage this failure caused until the time of trial,

not just the first instance of damage the purchaser noticed,

because “[w]here there is a continuing cause of damage, measuring

the damage immediately after the initial injury would be unduly

restrictive and would not compensate plaintiffs fully for their

injury.”   Id. at 343.   Here, in contrast, FOC sued for the total

value of its lost asset as of February 23, 2001.      All the damage

from the future use of its asset is measured at that time; there

is no need for a continuing measure of damages.

     A similar problem arises in FOC’s analogy to rent cases.

FOC cites Austin Hill Country Realty, Inc. v. Palisades Plaza,

Inc., 948 S.W.2d 293, 300 (Tex. 1997) for the proposition that a

landlord may, in the face of a tenant’s repudiation, maintain the

lease and sue for rent as it comes due.    Austin Hill Country

Realty confirms that this is one of a landlord’s four options for

dealing with a tenant’s failure to pay rent.    Id.    But again,

FOC’s actions are distinguishable; it did not bring a separate

suit each time performance came due.    It brought one suit for

                                 26
breach less than three weeks after the termination letter.18      Its

derivative claims based on alter ego or single business

enterprise, then, are not saved by an attempt to call Fluorogas’s

conduct a continuing breach.

     Thus, BOC cannot be held derivatively liable for the claims

under either an alter ego or single business enterprise theory

because the claims all arose before BOC acquired Fluorogas.    We

reverse the judgment against the two BOC entities.

Cross Appeal Issues

     The district court granted summary judgment on the tortious

interference and conspiracy claims against BOC, Inc. and all of

FOC’s claims against Applied.19   In granting summary judgment,

the district court accepted the magistrate judge’s report and

recommendation.   In accepting this recommendation, the district

court emphasized that “[a]fter pointing out discrepancies between

what FOC contended its evidence said and what it actually said,

the Magistrate determined that the evidence showed that Applied

     18
      One of the cases that FOC cites, Hampton v. Minton, 785
S.W.2d 854, 858 (Tex. App. – Austin 1990, writ denied), notes
that “the rule requiring the non-breaching party to ‘accept,’ by
words or conduct, the breaching party's repudiation has not
received favorable treatment by recent authorities and, in any
event, has generally been applied in the context of an
anticipatory repudiation.”
     19
      BOC plc did not move for summary judgment because it was
contesting personal jurisdiction. FOC argues that it did not
pursue its claims against BOC plc at trial because the district
court, in a pretrial conference, stated that FOC’s claims against
BOC were limited to derivative liability.

                                  27
did not tortiously interfere with the MOU.”     FOC appeals both

summary judgment rulings.

       The district court’s grant of summary judgment is reviewed

de novo, using the same standards as the district court.       Union

Pac. Res. Group, Inc. v. Rhône-Poulenc, Inc, 247 F.3d 574, 583

(5th Cir. 2001).     A movant is entitled to summary judgment when

“the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law.”

FED. R. CIV. P. 56(c).   In reviewing a motion for summary

judgment, a court must make all inferences in favor of the

nonmoving party.     Union Pac. Res. Group, 247 F.3d at 583.   Yet,

“[g]uesswork and speculation simply cannot serve as a basis for

sending a case to a jury.”     Brown v. CSC Logic, Inc., 82 F.3d
651, 658 (5th Cir. 1996).     Likewise, we have emphasized that

“unsubstantiated assertions are not competent summary judgment

evidence.”     Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994).

Tortious Interference with Contract

       The elements of a tortious interference with contract claim

are:

       (1)   the existence of a contract subject to  interferen
                                                     ce;
       (2)   a willful and intentional act of interference;
       (3)   such act was a proximate cause of damage; and
       (4)   actual damage or loss occurred.

                                  28
Thrift v. Hubbard, 44 F.3d 348, 356 (5th Cir. 1995) (citing

Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 926 (Tex. 1993)).

To show tortious interference, a plaintiff is not required to

prove that the defendant acted with intent to injure.

Southwestern Bell Tel. Co. v. John Carlo Tex., Inc., 843 S.W.2d
470, 472 (Tex. 1992).    The plaintiff must, however, establish

that the defendant’s interference with the contract was

intentional.    Id.

Tortious Interference Claim against BOC

     When ruling on the summary judgment motion, the magistrate

judge concluded that FOC failed to present any evidence that BOC

contacted Fluorogas before the termination on February 23, 2001.

Logically then, BOC could not have proximately caused FOC any

damage.   Although implying that BOC’s timing was suspicious, FOC

still does not argue that BOC contacted Fluorogas before February

23, 2001.20    FOC’s tortious interference claims against BOC are

solely based on its theory that Fluorogas’s termination was only

an anticipatory breach, which FOC refused to accept.21    For the

     20
      FOC’s Cross Appeal issue 3 contends that the court erred
in granting summary judgment on its claim against BOC “despite
overwhelming evidence that BOC unlawfully induced Fluorogas to
breach the MOU after February 23, 2001...” (Emphasis added.)
     21
      FOC also relies heavily on two unpublished cases, Int’l
Minerals & Res. S.A. v. Bomar Res., Inc., 5 Fed. Appx. 5, 2001 WL
1976691 (2d Cir. 2001) and Int’l Minerals & Res. S.A. v. Am. Gen.
Res., Inc., No. No. 87 CIV. 3988 HB, 1999 WL 672907 (S.D.N.Y.
1999). Both cases involve English contract law and anticipatory
breach: a party entered into a contract to sell a boat, but

                                  29
reasons stated in the derivative liability section, this argument

lacks merit.   The district court properly granted summary

judgment on this claim.

Tortious Interference Claims against Applied

     In its motion for summary judgment, Applied argued that it

did not proximately cause FOC’s damages.   In determining that FOC

failed to present evidence to show a fact question on this claim,

the magistrate judge analyzed FOC’s evidence, finding that “many

documents cited by Plaintiff do not say what Plaintiff says they

say.”   The magistrate judge concluded that, at most, the evidence

showed Applied had spoken to Fluorogas and that it had not

informed FOC of this meeting.   The magistrate also concluded that

the evidence only showed that this meeting concerned Applied’s

possible investment in Fluorogas, and that no discussions about

breaching or terminating the MOU occurred.

     Much of FOC’s argument is based solely on suspicion, not on

evidence.   For example, FOC cites an October 17, 2000 letter

Fluorogas sent to Applied that stated “[s]ince your intended end

use for the fluorine is CVD chamber cleaning, we have concluded

that we are unable to directly supply Applied Materials.     To do

so would breach our exclusive agreement with Flourine-on-Call.”

before the time when the sale was to occur, the seller agreed to
sell it to someone else. The district court concluded that the
original repudiation, which occurred before the time of
performance, was not a breach. Int’l Minerals & Res., No. 87
CIV. 3988 HB, 1999 WL 672907 at *3.

                                30
This letter, according to FOC, is evidence that “[i]ndeed

Fluorogas attempted to create the appearance that it was going to

resist Applied’s interference and instead honor the contract ..

.. Hodgson’s letter and the [first] FOC lawsuit served only to

drive Applied underground, so that thereafter it was more

circumspect in pursuing – and more skillful in hiding – its acts

of interference.”   Similarly, FOC describes, without citation,

proposal requests as evidence of its theory that “Applied

pretended to renew its interest in working with FOC.”     These

unsubstantiated assertions cannot constitute summary judgment

evidence.

     Nevertheless, some of FOC’s assertions go beyond mere

suspicion.   For example, FOC presented the handwritten notes of

an Applied executive, Jeet Harika, from an internal Applied

meeting on September 5, 2000.   These notes included the comment

“? get off FOC agreement.”   In response, Applied directs us to

Harika’s deposition testimony, which indicates that this was his

own internal note, not the subject of discussion at the meeting.

Additionally, FOC provided an email that Hodgson drafted in

October 2000, but did not send, about Applied trying to drive a

wedge between FOC and Fluorogas.     Finally, FOC presented a

February 6, 2001 email from Harika to Hodgson, reading “I would

like to talk about a few items with you.     Can you please let me

know best [sic] time to get in touch with you.”     While both the

note and the email have innocent explanations as well, which

                                31
explanation to accept is a question that should be decided by the

jury.     So, too, while Applied cites evidence that would strongly

argue against tortious interference, this evidence cannot resolve

the issue on summary judgment.22

Conspiracy Claims against BOC and Applied

     Finally, FOC challenges the district court’s conclusion that

it failed to present a fact question concerning its conspiracy

claims against BOC and Applied.     The elements of a conspiracy

claim under Texas law are “(1) two or more persons; (2) an object

to be accomplished; (3) a meeting of minds on the object or

course of action; (4) one or more unlawful, overt acts; and (5)

damages as the proximate result.”       Massey v. Armco Steel Co., 652
S.W.2d 932, 934 (Tex. 1983).

     FOC essentially concedes that it can present no actual

evidence of a pre-February 23, 2001 conspiracy.      Instead, FOC

     22
      Applied also offers an alternative basis for affirming the
summary judgment motion by arguing that, based on expert
testimony (and Siegele’s testimony), the language “for use in the
Chemical Vapor Deposition (‘CVD’) process, excluding etch
applications,” excluded post-process cleaning. Applied contends
that it only sought the generators for this excluded post-process
cleaning. As FOC correctly contends, its claims are based more
than on interfering with the exclusive rights, but also includes
the denial of access to technology and the termination of the
entire relationship with FOC. The definition of “CVD process” is
not relevant to those aspects of the claims.
     Similarly, we reject Applied’s contention that FOC’s claims
are presently barred by election of remedies. A party may plead
inconsistent theories arising from independent wrongs. See
Thornton, Summers, Biechlin, Dunham & Brown, Inc. v. Cook Paint &
Varnish, 82 F.3d 114, 117 (5th Cir. 1996).

                                   32
argues that despite the BOC executive’s testimony – that Applied

originally asked BOC to partner with 3M, that Applied never

mentioned Fluorogas’s name, that when touring the Applied

facility the company’s name on the generator was covered, and

that BOC discovered Fluorogas by performing internet searches23 –

summary judgment was inappropriate on the claims that BOC was

involved with a conspiracy.     With this, FOC argues that the BOC

executive’s credibility alone creates a fact question for the

jury.     Without evidence, however, FOC does not have enough for

its claims against BOC to survive summary judgment.24    See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986)

(nonmovant cannot merely cast doubt on movant’s statements but

must rather produce its own evidence to defeat summary judgment).

Therefore, the district court did not err in granting summary

judgment on this claim.     Because summary judgment was proper on

the conspiracy claim against BOC, summary judgment was also

proper on the conspiracy claim against Applied.

Attorney’s Fees

     The district court awarded FOC $24 million in attorney’s

     23
      On February 27, 2001, an internal email with a link to
Fluorogas’s web site was circulated within BOC.
     24
      FOC also argues that the magistrate ignored facts that the
executive changed his story about the date of a meeting with
Applied where Fluorogas’ name had not been raised (neither date
was before the termination of the MOU) and that BOC contacted
Fluorogas on March 2 with a confidentiality agreement. Neither
of these facts should defeat summary judgment.

                                  33
fees for its breach of contract claim.    This amount consisted of

$1,740,770.17 for time actually spent by its lawyers;

$22,458,267.28 under a contingency fee arrangement; $50,000 for

post-verdict work, and $65,000 for appeal.       We review the

attorney’s fees award for an abuse of discretion.       Strong v.

BellSouth Telecomms., Inc., 137 F.3d 844, 850 (5th Cir. 1988).

We review any fact finding underlying this award for clear error.

Id.

      Under Texas law, a party who recovers damages for a breach

of contract claim may recover reasonable attorney’s fees.         TEX.

CIV. PRAC. & REM. CODE § 38.001(8) (Vernon 1997); Green Int’l Co. v.

Solis, 951 S.W.2d 384, 390 (Tex. 1997).    If a party has recovered

on such a claim, an award of reasonable fees is mandatory.

Mathis v. Exxon Corp., 302 F.3d 448, 462 (5th Cir. 2002).         The

amount of reasonable fees, however, is discretionary.       Id.     The

Texas Civil Practice and Remedies Code provides a rebuttable

presumption that usual and customary fees are reasonable.         TEX.

CIV. PRAC. & REM. CODE § 38.003(Vernon 1997).    In a proceeding

before the court, the judge may take judicial notice of

reasonable and customary fees, along with the case file.         TEX.

CIV. PRAC. & REM. CODE § 38.004 (Vernon 1997).

      The Texas Supreme Court has outlined eight relevant factors

for courts to consider when determining the reasonableness of an

attorney’s fee award:

                                 34
     (1) the time and labor required, the novelty and
     difficulty of the questions involved, and the skill
     required to perform the legal service properly;
     (2) the likelihood ... that the acceptance of the
     particular employment will preclude other employment by
     the lawyer;
     (3) the fee customarily charged in the locality for
     similar legal services;
     (4) the amount involved and the results obtained;
     (5) the time limitations imposed by the client or by
     the circumstances;
     (6) the nature and length of the professional
     relationship with the client;
     (7) the experience, reputation, and ability of the
     lawyer or lawyers performing the services; and
     (8) whether the fee is fixed or contingent on results
     obtained or uncertainty of collection before the legal
     services have been rendered.

Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818

(Tex. 1997).   Although a contingent contract is relevant to this

determination, a contingent fee contract is not alone enough to

support an award of fees.   Id. at 818-19.   Yet affirming an award

based on a contract is not unheard of.   In Mathis, we affirmed

the award of a 40% contingency fee, citing two Texas cases,

Laredo Indep. Sch. Dist. v. Trevino, 25 S.W.3d 263 (Tex. App. –

San Antonio 2000, pet. denied) and European Crossroads’ Shopping

Ctr., Ltd. v. Criswell, 910 S.W.2d 45, 58-59 (Tex. App. – Dallas

1995, no writ) (decided before Arthur Andersen ).

     In this case, FOC’s lawyers had a “blended” fee agreement

under which they worked at a reduced hourly rate but also had a

contingency agreement.   This agreement resulted in a total hourly

fee of $1,643,157.45 (at the reduced rate) and a contingency fee

of $22,438,513.   These amounts appear in the district court’s

                                35
order.

     Using the regular hourly rate of FOC’s lawyers, BOC and

Fluorogas calculate the actual lodestar amount of fees at $3.3

million, although they also contend that this is an

overstatement.   Under this calculation, the $24 million

represented an eight-fold enhancement of the lodestar amount.

The district court abused its discretion in awarding such a vast

amount of fees, particularly since it originally did so before

providing BOC and Fluorogas with an opportunity to respond.

Furthermore, in light of our reversal of the lost-asset damages,

the results obtained by FOC’s lawyers have changed.25   We

therefore remand the attorney’s fee award to the district court

for reconsideration.

Conclusion

     For the reasons discussed in this opinion, we REVERSE the

judgment in favor of FOC on the fraud claims and render judgment

in favor of Fluorogas on those claims; REVERSE the award of

punitive damages; REVERSE the judgment in favor of FOC against

The BOC Group, Inc and The BOC Group PLC on the contract claims

and RENDER judgment in favor of The BOC Group, Inc and The BOC

Group PLC on those claims; REVERSE the grant of summary judgment

in favor of Applied on the tortious interference with contract

     25
      Given FOC’s limited recovery following this appeal, we
fail to see how any enhancement beyond the lodestar amount would
be justified in this case.

                                36
claim and REMAND that claim to the district court; and REVERSE

and REMAND the award of attorney’s fees.   We AFFIRM the district

court’s judgment in all other respects.

REVERSED and RENDERED in part; REVERSED and REMANDED in part;

AFFIRMED in part.

                               37