The Fifth Circuit previously overturned summary judgment in Johnson v. Maestri-Murrell Property Management, LLC, (5th Cir. 2012). I wrote about that decision here.  The remarkable thing about that summary judgment was the lower court ignored direct evidence of discrimination. The district court’s decision seemed to be result-oriented. See the Fifth Circuit decision here

The Fifth Circuit remanded the case back to the district court in upstate Louisiana. Well, remarkably, that same Louisiana U.S. district court granted summary judgment, again. See the second Fifth Circuit decision overturning summary judgment here. In the second appeal in Johnson v. Maestri-Murrell Property Management, LLC, the Fifth Circuit faulted the lower court for not following its remand order. That is judge-speak for the district court judge messed up big time. 

One error cited by the appellate court was the lower court again did not acknowledge the direct evidence of discrimination. Direct evidence is that evidence which shows discriminatory bias without need of any inference. When management said they would not hire a black manager, that is direct evidence of discrimination. It is one thing for a district court to reach that result. It is entirely different when a lower court disregards the appellate court’s finding that the evidence was direct. That omission by the lower court suggests the lower court is following some agenda other than routine respect of precedent. 

Like the plaintiff in Johnson, I have to question the impartiality of the district judge in this matter. He seems to have pre-determined views of the merits of Ms. Johnson’s lawsuit. I find it unfortunate that this Fifth Circuit decision will not be published. 

Its a remarkable story. An octogenarian team owner makes racist comments to his girlfriend, asking her not to bring blacks to "his" games. Donald Sterling specifically asks her not to bring "Magic" Johnson to any San Diego Clippers games. See CBS news report

Mr. Sterling has made outrageous statements before. He is one of the largest property owners in Los Angeles. He refused to rent to African-Amricans. He was sued by the Department of Justice in 2006 for housing discrimination. He eventually had to pay over $2 million to settle that alwsuit. See ESPN report. Allegations included that Mr. Sterling instructed his staff to rent to Koreans and to avoid Mexican-Americans. 

In 2003, a group of nineteen plaintiffs sued him for housing discrimination against blacks. Again, he paid millions of dollars to settle those claims. Yet, until this latest brouhaha, the NAACP was schedueld to give him a lifetime achievement award. 

And, by the way, Mr. Sterling is married. His girlfriend has been sued by Mrs. Sterling….

When I was a young lawyer, fresh out of law school, I worked as a law clerk for a state district judge in small town Louisiana.  My judge had sat on the bench for close to 20 years.  Prior to serving as a judge, he had worked as a prosecutor for 10 years or so.  So, he had a lot of court room experience.  We had a certain day each week dedicated to motions hearings.  We had all sorts of cases come through for their one day in court on some motion.  One day, he asked me about a case he had heard that day.  

He asked me what was the story behind this child support case?  I had no idea what he was talking about.  He quickly rattled off the "back story" to what seemed like a routine request for an increase in child support.  He said the husband had cheated on his wife and was now married to his mistress.  I asked him if he knew the family.  No, he said.  How did he "know" these things?  the answer is he did not know.  But, he was drawing inferences based on what he had seen during a 20 minute hearing.  His message to a young lawyer then was to look deeper than just the pleadings.  I did not realize it then, but he was just starting to teach me to draw inferences where it makes sense to do so. 

So, today, I find it a little surprising when judges do not draw inferences, when they seem to insist on some higher level of proof.  A lawsuit has been winding its way through the system regarding some property owned by the state south of downtown San Antonio.  The parties had their trial this week.  The trial lasted for several days. 

The facts concern Lisa Wong, owner of Rosario’s Cafe, who was bidding on the former so-called DPS museum.  The former museum sits across from her restaurant.  She offered $1.69 million, a full $90,000 more than the successful bidder.  Karl Johnson, a lawyer, was tasked by the state to sell the property.  Mr. Johnson hired David Held to work as real estate agent.  Testimony in trial showed that Mr. Johnson would receive $22,000 more in commission if he sold to the second highest bidder, Paul Covey and his son.  Mr. Johnson insisted that difference did not affect his decision.  He testified that he was concerned that the Wong bid would require a 90 day hold on the property before its conclusion.  But, the Covey bid would only involve a 30 day hold.  

The Attorney General sided with Ms. Wong and was asking the judge to rescind the sale and to have the sale start all over.

The testimony near the end of the trial showed that Ms. Wong submitted a back-up bid in case the Covey deal fell through.  Mr. Held, the real estate agent retained by Mr. johnson, altered a material term of the back-up offer.  He "whited out" a provision he did not like.  Going into the trial, no one knew who did this or why.  The Judge asked about the change.  

In the legal world, it is not kosher to change material portions of any agreement without making the change obvious.  We usually make "pen and ink" changes.  In the legal business, it would be considered unethical to use "white out" and tell no one.  

After the judge insisted on getting to the bottom of this change, Mr. Held took the stand and admitted he had made the change.  Ms. Wong’s lawyer asked incredulously why Held had not spoken up when he heard Mr. Johnson say he thought Ms. Wong was up to some "trickery" when he saw the alteration?  Mr. Held responded that he did not recall Mr. Johnson blaming Ms. Wong for the deletion.  He said it might sound crazy, but he mistakenly thought Wong or her agent had deleted that section – the section Held himself had deleted.   He said he had forgotten that he had deleted it with white-out.  He said he knew that sounded crazy.  See San Antonio Express news report

Yes, that sounds crazy.  In fact, it sounds like Mr. Held was impeached – that is, his testimony was shown to be less than credible.  Yet, Mr. Held and Mr. Johnson won the trial. 

It is very rare to get damaging testimony like this in trial.  "Gotcha" moments are actually quite rare in court.  One would think the Judge would consider Mr. Held to be far from truthful or very forgetful.  Since he was employed by the lawyer Johnson, one would expect Mr. Johnson to suffer a similar evaluation.  But, Mr. Johnson and the sale to the Coveys won

Even now, I can see Judge Jackson from small town Louisiana shaking his head.  

Part of the problem in identifying racism is we as a country do not agree on what "racism" is.  I remember back when I was in college in Ft. Worth, Texas in the 1970’s, a local federal judge was accused of racism because he sometimes used the n-word.  Today, most of us would agree that using the n-word indicates a racist bias.  But, back then, one or two of my more moderate friends argued no, that is just the way the judge was raised.  He came from a time when "everyone" used the n-word.  Well, that is not true.  Not everyone who grew up in the 1920’s and 1930’s used the n-word.  But, regardless, times have changed and most people recognize today that use of the n-word reflects some racist bias. 

Under Title VII, racism generally includes any action that cannot be adequately explained.  If someone is fired for no apparaent reason, a jury may conclude that the termination was motivarted by improper reason, such as racism.  In Louisiana, one of my favorite places, the state Supreme Court has been engaged in a fuss fight over whether Bernette Johnson should become its Chief Justice.  Judge Johnson has seniority.  Judge Johnson is black.

Under court rules and the state Constitution, she should ascend to the Chief Justice position based on years of service.  The justice with the next highest seniority, Jeff Victory, argued he should be the Chief.  Judge Victory is white.  He claimed that Judge Johnson served 4 years as an appointed justice and that appointed time should not count.

Her appointment is a story in itself.  Her appointment came about after protracted litigation itself.  

Judge Johnson, Victory and a second justice recused themselves from the decision.  The four remaining justices and three more designated district court judges resolved the dispute and ruled that Judge Johnson should be the chief judge.  See CBS news report

Judge Johnson filed suit in federal court last July.  The U.S. District Court found that Judge Johnson had more seniority under the Louisiana Constitution.  But, the federal court did not order that she be instituted as chief judge.  The Louisiana Supreme Court came to their own conclusion.  If they had found differently, would that have reflected racism?  Perhaps.  But, in the end, they did the right thing.  Chief Justice Johnson becomes the first black Chief Justice in Louisiana history.  And, the state will be better for it. 

A federal court here in San Antonio has found in favor of employees who sued AA Foundries.  i first wrote about the lawsuit here.  A manager was accused of using the n- word frequently.  A hangman’s noose was found in the breakroom.  The Equal Employment Opportunity Commission filed suit on behalf of four former workers.  A year ago, the defense lawyer merely commented that the noose was a one-time incident by an "idiot."

Well, the San Antonio jury agreed – sort of.  They found the company guilty of discriminatory acts.  The jury awarded punitive damages of $100,000 to one worker, $60,000 to a second worker and $40,000 to a third worker.  Regarding a fourth worker, Kathy White, the jury found she did not suffer any discrimination.  No worker was awarded compensatory damages.  See San Antonio Express News report.  The Superintendent, Ronnie Hunt, was accused of referring to black workers as "you people" and using the term "boy," as well as using the n- word. 

AA Foundries has 20 employees.  So, the amounts will be reduced to the cap on damages, which is limited to $50,000.  Compensatory and punitive  damages are limited to $50,000 for employers with 100 or fewer employes.  The company’s attorney indicates they will request a new trial and file an appeal if necessary. 

A separate, prior trial in July found in favor of AA Foundries and against a fifth employee, Mary L. Johnson. 

The EEOC did good work in this case, apparently conducting a thorough investigation and prosecuting the lawsuit. 

in a recent decision, the Fifth Circuit in New Orleans reversed summary judgment.  In Johnson v. Maestri-Murrell Property Management, LLC, No. 11-30914 (5th Cir. 8/14/12), the EEOC found in favor of the employee, a very rare event.  Yet, the lower court granted summary judgment in favor of the employer.  

The Plaintiff had direct evidence of discriminatory bias.  Ms. Johnson applied for a job as an assistant manager for an apartment property.  Ms. Johnson was black.  According to an employee of the apartment complex, the manager commented that she did not think the owners would want a black assistant manager.  The manager made notes on all the resumes, other than Ms. Johnson’s, an indication that she did not consider Ms. Johnson’s resume.  The property manager never interviewed Ms. Johnson.  The manager later hired a Caucasian woman for the position.  

That is strong evidence of discrimination.  Ms. Johnson was fortunate to have such evidence.  Only rarely does an applicant learn why they were not selected for a particular position.  It is remarkable that the district court would grant summary judgment in the face of this sort of evidence.  The property owners defended themselves, saying Ms. Johnson did not have experience in the field.  But, the person actually selected also lacked experience in managing apartments.  The lower court rejected the discriminatory comments because, said the district court, it is not clear whether they were made before or after the decision to hire the Caucasian applicant.   But, as the Fifth Circuit explained, the timing is less important than the content of the remarks.  They show a clear discriminatory intent regardless of when they were uttered. 

Viewing the evidence in favor of the non-movant, the court finds sufficient evidence upon which the jury could find in favor of the employee.  That means summary judgment is not appropriate. 

The Fifth Circuit correctly noted that on appeal, the court reviews the evidence de novo (i.e., without giving weight to what the lower court decided).  The court did not decide whether this evidence was direct or circumstantial, noting that either way, the Plaintiff had established a prima facie case of discrimination.  The district court should have denied the employer’s motion for summary judgment.  The Fifth Circuit did not mention the now discredited "stray remarks" doctrine in the decision. 

The Fifth Circuit got it right.  This decision is all the more remarkable since one of the more conservative judges, Edith Jones, sat on the panel.  See decision here

Jurors in San Antonio federal court rejected an African-American’s claim that she was subjected to discrimination.  The EEOC represented Mary Johnson in her suit against A.A. Foundries, makers of components for water wells.  The employee had a picture of a noose she was exposed to, but that was not enough for the jury.  The plaintiff and others claimed that management did nothing about the noose.  She also claimed that a supervisor frequently used the n- word. The jury found against the plaintiff. 

The suit started as a larger lawsuit on behalf of four workers.  But, the judge separated Ms. Johnson’s suit since she was the only one to see the noose. There were no blacks on the jury of six persons and one alternate.  See San Antonio Express News report

The lawyer for the company said the noose was a "joke" and the worker who did that was an "idiot."  He said the noose was taken down as soon as management became aware of it. Trial on behalf of three other workers is still to come.

I am not surprised that a jury with no blacks found against an African-American employee.  Many federal court juries do not have any African-Americans.  Federal juries can be anti-plaintiff anyway, but only more so when they lack a member of the aggrieved minority. .  

I first wrote about this case here.  An arbitrator failed to disclose his relationship with the attorney for one of the parties.  The arbitrator, Robert Faulkner, a former US Magistrate, had long standing ties with the lawyer for one of the parties, Brett Johnson.  The arbitration went well for Mr. Johnson of Fish and Richardson in Dallas.  Arbitrator Faulkner awarded $22 million to Mr. Johnson’s client and $6 million in attorney fees.  

The Fifth Court of Appeals in Dallas overturned the award last June, finding that Mr. Faulkner failed to disclose his prior relationship to Mr. Johnson and that Mr. Johnson deliberately concealed his prior relationship to the former Magistrate.  The court noted that at the outset of the arbitration hearing, both Faulkner and Johnson pretended to be meeting each other for the first time. 

Now, the losers in the arbitration have sued Fish and Richardson, Brett Johnson and the former opposing party for fraud.  See Texas Lawyer report.  The suit appears to be based on a Rule 11 agreement entered into by the parties early in the arbitration process.  In the Rule 11 agreement, Brett Johnson’s client, Jonathan Cooke agreed to arbitrate his dispute and to take the dispute to a neutral arbitrator with JAMS.  A Rule 11 agreement simply describes an agreement between opposing parties which is filed or capable of being filed withe the district clerk. 

As I have stated before, the problem with arbitration is the web of connections between all lawyers and law firms.  In the arbitration world, those connections are not apparent.  If the matter remained in a court of law, where it belongs, there is much greater transparency.  How many more connections are out there of which consumers and employees have no knowledge?  Yet, those same consumers and employees are forced into arbitrations everyday.  Arbitration is premised on the arbitrator and the parties disclosing all prior contacts.  But, if they choose not to disclose, who will know otherwise?

Arbitration is not popular with many people.  Part of the problem with arbitration is a lack of accountability.  There is no appeal from an award by an arbitrator.  There is often a lack of information about the arbitrator.  In a recent case, we see what goes on behind some arbitrations.  The Fifth Court of Appeals in Dallas vacated a $22 million dollar award by one JAMS arbitrator.  See decision on Karlseng v. Cooke, No. 05-09-01002-CV.  The decision focused on the social ties between the arbitrator and the lawyer for the winning party.  Robert Faulkner, the JAMS arbitrator and a former US Magistrate, had close ties to the lawyer, Brett Johnson.  The arbitration hearing lasted several days in 2007.  The arbitrator awarded $22 million in damages and another $6 million in attorney’s fees to the winning party.  The arbitral hearing concerned a partnership dispute. 

Karlseng, the losing party appealed the award to the trial judge, but was denied.  The Dallas Court of Appeals then overturned the lower court decision – finding that the ties were close between the former Magistrate and Mr. Johnson and those ties were not disclosed.   Of course, in an arbitration, all ties should be disclosed. 

In 2006, Johnson and Faulkner attended a Dallas Mavericks game, with Mr. Johnson paying some $1,200 for the tickets.  They ate dinner at an expensive restaurant to the tune of $428, again paid by Mr. Johnson.  In December, 2006, Mr. Johnson sent a $75 basket of wine to the Faulkners.  

Yet, at the start of the arbitration in 2007, Mr. Faulkner and Mr. Johnson acted as if they were meeting for the first time.  

Later, Mr. Faulkner said his wife opens the presents and he was not aware of the wine basket.  Mr. Faulkner said he forgot about the Mavericks game until reminded by his wife.  So says a report by Texas Lawyer.  

Arbitration is intended to represent an agreement between the parties to have their matter heard by an impartial third party.  It only works if the arbitrator discloses any potential biases.  It is a system based on contract.  If the arbitrator does not disclose all possible ties, the parties have no way of knowing.  The parties cannot make an intelligent choice in the absence of information. 

Arbitrations only work if the arbitrator discloses every possible bias.  Anyone who has purchased a new car, electronic device or who has worked for some 30% of the employers out there have knowingly or unknowingly agreed to mandatory arbitration.  A system based on arbitral disclosure will not work well for the average consumer, much less the average businessman involved in a partnership dispute. 

Judge Sharon Keller’s lawyer made his final arguments to the Texas Commission on Judicial Conduct.  He argues defensively that the protocol she was expected to follow was not in writing at the time.  He said the TCJC has completed a poor investigation.  He accused the lawyers for the executed killer, Michael Richard, of telling a "pack of lies" regarding the events.  

The prosecutor, actually a special counsel for the TCJC, argued that Judge Keller admitted that she knew the protocol, whether it was written or verbal. She admitted that she knew the protocol was mandatory.  The protocol required her to refer the lawyers to the duty judge, Cheryl Johnson.  Instead, she dealt with the lawyers’ request for more time herself.  

As the reader may recall, the lawyers for Michael Richard encountered computer trouble in trying to file a last minute motion.  The motion had a fair likelihood of success.  Richard was to be executed the next day.  So, the motion was critical.  They called the Criminal Court of Appeals.  The CCA is the final appeals court for criminal appeals.  The defense lawyers were eventually referred to Judge Keller.  They asked for more time.  Judge Keller said no.  She should have referred them to the duty judge Cheryl Johnson.  Indeed, most courts would have allowed the extra time, just because of the final nature of an execution.  See earlier posts (and here) about Judge Keller.  As Judge Berchelmann said, this was a grievous sin by any public servant. 

In following this story, I tend to think Judge Keller is normally a concerned, dedicated judge, and rather conservative.  It may have just been this one time, but I tend to believe that on this one day, she was impatient with the process that allows defense lawyers in death penalty cases to file motions at the very last minute.  It may have just been a bad day, but she showed poor judgment that one day.  Even judges are human.  This is a good lesson to anyone seeking justice in court. Judges do make mistakes.  Litigation is unpredictable in part because judges (and juries) are human.  

As I tell my clients all the time, you can have the best case and still lose.  Here, Michael Richard had good basis for a motion.  But, the motion was never filed……