Johnston v. Harris County Flood Control Dist.

• Decision Date: 17 April 1989
• Docket Number: No. 87-2970,87-2970
• Citation: 869 F.2d 1565
• Parties: 51 Fair Empl.Prac.Cas. 467, 50 Empl. Prac. Dec. P 38,937, 57 USLW 2615 Carl JOHNSTON, Plaintiff-Appellee, v. HARRIS COUNTY FLOOD CONTROL DISTRICT, et al., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1565

869 F.2d 1565

51 Fair Empl.Prac.Cas. 467,

50 Empl. Prac. Dec. P 38,937, 57 USLW 2615

Carl JOHNSTON, Plaintiff-Appellee, v. HARRIS COUNTY FLOOD CONTROL DISTRICT, et al., Defendant-Appellant.

No. 87-2970.

United States Court of Appeals Fifth Circuit.

April 17, 1989.

Rehearing Denied May 22, 1989.

David H. Melasky, Mike Driscoll, Rock William August Owens, County Attys., Houston, Tex., for defendant-appellant.

James Patrick Wiseman, Austin, Tex., Beatrice Mladenka-Fowler, Eric H. Nelson, Houston, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before GEE, SNEED, ^* and WILLIAMS, Circuit Judges:

GEE, Circuit Judge:

Having been unsuccessful at trial, the defendants in this civil rights action raise a multitude of challenges to the district court's finding of liability. Their appeal requires us to review the district court's disposition of two pretrial issues, its finding of liability under Title VII and Sec. 1983, its computation of damages and, finally, its award of attorney's fees. We affirm the district court's opinion on all issues save one, its computation of damages. Accordingly, we affirm in part and reverse in part, remanding the case for a recalculation of the damage award.

Carl Johnston (Johnston), the plaintiff in this case, began working for the Harris County Flood Control District (HCFD) as an hourly laborer in 1950. By 1977, Johnston had advanced to a supervisory position; he continued to work in that capacity until HCFD terminated his employment in 1981. Johnston's tenure with HCFD was long but not always peaceful. The directors of HCFD received many complaints about Johnston over the years, including complaints that he exhibited racial bias and played favorites. Moreover, Johnston had problems with HCFD's purchasing procedures that resulted in equipment purchases exceeding Johnston's authority. Despite these difficulties, Johnston's position at HCFD appears to have remained secure.

In 1980, Marilon Speed, another HCFD employee, filed an Equal Employment Opportunity charge against HCFD. The Harris County Commissioner's Court convened an Equal Employment Opportunity hearing (the EEO hearing) to review Ms. Speed's allegations. Johnston testified at the hearing on behalf of Speed; his testimony was not favorable to HCFD and its directors. Embarrassed by Johnston's testimony, James B. Green, the director of HCFD, lashed out at Johnston with a series of retaliatory employment actions. HCFD's retaliatory efforts culminated when it attempted to force Johnston to accept a demotion. When Johnston refused, HCFD terminated his employment.

Johnston then filed this action against HCFD and its individual directors, alleging violations of Title VII, Sec. 1983, federal age and handicap discrimination laws and a variety of state laws. The age and handicap discrimination claims and the state claims were dismissed before trial. After considerable jockeying, the case proceeded to trial. Johnston maintained that HCFD's scheme of retaliation violated both Sec. 704(a) of Title VII and the First Amendment. HCFD insisted that Johnston's racial attitudes and poor performance provided legitimate, non-retaliatory justifications for firing him. Rejecting HCFD's proffered justifications as pretextual, the court found HCFD liable under Title VII and Sec. 1983 and awarded Johnston actual and punitive damages as well as attorney's fees. HCFD's appeal raises issues from every stage of the litigation; we review each of HCFD's challenges in turn.

1. Disqualification of Johnston's Counsel

Casting an unusual light on an attorney's ethical obligation to maintain his client's confidences, HCFD contends, without merit, that the district court erred when it denied HCFD's motion to disqualify Johnston's attorneys. Under Texas state law, the Harris County Attorney's Office represents HCFD in legal matters. At the time of Marilon Speed's EEO hearing, Anthony Sheppard was an Assistant County Attorney. Sheppard attended and participated in the Speed EEO hearing, questioning witnesses and drawing up the Commissioner's Court's order. HCFD asserts that Sheppard represented HCFD at the EEO hearing, thus creating an attorney-client relationship between Sheppard and HCFD for purposes of the Speed matter. Johnston's attorneys contacted Sheppard during the discovery period of Johnston's action against HCFD and called Sheppard as a witness at trial. As a result, HCFD maintains, Johnston's attorneys caused Sheppard, HCFD's purported former counsel, to disclose information he learned while representing HCFD and, thus, to violate his ethical obligation to maintain HCFD's confidences. The district court denied HCFD's request to disqualify Johnston's attorneys three times; it was correct each time.

On review of a motion to disqualify counsel, we review findings of fact for clear error "while carefully examining the district court's application of relevant ethical standards." Cossette v. Country Style Donuts, Inc., 647 F.2d 526, 531 (5th Cir.1981) (citations omitted); Brennan's, Inc. v. Brennan's Restaurants, Inc., 590 F.2d 168, 171 (5th Cir.1979) (citation omitted). In this Circuit, we do not mechanically apply the rule of disqualification. Cossette, 647 F.2d at 530 (citing Church of Scientology v. McLean, 615 F.2d 691, 692 (5th Cir.1980)). Rather, we scrutinize the "precise nature of the relationship between the present and former representations." Duncan v. Merrill Lynch, Pierce, Fenner & Smith, 646 F.2d 1020, 1029 (5th Cir. Unit B), cert. denied, 454 U.S. 895, 102 S.Ct. 394, 70 L.Ed.2d 211 (1981). A party seeking to disqualify opposing counsel on the ground of a former representation must establish two elements: 1.) an actual attorney-client relationship between the moving party and the attorney he seeks to disqualify and 2.) a substantial relationship between the subject matter of the former and present representations. In re Corrugated Container Antitrust Litigation, 659 F.2d 1341, 1345 (5th Cir. Unit A 1981); Duncan, 646 F.2d at 1028. HCFD does not contend that Johnston's attorney's represented HCFD and, therefore, cannot represent a party adverse to HCFD. Rather, HCFD maintains that Sheppard, one of Johnston's witnesses, represented HCFD and that the confidences and ethical obligations that arose in Sheppard's relationship with HCFD extend to Johnston's attorneys. Thus, we examine Sheppard and HCFD's relationship to determine whether any aspect of that relationship precludes Johnston's attorneys from interviewing Sheppard or from calling Sheppard as a witness.

As HCFD and Sheppard did not have an attorney-client relationship with respect to the Speed EEO dispute, the district court did not err when it denied HCFD's motions to disqualify Johnston's counsel. HCFD ignores the "precise nature" of its relationship with Sheppard when it insists that an attorney-client relationship existed for the Speed EEO matter. At most, Sheppard's role in the Speed matter was ambiguous. Sheppard testified that he acted as an impartial figure at the hearing, performing a role analogous to that of an arbitrator or an impartial hearing officer. A review of the EEO hearing transcript reveals that Sheppard conducted the questioning, advised the Commissioner's Court, and drew up the Court's order. We cannot say precisely what function Sheppard performed, but we can say what function he did not perform: that of an advocate acting on behalf of HCFD--or of HCFD's individual officers or even of Marilon Speed. Furthermore, Sheppard's preparation for the hearing demonstrates that he did not act as HCFD's counsel. Before he attended the hearing, Sheppard explored the consequences of acting as an impartial participant instead of HCFD's advocate. Shephard believed that, if the hearing did not resolve the dispute and Speed brought a civil action against HCFD, he could not represent HCFD in the civil action; a conflict of interest would arise if an attorney functioned as an impartial participant at one stage of a controversy but chose sides and acted as an advocate for one party at the next stage. Sheppard attended the EEO hearing under the assumption that his action would prevent him from representing HCFD in a future proceeding on the same dispute, an assumption incompatible with an attorney-client relationship. Finally, Sheppard's actions following the Speed hearing preclude any conclusion that he and HCFD had an attorney-client relationship for the purposes of the Speed matter. When Ms. Speed felt that HCFD was violating the Commissioner's Court's order, she turned to Sheppard, who contacted HCFD, counselling it to comply with the order. If Sheppard was HCFD's attorney, it would be unusual for Ms. Speed to have sought his assistance to force HCFD to comply with the order or that Sheppard would offer such assistance. We cannot conclude that an attorney-client relationship existed and, thus, Sheppard was under no obligation to refrain from sharing the information he learned during the Speed dispute.

Even if Sheppard and HCFD had an attorney-client relationship, however, we would affirm the district court. This case is analagous to Brennan's, Inc. v. Brennan's Restaurants, Inc. In Brennan's, a corporation split into two, competing entities. 590 F.2d at 170-71. The attorney for the original corporation chose to work for one of the new entities, severing his ties with the other. Id. When litigation arose between the two new entities, the attorney retained co-counsel. Id. We affirmed the first attorney's disqualification because of his former relationship with the original corporation. Id. at 172. The new co-counsel, however, was not necessarily subject to disqualification for two reasons: there was no previous attorney client relationship between the co-counsel and the original client and the information that the co-counsel learned from the disqualified counsel may not have been privileged,...