Wardlaw v. Inland Container Corp.

United States Court of Appeals,

Fifth Circuit.

No. 94-10948.

Dudley WARDLAW, Plaintiff-Appellee-Cross-Appellant,

v.

INLAND CONTAINER CORPORATION, et al., Defendants,

Anheuser-Busch, Inc., Defendant-Appellant-Cross-Appellee.

March 13, 1996.

Appeals from the United States District Court for the Northern
District of Texas.

Before HIGGINBOTHAM, EMILIO M. GARZA and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

Defendant-appellant/cross-appellee Anheuser-Busch ("Anheuser")

appeals from a jury verdict awarding

plaintiff-appellee/cross-appellant Dudley Wardlaw ("Wardlaw")

damages for tortious interference with his employment. Wardlaw

cross-appeals, arguing that the district court erred in granting

Anheuser judgment as a matter of law on the issue of punitive

damages. We reverse the district court's denial of Anheuser's

motion for judgment as a matter of law, and affirm its judgment on

the issue of punitive damages.

I. Background

Wardlaw was employed as a National Account Service Executive

for Inland Container Corp. ("Inland"), which manufactures

corrugated paper products. Anheuser was one of Inland's customers.

Wardlaw successfully developed a quality and service program for

Anheuser. As a result of his work on the Anheuser account, Wardlaw

1
had access to information regarding the volume of Inland's business

with Anheuser.

On January 20, 1990, Wardlaw wrote a letter to Roger Stone of

Stone Container Corporation ("Stone"), an Inland competitor,

expressing interest in acting as a consultant for Stone. In the

letter, Wardlaw described his success with the Anheuser account,

including information about the volume of products that Anheuser

bought from Inland and the amount of revenues the account was

generating. Wardlaw indicated that Stone should call Anheuser to

confirm that Wardlaw's efforts had fostered Inland's growth.

Jim Riley, an employee of Stone, contacted Bob Scheetz,

Anheuser's purchasing agent for corrugated materials, on April 4,

1990 to determine whether Wardlaw had achieved the results

described in his letter. Scheetz requested a copy of the letter,

which was faxed the same afternoon. After reviewing the letter,

Scheetz realized that Wardlaw was communicating volume and revenue

information that Anheuser considered confidential. Scheetz

immediately called Ron Dailey, Inland's sales representative for

Anheuser, and expressed his concern over the release of the

information. Scheetz did not request that any action be taken

against Wardlaw or that the letter be reported to Wardlaw's

supervisors.

Dailey met with Wardlaw later that day and informed him that

Anheuser had a copy of the letter. Wardlaw became concerned that

the contents of the letter might be divulged to Inland's management

executives because various Inland and Anheuser representatives were

2
planning a golf trip together in the near future. He decided that

he should disclose the letter to his supervisor, Steve Raine.

After Raine received a copy of the letter, he sent it to Jim Cory,

Inland's Senior Vice President of Sales and Marketing, who placed

Wardlaw on administrative leave pending investigation of his

actions.

On April 12, 1990, Wardlaw was terminated for violating

Inland's Anti-Trust Compliance Policy and for offering to use

customer contacts he had acquired at Inland to influence major

customers to conduct business with Stone. After the termination,

Inland called several of its customers, including Anheuser, to

inform them that Wardlaw was no longer employed with Inland.

Wardlaw filed suit against Inland, alleging that his

termination violated the Age Discrimination in Employment Act and

the Employee Retirement Income Security Act. Wardlaw subsequently

sued Anheuser, alleging that Anheuser had tortiously interfered

with Wardlaw's employment contract. On August 22, 1992, Wardlaw

settled his claims against Inland.

After a jury trial, Wardlaw was awarded $390,000 in actual

damages for tortious interference and $1 million in punitive

damages. The district court granted Anheuser's motion for judgment

as a matter of law on the punitive damages issue, but denied

Anheuser's motion on the actual damages issue and its motion for

new trial.

II. Anheuser's Appeal

Anheuser initially attacks the district court's denial of its

3
motion for judgment as a matter of law, contending there was no

evidence to support the jury's finding that Anheuser tortiously

interfered with Wardlaw's employment contract and the evidence

overwhelmingly indicates that Anheuser's actions were privileged.

In reviewing a district court's disposition of a motion for

judgment as a matter of law, this Court applies the same test the

district court applied, without any deference to its decision.

Little v. Republic Ref. Co., Ltd., 924 F.2d 93, 95 (5th Cir.1991).

The applicable test provides:

[T]he Court should consider all of the evidence—not just that
evidence which supports the non-mover's case—but in the light
and with all reasonable inferences most favorable to the party
opposed to the motion. If the facts and inferences point so
strongly and overwhelmingly in favor of one party that the
Court believes that reasonable men could not arrive at a
contrary verdict, granting of the motions is proper. On the
other hand, if there is substantial evidence opposed to the
motions, that is, evidence of such quality and weight that
reasonable and fair-minded men in the exercise of impartial
judgment might reach different conclusions, the motions should
be denied....

Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir.1969) (emphasis

added).1 A conflict in substantial evidence must exist to create

a jury question. Id. at 375.

To establish a claim for tortious interference, a plaintiff

must prove: (1) the existence of a contract subject to

interference; (2) willful and intentional interference with that

contract; (3) the intentional interference was a proximate cause

of plaintiff's damage; and (4) actual damage or loss occurred.

1
In a diversity case, federal law governs the standard of
review for sufficiency of the evidence. Gibralter Sav. v.
LDBrinkman Corp., 860 F.2d 1275, 1291 (5th Cir.1988), cert. denied,
490 U.S. 1091, 109 S.Ct. 2432, 104 L.Ed.2d 988 (1989).

4
Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 939 (Tex.1991).

In the instant cause, Anheuser specifically attacks the jury's

findings with respect to the intentional interference and proximate

cause elements of Wardlaw's tortious interference claim. Anheuser

also complains of the district court's rejection of its privilege

defense.

A. Intent and Proximate Cause

Intentional interference does not require an intent to

injure, only that "the actor desires to cause the consequences of

his act, or that he believes that the consequences are

substantially certain to result from it." Southwestern Bell Tel.

Co. v. John Carlo Tex., Inc., 843 S.W.2d 470, 472 (Tex.1992)

(citing Restatement (Second) of Torts § 8A (1965)).2

"Substantially certain" requires that the interference be

"incidental to the actor's independent purpose and desire but known

to him to be a necessary consequence of his action." Southwestern

Bell Tel. Co. v. John Carlo Tex., Inc., 813 S.W.2d 613, 619

(Tex.Ct.App.1991), rev'd on other grounds, 843 S.W.2d 470

(Tex.1992) (quoting Restatement (Second) of Torts § 766 cmt. j.

(1965)). In short, Wardlaw had to prove that Anheuser intended to

2
Wardlaw argues that the test for intent is whether Anheuser
committed acts that were calculated to cause damage to Wardlaw in
his lawful business. We disagree. In John Carlo, the Houston
Court of Appeals expressly disapproved of this definition to the
extent that it means intent to cause harm is a required element of
tortious interference. See Southwestern Bell Tel. Co. v. John
Carlo Tex., Inc., 813 S.W.2d 613, 619 (Tex.Ct.App.1991). The Texas
Supreme Court agreed, concluding that intentional interference does
not require an intent to injure, only an intent to cause
interference or a substantial certainty that interference will
occur. See John Carlo, 843 S.W.2d at 472.

5
interfere with Wardlaw's employment or was substantially certain

that such interference would result from Scheetz's telephone call

to Dailey. Wardlaw also had to prove that such interference was a

proximate cause of Wardlaw's termination. See Travis v. City of

Mesquite, 830 S.W.2d 94, 98 (Tex.1992) (proximate cause consists of

cause in fact and foreseeability).

Although we perceive the issue to be close, an examination of

the evidence reveals that the facts and inferences would permit

reasonable jurors to conclude that Anheuser's interference was

intentional. The evidence presented raised a conflict sufficient

to create a jury question on the issue of intent. See Boeing, 411

F.2d at 375.

Wardlaw relies on two principle pieces of evidence to support

his claim of tortious interference. One piece of evidence involves

a phone call between Scheetz and Dailey that occurred in March,

approximately two or three weeks before the phone call regarding

Wardlaw's dissemination of confidential information. During this

conversation, Scheetz mentioned that he had heard that Wardlaw was

interested in a position with Stone. Wardlaw argues that Scheetz

released this information despite Wardlaw's request in his letter

to Stone that his interest in a consulting position not be

betrayed. The evidence indicates, however, that Scheetz's

disclosure was an offhand comment in the course of a regular

conversation with Dailey, made long before Scheetz was aware of the

6
letter to Stone.3

The second piece of evidence Wardlaw points to is the comment

of Jerry Lamm, Anheuser's group manager for packaging, when Cory

informed him that Wardlaw had been terminated: "I hope Anheuser-

Busch's involvement with the letter to Richard Stone had nothing to

do with it." Lamm also admitted that upon hearing about Wardlaw's

termination, he knew immediately that Wardlaw would not have been

fired if Scheetz had not called Inland.

Although Lamm and Scheetz each testified that Anheuser's sole

purpose was to prevent future dissemination of the confidential

information, Scheetz admitted during trial that he never contacted

3
This first conversation occurred in early March. On April 4,
1990, Scheetz contacted Dailey to inform him that Wardlaw had
released confidential information to Stone. Scheetz testified that
Riley called him that same day about the letter, that upon learning
about the confidential content he requested a copy, Riley faxed him
a copy a few hours later, he immediately called Dailey, and then
met with his supervisor, Jerry Lamm, to discuss the situation.

The parties point to no evidence to show that Scheetz was
aware of the letter or its contents before April 4. Thus, we
fail to see how Scheetz deliberately betrayed Wardlaw's
interest in a consulting job with Stone when he was unaware
that Wardlaw wanted that information kept confidential at the
time he revealed it to Dailey. Wardlaw admits as much in his
brief in discussing punitive damages when he asserts that "the
key evidence of ABC's intent to damage (injure) Wardlaw was
that long before Scheetz was even aware of the contents of
Wardlaw's letter, he told Ron Dailey that Wardlaw was looking
for a job with Stone, a competitor." (Emphasis added.)
Wardlaw is apparently trying to have it both ways, arguing on
the one hand that Scheetz knew Wardlaw did not want the
information that he was looking for a job betrayed based on
Wardlaw's letter, and on the other hand that Scheetz was
deliberately trying to get Wardlaw terminated long before he
knew the contents of the letter. We must presume therefore
that Scheetz mentioned Wardlaw's interest in a consulting
position before he was aware of the letter or of Wardlaw's
desire that his interest in employment with Stone not be
betrayed.

7
Wardlaw to prevent future dissemination, nor did he request that

Stone destroy its copy. Scheetz conceded that if he had made such

a request, Stone would have complied. Various Inland employees

testified that Anheuser did not request that Inland prevent further

dissemination by destroying all copies of the letter. After

Wardlaw was terminated, Scheetz and Lamm did nothing more to

prevent the dissemination.

As to proximate cause, Anheuser argues that Scheetz's phone

call was not a proximate cause of Wardlaw's termination; rather,

Wardlaw's action in giving the letter to Raine and his violation of

Inland's anti-trust policies caused his termination. Anheuser

asserts that it did not turn the letter over to anyone at Inland,

did not reveal or threaten to reveal the letter to Inland

executives, and exerted no pressure over Inland to terminate

Wardlaw. Various Inland employees testified that Wardlaw was not

terminated as a result of any pressure from Anheuser, but because

he had violated Inland's own policies and used information and

contacts that he obtained while an employee of Inland to Inland's

possible detriment.

Wardlaw points to the two phone calls from Scheetz to Dailey

as proximate causes of his termination. During the first phone

call, Scheetz mentioned that Wardlaw was applying for a job with

Stone. The record indicates, however, that this phone call was not

a proximate cause of Wardlaw's termination. Dailey described

Scheetz's comment as "Oh, by the way, I hear through the grapevine

that Dudley is looking for a job at Stone Container." Dailey then

8
asked Wardlaw about his job search, and Wardlaw admitted he was

seeking a consulting position so that he could spend more time on

an invention. Dailey testified that he did not tell anyone else at

Inland that Wardlaw was seeking a position at Stone. Wardlaw

presented no evidence that this phone call formed the basis of his

termination. Wardlaw has thus failed to carry his burden of proof

to establish that this phone call was a proximate cause of his

damages.

Wardlaw correctly asserts, however, that there was some

evidence that the second phone call, which concerned the release of

confidential information, was a proximate cause of his termination.

The phone call was a substantial factor in bringing about Wardlaw's

termination, without which the harm would not have occurred. See

Travis, 830 S.W.2d at 98.

Moreover, it was foreseeable that this phone call could result

in interference with Wardlaw's employment relationship with Inland.

Scheetz testified that he informed Dailey about the letter because

he expected Dailey to ensure that the release of information would

cease. He also stated that he was not surprised when he heard that

Wardlaw had met with his supervisor, Raine. Scheetz also admitted

that informing a company that its employee has done something wrong

is a serious matter for the employee accused of the wrongdoing. In

addition, Lamm testified that upon learning that Wardlaw had been

terminated, he knew instantly that Wardlaw would not have been

terminated if Scheetz had not called Inland. Evidence admitted at

trial indicated that Anheuser was upset about the release of

9
confidential information. Jim Cory, Inland's vice president of

sales, wrote a memo on April 4, 1990, which stated that Anheuser

had informed Dailey that it was not very happy about the letter.

We agree with Anheuser that the evidence of intent and

proximate cause4 is much less compelling in the instant cause than

the fact scenarios presented in the various Texas cases. See

Victoria Bank & Trust, 811 S.W.2d at 940 (bank retained security

interest after plaintiff paid off secured debt and then asserted

the security lien when plaintiff attempted to cash a draft at the

bank, refusing to pay until plaintiff agreed to deduct $40,000 from

the draft proceeds to apply to a disputed note); Sterner v.

Marathon Oil Co., 767 S.W.2d 686, 688 (Tex.1989) (oil company

directed contractor to fire plaintiff because plaintiff had once

sued oil company); Sakowitz, Inc. v. Steck, 669 S.W.2d 105, 107

(Tex.1984), overruled in part by Sterner, 767 S.W.2d at 690

(Sakowitz wrote letter to former employee's new employer asking

that it honor the non-competition agreement former employee signed

by firing employee); John Carlo, 813 S.W.2d at 616-17 (plaintiff

sued telephone company for delays in performance of plaintiff's

contract with the city resulting from company's failure to timely

relocate its utilities, despite being informed that relocation was

necessary); Exxon Corp. v. Allsup, 808 S.W.2d 648, 651

(Tex.Ct.App.1991, writ denied) (gas company, which was aware of

4
Although Anheuser correctly asserts that Wardlaw's discussion
of the letter with Raine was also a proximate cause, Texas law
recognizes the existence of concurrent proximate causes. See
Travis, 830 S.W.2d at 98. All individuals whose actions contribute
to the injury, proximately causing the injury, are liable. Id.

10
employee's lifetime contract as guard for ranch, told subcontractor

not to rehire employee at some point after it took over operations

of ranch's gate).

It is not this Court's function, however, to weigh

conflicting evidence and inferences, or to assess the credibility

of the witnesses. See Boeing, 411 F.2d at 375. Rather, our role

is merely to ensure that a substantial conflict existed in the

evidence to create a jury question. Id. Scheetz's knowledge that

some action would be taken in response to his phone call, his

admission that informing an employer that an employee had engaged

in wrongdoing could have detrimental effects on the employee, his

failure to request that all copies of the letter be destroyed,

Lamm's statement that he hoped Anheuser's involvement with the

letter did not cause Wardlaw's termination, and Lamm's testimony

that he knew as soon as he heard about the termination that Wardlaw

would not have been fired if Scheetz had not called Inland provide

some evidence from which a jury could conclude that the elements of

intent and proximate cause were satisfied.

Viewing the evidence and the permissible inferences to be

drawn from it, we are loathe to declare that under such

circumstances no reasonable jury could have found that Anheuser

intentionally interfered with Wardlaw's employment and that its

actions proximately caused Wardlaw's termination. See Boeing, 411

F.2d at 374. Accordingly, we reject Anheuser's attack on the

intent and proximate cause elements of Wardlaw's alleged cause of

action.

11
B. Privilege

Anheuser contends that Wardlaw is not entitled to recover for

tortious interference because Anheuser's actions were legally

justified. Anheuser is privileged to interfere in the contract of

another if it is done in a bona fide exercise of Anheuser's own

rights or if Anheuser has an equal or superior right in the subject

matter to that of the other party. Sterner, 767 S.W.2d at 691. A

party may assert the privilege "even though that claim may be

doubtful, so long as it asserts a colorable legal right."

Sakowitz, 669 S.W.2d at 107 (emphasis added).

Legal justification is an affirmative defense upon which

Anheuser bears the burden of proof. Victoria Bank & Trust, 811

S.W.2d at 939. Because Anheuser is appealing the district court's

failure to grant judgment as a matter of law on the ground of

privilege, Anheuser must show that it presented evidence so

strongly and overwhelmingly in favor of a privilege that a

reasonable jury could not have reached a contrary verdict. See

Boeing, 411 F.2d at 374.

The Texas Supreme Court recently clarified the law on legal

justification. In Texas Beef Cattle Company v. Green, the court

held that good faith is irrelevant if the evidence establishes a

legal right to interfere: "[I]f the trial court finds as a matter

of law that the defendant had a legal right to interfere with a

contract, then the defendant has conclusively established the

justification defense and the motivation behind assertion of that

right is irrelevant." 39 Tex.S.Ct.J. 194, 1996 WL 11237, at *7

12
(Tex. Jan. 11, 1996) (citations omitted). Although prior supreme

court precedent indicated that "the defense of legal justification

or excuse only protects good faith assertions of legal rights,"

Victoria Bank & Trust, 811 S.W.2d at 939, the court in Green

rejected the assertion that actual malice could vitiate the

privilege. Green, 1996 WL 11237, at *9. Good faith, however,

remains an essential element where the defendant asserts only a

colorable legal claim. Id. at *7.

During trial, Anheuser's purchase order agreement with Inland

was admitted in evidence. The agreement provided that "[v]endor

will not, without [b]uyer's prior written consent, advertise or

publish in any manner that it has furnished or contracted to

furnish to [b]uyer the goods or services specified herein."

(Emphasis added.) Wardlaw admitted that he did not seek Anheuser's

permission before disseminating the volume information to Stone.

Upon discovering Wardlaw's disclosure, Scheetz called Dailey

to complain of the release of volume information, which Anheuser

regarded as confidential based upon the purchase order agreement

and Anheuser's treatment of the information. The purchase order

agreement gave Anheuser a legal right to complain about the release

because Wardlaw's dissemination violated the agreement's express

terms. Scheetz's phone call to Inland represented Anheuser's total

involvement in the events precipitating Wardlaw's termination.

Anheuser's action (the interference) was reasonable and wholly

consistent with protecting its right of confidentiality. Because

the evidence clearly established that Anheuser had a legal right to

13
complain of Wardlaw's disclosure, Anheuser's assertion of that

right through Scheetz's call to Dailey was entitled to the

privilege. Anheuser was not required to prove that the right was

asserted in good faith. Id. Anheuser was entitled to a dismissal

of the claim against it based upon its legal right to interfere.

Even were we to conclude that the purchase order agreement

was insufficient to establish Anheuser's legal right to interfere

as a matter of law, we would nevertheless conclude that Anheuser

overwhelmingly proved the existence of a good faith assertion of a

colorable legal right. The evidence at trial indicates that

Anheuser considered the information confidential and took steps to

prevent its dissemination. Anheuser did not release information

regarding a supplier's volume to any other supplier. Inland

employees Dailey, Cory, and Raine testified that Anheuser kept

information about the volume from various competitors confidential.

Riley, a Stone employee, testified that Anheuser did not release

volume information and that no one at Anheuser had ever given him

this type of information. Additionally, the purchase order

agreement provided for confidentiality.

Although Wardlaw testified that volume information was not

confidential because it was not related to pricing, Wardlaw had no

personal knowledge of Anheuser's practice of keeping volume

information confidential. Indeed, Wardlaw's testimony is

apparently premised on Inland's policies concerning

confidentiality, not Anheuser's. Wardlaw failed to offer any

evidence to counter the testimony of various witnesses that

14
Anheuser considered this type of information confidential.5 We

conclude that Anheuser established that it considered the

information confidential, and acted on its right to protect that

confidentiality. Thus, Anheuser at the very least established a

colorable legal right to interfere.

If Anheuser's interference was a bona fide exercise of its

right to protect confidentiality, it is entitled to the privilege.

See Green, 1996 WL 11237, at *9; Victoria Bank & Trust, 811 S.W.2d

at 939. The evidence indicates that Anheuser never requested that

any action be taken against Wardlaw, did not talk to any Inland

executives about Wardlaw's letter, and called Inland because

Wardlaw was an Inland employee. This evidence sharply contrasts

with Texas cases in which the courts have concluded that the

defendant's interference was not legally justified. See Victoria

Bank & Trust, 811 S.W.2d at 940 (bank failed to release its

security interest in plaintiff's cattle after plaintiff paid off

secured debt and then asserted the security interest when plaintiff

sold the cattle); Sterner, 767 S.W.2d at 690 (defendant directed

that employee be fired by subcontractor despite the fact that

employee's performance had been satisfactory); Allsup, 808 S.W.2d

at 657-58 (defendant directed that subcontractor not rehire

plaintiff based on his failure to perform a job requirement, even

5
Wardlaw relies on Riley's testimony that he might be able to
figure out an approximate volume for other breweries based on
visits to Anheuser because he could see the boxes from different
breweries. Riley admitted, however, that his estimation would be
based upon his own observations and extrapolation, and that no one
at Anheuser would have provided him with this information.

15
though defendant knew a variance had been granted so that plaintiff

would not have to perform). Wardlaw violated what Anheuser

regarded as its right to confidentiality regarding volume

information. Anheuser understandably reacted to this violation by

contacting Inland.

Wardlaw nonetheless asserts that Anheuser's interference was

not a bona fide exercise because it did not attempt to prevent

further dissemination. Wardlaw relies on the fact that Anheuser

neither requested that Wardlaw or Stone turn over all copies of the

letter nor contacted Wardlaw to ensure that he would not

disseminate the information further. Wardlaw asserts that Anheuser

simply informed Inland that it was displeased with the release of

confidential information. Implicit in this statement, however, is

the inference that Anheuser does not want this type of release to

occur again.6

Despite Wardlaw's emphasis on actions Anheuser could have

taken when it discovered that confidential information had been

released, Texas law does not engage in this type of examination

6
Wardlaw also argues that the first phone call, in which
Scheetz mentioned that Wardlaw was seeking other employment, was
not done in a bona fide exercise of Anheuser's rights. We have
concluded, however, that this phone call was not a proximate cause
of Wardlaw's termination. Because legal justification is an
affirmative defense, we do not reach the issue of privilege unless
we first determine there was tortious interference. See Sterner,
767 S.W.2d at 689-90 (party asserting the privilege admits
interference occurred, but seeks to avoid liability based upon a
claimed interest that is being impaired or destroyed). Wardlaw did
not establish one of the necessary elements of tortious
interference. See Victoria Bank & Trust, 811 S.W.2d at 939. Thus,
Anheuser did not have to prove that it was legally justified in
making this phone call.

16
when analyzing good faith.7 The Texas cases do not focus on what

the defendant could have done or might have done; rather, they

look at what the defendant actually did in assessing good faith.

Victoria Bank & Trust, 811 S.W.2d at 940; Sterner, 767 S.W.2d at

691; Allsup, 808 S.W.2d at 657-58; International Bank of Commerce

v. Union Nat'l Bank, 653 S.W.2d 539, 549 (Tex.Ct.App.1983, writ

ref'd n.r.e.).

We conclude that Anheuser's assertion of its right was bona

fide and that no reasonable jury could find otherwise. All

evidence indicated that Anheuser kept volume information

confidential, refused to release information on suppliers to their

competitors, and considered volume information important as a

negotiating tool. Upon learning that this information had been

released by an Inland employee, despite Anheuser's purchase order

agreement and conversations with Inland that this type of

information was confidential, Anheuser called its normal contact at

Inland, Dailey, to inform him of the release.

Anheuser clearly had a well-grounded and justifiable belief

that the information was confidential. See Sakowitz, 669 S.W.2d at

107. Its phone call to Inland was a bona fide exercise of that

right because Inland was the party with whom it had an

understanding that such information would not be released. To

conclude otherwise would effectively destroy the privilege of legal

7
Wardlaw repeatedly asserts that Anheuser should have
contacted him and should have fought to have him rehired once it
became aware of his termination. Anheuser was under no legal
obligation to take such actions and, thus, its failure to do so
provides no indication that Anheuser acted in bad faith.

17
justification. The district court erred in denying the motion for

judgment as a matter of law on the issue of legal justification.

See Boeing, 411 F.2d at 374. Because Anheuser established legal

justification for its actions, Wardlaw is precluded from recovering

on his asserted claim of tortious interference.8

III. Wardlaw's Cross-Appeal: Punitive Damages

Wardlaw complains on cross-appeal of the district court's

order denying him recovery for punitive damages. Our holding that

Wardlaw cannot recover compensatory damages for tortious

interference precludes his recovery for punitive damages. See

Federal Express Corp. v. Dutschmann, 846 S.W.2d 282, 284

(Tex.1993); Hadley v. VAM P T S, 44 F.3d 372, 375 (5th Cir.1995)

(finding of actual damages is a prerequisite to the receipt of

punitive damages under Texas law). The district court did not err

in denying Wardlaw punitive damages.

CONCLUSION

For the foregoing reasons, we reverse the judgment of the

district court awarding Wardlaw damages for tortious interference

and affirm the district court's denial of punitive damages.

Wardlaw's claim is dismissed with prejudice.

AFFIRMED IN PART; REVERSED AND RENDERED IN PART.

8
Our disposition of Anheuser's claim of legal justification
renders our consideration of its other claims of error unnecessary.

18