Bellows v. Amoco Oil Co, TX

118 F.3d 268, 1997 WL 398739
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 17, 1997
Docket96-40051
StatusPublished
Cited by135 cases

This text of 118 F.3d 268 (Bellows v. Amoco Oil Co, TX) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bellows v. Amoco Oil Co, TX, 118 F.3d 268, 1997 WL 398739 (5th Cir. 1997).

Opinion

*270 GARWOOD, Circuit Judge:

Plaintiffs Martin J. Bellow 1 (Bellow) and Phillips Industrial Constructors, Inc. (PICI), a Texas corporation, brought this lawsuit against defendant Amoco Oil Company, Texas City refinery (Amoco), alleging that Amoco discriminated against them on the basis of their race by terminating, modifying, or changing their right to contract in violation of 42 U.S.C. § 1981. A jury returned a verdict in favor of Bellow, awarding him $50,-000 in “subjective damages” and $225,000 in punitive damages. We reverse.

Facts and Proceedings Below

Bellow, an African-American, began working in the construction business in 1970, working primarily in Texas City, Texas, and the surrounding Gulf Coast area specializing in civil construction and equipment operations. In 1974, Bellow met Harold Phillips (Phillips), a Caucasian, while they both worked for the same construction company. They instantly became friends, and over the next several years Bellow and Phillips continued to work together, first at the M.W. Kellogg Company, then at Byrd Construction, and later at Callie Construction.

In the summer of 1978, Phillips left Callie Construction and, with his wife, formed his own construction firm, PICI, a corporation organized under Texas law. During the first six months of its operation, PICI had difficulty obtaining construction work. 2 In early 1979, Phillips learned that Amoco was seeking qualified minority-owned construction firms to perform maintenance and construction work at its Texas City refinery. To take advantage of this opportunity, Phillips approached Bellow in March 1979 and offered him a 51% ownership interest in PICI. Bellow accepted the offer and became the president of PICI, while Phillips became PICI’s vice-president and general manager, owning 49% of the corporation’s stock. 3 On March 3, 1979, Bellow and Phillips wrote a letter to Amoco informing it of PICI’s new status as a minority-owned construction firm. Soon thereafter, PICI began receiving general maintenance and construction work from Amoco.

Beginning in 1979, and lasting throughout the 1980s, PICI’s business relationship with Amoco flourished. During this time, almost all of PICI’s business involved work from Amoco’s refinery. PICI performed a variety of civil construction and related maintenance work for Amoco, producing several millions of dollars in annual gross revenues for PICI (the amended complaint alleges that PICI’s gross receipts from the Amoco refinery totaled over 32 million dollars from January 1985 through June 1994). Bellow worked primarily in the field as a superintendent overseeing the work of PICI crews at the refinery, while Phillips was responsible mainly for the day-to-day administrative duties at the office.

PICI’s decade of prosperity came to an end, however. Sometime during the mid-1980s, Amoco began reevaluating its use of contractors and suppliers at the Texas City refinery. At one point, over 3,000 contractors and suppliers performed work for the refinery. In an effort to improve its monitoring of contractors and increase its efficiency, Amoco decided to reduce the number of contractors through “contract consolidation.” Under this consolidation process, Amoco decided to use a single, primary contractor to perform most of the construction and related maintenance work that its own personnel could not handle. 4 In 1989, Amoco began informing its construction contractors, including PICI, that it would begin using Brown & Root Industrial Services (BRIS) as *271 its primary outside maintenance contractor. 5 Under its new contract consolidation policy, construction jobs would first be assigned to Amoco personnel. If Amoco personnel were unavailable, the job would be assigned to BRIS. If BRIS did not have the personnel available or lacked the expertise for a particular job, Amoco’s Contracts group would either bid the job to outside contractors 6 or hire a contractor under a cost-plus contract. 7

Beginning in 1990, PICI and other general maintenance contractors experienced a dramatic decline in their general maintenance work. 8 Because Amoco personnel and BRIS consumed the bulk of Amoco’s maintenance jobs, little work was left over for PICI and other maintenance contractors. In 1991, PICI’s work load decreased even further when Amoco decided not to renew PICI’s service agreements—the primary source of PICI’s work. 9 From 1991 to 1994, PICI performed whatever cost-plus work it could obtain. PICI was invited to bid on several jobs when it did not have any cost-plus eon-tract work in the refinery; however, PICI was rarely a successful bidder, as its bids were usually too high. PICI’s annual gross revenues from Amoco work dropped from approximately $3.5 million in 1990 to $209,-537 in 1994 and $0 for the first half of 1995. 10

At around the same time that Amoco implemented its new contract consolidation policy, Bellow started to notice that Amoco was treating him in a manner which he believed to be discriminatory. Specifically, Bellow believed that Jerry Jordan (Jordan), an Amoco employee who worked as a supervisor both with the Contracts group and the PS & C group, was on a mission to “run him out of the refinery” solely because Bellow was African-American. 11 The specific incidents of racial discrimination attributed to Jordan include the following: (1) in 1989, Jordan told Phillips that he believed Bellow made too much money as a field superintendent; (2) in 1989, Bellow learned from Phillips, who in turn had been so informed by Albert De Los Santos (De Los Santos), another Amoco con *272 tractor, that Jordan had told De Los Santos “Albert, whenever you drive a white Cadillac or a Lincoln [like Bellow’s wife], I’ll stop doing business with you because you done made too much money”; (3) in 1990, when Bellow complained to Jordan about racist comments made by Sherman McNown (McNown), an Amoco Turnaround Superintendent, Jordan told Bellow that he could not do anything because he (Jordan) was prejudiced against African-Americans; 12

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118 F.3d 268, 1997 WL 398739, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bellows-v-amoco-oil-co-tx-ca5-1997.