No. 10-0426 IN THE SUPREME COURT OF TEXAS

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					                              No. 10-0426
   ________________________________________________________________

                    IN THE SUPREME COURT OF TEXAS
   ________________________________________________________________

                           SAFESHRED, INC.
                              Petitioner

                                  v.

                          LOUIS MARTINEZ, III
                             Respondent


ON PETITION FOR REVIEW FROM THE THIRD COURT OF APPEALS, AUSTIN, TEXAS


                       LOUIS MARTINEZ, III’S
                  RESPONSE TO PETITION FOR REVIEW




                                   GREGORY D. JORDAN
                                   State Bar No. 11011000
                                   LAW OFFICES OF GREGORY D. JORDAN
                                   5608 Parkcrest Drive, Suite 310
                                   Austin, Texas 78731
                                   512/419-0684 - Telephone
                                   512/419-0866 – Telecopier

                                   ATTORNEY FOR RESPONDENT,
                                   LOUIS MARTINEZ, III
                             IDENTITY OF PARTIES AND COUNSEL


         Pursuant to Texas Rule of Appellate Procedure §53.3(a), Petitioner has properly listed the
identities of the parties and counsel.




                                                 ii
                                            TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL…………....……………….....…….....…..............................ii

TABLE OF CONTENTS…….....………………………………………………........….............................iii

INDEX OF AUTHORITIES……………………………………………….................................................iv

STATEMENT OF THE CASE…………………………………………..................….….........................vi

STATEMENT OF JURISDICTION…………………………..............................…….. ........................viii

ISSUES PRESENTED………………………………………………………………..................................x

STATEMENT OF FACTS………………………………………………………........................................1

SUMMARY OF THE ARGUMENT……………………………………………….....................................8

ARGUMENT…………………………………………………………………………….............................10
I.   There is no need to grant review of the lower court’s opinion because a
     “Sabine Pilot” violation that has been committed with malice will support
     an award of exemplary damages without proof of another tort............................................10

II.      The evidence at trial was legally sufficient to support the jury’s finding
         of “malice” and thus the award of exemplary damages........................................................12

III.     The exemplary damage award complies with Texas and United States law........................13

CONCLUSION AND PRAYER………………………………………………….....................................15

CERTIFICATE OF SERVICE…………….........................................................................................16




                                                          iii
                                                INDEX OF AUTHORITIES

Cases
Almazan v. United Servs. Aut. Assn.,
    840 S.W.2d 776, 780 (Tex. App. - San Antonio 1992, writ denied)............................................12
Azar Nut Co. v. Caille,
     734 S.W.2d 667 (Tex. 1987)………………………………………..............…........................viii, 11
Bellefonte Underwriters Ins. Co. v. Brown,
    704 S.W.2d 742, 745 (Tex. 1986)...............................................................................................viii
Bennett v. Reynolds,
    ______S.W.3d ______, 2010 WL 2541096 (Tex.)…………..........................viii, ix, x, 8, 9, 14, 15
BMW of North America v. Gore,
        517 U.S. 559 (1996)……………………………..................................................................9, 14
City of Ft. Worth v. Zimlich
        29 S.W. 3d 62, 71 (Tex. 2000)..............................................................................................13
Continental Coffee Co. v. Cazares,
        937 S.W.2d 444 (Tex. 1996)…………………………………………………............................11
Garcia v. Sun Belt Rentals, Inc.,
        310 F.3d 403 (5th Cir. 2002)………………………………………………….............................12
Greater Ft. Worth and Tarrant County Community Action Agency v. Mims,
        627 S.W.2d 149 (Tex. 1982)………………………………......................................................11
Federal Express Corp. v. Dutschmann,
        846 S.W.3d 282 (Tex. 1993)……...................................................................................viii, 11
Ran Ken, Inc. v. Schlapper,
        963 S.W.2d 102 (Tex. App. – Austin 1998, rev. denied)……………………….....................10
Russell v. Edgewood Ind. Sch. Dist.,
        406 S.W.2d 249, 251 (Tex. Civ. App. - San Antonio 1966, writ ref’d n.r.e)..........................12
Sabine Pilot Service, Inc. v. Hauck,
        687 S.W.2d 733 (Tex. 1985)………………….....................................vi, viii, x, 7, 8, 10, 11, 12
Safeshred, Inc. v. Martinez,
        310 S.W.3d 649 (Tex. App. – Austin 2010, pet filed). ..........................................................vii
St. Farm Mutual Automobile Co. v. Campbell,
        538 U.S. 408 (2003)……………………………..................................................................9, 14
Texas National Bank v. Karnes,
        717 S.W.2d 901, 903 (Tex. 1986)........................................................................................viii
Town Hall Estates-Whitney, Inc. v. Winters,
    220 S.W.3d 71 (Tex. App. – Waco 2007)………………..............................................................13
Twin City Fire Ins. Co. v. Davis,
    904 S.W.2d 663, 665 (Tex. 1995)...............................................................................................viii
Upton County v. Brown,
    960 SW 2d 808, 816 (Tex. App. - El Paso 1997, no pet.)...........................................................11

                                                                 iv
Statutes
Tex. Civ. Prac. & Remedies Code §41.003........................................................................................ix
Tex. Civ. Prac. & Remedies Code §41.008…............................................................................vi, ix, 7
Tex. Gov’t. Code §22.001(a)(1)........................................................................................................viii
Tex. Gov’t. Code §22.001(a)(2)........................................................................................................viii
Tex. Gov’t. Code. §22.001(a)(3).........................................................................................................ix
Tex. Gov’t. Code §22.001(a)(6) .........................................................................................................ix
Tex. Transp. Code §547.004………………………………………………………...................................6
Tex. Transp. Code §644.151………………………………………………………...................................6

Regulations
49 CFR §393.100(b)………………………………………………………………….................................6
49 CFR §393.100(c)………………………………………………………………….................................6
49 CFR §393.104(b)………………………………………………………………….................................6
49 CFR §393.106(b)………………………………………………………………….............................2, 6
49 CFR §393.106(c)(2)……………………………………………………………….................................6




                                                                   v
                          STATEMENT OF THE CASE

Nature of the Case:   This case involves the “Sabine Pilot” public policy exception to the
                      employment at will doctrine which provides a cause of action to an
                      employee who is terminated for refusing to perform an illegal act.
                      Plaintiff Louis Martinez, III, was discharged from his position as a
                      truck driver with Defendant Safeshred, Inc. for refusing to haul an
                      improperly secured unstable load of 20’ long metal uprights on a
                      flatbed tractor trailer, which would have endangered the driving
                      public and himself. Martinez alleged that driving such a dangerous
                      and unsafe load would have been a violation of the criminal laws of
                      the State of Texas.

Trial Court:          County Court at Law Number 2, Travis County, Texas; Hon. J. David
                      Philips presiding.

Trial Court’s
Disposition:          Following a three day trial, the jury returned a verdict for Martinez
                      awarding him economic damages of $7,569.18, non-economic
                      damages of $10,000.00 and exemplary damages of $250,000.00.
                      The trial court entered judgment for Martinez in line with the jury’s
                      verdict, except the court reduced the amount of exemplary damages
                      to $200,000.00 in compliance with Texas Civil Practice & Remedies
                      Code §41.008(b)(1)(B)(2).

Parties in Court
of Appeals:           The appellant was the Plaintiff’s employer, Safeshred, Inc. The
                      appellee was the discharged employee, Louis Martinez, III.

Court of Appeals:     Third Court of Appeals, Austin, Texas




                                        vi
Court of Appeals
Disposition:       Appellant challenged the awards of non-economic and exemplary
                   damages, but not the award of economic damages. In a reported
                   opinion by Justice Diane Henson, joined by Justice Jan Patterson,
                   the Court affirmed the award of $200,000.00 in exemplary damages
                   but reversed the award of non-economic damages. Justice David
                   Puryear filed a dissenting and concurring opinion urging that both
                   awards should have been reversed. See Safeshred, Inc. v.
                   Martinez, 310 S.W.3d 649 (Tex. App. – Austin 2010, pet filed). A
                   copy is at Appendix Tab 4.




                                    vii
                                  STATEMENT OF JURISDICTION

        This Court has discretionary jurisdiction over this appeal pursuant to §22.001(a)(1) of the

Texas Government Code because one justice dissented on the issue of whether a Sabine Pilot

cause of action will support an assessment of punitive damages. Nevertheless, the court of

appeals’ decision is in line with existing analogous opinions of this Court (see, e.g., Azar Nut Co. v.

Caille, 734 S.W.2d 667 (Tex. 1987)), lower courts and the Fifth Circuit, so exercise of jurisdiction

would not be warranted. Additionally, the appellate court’s punitive damage assessment complies

with the criteria this Court established in the very recent case of Bennett v. Reynolds, _____S.W.3d

____, 2010 WL 2541096 (Tex.), so review is unwarranted on this point as well.

        Contrary to Petitioner’s assertion, the Texas Supreme Court does not have jurisdiction over

this appeal pursuant to §22.001(a)(2) of the Texas Government Code because the opinion of the

Austin Court of Appeals does not conflict with any of this Court’s prior holdings. In particular, the

appellate court’s opinion does not conflict with Federal Express Corp. v. Dutschmann, 846 S.W.3d

282 (Tex. 1993). Dutschmann dealt with statutory interpretation of an older version of the Texas

statute on employment discrimination which specified the types of recovery allowed and did not

provide for punitive damages. It has no relevance to the current case which pertains to whether

punitive damages are recoverable in a common-law Sabine Pilot cause of action. Petitioner’s

suggestion is also incorrect that the Court of Appeals’ opinion conflicts with this Court’s holdings in

Twin City Fire Ins. Co. v. Davis, 904 S.W.2d 663, 665 (Tex. 1995); Texas National Bank v. Karnes,

717 S.W.2d 901, 903 (Tex. 1986); and Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742,

745 (Tex. 1986). Petitioner suggests that the Court of Appeals’ opinion conflicts with these cases

                                                  viii
because the lower court allegedly relied on improper evidence to support a finding of malice. Quite

the opposite, the Court of Appeals relied on the types of evidence that this Court has consistently

indicated would appropriately support an award of punitive damages. See, e.g., Bennett v.

Reynolds.

        Petitioner also incorrectly suggests that this Court has jurisdiction pursuant to Government

Code §22.001(a)(3) because allegedly §41.003 and §41.008(b) of the Texas Civil Practice &

Remedies Code must be construed for a determination of the case. In fact, there is no reason to

construe either statute in resolving this case.

        Finally, Petitioner suggests this Court has jurisdiction under Texas Government Code

§22.001(a)(6), yet this assertion is incorrect because the majority below did not err, and the lower

court’s opinion is in line with the prior opinions of this Court and other courts.




                                                    ix
                                                    ISSUES PRESENTED

          1.        Whether a violation of the public policy exception to the employment at will doctrine

created in Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985) which is committed with

“malice” will support an award of exemplary damages, without evidence of another tort.

          2.        Whether the evidence in the record is legally sufficient to support the jury’s

finding of “malice” and thus the award of exemplary damages.1

          3.        Whether the exemplary damage award is permissible under Texas law and

the United States Constitution.




1
  Martinez objects to Petitioner’s second issue in that it falsely asserts the Court of Appeals based its finding of sufficient evidence
of “malice” on conduct that did not cause any harm to Martinez. A thorough reading of the lower court’s opinion shows that the court
found sufficient evidence of “malice” specifically in the conduct that harmed Martinez (i.e, his termination). In determining whether
there was “malice”, the appellate court did not consider in its opinion Petitioner’s conduct that placed Martinez and others in extreme
danger but did not cause actual injury to Martinez. Accordingly, Petitioner’s second and third issues have been combined into one
issue which simply asks whether there was legally sufficient evidence to support the jury’s finding of malice. It should be noted that
the Court of Appeals only considered the Petitioner’s related conduct that placed Martinez and others in extreme danger when the
court conducted it’s “reprehensibility” analysis while analyzing the amount of punitive damages assessed, which this Court has
indicated is appropriate in Bennett v. Reynolds, ____ S.W.3d _____, 2010 WL 2541096 (Tex.).


                                                                   x
                                      STATEMENT OF FACTS

       Louis Martinez, III (“Martinez”) is an Austin resident and the father of two young boys who

has maintained a Class A commercial driver’s license since 2000. 2 RR 57-58. Respondent

Safeshred, Inc. (“Safeshred”) repeatedly forced Martinez to choose between committing illegal acts

that endangered the driving public or losing his job. When Martinez refused to haul an illegal load

on October 17, 2007 because the danger was too great, Safeshred terminated his employment.

I.     The repeated conduct of Safeshred and termination of Martinez.

       On October 1, 2007, Martinez’s first day of work with Safeshred, he was asked to drive an

18 wheeler rig with a 53’ van attached. 2 RR 60-61. When Martinez performed the pre-trip

inspection of the tractor trailer, he saw the cab did not have the proper markings required by law,

the TXDOT identification numbers were missing, and the cab had an expired dealer’s tag. 2 RR

62. Martinez informed Safeshred’s President, Donald Wallace, that it would be illegal for him to

drive the vehicle in this condition, but Wallace told him to drive it anyway. 2 RR 62-63. Martinez

reluctantly did so as he needed the job and the rig did not appear unsafe. 2 RR 63. Safeshred

made no effort to fix the violations. 2 RR 64-65.

       On Monday, October 8, 2007, Martinez was told to drive an 18 wheeler rig with a flatbed

trailer that was stacked with 20’ long steel uprights and 8’ long steel shelves from Austin to Schertz,

Texas. 2 RR 65-66. During his pre-trip inspection, Martinez found the same violations he had

previously noted on the cab as well as problems with the flatbed trailer and the way it was loaded.

2 RR 66-69. He reported to a manager that the cab and trailer were not legal, that the side


                                                    1
markings on the trailer were illegal, that a reflector was missing, that one of the wheels was missing

a lugnut and the straps which secured the long steel uprights and shelves had cuts in them. 2 RR

67-75, 5 RR PX 2. Martinez’s manager told Martinez to drive the truck anyway. 2 RR 70.

Martinez protested but to no avail. 2 RR 70-75.

        On the trip to Shertz, Martinez was stopped by the DPS and ticketed, not for a moving

violation, but rather for the problems with the vehicle and the load. 2 RR 75-76. The officer noted

on the citation that the cab did not have the appropriate TXDOT insurance cab card, the inspection

certificate was expired, the vehicle did not have proper identifying markings, wrong color marker

lamps existed on the trailer, there was not an appropriate license receipt on the vehicle, the trailer

had a missing wheel fastener, and there were “no tiedowns/securement device used” referring to

Motor Vehicle Safety Standard §393.106(b) which provides that loads on flatbed trailers cannot be

secured with tiedowns which have cuts. 2 RR 76-81; 5 RR PX 1. The DPS officer instructed

Martinez to finish his run, return the vehicle to his place of work and tell his supervisor that the cab

could not be driven again until all of the violations were corrected. 2 RR 81. Martinez returned to

the Safeshred location, provided his managers with a copy of the ticket and again explained to

them what was illegal on the tractor trailer. 2 RR 81-82.

        When Martinez returned to work the very next day, his manager Tooley, in complete

disregard of the instructions from the DPS, told Martinez to drive the cab to Abilene to pick up a

“belly-dump” trailer. 2 RR 82-83. Martinez reiterated that the cab could not be moved until the

violations were corrected and he flatly refused to drive it. 2 RR 83. The manager repeatedly tried


                                                   2
to convince Martinez to drive it anyway, but Martinez refused to do so even though he was

concerned he would be fired if he did not. 2 RR 83. Since he refused to haul the illegal load,

Martinez was assigned document delivery tasks for the remainder of the week. 2 RR 84. The

tractor trailer was finally brought into compliance near the end of that week. 2 RR 84.

       When Martinez reported to work on Monday October 15, 2007, he was told to haul the

flatbed tractor trailer which was again loaded with 20’ long steel uprights and 8’ long steel shelves

to Schertz. 2 RR 84-88. When Martinez inspected the vehicle, he saw it was illegally loaded, that

the steel was not properly stacked, that it was unstable and that it appeared dangerous to haul. 2

RR 84-88; 5 RR PX 3. The uprights and shelves were stacked in two long rows running lengthwise

on the flatbed trailer and there was nothing between the rows (i.e., “dunnage”) that would prevent

the uprights and shelves from shifting and potentially falling off the trailer. 2 RR 84-88. He saw

that the straps which were used to secure the load had cuts in them. 2 RR 84-88. Martinez told

his supervisor that this load was illegal and dangerous and that he could not drive it, but his

supervisor told him to take it. 2 RR 88. Martinez protested again and even went to another

manager to explain what was illegal and how it would endanger other motorists, but he was told to

haul the load anyway. 2 RR 88-89. Martinez was extremely concerned about this dangerous load

but he also needed the job in order to provide for his family, so he took the load as instructed. 2

RR 88-90. On the trip, the steel uprights and shelves were shifting and moving which made the

trailer sway and affected its handling. 2 RR 89-90. Martinez drove as carefully as he could, but he

was terrified that the steel uprights would fall off and hurt someone on the road. 2 RR 89-90.


                                                 3
          On October 17, 2007, Martinez was told to drive another illegal load of 20’ long steel

uprights and 8’ long steel shelves to Schertz. 2 RR 98-103. In his pre-trip inspection, Martinez

saw that the load was poorly secured and that it would not be stable in transit. 2 RR 98-103. The

shelves and uprights were stacked taller than the roof of the cab. 2 RR 98-103. The stacks ran the

length of the flatbed trailer with one side higher than the other and the higher stacks leaning over

the other side. 2 RR 98-103. There was nothing between the rows to prevent them from shifting in

transit and falling from the flatbed trailer. 2 RR 98-103. The straps securing the load had cuts in

them. 5 RR PX 4, 2 RR 47-49, 98-103. Martinez told his supervisors again that this load was

illegal and unsafe, and that someone on the road could get hurt. 2 RR 103-107. His supervisors

told him to drive it anyway. 2 RR 106.

          Martinez was again terrified that he was risking other people’s lives and his own if he

hauled this load, but he knew that he needed this job in order to support his family, so he again

reluctantly tried to do as instructed. 2 RR 106-107. When Martinez tried to drive this load, he

could see and feel the load shifting dangerously and affecting the maneuverability of his vehicle so

he stopped after about five miles and returned to Safeshred. 2 RR 107-109.2 When Martinez

returned to Safeshred’s offices, he again told two of his managers, Kroll and Tooley, that the load

was illegal and unsafe and that he could not drive it; that the load was shifting, moving and

creaking and affecting the handling of the vehicle; that there were cuts in the straps securing the


2
   A witness who saw the load before Martinez left and after he returned to Safeshred testified the load had obviously shifted during
this short drive. 2 RR 50-52. The witness further testified that Martinez expressed his concerns that hauling the load would place
other people’s lives in danger. 2 RR 50-52.


                                                                 4
load; that there were no dunnage blocks between the rows; and that the load was stacked too high

for the way it was secured. 2 RR 109-112.

         Tooley called the president of Safeshred, Donald Wallace.                                2 RR 112.           Tooley

recommended to Wallace that Martinez be fired for refusing to haul the load and then put Martinez

on the phone with Wallace. 3 RR 50; 2 RR 112; 3 RR 6-7. Martinez repeated for Wallace how the

load was illegal and unsafe, how it was shifting and creaking, how it was affecting the handling of

the vehicle, how straps securing the load had cuts in them, how the load was stacked too high for

the way it was secured and how there was nothing between the rows to keep them from shifting. 2

RR 112-113. Martinez told Wallace how he was afraid the load might kill someone. 2 RR 127.

Wallace then fired Martinez and told him that if he was not going to drive the truck, he could get in

his own truck and go home. 2 RR 113-115.3

         After Wallace fired Martinez, Tooley completed a company form and falsely claimed

Martinez “abandoned” his job. 3 RR 64-67, 5 RR PX 8. Even though everyone with Safeshred

said Martinez was a good employee, Tooley wrote on the form he was not eligible for rehire. 3 RR

66-67. Safeshred could have moved Martinez to one of the more than 200 other positions they

had, but they wanted to get rid of him. 3 RR 47-48. Martinez incurred substantial mental anguish

throughout this ordeal.4

3
    Wallace terminated Martinez even though everyone (including Mr. Wallace) testified Martinez was a good worker, reliable and
honest. 3 RR 12, 48, 52, 81-82. Safeshred terminated Martinez even though Martinez’ managers knew it would be illegal for them
to have Martinez drive an unsafe load. 3 RR 54-55, 84.
4
   When Safeshred was telling Martinez to drive the illegal and unsafe loads, Martinez was terribly stressed. 2 RR 52, 88-90,
106-107,121-123, 127. He was extremely upset and stressed about the possibility of killing or hurting himself or someone else
with the illegal and unsafe loads. 2 RR 88-90, 106-107, 121-123, 127. He worried about trying to raise his family and be a role
model to them, at the same time he was being told to do something illegal and unsafe that risked people’s lives. 2 RR 122.


                                                              5
          On October 22, 2007, Safeshred hired another contract driver to take the load Martinez had

refused to haul to Schertz. 3 RR 38. On the way to Schertz, the 20’ long steel uprights and 8’ long

steel shelves on the flatbed trailer came loose and crashed into the back of the cab and through

the rear window of the cab. 3 RR 38-40, 67, 5 RR PX 5.

          II.        Proceedings below.

          Martinez filed suit against Safeshred on December 12, 2007, alleging Safeshred terminated

his employment as a result of his refusal to commit an illegal act, i.e., operate a commercial motor

vehicle with an improperly secured or unsafe load. CR 3.5 During trial, Safeshred’s witnesses, in

an apparent effort to avoid responsibility for their actions, changed their stories, contradicted their

deposition testimony and made false and misleading statements under oath.6

Martinez testified these worries caused him to lose sleep. 2 RR 122. The termination caused him even more stress, caused him
to worry about obtaining any source of income, caused him to stress over how his termination affected his fiancé, caused him
stress about being able to support and raise his two children and caused him to stress about staying together as a family. 2 RR
122-123. Martinez broke down sobbing on the stand describing the sever stress he had endured. 2 RR 122-123. Martinez
testified he lost a lot of sleep. 2 RR 123.
5
    The Court specifically instructed the jury it would have been illegal for Martinez to operate the vehicle, (CR 189): (a) When the
cargo is not adequately immobilized or secured to prevent it from shifting to such an extent that it would adversely affect the vehicle’s
stability or maneuverability, 49 CFR §393.100( c); (b) Which has cargo placed beside each other that is secured by transverse
tiedowns, unless the cargo is placed in direct contact with each other or prevented from shifting towards each other while in transit,
49 CFR §393.106( c)(2); ( c ) With cargo secured by securement devices that have any cracks or cuts that will adversely affect their
performance for cargo securement purposes, including the working load limit, 49 CFR §393.104(b); (d) Operating a vehicle that is
unsafe so as to endanger a person, Tex. Transp. Code §547.004; (e) When the cargo is not firmly immobilized or secured on the
vehicle by structures of adequate strength, dunnage or dunnage bags, shoring bars, tiedowns or a combination of these, 49 CFR
§393.106(b); or (f) When the cargo is not secured to prevent the cargo from falling from the motor vehicle, 49 CFR §393.100(b).
Pursuant to Tex. Transp. Code §644.151 and/or §547.004, violation of any of the above specified rules or statutes would have
constituted a Class C misdemeanor. CR 148-150.
6
   For example, at trial the president claimed Martinez told him the only reason the load of October 17, 2007 was unsafe was because
of the overhang off the rear of the trailer, but this contradicted his deposition testimony. 3 RR 23-26. Martinez’ manager initially
claimed the rows of steel uprights were pushed together on the load of October 17, 2007, and then at trial tried to claim there were
dunnage pallets between them. 3 RR 93-97. His manager also tried to deny Martinez had complained about the way the trailer was
loaded on October 17. 2007, even though he testified to that fact in his deposition. 3 RR 97-100. The Chairman of the Board of
Safeshred claimed at trial to know DPS rules and regulations, in direct contradiction to his deposition testimony. 3 RR 128-131. The
Chairman of the Board also told multiple contradictory stories about whether on the load of October 17, 2007 the railings were stacked
touching each other and whether there was dunnage between the rows or not. 3 RR 136-140.




                                                                   6
       The jury found Martinez had been discharged for the sole reason he refused to perform an

illegal act; found he was entitled to lost earnings and employee benefits in the amount of $7,569.18

and non-economic compensatory damages in the amount of $10,000.00. CR 186-194. The jury

also found by clear and convincing evidence that the harm to Louis Martinez, III resulted from

malice attributable to Safeshred and assessed exemplary damages in the amount of $250,000.00.

CR 186-194.     Pursuant to Tex. Civ. Prac. & Remedies Code §41.008, the Court reduced the

exemplary damage award to $200,000.00 but, in all other respects, entered judgment on the

verdict. CR 196-198.

       The Court of Appeals affirmed the trial court’s judgment on the assessment of $7,569.18 for

lost earnings and employee benefits and $200,000.00 in exemplary damages. The court reversed

the award of non-economic compensatory damages on sufficiency of evidence grounds.

                                  SUMMARY OF THE ARGUMENT

       Safeshred repeatedly forced Martinez to choose between being fired or illegally hauling

loads, including loads of improperly secured 20’ long steel uprights that presented a grave danger

to Martinez and the driving public. When Martinez refused to haul an extremely dangerous and

illegal load on October 17, 2007, Safeshred fired him. That termination gave rise to Martinez’

Sabine Pilot claim since he was fired for refusing to perform an illegal act.

       The Court of Appeals rightfully held that a Sabine Pilot violation done with malice allows for

the recovery of exemplary damages without evidence of an independent tort. Exemplary damages




                                                   7
are a recognized and necessary deterrent to prevent employers from forcing employees to choose

between criminal activities and their jobs. The Sabine Pilot common law cause of action is

appropriately patterned after a cause of action under the Anti-Retaliation Statute which has been

held to necessarily allow for the recovery of exemplary damages, at least partly due to their

deterrent effect. Additionally, the Court of Appeals decision is in line with the decisions of all courts

that have examined the Sabine Pilot cause of action or analogous situations.

         Safeshred failed to object to the trial court’s definition of “malice”, so that definition controls

on appeal. The jury’s finding of malice is supported in the record and such finding supports the

award of exemplary damages. Safeshred falsely asserts that the Court of Appeals based its

finding of sufficient evidence of malice on conduct that did not cause any harm to Martinez. To the

contrary, in determining whether there was sufficient evidence of malice to support an award of

exemplary damages, the lower court only looked to evidence of malice in the conduct that actually

harmed Martinez, i.e., his firing.7 Some of the evidence of “malice” in the firing of Martinez includes

evidence that (1) Safeshred’s managers knew they were trying to force Martinez to commit illegal

acts when they intentionally and substantially injured him by firing him, (2) Safeshred tried to cover

up the firing by falsely reporting Martinez “abandoned” his job, (3) Safeshred’s managers intended

to single out and cause substantial injury to Martinez when, as part of the firing, they made him

ineligible for rehire, even though they admitted he was an excellent worker, (4) Safeshred engaged


7
   The Court of Appeals only considered Safeshred’s related conduct that placed Martinez and others in extreme danger but did not
result in actual harm to Martinez when the Court conducted its “reprehensibility” analysis while analyzing the amount of punitive
damages assessed, which this Court has indicated is proper in Bennett v. Reynolds, ___ S.W.3d ___, 2010 WL 2541096 (Tex.).


                                                               8
in a repeated pattern of trying to force Martinez to perform illegal acts, culminating in his

termination, and (5) Safeshred’s managers gave false and misleading testimony at trial to try to

avoid responsibility for their acts in terminating Martinez.

         The amount of exemplary damages awarded complies with Texas and U.S. law and this

Court’s recent pronouncements in Bennett v. Reynolds, ____S.W.3d ____, 2010 WL 2541096

(Tex.). The analysis required by Gore, Campell and Bennett shows that all five “reprehensibility”

factors were present and that Safeshed’s conduct was utterly reprehensible. See BMW of North

America v. Gore, 517 U.S. 559 (1996) and St. Farm Mutual Automobile Co. v. Campbell, 538 U.S.

408, 418 (2003). In particular, (1) Safeshred’s conduct caused Martinez not only economic harm,

but emotional and psychological harm as well; (2) Safeshred acted with indifference to or reckless

disregard of the safety of Martinez and others (including a large segment of the driving public)

when conditioning his employment on hauling a load of steel they had reason to know was unsafe,

which eventually broke free and crashed through the rear window of the cab; (3) Safeshred’s target

of the conduct, Martinez, was a lower paid employee who was financially vulnerable; (4) this was

not an isolated incident, Safeshred repeatedly tried to force Martinez to haul illegal and dangerous

loads and these actions culminated in Martinez’ termination; and (5) the harm to Martinez (his

firing) resulted from intentional malice, trickery or deceit and was not a mere accident. Further, the

ratio between the punitive and compensatory damages8 is acceptable, especially when one


8
  The ratio is 11 to 1 when compensatory damages for mental anguish and other non-economic losses are included and 26 to 1
when they are not.


                                                             9
considers the particularly egregious nature of Safeshred’s actions as measured by the Gore and

Campbell factors, and the low amount of actual damages

                                            ARGUMENT

I.     There is no need to grant review of the lower court’s opinion because a “Sabine
       Pilot” violation that has been committed with malice will support an award of
       exemplary damages without proof of another tort.

       In Sabine Pilot Service, Inc. v. Hauck, the Texas Supreme Court held that an employee has

a common law cause of action against his employer if he is discharged for refusing to perform an

illegal act. 687 S.W.2d 733 (Tex. 1985). The recognized “public policy behind the Sabine Pilot

exception is to deter the violation of criminal laws.” See Ran Ken, Inc. v. Schlapper, 963 S.W.2d

102,106 (Tex. App. – Austin 1998, rev. denied). An employee should never be placed in the

untenable position of being required to either commit a crime or lose his job. The only realistic way

to provide the deterrent effect warranted against such conduct is through the recovery of exemplary

damages when the employer acts with malice.

       Where the judicially created Sabine Pilot cause of action has been in existence for over 25

years, and the legislature has chosen not to modify it, the appropriate body to interpret this cause

of action should continue to be the judiciary. Martinez is not seeking an expansion of the Sabine

Pilot cause of action, but rather an acknowledgment of its scope. Courts have recognized that the

damages alleged in a Sabine Pilot cause of action should be patterned after the damages allowed




                                                 10
in a cause of action pursuant to the Anti-Retaliation Statute, which prohibits an employer from

discharging an employee in retaliation for filing a worker’s compensation claim.9

          The Anti-Retaliation Statute simply states that an affected employee can recover

“reasonable damages.” Id. In construing that statute, this Court held that punitive damages are,

and should be, recoverable where an employee is terminated in retaliation for filing a worker’s

compensation claim. Azar Nut Co. v. Caille, 734 S.W.2d 667, 669 (Tex. 1987). The Azar court

stated “the threat of punitive damages is inherently more likely to restrain bad faith employers from

wrongfully terminating employees, and is therefore consistent with the purposes of the statute.” Id.

See also Continental Coffee Co. v. Cazares, 937 S.W.2d 444, 453-454 (Tex. 1996). The rationale

in the concurring opinion in Sabine Pilot and in the opinions from the Texas Supreme Court in Azar

Nut and Continental Coffee should be followed and exemplary damages should be allowed in a

Sabine Pilot case.

          Safeshred next suggests that a Sabine Pilot claim should be considered to “sound in

contract”, yet this is incorrect.10 Retaliatory discharge claims have “long been recognized as an

action sounding in tort.” Upton County v. Brown, 960 SW 2d 808, 816 (Tex. App. - El Paso 1997,

9
   For example, in his concurring opinion in Sabine Pilot, Justice Kilgarlin stated that the Anti-Retaliation Statute should serve as
a guide and recoverable damages would include punitive damages. Sabine Pilot, 687 S.W.2d at 736.
10
      Safeshred’s cites to Greater Fort Worth and Dutschmann on this point are misguided. First, the Greater Ft. Worth case cited
by Defendant for the alleged “general rule” on damages in a wrongful discharge case is addressing a situation where there was a
breach of an actual employment contract. See Greater Ft. Worth and Tarrant County Community Action Agency v. Mims, 627
S.W.2d 149, 151 (Tex. 1982). The current employment at will situation is nothing like the situation addressed in Greater Ft.
Worth. The public policy exception that Sabine Pilot creates to the employment at will doctrine does not create a contract
between the employer and the employee. Rather, it creates a cause of action (i.e., a right of recovery) if an employer acts to
terminate an employee for refusing to perform an illegal act. Additionally, Dutschmann is inapplicable because it dealt with an
older version of the Texas statute on employment discrimination which specified the recoveries available and did not include
punitive damages in the allowable recoveries. Federal Express Corp. v. Dutschmann, 846 S.W.3d 282 (Tex. 1993).


                                                                  11
no pet.). See also Almazan v. United Servs. Aut. Assn., 840 S.W.2d 776, 780 (Tex. App. - San

Antonio 1992, writ denied); Russell v. Edgewood Ind. Sch. Dist., 406 S.W.2d 249, 251 (Tex. Civ.

App. - San Antonio 1966, writ ref’d n.r.e). Further, the Fifth Circuit has found attorney’s fees are

not recoverable in a Sabine Pilot claim, indicating such a cause of action does not sound in

contract. Garcia v. Sun Belt Rental, Inc. 310 F.3d 403 (5th Cir. 2002).

II.      The evidence at trial was legally sufficient to support the jury’s finding of “malice”
         and thus the award of exemplary damages.

         In an apparent effort to entice this Court to grant review, Safeshred falsely asserts that the

appellate court based its findings of “malice” on conduct that did not cause any harm to Martinez.

This is simply not true. The court found sufficient evidence of “malice” specifically in the conduct

that harmed Martinez (i.e., his termination). In determining whether there was “malice”, the

appellate court did not consider in its opinion Safeshred’s conduct that placed Martinez and others

in extreme danger, but did not cause actual injury to Martinez.

         The award of exemplary damages to Martinez is supported by the jury’s finding of malice

which is in turn supported by the evidence at trial.11 Some of the evidence of “malice” in the firing

11
     Jury Question Number 3 asked “Do you find by clear and convincing evidence that the harm to Louis Martinez, III resulted
from malice attributable to Safeshred, Inc.?” The jury responded “yes”. CR 191-192. “Malice” was defined in the charge in the
following manner.
           “Malice” means:
                      (a)      a specific intent by Donald Wallace or Kirk Tooley to cause substantial injury to Louis
                               Martinez, III; or
                     (b)       an act or omission by Donald Wallace or Kirk Tooley,
                               (i)        which when viewed objectively from the standpoint of Donald Wallace or Kirk
                                          Tooley at the time of its occurrence involves an extreme degree of risk,
                                          considering the probability and magnitude of the potential harm to others; and
                               (ii)       of which Donald Wallace or Kirk Tooley has actual, subjective awareness of the
                                          risk involved, but nevertheless proceeds with conscious indifference to the
                                          rights, safety, or welfare of others.


                                                              12
of Martinez includes evidence that (1) Safeshred’s managers knew they were trying to force

Martinez to commit illegal acts when they intentionally and substantially injured him by firing him,12

(2) Safeshred tried to cover up the firing by falsely reporting Martinez “abandoned” his job,13 (3)

Safeshred’s managers intended to single out and cause substantial injury to Martinez when, as part

of the firing, they made him ineligible for rehire, even though they admitted he was an excellent

worker,14 (4) Safeshred engaged in a repeated pattern of trying to force Martinez to perform illegal

acts, culminating in his termination,15 and (5) Safeshred’s managers gave false and misleading

testimony at trial to try to avoid responsibility for their acts in terminating Martinez.16

          There is more than sufficient evidence to support the jury’s finding of malice.

III.      The exemplary damage award complies with Texas and United States law.

          The exemplary damage award of $200,000.00, which was reduced from the verdict amount

of $250,000.00 by the trial court, does not exceed the constitutional Due Process constraints




 Where a party does not object to the definition of malice given in the charge, the appellate court is bound to review the evidence
in light of the definition given by the trial court. City of Ft. Worth v. Zimlich, 29 S.W. 3d 62, 71 (Tex. 2000).
12
      Here, Safeshred’s managers knew it would be illegal to have Martinez drive an unsafe load. 3 RR 54-55, 84. There was a
wealth of evidence from which the jurors could have found Safeshred’s managers knew the loads were unsafe. See, e.g., 2 RR
84-90, 98-115. Yet Safeshred’s managers instructed Martinez to drive the loads anyway or be fired. 2 RR 84-90, 98-115.
13
      Safeshred wrote Martinez was fired because he “abandoned” his job. 3 RR 64-67, 5 RR PX 8.
14
      Safeshred’s management testified Martinez was a good, reliable and honest worker. 3 RR 12, 48, 52, 81-82. If Safeshred’s
managers had not intended to substantially injure Martinez, Safeshred could have found another position for him within the over
200 other positions they had. 3 RR 47-48, 66-67. Safeshred without any good reason said Martinez was not eligible for rehire
and indicated such on the termination forms. 3 RR 66-67, 5 RR PX 8.
15
      This pattern is described in detail in the Statement of Facts.
16
      The jury could reasonably have looked at the false and misleading testimony Safeshred’s managers provided at trial as
evidence of malice. Town Hall Estates-Whitney, Inc. v. Winters, 220 S.W. 3d 89 901 (Tex. App. - Waco 2007). For example,
Safeshred’s managers repeatedly testified contrary to the testimony each had given in deposition about such matters as what
was illegal or unsafe with the loads or what complaints Martinez had made. See, e.g., 3 RR 23-26, 93-97, 97-100, 128-131, 136-
140.


                                                                 13
asserted by Safeshred.17 “The most important indicium of the reasonableness of a punitive award

is the degree of reprehensibility of the defendant’s conduct.” Campbell, 538 U.S. at 419.

          The “reprehensibility” analysis required by Gore, Campell and Bennett shows that all five

“reprehensibility” factors were present and that Safeshed’s conduct was utterly egregeous. In

particular, (1) Safeshred’s conduct caused Martinez not only economic harm, but emotional and

psychological harm as well; (2) Safeshred’s managers acted with indifference to or reckless

disregard of the safety of Martinez and others (including a large segment of the driving public)

when conditioning his employment on hauling loads of steel they had reason to know were unsafe,

one of which eventually broke free and crashed through the rear window of the cab;18 (3)

Safeshred’s target of the conduct, Martinez, was a lower paid employee who was financially

vulnerable; (4) this was not an isolated incident, Safeshred repeatedly tried to force Martinez to

haul illegal and dangerous loads and these actions culminated in Martinez’ termination; and (5) the

harm to Martinez (his firing) resulted from intentional malice, trickery or deceit and was not a mere

accident.

          The second guideline to be considered in reviewing the amount of exemplary damages

assessed is the ratio between exemplary and actual damages. The United States Supreme Court

17
    The three guideposts to be considered in a due process analysis are: (1)The degree of reprehensibility of the defendant’s
misconduct; (2) The disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and
(3) The difference between the punitive damages awarded by the jury and the civil penalties awarded or imposed in other
comparable cases. See St. Farm Mutual Automobile Co. v. Campbell; 538 U.S. 408, 418 (2003);
BMW of North America v. Gore, 517 U.S. 559 (1996); Bennett v. Reynolds,_____S.W.3d ____, 2010 WL 2541096 (Tex.). (As
there are no comparable civil penalties, this third guidepost has little relevance in this case.)
18
    As this Court recently indicated in Bennett, a reprehensibility analysis can include surrounding circumstances beyond the
underlying tort. The likelihood of greater harm is also evident from the fact the steel crashed through the cab’s rear window when
the illegal load was hauled.


                                                                14
has refused to impose a “bright line ratio”, but has indicated that few awards exceeding a single

digit ratio will satisfy due process. State Farm, 538 U.S. at 425. Nevertheless, this Court and the

U.S. Supreme Court have recognized that rigid application of a preset ratio is not appropriate and

“ratios greater than those we have previously upheld may comport with due process where ‘a

particularly egregious act has resulted in only a small amount of economic damages.’ ” State Farm,

538 U.S. at 425; Bennett v. Reynolds,_____S.W.3d ____, 2010 WL 2541096 (Tex.). Here, the

ratio of 11 to 1 if non-economic damages are considered and 26 to 1 if they are not is

constitutionally acceptable given the small size of the compensatory damages and the particularly

egregious nature of Safeshred’s conduct which repeatedly endangered Martinez and a large

segment of the driving public.

                                   CONCLUSION AND PRAYER

       This case does not warrant review. Exemplary damages are recoverable in a Sabine Pilot

cause of action. The exemplary damages assessed are within constitutional guidelines and are

supported by evidence in the record. Mr. Martinez respectfully prays that this Court deny

Safeshred’s Petition and for such other relief as the Court may find appropriate.




                                                 15
                                                   Respectfully submitted,

                                                   LAW OFFICES OF GREGORY D. JORDAN
                                                   5608 Parkcrest Drive, Suite 310
                                                   Austin, Texas 78731
                                                   512-416-0684 – Telephone
                                                   512-419-0866 – Telecopier


                                                   By:__/s/________________________
                                                      Gregory D. Jordan
                                                      State Bar No. 110111000

                                                   Attorney for Respondent
                                                   Louis Martinez, IIII

                                  CERTIFICATE OF SERVICE

       I hereby certify by my signature below, that a true and correct copy of the foregoing has
been delivered as indicated below to all counsel of record on this 27th day of August, 2010.

       Craig Morgan                                        Via Certified Mail/RRR
       718 Sunfish                                         7009 3410 0002 1496 0101
       Austin, Texas 78734




                                                   __/s/__________________________
                                                   Gregory D. Jordan




                                              16
                                          APPENDIX

1.    Trial Court Judgment (Supp CR 2-5)

2.    Charge of the Court and Jury Verdict (CR 186-195)

3.    Court of Appeals Judgment

4.    Safeshred, Inc. v. Martinez, 310 S.W.3d 649 (Tex. App. - Austin 2010, pet filed)

5.    Tex. Civ. Prac. & Remedies Code §41.003

6.    Tex. Civ. Prac. & Remedies Code §41.008

7.    Tex. Gov’t. Code §22.001(a)

8.    Tex. Transp. Code §547.004

9.    Tex. Transp. Code §644.151

10.   49 CFR §393.100

11.   49 CFR §393.104

12.   49 CFR §393.106

13.   5 RR Plaintiff’s Ex 3

14.   5 RR Plaintiff’s Ex 4

15.   5 RR Plaintiff’s Ex 5




                                              17

				
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