Zastrow v. Houston Auto Imports Greenway Ltd.
789 F.3d 553
| 5th Cir. | 2015Background
- Zastrow owns Heights Autohaus and historically bought Mercedes parts at a 25% discount from Mercedes-Benz of Houston Greenway ("Greenway").
- Zastrow inspected a 2006 Mercedes CLK for a customer (McKamie) who represented the Howards in an arbitration alleging the dealership sold a defective car and asserting racial-discrimination and retaliation claims.
- Zastrow agreed to serve as an expert and was deposed on January 8, 2013; he alleges Greenway called on January 7 warning him not to testify, and on January 9 told him it would stop selling him parts.
- Greenway’s counsel sent a January 14 letter formally terminating the business relationship because of Zastrow’s deposition testimony; Zastrow’s deposition was read at the arbitration.
- Zastrow sued Greenway, its lawyer Kurisky, and Kurisky’s firm under civil RICO (18 U.S.C. § 1962(c)), 42 U.S.C. § 1981 (retaliation), and § 1982; the district court granted summary judgment to defendants.
- The Fifth Circuit affirmed summary judgment on RICO and § 1982 claims, but vacated and remanded as to the § 1981 retaliation claim for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether alleged threats and termination of parts sales constitute predicate acts and a "pattern of racketeering" under § 1962(c) (RICO) | Zastrow contends the Jan. 7 call, Jan. 9 call, and Jan. 14 letter were obstruction of justice (§ 1503) predicate acts forming a RICO pattern | Defendants argue their conduct was retaliatory/business termination, not criminal obstruction, and not a pattern threatening continued criminal activity | Affirmed for defendants: no RICO pattern — at most a single predicate act (the Jan. 7 call) and insufficient continuity or threat of ongoing racketeering |
| Whether defendants formed an "association-in-fact" enterprise distinct from the alleged racketeering | Zastrow alleges Greenway, Kurisky, and his firm acted in combination to obstruct justice, forming an enterprise | Defendants contend no separate, ongoing organization exists; attorney participation was routine legal services | Affirmed: no enterprise pleaded or shown separate from alleged predicate acts |
| Whether Zastrow’s expert testimony in support of the Howards is protected activity under 42 U.S.C. § 1981 (retaliation) | Zastrow argues his testimony was necessary to vindicate the Howards’ § 1981 rights and thus is protected activity; termination of parts sales was retaliatory | Defendants assert testimony was purely technical, not related to racial discrimination claims, and refusal to contract is lawful absent racial motive | Reversed and remanded on § 1981: court holds testimony can be protected activity; summary judgment vacated to allow McDonnell Douglas framework to be applied |
| Whether refusal to sell parts is an adverse action under § 1981 and whether causation can be shown | Zastrow views severing business as adverse and causally linked to his protected testimony | Defendants treat termination as lawful exercise of freedom to contract and deny causation/retaliatory motive | Not finally decided — court noted refusal can be adverse if motivated by retaliation for protected activity and remanded for further factual/burden-shifting analysis |
Key Cases Cited
- Performance Autoplex II Ltd. v. Mid-Continent Cas. Co., 322 F.3d 847 (5th Cir. 2003) (summary-judgment standard review)
- In re Burzynski, 989 F.2d 733 (5th Cir. 1993) (RICO predicates committed in defense of litigation do not show long-term criminal activity)
- Abraham v. Singh, 480 F.3d 351 (5th Cir. 2007) (definition of RICO pattern requires related acts and threat of continuity)
- Word of Faith World Outreach Ctr. v. Sawyer, 90 F.3d 118 (5th Cir. 1996) (pattern requires related predicates and continuity)
- H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (continuity and threat-of-continuity tests for RICO pattern)
- United States v. Williams, 874 F.2d 968 (5th Cir. 1989) (elements of obstruction-of-justice under § 1503)
- Reves v. Ernst & Young, 507 U.S. 170 (requirement that RICO defendant participate in operation or management of enterprise)
- Whelan v. Winchester Prod. Co., 319 F.3d 225 (5th Cir. 2003) (enterprise must be distinct from racketeering acts)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (burden-shifting framework for discrimination/retaliation cases)
- Willis v. Cleo Corp., 749 F.3d 314 (5th Cir. 2014) (applying McDonnell Douglas to § 1981 retaliation)
- Sayger v. Riceland Foods, Inc., 735 F.3d 1025 (8th Cir. 2013) (testimony in discrimination investigation/proceeding can be protected activity under § 1981)