Fed. Sec. L. Rep. P 93,273 George S. McLean v. International Harvester Company, (Now Known as Navistar International Company)

waiver, however, the denial of his visa is not subject to review a federal

court.

This prior result is accord with our

holdings that decisions of United States visa

consuls on matters are nonreviewable INS, the courts. Te Kuei v. Liu (5th Cir.1981);

F.2d Gonzalez- INS,

Cuevas v.

Cir.1975). The district court’s dismissal of appellants’ suit therefore

AFFIRMED. McLEAN,

George Plaintiff-Appellant, S.

INTERNATIONAL HARVESTER COM (Now

PANY, known as Navistar Inter al., Company),

national et Defendants-

Appellees.

No. 86-2454. Appeals,

United States Court of

Fifth Circuit.

June Rehearing

Opinion on Denial 16, 1987.

July Organizations Act, tional Immunities or an cutes written waiver in the form same attendant, servant, alien who is the employee, 1257(b) prescribed substance as is section or alien family member the immediate such title. this apply shall not be entitled to for or applied nonimmigrant Centeno visitor's visa, immigrant receive or to enter the visa. immigrant United States as an unless he exe- Houston, Tex., Sullivan,

Charles J. plaintiff-appellant. Collins, Sheinfeld, Maley Kay,

Tom & Houston, Cusick, Tex., P. James Kirkland Ill., Ellis, Chicago, defendants-appel & lees. during

ment Justice the late 1970's, certain International Harvester em- McLean, ployees, including had violated the GARZA, Before WILLIAMS dealings FCPA officials Pe- GARWOOD, Judges. Circuit (Pemex). Pemex, tróleos Mexicanos Mexi- petroleum co’s national company, pur- GARZA, Judge: Circuit large compres- chased volumes of turbine McLean, George of employee S. former equipment sor from Solar. Company, Harvester sought International 22, 1982, McLean, On October among relief International Harvester and others, was formally charged with one present and former several directors and of conspiracy count of aiding and counts company. the alleged, counsel of abetting and the violations of FCPA.1 On alia, inter conspired to that the defendants November International Harvest- rights, civil cast him in violate his a false pled er guilty respondeat superior under a neglected indemnify him for light, and theory to a one-count of bill information legal proceeding. a criminal fees in At charging conspiracy to violate the FCPA. trial, eight Judge Bue dismissed of Mc- accepted The United States International pursuant 12(b)(6), Lean’s claims to Rule Harvester’s of waiver indictment and its Fed.R.Civ.P., granted and summary judg- plea guilty company attorneys when per- on ment the defendants the indemnifi- Department suaded Justice officials that an question. cation indictment would exact an enormous finan- appeal, challenges On the dis- toll company. cial on the disposition trict court’s of six of the nine Harvester it pleading guilty stated was so complains causes of action. McLean also it could devote all its economic and mana- the discovery of trial court’s limitations on gerial voluntary resources its restructur- its of McLean’s and denial to file a motion ing plea effort. with connection the of agree Fourth Amended We government International Harvester the the district court that McLean has proof. filed offer of Statements includ- cognizable failed to state claim for relief information, plea ed in the bargain, the and any of the under stated causes action. proof the offer of underlie McLean’s Additionally, the district did not court present action. its structuring abuse discretion dis- covery refusing as it did and Although allow charged not was in the file a Fourth Amended information, Com- having indicted, earlier been find, however, plaint. doWe that McLean alleged the information that McLean and not his did waive be reimbursed Likewise, others the violated FCPA. International Harvester his ex- proof essentially offer accused McLean penses, judgment therefore reverse and violating During hearing the FCPA. single of the on point. district court that prior approval plea held to court of the Johnson, bargain, Elmer International Har-

I. general counsel, vester’s told former company “acceptfed] that vice-president McLean was the of Inter- strong representation of the U.S. Justice national Harvester’s Solar Turbines Inter- Department they (Solar) have more than ade- national he Division when left the quate prove company evidence two our on December 1980. Seven later, employees former Depart- months ... aided and abetted United States Foreign Corrupt violations of the ment Justice announced that Solar Practices grand target jury simply position Act. We are in a federal investi- not gation Foreign verify representations.” into violations those This Cor- state- (FCPA). rupt Act Depart- appeared Practices ment also in an International During pre-trial, acquitted McLean's criminal the dis- him. McLean was tried and remaining conspiracy charge. trict court dismissed the 43 substantive counts conspiracy violations. As for the announced FCPA release which press Harvester count, acquit- later tried and McLean was agreement. plea ted. that the com McLean believed Because guilty plea negotiations and plea pany’s suit, McLean, wife, and In this their in the implicating him the effect had million dollars in dam- children seek $27 scheme, struggled to bribery Harvester, against International two ages Initially, sought he to have his name. clear one former director of the com- current and from the information expunged his name general former counsel of the pany, one he was in which related documents and company, three of the out- charged coconspirator. as a named but attorneys. McLean’s nine-count Third side the motion court denied The district Complaint claims under Amended affirmed. United States Fifth Circuit 1985(3), 1985(2), U.S.C. U.S.C. Co., v. International Code, Del. Title 145 of the Delaware denied, Cir.1983), 466 U.S. cert. (5th 418 8, 145, and six common Ann. tit. Code § (1984). 1915, 463 939, 80 L.Ed.2d 13, 1986, January after law doctrines. On charges the observed This Court motions and orders had been numerous and those in the indictment against McLean rendered, enduring filed and district were the same or alleged in the information eight of judge dismissed counts Thus, his constitutional closely related. pursuant Complaint Third Amended against charges himself right to defend 12(b)(6).3 He also ordered Rule he be tried because would were not violated more definite statement of the indem- file a indictment. Id. at 420. on the alleged Fi- claim in Count Six. nification to dismiss all then filed motions McLean’s nally, judge denied as moot to the against him. Pursuant 44 counts compel production of documents motions to Amendment, 78ff(c)-( 15 U.S.C. Eckhardt § to file a Fourth Amended and for leave 3),2 employee suggested that criminal offense not convicted of a could January McLean filed a On employer unless his also under the FCPA of his indemnifica- more definite statement Mc In United States v.

was convicted. $158,816.91 in prayed claim. He Cir.1984), Lean, (5th 738 F.2d 655 in legal expenses incurred out-of-pocket denied, 1050, 105 S.Ct. 84 470 U.S. February his criminal trial. On defense of (1985), 813 this Court construed L.Ed.2d 24,1986, defendants moved for summa- prohibit Amendment to the Eckhardt count, remaining to this ry judgment as sanctions under the imposition of criminal voluntarily arguing had that McLean acts at against employee “who FCPA right any renounced to indem- waived of his of and for the benefit the behest May after submis? nification. On employer unless “his has been employer,” argument, and oral sion of written briefs violations.” Id. similar convicted of FCPA summary judgment court entered the lower affirmed the district court’s at 659. We defendants, holding that in favor of the of the 43 substantive counts dismissal any of law had waived McLean as a matter company McLean because the had indemnification. claim to any convicted of substantive not been Amendment, eight court dismissed Because the district codified at 2. The Eckhardt 12(b)(6), 78ff(c)(3), provides our re- as follows: under Rule U.S.C. McLean’s claims § complaint the standard that "a view focuses on have violat- Whenever an issuer is found to title, 78dd-l(a) any employ- state a be dismissed for failure to of this should not ed section agent appears beyond such who is a United ee or issuer doubt that claim unless it citizen, national, support or resident or is other- prove States plaintiff no set of facts in can subject jurisdiction the United to the wise him to relief.” which would entitle his claim director, officer, (other or than an 41, 45-6, States Gibson, S.Ct. Conley issuer), willfully of such and who stockholder (1957); see Jones v. United 2 L.Ed.2d 80 constituting practice out the act or carried Cir.1984). States, conviction, shall, upon be fined such violation $10,000, imprisoned or more than not more than five years or both. Clearly, allegations, such even if

II. Lean. insufficient to state a violation proved, are through and Seven One Five In Counts 1985(2). Brown, 612 F.2d at 502 See § Complaint, McLean the Third Amended 1985(2) (no claim arises under for failure § arising out of Inter- of action pleads causes trial); present favorable evidence at plead decision to national Harvester’s (no Brawer, 535 F.2d at 840 claim arises charging of information guilty to a bill 1985(2) using perjured under testimo- All of the conspiracy to violate the FCPA. ny). Neither the actions plea negotia- actions focus on the stated remaining Harvester nor of the defendants McLean theo- the basis for relief. tions as per- other interfered with McLean’s bargain company’s plea rizes that the testify to attend court and free- son’s damages plea give rise to a claim for guilty Furthermore, perjured ly. because testi- effect, because, company implicated give to an action under mony does not rise alleged scheme. McLean in the FCPA 1985(2), allegedly false the defendants’ essence, trial, statements, made before conspiracy involved in a government was cannot be the basis of a cause action result- International Harvester which section. For this fundamental under this agreement plea for the ed a favorable properly One was dismissed. reason Count leaving scape- company, while McLean as a litigation of this goat. Our third review 1985(3) 42 U.S.C. disagreeing with McLean’s conten- us

finds tions. alleged next that the defendants rights conspired to interfere with his civil 1985(2) 42 U.S.C. § 1985(3). per- in of 42 U.S.C. violation § alleged first the de pri- part, tinent that section establishes a conspired to interfere with his fendants persons right recovery any from vate rights, and that such conduct was vio civil directly indirectly, to de- conspire, who or 1985(2). 42 That section lative of U.S.C. prive any equal protection § individual parts. part The first consists of two equal privileges or of and immu- law 1985(2) private of recov creates 1985(3). 42 § nities under the law. U.S.C. § “force, ery against persons who intimi 1985(3)requires A cause of action under § dation, prevent parties or wit or threat” racial, perhaps or otherwise class- “some attending in testifying or nesses based, invidiously discriminatory animus “force, It also forbids the use court.4 conspirators’ action.” behind the Griffin intimidation, threat” to influence ver or 88, 102, Breckenridge, 403 U.S. 91 S.Ct. v. A cause of action dicts and indictments. (1971); 1790, 1798, 29 L.Ed.2d 338 McLel- requires conspiratorial under this section Co., 545 Mississippi Light Power & lan v. directly attempts affects or conduct 919, (5th Cir.1977). F.2d 928 in parties, jurors a fed affect witnesses Supreme Court has indicated that Chaffee, eral court. Brown v. 612 F.2d 1985(3) racially-moti- may prohibit only § 497, (10th Cir.1979); 502 Brawer v. Horo question a close conspiracies. is vated “[I]t witz, 830, (3d Cir.1976). 840 535 F.2d 1985(3) intended to reach whether § other than animus alleged any any direct class-based animus McLean has champi- force, against Negroes and those who testimony by deterrence of intimi seeking their cause.” United Bhd. Car- dation or threat. His sole basis for oned Scott, allegations v. 463 U.S. penters such relief rests on the that the and Joiners 3352, 3360, court, 77 L.Ed.2d 1049 gave testimony in 103 S.Ct. defendants false Scott, McLean, (1983). this Court failed to disclose information to Consistent tp against extension produce expressly Mc- cautioned and failed to documents 1985(2) allegations conduct inter- part applies that the defendants’ 4. The second to con- proceedings. All of spiracies justice state court to obstruct the course of fered with federal allegations limited to the various Ryland Shapiro, F.2d his are state courts. (5th Cir.1983). proceedings. provides n. 7 no 1985(3) beyond prejudice (1984). the racial it L.Ed.2d 463 It is evident that the was enacted to address: correctly district court held that Count Two 1985(3) does not state

[Sjection will not a cause of action. be extended to every contrive____ pleader class which the artful can remain mindful

We ... of 78ff(c)(3) 15 U.S.C. § Supreme Court’s evident concern in explains in his third count that the broad sweep over literal Griffin guilty plea Harvester’s had the statute. That concern dictates the making the effect of him “scapegoat” exercise of restraint when a court is con- the FCPA scheme. alleges McLean neither fronted with class-based discrimination the elements of this cause of action nor grounded in a non-racial animus. discusses its applicability to the facts of McLellan, 545 F.2d at 928-29. Since this argument case. His sole scape- is that McLellan, this only Court has held that goating prohibited by the Eckhardt types protected two of classes are Amendment to the FCPA. 1985(3): 1) those characterized “some The Eckhardt Amendment establish characteristic;” inherited or immutable penalties es corporate employ 2) by “political those characterized beliefs violating ees convicted of the FCPA. It McDuffy, Kimble v. D.J. or associations.” provides employee may that an not be con Inc., (5th Cir.1980), particular victed of a criminal offense un granted, reh’g Cir.) (en 648 F.2d 340 corporate less his employer also is convict denied, banc), 1110, 102 454 U.S. S.Ct. ed. authority We find no for McLean’s (1981). 70 L.Ed.2d 651 suggestion that the Eckhardt Amendment McLean has no racial or oth private creates its own cause of action. erwise class-based discriminatory invidious Likewise, McLean has not revealed to us animus behind the defendants’ conduct. any case or supports posi statute which argues employees that some were tion. Based on the factors enunciated in scapegoats by made FCPA employers, their Ash, Cort v. and thus a discriminated class exists. We 2088, (1975), 45 L.Ed.2d 26 find inap we it in find no merit this claim because that propriate imply private to cause of action group is neither well-defined nor tradition from the statute. The statute on its face Anker, ally disadvantaged. See Orshan v. congressional shows no intent to create a 820, F.Supp. (E.D.N.Y.1980). 489 823 private Moreover, legislative action. no possess discrete, class does not insular and history referring exists to such an intent. race, immutable characteristics similar to We find that the district correctly origin national or sex. Murphy See v. complaint dismissed Count Three of the School, High Mount Carmel 543 F.2d scapegoating recog because has 1189, not been (7th Cir.1976). 1192 n. 1 as any jurisdict nized a cause of action in Additionálly, alleged McLean has not an ion.5 independent rights violation of his as estab 1985(3). lished properly His failure to Light False allege any specific equal denial protec purported McLean privileges plead or of his also has to and immunities is likewise fatal to his cause of action claim. As this Court defendants for found, already light privacy. false invasion of constitutional rights argues have not been any way. misleading violated in that false or statements United States v. International Harvester were proof included in the offer of and in Co., (5th Cir.1983), cert. de communications, 418 certain oral and that those nied, were, 939, 1915, 466 U.S. 80 privileged. statements Texas has Although sought appeal Allegations by to from the Affirmation of the United States Four, district court’s being dismissal of Count McLean. This about argued, issue not briefed or does not address the deficiencies of that is waived and thus we need not deter- appellate purported issue in his brief. McLean mine whether a viable cause of action was al- plead Negligent Acceptance leged. a claim for

1220 (Second) terial, of Torts material, adopted light prelimi- the Restatement and thus false v. light. Hustler or in concept nary of false Wood judicial proceed- course of 1084, Inc., 1088 736 Magazine, ings F.2d. if the material is pro- related to the 1107, denied, Cir.1984), 105 469 ceedings. privi- Id. at 585-88. These §§ (1985). The Re 83 L.Ed.2d 777 S.Ct. leges exist Texas. Reagan See v. provides as follows: statement Co., Guardian Ins. 140 Tex. 166 Life (1942). 912 S.W.2d Light False Publicity Placing Person in complains 1) about: state gives publicity a matter con- One who made in ments various drafts of the writ the other cerning places be- another plea bargain agreement; ten 2) statements light subject public in fore the a false in the contained written offer proof filed liability invasion of his other for with the court at the time of company’s privacy, if 3) guilty plea; and oral statements made (a) the other was light the false in which representatives at the offensive to a placed highly would be arraignment hearing.6 all Because person, and reasonable these falsehoods were uttered in (b) knowledge of or the actor had acted connection with and were related Inter falsity disregard in reckless as to plea national Harvester’s bargain, they light the false publicized matter and support an light cannot action for false as a placed. be in which the other would Five, therefore, matter of law.7 Count properly dismissed. (Second) Torts 652E Restatement light (1977). false claim McLean’s tenuous Conspiracy Civil fail because all of statements must judicial made of a were within the confines There are two essential elements defendants, and were proceeding an establish actionable claim for civil absolutely privileged. therefore First, conspiracy. there must be an unlaw law, purpose As a communications ful or an of carry matter unlawful means during proceedings ing are ab purpose by made a court’s out lawful two more Second, solutely privileged persons. and are immune there must at least alleging or invasion of action defamation one Massey unlawful and overt act. v. Brown, S.W.2d Co., (Tex. v. 637 privacy. James Armco Steel S.W.2d (Tex.1982); Arroyo, 1983). argues the defend Wolfe (Tex.Civ.App.1976). The Re W.2d during S. plea bargain ants’ statements provides privileges ap that the statement ing process violated various canons of the “apply also plicable in defamation actions Texas Code Professional Responsibility. that is an publication matter However, to rely he did not on or these cite (Sec privacy.” invasion of Restatement alleged canon violations in his Third ond) According to the of Torts 652F. Amended For necessary the act, Restatement, attorneys, parties, judges, wholly unlawful relied on the defamatory ma- light false tort of and the publish defendants’ al- may and witnesses case, estab- In this McLean has not press arguably false. 6. The does not fall statement any state- privilege was released af the made false within the because it defendants lished that Indeed, plea bargain proceedings company ended. How ter the the was cautious ments. ever, the release is a employees. the offensive in damage matter reputations the of its not by quotation of the Johnson, mere statements general for the former counsel Elmer during judicial proceeding counsel the at which Harvester, point was careful International accepted plea. Those comments the court the out: "unreasonably privileged im were pair and it would accept strong representation of the the [W]e privilege” press release to hold that they Department have more Justice quote privileged could not comments. See prove adequate two of evidence to than Wyatt Kaplan, Cir. employees division of a former our former Furthermore, 1982). press release did not Foreign of the and abetted violations aided name, identify any employees by thus and it simply not in a Corrupt are Act. We Practices placed specific light. person false no in a representations. verify position those addition, light false of for cause action plaintiff requires that the statements about corporate employees agents of and in 1985(3). 1985(2) and leged violations §§ 145(c) litigation.9 volved in Section re alleged a explained, As quires corporate employ indemnification of 1985, and due to under action cause of agents successfully ees and who defend no he has infra, discussed privilege litigation.10 in themselves See Galdi v. have claim.8 We conspiracy civil actionable (D.Del.1973) F.Supp. (expla Berg, into not enter company did found that application nation and indem did not Delaware therefore activity, and any unlawful statute); guilty Westcap nification enter a Green v. bargain or to conspire plea Delaware, (Del. Corp. 492 A.2d plea. claim conspiracy Additionally, for a civil (same). Sup.1985) International Harvester be an unlawful there must actionable to be knowingly maintains that McLean and vol conspiracy. in furtherance overt act untarily rights waived his indemnification of the Offer suggests that tender in contained the Delaware statute. af- oral defendant Johnson’s of Proof and International paid Harvester for Mc- in the Offer the statement firmation of Lean’s attorney while both McLean and in- study acts. Our overt Proof constitute International Harvester were under investi- un- neither actions were that those dicates gation and indictment the United States. protect- of McLean’s nor a violation lawful McLean had already left the company for Therefore, agree with the we rights. ed other reasons. company The was able to dismissing in judgment district court’s advance necessary fees and ex- Count Seven. penses under the discretionary part of the Legal Fees Indemnification Delaware statute, indemnification which summary judg- permits corporation court entered pay legal district costs defending on of International employees ment behalf its or former em- ployees claim for indemnification if company so desires. McLean defending attorneys’ accepted fees incurred while representation pro- counsel prosecution. himself from criminal Sum- vided International Harvester when appropriate only when mary judgment both investigation. were under genuine there is no agreement the record shows “that executed an between himself any material fact and that the issue as to agreeing International Harvester moving party judgment pay if, is entitled to as a all expenses fees and at the conclu- 56(c). matter of law.” Fed.R.Civ.P. sion of all proceedings, he was found not to corporation’s controls a in- Delaware law be entitled to indemnification under Dela- employees legal demnification of ex- Thus, ware law. throughout fees during penses arising out of actions taken grand 1981-82 jury investigation were employment. their DeLCode Ann. tit. received in advance and as needed from 145(a) permits 145. Section indemnifica- Harvester. light fees), 8. The torts of judgments, false and defamation cannot paid fines and amounts requisite serve as the actually overt reasonably unlawful act be- settlement incurred cause, described, action, as the elements of that tort are him in connection with such suit or privileged Allowing recovery in this case. proceeding good if he acted in faith and in a conspiracy having civil as reasonably its overt act either of manner he opposed tion, and, believed to be in or not these torts would privilege any eviscerate the corpora- to the best interests of the light joint case where the false action. resulted respect criminal action proceeding, or had no reasonable cause to believe his conduct was unlawful. reads, 145(a) pertinent 9. Section part: 145(c) entirety: 10. Section in its reads corporation power A shall have to indemni- fy any person director, officer, party who was or is a or is To the extent that a em- party any threatened to be made a ployee agent corporation threat- or of a has been ened, action, pending completed or suit or successful on the merits or in de- otherwise civil, criminal, proceeding, action, whether any proceeding adminis- fense of suit or re- (other investigative trative or by (a) (b), than an action ferred to in subsections defense of and or in right claim, therein, or corporation) by in the of the any issue or matter director, reason of (in- the fact that he is or against expenses actually was a he shall be indemnified officer, employee agent fees) corporation, or cluding attorneys’ of the and reason- against expenses (including attorneys’ ably ... by incurred him in connection therewith. After McLean was indicted and had en- $158,815.91 indemnification of in legal fees guilty plea, tered his not International Har- expenses by incurred him commencing vester’s counsel advised McLean that the in February, 1985 and continuing through- board directors had decided out the trial. International Harvester says paying legal to continue for his fees. In- that McLean has any right waived to re- ternational Harvester asked McLean to payment because he refused the attorney sign undertaking permit an additional company the offered him before trial. We company to advance his fees and ex- position find this untenable. Merritt-Chapman Corp. In & Scott penses. company The made an offer to Wolfson, (Del.Sup.1974), 321 A.2d 138 whereby provid- McLean would be Delaware court in- reviewed the status of attorney, paid by ed with an for Interna- legislation demnification in The Harvester, Delaware. subject tional to McLean’s designed “promote was énd desirable agreement he pay would International corporate officials will resist what Harvester guilty back should he be found claims, they unjustified consider suits and charges. of the rejected criminal knowledge secure in the that their reason- this offer. He delivered a letter on Janu- expenses by corpora- will able be borne ary refusing sign the undertak- they they have served if are vindicat- ing from International Harvester. McLean (citations omitted). ed.” Id. at In its subsequently discharged attorney hired analysis mandatory nature of by International Harvester because he ob- 145(c), Green, the court in 492 A.2d at jected to guilty International Harvester’s legislative reviewed the section’s histo- plea, perceived which McLean as a tactic ry and stated: designed to him make absorb the brunt of government’s prosecution. following quotation re- felt he had by been “sold out” Internation- view the 1967 Delaware General Cor- al Harvester and he believed his poration objective defense law shows strategy compromised would if legal 145(c): his In addition expenses defining paid by were for area corporation permitted which a Harvester. grant indemnity, the new statute adds papers McLean filed in the district court provision granting an absolute days confirming two later that he had de- director, officer, indemnity any of employee reject cided to advance fees from Interna- agent corporation or tional Harvester. McLean advised the trial successful, who has been on the merits unwilling court that he repre- to be otherwise, any pro- or in a defense of by sented counsel whose being fees were claim, ceeding, issue or matter paid by for International Harvester: person therein. Such is entitled to re- absolutely way “There is no I expect could expenses, including attorneys cover adequate by lawyers defense beholden fees, actually reasonably incurred to International Harvester and their law- by him in portion connection with that yers.” legal guar- McLean wanted his fees of his defense which was successful. or, alternative, anteed in the added). (emphasis Id. at 265 appoint wanted the court to counsel be- very important difference be- There is a cause McLean could not attorney. afford an corporation’s discretion to advance tween March, filing In a with the district being statutorily prior fees to trial and court, again stated that he had entitled to fees acquittal after on criminal legal payment renounced of his fees charges. 145(a) Section empowered Inter- International Harvester the same rea- national Harvester with the discretion to April request son. McLean’s offer reimbursement of ex- appointment of counsel was denied. penses incurred him in defense of the proceeded shortly He until without counsel charges brought by govern- represented before his trial. McLean was ment. The offer to advance fees and ex- by acquitted counsel at trial and was of the penses was a discretionary decision In- charges. requests McLean now ternational subject Harvester to ongo- Nothing McLean lawyers. its vester and ing review of the Board Directors. the contention that supports said undertaking did or on the terms of Based statutory right his if renounced company, International McLean offered International Har- determined that there was a con- Harvester indemnification McLean, acquitted. it could dis- flict interest with once he was vester payment funds for continue its of advance argument International Harvester’s that expenses and demand McLean’s defense McLean has somehow waived indemnifica repayment money previously advanced simply tion is credible. The right not to according agreement to the terms 145(c) indemnification under is mandato signed by If International McLean. Har- ry and did not vest until McLean ac was McLean, paid vester for counsel Mc- quitted. McLean never had a right honestly could have believed that In- Lean 145(c) waive under until he acquitted was have ternational Harvester could exerted charges. of the criminal Only a conscious counsel, control and also some over that reject right operates decision to a known as may counsel have had a conflict interest is waiver. “Waiver the intentional relin maintaining representation through- quishment of a known or intentional instance, company’s out the trial. For conduct claiming inconsistent with it.” keep legal expenses admonition “the Inc., Fargo Wells Business v. Ben Kozloff, justifiably absolute minimum” could have (5th Cir.1983), de interpreted by as an been McLean indica- nied, 464 U.S. 78 L.Ed.2d going tion that Harvester was to maintain (1984) cases). (citing compa Texas The presentation over the control his defense ny cannot prospec maintain McLean though already pled even the company had tively statutory right waived his of indem guilty. nification record clearly when the reflects clearly per McLean interests he attempt had his In assure indemnification. deed, indicated, as adverse Judge ceived to International Harvest April Gire on Indeed, gravamen er. of the civil com that he believed McLean’s clear inten plaint today here is that International Har your lawyer tion was “to own select possible did as vester much as to make pay make for it.” the scapegoat company’s McLean for the Although summary judgment en- was breaking. law McLean did not ac Harvester, tered on behalf of International cept company’s offer of in conditional our review of the record shows that it attorneys’ fees demnification because summary McLean entitled to who was he did not think it was in his best interest judgment he has not because waived the so at that importantly, to do time. More he statutory entitlement to reimbursement compelled was to do so under Delaware attorneys’ successfully while fees incurred simply unwilling law. defending himself for actions taken while agree to indemnification in advance on the employed corporation. by the terms demanded board of Remaining Claims directors. wanted fees guaranteed acquit whether or not he was Finally, argues the trial This is something ted. International Har judge abused in limiting his discretion vester would not and not do staying deposi- could under discovery period, certain anything, If tions, Delaware law. compel production sim refusing to of cer- ply for more than he was asked entitled to documents, refusing to tain allow Mc- 145(a) permits trial. Section a cor Complaint. to file Amended Lean a Fourth before poration discretionary payments to make proceedings patently A review of the rein- employees, or point. former current officers affirm on forces our decision to this corporation original complaint should the so on directors desire. McLean filed his Oc- defendants part corpora discretion on the tober 1984. The moved This 12(b)(6). January On dismiss it under Rule employ tion does not alter what the former filed his First Amended 145(c) under ee is entitled to trial if after again The defendants moved defending successful in he is himself. Mc responded to dismiss. McLean with re- simply Lean distrusted International Har- 1224 quests production deposi- for document and Ill motion, tions. On the defendants’ the dis- conclusion, In AFFIRM the district we stayed discovery pending trict court resolu- dismissing prejudice court’s orders 16, July tion of the motion to dismiss. On through Counts One Five and Seven 1985, McLean filed his Second Amended Complaint for failure to Third Amended opened district Complaint. The court dis- upon claim which relief can be state a covery and continued the defendants’ mo- limiting discovery, denying granted, and as approximately

tion to dismiss six to a Fourth moot McLean’s motion file interim, In months. McLean filed his Complaint. We Amended REVERSE Complaint. During Third Amended this granting district court’s order time, produced the defendants various doc- judgment on Count summary deposed persons. uments and McLean six Amended Complaint, and Six of the Third The defendants also moved to dismiss the Harvester must re- Complaint. hold that International Third Amended McLean re- necessary legal McLean for his sponded by noticing motion imburse this seven depositions. expenses proceedings The in the stayed more district court deposition requests pending provided under the Dela- these his rul- him as ing January the motion to dismiss. On on ware statute. 1986, granted the district court the mo- On for Rehearing Petition tion to dismiss all claims save the indemni- PER CURIAM: action, deposi- fication denied as moot the petition rehearing is DENIED. requests, request denied McLean’s We see no reason to reconsider our decision Complaint. file Fourth Amended complaint McLean’s failed to state a note We first that as funda cause of action for scapegoating under the jurisdiction, mental rule our a district Foreign Eckhardt Amendment to the Cor- possesses broad discretion its su rupt Maj. Practices op. Act. at 1219. We pervision discovery and its decision do arguments note that the McLean raises permit complaints. whether amended as to his to full indemnification under Co., Harris v. Amoco Prod. F.2d 768 can Delaware statute made (5th Cir.1985)(discovery), denied, 684 district court it when determines _ U.S. _, 89 L.Ed.2d “expenses amount of (including attorneys’ (1986); Chitimacha v. Harry Tribe L. fees) actually reasonably by” incurred Co.,

Laws Cir. McLean to which he Maj. op. is entitled. at 1982) (filing complaints), amended cert. de (quoting statute). 1221 n.10 Delaware nied, 814, 104 S.Ct. L.Ed.2d (1983). the unduly Given burdensome and “eleventh hour” tactics of McLean’s

discovery requests, our study reveals that

Judge Bue did not abuse his discretion in fact,

these matters. the record shows judge consistently attempted NEELY, Joe Plaintiff-Appellant Hilburn safeguard and, McLean’s at interests time, litigation same along move the so as COMPANY, DELTA BRICK AND TILE prevent delaying this case his dock INC., Defendant-Appellee. Judge et. properly Bue also exercised his denying broad discretion in McLean leave No. 86-4428. Complaint. file a Fourth Amended Giv United States of Appeals, Court en previous unsuccessful at Fifth Circuit. tempts pleading to correct deficiences and apparent diligence lack of in filing the June amend, final motion for judge leave to properly denied McLean to file leave

Fourth Amended

Case Details

Case Name: Fed. Sec. L. Rep. P 93,273 George S. McLean v. International Harvester Company, (Now Known as Navistar International Company)

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Jul 16, 1987

Citation: 817 F.2d 1214

Docket Number: 86-2454

Court Abbreviation: 5th Cir.