                                                         United States Court of Appeals
                                                                  Fifth Circuit
                                                               F I L E D
                 IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT                  June 14, 2005

                                                           Charles R. Fulbruge III
                                                                   Clerk
                             No. 04-60735




RAIN BIRD CORP

                       Plaintiff - Appellee

v.

NATIONAL PUMP COMPANY LLC; ET AL

                       Defendants

ROBERT MILTON

                       Defendant - Appellant

                      --------------------
          Appeal from the United States District Court
            for the Northern District of Mississippi
                         2:02-CV-18-M-D
                      --------------------

Before GARWOOD, GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     In this tort action, Defendant-Appellant Robert Milton

(“Milton”) appeals the district court’s entry of final judgment

in favor of Plaintiff-Appellee Rain Bird Corp. (“Rain Bird”) and

its assessment of actual and punitive damages against him.



     *
        Pursuant to 5TH CIR. R. 47.5, the Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

                                    1
Having reviewed the record and considered the briefs and

arguments on appeal, we affirm the judgment of the district court

and uphold the award of actual and punitive damages.

     Milton raises three issues on appeal.   First, Milton

contends that the district court’s findings of fact are clearly

erroneous inasmuch as they disregard certain evidence presented

by Milton at trial.   Following a bench trial, we review the

district court’s findings of fact for clear error.     See Energy

Mgmt. Corp. v. City of Shreveport, 397 F.3d 297, 302 (5th Cir.

2005).   In light of the record viewed in its entirety, and given

that the district court’s findings were based largely on

determinations regarding witness credibility, see Schlesinger v.

Herzog, 2 F.3d 135, 139 (5th Cir. 1993), we conclude that the

district court’s account of the facts did not disregard evidence

and was not clearly erroneous.

     Second, Milton asserts that the district court erred in

finding in favor of Rain Bird, and against Milton, as to Rain

Bird’s causes of action.    Specifically, Milton complains that it

was error for the district court not to accept his version of the

facts and that, had the district court done so, judgment in his

favor would be warranted.   In essence, Milton’s argument under

this assignment of error amounts to nothing more than a complaint

that the district court erred in declining to adopt facts more to

Milton’s liking.   As discussed supra, in light of the record


                                  2
viewed in its entirety, and given that the district court’s

findings were based largely on determinations regarding witness

credibility, the district court’s account of the facts was not

clearly erroneous.

     Finally, Milton contends that the district court erred in

its assessment of damages against Milton in four respects.    In

reviewing damages assessments, “[a]bsent an error of law, [we]

will sustain the amount of damages awarded by the fact finder,

unless the amount is clearly erroneous or so gross or inadequate

as to be contrary to right reason.”   Vogler v. Blackmore, 352

F.3d 150, 154 (5th Cir. 2003) (citations omitted).

     With respect to damages, Milton first contends that the

district court ignored cost of investment in determining Rain

Bird’s lost future profits.   We find this argument to be without

merit.   The earnings projections relied on by the district court

to assess Rain Bird’s lost future profits specifically account

for cost of investment, calculated on an annualized basis as a

yearly depreciation deduction.   Therefore, we conclude that the

district court did not err in calculating Rain Bird’s lost future

profits.

     Milton next contends that the district court erred in

considering the projected earnings pro-forma introduced as

Exhibit P-110 as evidence of Rain Bird’s lost future profits.      On

appeal, Milton argues that because the challenged pro-forma was



                                 3
not prepared for the specific purpose of demonstrating Rain

Bird’s lost future profits, the district court’s reliance on that

pro-forma was clearly erroneous.       Because Milton did not object

at trial to either the introduction or reliability of the

challenged pro-forma, we need not determine whether the district

court’s reliance on that pro-forma was clearly erroneous.       See

Colonial Refrigerated Transp., Inc. v. Mitchell, 403 F.2d 541,

552 (5th Cir. 1968) (citations omitted).

     Third, Milton contends that the district court erred in

awarding Rain Bird damages in the amount of the severance package

Milton awarded himself from the coffers of Golf Course Irrigation

Services, Inc. (“GCIS”).   We find Milton’s argument to be without

merit.   In awarding himself a severance package that was not part

of his proper compensation, Milton breached his fiduciary duty to

Rain Bird, as the pledgee of GCIS stock, by unjustly enriching

himself by the amount of the severance package.       See Gibson v.

Manuel, 534 So. 2d 199, 202 (Miss. 1988); Knox Glass Bottle Co.

v. Underwood, 89 So. 2d 799, 814-15 (Miss. 1956).       Accordingly,

Milton is liable to Rain Bird for the amount of the severance

package, irrespective of any harm to GCIS or any diminution in

value of the GCIS stock pledged to Rain Bird.       See Knox, 89 So.

2d at 815.   Therefore, the district court’s assessment of damages

against Milton in the amount of his GCIS severance package was

not clearly erroneous.


                                   4
     Lastly, Milton contends that the district court’s assessment

of $500,000 in punitive damages against him runs afoul of the

constitutional prohibition against grossly excessive or arbitrary

punitive damages awards.1   Because Milton challenges the

constitutionality of the size of the district court’s punitive

damages award, we review Milton’s challenge de novo.   See Watson

v. Johnson Mobile Homes, 284 F.3d 568, 572 (5th Cir. 2002).

     In BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996),

the United States Supreme Court articulated three guideposts that

courts should consider in determining whether an award of

punitive damages is constitutionally excessive.   The three

guideposts are:   (1) the degree of the defendant’s

reprehensibility; (2) the disparity between the harm or potential

harm suffered by the victim and the punitive damages award; and

(3) the sanctions authorized for comparable misconduct.     See

Gore, 517 U.S. at 575-85; see also State Farm Mut. Auto. Ins. Co.

v. Campbell, 538 U.S. 408, 418 (2003) (reiterating the importance

of the Gore guideposts).

     Regarding the first Gore guidepost, the harm Milton

inflicted on Rain Bird was purely economic in nature and Milton’s

conduct evinced no indifference to, or reckless disregard for,


     1
       We note that Milton raises only a constitutional
challenge to the size of the district court’s punitive damages
award. Because Milton does not raise an excessiveness challenge
under Mississippi state law, we decline to address that issue.

                                 5
the health and safety of others.       See Gore, 517 U.S. at 576.

However, “[t]o be sure, infliction of economic injury, especially

when done intentionally through affirmative acts of misconduct,

or when the target is financially vulnerable, can warrant a

substantial penalty.”   Id.    In the instant case, Milton’s conduct

included:   (1) knowingly providing defendant National Pump

Company (“NPC”) with Rain Bird’s confidential information,

enabling NPC to essentially steal Rain Bird’s prospective

customers; (2) improperly transferring to NPC GCIS’s secured

assets, in knowing violation of the Loan and Security Agreement

with Rain Bird; and (3) continuing to transfer GCIS’s secured

assets to NPC in violation of a preliminary injunction entered by

the district court, resulting in the district court holding

Milton in contempt of court.    Accordingly, we conclude that the

combination of economic injury to Rain Bird and Milton’s multiple

affirmative acts of misconduct supports a punitive damages award.

     Regarding the second Gore guidepost, the $500,000 in

punitive damages assessed against Milton is substantially less

than the $2,869,167 in actual damages caused by Milton’s conduct,

resulting in a punitive damages-to-actual damages ratio of 0.17.

This fractional ratio does not even come close to approaching the

ratio contemplated as questionable by the Supreme Court.       See

Campbell, 538 U.S. at 410.    Accordingly, we conclude that the

second Gore guidepost supports upholding the amount of punitive


                                   6
damages assessed against Milton.

       Regarding the final Gore guidepost, the comparable sanctions

under Mississippi state law for the disposal of property that is

secured by a lien are up to one year’s imprisonment, a fine not

exceeding the value of the property disposed of, in this case

$90,000, or both.    See Miss. Code Ann. § 97-17-75 (1972).   This

provision imposes relatively severe penalties on wrongdoers,

indicating the seriousness with which the state views the

wrongful action.    Accordingly, we conclude that the relevant

civil and criminal penalties under Mississippi state law provided

Milton with constitutionally adequate notice of the severity of

the penalty that the state may impose.    See Gore, 517 U.S. at

584.    Therefore, we uphold the district court’s punitive damages

award against Milton.

       For the foregoing reasons, we affirm the judgment of the

district court with respect to Milton and uphold the actual and

punitive damages awards against Milton.




                                   7
