                   IN THE UNITED STATES COURT OF APPEALS

                             FOR THE FIFTH CIRCUIT

                                 _______________

                                    No. 95-50409
                                 Summary Calendar
                                  _______________


                                 STANLEY E. REED,

                                                            Plaintiff-Appellee,


                                        VERSUS

                           CHEVRON PIPE LINE COMPANY,

                                                            Defendant-Appellant.


                           _________________________

             Appeal from the United States District Court
                   for the Western District of Texas
                             (M0-94-CA194)
                       _________________________

                                  April 8, 1996

Before KING, SMITH, and BENAVIDES, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*


       Defendant     Chevron     Pipe    Line     Company   (“CPL”)    appeals    a

judgment, entered after a jury verdict, for plaintiff Stanley E.

Reed   on   his    claim    of   compelled       self-publication     defamation.1

Concluding    that    the    evidence     is     insufficient   to    support   the


      *
        Local Rule 47.5.1 provides: "The publication of opinions that have no
precedential value and merely decide particular cases on the basis of well-
settled principles of law imposes needless expense on the public and burdens on
the legal profession." Pursuant to that rule, the court has determined that this
opinion should not be published.
     1
        Reed’s complaint alleged several other claims, but judgment for Reed was
entered only as to the claim of compelled self-publication defamation. Reed has
not appealed the judgment regarding his other claims.
verdict, we reverse and render judgment for the defendant.



                                    I.

     Stanley Reed worked for CPL and its corporate predecessor,

Gulf Oil Corporation, for twenty-one years until CPL terminated

him. During his last year of employment, he worked as a supervisor

at CPL’s Odessa office.         Most of Reed’s time was spent in the

office rather than in the field.           Two clerical employees, Maria

Salgado and Paula Roberts, also worked at the Odessa office.            Their

duties also required them to spend most of their time in the

office.

     In May of 1993, Salgado and Roberts contacted a supervisor in

another office to report Reed for allegedly hostile, harassing, and

intimidating    behavior.      Salgado    also    reported   Reed’s   alleged

behavior to Dub Brown, one of CPL’s human resources representa-

tives.

     Brown     investigated     Salgado     and    Roberts’s   allegations,

concluding that Reed had created a hostile work environment and had

intimidated the two women in violation of CPL’s corporate policies.

Brown reported his conclusions to Gary Williams, Reed’s direct

supervisor in Houston.        Based on Brown’s investigation, Williams

referred Reed to CPL’s employee assistance program (“EAP”).

     As part of his participation in CPL’s EAP, Reed was required

to undergo counseling with a psychologist, Dr. Perry Marchioni.

After this initial round of counseling, Marchioni determined that

Reed was fit to return to work.           He in fact returned to work on


                                     2
June 2, 1993.

     Shortly thereafter, Salgado’s supervisor in Odessa called Bob

Kinnear, another member of CPL’s management, to allege that Reed

was retaliating against Salgado and Roberts.   Kinnear called Reed

and ordered him to go home but did not terminate him at that time.

Instead, he referred Reed back to the EAP for extensive counseling.

     Marchioni referred Reed to a hospital to confirm that there

was no physical cause for his alleged behavior.    Marchioni began

seeing Reed on a regular basis for counseling purposes and, after

several visits, concluded that Reed suffered from several personal-

ity disorders.   Marchioni also concluded that further attempts at

therapy would be futile and recommended that Reed be placed in a

position with limited or no supervisory duties.

     Upon receiving Marchioni’s report, CPL directed Brown and

Jeanne SuminskiSSan in-house attorney for Chevron Corporation,

CPL’s parent companySSto conduct further investigations. They held

further interviews, from which they concluded that Salgado and

Roberts’s complaints were valid.

     CPL also called in outside consultantsSSpsychologists special-

izing in workplace violenceSSto consider Reed’s alleged behavior.

These psychologists confirmed Brown and Suminski’s determination

that the complaints against Reed were valid and concluded, in

addition, that Reed could become potentially violent when faced

with a stressful situation, such as termination.   They recommended

that, if CPL decided to terminate Reed, it should hire security for

both the location of the termination and the Odessa office for the


                                   3
three days following termination.

     Based upon the results of all of these investigations and

examinations, Brown determined that the allegations against Reed

were true and in violation of CPL’s corporate policies.                            He

reported those conclusions to Kinnear, whoSSafter conferring with

Brown, Suminski, and others involved in the investigation of

ReedSSthen decided to terminate Reed.                  After Reed refused CPL’s

offer     to    allow   him    to   resign,         Kinnear    terminated   him    on

November 11, 1993, on the ground that he had engaged in sexual

harassment and improper conduct.

     Reed introduced no evidence contravening these facts, although

he did hotly dispute at trial the substantive results of the

investigations and examinationsSSi.e., he did adduce evidence to

support        his   arguments      that       he    was      not   psychologically

dysfunctional, that he had not engaged in sexual harassment and

improper conduct,        and   that   CPL      had    erred    in   concluding    that

Salgado’s and Roberts’s complaints were valid.

     It is undisputed that no CPL employee ever communicated the

reasons for Reed’s termination to a third party, including any of

Reed’s prospective employers.              Reed testified, however, that he

felt compelled, in employment interviews, to disclose the stated

reasons for his termination.

     At trial, Reed introduced no evidence from which to infer that

Kinnear, Williams, Brown, or Suminski personally disbelieved either

(1) that Reed had engaged in sexual harassment and other improper

conduct or (2) that he had been fired for the reasons given to him.


                                           4
CPL introduced affirmative evidence that Brown (1) believed the

allegations against Reed and (2) believed that Reed was terminated

for the reasons CPL had advanced.



                                     II.

     The jury returned a verdict for Reed on the compelled self-

publication   defamation    claim,    and   the   district   court   entered

judgment accordingly.      CPL moved for judgment as a matter of law

(1) at the close of the plaintiff’s case; (2) at the close of all

evidence; and (3) after the verdict.              It also moved for post-

judgment relief.

     We review the verdict for sufficiency of the evidence.              See

Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc).

In so doing, we note that (1) “[a] mere scintilla of evidence is

insufficient to present a question for the jury,” and (2) “[t]here

must be a conflict in substantial evidence to create a jury

question.”    Id. at 374-75.



                                     III.

     Except for the differences in procedural posture and standard

of review, this case is virtually indistinguishable from our

decision last year in Duffy v. Leading Edge Prods., Inc., 44 F.3d

308 (5th Cir. 1995).       In that case, the plaintiff sued under a

theory of compelled self-publication defamation, alleging that his

former employer was liable for damages “because it was reasonably

foreseeable that he would as a practical matter be required to tell


                                      5
prospective employers of the allegedly defamatory reason for his

termination.”       Id. at 311.    As we did in Duffy, we assume arguendo,

without deciding, that a publication had occurred in this case and

that a cause of action for compelled self-publication defamation

exists under Texas law.         See id. at 312 n.5.2

      We held in Duffy that, under Texas law, “‘[a] communication on

a subject in which the author or the public has an interest, or

with respect to which the author has a duty to perform to another

owing       a   corresponding   duty,   may   constitute     a   qualified    or

conditional privilege.’”          Id. at 312 (quoting Marathon Oil Co. v.

Salazar, 682 S.W.2d 624, 630 (Tex. App.SSHouston [1st Dist.] 1984,

writ ref’d n.r.e.)).       The Duffy court also held that references and

accusations made by an employer about an employee have a qualified

privilege if the remarks are made to a person with an interest in,

or a duty regarding, the matter to which the remarks relate.                 See

id.; see also Schauer v. Memorial Care Sys., 856 S.W.2d 437, 449

(Tex. App.SSHouston [1st Dist.] 1993, no writ); ContiCommodity

Servs. v. Ragan, 63 F.3d 438, 442 (5th Cir. 1995) (“Accusations or

comments about an employee by his employer, made to a person having

an interest or duty in the matter to which the communication



        2
          In Duffy, we noted that it was an open questionSSone over which the
Texas appellate courts had splitSSas to whether Texas recognizes a cause of
action for compelled self-publication defamation. See 44 F.3d at 312 n.5. The
appellate case we cited for the proposition that Texas does not recognize such
a cause of action is Doe v. SmithKline Beecham Corp., 855 S.W.2d 248, 259 (Tex.
App.SSAustin 1993), aff’d as modified on other grounds sub nom. SmithKline
Beecham Clinical Lab. v. Doe, 903 S.W.2d 347, 350 (Tex. 1995). See Duffy, 44
F.3d at 312 n.5. The Texas Supreme Court granted a writ of error in that case,
but the court did not have an opportunity to decide the issue of whether Texas
recognizes such a cause of action. See SmithKline Beecham Clinical Lab., 903
S.W.2d at 350 (noting that plaintiff had withdrawn her point of error complaining
of summary judgment for defendant on defamation claim).

                                        6
relates, have a qualified privilege.”), cert. denied, 1996 WL 26533

(U.S. Mar. 25, 1996).

     The qualified privilege protects communications to which it

applies   unless   actual   malice   is   shown.    See   id.   Qualified

privilege must be pled as an affirmative defense.         See id. at 443.

If that defense is validly asserted by the employer, Texas law

places the burden of proving “actual malice” upon the plaintiff.

See id.; Duffy, 44 F.3d at 314.

     “Whether a communication has a qualified privilege is a

question of law for the court.”          Schauer, 856 S.W.2d at 449.   In

this case, the district court concluded that the privilege applied.

Reed has not challenged that conclusion.

     Under Texas defamation law, “actual malice” does not mean “ill

will, spite, or evil motive.”    See Ragan, 63 F.3d at 442; Duffy, 44

F.3d at 313.   It is a term of art, borrowed from New York Times v.

Sullivan, 376 U.S. 254 (1964), and its progeny.       See Duffy, 44 F.3d

at 313. In Duffy, we determined that the Texas Supreme Court would

apply the following definition of actual malice in a compelled

self-publication defamation case:

     “Actual malice is not ill will; it is the making of a
     statement with knowledge that it is false, or with
     reckless disregard of whether it is true.      ‘Reckless
     disregard’ is defined as a high degree of awareness of
     probable falsity, for proof of which the plaintiff must
     present ‘sufficient evidence to permit the conclusion
     that the defendant in fact entertained serious doubts as
     to the truth of his publication.’ An error in judgment
     is not enough.” Carr v. Brasher, 776 S.W.2d 567, 571
     (Tex. 1989) (citations omitted).




                                     7
44 F.3d at 313.3

      We interpreted this passage as stating that actual malice is

“a higher standard than common law malice” and that “only clear and

convincing proof will support recovery.”           Id.   We also noted that

the Texas Supreme Court had extended the New York Times test to

cases of qualified privilege outside the First Amendment context.

See id.4     In any case, because we applied this actual malice

standard in Duffy, we are bound to do so here as well.



                                      IV.

      When reviewing a jury verdict, we apply federal procedural law

in determining whether there was sufficient evidence to support the

verdict.     See Boeing, 411 F.2d at 374.           We look to state law,

however, for “‘the kind of evidence that must be produced to

support a verdict.’”      Ayres v. Sears, Roebuck & Co., 789 F.2d 1173,


     3
        In Hagler v. Proctor & Gamble Mfg. Co., 884 S.W.2d 771 (Tex. 1994) (per
curiam), the court stated its legal standard for actual malice:
      This court has set forth the legal standard for proving actual
      malice in a defamation case, stating that actual malice is a term of
      art which is separate and distinct from traditional common law
      malice. Actual malice in the defamation context does not include
      ill will, spite or evil motive, but rather requires “sufficient
      evidence to permit the conclusion that the defendant in fact
      entertained serious doubts as to the truth of his publication.”
      Actual malice is not ill will; it is the making of a statement with
      knowledge that it is false, or with reckless disregard of whether it
      is true.
Id. at 771-72 (citation omitted). Although we did not cite to this opinion in
Duffy, our opinion in Duffy is consistent with the legal standard articulated in
Hagler.
     4
        The Supreme Court has expressly held that the states have broadSSbut not
unlimitedSSdiscretion to define the scope of a publisher’s liability for
defamation of a private individual: “We hold that, so long as they do not impose
liability without fault, the States may define for themselves the appropriate
standard of liability for a publisher or broadcaster of defamatory falsehood
injurious to a private individual.” Gertz v. Robert Welch, Inc., 418 U.S. 323,
347 (1974).

                                       8
1175 (5th Cir. 1986) (quoting McCandless v. Beech Aircraft Corp.,

779 F.2d 220, 223 (5th Cir. 1985), vacated on other grounds on

petition for panel reh’g, 798 F.2d 163 (5th Cir. 1986) (per

curiam)). The critical question presented in this case, therefore,

is whether Reed presented evidence sufficient to constitute clear

and convincing proof that CPL acted with actual malice.            Cf. Duffy,

44 F.3d at 312-13.5

     The actual malice analysis is a subjective standard that

centers on the state of mind of the person or persons making the

allegedly defamatory statements.           See Seidenstein v. National

Medical Enters., 769 F.2d 1100, 1104 (5th Cir. 1985).                 In this

case, the relevant persons for that inquiry are the people who

terminated Reed.     At most, this would include Kinnear, Williams,

Brown, and Suminski.      Any allegedly defamatory statements made by

them were entitled to a presumption of good faith and lack of

malice.   See Schauer, 856 S.W.2d at 449.

     Reed offered no direct evidence on the state of mind of any of



      5
        The Supreme Court has expressly approved this synthesis of federal and
state legal standards in an analogous context:
     In sum, we conclude that the determination of whether a given
     factual dispute requires submission to a jury must be guided by the
     substantive evidentiary standards that apply to the case. This is
     true at both the directed verdict and summary judgment stages.
     Consequently, where the New York Times “clear and convincing”
     evidence requirement applies, the trial judge’s summary judgment
     inquiry as to whether a genuine issue exists will be whether the
     evidence presented is such that a jury applying that evidentiary
     standard could reasonably find for either the plaintiff or the
     defendant. Thus, where the factual dispute concerns actual malice,
     clearly a material issue in a New York Times case, the appropriate
     summary judgment question will be whether the evidence in the record
     could support a reasonable jury finding either that the plaintiff
     has shown actual malice by clear and convincing evidence or that the
     plaintiff has not.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

                                      9
these individuals.     Instead, he argued below that he was not

psychologically dysfunctional, that he should have been accorded

fictitious “due process” rights, that he was unfairly treated by

CPL, and that he was discriminated against on the basis of age.   In

other words, he misapprehended the legal theory of defamation and

failed to present direct evidence on a critical element of a

defamation claim brought under Texas law:   actual malice.

     The key question, in other words, is not whether Reed actually

sexually harassed Salgado and Roberts (or engaged in improper

conduct toward them), but rather whether Kinnear, Williams, Brown,

or Suminski believed that he did.    Even if Reed had been able to

prove that the allegations of Salgado and Roberts were false, he

still could not prevail. The actual malice analysis focuses on the

declarant’s subjective state of mind, not the objective truth of

the declarations; thus, “[p]roof of falsity in fact is not enough,

nor is proof of a combination of falsehood and general hostility.”

Seidenstein, 769 F.2d at 1104; see also Ragan, 63 F.3d at 443;

Duffy, 44 F.3d at 314.

     The most glaring example of Reed’s failure to understand his

legal theory occurred during the direct and cross-examinations of

Brown.    On direct, CPL’s counsel asked Brown questions regarding

his state of mind during and after his investigation of Reed:

     Q:    And when you spoke to these Chevron employees [the
           ones Brown interviewed when investigating Reed],
           did you believe them.
     A:    Yes. Yes.
     Q:    Was there any doubt in your mind that they were
           telling the truth or telling falsehoods?
     A:    No, not at that point in time.
     Q:    Did you ever, at any time, think that they were not

                                10
            telling the truth?
       A:   No.

On cross, Reed’s counsel did nothing to challenge either this

specific testimony or the broad proposition that Brown had believed

that    Reed    had   engaged      in    sexual       harassment     and   improper

conductSSthe      grounds    CPL     gave      Reed   as   the     basis   for   his

termination.

       In Seidenstein, the plaintiff called as a witness Dr. Egbert,

the declarant of the allegedly defamatory statement.                  See 769 F.2d

at 1104.       On cross examination, the defendant corporation asked

Egbert whether he believed the contents of his allegedly defamatory

statement.      See id.     Egbert answered affirmatively.            See id.    The

plaintiff did not challenge this assertion, “[d]espite the obvious

importance to Seidenstein’s case of establishing that Egbert did

not in fact so believe.”           Id.

       Even more astonishing is what occurred when the defense

counsel tried to cross-examine one of the plaintiff’s witnesses on

the issue of Egbert’s truthfulness:                    The plaintiff’s counsel

objected on the ground that he “‘knew of nothing yet that would

bring that into issue.’”        Id.      We corrected the impressions of the

plaintiff’s counsel in no uncertain terms:

       To the contrary, it is difficult to imagine anything more
       fundamentally at issue than Dr. Egbert’s truthfulness in
       an action governed, as was this one, by the definitions
       of “actual malice” . . . ; Dr. Seidenstein can scarcely
       have been expected to prove that Dr. Egbert spoke with
       knowledge that his statement was false or with reckless
       disregard for whether it was false or not without
       questioning Egbert’s truthfulness.

Id.


                                          11
     While Reed correctly argues that the jury could have chosen to

disbelieve    Brown,    it   is   well-established     that   “‘discredited

testimony is not considered a sufficient basis for drawing a

contrary conclusion.’”        See id. at 1105 (quoting Bose Corp. v.

Consumers Union of United States, Inc., 466 U.S. 485, 512 (1984)).

The Texas courts have specifically held that a jury’s belief that

a statement was in fact incorrect does not constitute affirmative

evidence that the statement’s declarant knew that it was false.

See Casso v. Brand, 776 S.W.2d 551, 558-59 (Tex. 1989) (noting that

it was unlikely, although not inconceivable, that such evidence

could be uncovered for first time in cross-examination); Breen v.

DeLord, 723 S.W.2d 166, 170 (Tex. App.SSAustin 1986, no writ).

     Reed argues on appeal that the jury could have inferred that

the investigation and termination of Reed were based on reasons

other than those given to ReedSSi.e., ulterior motives.6 Cf. Duffy,

44 F.3d at 315 n.10 (dictum) (stating only that evidence of

ulterior motive could “bolster” an inference of actual malice, not

support it independently).        Reed argues, in particular, that the

jury could have found that he was terminated because of his age and

points to the fact that the jury found that his termination had

constituted age discrimination.

     The district court, however, granted judgment as a matter of

law against him on the age discrimination claim after the jury had

returned its verdict. The order of final judgment expressly stated

that Reed’s “proof” of age discrimination consisted entirely of a

     6
         The jury was not instructed on this ulterior motive theory.

                                      12
mild, conclusionary assertion that he thought age might have been

a factor in his hiring.         As the district court noted, this was

nothing more than “mere refutation.” It was certainly not the type

of evidence that could clear the “clear and convincing” hurdle. In

fact, the district court expressly found that it was not even

sufficient to demonstrate, by a preponderance of the evidence, that

Reed was a victim of age discrimination committed by CPL.7                Such

evidence, even if believed, could not have met Reed’s burden of

showing actual malice by clear and convincing proof.

          The burden of proving actual malice by clear and convincing

evidence is a heavy one:        “When the testimony concerning ‘actual

malice’ has conflicted or could plausibly be interpreted either

way, we have concluded that the Plaintiff has not met his burden.”

National Ass’n     of   Gov’t   Employees    v.   National   Fed’n   of   Fed.

Employees, 844 F.2d 216, 220 (5th Cir. 1988).          The evidence that an

alleged defamer entertained serious doubts as to the truth of his

communication “cannot be found in a record that causes us to

entertain [instead] serious doubts as to [the communication’s

purported] falsity.”      Seidenstein, 769 F.2d at 1105.

      In this case, we are faced with precisely this situation.            The

evidence offered by Reed did not even approach clear and convincing

proof of actual malice.

      To the contrary, the record causes us seriously to doubt that

CPL’s stated grounds for termination were anything but true.               The


      7
         Because we hold that Reed failed to prove actual malice, we need not
reach CPL’s claims contesting some of the district court’s evidentiary rulings.

                                      13
record certainly prevents us from seriously entertaining either the

notion   that   Kinnear,    Williams,       Brown,   or   Suminski   personally

disbelieved that Reed had engaged in sexual harassment and improper

conduct, or the notion that they had personally disbelieved that

Reed was being fired for those reasons.



                                       V.

      The district court awarded attorney’s fees to Reed of $20,000.

CPL appeals the award, arguing that there was no legal basis for

it.   Reed concedes on appeal that he was not entitled to fees.               He

did not prevail on his claim under the Age Discrimination in

Employment Act (“ADEA”) and therefore could not collect fees under

that statute.8    Furthermore, Texas law does not permit the recovery

of attorney’s fees for tort claims.          See Stine v. Marathon Oil Co.,

976 F.2d 254, 264 (5th Cir. 1992); TEX. CIV. PRAC. & REM. CODE ANN.

§ 38.001 (West 1986).       The award of attorney’s fees must therefore

be reversed, as there is no legal basis to support it.

      Accordingly, we REVERSE the judgment against CPL on the

defamation claim, RENDER judgment for CPL on that claim, and

REVERSE the award of attorney’s fees.




      8
         The ADEA, 29 U.S.C. § 626(b) (1985), incorporated the attorney’s fees
provision of the Fair Labor Standards Act, 29 U.S.C. § 216(b) (Supp. 1995), which
authorizes the recovery of attorneys fees only by a plaintiff who secures a
judgment. See 29 U.S.C. § 626(b); cf. Falcon v. General Tel. Co., 815 F.2d 317,
322 (5th Cir. 1987) (stating that plaintiff in title VII case must demonstrate,
as threshold requirement for obtaining attorney’s fees, that he was prevailing
party).

                                       14
