author: CARL E. STEWART, Chief Judge:

text:
    UNF WEST, INCORPORATED, Petitioner Cross-Respondent v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner
    No. 16-60124
    United States Court of Appeals, Fifth Circuit.
    Filed December 20, 2016

      Douglas M. Topolski, Esq., Ogletree Deakins, P.C., Washington, DC, Franklin Dalton Davis, Attorney, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Dallas, TX, for Petitioner Cross-Respondent.
    Linda Dreeben, Esq., Deputy Associate General Counsel, Jill A. Griffin, Esq., Supervisory Attorney, Rebecca Jean Johnston, National Labor Relations Board, Appellate & Supreme Court • Litigation Branch, Washington, DC, Olivia Garcia, Los Angeles, CA, for Respondent Cross-Petitioner.
    Before STEWART, Chief Judge, and SMITH and DENNIS, Circuit Judges.
   CARL E. STEWART, Chief Judge:

UNF West, Inc. (“UNF”) petitions for review of a National Labor Relations Board (“Board”) Decision and Order finding that UNF engaged in unfair labor practices by (1) interrogating employees about their union activities, (2) threatening employees with futility regarding their rights to organize and bargain collectively, and (3) threatening employees with reduction of wages. The Board cross-applies for enforcement of its Order. UNF’s petition is DENIED; the Board’s cross-application is GRANTED.

I. Background

UNF is a California corporation involved in distributing natural and organic foods. It maintains a facility in Moreno Valley, California. The International Brotherhood of Teamsters, Local 166 (“Union”) began an organizing campaign at the Moreno Valley facility in 2012. That same year the Board conducted a representation election, which the Union lost. The Union subsequently filed objections based on alleged unfair labor practices, asking for the result to be set aside. The Regional Director found merit in' the Union’s claims, and the matter was heard before an Administrative Law Judge (“ALJ”). However, before the ALJ ruled, the Union withdrew its objections to the election and sought again to be elected as the employees’ representative. The ALJ eventually rendered his decision, which the Board adopted and the D.C. Circuit enforced in UNF West, Inc. I, 361 NLRB No. 42 (2014). Meanwhile, the Board set a new election date for late May, but canceled that election the night before due to fresh allegations of unfair labor practices on the part of Juan Negroni (“Negroni”) and Carlos Ortiz (“Ortiz”), Kulture labor consultants who acted as UNF’s agents.

After a hearing, a second ALJ found the conduct of thesé consultants to have violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) insofar as it involved (1) engaging in coercive interrogation with and making threats of futility to employee Armando Perez Aceves (“Aceves”), (2) doing the same with respect to employee Lino Contreras (“Contreras”), and (3) threatening a group of employees with the possibility of a reduction in wages. According to testimony presented at the hearing, the culpable conduct occurred on three separate occasions.

First, on May 9, 2014, Aceves attended a meeting with Ortiz, at which Negroni was also present. Aceves was an open union supporter, but the ALJ found no evidence that this fact was known to UNF. Aceves testified that the meeting lasted about 40-50 minutes. After the meeting, Aceves testified that he returned to his work area in the warehouse.. Negroni approached Aceves in the warehouse and asked him, “How are you doing? How do you feel with the Union?” Aceves replied, “Is this an interrogation? I’m working. Leave me alone. I’m working. Don’t interrupt me.” Negroni said, “Calm down.” Aceves then showed Negroni a document entitled “Employee Rights Under the National Labor Relations Act” because, as Aceves testified, Negroni pressured employees and spoke ill of the Union. After seeing the document, Negroni said, “This document doesn’t work here, my brother.” He also said, “Who pays your check, the company or the Union?” Aceves then asked Negro-ni, “If the firemen, the policemen, have [a] union, why are you always talking bad about the Union?” Negroni stared at Aceves and then left.

With regard to the second incident, Contreras alleged that he had a conversation with Negroni in the warehouse on May 22, 2014. Negroni purportedly approached him in an aisle and asked, “What about the Union?” Negroni went on to say, “I have heard that the Union is making a lot of promises.” After Contreras denied this and suggested that Negroni and his colleagues were “making false promises” and “[l]ying to people and threatening them,” Negroni allegedly said “I hope the company won’t hear what you’re saying.” In response, Contreras showed him the same document that Aceves had shown Negroni two weeks prior, which prompted Negroni to admonish that the document was “useless,” as “[t]he company ha[d] its own policies.”

As to the third incident, on May 16, 2014, UNF called Contreras to attend an employee meeting in the human resources department at which Ortiz gave a slide presentation. Contreras testified that Ortiz began the meeting by speaking ill of the Union, whereupon Contreras interjected with the following: “I have heard from the warehouse that you guys are saying that if the Union wins, the Company’s going to reduce the wages of all the employees.” Ortiz responded, “Lino, we put that message on the projector so everybody could see it. Lino, of course, if the Union wins, the Company could reduce your wages.” Contreras responded, “But that’s illegal.” Ortiz responded again, “Lino, who pays your salary? The Company, right? Therefore, the Company has the right to reduce your salary.” Employee Juan Urquiza, also present at the meeting, corroborated this version of events, testifying that in response to questioning by Contreras, Ortiz said, “If the Union won and they would represent [you], .. the company could lower [your] wages, salaries ... because the company pays [your] salaries.”

The Board considered and affirmed the ALJ’s rulings and. adopted his recommended Order. UNF then filed the instant petition with this court.

II. Standard of Review

We will affirm the Board’s findings of fact if they are “supported by substantial evidence on the record, considered as a whole.” Poly-Am., Inc. v. NLRB, 260 F.3d 465, 476 (5th Cir. 2001). “Substantial evidence is that which is relevant and sufficient for a reasonable mind to accept as adequate to support a conclusion. It is more than a mere scintilla, and less than a preponderance.” El Paso Elec. Co. v. NLRB, 681 F.3d 651, 656 (5th Cir. 2012) (emphasis omitted) (quoting Spellman v. Shalala, 1 F.3d 357, 360 (5th Cir. 1993)). Although the reviewing court is “obligated to consider evidence that detracts from the Board’s finding,” Asarco, Inc. v. NLRB, 86 F.3d 1401, 1406 (5th Cir. 1996), the ALJ’s decision stands “if a reasonable person could have found what the ALJ found, even if the appellate court might have reached a different conclusion had the matter been presented to it in the first instance.” Standard Fittings Co. v. NLRB, 845 F.2d 1311, 1314 (5th Cir. 1988). The ALJ’s credibility choices bind this court “unless one of the following factors exists: (1) the credibility choice is unreasonable, (2) the choice contradicts other findings, (3) the choice is based upon inadequate reasons or no reason, or (4) the ALJ failed to justify his choice.” Asarco, 86 F.3d at 1406.

Challenges to legal conclusions are reviewed de novo, id., while procedural and evidentiary rulings are reviewed for abuse of discretion. Marathon LeTourneau Co., Longview Div. v. NLRB, 699 F.2d 248, 254 (5th Cir. 1983).

III. Discussion

The NLRA functions to regulate conduct attending organizational activities in the workplace in a manner that balances between protecting the rights of employees, employers, and “to a lesser extent, ... the union.” Section 7 of the NLRA grants employees a wide range of rights to organize themselves, to “form join, or assist labor organizations,” to engage in collective bargaining via their chosen representatives, “to engage in concerted activities” to further collective bargaining or “other mutual aid or protection,” or to refrain from these activities. 29 U.S.C. § 157 (2015). Section 8(a)(1) functions to protect employees in the exercise of these rights, and it outlaws as “unfair labor practice's” any employer activities that “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [Section 7].” 29 U.S.C. § 158 (a)(1). In.this case, the alleged unfair labor practices take the form of (1) a threat to reduce wages, (2) threats of futility regarding exercise of Section 7 rights, and (3) coercive interrogation of employees.

A Threats to Reduce Wages

The ALJ determined (1) that Ortiz’s statement—that UNF could reduce employees’ wages because it pays those wages—came before the slide presentation and included no mention of collective bargaining, and (2) that even if the later slide presentation referenced collective bargaining, the earlier statement without that reference was never specifically corrected. Accordingly, Ortiz’s statement could be reasonably interpreted as conveying a threat that UNF would unilaterally reduce wages should the Union win the election.

On appeal, UNF contends that because (1) the slide presentation began by defining collective bargaining as the subject of the meeting and (2) Ortiz read slides describing collective bargaining in an objective manner and specifically disclaimed authority to make threats, the slides should establish that Ortiz’s statements were made in the context of collective bargaining.

The alleged threats to reduce wages at the May 16, 2014 meeting violate Section 8(a)(1) “if, under the totality of the circumstances, ‘the employees could [have] reasonably conclude[d] that the employer [was] threatening economic reprisals if they supported] the Union.’ ” TRW-United Greenfield Div. v. NLRB, 637 F.2d 410, 418 (5th Cir. 1981) (quoting Hendrix Mfg. Co. v. NLRB, 321 F.2d 100, 105 (5th Cir. 1963)). Employers are “free only to tell “what [they] reasonably believe[] will be the likely economic consequences of unionization that are outside [their] control,’ and not ‘threats of economic reprisal to be taken solely on [their] own volition.’” NLRB v. Gissel Packing Co., 395 U.S. 575, 619, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969) (quoting NLRB v. River Togs, Inc., 382 F.2d 198, 202 (2d Cir. 1967)). Although employers can communicate “general views about unionism” or “specific views about a particular union,” TRW, Inc. v. NLRB, 654 F.2d 307, 313 (5th Cir. 1981), statements that carry “any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him,” are considered impermissible threats of retaliation. Gissel, 395 U.S. at 618, 89 S.Ct. 1918.

Cases applying this rule to statements regarding reductions in wages or benefits have found that such a statement is not a threat of reprisal where it “was made in a context ,.. indicating] ... that bargaining is a process in which each side makes its own proposals, that it requires mutual agreement, and where existing benefits may be traded away.” Histacount Corp., 278 NLRB 681, 689 (1986). But if the statement in its context “fail[s] to include any reference to the collective-bargaining process or to any economic necessities or other objective facts as a basis for its prediction that wages might be reduced,” then it is impermissible, because it implies that an employer may act on its own initiative, unilaterally, and for its own reasons. President Riverboat Casinos of Mo., Inc., 329 NLRB 77, 77 (1999).

We agree with the Board and the ALJ that Ortiz’s statements constitute a threat to reduce wages in violation of Section 8(a)(1). Our review of the record evidence shows that the context existing contemporaneously with or immediately prior to Ortiz’s statements was devoid of reference to the give and take of collective bargaining. This is because the only statements objectively characterizing collective bargaining began at the second slide of the presentation, and according to testimony credited by the ALJ, Ortiz’s problematic statements were made before he began reading the slides. In the absence of prior or contemporaneous context indicating that collective bargaining is a give-and-take process, Ortiz’s admonition that “of course, if the Union wins, the Company could reduce your wages,” along with “Lino, who pays your salary? ... The Company, right? Therefore, the Company has the right to reduce your salary” reasonably implied that UNF could unilaterally lower wages for any reason it chose. See id. at 77; Gissel, 395 U.S. at 618, 89 S.Ct. 1918.

Second, Ortiz’s later statements, which consisted of his reading the slide presentation text word for word, did not even address the earlier implication that UNF could unilaterally reduce wages. While only contemporaneous or earlier contextual factors can influence a statement’s reasonable import for the listener at the time that the statement was uttered, see TRW, 654 F.2d at 313 (noting that “language used by the parties involved in a union representation campaign ... must be considered in light of the circumstances existing when such language was spoken” (emphasis added)), additional comments can be made to clarify, expand, or otherwise alter the context and reasonable import of that statement. See Plastronics, Inc., 233 NLRB 155, 156 (1977) (noting that “statements are not objectionable when additional communication to the employees” establishes that reductions in.wages will come only as a result of “the normal give and take of collective bargaining,” thus dispelling any misimpressions). However, any remedial statements must be, inter alia, specific in nature to the coercive conduct. Passavant Mem’l Area Hosp., 237 NLRB 138, 138 (1978); accord Teksid Aluminum Foundry, Inc., 311 NLRB 711, 711 n.2 (1993). In this case, the content of the slides that Ortiz read—stating that “bargaining starts from where you are now and you can gain, stay the same, or you can lose,” and that “as a result of bargaining, you may end up with more than you have today, the same as you have today, or less than you have today”—fails to specifically address the earlier implication that UNF could unilaterally lower wages if the Union carried the election. Accordingly, we conclude that the ALJ’s holding is not in error. Asarco, 86 F.3d at 1406.

B. Threats of Futility

The ALJ found that Negroni’s May 9th statement in relation to the document listing employee rights that Aceves handed to him “doesn’t work here” clearly conveyed that Section 7 rights, “including the right to form a union, did not apply to [UNF] and it was therefore useless for Aceves to attempt to organize with his coworkers and ... join the Union.” The ALJ also found that Negroni’s May 22nd statement to Contreras that the document detailing employee rights was “useless” because “[t]he Company has its own policies” communicated the same message.

On petition for review, UNF argues ■principally that neither of the statements that the ALJ found to be threats of futility was accompanied by a threat to take action to ensure futility, and so they do not run afoul of Section 8(a)(1) under this court’s precedent. We disagree.

Threats of futility include “remarks concerning the futility of electing a union,” NLRB v. Laredo Coca Cola Bottling Co., 613 F.2d 1338, 1341 (5th Cir. 1980), or those that communicate a message to “employees that selection of a union would be an ‘exercise in futility.’” While the Board proscribes such remarks where they “were clearly intended to and had the effect of conveying to the employees the futility of their support of the Union,” Wellstream Corp., 313 NLRB 698, 706 (1994), “this Court has only found comments' to be unlawful statements about futility when accompanied by a threat or implication that the employer will take some action to render union support futile.” Brown & Root, Inc. v. NLRB, 333 F.3d 628, 634 (5th Cir. 2003) (emphasis added). Accordingly, we review the record for affirmative evidence that (1) remarks were made concerning the futility of exercising unionization rights and (2) those remarks were conjoined with a threat or implication that UNF would act to ensure the futility of union organization. See Brown & Root, Inc., 333 F.3d at 634.

Because our review reveals such evidence, we agree with the Board and the ALJ that Negroni’s statements constituted threats of futility in violation of Section 8(a)(1). Regarding the conversation with Aceves, a UNF representative’s remark that “this document doesn’t work here” in reference to a document detailing inter alia, employee rights to (1) organize; (2) form, join, or assist a Union; (3) bargain collectively; (4) discuss wages and benefits; and (5) improve working conditions, suggests that such rights are not enforceable by employees of UNF. This statement thus communicates the futility of exercising these rights. See Wellstream, 313 NLRB at 706. Moreover, Negroni’s reminder of who pays Aceves’s check constitutes a threat or implication that UNF could take some action to ensure the futility of unionization. The reference to Aceves’s check highlights Aceves’s economic dependence on his employer, and tells Aceves that the employer is in sole control of the results and achievements of unionization. Combined with the earlier statement regarding the disutility of the employee rights document,, this paycheck reference can be reasonably understood to mean that UNF could take action to ensure futility by lowering wages, by firing employees, or by disregarding employee rights—including their rights to bargain and discuss wages.

Regarding Contreras, Negroni’s comments that the employee rights document in Contreras’s possession (the same document Aceves showed Negroni) was “useless” because “[t]he company has its own policies,” coupled with Negroni’s earlier comment that “I hope the company won’t hear what you’re saying” constituted a threat of futility. First, Negroni’s comment on the uselessness of the employee rights document signifies that attempts to exercise employee rights are futile because UNF has its own policies. See Wellstream, 313 NLRB at 706. Second, the full context of Negroni’s remarks establishes the presence of an accompanying threat to ensure futility. See Brown & Root, Inc., 333 F.3d at 634. This conclusion depends on the aggregation of two aspects of the conversation: (1) the statement regarding UNF’s policies, which signals that UNF is in full control of anything going on inside the facility; and (2) Negroni’s statement'prior to the remarks concerning futility, which implied consequences for Negroni’s "expression of discontent with UNF’s actions and so imparts information regarding UNF’s disposition to punish. To join an assertion of control with a disposition to punish is to combine a threat of punishment with a statement of capability. Combine this further with a remark of futility, and the jurisprudential requirements are met.

. The difficulty is the timing of the comments to be combined. The actual threat communicating disposition to punish came before the subject matter prompting the remarks of futility and before the comments asserting unilateral control. Accordingly, one might claim that these statements are disconnected,' and that the threat does not accompany the remark of futility. However, this view would seem to ignore the requirement that threats of futility, just like other violations of Section 8(a)(1), are to be examined according to their full context. See Whirlpool Corp., 337 NLRB 726, 730-31 (2002) (describing legal principles generally applicable to § 8(a)(1) violations); Rossmore House, 269 NLRB 1176, 1177 (1984) (“To fall within the ambit of § 8(a)(1), either the words themselves or the context in which they are used must suggest an element of coercion or interference.” (emphasis added)). A threat communicating a disposition to punish in one part of a conversation does not simply evaporate as regards another part of the conversation transpiring mere moments later. Because the threat was already part of the context surrounding the remarks of futility, Negroni’s comments to Contreras constituted a threat of futility. See Rossmore House, 269 NLRB at 1177; Brown & Root, Inc., 333 F.3d at 634. For the above reasons, we conclude that the ALJ’s holding on this issue was not in error. Asarco, 86 F.3d at 1406.

C. Coercive Interrogation

The ALJ found that both the May 9th and May 22nd conversations between Neg-roni and employees Aceves and Contreras, respectively, constituted coercive interrogations. The ALJ concluded that the “entire [May 9th] conversation established” the interrogation’s coerciveness because: (1) Aceves was questioned by a UNF agent charged with combatting the Union’s organizing campaign shortly before an election; (2) there was no evidence that Aceves engaged in open Union activity at the workplace or that Negroni was aware of the degree of Aceves’s Union involvement; (3) the conversation between Negro-ni and Aceves was neither casual, friendly, nor joking (Aceves told Negroni, “Leave me alone”); and (4) Negroni issued “an employer’s ultimate threat, that it' controlled Aceves’s employment.” As for the May 22nd conversation, the ALJ found that its entire context established coerciveness based on the information sought by Negroni’s questioning and his statement that UNF would not want to hear what Contreras was saying, implying adverse consequences for Contreras.

UNF’s primary objection to the ALJ’s analysis of this issue is that it failed to apply all of the Bourne factors. UNF asserts that some of those that were not applied would have weighed in its favor. UNF asserts that the ALJ’s treatment of the factors is legal error preventing enforcement. We disagree.

Interrogation of employees is illegal when “the words themselves or the context in which they are used ... suggest an element of coercion or interference.” Rossmore House, 269 NLRB at 1177. The presence of such an element is ascertained by examining the totality of the circumstances, an analysis guided by the application of several factors: (1) the background, or history of employer hostility and discrimination; (2) the nature of the information the questioner seeks; (3) the rank of the questioner in the company hierarchy; (4) the place and manner of the interrogation; (5) the truthfulness of the employee’s reply; (6) whether the employer had a valid purpose in obtaining the information sought about the union; (7) whether a valid purpose, if existent, was communicated to the employee; and (8) whether the employer assured the employee that no reprisals would be forthcoming should he or she' support the union. NLRB v. Brookwood Furniture, 701 F.2d 452, 460-61 (5th Cir. 1983); accord Paceco v. NLRB, 601 F.2d 180, 183 (5th Cir. 1979); TRW-United, 637 F.2d at 416; see also Bourne v. NLRB, 332 F.2d 47, 49 (2d Cir. 1964).

The Bourne factors are analytical guiding lights—not a mandate for formalistic analysis. See Sturgis Newport Business Forms, Inc. v. NLRB, 563 F.2d 1252, 1256 (5th Cir. 1977) (noting that “a proper evaluation of the evidence goes beyond examining a list of factors and then comparing the number that favor the employer to the number that favor the union,” since “[i]n-timidation may occur even if all factors cut in favor of the employer”). Both the NLRB and this circuit have repeatedly stressed that “[n]o single factor is determinative and ‘coercive interrogation may still be found ... even if all the above enumerated factors operate in the employer’s favor.’” Tellepsen Pipeline Servs. Co. v. NLRB, 320 F.3d 554, 561 (5th Cir. 2003) (quoting McCullough Envtl. Servs., Inc., 5 F.3d 923, 928 (5th Cir. 1993)); accord TRW-United, 637 F.2d at 416 (noting that the list of factors “is not exhaustive ... and coercion may occur even if all of these factors operate in favor of the employer”). Moreover, it is important to note that the inquiry relates to potentiality, and not to actuality—that is, “the test is whether the questioning tends to be coercive, not whether the employees are in fact coerced.” NLRB v. Varo, Inc., 425 F.2d 293, 298 (5th Cir, 1970).

Our review of the record evidence indicates that the Board and ALJ properly concluded that Negroni’s conduct on May 9th and May 22nd constituted coercive interrogation in violation of Section 8(a)(1). There is no requirement that an ALJ apply all the factors to every situation, and coerciveness can be found even Where no enumerated factors favor the Board. See, e.g., Tellepsen Pipeline, 320 F.3d at 561. If not all are required, then a failure to apply them all cannot be legal error, and although it is true that the Board’s opinion must provide an appellate court with a basis to determine whether these factors were applied and “evaluate the substantiality of the evidence to support each factor,” Paceco, 601 F.2d at 183, the Board’s discussion of facts relevant to the factors it did apply in this case met that requirement.

For both scenarios, the ALJ specifically mentioned the Bourne factors and based his decision on a number of facts relevant to them in consideration of the-totality of the circumstances, including (1) the background, namely that these incidents occurred “shortly before an election”; (2) the identity of the questioner as a UNF agent “charged with combatting the Union’s organizing campaign”; (3) the nature of Aceves’s responses to questioning, concluding that these indicated that the conversation was not friendly or joking; (4) the place and method of the interrogation, noting that the questions Negroni asked were accompanied by a threat referencing Aceves’s economic dependence. Indeed, the presence of a threat implies the absence of a free choice, and accordingly, “interrogation accompanied by threats has been held to interfere with an election even though only one percent of the employees were threatened.” For the reasons stated, we see no basis upon which to disturb the ALJ’s finding on coerciveness.

D. Remaining Objections

UNF also raises three other objections to the Board and ALJ’s decision, all of which we conclude to be without merit.

First, UNF objects that the Board and ALJ erred by refusing to allow Ortiz to testify in Spanish while allowing the General Counsel’s witnesses to do so. Evaluations regarding the competence of a witness to testify in English and the corresponding “need for an interpreter [are] within the discretion of the [ALJ].” Meat Packers Int’l, 225 NLRB 294 n.8 (1978). Ortiz is fluent in English, and a significant part of his job involves translating between English and Spanish. He displayed no apparent difficulty testifying in English, and review of the transcript uncovers no evidence of his confusion or misunderstanding. Moreover, the ALJ’s decision to withhold an interpreter was subject to revision if Ortiz began to display linguistic difficulty—which he did not. We conclude that the ALJ reasonably exercised his discretion in requiring Ortiz to testify in English, See Marathon LeTourneau Co., 699 F.2d at 254.

Second, UNF objects that the Board and ALJ' erred by ordering the extraordinary remedy of public notice reading. Because “[t]he particular means by which the effects of unfair labor practices are to be expunged are matters for the Board[,] not the courts to determine,” Va. Elec. & Power Co. v. NLRB, 319 U.S. 533, 539, 63 S.Ct. 1214, 87 L.Ed. 1568 (1943) (quotation marks omitted), administrative remedial' choices “stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.” Id. at 540, 63 S.Ct. 1214; accord J.P. Stevens & Co. v. NLRB, 417 F.2d 533, 537 (5th Cir. 1969). Public notice reading in particular is designed to “ensure that the important information set forth in the notice is disseminated to all employees, including those who do not consult the [employer’s] bulletin boards.” Excel Case Ready, 334 NLRB 4, 5 (2001). This court has previously noted that “[f]or repeated violations persisted in despite intervening declarations of illegality, the Board is warranted in impliedly concluding that such conduct has created a chill atmosphere of fear and, further, in recognizing that the reading requirement is an effective but moderate way to let in a warming wind of information and, more important, reassurance.” J.P. Stevens & Co., 417 F.2d at 540.

It is incontrovertible that UNF is a repeat violator of Section 8(a)(1). In 2014, in the same Moreno Valley facility, an ALJ found UNF to have (1) made threats of futility, (2) made threats to reduce benefits, and (3) coercively interrogated employees, UNF West, Inc. I, 367 NLRB at *2. The instant case thus represents the second round of the same problematic-conduct in the same facility, in the context of the same unionization campaign—only with new characters. Accordingly, the Board’s choice of remedy was not a patent attempt to extend itself beyond the policies of the Act. See Va. Elec. & Power Co., 319 U.S. at 540, 63 S.Ct. 1214.

Finally, UNF objects that the Board and ALJ erred by refusing to allow it to present testimony that established that there was a petition to ask the Union to withdraw, that proffered witnesses had signed the petition, and that those witnesses had never heard Ortiz or Negroni make any of the allegedly problematic statements to Aceves or Contreras or. to them individually. The ALJ enjoys wide discretion to exclude irrelevant or otherwise inadmissible evidence. See Marathon LeTourneau Co., 699 F.2d at 254. The Board conducts its proceedings in accordance with the Federal Rules of Evidence, so far as possible. Id. at 253. Under the Rules, evidence is relevant only if it has a tendency to make a fact of consequence more or less probable. Fed. R. Evid. 401. Additionally, testimony is admissible only where there is evidence to show the witness has personal knowledge of the matter to which she testifies. Fed. R. Evid. 602.

Neither the petition expressing the opinion of some employees about the Union nor the proffered testimony regarding each witness’s individual lack of experience with the labor consultants is probative of what happened to Aceves or Contreras. Moreover, there is no evidence that these witnesses were in a position to observe Aceves, Contreras, Ortiz, or Negroni at key moments—thus, the witnesses seemingly lacked personal knowledge from which to testify about the interactions between these individuals. Lastly, despite UNF’s claims to the contrary, whether Union support was in fact chilled by an Section 8(a)(1) violation—i.e., whether the problematic conduct in fact coerced anyone or interfered with a campaign—is inconsequential in an 8(a)(1) case, and so cannot serve as a predicate to establish the relevance of evidence. Fed. R. Evid. 401 (noting that evidence must relate to a fact of consequence). Thus, the ALJ did not abuse his discretion in excluding the proffered evidence. See Marathon LeTourneau Co., 699 F.2d at 254.

IV. Conclusion

For the aforementioned reasons, UNF West’s petition is DENIED. The Board’s cross-application for enforcement is GRANTED.

      . Although not specifically stated in the record, it appeárs from the context of the references in the witnesses’ testimony, the ALJ's decision, and, the parties’ briefs that "Kulture” refers to Kulture Consulting, LLC—an organization that offers consulting services in the field of labor relations.

      . 1 ABA Section of Labor & Employment Law, The Developing Labor Law 81 (John E. Higgins, Jr., et al. eds., 6th ed. 2012).

      . UNF also argues that Ortiz’s use of "could”—as opposed to “would”—in reference to wage reduction establishes the permissibility of his statements. We find this view unpersuasive. Telling employees that UNF could choose to lower wages at its option— i.e., regardless of Union exception—no more objectively and accurately represents the give , and take of collective bargaining negotiations than would a more direct statement of UNF’s unilateral intention to reduce wages in the event of unionization. See President Riverboat Casinos of Mo., 329, NLRB 77, 77 (1999).

      . Developing Labor Law, supra note 2, at 150; see also NLRB v. Varo, Inc., 425 F.2d 293, 299 (5th Cir. 1970).

      . Bourne v. NLRB, 332 F.2d 47, 49 (2d Cir. 1964).

      . Developing Labor Law, supra note 2, at 182; see also Super Thrift Mkts.; Inc., 233 NLRB 409, 409 (1977) (noting that one can reasonably expect coercive statements made to a small number of employees in election campaigns to be disseminated to others),

      . UNF also claims that Negroni’s statements to Aceves and Contreras are too ambiguous to violate the NLRA, highlighting what it perceives as a lack of evidence to support the ALJ’s finding that Negroni’s statements had a threatening aspect. As this contention relates to inferences drawn from the evidence as to the meaning of words in context and what meaning employees took from those words, whether statements have a threatening quality is a factual question (as opposed to whether statements violated the NLRA, which would be a legal question). See, e.g., Louisville Chair Co., 146 NLRB 1380, 1381 (1964) (finding the record too conflicted to support treating statement that employee would "have to walk the chalk line” or "was going out” as a threat); Bomber Bait Co. Inc., 210 NLRB 673, 674 (1974) (finding the record rendered statement "won’t be there long enough” too ambiguous to support finding of violation). Accordingly, this court will defer to the ALJ’s reasonable inferences drawn from the record if there is substantial evidence to support them. Standard Fittings Co., 845 F.2d at 1314. Considering the evidence before him, the ALL found that the statements were threatening. Based on our review of the record, we conclude that this was a reasonable inference to draw.

      . See, e.g., TRW-United, 637 F.2d at 419 (discussing what threatened employees could reasonably conclude as the litmus test for a Section 8(a)(1) violation); cf. Super Thrift Mkts., Inc., 233 NLRB at 409.

      . UNF also raises a number of challenges to the ALJ's evidentiary findings and credibility determinations. UNF argues that there is no substantial evidence on the record to support that any of the three allegedly problematic incidents occurred at all. However, the record is almost entirely composed of testimony, and there is no question that testimonial evidence exists to support each of the ALJ’s findings. Accordingly, the essence of UNF’s objections as to the occurrence of certain events is that its witnesses—who deny the occurrence of those events—are more credible than the Board’s witnesses, who UNF claims are unreliable. As discussed above, the ALJ's credibility determinations are binding on this court except in very rare instances. Asarco, 86 F.3d at 1406. Here, the ALJ’s credibility findings, which were based on witness demeanor and extent of contradiction or corroboration, were eminently reasonable. Thus, we decline to disturb either those determinations or any factual findings based upon them. Id.


source: Caselaw Access Project

author: KING, Circuit Judge:

license: Public Domain

text:
    SPEAR MARKETING, INCORPORATED, Plaintiff-Appellant v. BANCORPSOUTH BANK; Argo Data Resource Corporation, Defendants-Appellees
    No. 16-10155
    United States Court of Appeals, Fifth Circuit.
    Filed December 22, 2016

      Steven Dominic Sanfelippo, Thomas C. Wright, Cunningham Swaim, L.L.P., Thomas C. Wright, Rose Walker, L.L.P., Dallas, TX, for Plaintiff-Appellant.
    Tonya M. Gray, Andrews Kurth, L.L.P., David Harlan Harper, Attorney, Jason Patrick Bloom, Esq., Haynes & Boone, L.L.P., Dallas, TX, for Defendants-Appel-lees.
    Before KING, OWEN, and HAYNES, Circuit Judges.
   KING, Circuit Judge:

This case is before us for the second time. Following our first decision, the district court awarded Defendants-Appellees nearly $1 million in attorneys’ fees under state law, or, in the alternative, under the Copyright Act. Now, Plaintiff-Appellant Spear Marketing, Inc. appeals this award, arguing that the district court ■ erred in awarding attorneys’ fees under state law because its state law claim was- preempted and erred in alternatively awarding attorneys’ fees under the Copyright Act because it never pleaded or litigated a copyright claim. We conclude that no court has ever held the state law claim to he preempted, and therefore the district court did not err in awarding attorneys’ fees under the state law.

I. Factual and Procedural Background

In this appeal, Plaintiff-Appellant Spear Marketing, Inc. (SMI) challenges the district court’s award of attorneys’ fees to Defendants-Appellees BancorpSouth Bank and Argo Data Resource Corp. (Defendants). This appeal is the second time that this litigation has come before this court. See Spear Mktg., Inc. v. BancorpSouth Bank (Spear Marketing I), 791 F.3d 586 (5th Cir. 2015). Because the primary disagreement between the parties is over what was decided by the district court in the underlying litigation and by this court in Spear Marketing I, it is necessary for us to provide a detailed review of this case’s procedural history pertinent to the resolution of this appeal.

A. Initial Procedural History and Grant of Defendants’ Motion for Summary Judgment

SMI is a small software developer that produces VaultWorks, a computer program that assists banks in managing their cash inventories. Id. at 589-90. Bancorp-South Bank (BCS) was one of the banks that used VaultWorks; however, in February 2012, BCS terminated its agreement with SMI because BCS had reached an agreement with Argo, another software developer for the banking industry. Id. at 590-91. BCS agreed to license Argo’s new program, Cash Inventory Optimization (CIO), which included functions similar to SMI’s VaultWorks. Id.

In August 2012, SMI filed its Original Petition against Defendants in Texas state court, primarily alleging that Defendants had stolen trade secrets related to the operation of VaultWorks in order to create CIO. The allegedly stolen trade secrets included both technical data and information, such as formulas, algorithms, and methods of operation, as well as business information, such as customer lists, cost and pricing information, financial information, and personnel details. The Original Petition asserted ten causes of action, including claims for misappropriation of trade secrets, theft of trade secrets under the Texas Theft Liability Act (TTLA), and conversion. SMI did not assert a copyright claim.

In September 2012, Defendants removed the case to federal court on the ground that the claims in the Original Petition were completely preempted by the Copyright Act. See 17 U.S.C. §,301 [expressly preempting all causes of action falling within the subject matter of the Copyright Act, with a few exceptions not applicable here). Defendants noted that each of SMI’s claims concerned the subject matter of copyright and highlighted how the Original Petition alleged that “Defendants ‘copied objects, materials, devices or substances, including writings’ belonging to SMI and then ‘communicated and transmitted’ the copied materials.” (Emphasis omitted.) Shortly after removal, Defendants moved to dismiss all of SMI’s claims, arguing, in relevant part, that each claim was preempted by the Copyright Act.

In response to the motion to dismiss, SMI filed a First Amended Complaint (FAC), which omitted from its TTLA claim allegations of copying, communicating, and transmitting writings and other materials, and deleted its conversion claim, leaving nine total claims. Defendants then filed a second motion to dismiss, arguing once again, in relevant part, that each claim in the FAC was preempted by the Copyright Act. In turn, SMI moved to remand the litigation to Texas state court, arguing that the claims in the FAC were not preempted by the Copyright Act, and thus the district court lacked subject matter jurisdiction over the claims in the FAC.

In May 2013, the district court denied SMI’s motion to remand. First, the district court explained that whether removal was proper should be determined based on the claims in the Original Petition, not the FAC. Second, the district court found that the TTLA claim in the Original Petition was completely preempted by the Copyright Act for the purposes of establishing federal jurisdiction. According to the district court, at least some of the allegedly stolen trade secrets on which the TTLA claim and the conversion claim in the Original Petition were based fell within the subject matter of copyright. In July 2013, the district court denied Defendants’ second motion to dismiss. Regarding Defendants’ preemption argument, the district court found that at least some of SMI’s alleged stolen trade secrets, “such as customer lists, business plans, marketing strategies, and customer preferences,” fell outside the coverage of the Copyright Act and thus were not preempted. As a caveat, the district court noted that, once the record was fully developed, it may find “that some or all of the state law claims are in fact preempted, and thus [it] may revisit the issue of preemption later in the case.”

In September 2013, Defendants moved for summary judgment on all nine claims in the FAC, arguing that (1) all of SMI’s allegations were based on the alleged misappropriation of trade secrets, and because SMI could not show that Defendants used SMI’s trade secrets in developing CIO, none of the claims was viable; (2) no trade secrets existed; and (3) all of the claims were preempted by the Copyright Act. In June 2014, the district court granted Defendants’ motion for summary judgment on all nine claims. The district court concluded that SMI could not establish a trade secret misappropriation claim because SMI failed to show Defendants’ unauthorized use of those trade secrets, an essential element of a claim for misappropriation of trade secrets. And the district court found that each of SMI’s other state law claims, including its TTLA claim, failed because of the insufficient evidence of Defendants’ use of SMI’s trade secrets. Given that all of SMI’s claims failed on the merits, the district court declined to address Defendants’ preemption argument. The district court accordingly dismissed all of SMI’s claims with prejudice.

B. Spear Marketing I

SMI appealed both the order denying its motion to remand and the order granting Defendants’ motion for summary judgment and dismissing all claims with prejudice, and this court affirmed. Spear Marketing I, 791 F.3d at 591, 598, 600-03. First, with regard to the motion to remand, Spear Marketing I held that the claims in the Original Petition, not the FAC, dictated whether federal jurisdiction existed because that was the operative complaint at the time of removal. Id. at 591-93; see Louisiana v. Am. Nat. Prop. & Cas. Co., 746 F.3d 633, 636 (5th Cir. 2014) (“[Jjurisdictional facts are determined at the time of removal, and consequently post-removal events do not affect that properly established jurisdiction.”); Brown v. Sw. Bell Tel. Co., 901 F.2d 1250, 1254 (5th Cir. 1990) (“When a defendant seeks to remove a case, the question of whether jurisdiction exists is resolved by looking at the complaint at the time the petition for removal is filed.” (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537-38, 59 S.Ct. 347, 83 L.Ed. 334 (1939))). Looking to the claims in the Original Petition, Spear Marketing I applied the two-prong complete preemption test and found that (1) a subset of SMI’s allegedly stolen trade secrets, “the technical trade secrets,” fell within the subject matter of copyright, and (2) the TTLA claim in the Original Petition, which alleged wrongful acts such as “[cjopying, communicating, and transmitting,” was equivalent to a copyright claim. Spear Marketing I, 791 F.3d at 594-98. Thus, Spear Marketing I held that the state law claims in the Original Petition were completely preempted by the Copyright Act, and, accordingly, the district court “properly exercised jurisdiction over” the suit. Id. at 598.

Spear Marketing I then reviewed the district court’s grant of summary judgment and dismissal with prejudice, this time considering the claims in the FAC because that was by then the operative complaint. It analyzed SMI’s claim for misappropriation of trade secrets and agreed with the district court that SMI failed to show a genuine dispute regarding an essential element of a misappropriation claim because SMI failed to show that Defendants used SMI’s trade secrets. Id. at 600-03. With respect to the other eight claims in the FAC, including the TTLA claim, Spear Marketing I held that SMI had waived its right to appeal summary judgment on these claims by entirely omitting any mention of them from its opening brief. Id, at 602-03.

C. Award of Attorneys’ Fees

Following the decision in Spear Marketing I, Defendants filed a motion in the district court for attorneys’ fees and costs under the TTLA or, alternatively, under the Copyright Act, 17 U.S.C. § 505. In relevant part, Defendants argued that they prevailed on the merits of SMI’s TTLA claim, and therefore, were entitled to attorneys’ fees under the TTLA. In opposition, SMI argued that an attorneys’ fees award under the TTLA was not proper because that claim was preempted and therefore Defendants had not prevailed on the claim’s merits. In January 2016, the district court granted Defendants’ motion for attorneys’ fees under the TTLA or, alternatively, under the Copyright Act, explaining that its award would not vary between the two statutes. The district court first addressed the argument for attorneys’ fees under the TTLA. The district court viewed itself as facing a dilemma: it needed to decide “whether to treat Defendants as prevailing parties under the TTLA because they successfully defended against SMI’s TTLA claim, despite the fact that [Spear Marketing I] later held the TTLA claim was completely preempted.” Finding no'binding legal authority on how to answer this question, .the district court awarded nearly $1 million in attorneys’ ' fees to Defendants because the TTLA claim was fully adjudicated, necessitating the expenditure of attorneys’ fees and costs by the parties. SMI timely appealed the award.

II. Award of Attorneys’ Fees under the TTLA

We review the district court’s award of attorneys’ fees under its first alternative basis: the TTLA. A district court may not award attorneys’ fees “unless a statute or contract provides” the basis for such an award. Baker Botts L.L.P. v. ASARCO LLC, — U.S. -, 135 S.Ct. 2158, 2164, 192 L.Ed.2d 208 (2015) (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010)). A state law, such as the TTLA, can provide the basis for an attorneys’ fee award if that state law supplies' the rule of decision. See Walker Int'l Holdings, Ltd. v. Republic of Congo, 415 F.3d 413, 415 (5th Cir. 2005), We review de novo the question of whether a state law supplied the rule of decision. Id.

Here, the district court interpreted Spear Marketing I as holding that the TTLA claim was preempted by federal law. The district court thus viewed itself as facing a dilemma. On the one hand, it could not award attorneys’ fees under the TTLA because the TTLA claim was preempted, and thus federal law supplied the rule of decision. On the other hand, the TTLA claim was adjudicated on the merits—it was dismissed with prejudice—and therefore, the TTLA’s attorneys’ fees provision should apply. The crux of the dispute between the parties is not over the law, but rather over the district court’s interpretation of Spear Marketing I. Put another way, the parties do not dispute that, if the TTLA claim was preempted, then the award of attorneys’ fees was improper. Nor do they' dispute the converse—that, if the TTLA claim was not preempted, then the award of attorneys’ fees was proper. Specifically, SMI argues on appeal that the district court erred in awarding attorneys’ fees under the TTLA because Spear Marketing I held that the TTLA claim was completely preempted, and, according to SMI, when a claim is completely preempted by federal law, an award of attorney’s fees cannot be based upon state law.-Moreover, SMI urges, the TTLA permits awards only to a party “who prevails in a suit under” the TTLA, and given that the TTLA claim was rendered a nullity through preemption, Defendants were not prevailing parties under the TTLA. Finally, SMI argues that Spear Marketing Fs preemption holding became the law of the case and superseded any conflicting findings made by the district court,

We disagree. The TTLA claim in the FAC—the operative complaint at the time of the attorneys’ fee award—was never held to be preempted. Spear Marketing I addressed only the TTLA claim as it was pleaded , in the Original Petition and did not consider the TTLA claim in the FAC. This is significant because the TTLA claim in the FAC was distinct from that in the Original Petition and specifically omitted allegations that were equivalent to copyright, with the intention of avoiding preemption. And the district court also never held that the FAC’s TTLA claim was preempted. Rather, the TTLA claim in the FAC was litigated and dismissed on the merits during summary judgment, and therefore it was proper to award attorneys’ fees under the TTLA because that law supplied the rule of decision.

The district court mistakenly interpreted Spear Marketing I as holding that the TTLA claim in the FAC was preempted. Nevertheless, we conclude the district court reached the correct outcome in awarding attorneys’ fees under the TTLA. The district court’s misunderstanding stems from its failure to distinguish between the TTLA claim in the Original Petition and that in the FAG. As our foregoing review of the procedural history should make clear, Spear Marketing I did not hold that the TTLA claim as asserted in the FAC was preempted. In fact, Spear Marketing I did not address the TTLA claim in the FAC at all. Rather, Spear Marketing I considered the TTLA claim only in the context of reviewing the district court’s denial of SMI’s motion to remand. In reviewing this denial, Spear Marketing I considered the TTLA claim only as it was asserted in the Original Petition because that was the operative complaint at the time of removal. Spear Marketing I, 791 F.3d at 591-98. Indeed, in conducting the equivalency prong of the preemption test comparing the TTLA claim and a copyright claim, Spear Marketing I quoted language from the TTLA claim in the Original Petition that was specifically omitted from the TTLA claim in the FAC, such as allegations that SMI’s confidential information was “communicated” and “transmitted.” Id. at 598. Spear Marketing I concluded that the TTLA claim in the Original Petition was completely preempted, and thus removal was proper and remand not warranted. Id. This analysis makes' clear that Spear Marketing I did not reach the question of whether the FAC’s TTLA claim was preempted.

SMI urges that even if Spear Marketing I only dealt with the TTLA claim in the Original Petition, its holding necessarily means that the FAC’s TTLA claim is equally preempted because it is based on the same trade secrets. Yet this argument ignores the fact that the claims in these two pleadings are distinct. SMI filed the FAC in response to Defendants’ motion to dismiss the Original Petition on preemption grounds. SMI described its reasons for filing the FAC in part as an attempt to avoid Defendants’ preemption argument by omitting allegations of wrongful copying, communicating, and transmitting of trade secrets, all of which “fall squarely within the exclusive rights protected by [the Copyright Act].” Id. Accordingly, Spear Marketing J’s holding that the TTLA claim in the Original Petition was preempted does not necessarily extend to the TTLA claim in the FAC. For this same reason, .SMI’s law of the case argument also fails. While Spear Marketing I may be highly persuasive, it does not constitute the law of the case such that the FAC’s TTLA claim is necessarily preempted. See Med. Ctr. Pharmacy v. Holder, 634 F.3d 830, 834 (5th Cir. 2011) (“[A]n issue that is not expressly or implicitly decided on appeal does not become part of the law of the case.”).

We also note that in addition to limiting its analysis to the TTLA claim in the Original Petition, Spear Marketing I limited its analysis to complete preemption for the purposes of establishing federal jurisdiction and did not reach the question of “ordinary” preemption—that is, whether federal preemption provided a defense against all the trade secrets upon which SMI’s TTLA claim was based. Contrary to the district court’s assertion, Spear Marketing I said nothing to suggest that the TTLA claim was entirely preempted, i.e., that every trade secret alleged to be stolen fell within the subject matter of copyright. To the contrary, Spear Marketing I suggested that it only considered a portion of the trade secrets alleged to be stolen— technical trade secrets (not the business trade secrets that SMI alleged were also stolen)—in conducting its preemption analysis. Spear Marketing I, 791 F.3d at 597 (“When we apply this [preemption] principle to SMI’s claims, we see that the technical trade secrets found within VaultWorks fall within the subject matter of copyright.” (emphasis added)). Having made this finding, the court needed to go no further because complete preemption was established on the basis of just this subset of trade secrets. Spear Marketing I thus not only did not reach the TTLA claim in the FAC but also did not reach the question of whether the trade secrets comprising the TTLA claim were entirely preempted on the merits.

In addition to the absence of any preemption holding by Spear Marketing I on the TTLA claim in the FAC, there was also never a holding by the district court that the TTLA claim in the FAC was preempted. To the contrary, in its order denying Defendants’ motion to dismiss the FAC on preemption grounds, the district court concluded that at least some of the allegedly stolen trade secrets comprising the TTLA claim fell outside the subject matter of copyright and thus were not preempted. The district court specifically cited SMI’s “customer lists, business plans, marketing strategies, and customer preferences” as trade secrets falling outside the subject matter of copyright and thus not entirely preempted. The court noted that it may revisit this conclusion later on after the record was fully developed, but it never did. And later on, in granting Defendants’ motion for summary judgment, the district court explicitly declined to address whether the FAC’s TTLA claim was preempted. Indeed, the basis on which the district court granted summary judgment on the TTLA claim was that SMI failed to show that Defendants had actually stolen its trade secrets, an essential element of a TTLA claim. See Tex. Penal Code § 31.05; Tex. Civ. Prac. & Rem. Code § 134.005(a) (2012). The district court even recognized that it had never made such a finding of preemption when it was addressing the attorneys’ fees motion. Clearly, the district court never held that the TTLA claim -in the FAC was preempted.

We conclude that, at the time of the motion for attorneys’ fees, no court had ever held that the TTLA claim in the FAC was preempted. Rather, the district court adjudicated the TTLA claim in the FAC on the merits, dismissing it with prejudice. The TTLA therefore supplied the rule of decision in this case, and, accordingly, the district court did not err by awarding attorneys’ fees under the TTLA. See Walker, 415 F.3d at 415 (“State law controls ... the award of ... fees ... where state law supplies the rule of decision.” (quoting Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002))); Tex. Civ. Prac. & Rem. Code § 134.005(b) (providing that anyone who “prevails” in a TTLA suit “shall be awarded court costs and reasonable and necessary attorney’s fees”).

III. Conclusion

For the foregoing reasons, we AFFIRM the district court’s attorneys’ fees award.

      . To establish a claim for misappropriation of trade secrets under Texas law, a plaintiff must show: “(a) a trade secret existed; (b) the trade secret was acquired through a breach of a confidential relationship or discovered by improper means; and (c) use of the trade secret without authorization from the plaintiff.” Spear Marketing I, 791 F.3d at 600.

      . To establish a claim for theft of trade secrets under the version of the TTLA in effect at that tíme, a plaintiff had to show: (1) the defendant knowingly (a) stole the plaintiff's trade secret, (b) made a copy of an article representing the trade secret, or (c) communicated or transmitted a trade secret; and (2) ,the plaintiff sustained damages as a result. See Tex. Penal Code § 31.05; Tex. Civ. Prac. & Rem. Code § 134.005(a) (2012).

      . At the outset, a brief detour into preemption terminology is instructive. “Complete preemption” is a jurisdictional doctrine sometimes invoked upon removal to federal court. See 14B Charles Alan Wright et al., Federal Practice & Procedure § 3722.2 (4th ed. 2016). The complete preemption doctrine provides that the preemptive force of some federal statutes is so strong that “it converts an ordinary state- common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule,” such that removal is possible. GlobeRanger Corp. v. Software AG (“GlobeRanger I”), 691 F.3d 702, 705 (5th Cir. 2012) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). The Copyright Act is one such federal statute that completely preempts the substantive field. Id. at 706. Complete preemption for the purpose of establishing federal subject matter jurisdiction is thus a purely jurisdictional doctrine that is distinct from ordinary preemption. See Elam v. Kan. City S. Ry. Co., 635 F.3d 796, 803 (5th Cir. 2011). Whereas complete preemption establishes federal subject matter jurisdiction over a. state law claim, ordinary preemption (variably called "defensive preemption") is an affirmative defense that a defendant can invoke "to defeat a plaintiff's state-law claim on the merits by asserting the supremacy of federal law.” Cmty. State Bank v. Strong, 651 F.3d 1241, 1261 n.16 (11th Cir. 2011). Complete preemption and ordinary preemption therefore may not perfectly overlap; a state law claim may be completely preempted (meaning there is federal jurisdiction over it) but ultimately not entirely preempted on the merits (meaning that preemption provides a defense against only some portion of the state law claim, leaving a viable state law claim to be litigated on the merits). See GlobeRanger I, 691 F.3d at 709 (recognizing that "at least part of the factual basis for GlobeRanger’s claims may fall outside the scope of copyright” and ”[i]f none of the claims were preempted ... there would not be federal jurisdiction under the complete preemption doctrine”). For instance, a TTLA claim based on multiple wrongful acts may not be entirely preempted on the merits if only some of those acts violate rights that are equivalent to copyright. SMI conceded this distinction at oral argument.

      . To determine whether a state law claim is completely preempted by the Copyright Act, we ask: (1) Does the claim fall within the subject matter of the Copyright Act, see 17 U.S.C. § 102? and (2) Does the state law .protect rights that are equivalent to. any of the exclusive rights protected by the Copyright Act, see 17 U.S.C. § 106? Spear Marketing I, 791 F.3d at 594.

      . Section 505 of the Copyright Act provides that "[i]n any civil action under [the Copyright Act], the court in its discretion may allow the recovery of full costs by or against any party ... [and] may also award reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. § 505.

      . Under the TTLA, anyone who “prevails” in á TTLA suit “shall be awarded court costs and reasonable and necessary attorney’s fees.” Tex. Civ. Prac. & Rem. Code § 134.005(b). Texas courts have interpreted "prevails” to include parties who successfully defend against a TTLA claim, such as achieving a dismissal with prejudice. See, e.g.; Arrow Marble, LLC v. Estate of Killion, 441 S.W.3d 702, 706-07 (Tex. App.—Houston [1st Dist.] 2014, no pet.).

      . The district court also addressed the amount of fees and costs awarded, but these portions of the judgment are not challenged by either party on appeal.

      . With regard to its alternative basis for the attorneys’ fee award, the Copyright Act, the district court found persuasive Fourth Circuit precedent holding that a preempted state law .claim constitutes a civil action for the purposes of section 505 of the Copyright Act, and therefore, a district court has discretion to award fees under section 505 when a state law claim is found to be preempted by the Copyright Act. See Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225, 233 (4th Cir. 1993).

      . SMI also argues that Defendants should be judicially estopped from arguing that the TTLA claim was preempted, but SMI did not raise this argument until its reply brief and thus waived it. See In re Katrina Canal Breaches Litig., 620 F.3d 455, 459 n.3 (5th Cir. 2010).

      . Because we agree with Defendants that the TTLA claim was never held to be preempted, we do not address their alternative bases for affirming the award of fees under the TTLA.

      . The district court’s confusion may stem from Spear Marketing I’s footnote 62, which discussed the course of conduct a district court can take after a claim is found to be completely preempted. Spear Marketing I, 791 F.3d at 598 n.62. Yet Spear Marketing I only considered the TTLA claim as it was asserted in the Original Petition, and thus footnote 62 is merely dicta because the FAC’s TTLA claim—not the Original Petition's TTLA claim—was by then the operative claim.

      . Because we conclude that attorneys’ fees were properly awarded under the TTLA, we do not address the district court’s alternative grounds for awarding the fees under the Copyright Act.


author: i EDITH H. JONES, Circuit Judge:

text:
    WBCMT 2007 C33 OFFICE 9720, L.L.C., Plaintiff-Appellant v. NNN REALTY ADVISORS, INCORPORATED, Defendant-Appellee
    No. 15-20086
    United States Court of Appeals, Fifth Circuit.
    Filed December 22, 2016

      Thomas C. Van Arsdel, Esq., Winstead, P.C., Houston, TX, for Plaintiff-Appellant.
    Adam Timothy Kent, Professional Partners Group, L.L.C., Newport Beach, CA, for Defendant-Appellee.
    Before JONES, DENNIS, and PRADO, Circuit Judges.
   i EDITH H. JONES, Circuit Judge:

NNN Realty Advisors, Inc. (NNN Realty), defendant-appellee here, persuaded .the district court that its guaranty of financing for a commercial project in Houston, Texas, was not activated despite a “part [of the Property] becoming an asset in ... a voluntary bankruptcy or insolvency proceeding of Borrower[.]” Interpreting a complex set of financing documents, the district court held after trial that the term “Borrower” in the guaranty refers collectively to all of the numerous borrowing entities, not to each of them individually. The current noteholder, plaintiff-appellant WBCMT 2007 C33 OFFICE 9720, L.L.C. (WBCMT) challenges the adverse judgment in its breach-of-contract suit to recover on the guaranty. We REVERSE and RENDER judgment for WBCMT.

I.

In June 2007, Wachovia Bank loaned $17.5 million to various borrowing entities formed by investors for the sole purpose of owning tenant-in-common interests in a Houston, Texas, office building complex (the Property). Each borrowing entity is jointly and severally liable for all loan obligations. The promissory note is secured in part by two agreements: (1) a Deed of Trust, Security Agreement, and Fixture Filing, which encumbers the Property (the Security Instrument); and (2) an Indemnity and Guaranty Agreement (the Guaranty) executed by NNN Realty as Guarantor. Through various assignments, WBCMT acquired Wachovia Bank’s interests in the loan.

The Guaranty references the individual borrowing entities as follows:

WHEREAS, NNN Cypresswood Drive, LLC, NNN Cypresswood Drive 1, LLC, NNN Cypresswood Drive 3, LLC, NNN Cypresswood Drive 4, LLC, NNN Cypresswood Drive 5, LLC, NNN Cypresswood Drive 6, LLC, NNN Cypresswood Drive 7, LLC, NNN Cypresswood Drive 9, LLC, NNN Cypresswood Drive 10, LLC, NNN Cypresswood Drive 11, LLC, NNN Cypresswood Drive 12, LLC, NNN Cypresswood Drive 13, LLC, NNN Cypresswood Drive 14, LLC, NNN Cypresswood Drive 17, LLC, NNN Cypresswood Drive 18, LLC, NNN Cypresswood Drive 19, LLC, and NNN Cypresswood Drive 20, LLC, each a Delaware limited liability company (as defined in the Security Instrument), the “Borrower”), have obtained a loan (the “Loan”) in the principal amount of Seventeen Million Five Hundred Thousand and No/100 Dollars ($17,500,000.00) from [Wachovia Bank.]

Notably, this recital contains a typographical error—a missing or extra parenthesis in the phrase “(as defined in the Security Instrument), the ‘Borrower’).”

The contracting parties agreed that additional parties could obtain tenant-in-common interests in the Property and become part of “Borrower” under the loan documents. Section 2.9 of the Security Instrument governs the transfer of interests. And the Guaranty states that, upon a valid transfer under section 2.9, “the Co-Owner Transferee [the additional party that obtained an interest] shall be included in the defined term ‘Borrower’ hereunder[.]”

Pursuant to these provisions, various “NNN Cypresswood Drive” entities acquired tenant-in-common interests in the Property and were included in the term “Borrower.” NNN Cypresswood Drive 25, LLC became one such entity when it obtained a 3.305% interest in the Property and assumed the loan obligations.

A few years later, the borrowing entities were notified that they were in default. Shortly thereafter, NNN Cypresswood Drive 25, LLC filed a voluntary Chapter 11 bankruptcy petition and listed its 3.305% tenant-in-common interest as an asset in the bankruptcy case. It is undisputed that “the Property or any part thereof’ thus became an asset in the. voluntary bankruptcy case. The lender then notified NNN Realty that it was “fully liable for all principal, interest and other amounts which are due and owed.” This claim was based on the penultimate paragraph of section 1 of the Guaranty, which provides in relevant part:

[NNN Realty] shall be fully liable for all principal, interest and other amounts which may be due and owning by Borrower under the Note, the Security Instrument and any other Loan Document from and after ... the Property or any part thereof becoming [sic] an asset in (x) a voluntary bankruptcy or insolvency proceeding of Borrower[.]

In the meantime, as the default remained uncured, WBCMT foreclosed on and purchased the 96.695% interest in the Property owned by the non-bankrupt borrowing entities for $6,925,000. WBCMT then obtained a lift-stay order from the bankruptcy court and purchased NNN Cy-presswood Drive 25, LLC’s 3.305% interest at foreclosure for $305,184. WBCMT now owns 100% of the Property,' and the remaining deficiency at the date of foreclosures was $14,605,545.06, plus expenses.

On August 29, 2013, WBCMT sued NNN Realty, inter alia, for breach of the Guaranty. WBCMT alleged that NNN Realty’s liability to pay arose when NNN Cypresswood Drive 25, LLC’s 3.305% interest in the Property became an asset in the investor’s bankruptcy. A week later, WBCMT moved for summary judgment.

NNN Really responded that there was a material issue of fact as to whether - a liability-triggering event had occurred. Specifically, NNN Realty asserted that “Borrower” is “a term defined in the Guaranty to be the collective group of borrowers, not a single borrower,” because the word “and” connects all of the borrowing entities listed in the Guaranty’s recital. Thus, according to NNN Realty, when the Guaranty refers to “a voluntary bankruptcy ... proceeding of Borrower,” its plain terms mean “a bankruptcy proceeding filed by all of the borrowers” collectively, not a single borrower. Consequently, the Guaranty had not been triggered.

WBCMT pointed out that the phrase “as defined in the Security Instrument” appears before “Borrower” in the Guaranty’s recital, and the Security Instrument defines the borrowing entities “individually or collectively’ as “Borrower.” After the district court concluded, contrary to both parties’ contentions, that the Guaranty’s definition of “Borrower” was ambiguous, the case proceeded to a bench trial, in which the sole witness was Greg Kaliman, who represented WBCMT in seeking to enforce the Guaranty. Kaliman generally testified that interpreting “Borrower” to mean all borrowing entities collectively would make the loan almost impossible to enforce, and that no lender would make such a loan.

Without relying on the testimony at trial, the district court rendered judgment for NNN Realty. The court emphasized that the use of the word “and” to connect the names of the borrowing entities “indicates that the term ‘Borrower’ refers to the full complement of entities.” The court rejected as ambiguous the parenthetical reference to the Security Instrument in the Guaranty’s recital “because it is unclear to what the parenthetical refers.” Other than observing that the parenthetical appears grammatically to relate to “Delaware limited liability company,” a term not defined in -the Security Instrument, the court expressed no other possible object of the Security Instrument reference. In any event, the court concluded that the “Guaranty, construed strictly and in favor of the Guarantor, defines ‘Borrower’ as all listed NNN Cypresswood Drive entities. As a result, NNN’s liability under the Guaranty did not arise upon the bankruptcy filing by one entity[.]”

WBCMT has appealed, asserting that in the Guaranty, “Borrower” unambiguously refers to the borrowing entities either collectively or individually.

II.

A. Standard of Review

Under Texas law, which, according to the loan documents, governs the transaction, the interpretation of an unambiguous contract, including the determination whether the contract is ambiguous, is a legal question reviewed de novo. E.g., Leasehold Expense Recovery, Inc. v. Mothers Work, Inc., 331 F.3d 452, 456 (5th Cir. 2003). If the contract is ambiguous, then “the district court’s findings of fact as to the intent of the parties are reviewed for clear error.” McLane Foodservice, Inc. v. Table Rock Rests., L.L.C., 736 F.3d 375, 377 (5th Cir. 2013). Although the court conducted a bench trial, none of the court’s dispositive findings depended on the testimony of WBCMT’s witness or on extrinsic evidence concerning the transaction.

B. Analysis

“The primary concern of contract interpretation under Texas law is to ascertain the true intentions of the parties as expressed in the instrument.” Weeks Ma rine, Inc. v. Standard Concrete Prods., Inc., 737 F.3d 365, 369 (5th Cir. 2013). Texas courts thus “examine the entire contract in an effort to harmonize and give effect to all provisions so that none is rendered meaningless.” Id. A contract is unambiguous if it can be given “a definite or certain legal meaning.” McLane Foodservice, Inc., 736 F.3d at 378. Ambiguity-does not arise simply because of a lack of clarity, or because the parties proffer different interpretations of the contract. Id. Instead, a contract is ambiguous “only if it is subject to two or more reasonable interpretations , after applying the pertinent canons of construction.” Id.; cf. Kern v. Sitel Corp., 517 F.3d 306, 309 (5th Cir. 2008) (“A contract, however, is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning.” (quoting Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983))). Moreover, where the interpretation of a guaranty is in dispute, the guarantor “is entitled to have his agreement strictly construed,” and “[w]here uncertainty exists as to - the meaning of a contract of guaranty, its terms should be given a construction which is most favorable to the guarantor." Coker, 650 S.W.2d at 394 n.1.

Guided by these principles, we analyze the Guaranty in three parts. First, we consider NNN Realty’s argument that the word.“and,” which connects the names of the borrowing entities in the recital, necessarily defines “Borrower” as a collective entity. Second, we address .WBCMT’s argument that the phrase “as defined in the Security Instrument” modifies “Borrower” in the Guaranty’s recital and thereby incorporates the Security Instrument’s alternative definition of “Borrower” as a collective or individual entities depending on the context. Finally, we examine how the term “Borrower” is used throughout the Guaranty. This analysis reveals that numerous provisions of the Guaranty only make sense when “Borrower” refers to each borrowing entity, individually. From a holistic standpoint of-interpretation, “Borrower” refers, as WBCMT contends, to each borrowing entity individually or collectively.

1. The Relevance of “And”

NNN Realty bases its entire argument in this case on the word “and” in the definition of “Borrower.” In relevant part, the Guaranty’s recital states:

WHEREAS, NNN Cypresswood Drive, LLC, NNN Cypresswood Drive 1, LLC, NNN Cypresswood Drive 3, LLC, NNN Cypresswood Drive 4, LLC, NNN Cypresswood Drive 5, LLC, NNN Cypresswood Drive 6, LLC, NNN Cypresswood Drive 7, LLC, NNN Cypresswood Drive 9; LLC, NNN Cypresswood Drive 10, LLC, NNN Cypresswood Drive 11, LLC, NNN Cypresswood Drive 12, LLC, NNN Cypresswood Drive 13, LLC, NNN Cypresswood Drive 14, LLC, NNN Cypresswood Drive 17, LLC, NNN Cypresswood Drive 18, LLC, NNN Cypresswood Drive 19, LLC, and NNN Cypresswood Drive '20, LLC, each a Delaware limited liability company (as defined in the Security Instrument), the “Borrower”), have obtained a loan (the “Loan”) in the principal amount of Seventeen Million Five Hundred Thousand arid No/100 Dollars ($17,500,000.00) from [Wachovia Bank.]

As was noted above, the district court found that the word “and” is dispositive. The court stated that “[t]he.first sixteen entities are connected with the final listed entity only by the word ‘and’—not ‘and/ or.’ ” Therefore, the court reasoned, “[t]he parties’ use of the conjunctive indicates that the term ‘Borrower’ refers to the full complement of entitles.” NNN Realty echoes the district court.

That reasoning places more weight on the word “and” than it can bear. Specifically, it overlooks that the definition of “Borrower” occurs in a sentence in the recital: “[16 entities ‘and’ a 17th entity], each a Delaware limited liability company (as defined in the Security Instrument), the ‘Borrower'), have obtained a loan (the ‘Loan’)[.]” The suggestion that the parties should have used the words “and/or” instead of “and” makes no sense in the context of the sentence: either all 17 entities obtained a loan or they did not. That is, the recital states a fact—each of the 17 entities is a party to the loan. There would be no reason for the parties to write that “16 entities and/or a 17th entity have obtained a loan,” when in fact all 17 entities obtained the loan. The centerpiece of the district court’s and NNN Realty’s reasoning, therefore, is unsound and not disposi-tive.

2. What “as Defined in the Security Instrument” Modifies

Having eliminated NNN Realty’s sole argument for why “Borrower” must refer to the collective body of borrowing entities, we consider next WBCMT’s argument to the contrary. In light of the extraneous or missing parenthesis in the Guaranty’s recital, WBCMT invokes the well-established rule ' that “[t]he words, not the punctuation, are the controlling guide in construing a contract.” Anderson & Kerr Drilling Co. v. Bruhlmeyer, 134 Tex. 574, 136 S.W.2d 800, 803 (1940). “If the meaning of the words is clear[,] the court will interpret a contract according to their meaning and without regard to the punctuation marks or the want of them.” Id. Applying this rule, WBCMT contends that the Guaranty clearly incorporates the Security Instrument’s definition of “Borrower,” which speaks in terms of the borrowing entities “individually or collectively as the context may require.” A comparison of the two definitions (with emphases added) appears below:

WBCMT urges that, read plainly, the Guaranty’s parenthetical “as defined in the Security Instrument” incorporates the Security Instrument’s definition, which describes the borrowing entities “individually or collectively” as “Borrower.”

We agree with WBCMT. The recital supplies only three possible objects of the clause “as defined in the Security Instrument”: (1) the list of borrowing entities; (2) “Delaware limited liability company”; or (3) “Borrower.” As the district court correctly noted, the second option is ruled out because “Delaware limited liability company” is not “defined” in the Security Instrument. Both the first and third options, however, can reasonably be read in light of the Security Instrument’s definition of “Borrower.” That is, the Security Instrument twice defines “Borrower” as the borrowing entities “individually or collectively as the context may require/’ and it applies every covenant, condition and requirement of the Security Instrument to both the collective and the individual entities. The district court’s interpretation of the clause rendered it meaningless and overemphasized the importance of the misplaced or superfluous parenthesis. WBCMT’s interpretation better fulfills the requirements of Texas law, as it gives effect to the clause and looks at the words where.-pune-tuation is uncertain. We conclude that the Guaranty incorporates the Security Instrument’s definition of “Borrower,” which unambiguously includes each borrowing entity individually as well as. collectively..

3. The Guaranty’s Context

This reading of the Guaranty’s recital is reinforced by a survey of the Guaranty’s provisions, many of which would be rendered meaningless by NNN Realty’s theory that “Borrower” refers exclusively to all borrowing entities collectively. Our task is to “examine the entire contract in an effort to harmonize and give effect to all provisions so that none is rendered meaningless.” Weeks Marine, Inc., 737 F.3d at 369; Coker, 660 S.W.2d at 393. See also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 167, 174 (2012) (stating that “[t]he text must be construed as a whole,” and “[i]f possible, every word and every provision is to be given effect”). So considered, various provisions of the Guaranty indicate that “Borrower” must refer to the borrowing entities individually or collectively.

To begin, the phrase “Borrower or any other person” and slight variations thereof appear 15 times in the Guaranty. A “person” is defined as “a human being,” or in the artificial sense, “[a]n entity, such as a corporation, created by law and given certain legal rights and duties of a human being.” Person, Brack’s Law Dictionary (10th ed. 2014). This repeated phrase in the Guaranty thus translates to “Borrower or any other [human being or entity].” But in order for there to be any other human being or entity, there must first be a human being or entity. That is, the “Borrower” must itself be a human being or entity. In this transaction, by its own terms, the borrowing entities taken together are not an artificial legal “person.” NNN Realty acknowledges this fact: they are “a number of individual investors that each formed separate limited liability companies” (emphasis added). Although each, borrowing entity is an autonomous owner of a tenant-in-common interest, they do not comprise a single entity. Thus, if we adopted NNN Realty’s interpretation of “Borrower”, as all borrowing entities collectively, it would effectively render nonsensical the phrase “Borrower or any other person” because the collective “Borrower” in the structure of this transaction is not a “person.”.

A second example arises with regard to the Guaranty’s use of entity-specific language. For example; section 1 of the Guaranty defines the scope of NNN Realty’s obligations to guarantee or indemnify the lender. Sections 1(f) and 1(h) refer to “Borrower or any of its principals, officers, general partners or 'members[.]” And the penultimate paragraph in section 1 réfers to “Borrower ... or any general partner, manager or managing member of Borrower[.]” Terms like “principal,” “officer,” “general partner,” and “member” are all entity-specific terms of art that relate to legal “persons.” Yet, as explained above, it is undisputed that the individual investor entities in this transaction disclaimed the formation of any collective entity or “person.” Accepting NNN Realty’s interpretation of “Borrower” as only the borrowing entities collectively would thus render meaningless the Guaranty’s expansive references to principals, officers, general partners or members. Applied to each investor individually, “as the context may require,” however, the references make perfect sense and expand NNN Realty’s obligations. At oral argument, NNN Realty dismissed the references to these terms as mere “boilerplate language.” But courts are not entitled to disregard boilerplate language as such. Our task is to give effect “to all provisions,” boilerplate or not. Weeks Marine, Inc., 737 F.3d at 369 (emphasis added).

In regard to the scope of the indemnity, NNN Realty assumes responsibility in section l(j) for “Costs” arising from “Borrower’s failure to comply with the Securities Act (as defined in the Security Instrument) ' and all applicable state securities laws[.]” If “Borrower” means only the collective entities, then any individual entity investor’s failure to comply with applicable securities laws in a transfer of its tenant-in-common interest in the Property is excluded from NNN Realty’s guaranty. Put otherwise, NNN Realty would indemnify the Lender only in the nonsensical and unlikely event that all of the entities comprising Borrower were involved in securities law violations. Reading “Borrower” to include the entities individually and collectively accords with the transaction’s legal structure.

Particularly relevant to this dispute is the language outlining NNN Realty’s obligation as indemnitor to “be fully liable for all principal, interest and other amounts which may be due and owing by Borrower ... after ■... (ii) the Property or any part thereof becom[es] an asset in (x) a voluntary bankruptcy or insolvency proceeding of Borrower[.]” WBCMT argues that if NNN Realty correctly defines Borrower as a collective entity, then filing “any part” of the Property as an asset in bankruptcy is rendered meaningless, because the only bankruptcy covered by the indemnity would be that of the collective Borrower for all of the Property. On the other hand, if am individual borrowing entity is within the “Borrower” definition, and that entity sought bankruptcy relief, as happened here, then its tenant-in-common interest in “any part” of the Property became an asset of the estate. WBCMT’s interpretation gives meaning to the entirety of the language in this provision. NNN Realty’s only response is to dismiss “any part thereof’ as “boilerplate,” which, as already noted, this court may not do.

A further objection to- limiting “Borrower” to the collective group of entities is a serious doubt whether they could, as a collective, file the “Property” in a bankruptcy case. The Bankruptcy Code defines a “debtor” as a “person’’ “concerning which a case under this title has been commenced,” and a “person” includes an “individual, partnership, and corporation[.]” 11 U.S.C. § 101(13), (41). Only a “person” (that resides in the United States) may be a debtor under Title 11. Id. § 109(a). The Code permits neither a “property” nor, apparently, a group of individuals who happen to be tenants in common to be a “debtor” entitled to the protection of federal bankruptcy law. That the individual investor entities could do so, however, is beyond dispute. In this instance, interpreting “Borrower” to include a collective or individual entities is the only way to effectuate the provision.

Tension also arises between NNN Realty’s definition of “Borrower” and the use of the term in the same provision just discussed, which also holds NNN Realty “fully liable” for the debt “from and after (i) a default by Borrower ... of any of the covenants set forth in Section 2.9, Section 2.29, or Section 2.34 of the Security Instrument.” “Borrower” includes both the collective entities and the entities individually under the Security Instrument. These sections of the Security Instrument treat, respectively and generally speaking, transfers or alienations of interest in the Property (2.9), maintaining the status of a single purpose entity (2.29), and preserving intact the tenant in common agreement underlying the transaction (2.34). In each section, it is clear that individual entities as “Borrowers” may commit a breach as well as the collective group. If NNN Realty’s narrower interpretation of “Borrower” prevails, then a serious question woqld arise whether “Borrower” in this provision is defined under the Security Instrument or the Guaranty. Using the consistent definition -indicated by the Guaranty recital’s reference to the Security Instrument definition eliminates this problem.

Another example lies in section 6(c), in which NNN Realty purportedly waives “any right of subrogation, contribution, reimbursement or indemnity whatsoever or any right of recourse to or with respect to the assets or property of Borrower.” Under NNN Realty’s interpretation, NNN Realty could nevertheless pursue against any individual borrowing entity (or even many of them) “any right of subrogation, contribution, reimbursement ór indemnity whatsoever or any right of recourse to or with respect to the assets or property of’ such entity to satisfy NNN Realty’s indemnity obligations. This result would follow even though NNN Realty waived such rights against the collective “Borrower.”

In each of these examples, however, reading “Borrower” as referring to each borrowing entity individually or collectively, according to the context, solves obvious interpretive problems that arise from NNN Realty’s narrower construction of the term. Interpreting “Borrower” to in- ' corporate the Security Instrument’s definition makes use of and makes sense of the Guaranty as a whole.

For these reasons, NNN Realty’s interpretation of “Borrower” as limited to all borrowing entities collectively creates various absurdities throughout the Guaranty— so much so that the interpretation cannot be considered a reasonable alternative interpretation of “Borrower.” The only reasonable, textually supportable interpretation of “Borrower” is that it refers to the collective entities or to each individual borrowing entity, as the context may require. “Borrower” is unambiguous as a matter of law in the Guaranty.

We REVERSE and RENDER judgment for WBCMT.

      , It bears noting that NNN Realty’s position, that it only agreed to be liable when all borrowing entities act collectively, misstates the nature of the investors’ deal. NNN Realty had to be aware of the borrowing entities’ tenant-in-common agreement, which expressly provides that the investor entities "do not intend by this Agreement or otherwise to create a partnership or joint venture among themselves;’’ ROA.370. Indeed, NNN Realty's own brief refers to the borrowing entities as "individual” and "separate” entities. Red Br. at 4-5. Despite numerous provisions throughout the investment transaction documents, which we need not recite here, that bind the investors either as individual entities or collectively, as the context may require, NNN Realty maintains that its Guaranty obligation exists only for events in which the borrowing entities act as one collective.

      . On this note, the parties to the Security Instrument addressed the potential situation where there are inconsistencies between the Security Instrument and the Guaranty and prescribed that "the provisions of [the Security Instrument] shall control over the provisions of ... the Indemnity and Guaranty Agreement!.]” This means that the Security Instrument’s definition of "Borrower” should supersede any inconsistent definitions elsewhere in the loan documents. Of course, NNN Realty was not a party to the Security Instrument, but NNN Realty did agree in the Guaranty that the Guaranty and other loan documents (including the Security Instrument) "embodied] the final entire agreement among the parties hereto[.]” NNN'Realty’s endeavor here to devise inconsistent definitions of "Borrower” thus not only has no basis in the Guaranty’s text, but it also attempts to walk back NNN Realty’s assent to the Security Instrument’s explicit guidance on how to resolve inconsistencies.

      . NNN Realty’s only other affirmative argument is that the Guaranty should be understood as "limited,” "narrower in scope,” and "not necessarily ... as inclusive as the Security Instrument.”- But that argument- fails to address the interpretational conundrums that NNN Realty’s interpretation of "Borrower” would create in various provisions of the Guaranty referenced above. We find this argument unpersuasive.