Jones v. City of Hutto

Case: 24-50096 Document: 86-1 Page: 1 Date Filed: 10/07/2025

United States Court of Appeals for the Fifth Circuit United States Court of Appeals ____________ Fifth Circuit FILED No. 24-50096 October 7, 2025 ____________ Lyle W. Cayce Clerk Odis Jones, Plaintiff—Appellee, versus City of Hutto, Defendant—Appellant. ______________________________ Appeal from the United States District Court for the Western District of Texas USDC No. 1:20-CV-1210 ______________________________ Before Richman, Graves, and Ramirez, Circuit Judges.

Priscilla Richman, Circuit Judge: Odis Jones, a black man, ended his tenure as City Manager of Hutto, Texas under a separation agreement that provided him with a severance payment, a non-disparagement provision, and other contractual rights. This parting of ways came as a result a prolonged conflict, primarily with Councilmembers Mike Snyder and Tanner Rose, that bore an alleged racial character. After Jones’s departure, councilmembers allegedly disparaged him, and the City Council ultimately voted to rescind the separation agreement. The City of Hutto argues this was pursuant to a legal opinion by the City Attorney that the agreement was void or voidable. Jones argues it Case: 24-50096 Document: 86-1 Page: 2 Date Filed: 10/07/2025

No. 24-50096 was because of racial animus and that the City’s actions have severely affected his employment prospects.

Jones brought a 42 U.S.C. § 1981 claim, alleging a racially motivated impairment of his contract rights and a breach of contract claim under Texas law. The jury found for Jones on both claims, and the district court entered a judgment in favor of Jones. We affirm the district court’s judgment in part, reverse in part, and remand for further proceedings.

I A The City of Hutto hired Odis Jones as its first black city manager in 2016. Jones worked closely with the seven elected members of the Hutto City Council. The City, a neighbor of Austin, felt the effects of the larger city’s growth. This caused a rift in local politics between the “pro-growth” and “anti-growth” factions. The “pro-growth” faction wanted to attract development and businesses and the “anti-growth” faction was concerned that development would affect the City’s culture and infrastructure. Jones aligned himself with the “pro-growth” contingent. He led efforts that included improving the City’s water system, restructuring the police department, and bringing a $1.5 billion development project to the City, the largest in its history.

Jones was not without opposition, however. In May 2019, two new “anti-growth” councilmembers, Mike Snyder and Tanner Rose, won election after mounting campaigns allegedly aimed at “get[ting] rid of the city manager and his staff.” Snyder’s frustration with Jones initially concerned a perceived lack of transparency and suspicion of improper dealing. Later, two investigations unearthed no impropriety by Jones.

Tensions mounted that took on an alleged racial character and Jones reported race-based discrimination by Snyder and Rose to the City Council in August Case: 24-50096 Document: 86-1 Page: 3 Date Filed: 10/07/2025

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2019. The situation did not resolve and the parties began to discuss parting ways. In November 2019, the City Council entered into a separation agreement with Jones by a five-vote majority (5-1), noting the split was “without cause.” Rose cast the lone “nay” vote and Snyder was absent and did not vote. In accordance with Jones’s employment agreement, the separation “without cause” provided him with twelve months of salary and health benefits, $412,000 in total. The separation agreement also contained a mutual non-disparagement clause and a mutual waiver of then-existing legal claims.

The next day, the City released a statement announcing this news and praising Jones for his tenure as City Manager. Snyder and Rose, however, voiced their dissenting opinions in a “press release” posted to Snyder’s candidacy Facebook page. Jones alleges this began a “campaign” by Snyder and Rose to have the City Council retract the separation agreement.

Ultimately, in December 2020, the Council unanimously voted to adopt a resolution that purportedly rescinded the separation agreement pursuant to a legal opinion by the City Attorney that it was defectively executed and thus void. The City argues it focused on the separation agreement’s validity because the City was experiencing a budget shortfall and an audit identified the agreement as a cost. After the City voted to rescind the agreement, the City Attorney sent the resolution and a demand letter to Jones demanding the return of $412,000 received under the separation agreement.

A week later, Jones filed this suit in federal court. By trial, the claims had narrowed to a civil rights claim under 42 U.S.C. § 1981 and a state-law breach of contract claim. The parties both moved for summary judgment on the separation agreement’s validity; the court granted Jones’s motion, declaring the contract valid and enforceable. The case then proceeded to trial. At the close of evidence, the City moved for judgment as a matter of law under Rule 50(a), which the court denied. The court submitted Jones’s Case: 24-50096 Document: 86-1 Page: 4 Date Filed: 10/07/2025

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§ 1981 and Texas breach of contract claims to the jury. The jury returned a verdict for Jones on both claims, awarding him $8 million for the § 1981 claim and $4.5 million for breach of contract, upon which the court entered final judgment.

The City filed a renewed motion for judgment as a matter of law under Rule 50(b) and a motion for new trial or remittitur under Rule 59. 1 The court denied the renewed motion for judgment as a matter of law but suggested remittitur because a statute barred all breach of contract damages except for attorney fees and Jones did not segregate his attorney fees between the claims, risking double recovery. The court suggested that Jones seek attorney fees by post-trial motion. Jones accepted remittitur totaling $5 million and filed a motion for attorney fees. The City now appeals the denial of judgment as a matter of law as to both the § 1981 claim and the breach of contract claim.

B We review the district court’s denial of judgment as a matter of law de novo. 2 We apply the same standard as the district court, found in Rule 50(a), directing judgment as a matter of law if “a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” 3 Here, we should reverse the district court “only if ‘the facts and inferences point so strongly and overwhelmingly in favor of [Hutto]’” that it was Case: 24-50096 Document: 86-1 Page: 5 Date Filed: 10/07/2025

No. 24-50096 unreasonable for the jury to find for Jones. 4 Deference to the trier of fact requires us to “consider all of the evidence, drawing all reasonable inferences and resolving all credibility determinations in the light most favorable to the non-moving party,” Jones. 5 II For Jones’s civil rights claim, there are two statutes in play: 42 U.S.C. §§ 1981 and 1983. First, § 1981 protects, among other rights, the right “to make and enforce contracts” 6 against discriminatory “impairment.” 7 Subsection (b) broadly defines “make and enforce contracts” as “the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.” 8 However, because § 1981 does not provide an independent cause of action against local government entities, plaintiffs must bring a claim under 42 U.S.C. § 1983. 9 Under § 1983, municipalities “cannot be found liable on a theory of vicarious liability or respondeat superior.” 10 So, the unconstitutional conduct must be “directly attributable to the municipality through some sort of official action or imprimatur,” whereas “isolated Case: 24-50096 Document: 86-1 Page: 6 Date Filed: 10/07/2025

No. 24-50096 unconstitutional actions by municipal employees will almost never trigger liability.” 11 To prevail, a plaintiff must establish that “(1) an official policy (2) promulgated by the municipal policymaker (3) was the moving force behind the violation of a constitutional right.” 12 A Jones satisfies § 1983’s requirements. For the first prong, “written policy statements, ordinances, or regulations” suffice to establish a municipal policy for purposes of liability. 13 The Supreme Court has held that a single decision “may represent ‘an act of official government policy’” if made by an authorized decisionmaker. 14 Here, the resolution adopted by the City Council rescinding the separation agreement is such a policy. 15 Next, a “policymaker” is the person or entity that “possesses final authority to establish municipal policy with respect to the action ordered.” 16 This is a question of state law, aided by looking at relevant municipal charters. 17 Hutto’s Charter provides “all powers of the City . . . shall be vested in an elected council, . . . the ‘City Council,’ which shall enact local legislation, adopt budgets, determine policies and appoint the City Manager” and “vest[s] all authority . . . of [City Manager] suspension or removal in the Case: 24-50096 Document: 86-1 Page: 7 Date Filed: 10/07/2025

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City Council.” Here, the policymaker for the resolution is the Hutto City Council.

Lastly, regarding § 1983, we have treated “moving force” as a “direct causal link between the municipal policy and the constitutional deprivation.” 18 Here, there is no question on the link between the policy (the resolution) and the deprivation (the impairment of contract rights); the resolution is the very instrument that purported to void Jones’s rights under the separation agreement.

B Advancing from § 1983, a § 1981 plaintiff must establish: “(1) [H]e is a member of a racial minority; (2) the defendant had an intent to discriminate on the basis of race; and (3) the discrimination concerned one or more of the activities enumerated in the statute.” 19 Jones is black, and the parties do not dispute this element. Elements two and three are in contest. The claim resolves on whether the impairment, if any, was racially motivated.

To prevail on his § 1981 claim, Jones must “ultimately prove that, but for race, [he] would not have suffered the loss of a legally protected right.” 20 Importantly, “[a] plaintiff can prove intentional discrimination through either direct or circumstantial evidence” as direct evidence of racial discrimination is often scarce. 21 In addition, because of Monell’s 22 bar on respondeat superior in § 1983 claims against municipalities, Jones must show Case: 24-50096 Document: 86-1 Page: 8 Date Filed: 10/07/2025

No. 24-50096 that the “animus is [] chargeable to the [b]oard itself.” 23 Jones argues that discriminatory intent is demonstrated by either (1) a headcount analysis or (2) a “cat’s paw” analysis. Jones’s claim fails.

Under a headcount analysis, Jones must present sufficient evidence demonstrating race was a but-for reason of a “majority” (four of the six) of the councilmembers’ votes to rescind the separation agreement. 24 Jones argues at length that both Councilmembers Snyder and Rose bore racial animus due to several comments and interactions. We assume arguendo that Snyder and Rose did act from animus.

Councilmember Robin Sutton won a seat on the City Council after the separation agreement and voted in favor of the resolution. Prior to her election, she vocally supported Snyder and Rose and opposed Jones at City Council meetings. She won election after councilmembers resigned their positions because of alleged “harassment” from the “anti-Odis” contingent.

None of these instances cited by Jones contain anything indicating racial animus chargeable to Sutton.

Councilmembers Patti Martinez and Peter Gordon are similarly situated. Both voted for the resolution despite having voted for the separation agreement. Martinez and Gordon joined with Snyder on post- Jones actions including opening an investigation into the City Manager role, initiating a forensic audit after Jones departed, and launching an investigation into the separation agreement. As with Sutton, these instances of agreement Case: 24-50096 Document: 86-1 Page: 9 Date Filed: 10/07/2025

No. 24-50096 with Snyder and Rose do not support the inference of racial animus chargeable to Martinez or Gordon.

Lastly, Jones does not argue that Councilmember Daniel Thornton bore animus. In sum, even assuming arguendo that Snyder and Rose bore animus, Jones cannot establish animus chargeable to the board on a headcount analysis.

Jones invokes a “cat’s paw” theory establish the City’s liability. The cat’s paw doctrine, used in employment discrimination cases, holds an employer liable “even if the ultimate decisionmaker herself holds no discriminatory animus as long as the plaintiff can demonstrate that her decision was influenced by another who does hold such animus.” 25 However, the doctrine does not apply in the present suit.

Outside of § 1983 suits, we have held that the cat’s paw doctrine serves to “impute” the illicit motives of an earlier actor to the official decisionmaker. 26 Jones similarly describes the cat’s paw as “imput[ing] [discriminatory] attitudes.” This “imputation of motives” language appears to reveal some potential daylight between respondeat superior and cat’s paw.

After all, as Jones argues, if cat’s paw imputes only the motives of the prior actor to the decisionmaker, perhaps cat’s paw liability is ultimately predicated on the decisionmaker’s final action and is not vicariously imposed Case: 24-50096 Document: 86-1 Page: 10 Date Filed: 10/07/2025

No. 24-50096 from the earlier actor’s conduct. However, a close inspection of the theory’s headwaters reveals the cat’s paw is based in agency principles. It is thus incompatible with Monell and unavailable to Jones in this suit.

Judge Posner has been credited for terming the cat’s paw doctrine. 27 In Shager v. Upjohn Co., 28 an ADEA case, former employee Shager brought an age discrimination claim against his former employer after his supervisor, who allegedly held age-related animus, recommended Shager’s termination to a personnel committee. 29 If the supervisor had directly fired Shager, the employer would have been found liable under respondeat superior. 30 The insertion of the committee presented a causation problem because the committee fired Shager, not the supervisor with the alleged animus. 31 But the supervisor’s influence overcame the interruption of the committee with tort causation and agency principles: If [the committee] acted as the conduit of [the supervisor’s] prejudice—his cat’s-paw—the innocence of its members would not spare the company from liability. For it would then be a case where [the supervisor], acting within (even if at the same time abusing) his authority as district manager to evaluate and make recommendations concerning his subordinates, had procured Shager’s discharge because of his age. 32

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If there was any ambiguity as to cat’s paw’s basis in respondeat superior, Judge Posner plainly follows with: “[The supervisor] would have violated the statute, and his violation would be imputed to [the employer].” 33 The action is imputed, not the motive.

The Supreme Court later blessed cat’s paw in a USERRA case, Staub v. Proctor Hospital. 34 The Court reviewed general tort and agency principles before asserting, “[an] employer is at fault [if] one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision.” 35 Again, Staub does not base cat’s paw on imputing the motive of the earlier actor. 36 Rather, liability attaches to the employer “under traditional agency principles.” 37 Shager and Staub agree: The cat’s paw preserves the casual link between an earlier agent’s discriminatory action and a neutral decisionmaker’s adverse action; then, agency principles attribute the earlier agent’s action to the employer.

In a pre-Staub unpublished case, we clearly spelled out the mechanics of cat’s paw in a case against an individual, not an employer: In the employment context, the actions of ordinary, non- supervisory employees are not typically a basis for a claim. An Case: 24-50096 Document: 86-1 Page: 12 Date Filed: 10/07/2025

No. 24-50096 exception is where the decision-maker functions as the ordinary employee’s “cat’s paw” such that the adverse employment decision could fairly be attributed to the employee. 38 Thus, despite our several cases describing “imputed motives,” we have acknowledged that cat’s paw is a “theory of causation” 39 that connects a bad actor to an adverse action when the decisionmaker is an intermediary, then, if applicable, agency law attributes the action of the bad actor to an employer.

Our confusing language of “imputing motives” seems to pre-date Staub and continue after it. 40 This phrase may have originated from Long v. Eastfield College, 41 a Title VII case, which stated that in some cases “the wrongful intent on the part of the supervisory employee is properly imputable Case: 24-50096 Document: 86-1 Page: 13 Date Filed: 10/07/2025

No. 24-50096 to the employer.” 42 As this statement came directly after citing Shager’s explication of the respondeat superior principles underlying the theory, Long’s “imputation of intent” language is best understood as imprecision. 43 Given the tension between cat’s paw and Monell’s bar on vicarious liability, we have been extremely wary of applying the theory to Monell claims.

Jones does not cite any case in which the Fifth Circuit applied cat’s paw to a Monell claim and we are similarly unaware of any such authority. 44 In fact, our cases impliedly reject the theory in Monell contexts. In Howell, 45 we acknowledged that “the ‘cat’s paw’ theory of liability allows a final decisionmaker to be held liable if his or her decision is influenced by a subordinate’s retaliatory animus,” but noted the plaintiff’s two routes in establishing liability against the municipality were proving “that the Board itself harbored retaliatory animus, or that it ratified both [the supervisor’s] recommendation for discharge and the retaliatory animus backing it.” 46 This amounts to a headcount route and a ratification route (following Beattie, 47 a case the City addresses, but Jones does not), not cat’s paw. In an unpublished decision, we again implicitly rejected cat’s paw in Monell claims: “It is the formal allocation of power—not the way power is exercised ‘in practice’— that matters for municipal liability under Section 1983” because otherwise “municipalities [could] be held liable under Section 1983 on what would Case: 24-50096 Document: 86-1 Page: 14 Date Filed: 10/07/2025

No. 24-50096 operate in practice as a respondeat superior theory—something the Supreme Court has repeatedly forbidden.” 48 A district court in our circuit more explicitly denounced cat’s paw’s application to Monell claims. 49 Other circuits are similarly wary of extending cat’s paw to Monell. In an extended discussion in a footnote, the Seventh Circuit stated: [The plaintiff] makes a passing reference to the “cat’s paw” theory, but we question whether such a theory is applicable for purposes of establishing § 1983 municipal liability. . . . The theory is steeped in agency principles which are applied in the Title VII context, but don’t apply to § 1983 municipal liability.

We were unable to find any other case applying the cat’s paw theory to hold a municipality liable under § 1983. . . . Imputing a nondecisionmaker’s motive to a municipal employer sounds a lot like respondeat superior liability. Given that well developed § 1983 municipal liability law recognizes delegation and ratification, there seems to be little point in trying to awkwardly fit the cat’s paw concept in this area of civil rights law. 50

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The Seventh Circuit re-urged its concern in a later case. 51 Similarly, on the Tenth Circuit, then-Judge Gorsuch cast doubt as to whether cat’s paw squares with Monell in an unpublished opinion. 52 District courts across the circuits more clearly deny cat’s paw in Monell claims. 53

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* * * * * In sum, Jones advances a headcount theory and a cat’s paw theory.

Even assuming arguendo that Snyder and Rose bore animus, Jones has not established the discriminatory intent of any of the remaining four councilmembers, so the headcount fails. Second, the cat’s paw claim is based in agency principles, so it is incompatible with Monell’s bar on respondeat superior and unavailable to Jones. Jones did not establish this element of his civil rights claim and the district court’s judgment must be reversed as to this claim.

III The City also argues that the district court erred in concluding that the agreement with Jones was valid. The City also contends that the jury’s finding of breach of contract liability should be reversed.

A We first consider whether certain issues are preserved for review.

The parties submitted competing motions for summary judgment as to contract validity, and the district court granted Jones’s motion, upholding the validity of the separation agreement. Jones argues that the City must have re-urged its argument on this point to preserve it for appeal, but that is inaccurate. The Supreme Court held in Dupree v. Younger, 54 that “a post- trial motion under Rule 50 is not required to preserve for appellate review a purely legal issue resolved at summary judgment.” 55 To the extent the City’s Case: 24-50096 Document: 86-1 Page: 17 Date Filed: 10/07/2025

No. 24-50096 arguments present questions of law, we can consider them. On appeal, the City brings three arguments on contract validity: (1) a Texas Open Meetings Act (TOMA) violation, (2) a City Charter violation, and (3) immunity.

B The City argues that the separation agreement is voidable under TOMA. The City directly made this argument, a question of law, in its motion for summary judgment. 56 We can now review it.

TOMA, aimed at “enabl[ing] public access to and [] increas[ing] public knowledge of government decisionmaking,” 57 requires a “governmental body [to] give written notice of the date, hour, place, and subject of each meeting held by the governmental body.” 58 The City argues that the meeting that concerned the separation agreement failed this requirement by insufficiently disclosing the subject matter of the action that was to be considered regarding Jones.

The parties agree that the public notice on the action item was: “Consideration and possible action(s) on personnel matters regarding city manager.” If a generalized “‘reader’ is given notice, the requirement of [TOMA] is satisfied and its purpose served.” 59 While notice may not be “as Case: 24-50096 Document: 86-1 Page: 18 Date Filed: 10/07/2025

No. 24-50096 clear as it might be,” 60 it is sufficient when “it alerts a reader that some action will be taken relative to a topic.” 61 The City correctly notes that “as public interest in a matter increases, the Act requires correspondingly more detailed descriptions of the subject to be discussed.” 62 It argues that because the separation agreement involved “secret payment of an unbudgeted $412,000 . . . , a release by the City of all claims the City might have against Jones . . . ; a post-employment confidentiality provision . . . ; [and] a non-disparagement provision purporting to waive the City’s governmental immunity,” it required more specific notice to comply with TOMA. In Cox Enterprises, 63 cited by the City, a school board was considering filling the position of superintendent but only described the action in the agenda as relating to “personnel.” 64 Because the issue was of special interest to the public, the court held that notice was insufficient under TOMA. 65 The court noted that the notice “should specifically disclose the subjects to be considered at the upcoming meeting.” 66

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Here, notice went beyond the general “personnel” descriptor in Cox Enterprises. The notice specifically indicated that action was contemplated “on personnel matters regarding city manager.” The specification of the subject of the personnel matters differentiates this case from Cox Enterprises.

The City cites no case that demonstrates that the added specificity, “regarding city manager,” is insufficient under the notice requirement.

Furthermore, “[f]ar from serving the purposes of the Act, [too high of a] degree of specificity would so overwhelm readers” and prove less informative than a leaner notice. 67 We are persuaded that the notice in this case satisfied TOMA. Notably, neither party cited a case where a municipality challenged its own TOMA violation. Because the City’s notice was sufficient, we do not consider whether and under what circumstances a city could void its own action under TOMA.

C The City asserts that the severance agreement is void under § 8.10 of the City Charter, an overspending provision. That provision requires that “[n]o payment shall be made . . . except in accordance with authorized appropriations and unless the City Manager or his designee first certifies that there is a sufficient unencumbered balance . . . and that sufficient funds are or will be available” to cover the claim when it becomes due. Hutto argues that there was no certification for the funds to be expended under the separation agreement, voiding the agreement.

While § 8.10 appears throughout the record as it was one of the bases for the resolution in the City Attorney’s demand letter, this argument was not made in either the City’s Motion for Summary Judgment or its Renewed Case: 24-50096 Document: 86-1 Page: 20 Date Filed: 10/07/2025

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Motion for Judgment as a Matter of Law. Consequently, this argument is forfeited. 68 The City argues that the non-disparagement provision is invalid because of immunity, even if the rest of the contract is enforceable. Because the validity of the non-disparagement provision has no bearing on the issues on appeal, we need not consider it.

D Jones argues the City breached the separation agreement by (1) adopting the resolution rescinding the separation agreement and sending the associated demand letter and (2) disparaging Jones in violation of the non-disparagement provision.

Hutto argues that its attempted recission of the separation agreement did not impair Jones’s contract rights because Jones received and retains the $412,000 promised under the contract and, while Hutto demanded return of the payment and threatened suit, it made no counterclaim for the return of the money. This rings hollow.

The City continues to argue before this court that the separation agreement was invalid and was properly rescinded. The district court ruled against the City on the issues of contract validity and breach at the summary judgment stage. Jones prevailed on the breach of contract issue in the district court. We agree with the district court that, as a matter of law, the separation agreement was valid regarding the separation payment, and the City breached the agreement when it attempted to rescind.

The jury found the City liable for breach of contract and awarded Jones $4.5 million after the district court instructed it to consider (1) the Case: 24-50096 Document: 86-1 Page: 21 Date Filed: 10/07/2025

No. 24-50096 difference in the value contracted for and received, (2) Jones’s reasonable and necessary expenses in pursuing the claim, and (3) consequential damages stemming from lost profits or damage to reputation. The Texas Local Government Code provided the waiver of governmental immunity for Jones’s breach of contract claim, 69 but the district court, in a post-trial order, correctly noted this statute also limits Jones’s recovery. Notably, § 271.153(b) specifically bars recovery of consequential damages. 70 Because of this bar, the trial court correctly noted Jones cannot recover consequential damages.

Though Jones retained the $412,000 payment throughout the proceedings, the City disputed his right to retain that payment. Jones prevailed, and as a consequence, was not required to repay the $412,000. His claim for attorney fees remains.

The City maintains that Jones is not entitled to recover attorney fees because he is not entitled to any damages in light of the fact he never repaid the $412,000. The Supreme Court of Texas has directed that “suits cannot be maintained solely for the attorney’s fees; a client must gain something before attorney’s fees can be awarded.” 71 But Jones did “gain something.”

He pursued and prevailed on his right to retain the separation payment made under the contract.

As to the breach of contract claim for disparagement, even if we were to conclude that such a claim is not barred by Tex. Loc. Gov’t Code § 271.153(b), an issue we do not decide, there is no evidence that the City Case: 24-50096 Document: 86-1 Page: 22 Date Filed: 10/07/2025

No. 24-50096 disparaged Jones. Evidence of disparagement by two members of the City Council is not evidence of disparagement by the City or the council as a body.

The evidence reflected that disparaging statements by the two council members were made individually, in contexts that could not have been construed as reflecting actions of the City or the City Council.

Accordingly, we remand this case to the district court to consider only the attorney’s fee issue. * * * For the foregoing reasons, the judgment of the district court is AFFIRMED in part, REVERSED in part, and the case is REMANDED for proceedings consistent with this opinion.