GARRIOTT v. NCSOFT CORPORATION
RICHARD GARRIOTT, Plaintiff-Appellee,
v.
NCSOFT CORPORATION, Defendant-Appellant.
No. 10-50939.
United States Court of Appeals, Fifth Circuit.
Filed: October 21, 2011.
Before: REAVLEY, ELROD, and GRAVES, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge.
NCsoft Corporation appeals a jury verdict awarding damages to its former employee, Richard Garriott, for breach of a stock options contract. NCsoft argues that the jury instruction misstated the governing Korean law, that the jury's verdict relied on legally insupportable evidence, and that the district court applied the wrong law when determining attorney's fees. Because NCsoft fails to demonstrate reversible error, we AFFIRM.
I.A.In 2001, Richard Garriott sold a computer game development company to NCsoft Corporation.1 In return, Garriott received compensation that included a stock options contract. The options contract gave Garriott a ten-year period to exercise his options, creating a risk-free right to evaluate the progress of NCsoft stock. NCsoft also employed Garriott as its executive producer of online games. Seven years later, NCsoft decided to terminate Garriott's employment. The company also determined to shut down a computer game called Tabula Rasa—a poor-performing game that Garriott had developed. By October 2008, NCsoft's founder and global CEO, T.J. Kim, directed the senior officer in North America, Chris Chung, to remove Garriott from the company. Consequently, Chung told Garriott that after talking with Kim, they decided that Garriott's "time with NCsoft is over." Garriott objected, said he did not want to leave, and asked if there was any way to appeal the decision. Chung replied that NCsoft's executive management was involved in the decision, there was no possibility of appeal, and the decision was final. Later that day, NCsoft sent Garriott a press release announcing his departure to Tabula Rasa fans. Garriott reviewed and signed the announcement, which stated that "I am leaving NCsoft to pursue [other] interests." NCsoft subsequently prepared a resignation letter for Garriott's signature addressed from him to the company, but Garriott did not sign the letter.
In December 2008, NCsoft informed Garriott that the company classified his departure as a voluntary resignation, rather than a forced termination. This distinction impacted the stock options contract, which provided that if Garriott voluntarily resigned he must exercise his options within 90 days. Although Garriott had intended to hold his options until after NCsoft released a game called Aion to the market, the 90-day period required Garriott to exercise his options by a new date imposed by the company, which he did in January 2009. To meet this deadline, Garriott scrambled to raise enough money by obtaining loans from family members and business colleagues, liquidating personal holdings, and borrowing from his IRA.
1. We view the facts in the light most favorable to the jury verdict, as we must.
2. The district court determined—and the parties agree—that South Korean law governs the contract claim.
3. The Korean Supreme Court explained the legal standard: "When an employer terminates a labor contract relationship . . . by receiving a letter of resignation from an employee and if the employee had no choice but to prepare and submit the letter of resignation even though the employee had no intent to resign, such termination corresponds to a forced dismissal since the termination of the employment contract relationship is based on the employer's unilateral intent." Supreme Court, 2005Da38270, Nov. 25, 2005 (S. Kor.). In the present case, the district court's instruction stated "if an employer has a unilateral intent to terminate the employee and gave the employee no option but to resign, then his resignation is not of his own free [sic] and involuntary."
4. We also arrive at plain error review if we characterize NCsoft's new argument as contesting the jury instruction, which allowed the jurors to calculate damages by considering "any amount he would have made exercising his stock options" after the breach. NCsoft never objected to that instruction as required by Rule 51 of the Rules of Civil Procedure. See Jimenez v. Wood County, Tex., ___ F.3d ___, 2011 WL 4837488, *3 (5th Cir. 2011) (en banc) ("Objections to the jury instructions must be made . . . after the court announces its proposed instructions, and before the instructions and arguments are delivered."). "Where a proper objection is not made . . . our review of a jury instruction challenge is limited to review for plain error." Id.
5. NCsoft's damages theory apparently is based on its view that it could force Garriott to exercise his ten-year options with a premature deadline, and then limit Garriott's damages to the date chosen by NCsoft itself. In fact, the record shows that the company had previously requested Garriott to exercise his options early "for the sake of the company," but Garriott refused. Thus, NCsoft's damages theory would allow NCsoft to acquire by force the exercise of shares it could not obtain by persuasion.
6. In its brief, NCsoft misrepresents that "the District Court recognized [that] under Korean law Garriott would be entitled to a maximum recovery of $423,558.64." (emphasis in original). This is simply false. To the contrary, the district court cited Korean legal authorities that would entitle Garriott to additional attorney's fees and concluded "Thus, there is no reason, in either Texas or South Korean law, to limit fees [to the $423,558.64]."