Court Opinion

ID: 195590
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:43:16+00
Date Added: 2024-06-11T11:52:48.830967
License: Public Domain

[Not for Publication]

                United States Court of Appeals
                    For the First Circuit
                                         

No. 94-1266

                NORTHEAST DATA SYSTEMS, INC.,

                    Plaintiff, Appellant,

                              v.

                    MICRODATA CORPORATION,

                     Defendant, Appellee.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

       [Hon. Robert B. Collings, U.S. Magistrate Judge]

                                         

                            Before

                Cyr and Stahl, Circuit Judges,
                                             
                 and Zobel,* District Judge.
                                           

                                         

Roger S. Davis with whom Cheri L. Hoff  and Davis, Rubin & Parker,
                                                                  
P.A. were on brief for appellant.

Frederick W. Rose  with whom Gianfranco  A. Pietrafesa and Cooper,
                                                                  
Rose & English were on brief for appellee.
          

                                         

                                         

                 
*Of the District of Massachusetts, sitting by designation.

          Per  Curiam.    Plaintiff-appellant Northeast  Data
          Per  Curiam.
                     

Systems appeals the district court's denial of its motion for

sanctions   against   defendant-appellee  McDonnell   Douglas

Computer Systems Company.  We affirm.

                              I.
                                

                      PRIOR PROCEEDINGS
                                       

          Plaintiff  originally commenced this action in 1983

in  state  court against  Microdata Corporation.1   Defendant

removed this action to  the United States District Court  for

the  District of  Massachusetts where  plaintiff subsequently

filed an amended complaint  charging defendant with breach of

contract,  interference  with  contractual  and  advantageous

relationships, deceit, breach of the implied covenant of good

faith and fair  dealing, breach of fiduciary  duty, bad faith

termination, antitrust law violations, and violation of Mass.

Gen. L.  ch. 93A     11.   Defendant filed  an  answer and  a

counterclaim containing,  inter alia, claims  for breach  and
                                    

tortious  breach of  the implied  covenant of good  faith and

fair   dealing,   breach   of  fiduciary   duty,   bad  faith

termination, antitrust  violations,  and violation  of  Mass.

Gen. Laws ch. 93A   11.

          Post  judgment, plaintiff  filed with  the district

court  a motion seeking  sanctions against defendant pursuant

                    

1.  Microdata Corporation  was acquired by  McDonnell Douglas
Corporation in  1979 and renamed  McDonnell Douglas  Computer
Systems Company during the pendency of this litigation. 

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to  Fed. R.  Civ. P.  11 (1988),  28 U.S.C.    1927,  and the

inherent  powers of the court.   In a  lengthy written order,

the  magistrate  judge  denied  plaintiff's  motion  and this

appeal was taken.

                             II.
                                

                          DISCUSSION  
                          DISCUSSION
                                    

          Defendant concedes that the only issue on appeal is

whether  the lower court  erred in  denying sanctions.   More

specifically,  plaintiff  argues  that the  magistrate  judge

erred  in  failing  to  find  that  defendant  1)  filed  its

counterclaims solely for the purpose of delay and harassment;

2) knew at the time of its filing, and subsequently, that the

claims  lacked   merit;  and   3)  filed  false   answers  to

interrogatories to mislead and obstruct plaintiff.  Plaintiff

primarily  offers  as  evidence  the interrogatories  of  two

individuals  who  defendant  claimed  had  knowledge  of  the

factual  basis  for  its  counterclaims,  and  the subsequent

deposition  testimony  of  these  same  two  witnesses  which

plaintiff  claims show  that neither  actually  possessed any

such  factual   knowledge.    Plaintiff  argues   that  these

allegedly inconsistent statements prove that defendant failed

to conduct  a sufficient  pre-filing inquiry with  respect to

its   counterclaims  and  that   such  failure  should  merit

sanctions.

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          Because  all  of the  events animating  this appeal

occurred  prior to  December  1, 1993,  the magistrate  judge

relied  upon Fed.  R.  Civ. P.  11 (1988)  and  not the  1993

amended  version.2   We review a  district court's  denial of

sanctions  for abuse  of  discretion.   See Navarro-Ayala  v.
                                                         

Nunez, 968  F.2d  1421,  1425  (1st Cir.  1992)  ("[A]  party
     

protesting  an   order  in  respect  to   sanctions  bears  a

formidable  burden in  attempting  to convince  the court  of

appeals that the district judge erred in finding that Rule 11

was, or was not, violated.").

          In  his  order  denying  plaintiff's   motion,  the

magistrate judge  observed that this same  argument served as

the focal  point for plaintiff's March 1987  motion to strike

the counterclaims and  for sanctions, a motion  denied by the

court.   Before  reaching  the merits  of plaintiff's  second

request  for  sanctions,  the  magistrate  judge  noted  that

plaintiff  never filed  a motion  for reconsideration  of the

first  denial.   He then  held that  "based upon  the factual

recitation  incorporated in  the  affidavit  of  [defendant's

counsel] as well as  a review of the complete  transcripts of

the  [two] depositions,  it  cannot be  found that  Microdata

answered  the  interrogatories  in  bad  faith, attempted  to

mislead plaintiff or failed to conduct an adequate pre-filing

investigation."  

                    

2.  Neither party has challenged this decision on appeal.

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          A comprehensive review  of the  lengthy history  of

this  litigation and the careful and full review given by the

magistrate judge of the latest request for sanctions not only

satisfies us that there was no abuse of  discretion, manifest

or otherwise,3 but that this appeal is frivolous.  

                             III.
                                 

                          CONCLUSION
                                    

          For the foregoing reasons,  we  affirm the district

court's denial of sanctions. 

          Affirmed.  Double costs.
                                  

                    

3.  The magistrate judge also  separately reviewed and, after
careful   consideration,   dismissed   each  of   plaintiff's
additional  evidentiary  offers,  i.e.,  that   defendant  1)
improperly   delayed  the  completion  of  a  deposition;  2)
obstructed  defendant's  motion   for  summary  judgment;  3)
frivolously reopened  discovery; and  4) failed to  prosecute
its  counterclaims.   Because  we agree  with the  magistrate
judge's  finding   that  none  of  these   allegations  merit
sanctions  in   this  case,  we  need   not  regurgitate  his
discussion here.

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