Court Opinion

ID: 195431
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:39:49+00
Date Added: 2024-06-11T13:09:26.396134
License: Public Domain

June 16, 1994
                 UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                          

  No. 93-1896
  No. 93-1897

                    COOL LIGHT COMPANY, INC.,
                      Plaintiff, Appellant,

                               v.

                    GTE PRODUCTS CORPORATION,
                      Defendant, Appellee.

                                           

                          ERRATA SHEET

       Please make the following  correction in the opinion in
  the above case released on May 25, 1994:

  Page 2, line 8:     delete the word "counsel"

  Page 2, line 9:     insert  the  word "been"  between "have"
                      and "raised"

  Page 6, line 10:    insert,  after   the  open  parenthesis,
                      "belonging to a  different law firm than
                      the  firm  representing  GTE on  appeal,
                      and"

                 UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                        

No. 93-1896
No. 93-1897

                 COOL LIGHT COMPANY, INC.,

                   Plaintiff, Appellant,

                             v.

                 GTE PRODUCTS CORPORATION,

                    Defendant, Appellee.

                                        

       APPEALS FROM THE UNITED STATES DISTRICT COURT

             FOR THE DISTRICT OF MASSACHUSETTS

        [Hon. Robert E. Keeton, U.S. District Judge]
                                                   

                                        

                           Before

                    Breyer, Chief Judge,
                                       
            Torruella and Stahl, Circuit Judges.
                                               

                                        

Edwin A. McCabe with  whom Karen Chinn Lyons, Joseph P. Davis, III
                                                                 
and The McCabe Group were on brief for appellant.
               
Allan  van Gestel with whom Marie P. Buckley,  John B. Daukas, and
                                                            
Goodwin, Procter & Hoar were on brief for appellee.
                  

                                        

                        May 25, 1994
                                        

          BREYER,  Chief Judge.   The appellant,  Cool Light
                              

Company,  Inc.  ("Cool  Light"),  asks for  relief  from  an

adverse judgment,  Fed. R. Civ.  P. 60(b)(6), on  the ground

that  Judge McNaught,  the  judge who  initially tried  this

case, was prejudiced -- or, at least, gave the appearance of

prejudice  -- against  it.   28 U.S.C.    455(a),  (b).   In

deciding whether or not Rule 60(b)(6) relief is appropriate,

we  have  examined   the  charges  and   counter-charges  of

impropriety  that have  been raised.   We have  assumed, but

purely   for  argument's   sake,  that   Cool  Light   could

demonstrate  a   significant   degree  of   partiality   (or

appearance  of partiality)  on the  part of  Judge McNaught.

And, we have asked whether any such partiality would justify

the type of relief that Cool Light now seeks.

          Upon  examining  the record,  we  found that  Cool

Light has already received what was, in essence, a new trial

on  the key issues and that Judge Keeton (the judge assigned

to   this   matter   upon   Judge   McNaught's   retirement)

independently reviewed Judge McNaught's decision  to grant a

new trial.  Cool Light would have received no more had Judge

McNaught  decided to recuse himself.  And, that being so, we

conclude  that Judge  Keeton's  decision not  to grant  Rule

60(b) relief was lawful.

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                             I

                         Background
                                   

                             A

              The Dispute Between the Parties
                                             

          In  the 1970's,  Cool Light  tried to  develop and

sell  a special kind of lighting, to be used by film-makers,

which  would  generate  less  heat than  the  lighting  then

customarily  used.    As  part of  this  effort,  Cool Light

contacted  the appellee,  GTE Products  Corporation ("GTE"),

and  the   parties  discussed   the  possibility   of  GTE's

developing   and  supplying  the   necessary  special  light

reflectors.    Cool   Light  placed   purchase  orders   for

reflectors;  it later found GTE's reflectors unsatisfactory;

it refused to  pay money that GTE  thought it owed;  and GTE

stopped  supplying the  reflectors.  Eventually,  Cool Light

went out of business.

                             B

                    Cool Light's Lawsuit
                                        

          In 1984,  Cool Light filed a  lawsuit against GTE.

The heart of  the lawsuit consisted of a claim  that GTE had

failed to supply the reflectors it had promised and that, as

a result,  Cool Light went out of business.  In Cool Light's

view,  the   core  facts  that  Cool   Light  alleged  (when

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                             5

supplemented by various  alleged subsidiary facts)  entitled

it  to damages under several different legal theories.  Cool

Light said that GTE's failure to supply proper reflectors 1)

violated the  express terms  of  its contract  with GTE,  2)

violated  an implied term in  its contract to  deal in "good

faith,"  and 3) demonstrated  that various  GTE pre-contract

statements about  the reflectors and GTE's  plans to produce

other lighting  products were  fraudulent.  Cool  Light also

said  that GTE's course of behavior amounted to 4) an unfair

trade  practice,  Mass.  Gen.  L.  ch. 93A,  and  5)  unfair

competition, Cal.  Bus. & Prof. Code    17200.    Cool Light

tried the first  three of these claims to a  jury.  It tried

the latter two claims to Judge McNaught for decision without

a jury.

          Judge McNaught found against Cool Light on each of

the  non-jury  claims.   The  jury, however,  found  in Cool

Light's  favor on the  breach of contract  and fraud claims.

It assessed  damages of  $3.694 million  for  breach of  the

express terms of the contract; of $2.8 million for breach of

the implied "good faith" dealing contract term; and of $9.45

million for  fraud.   Judge McNaught  found that  the jury's

verdicts were inconsistent.  He set them aside and ordered a

new trial.

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                             6

          At the  second trial, Cool Light  waived its right

to  a jury trial  on its contract  and fraud-related claims.

Both parties asked Judge Keeton -- replacing Judge McNaught,

who had retired  -- to make findings  of both fact and  law,

based on the record of the first trial plus the testimony of

certain  additional witnesses.  Judge Keeton  did so, and he

found in GTE's  favor.  Cool  Light then appealed,  claiming

that Judge McNaught should have accepted the jury's findings

and not ordered a new trial.  After examining the record, we

found that  the order for  a new  trial was  lawful, and  we

affirmed  the judgment for GTE that Judge Keeton had entered

after that new  trial.  Cool Light Co. v.  GTE Prods. Corp.,
                                                           

973 F.2d  31 (1st Cir. 1992), cert.  denied, 113 S. Ct. 1417
                                           

(1993).

          We add one  further background point.   Initially,

this case involved  a further  set of claims  by Cool  Light

that  GTE  had  misappropriated various  trade  secrets  and

confidential   business  information.     For   purposes  of

expositional clarity, we shall postpone  discussion of these

claims  until  Part IIB  of  this  opinion,  where we  shall

explain why  their initial  presence in  this case  makes no

difference to our result.

                             C

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               Cool Light's Rule 60(b) Motion
                                             

          On December 1, 1992,  Cool Light moved, under Rule

60(b)(6),  for relief  from Judge  Keeton's judgment.   Cool

Light  said in its motion  that jurors from  the first trial

had  contacted  Cool Light's  owner, George  Panagiotou, and

Cool Light's lawyer, Edwin A. McCabe, and had told them that

Judge  McNaught  had spoken  to  the jurors  after  they had

reached their verdict.  According  to the jurors, the  judge

told them  1) that he strongly disagreed with their verdict,

and 2) that  he knew that  George Panagiotou previously  had

been "belonging  to  a different  law  firm thatn  the  firm

representing GTE on appeal, and  involved with drugs."  Cool

Light  said  that this  last  mentioned  remark (about  drug

involvement)  showed  that  Judge  McNaught  was  prejudiced

against it and meant that Judge McNaught should have recused

himself.  Cool Light added that, during the first trial, Mr.

Panagiotou  saw one of GTE's  lawyers (once a  law clerk for

Judge    McNaught)    enter   Judge    McNaught's   chambers

unaccompanied  by  lawyers  for  Cool  Light.    Cool  Light

concluded  that, as  a result,  it  was legally  entitled to

reinstatement  of  the  first-trial  jury  verdict,  to   an

independent  reexamination of  Judge  McNaught's  new  trial

determination, and  to an independent reexamination of Judge

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                             8

McNaught's determination  of the  non-jury issues --  or, in

the alternative, to a new trial.

          Judge  Keeton  denied  the Rule  60(b)(6)  motion.

Cool Light Co.  v. GTE Prods.  Corp., 832  F. Supp. 449  (D.
                                    

Mass. 1993).   He found  that his further,  and independent,

review of the entire  record led him to the  same conclusion

that  Judge McNaught  had reached,  that is  to say,  had he

presided  at the  first trial,  he would  have set  the jury

verdict aside and  ordered a new trial.  Id.  at 460.  Judge
                                            

Keeton also said that, had Judge McNaught recused himself as

Cool Light says he should have done, Cool Light would simply

have received a  new trial.  Id. at 461.   He concluded that
                                

Cool Light,  in essence, had already received  that to which

the law would entitle  it were its claims of  impropriety or

partiality true.  Id. at 460-61.
                     

          Judge Keeton did not characterize Judge McNaught's

alleged  remark to the  jury either  as inappropriate  or as

proper.     He  did,  however,  characterize   Cool  Light's

accusations of misconduct by  opposing counsel as "vague and

wholly  unsupported."  He also found that there was "a prima

facie basis" for believing that Cool Light, and its counsel,

Mr. McCabe, had  violated the rules  governing "post-verdict

contact  with jurors."    Id. at  467.   (Subsequently,  Bar
                             

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Counsel  wrote  to Mr.  McCabe stating  that "[i]n  light of

existing   .  .  .   case  law  permitting   some  level  of

investigation in response to unsolicited communications from

jurors," she was "not  pursuing this matter further," though

shesuggested"that inthefuture,"he "errontheside ofcaution.")

          Ultimately,  Judge Keeton  entered  a final  order

denying Cool  Light's Rule  60(b)(6) motion for  relief from

judgment.  Cool Light now appeals from that order.

                             II

                 The Rule 60(b)(6) Decision
                                           

          In reviewing  the district court's denial  of Cool

Light's Rule 60(b)(6) motion, we need not explore the merits

of the various claims  of impropriety.  Indeed, it  would be

difficult to discover what, in fact, occurred, for the judge

in  question has died.  Rather, for purposes of this appeal,

we shall simply  assume, for argument's sake, that the judge

made the statements that Cool  Light attributes to him,  and

we shall also assume  circumstances such that the statements

would have called for recusal.  See Liteky v. United States,
                                                           

114  S. Ct. 1147, 1155-57 (1994).  Despite these assumptions

favorable  to  Cool  Light,  we nonetheless  find  that  the

district court's decision to deny the motion lay well within

the  scope  of its  broad Rule  60(b)  authority.   Cotto v.
                                                         

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United States, 993 F.2d 274, 277 (1st Cir. 1993); Teamsters,
                                                            

Chauffeurs, Warehousemen  & Helpers  Union, Local No.  59 v.
                                                         

Superline Transp. Co., 953 F.2d 17, 19 (1st Cir. 1992).
                     

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                             A

          The Parties' Contract and Fraud Disputes
                                                  

          Our reasoning in respect to the claims arising out

of the basic substantive dispute between the parties is  the

same  as that of Judge  Keeton.  Had  Judge McNaught recused

himself,  Cool Light  would have  had a  new trial  before a

different judge.   Pontarelli  v. Stone,  978 F.2d 773,  775
                                       

(1st  Cir. 1992).  Cool Light, however, did have a new trial

before a  different judge.  And,  the law entitles it  to no

more.

          We   recognize  that   Cool  Light   suggests  the

existence  of special  circumstances  requiring a  different

result.  But, we do not agree.  First, Cool  Light says that

it  received a new trial only on the counts originally tried

to the jury (breach of contract; fraud).  It did not receive

a  new trial on the  counts tried to  Judge McNaught (unfair

trade practices; unfair competition).   This argument is not

convincing,   however,   primarily   because  Cool   Light's

different  judge-tried claims,  like its  various jury-tried

claims,  amount to dressing up what are essentially the same

facts in  different sets of  legal clothes.   In particular,

Judge Keeton's unappealed  (second trial) findings  that GTE

did not cause the harm Cool  Light alleged, that GTE had not

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                             12

breached its agreement  with Cool  Light, that  GTE did  not

commit  fraud, and that  Cool Light failed  to prove damages

with sufficient  specificity, would collaterally  estop Cool

Light from successfully arguing  the contrary in any further

proceeding  related  to the  judge-tried claims.   Federated
                                                            

Dep't Stores, Inc. v. Moitie, 452 U.S. 394,  398-402 (1981);
                            

Sidney  v. Zah, 718 F.2d 1453, 1457-58 (9th Cir. 1983); Itel
                                                            

Capital Corp. v. Cups Coal Co., 707 F.2d 1253, 1260-61 (11th
                              

Cir. 1983);  Hurley v. Beech  Aircraft Corp., 355  F.2d 517,
                                            

522  (7th Cir.), cert. denied, 385  U.S. 821 (1966).  As far
                             

as the  briefs  and papers  before  us reveal,  the  overlap

between  the  two sets  of claims  is  such that,  given the

second trial findings, any  further trial on related matters

would simply  prove "an empty  exercise," which circumstance

makes  appropriate, and  lawful,  the denial  of Rule  60(b)

relief.  Cotto, 993 F.2d at 280; Superline, 953 F.2d at 20.
                                          

          Second,  Cool Light  suggests that  we should  not

treat  Judge Keeton's  unappealed second  trial findings  as

binding  because  it did  not  know  about Judge  McNaught's

remark either a) when it decided what evidence to present to

Judge Keeton,  or b) when  it filed its appeal.   Cool Light

has failed to  show us, however,  how any earlier  knowledge

could have made a significant difference.  Judge Keeton gave

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Cool Light a full opportunity to present additional evidence

at the  second trial.  Cool Light  has not explained how, or

why, knowledge of Judge McNaught's  remark would have led it

to  produce significantly  different evidence.   Nor  has it

suggested  any legal  flaw  in Judge  Keeton's second  trial

findings.   Neither is there any  unusual problem in respect

to  timing.   Cool  Light, in  fact,  found out  about Judge

McNaught's remark after it received our opinion in its first

appeal but  while its petition for rehearing was pending and

about one month before our mandate  issued.  The consequence

of  Cool Light's failure to show why earlier knowledge would

have mattered,  in our view, is  that the law would  give to

Judge Keeton's findings their normal preclusive effect.

          Third,  Cool  Light  says  that,  on  grounds   of

elementary  fairness,   the  remedy  for   Judge  McNaught's

"partiality," which (in  Cool Light's view)  led him to  set

aside the jury verdict is either 1)  simple reinstatement of

the  verdict or 2) an independent judicial review of the new

trial  decision.   Elementary  fairness,  however,  does not

argue  for reinstatement of  the verdict.   Rather, often if

not ordinarily, the remedy for  a serious procedural flaw is

new, better,  and fairer procedure, not a  monetary award to

the losing party.   Pontarelli, 978 F.2d at 775.   Moreover,
                              

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despite  Cool Light's  strong  contrary  protestations,  our

review  of the record indicates that Judge Keeton gave Judge

McNaught's   "new  trial"   decision  that   very  new   and

independent review, with appropriate  deference for the jury

verdict, for which Cool Light argues.  Judge Keeton wrote:

          [W]hen I now  make an independent review
          of  the  evidence  offered  in  the  two
          trials  combined  I  conclude  that  the
          verdict [at the first trial] should have
          been set aside and,  at the least, a new
          trial  should  have  been   granted,  if
          indeed the  court did not  instead order
          judgment      for     the      defendant
          notwithstanding the verdict.

Cool Light, 832 F. Supp. at 461.
          

          For  these  reasons,   we  consider  lawful  Judge

Keeton's denial  of the Rule 60(b)(6) motion,  in respect to

all  counts  related to  the  underlying  contract or  fraud

disputes between the parties.

                             B

                  The Trade Secret Claims
                                         

          Cool Light,  in its  initial complaint,  set forth

several other legal claims  that we have not  yet discussed.

Those claims essentially rested  upon its assertion that GTE

had misappropriated trade  secrets and confidential business

information.   Cool Light set forth  several different legal

theories that,  in its  view, entitled  it to  damages based

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                             15

upon that alleged theft.  See,  e.g.,  Plaintiff's Complaint
                                    

Count IV (Taking of a  Trade Secret, Mass. Gen. L. ch.  93  

42); id. Count  VII (Unjust Enrichment).  As was true of the
        

contract and  fraud claims, Cool Light, at  the first trial,

tried some of its trade secret related claims to a jury  and

others to the judge.

          The trade  secret related claims  differ from  the

contract  and fraud  related claims,  however, in  that both
                                                            

judge  and jury found against  Cool Light on  all the claims
               

involving trade secrets.   Further, Cool Light chose  not to

retry  the jury-tried claims before Judge Keeton.  And, Cool

Light has  not provided  us with any  information suggesting

that, despite the jury's having found against it in  respect

to  those  claims,  a  new  trial  would  likely  produce  a

different  result.  Finally, Judge Keeton's binding findings

in the  second  trial,  many of  which  touch  on  necessary

elements  of  the  trade   secrets  claims,  would  make  it

difficult, if not impossible, for Cool Light to prevail in a

new trial.  The  upshot is that Cool Light  has not provided

us  with  any  reason  to  believe  it  has  a  "potentially

meritorious" trade secret related claim, Superline, 953 F.2d
                                                  

at  20, or  that a  new trial  on  the trade  secret related

counts would be  other than  "an empty exercise,"  id.   For
                                                      

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these  reasons,  the district  court's  denial  of the  Rule

60(b)(6) motion inrespect to those claims waslegally proper.

          The judgment of the district court is

          Affirmed.
                   

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