Court Opinion

ID: 2788121
Source: CourtListenerOpinion
Date Created: 2015-03-20 20:00:41.983751+00
Date Added: 2024-06-11T09:32:38.040231
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 12-2007

                ADVANCED FLEXIBLE CIRCUITS, INC.,

                      Plaintiff, Appellant,

                               v.

      GE SENSING & INSPECTION TECHNOLOGIES GMBH; GE SENSING,
    DIVISION OF CARIBE GE INTERNATIONAL OF PUERTO RICO, INC.,

                     Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Gustavo A. Gelpí, U.S. District Judge]

                             Before

                       Lynch, Chief Judge,
              Torruella and Lipez, Circuit Judges.

     Wilfredo A. Géigel, Sr., with whom Law Offices of Wilfredo A.
Géigel, was on brief, for appellant.
     Michael D. Fisse, with whom Daigle, Fisse & Kessenich, PLC,
was on brief, for appellees.

                         March 20, 2015
           TORRUELLA, Circuit Judge.          This case stems from the

termination     of   precontractual         negotiations      between       two

corporations.     Plaintiff-Appellant, Advanced Flexible Circuits

("AFC"), entered into negotiations with Defendants-Appellees, GE

Sensing & Inspection Technologies GmbH and GE Sensing, Division of

Caribe GE International of Puerto Rico, Inc. (collectively, "GE"),

for AFC to manufacture and supply thermal filaments for GE to use

in its production of cardiac catheters.           After about two years of

negotiations between the parties, but prior to the execution of a

contract, GE terminated negotiations with AFC.              AFC subsequently

filed suit against GE in the United States District Court for the

District   of   Puerto   Rico,    alleging    that    GE    was   liable    for

precontractual damages under the Puerto Rico doctrine of culpa in

contrahendo for arbitrarily and unjustifiably withdrawing from

contractual     negotiations     with     AFC.1      Both    parties       filed

cross-motions for summary judgment; the district court denied AFC's

motion and granted GE's motion, thus dismissing AFC's claims

against GE.

           AFC now appeals that decision, arguing that the district

court erred in finding that there was no genuine dispute as to any

material facts regarding the culpa in contrahendo claim.                     AFC

1
    Under Puerto Rico law, the tort-law doctrine of culpa in
contrahendo "requires parties to negotiate in good faith." Ysiem
Corp. v. Commercial Net Lease Realty, Inc., 328 F.3d 20, 23-24 (1st
Cir. 2003).

                                    -2-
further contends that the district court abused its discretion in

sanctioning AFC for its alleged failure to comply with the district

court's "anti-ferret rule," Local Rule 56, in its opposition to

GE's motion for summary judgment.    See D.P.R. Civ. R. 56.2    GE

responds by asserting that: (1) GE was justified in withdrawing

from negotiations due to AFC's failure to produce satisfactory

samples of the filaments; (2) AFC thus could not have had a

reasonable expectation of finalizing a contract with GE; (3) in the

alternative, AFC's alleged damages are not recoverable under culpa

in contrahendo or are otherwise unsupported by the evidence; and

(4) the district court properly applied its anti-ferret rules in

sanctioning AFC for its failure to comply with Local Rule 56.

          After reviewing the record and the parties' filings, we

conclude that AFC has offered no competent evidence permitting a

finding of liability on its culpa in contrahendo claim.    The two

parties engaged in precontractual negotiations, and after the

initial sample units supplied by AFC failed multiple quality and

performance tests, GE ultimately withdrew from negotiations. Other

2
   AFC nominally raises a third issue, "[w]hether the [district
court] erred in finding that plaintiff/appellant had not met the
standard for granting of summary judgment in its favor." However,
this formulation is misleading. Rather than setting out a distinct
issue, the corresponding section of AFC's brief merely continues to
argue that the district court should not have granted GE's motion
for summary judgment and should not have sanctioned AFC under Local
Rule 56. In so doing, AFC does not argue that its own cross-motion
for summary judgment should have been granted, but instead argues
that "it would have been more appropriate . . . to deny both sides'
motions and let the jury decide."

                               -3-
than   speculative,   conclusory     allegations,     AFC    has   offered   no

evidence that GE's termination of those negotiations was arbitrary,

unjustified, or otherwise wrongful.         Accordingly, we affirm the

district   court's    grant    of    summary      judgment    in    favor    of

Defendants-Appellees.     Secondly, we conclude that the district

court did not abuse its discretion in sanctioning AFC for failing

to comply with the court's local rules.

                              I.    Background

           We begin with an overview of the factual background,

drawn from the summary judgment record and viewed in the light most

favorable to Plaintiff-Appellant AFC.            See Tobin v. Fed. Express

Corp., 775 F.3d 448, 449 (1st Cir. 2014).

A.   The Negotiations

           GE is in the business of manufacturing and assembling

various products, including component parts of medical catheter

devices, which are assembled at a facility in Añasco, Puerto Rico

("Añasco Facility"), and then distributed to its customers. One of

the pieces of a medical catheter component part assembled at the

Añasco Facility is a "thermal filament" (otherwise known as a

"heater filament").      GE purchases these heater filaments from

suppliers before incorporating them into the assembled catheter

components which it then, in turn, sells to its customers.

           AFC is a Minnesota corporation.         During the negotiations

between GE and AFC, AFC had one employee: Theresa Bailey, who

                                     -4-
served as AFC's president, secretary, and treasurer. In the summer

of 2006, Manuel Hidalgo, a sales representative for an organization

called "Yes America," approached Maritza Cedó, the Material Leader

for GE at the Añasco Facility.     Hidalgo told Cedó that he was a

sales agent for a company, AFC, that was capable of engineering and

manufacturing the heater filament used in the catheter component

assembled by GE at the Añasco Facility; Hidalgo proposed to Cedó

that AFC could supply the heater filament for GE.              Cedó told

Hidalgo that GE currently purchased the heater filaments from

another supplier, that GE had incomplete information about the

filament, and that GE did not know how to manufacture the filament

itself.

          Hidalgo informed Cedó that AFC: (1) was experienced in

manufacturing   heater   filaments;    (2)   had   expertise     in   the

engineering and manufacturing of heater filaments; and (3) was

capable of determining, without further information, how the heater

filament manufactured by GE's then-current supplier was engineered

and constructed.   Cedó explained to Hidalgo that AFC would have to

submit samples of the heater filaments to GE for quality testing.

Cedó further explained that the decision to purchase the filaments

was contingent upon the samples passing GE's quality tests.           If

AFC's sample heater filaments passed the quality inspection and

tests by GE, then AFC's filaments could be approved for supply. GE

did not provide specific technical specifications, schematics, or

                                 -5-
engineering drawings to AFC, but rather gave AFC two physical

samples of the heater filament it needed.

             AFC and GE began negotiations on a "proposed contract" in

January of 2007, and the negotiations continued for two years. AFC

acknowledges that the negotiations from 2007 until March of 2009

"comprise[d] the technical period," during which information was

exchanged and tests were conducted, and that if either party

withdrew during this period, there would be no repercussions.

             In 2009, Ulrich Angeli, the Senior Manager and Global

Commodity Leader for GE, became personally involved in negotiations

with   Bailey    regarding   AFC's   proposed    supply   of    the   heater

filaments.     During the spring and summer of 2009, the two parties

exchanged drafts of a purchase agreement.           They negotiated via

email regarding the terms of the agreement, including the duration

of   the   contract,   the   applicable    law   that   would   govern   the

agreement, and the price per unit. Angeli informed Bailey that AFC

would need to produce sample heater filaments that could pass the

requisite quality tests before the final contract terms could be

settled.

             According to GE, AFC submitted a total of four groups of

sample heater filaments during the two years of negotiation, and

all of them failed quality testing "because they did not satisfy

the specified dimensional, mechanical, or electrical parameters

that were required before the heater filaments could be used in

                                     -6-
medical catheter devices."    AFC, for its part, maintains that the

delays and test failures were not the result of AFC's shortcomings

or improper manufacturing but rather "were due to improper, wrong

and misguided information provided by GE."

            On June 25, 2009, before the testing of the fourth and

final group of sample elements, AFC sent GE two signed copies of a

negotiated purchase agreement between the two companies; GE never

executed this contract.    The fourth and final sample was rejected

by GE in August 2009 due to problems with its dimensions, among

other reasons.     By September 2009, GE had withdrawn from the

negotiations.

            On September 21, 2009, after the negotiations between AFC

and GE had been terminated by GE, Bailey sent an e-mail to Angeli

with a final invoice of $183,232.00 for "the development costs and

total hours spent by all the participants in the supply chain who

contributed to the development and successful outcome of this

project."    In the same e-mail, Bailey also mentioned that AFC

thought the "project was near the production phase," and that AFC

had tried to get in contact with GE to find out "why the project

was abruptly cancelled."     GE refused to pay, and AFC subsequently

filed this lawsuit.

B.   Procedural Background

            On January 29, 2010, AFC filed suit against GE in the

district court, claiming that GE had wrongfully withdrawn from

                                  -7-
contractual negotiations with AFC.              On that basis, under the

doctrine    of   culpa    in    contrahendo,     AFC    sought     recovery    of

precontractual     damages      allegedly   incurred    by   AFC    during    its

attempts to manufacture the heater filaments to supply to GE.

            After discovery, GE filed a motion for summary judgment

to dismiss AFC's claim because AFC had failed to produce any

evidence in support of its culpa in contrahendo claim.                  In the

alternative, GE also moved for partial summary judgment to dismiss

AFC's claims for the following damages "not recoverable under a

culpa in contrahendo claim: (1) damages allegedly incurred by

parties other than AFC; (2) 'hourly' charges of third parties and

unsupported by evidence; and (3) incidental and consequential

damages."    In response to GE, AFC filed its own motion for partial

summary    judgment;     this   motion   was   denied   (without     prejudice)

because AFC failed to comply with the relevant rules, but the

district court allowed AFC to file a renewed motion for partial

summary judgment.

            In ruling on these motions, the district court determined

that AFC's counterstatement of material facts in opposition to GE's

motion for summary judgment failed to comply with Local Rule 56 for

two reasons.     First, the district court stated that AFC had failed

to properly controvert the statement of undisputed facts supporting

GE's motion for summary judgment, because AFC's opposing statement

"d[id] not admit, deny, or qualify any fact, nor d[id] it use the

                                      -8-
words admit, deny or qualify or any synonym thereof to describe its

stance regarding each fact."        The district court noted that it did

not know whether AFC's "disputed" facts were meant to deny or

qualify GE's statement of undisputed facts.

             Second, the district court held that, regardless of

whether AFC meant to deny or qualify given facts, AFC violated

Local   Rule    56   by    "fail[ing]   to    provide    any    required    record

references      in   its    opposing     statement      of     material    facts."

Consequently, the district court "only consider[ed] those parts of

AFC's opposition to GE Sensing's statement of uncontested facts

that compl[ied] with Local Rule 56 -- i.e., the facts deemed

admitted."     However, the district court explicitly stated that, in

ruling on GE's motion for summary judgment, the court considered

AFC's statement of facts that accompanied its own cross-motion for

partial summary judgment.

             Evaluating the merits of the competing summary judgment

motions, the district court held that GE did not violate the

doctrine of culpa in contrahendo.              The court reasoned that the

evidence did not establish that GE had failed to act in good faith

or was unjustified in withdrawing from the contractual negotiations

with AFC.      Furthermore, the evidence did not show that AFC could

have had a reasonable expectation of entering into a contract with

GE, because AFC admitted that it never provided a sample group of

heater filaments that passed GE's quality testing.                  In rejecting

                                        -9-
AFC's argument that GE did not negotiate in good faith, the

district court highlighted that AFC was aware that GE "did not

manufacture the heater filament, did not know how to manufacture

the heater filament, and did not have all the information regarding

the heater filament."    Therefore, AFC could not have reasonably

expected GE to have provided them with exact specifications for the

heater filament.    The district court further emphasized that AFC

was at fault for failing to provide heater filaments that met

quality standards, as GE relied on AFC's representation that it was

an experienced expert in engineering and manufacturing quality

heater filaments.

          Dismissing AFC's contention that it reasonably expected

the contract to be completed, the district court found that the

evidence showed that AFC knew it had to produce a sample group of

heater filaments that met all the relevant quality standards before

an agreement could be reached, and AFC never produced a sample

group that passed the quality testing and validation process.

Accordingly, the district court granted summary judgment in favor

of GE, dismissed AFC's culpa in contrahendo claims, and denied

AFC's renewed motion for summary judgment.   The district court did

not address GE's alternative motion for partial summary judgment,

as that motion was thus moot.

          With the foregoing background in mind, we examine the

principal issue presented in this appeal: whether the district

                                -10-
court, in granting summary judgment in favor of GE, correctly

concluded    that   there     was    no     genuine    dispute   regarding   facts

material to whether GE is liable to AFC under a theory of culpa in

contrahendo.

    II.     Summary Judgment on AFC's Culpa in Contrahendo Claim

             We review the district court's decision to grant summary

judgment de novo, viewing the facts in the light most favorable to

AFC, the non-movant.         See Klunder v. Brown Univ., 778 F.3d 24, 30

(1st Cir. 2015).          Summary judgment is properly granted when the

movant shows that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.

See Fed. R. Civ. P. 56(a).                 We are not to make "credibility

determinations      or    weigh   the      evidence"    in   determining   whether

summary judgment should be granted.                Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 255 (1986).

             In order to defeat a motion for summary judgment, the

nonmovant    may    not    rest     upon    some   combination    of   conclusory

allegations, improbable inferences, and unsupported speculation,

but must instead present definite, competent evidence to rebut the

motion.     See Ahern v. Shinseki, 629 F.3d 49, 54 (1st Cir. 2010);

Maldonado-Denis v. Castillo-Rodríguez, 23 F.3d 576, 581-83 (1st

Cir. 1994).

             Parties involved in contract negotiations are generally

"free to contract or to withdraw as it best suits their interests."

                                           -11-
Producciones Tommy Muñiz, Inc. v. COPAN, 113 P.R. Dec. 517, 526, 13
P.R. Offic. Trans. 664, 676 (P.R. 1982) ("COPAN").   However, under

the Puerto Rico doctrine of culpa in contrahendo, "precontractual

negotiations trigger a social relationship which imposes on the

parties the duty to act in good faith."   Torres v. Gracía, 119 P.R.

Dec. 698, 703 (P.R. 1987).3

          "Under this doctrine, negotiations toward an agreement

can -- even without a letter of intent -- readily give rise to

mutual expectations that the parties will bargain in good faith and

refrain from misconduct."     Ysiem Corp. v. Commercial Net Lease

Realty, Inc., 328 F.3d 20, 24 (1st Cir. 2003).     The doctrine "is

designed primarily to protect reliance rather than expectation

interests."   Id.; see also Velázquez Casillas v. Forest Labs.,

Inc., 90 F. Supp. 2d 161, 166 (D.P.R. 2000) (observing that culpa

in contrahendo is generally "used to compensate a party for the

expenses it incurred in reliance on the other party's offer to form

a contract when the contract negotiations break down" (citing

3
    Culpa in contrahendo is a claim sounding in tort, not in
contract. See Ysiem, 328 F.3d at 24; Shelley v. Trafalgar House
Pub. Co., 987 F. Supp. 84, 86 (D.P.R. 1997) ("characteriz[ing] the
culpa in contrahendo action as a legal action in torts"); COPAN, 13
P.R. Offic. Trans. at 679 (explaining that the doctrine arises from
Article 1802 of the Civil Code, which imposes extracontractual
liability for acting in a tortious or wrongful manner during
preliminary negotiations). The two leading cases from the Supreme
Court of Puerto Rico examining the culpa in contrahendo doctrine
are COPAN, 13 P.R. Offic. Trans. 664, and Colón v. Glamorous Nails,
167 P.R. Dec. 33 (P.R. 2006).

                                -12-
Snyder v. Champion Realty Corp., 631 F.2d 1253, 1255–56 (5th Cir.

1980))).

           A party's withdrawal from contractual negotiations may be

considered to be a violation of the duty of good faith if: (1) the

withdrawal was arbitrary or without justification; and (2) the

other   party   had   a     reasonable    expectation     that   a   contractual

agreement would be consummated.           See, e.g., COPAN, 13 P.R. Offic.

Trans. at 678-79; see also WHTV Broad. Corp. v. Centennial Commc'ns

Corp., 460 F. Supp. 2d 297, 306 (D.P.R. 2006) (stating that the

doctrine   of   culpa       in    contrahendo    allows   for    precontractual

liability of a party who "fails to negotiate in good faith when the

other party had reasonable expectations that an agreement would

finally be reached among the parties" (citing Glamorous Nails, 167
P.R. Dec. at 45-47)).

           To determine liability under culpa in contrahendo, courts

have    evaluated     the        circumstances   of   the    withdrawal    from

negotiations by considering certain factors, including:

           (1) the development of the negotiations, (2)
           how did [the negotiations] begin, (3) their
           course, (4) the conduct of the parties
           throughout [the negotiations], (5) the stage
           at which the interruption took place, [and]
           (6) the parties' reasonable expectations to
           form a contract, as well as any other relevant
           circumstance   under    the   facts   of   the
           case . . . .

Torres, 19 P.R. Offic. Trans. at 749.             Accordingly, applying the

doctrine involves a context-dependent and fact-intensive inquiry.

                                        -13-
We have previously noted that "[t]he culpa in contrahendo test is

not very precise and the courts appear reasonably cautious in

applying a doctrine that could, if applied too freely, chill

negotiations rather than facilitate them."    Ysiem, 328 F.3d at 24.

Importantly, the doctrine of culpa in contrahendo "should be

applied restrictively."   Velázquez Casillas, 90 F. Supp. 2d at 167

(citing Torres, 19 P.R. Offic. Trans. at 754).

          The mere "breaking off of negotiations is not sufficient

in and of itself to create liability," id., but rather it is the

"unjustified   withdrawal    or    termination    of   precontractual

negotiations" that results in liability.         See Satellite Broad.

Cable, Inc. v. Telefónica de España, S.A., 807 F. Supp. 218, 219

(D.P.R. 1992) (emphasis added).     Thus, "[a] negotiating party may

incur culpa in contrahendo liability if its conduct is wrongful,

fraudulent, or dolose." Velázquez Casillas, 90 F. Supp. 2d at 167;

see also WHTV, 460 F. Supp. 2d at 306 ("[I]n order to impose

liability under this doctrine, there must be a finding of bad faith

or fault on the part of the party who terminated the negotiations."

(citing COPAN, 13 P.R. Offic. Trans. at 678)); Torres, 19 P.R.

Offic. Trans. at 744   ("[T]he action for damages based on culpa in

contrahendo was not established since it was not proved that the

defendants' conduct was wrongful, deceitful or fraudulent.").

          This "doctrine applies even if the Defendant's conduct

was not intentional, but merely negligent."      WHTV, 460 F. Supp. 2d

                                  -14-
at 306; see also Glamorous Nails, 167 P.R. Dec. at 46 (stating

that the Supreme Court of Puerto Rico "has acknowledged culpa in

contrahendo not only when one of the parties participating in the

formation of a contract acts intentionally through dolus [deceit],

fraud or abuse of rights, but also when that party causes harm by

acting negligently").4     Indeed, the Supreme Court of Puerto Rico

has   observed   that   "the   wide    spectrum    of   grounds   upon   which

precontractual liability may rest" include "fault, dolus, fraud,

good faith, abuse of law, or other general principle[s] of law."

COPAN, 13 P.R. Offic. Trans. at 679.         Examples of wrongful conduct

that can give rise to culpa in contrahendo liability include the

following:

             a party's failure to disclose its lack of
             legal capacity to enter into a contract; a
             party's negotiating without any intent of
             entering into a contract but with the intent
             of obtaining confidential business information
             from the other side; a party's using the
             negotiations not in order to finalize an
             agreement but to obtain some advantage in its
             dealings with a third party; or a party's
             fault causing the business transaction to be
             ineffective.

Velázquez Casillas, 90 F. Supp. 2d at 167 (citing COPAN, 13 P.R.

Offic. Trans. at 679).

4
  "Dolus or dolo is a form of contractual deceit that can serve to
invalidate consent to an otherwise valid contract or compromise."
Citibank Global Markets, Inc. v. Rodríguez Santana, 573 F.3d 17, 29
(1st Cir. 2009) (citing P.R. Laws. Ann. tit. 31, § 4828).

                                      -15-
            Here, AFC has failed to present definite, competent

evidence showing such wrongful conduct on behalf of GE.                AFC has

not presented specific facts suggesting that GE's conduct in the

negotiations was "wrongful, fraudulent, or dolose."               See id.; see

also Ahern, 629 F.3d at 54 (stating that where nonmovants bear the

burden of proof on an issue, they must point to specific facts to

defeat summary judgment, and they cannot "rely[] upon conclusory

allegations, improbable inferences, acrimonious invective, or rank

speculation").       To the contrary, AFC has either admitted or failed

to    contest   facts   that   show    that    GE   had   valid   reasons   for

withdrawing from negotiations and for choosing not to execute a

contract with AFC.

            AFC explicitly admitted that it represented to GE that it

was   capable   of    engineering     and    manufacturing   quality    heater

filaments. AFC further represented that it had experience with the

manufacture of the same type of heater filaments sought by GE, and

it conceded that GE relied on these representations of expertise.

AFC also admitted that, under the agreement contemplated by the

parties, it had to first produce "sample" filaments for "inspection

and testing evaluation."       Only if the samples passed this process

could the filaments then be approved for later supply in quantities

required by GE.

            Additionally, AFC conceded that the first sample "failed

the test" because it was not a heater filament, although AFC

                                      -16-
maintains that this failure was because GE had not provided the

required   specifications.   Furthermore,   AFC   "was    still   having

difficulties" manufacturing sample filaments as of March 2, 2009,

and June 24, 2009.

           AFC also failed to contest certain other facts alleged by

GE.5 Accordingly, as relevant here, the following additional facts

are not in dispute.   First, it took AFC a period of more than two

years to produce multiple filament samples, including a delay of

one year to determine the correct material to use.       Four different

lots of sample components were provided from 2008 to 2009, and at

least three of those lots failed qualification testing.6      Although

AFC alleges that these failures "were due to improper, wrong and

misguided information provided by GE," there is no dispute that

three of the four sample lots provided by AFC failed GE's quality

tests -- including the fourth and final sample lot.       Regarding the

5
   The district court considered whether facts contained in AFC's
statement of facts in support of its own cross-motion for summary
judgment contradicted any of the facts asserted by GE. See, e.g.,
Fair Hous. Council of Riverside Cnty., Inc. v. Riverside Two, 249
F.3d 1132, 1137 (9th Cir. 2001) (holding that when a court
disregards a party's motion in opposition to summary judgment for
failure to comply with a local rule, the court still has a duty "to
review the evidence properly submitted in support of cross-motions
for summary judgment to determine whether that evidence
demonstrates a genuine issue of material fact"); see also P.R. Am.
Ins. Co. v. Rivera-Vázquez, 603 F.3d 125, 133 (1st Cir. 2010)
(stating that when "cross-motions for summary judgment are filed
simultaneously, or nearly so, the district court ordinarily should
consider the two motions at the same time").
6
  GE maintains that all four sample lots failed the qualification
testing.

                                -17-
first two of the four sample lots, AFC has further admitted that it

was reasonable for GE to reject the samples due to their poor

quality.7     Moreover, AFC has presented no evidence nor argument

showing that GE was obligated or expected to enter into a contract

with AFC if just some of the samples passed the quality testing.

             Additionally, in August 2009, following the testing

failure of the fourth lot of sample filaments, AFC was planning to

advise GE that unless different arrangements were made -- including

GE paying AFC for the production of additional samples -- AFC would

not go forward with the project.            For its part, GE's decision to

withdraw from negotiations with AFC was based primarily on AFC's

multiple failed attempts to produce quality samples, but also other

factors such as: AFC's delays in production, its failure to

participate in weekly status meetings, and its reliance on third

parties for production. On the basis of the foregoing, the summary

judgment record contains evidence of undisputed facts showing that

GE's   withdrawal     from   negotiations     was   justified    and   was   not

arbitrary or otherwise wrongful.        See WHTV, 460 F. Supp. 2d at 306

(observing     that    the    mere    withdrawal      from      precontractual

negotiations does not -- in and of itself -- give rise to liability

under culpa in contrahendo); see also Satellite Broad. Cable, Inc.,

7
  Even in AFC's (properly disregarded and stricken) opposition to
GE's motion for summary judgment, AFC only disputed this fact to
the extent that "the rejection was not due to improper
manufacturing but to improper, wrong and misguided information
provided by GE."

                                     -18-
807 F. Supp. at 219 (establishing that it is only the unjustified

termination   of   precontractual   negotiations   that   results   in

liability under the doctrine). By contrast, AFC failed to properly

point the court to any evidence in the summary judgment record

showing wrongful conduct on behalf of GE.    See WHTV, 460 F. Supp.
2d at 306 (citing COPAN, 113 P.R. Dec. at 529).8

           AFC argues that GE was also engaging in negotiations with

an alternative supplier: a Chinese company that offered better

pricing.   However, AFC failed to properly support this argument

with a citation to a specific place in the record.    Moreover, even

assuming that GE was indeed negotiating with another supplier, AFC

has put forth no evidence –- and indeed, has not even made a

specific allegation –- showing why such conduct would be wrongful

under these circumstances.    Nor has AFC provided us with legal

authority establishing that engaging in simultaneous precontractual

8
    Given that the application of culpa in contrahendo depends
heavily on the facts and context of each case, we do not opine here
on the types of conduct that would be either necessary or
sufficient to establish liability in every hypothetical case. We
nonetheless note that AFC has failed to adduce any evidence that
might suggest wrongful conduct on behalf of GE.         Aside from
unsupported, conclusory allegations, AFC has submitted no evidence
showing, for example: that GE never had any intention of executing
a contract; that GE undertook the negotiations with the sole intent
of obtaining confidential business information from AFC; that GE
used the negotiations not in order to finalize an agreement but
only to obtain some advantage in its dealings with a third party;
or that GE was at fault in causing the business transaction to be
ineffective. See Velázquez Casillas, 90 F. Supp. 2d at 167 (citing
COPAN, 13 P.R. Offic. Trans. at 679) (listing these as examples of
wrongful conduct potentially giving rise to precontractual
liability).

                                -19-
negotiations with two alternative suppliers is wrongful.                  There is

nothing      inherently    nefarious    about      engaging   in    simultaneous

negotiations with competing suppliers. Surely many businesses must

do so regularly.       Aside from vague, unsupported allegations and

speculation, AFC failed to present any evidence of conduct by GE

that   was    "wrongful,    fraudulent,       or   dolose."        See   Velázquez

Casillas, 90 F. Supp. 2d at 167; see also Ahern, 629 F.3d at 54;

Maldonado-Denis, 23 F.3d at 581.

              AFC further argues that GE was at "fault" in "causing the

business transaction to be ineffective," because GE failed to

provide the necessary technical information to AFC.                See Velázquez

Casillas, 90 F. Supp. 2d at 167 (citing COPAN, 13 P.R. Offic.

Trans. at 679).       This argument fails for at least two reasons.

First, AFC has not provided us any legal authority establishing

that such a failure, without more, would give rise to culpa in

contrahendo liability.        Second, the undisputed evidence regarding

the technical specifications shows that neither GE nor AFC knew how

to manufacture the heating filaments, that AFC was aware of GE's

lack of knowledge, that AFC held itself out as an expert capable of

reverse-engineering the filaments, and that GE did not falsely

represent to AFC that it would provide the necessary technical

blueprints.     In light of this evidence, it is clear that GE was not

at fault, nor did it cause the transaction to be ineffective.

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          Rather than citing "definite, competent" record evidence

that shows specific facts establishing a genuine dispute as to any

wrongful conduct by GE, AFC has instead relied upon a combination

of conclusory allegations, improbable inferences, and unsupported

speculations.   See Ahern, 629 F.3d at 54; Maldonado-Denis, 23 F.3d

at 581-83.   Given the foregoing, AFC has failed to effectively

rebut the evidence and arguments presented by GE in its motion for

summary judgment.   On the basis of the undisputed facts, GE was

entitled to judgment as a matter of law, and its motion was

properly granted.

                        III.   Local Rule 56

          AFC further argues that the district court abused its

discretion in applying the court's anti-ferret rule under Local

Rule 56 to disregard AFC's counterstatement of facts in its

opposition to GE's motion for summary judgment.     Rejecting this

argument, we find no such abuse of discretion.

          Local Rule 56 "requires a party moving for summary

judgment to submit a 'separate, short, and concise statement of

material facts, set forth in numbered paragraphs, as to which the

moving party contends there is no genuine issue of material fact.'"

P.R. Am. Ins. Co., 603 F.3d at 130 (quoting D.P.R. Civ. R. 56(b)).

"Each fact must be supported by a citation to a specific paragraph

or page of the summary judgment record."   Id. (citing D.P.R. Civ.

R. 56(e)).   A party opposing a motion for summary judgment must

                                -21-
submit a statement countering the movant's statement of undisputed

facts; this counter-statement "'shall admit, deny or qualify the

facts by reference to each numbered paragraph of the moving party's

statement of material facts and unless a fact is admitted, shall

support each denial or qualification by a record citation.'"         Id.

at 131 (quoting D.P.R. Civ. R. 56(c)).     "Properly supported facts

contained in a[] [statement of undisputed facts] shall be deemed

admitted unless controverted in the manner prescribed by the local

rule."   Id. (citing D.P.R. Civ. R. 56(e)).

           Anti-ferret rules are intended to reduce the burden on

trial courts and "prevent parties from unfairly shifting the

burdens of litigation to the court."       Cabán Hernández v. Philip

Morris USA, Inc., 486 F.3d 1, 8 (1st Cir. 2007).                When the

nonmovant fails to comply with the standards of Local Rule 56, "a

district court is free, in the exercise of its sound discretion, to

accept the moving party's facts as stated."        Id. at 7.    In such a

situation, "the district court must still apply the standard

articulated in Federal Rule of Civil Procedure 56."       P.R. Am. Ins.

Co., 603 F.3d at 130.    We then review the district court's order

applying Local Rule 56 for an abuse of discretion, giving a

"special   degree   of   deference"   to     the     district    court's

interpretation of its own local rules.     Id.

           At the outset, we note that this issue is moot with

respect to many, if not all, of the facts proposed by AFC in its

                               -22-
opposition    to   GE's   motion   for   summary    judgment,    because   the

district court actually considered those same proposed facts.

Indeed, in ruling on both parties' cross-motions for summary

judgment, the district court explicitly stated that it considered

the statement of facts in AFC's own motion for partial summary

judgment, and there was significant overlap between AFC's two

statements of facts (one of which was disregarded, and the other of

which was duly considered).        Thus, although the court stated that

it would disregard portions of AFC's opposing statement of material

facts, it nonetheless considered those same facts as they were

presented in AFC's own motion for summary judgment.             Arguably, the

district court considered most, if not all, of the facts that AFC

now complains were erroneously stricken.           AFC has failed on appeal

to point us to a single fact that was actually not considered by

the district court and that would be material to a question

necessary for the resolution of this matter.

             Reviewing the record and the parties' submissions, and

giving a "special degree of deference" to the district court's

interpretation of its own rules, we find no abuse of discretion in

the district court's application of Local Rule 56.              See P.R. Am.

Ins. Co., 603 F.3d at 130.         Therefore, we find AFC's arguments

regarding the district court's application of Local Rule 56 to be

unavailing.

                                    -23-
                         IV.   Conclusion

          For the foregoing reasons, we conclude that AFC has

presented no competent evidence showing a genuine issue of material

fact as to any wrongful conduct on the part of GE in negotiating.

It was neither "arbitrary" nor "unjustified" for GE to withdraw

from precontractual negotiations after the sample parts provided by

AFC failed multiple quality evaluations and tests.    Furthermore,

the district court did not abuse its discretion in sanctioning AFC

for failing to comply with the court's local rules.   Accordingly,

summary judgment in favor of Defendants-Appellees was proper, and

the district court's decision is affirmed.

          AFFIRMED.

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