Alternative System Concepts, Inc. v. Synopsys, Inc.

United States Court of Appeals
For the First Circuit

No. 03-1406

ALTERNATIVE SYSTEM CONCEPTS, INC.,

Plaintiff, Appellant,

v.

SYNOPSYS, INC., SUCCESSOR TO
LANGUAGE FOR DESIGN AUTOMATION, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Paul J. Barbadoro, U.S. District Judge]

Before

Selya, Circuit Judge,

Cyr, Senior Circuit Judge,

and Lipez, Circuit Judge.

John P. Griffith, with whom Griffith & Associates, PLLC was on
brief, for appellant.
Chris Scott Graham, with whom Grace E. Jo and Dechert LLP were
on brief, for appellee.

July 7, 2004
 SELYA, Circuit Judge. This is a case of a suitor

scorned. Plaintiff-appellant Alternative System Concepts, Inc.

(ASC) courted Language for Design Automation, Inc. (LEDA) and

forged a short-term distribution relationship. As the couple moved

toward a more durable bond, defendant-appellee Synopsys, Inc.

acquired LEDA and dashed ASC's hopes.

The jilted suitor responded aggressively, haling Synopsys

into court and claiming, inter alia, misrepresentation and breach

of promise. The district court dismissed the former claim early in

the proceedings and subsequently granted summary judgment for

Synopsys on the latter. ASC appeals. After addressing a number of

issues (including an issue of first impression in this circuit

concerning judicial estoppel), we affirm.

I. BACKGROUND

We rehearse the facts in the light most favorable to the

nonmoving party (here, ASC) and draw all reasonable inferences in

that party's favor. Because there are differences between the

ground rules that apply to motions to dismiss as opposed to motions

for summary judgment, compare Chongris v. Bd. of Appeals, 811 F.2d

36, 37 (1st Cir. 1987) (explaining that the factual averments

contained in the plaintiff's complaint supply the template for

review of a decision granting a Rule 12(b)(6) motion to dismiss),

with Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)

(explaining that the evidence of record supplies the template for

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review of a decision granting a Rule 56 motion for summary

judgment), we adjust for those differences in our ensuing

discussion of the district court's rulings.

ASC is a New Hampshire corporation involved in the design

and marketing of programs used in the production of computer chips.

On March 29, 1999, it entered into a letter of understanding (the

LOU) with LEDA, a French software designer. In the LOU, LEDA

appointed ASC as the exclusive distributor of its Proton product

line in the United States for a six-month term commencing April 1,

1999. The parties further declared that they would attempt to

"negotiate in good faith a permanent agreement based on experiences

during the term of th[e] LOU." That declaration was purely

aspirational; the LOU stated expressly that neither party had any

obligation to enter such a permanent agreement.

During the next six months, the two firms engaged in

sporadic negotiations. On September 1, 1999, their representatives

met in France in hopes of hammering out the details of a permanent

arrangement. Although LEDA's managing director assured ASC that

"all was satisfactory with regard to a permanent agreement," the

parties neither developed nor signed a written contract. Later

that month, the parties exchanged e-mails that apparently extended

the geographic coverage of the LOU to Canada.

Talks continued past the LOU's expiration date (September

30, 1999). On October 5, representatives of the two companies met

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in Florida. LEDA agreed to extend the LOU for a reasonable time

pending the completion of negotiations. It also notified a

prospective customer that ASC remained the exclusive distributor of

LEDA products in the United States and Canada. ASC claims that the

parties had by then substantially agreed on the key terms of a

permanent distribution relationship, but the fact remains that LEDA

balked at signing such an agreement.

In January of 2000, Synopsys (a California-based

competitor of ASC) acquired LEDA. It promptly terminated the

interim distribution agreement and broke off the negotiations for

a permanent relationship. ASC was left out in the cold.

ASC lost little time in bringing this diversity action

against Synopsys in New Hampshire's federal district court. See 28

U.S.C. § 1332(a). Its first amended complaint charged that LEDA

had been derelict in its duty to negotiate a permanent distribution

agreement in good faith; that LEDA had intentionally misrepresented

the nature of its interactions with Synopsys; that LEDA had flouted

an implied covenant of good faith and fair dealing; and that

Synopsys bore responsibility for these transgressions as LEDA's

successor in interest. Finally, the first amended complaint

charged Synopsys, in its own right, with having interfered with

ASC's advantageous contractual relations.

Synopsys moved to jettison the complaint for failure to

state claims upon which relief could be granted. See Fed. R. Civ.

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P. 12(b)(6). On August 2, 2001, the district court dismissed the

misrepresentation claim on the ground that ASC had not pleaded

misrepresentation with the requisite particularity. ASC v.

Synopsys, Inc., No. 00-546, 2001 WL 920029, at *2 (D.N.H. Aug. 2,

2001) (ASC I). Nevertheless, the court refused to dismiss the

breach of contract claim. See id. A period of protracted pretrial

discovery commenced. Eighteen months later, the district court

granted Synopsys's motion for summary judgment on the breach of

contract count.1 ASC v. Synopsys, Inc., No. 00-546, 2003 WL

358737, at *3 (D.N.H. Feb. 19, 2003) (ASC II). That ended the suit

and precipitated this appeal.

In order to put the arguments on appeal into workable

perspective, we pause to provide additional detail anent the lower

court's treatment of ASC's breach of contract claim. Count I of

the first amended complaint alleged that "Synopsys/LEDA breached

its agreement to negotiate a permanent agreement in good faith and

to honor the Canadian distributorship." In support of its motion

to dismiss, Synopsys argued in relevant part that, to the extent

this claim was premised on an oral contract entered into between

the parties following the execution of the LOU, it was barred by

the statute of frauds. See N.H. Rev. Stat. Ann. § 506:2 (providing

1
In other pretrial rulings, the district court dismissed ASC's
implied covenant claim and granted summary judgment for Synopsys on
ASC's interference claim. ASC has not appealed from either of
these decisions, so we need not probe them more deeply.

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that "[n]o action shall be brought . . . upon any agreement . . .

that is not to be performed within one year from the time of making

it, unless such . . . agreement . . . is in writing"). In its

opposition, ASC clarified that it was "not claiming that

[LEDA/Synopsys] breached an agreement to enter into a long term

contract." Rather, its breach of contract claim was "that LEDA

breached its agreement to negotiate in good faith" as required by

the LOU.

The district court took ASC at its word. Noting that ASC

had explicitly abandoned any claim that the parties had entered a

subsequent oral agreement, the court treated ASC's cause of action

as one "that LEDA breached its contractual obligation to make a

good faith effort to negotiate a permanent marketing agreement that

initially covered the United States and later was amended to

include Canada." ASC I, 2001 WL 920029, at *2 n.2. Since the

court tentatively deemed the statute of frauds impuissant to defeat

this cause of action, it denied the motion to dismiss the breach of

contract count. Id. at *2.

By the time that discovery had run its course and the

parties had gotten around to filing cross-motions for summary

judgment, ASC had experienced an epiphany. In its summary judgment

papers, it alleged that on October 5, 1999, the parties entered

into an oral distribution agreement covering the United States and

Canada. It also averred that LEDA/Synopsys subsequently breached

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this permanent arrangement. Synopsys vociferously objected to this

changed tune. It maintained that this approach evinced a new and

inconsistent theory; that, throughout the litigation, ASC had

construed its breach of contract claim as a claim for breach of a

duty to negotiate in good faith; and that this tergiversation

resulted in a theory that fell outside the purview of the first

amended complaint.

The district court agreed with Synopsys's assessment. It

invoked the doctrine of judicial estoppel, pointing out that ASC

had obtained an "advantage by contending in opposition to

Synopsys's motion to dismiss that its breach of contract claim was

premised on an alleged breach of the LOU, rather than a subsequent

oral agreement to make the LOU permanent." ASC II, 2003 WL 358737,

at *3. Accordingly, the court held that ASC was barred from

advancing a contradictory position on summary judgment. Id. The

court thereupon granted brevis dispositon in favor of Synopsys.

On appeal, ASC contends that the lower court erred in (i)

dismissing its misrepresentation claim, (ii) refusing to allow a

further amended complaint designed to cure defects in the

misrepresentation count, and (iii) invoking the doctrine of

judicial estoppel to bar the breach of contract claim that it

wished to propound on summary judgment.2 Synopsys, by motion, asks

2
ASC also makes a perfunctory attempt to assert a theory of
promissory estoppel. This theory was not presented to the district
court in the summary judgment proceedings. Accordingly, we deem

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us to (i) dismiss the appeal, and (ii) award sanctions against ASC.

We address these points below, starting with Synopsys's motion to

dismiss, then confronting ASC's asseverational array, and ending

with a consideration of the request for sanctions.

II. THE MOTION TO DISMISS THE APPEAL

While this case was pending in the district court,

Synopsys filed a California state court action accusing ASC of

conspiracy and unfair business practices. On April 1, 2003 —

shortly after the institution of this appeal — the parties reached

at least a tentative settlement in the California action. There is

some indication that the terms of the settlement contemplated the

dismissal of the earlier (New Hampshire) action. After Synopsys

encountered resistance from ASC with respect to implementing the

supposed settlement, it asked the California court to enter

judgment pursuant to the settlement agreement. The court obliged,

albeit without discussion, entering judgment ex parte on September

11, 2003.

Citing these facts, Synopsys invites us to dismiss this

appeal as moot and/or barred by the doctrine of res judicata.3 ASC

the argument unpreserved. See Teamsters Union v. Superline Transp.
Co., 953 F.2d 17, 21 (1st Cir. 1992); Clauson v. Smith, 823 F.2d
660, 666 (1st Cir. 1987).
3
Synopsys premises both mootness and res judicata on the same
series of events. Since Synopsys directs virtually all of its
legal argumentation to res judicata, we use that label to embrace
both concepts.

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counters by asserting that the settlement was never consummated.

It also contends that the California judgment was entered without

proper notice (and is, therefore, void).

We decline Synopsys's invitation to short-circuit this

appeal. The record and briefing before us are too skimpy to allow

a definitive determination as to either the status or scope of the

ostensible settlement. By like token, the record is inadequate to

permit us to assess the res judicata effect of the California

judgment. Given the need for more information, we deem it prudent

to sidestep the late-emerging res judicata issue and proceed

directly to the merits. See, e.g., Henry v. Connolly, 910 F.2d

1000, 1004 (1st Cir. 1990) (deciding appeal on merits, favorably to

appellees, without deciding whether action was barred by res

judicata or lack of standing); see also Penobscot Nation v. Ga.-

Pac. Corp., 254 F.3d 317, 324 (1st Cir. 2001) (discussing limits of

Supreme Court plurality decision in Steel Co. v. Citizens for a

Better Env't, 523 U.S. 83 (1998)). Any other course would be an

exercise in batrachomyomachia.

III. THE MISREPRESENTATION CLAIM

ASC assigns error to both the district court's dismissal

of its misrepresentation claim and to the court's subsequent

"failure" to allow a curative amendment. These remonstrances need

not occupy us for long.

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 A. Applicable Legal Standards.

We review de novo a trial court's allowance of a Rule

12(b)(6) motion to dismiss. LaChapelle v. Berkshire Life Ins. Co.,

142 F.3d 507, 509 (1st Cir. 1998). In that process, we take as

true the factual averments contained in the complaint, but "eschew

any reliance on bald assertions, unsupportable conclusions, and

opprobrious epithets." Chongris, 811 F.2d at 37 (citation and

internal quotation marks omitted). From this plaintiff-friendly

coign of vantage, we may affirm an order for dismissal only if no

well-pleaded set of facts supports recovery. Conley v. Gibson, 355

U.S. 41, 45-46 (1957); LaChapelle, 142 F.3d at 508.

Federal civil practice is based on notice pleading.

Thus, "[g]reat specificity is ordinarily not required to survive a

Rule 12(b)(6) motion." Garita Hotel Ltd. P'ship v. Ponce Fed.

Bank, 958 F.2d 15, 17 (1st Cir. 1992); accord Educadores

Puertorriqueños en Acción v. Rey Hernández, 367 F.3d 61, 66 (1st

Cir. 2004) (disclaiming heightened pleading standards except where

a statute or Civil Rule specifically imposes one). Cases alleging

fraud — and for this purpose, misrepresentation is considered a

species of fraud — constitute an exception to this general

proposition. The Civil Rules explicitly require that "[i]n all

averments of fraud . . . the circumstances constituting fraud . .

. shall be stated with particularity." Fed. R. Civ. P. 9(b). In

such cases, the pleader usually is expected to specify the who,

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what, where, and when of the allegedly false or fraudulent

representation.4 Powers v. Boston Cooper Corp., 926 F.2d 109, 111

(1st Cir. 1991); McGinty v. Beranger Volkswagen, Inc., 633 F.2d

226, 228 (1st Cir. 1980).

B. The Original Claim.

ASC's first amended complaint alleged in substance that

LEDA failed to disclose that merger talks were ongoing between it

and Synopsys, but, rather, downplayed the discussions and

characterized the contemplated relationship as merely a "technical

partnership" that would not affect the outcome of the ASC-LEDA

negotiations. ASC further alleged that it relied on these

knowingly false representations to its detriment.5 Despite the

fervor with which ASC denounced this treachery, it did not provide

any details as to who allegedly uttered the misleading statements,

to whom they were made, where they were made, when they occurred,

and what actions they engendered. See ASC I, 2001 WL 920029, at

4
We say "usually" because there may be occasional exceptions,
owing to extraordinary circumstances. See, e.g., Corley v.
Rosewood Care Ctr., Inc., 142 F.3d 1041, 1050-51 (7th Cir. 1998).
No such circumstances are extant here.
5
Under New Hampshire law, the elements of a fraudulent
misrepresentation claim are: "(1) the defendant misrepresented a
material fact to the plaintiff, knowing it to be false; (2) the
defendant did so with fraudulent intent that the plaintiff act on
it; and (3) that the plaintiff, without knowledge of its falsity,
detrimentally relied on the misrepresentation." Alexander v.
Fujitsu Bus. Communic. Sys., Inc., 818 F. Supp. 462, 467 (D.N.H.
1993) (citing Proctor v. Bank of N.H., 464 A.2d 263, 265 (N.H.
1983)).

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*2. In short, ASC's misrepresentation claim was wholly conclusory

and lacking any semblance of specific detail. Given the strictures

of Rule 9(b), the district court's dismissal of that barebones

claim was entirely proper. See, e.g., Powers, 926 F.2d at 111;

Lopez v. Bulova Watch Co., 582 F. Supp. 755, 766 (D.R.I. 1984).

C. The Curative Amendment.

ASC's fallback position is as insubstantial as a house

built upon the shifting sands. It notes that, after the district

court had dismissed the misrepresentation claim for want of

specificity, it moved for leave to refile, in a further amended

complaint, a more particularized version of the claim. The

district court denied this request on February 14, 2003, and ASC

now calumnizes that order.

This challenge is based on a half-truth. Although ASC

did seek leave to file a curative amendment, it unilaterally

withdrew that motion before the court reached the matter. A party

who voluntarily withdraws a motion prior to judicial consideration

cannot later claim that the court's pro forma denial of the

withdrawn motion constitutes reversible error. See Baty v. United

States, 275 F.2d 310, 311 (9th Cir. 1960) (per curiam); cf. United

States v. Tierney, 760 F.2d 382, 388 (1st Cir. 1985) ("Having one's

cake and eating it, too, is not in fashion in this circuit.").

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IV. THE BREACH OF CONTRACT CLAIM

The district court, invoking the doctrine of judicial

estoppel, consigned ASC's breach of contract claim to the scrap

heap. ASC II, 2003 WL 358737, at *3. ASC assigns error and seeks

reversal of the summary judgment entered in favor of Synopsys on

that claim. We examine the particulars of this contretemps below.

A. Applicable Legal Standards.

We review the district court's disposition of a motion

for summary judgment de novo, scrutinizing the facts in the light

most favorable to the nonmoving party. See Garside, 895 F.2d at

48. We will affirm only if the "pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law." Fed. R. Civ. P. 56(c).

This court has not yet had occasion to determine the

appropriate standard for reviewing a trial court's application of

the doctrine of judicial estoppel. See Gens v. Resolution Trust

Corp., 112 F.3d 569, 572 n.2 (1st Cir. 1997) (reserving the

question); Desjardins v. Van Buren Cmty. Hosp., 37 F.3d 21, 23 (1st

Cir. 1994) (same). This case requires us to fill that void. We

hold that the applicable rubric is abuse of discretion. We ground

this holding on four lines of reasoning.

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 First, the Supreme Court has explained that "judicial

estoppel is an equitable doctrine invoked by a court at its

discretion." New Hampshire v. Maine, 532 U.S. 742, 750 (2001)

(citation and internal quotation marks omitted). On that basis,

the abuse of discretion standard seems a natural fit. Cf. Pierce

v. Underwood, 487 U.S. 552, 558 (1988) (noting that matters

consigned to a trial court's discretion are generally reviewed for

abuse of discretion). Second, deferential review often is

appropriate for matters in which the trial court is "better

positioned . . . to decide the issue in question." Miller v.

Fenton, 474 U.S. 104, 114 (1985). Judicial estoppel is such a

matter. Determining whether a litigant is playing fast and loose

with the courts has a subjective element. Its resolution draws

upon the trier's intimate knowledge of the case at bar and his or

her first-hand observations of the lawyers and their litigation

strategies. Third, abuse of discretion is a flexible standard, and

the amorphous nature of judicial estoppel, cf. Desjardins, 37 F.3d

at 23 (observing that "judicial estoppel is not extrinsically a

matter of fact or law; the issues that arise may turn out to be

ones of raw fact, abstract law, or something in between"), places

a high premium on such flexibility. See Underwood, 487 U.S. at 562

(suggesting discretionary review for "multifarious and novel

question[s], little susceptible . . . of useful generalization").

Last — but far from least — the other courts of appeals to have

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addressed this question have settled unanimously on abuse of

discretion review. See, e.g., Coastal Plains, Inc. v. Mims (In re

Coastal Plains, Inc.), 179 F.3d 197, 205 (5th Cir. 1999); Talavera

v. Sch. Bd., 129 F.3d 1214, 1216 (11th Cir. 1997); McNemar v.

Disney Store, Inc., 91 F.3d 610, 616-17 (3d Cir. 1996); Data Gen.

Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed. Cir. 1996); United

States v. Garcia, 37 F.3d 1359, 1367 (9th Cir. 1994). A court of

appeals should always be reluctant to create a circuit split

without a compelling reason, and none exists here.

The fact that this case arises in the summary judgment

context does not affect our decision to review the trial court's

determination for abuse of discretion. Although there may seem at

first blush to be some tension between the plenary review afforded

to a summary judgment ruling and the deferential review of a

threshold judicial estoppel determination, that tension is more

apparent than real. Most evidentiary determinations are reviewed

for abuse of discretion, see, e.g., Colasanto v. Life Ins. Co. of

N. Am., 100 F.3d 203, 212-13 (1st Cir. 1996); Blinzler v. Marriott

Int'l, Inc., 81 F.3d 1148, 1158 (1st Cir. 1996), and the same

standard of review typically applies to threshold evidentiary

determinations made in connection with summary judgment motions,

see, e.g., Gen. Elec. Co. v. Joiner, 522 U.S. 136, 142-43 (1997)

(holding that an appellate court should review a trial court's

decision to admit or exclude expert testimony at summary judgment

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for abuse of discretion); Schubert v. Nissan Motor Corp., 148 F.3d

25, 29 (1st Cir. 1998) (holding that if the district court

determines the admissibility of evidence for purposes of a summary

judgment proceeding, the court of appeals must "review that

decision for abuse of discretion prior to turning to [its] de novo

summary judgment examination"); EEOC v. Green, 76 F.3d 19, 24 (1st

Cir. 1996) (discussing the district court's "broad authority to

prescribe the evidentiary materials it will consider in deciding a

motion for summary judgment" and conducting appellate review for

abuse of discretion). Evidentiary rulings have the potential to

shape and winnow the scope of the summary judgment inquiry, and a

trial court should have as much leeway in dealing with those

matters at the summary judgment stage as at trial. As other courts

have recognized, judicial estoppel fits neatly into this taxonomy.

See, e.g., Ahrens v. Perot Sys. Corp., 205 F.3d 831, 833 (5th Cir.

2000); Johnson v. Oregon, 141 F.3d 1361, 1364 (9th Cir. 1998);

Talavera, 129 F.3d at 1216. We adopt that standard.

The abuse of discretion standard is familiar. We will

not overturn a nisi prius court's discretionary decision unless it

plainly appears that the court committed a clear error of judgment

in the conclusion it reached upon a weighing of the proper factors.

In re San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007, 1019

(1st Cir. 1988); In re Josephson, 218 F.2d 174, 182 (1st Cir. 1954)

(Magruder, C.J.). This standard is deferential and requires that

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a reviewing court remain mindful of its obligation "not to

substitute its judgment for that of the [district court]." Motor

Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,

43 (1983).

B. Choice of Law.

There is a potential choice of law problem lurking in the

interstices of this case. A federal court sitting in diversity

jurisdiction is obliged to apply federal procedural law and state

substantive law. Hanna v. Plumer, 380 U.S. 460, 465 (1965); Erie

R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). As judicial estoppel

appears neither clearly procedural nor clearly substantive, there

may be a legitimate question as to whether federal or state law

(here, New Hampshire law) should supply the rule of decision.

Having noted this question, we swiftly lay it to one

side. The parties have addressed the judicial estoppel issue on

the frank assumption that federal standards control and the

district court operated on that assumption. See ASC II, 2003 WL

358737, at *3 (citing federal precedents). We have stated before,

and today reaffirm, that "[w]here . . . the parties have agreed

about what law governs, a federal court sitting in diversity is

free, if it chooses, to forgo independent analysis and accept the

parties' agreement." Borden v. Paul Revere Life Ins. Co., 935 F.2d

370, 375 (1st Cir. 1991). Although we have not heretofore had

occasion to apply this tenet with regard to judicial estoppel,

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other courts have done so. See Ryan Oper'ns G.P. v. Santiam-

Midwest Lumber Co., 81 F.3d 355, 358 (3d Cir. 1996); Astor

Chauffeured Limousine Co. v. Runnfeldt Inv. Corp., 910 F.2d 1540,

1551 (7th Cir. 1990). Accordingly, we proceed to analyze the issue

on the understanding that federal law supplies the rule of

decision.

We add, moreover, that we would likely reach this same

conclusion even without the parties' acquiescent behavior. It has

long been held that federal courts may bypass conflicting state

rules of decision in favor of federal standards when positive

considerations, such as the presence of a strong federal policy,

militate in favor of employing federal standards. Byrd v. Blue

Ridge Rural Elec. Coop., 356 U.S. 525, 537-38 (1958). Such

countervailing considerations are present here. The aim of

judicial estoppel is to protect the integrity of the courts. New

Hampshire, 532 U.S. at 750. Where, as here, both the putatively

estopping conduct and the putatively estopped conduct occur in a

federal case, a federal court has a powerful institutional interest

in applying federally-developed principles to protect itself

against cynical manipulations. See Hall v. GE Plastic Pac. PTE

Ltd., 327 F.3d 391, 395-96 (5th Cir. 2003).

C. The Doctrine of Judicial Estoppel.

"As a general matter, the doctrine of judicial estoppel

prevents a litigant from pressing a claim that is inconsistent with

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a position taken by that litigant either in a prior legal

proceeding or in an earlier phase of the same legal proceeding."

Intergen N.V. v. Grina, 344 F.3d 134, 144 (1st Cir. 2003); accord

Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000). The doctrine's

primary utility is to safeguard the integrity of the courts by

preventing parties from improperly manipulating the machinery of

the judicial system. New Hampshire, 532 U.S. at 750; United States

v. Levasseur, 846 F.2d 786, 792 (1st Cir. 1988). In line with this

prophylactic purpose, courts typically invoke judicial estoppel

when a litigant is "playing fast and loose with the courts."

Patriot Cinemas, Inc. v. Gen. Cinema Corp., 834 F.2d 208, 212 (1st

Cir. 1987) (quoting Scarano v. Cent. R. Co., 203 F.2d 510, 513 (3d

Cir. 1953)).

The contours of the doctrine are hazy, and there is no

mechanical test for determining its applicability. See New

Hampshire, 532 U.S. at 750-51; Patriot Cinemas, 834 F.2d at 212.

Each case tends to turn on its own facts. It is, however, widely

agreed that, at a minimum, two conditions must be satisfied before

judicial estoppel can attach. See, e.g., Hall, 327 F.3d at 396;

Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 783-84 (9th

Cir. 2001); Levinson v. United States, 969 F.2d 260, 264-65 (7th

Cir. 1992); Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599 (6th

Cir. 1982). First, the estopping position and the estopped

position must be directly inconsistent, that is, mutually

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exclusive. See Faigin v. Kelly, 184 F.3d 67, 82 (1st Cir. 1999);

Levasseur, 846 F.2d at 794. Second, the responsible party must

have succeeded in persuading a court to accept its prior position.

Lydon v. Boston Sand & Gravel Co., 175 F.3d 6, 13 (1st Cir. 1999);

Gens, 112 F.3d at 572-73. The presence of these elements creates

the appearance that either the first court has been misled or the

second court will be misled, thus raising the specter of

inconsistent determinations and endangering the integrity of the

judicial process. See New Hampshire, 532 U.S. at 750-51.

While it is not a formal element of a claim of judicial

estoppel, courts frequently consider a third factor: absent an

estoppel, would the party asserting the inconsistent position

derive an unfair advantage? Id. at 751. Relatedly, courts often

inquire as to whether judicial acceptance of a party's initial

position conferred a benefit on that party. See, e.g., Levasseur,

846 F.2d at 793; Patriot Cinemas, 834 F.2d at 213. Judicial

acceptance and partisan benefit normally are two sides of the same

coin (after all, it is unlikely that a party will advance a

particular position unless that position benefits its cause). To

the extent that there is a separation, however, it is the court's

acceptance of the party's argument, not the benefit flowing from

the acceptance, that primarily implicates judicial integrity. See

New Hampshire, 532 U.S. at 750. Thus, benefit is not a sine qua

non to the applicability of judicial estoppel.

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 Synthesizing these various points, we recently concluded

that, in a prototypical case, judicial estoppel applies when "a

party has adopted one position, secured a favorable decision, and

then taken a contradictory position in search of legal advantage."

Intergen, 344 F.3d at 144. It is against this nuanced backdrop

that we must evaluate the ruling below.

D. Application of the Doctrine.

The district court pronounced this to be "precisely the

case for which the doctrine of judicial estoppel was created." ASC

II, 2003 WL 358737, at *3. After careful perscrutation of a

tangled record, we conclude that this determination fell

comfortably within the encincture of the court's discretion.

In its opposition to Synopsys's motion to dismiss, ASC

asserted unequivocally that it was "not claiming that defendant[]

breached an agreement to enter into a long term contract," but,

rather, its contract claim was "that LEDA breached its agreement to

negotiate in good faith." This was an unambiguous claim for breach

of the LOU — no more and no less — and by characterizing the claim

in that fashion, ASC danced out of reach of Synopsys's statute of

frauds defense. Having skirted that pitfall, ASC then adopted a

vastly different position. In its objection to Synopsys's motion

for summary judgment, it asserted that its breach of contract claim

related not to the LOU but to "a permanent [oral] agreement . . .

entered into by LEDA and ASC."

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 These positions are totally inconsistent. ASC's argument

on summary judgment directly contradicts its prior disclaimer of a

breach of contract theory based on an alleged parol agreement.

While "holding a litigant to his stated intention not to pursue

certain claims is different from the 'classic' case of judicial

estoppel," such inconsistencies may present an even "stronger

argument than do the classic cases for application of the

doctrine." Patriot Cinemas, 834 F.2d at 214 (emphasis in the

original); accord Wagner v. Prof'l Eng'rs in Cal. Gov't, 354 F.3d

1036, 1044 (9th Cir. 2004) ("Judicial estoppel applies to a party's

stated position whether it is an expression of intention, a

statement of fact, or a legal assertion.").

The second element in the judicial estoppel calculus is

present in spades. There is no question but that the district

court bought what ASC was selling the first time around. In its

order denying Synopsys's motion to dismiss the breach of contract

claim, the court stated:

Synopsys mistakenly assumes that ASC is
claiming a breach of an oral agreement to
grant it an exclusive marketing agreement . .
. . It then challenges this purported claim
based on the statute of frauds. In reality,
ASC is claiming that LEDA breached its
contractual obligation to make a good faith
effort to negotiate a permanent marketing
agreement that initially covered the United
States and later was amended to include
Canada.

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ASC I, 2001 WL 920029, at *2 n.2 (emphasis supplied). The court

then relied on ASC's stated position to repulse Synopsys's statute

of frauds assault and allow the breach of contract count to go

forward. See id. at *2. To that extent, ASC derived a direct (if

temporary) benefit from its original position.

To cinch matters, ASC — if allowed to pursue its nascent

oral contract theory at summary judgment — would have gained an

unfair advantage. Relying on ASC's prior representation, Synopsys

conducted discovery under the warranted assumption that it faced a

charge of failing to negotiate in good faith as called for by the

LOU. The factual predicate and legal elements of that charge are

materially different from the factual predicate and legal elements

of the charge that ASC attempted to advance at summary judgment.

Synopsys had every reason to assume, based on ASC's previous

statements, that the oral contract theory was not in the case. The

unfairness is apparent. Had the lower court allowed ASC to go

forward with its revisionist claim, it would have been sanctioning

what amounted to a sneak attack.

Given this background, we cannot fault the district

court's determination that ASC was playing fast and loose. The

court's rescript paints a convincing picture of a litigant who took

one position, used that position to its advantage at the motion to

dismiss stage, and later attempted to switch horses midstream to

revive a previously abandoned (and flatly inconsistent) claim. See

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ASC II, 2003 WL 358737, at *1-*3. The court's findings encompass

the basic elements of judicial estoppel: the assertion of

inconsistent positions and judicial acceptance of the original

position. On abuse of discretion review, these findings are fully

supportable, as is the court's follow-on inference that ASC was

carrying out a game of bait and switch.

In a desperate effort to blunt the force of this

reasoning, ASC mounts two additional arguments. First, it

maintains that applying judicial estoppel in this case would

countermand its right to plead in the alternative. See Fed. R.

Civ. P. 8(e)(2). In ASC's view, its first amended complaint should

be read as alleging, in the alternative, that LEDA/Synopsys not

only breached a duty, rooted in the LOU, to negotiate a permanent

agreement in good faith, but also entered into and subsequently

breached an oral distribution agreement.

This is artful dodging. Like the Fourth Circuit, Allen

v. Zurich Ins. Co., 667 F.2d 1162, 1167 (4th Cir. 1982), we can

envision cases in which the doctrine of judicial estoppel comes

into tension with a party's right to plead in the alternative.

Here, however, nothing in the first amended complaint suggests an

attempt to plead in the alternative — and at the motion to dismiss

stage, ASC expressly denied that it was proffering alternative

claims. On this record, the "pleading in the alternative" argument

is a red herring.

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 ASC's final asseveration is that its conduct should be

excused because its shift in position was attributable to evidence

unearthed during the course of pretrial discovery. To support this

asseveration, it points to the deposition of its president, Carl

Karrfault, taken in 2002 (well after the denial of the motion to

dismiss), during which Karrfault offered an account of the October

5 negotiations that tends to show the formation of a permanent

distribution contract.

This is smoke and mirrors. We acknowledge that, in

limited circumstances, courts have recognized a good faith

exception to the operation of judicial estoppel. See, e.g.,

Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1428 (7th Cir.

1993) (stating that a court may reject estoppel when "the position

adopted in the first suit was clearly wrong yet had been advanced

in good faith by the party now sought to be estopped"); 18B Charles

Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice

& Procedure § 4477, at 583-87 (2d ed. 2002) (collecting cases); cf.

Intergen, 344 F.3d at 144 ("We would not want to institute a rule

[of judicial estoppel] that unduly inhibits a plaintiff from

appropriately adjusting its complaint either to correct errors or

to accommodate facts learned during pretrial discovery."). For

example, that exception may be available if the responsible party

shows that the new, inconsistent position is the product of

information neither known nor readily available to it at the time

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the initial position was taken. See, e.g., Chaveriat, 11 F.3d at

1428; Konstandinis v. Chen, 626 F.2d 933, 939-40 (D.C. Cir. 1980);

see generally Wright, Miller & Cooper, supra § 4477, at 584 & n.57.

In this instance, ASC cannot colorably lay claim to the

exception. The newly discovered evidence to which it adverts

consists of the deposition testimony of its own president. When a

corporation takes a litigation position, we think it both sensible

and fair to impute to it the knowledge of its chief executive

officer. See United States v. Josleyn, 206 F.3d 144, 159 (1st Cir.

2000); 3 William Meade Fletcher, Fletcher Cyclopedia of the Law of

Private Corporations § 811, at 77-80 (perm. ed. 2002). In all

events, Karrfault's recollection of the October 5 negotiations was

readily available to ASC at the inception of the litigation — and

that fact alone renders the exception inapplicable. See, e.g.,

Czajkowski v. City of Chicago, 810 F. Supp. 1428, 1437 (N.D. Ill.

1993); see generally Wright, Miller & Cooper, supra § 4477, at 586

(noting that a "new understanding of the facts may not excuse a

party who has failed a standard of ordinary negligence").

Our decision that the district court acted within the

realm of its discretion in estopping ASC from claiming a breach of

an oral contract effectively ends this aspect of the case. On

summary judgment, ASC abandoned its earlier "failure to negotiate

in good faith" theory and the estoppel left it without an arguable

ground for opposing Synopsys's motion. Hence, the district court

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acted appropriately in entering brevis disposition for Synopsys on

the breach of contract count.

V. THE MOTION FOR SANCTIONS

Synopsys moves for sanctions against ASC and its counsel

based upon three theories: (i) that ASC continued to prosecute its

appeal even after the appeal became hopeless; (ii) that ASC made

misrepresentations in its brief and withheld material facts from

this court; and (iii) that ASC violated 1st Cir. R. 30(b)(1) by

refusing to cooperate with Synopsys in preparing the joint

appendix. Although the question is not free from doubt, we deny

the motion.

A. Frivolousness.

Appellate sanctions are a means of discouraging litigants

and their lawyers from either wasting an adversary's time and

resources or burdening the court with obviously groundless appeals.

See Transnat'l Corp. v. Rodio & Ursillo, Ltd., 920 F.2d 1066, 1072

(1st Cir. 1990); see also Fed. R. App. P. 38. Synopsys insists

that this is such a case. In its view, the appeal is frivolous

because it is barred by res judicata. See supra Part II.

"An appeal is frivolous . . . when the appellant's legal

position is doomed to failure — and an objectively reasonable

litigant should have realized as much from the outset." Toscano v.

Chandris, S.A., 934 F.2d 383, 387 (1st Cir. 1991). An appeal,

arguable at the outset, may become hopeless (and, thus, frivolous),

-27-
by reason of subsequent developments. Persisting in an appeal that

plainly has become moot or foreclosed by the operation of res

judicata would qualify under this branch of the frivolousness

doctrine. See, e.g., Westcott Constr. Corp. v. Firemen's Fund, 996

F.2d 14, 15 (1st Cir. 1993).

In this case, ASC's appeal was arguable when taken. Even

after the proceedings in California ripened into a judgment,

significant questions remained regarding the status of the supposed

settlement, the scope of the state court litigation, and the

efficacy of the resulting judgment. See supra Part II. These

uncertainties cast doubt over whether this appeal had become a dead

man walking. That doubt undermines the claim that persisting in

the appeal is sanctionable. See, e.g., Ins. Co. of West v. County

of McHenry, 328 F.3d 926, 929-30 (7th Cir. 2003); Carter v. C.I.R.,

784 F.2d 1006, 1009 (9th Cir. 1986).

B. Material Misstatements.

Synopsys's exhortation that we should impose sanctions on

ASC for material omissions in its appellate brief raises a close

question. This exhortation relates largely to ASC's argument

concerning the trial court's denial of its motion to amend the

misrepresentation count. See supra Part III(C). Synopsys is

correct in pointing out that ASC failed to mention in its brief

that it had opted to withdraw its motion to amend before the

district court denied that motion. We have indicated before that

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brazen misrepresentations in an appellant's brief can justify the

imposition of sanctions. Thomas v. Digital Equip. Corp., 880 F.2d

1486, 1491 (1st Cir. 1989). Given that benchmark, we certainly

possess the authority to sanction the omission here. See, e.g.,

id. (sanctioning an appellant for omitting material facts

concerning discovery requests); Ortiz Villafane v. Segarra, 797

F.2d 1, 2 (1st Cir. 1986) (sanctioning an appellant for falsely

claiming that he had filed a motion to amend).

ASC's explanation is that the district court never

formally ruled on its motion to withdraw the misrepresentation

count, leading it to assume that the withdrawal had no legal

significance. This is less an explanation than a lame excuse, and

we find it wholly inadequate. We note, however, that Synopsys's

other misstatement claims lack force. That is significant because

the misrepresentation claim was a sideshow — not the main event —

and the misleading omission was so easily exposed that it caused

neither Synopsys nor this court an iota of extra work. Courts may,

as a matter of discretion, decline to impose sanctions. See, e.g.,

Oakville Dev. Corp. v. FDIC, 986 F.2d 611, 615 n.5 (1st Cir. 1993).

Under the circumstances of this case, we find that course

advisable.

C. Noncompliance with Local Rules.

Synopsys's final ground for sanctions relates to 1st Cir.

R. 30(b)(1). That rule provides in pertinent part that "[t]he

-29-
parties are encouraged to agree on the contents of the appendix."

Id. It then provides for various steps that must be taken in the

absence of an agreement.

In the last analysis, the rule merely encourages

cooperation; it does not mandate it. Moreover, experience teaches

that the encouraged cooperation invariably entails a certain amount

of pulling and hauling. As to the alternative steps that ASC was

expected to take in the absence of an agreement, the record

consists mostly of finger-pointing and is insufficient to allow us

to assess the magnitude of the claimed violations. Finally, the

rule imposes correlative obligations on an appellee, and the record

on appeal is too sparse to warrant pinning the blame for

transgressions exclusively on ASC. Cf. Quinones-Pacheco v. Am.

Airlines, Inc., 979 F.2d 1, 8 n.9 (1st Cir. 1992) (denying

sanctions and observing that "[t]he lemon should not be allowed to

reap a reward for calling the grapefruit sour"). Consequently, we

eschew any award of sanctions on this ground.

VI. CONCLUSION

We need go no further. For the reasons alluded to above,

we deny Synopsys's motion to dismiss this appeal; affirm the

district court's decision to dismiss ASC's misrepresentation claim

and to deny the subsequent motion to amend that claim; uphold the

entry of summary judgment on the breach of contract claim; and

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decline to impose sanctions. Withal, we direct that costs be taxed

in favor of Synopsys (as the prevailing party).

So Ordered.

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