USCA1 Opinion
June 16, 1994
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 93-1896
No. 93-1897
COOL LIGHT COMPANY, INC.,
Plaintiff, Appellant,
v.
GTE PRODUCTS CORPORATION,
Defendant, Appellee.
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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.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Torruella and Stahl, Circuit Judges.
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Edwin A. McCabe with whom Karen Chinn Lyons, Joseph P. Davis, III
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and The McCabe Group were on brief for appellant.
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Allan van Gestel with whom Marie P. Buckley, John B. Daukas, and
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Goodwin, Procter & Hoar were on brief for appellee.
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May 25, 1994
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BREYER, Chief Judge. The appellant, Cool Light
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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
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A
The Dispute Between the Parties
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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
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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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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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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.,
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973 F.2d 31 (1st Cir. 1992), cert. denied, 113 S. Ct. 1417
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(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
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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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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.
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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
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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
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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.
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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
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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,
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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,
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Chauffeurs, Warehousemen & Helpers Union, Local No. 59 v.
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Superline Transp. Co., 953 F.2d 17, 19 (1st Cir. 1992).
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A
The Parties' Contract and Fraud Disputes
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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
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(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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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
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Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398-402 (1981);
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Sidney v. Zah, 718 F.2d 1453, 1457-58 (9th Cir. 1983); Itel
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Capital Corp. v. Cups Coal Co., 707 F.2d 1253, 1260-61 (11th
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Cir. 1983); Hurley v. Beech Aircraft Corp., 355 F.2d 517,
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522 (7th Cir.), cert. denied, 385 U.S. 821 (1966). As far
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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.
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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.
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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
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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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upon that alleged theft. See, e.g., Plaintiff's Complaint
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Count IV (Taking of a Trade Secret, Mass. Gen. L. ch. 93
42); id. Count VII (Unjust Enrichment). As was true of the
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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
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judge and jury found against Cool Light on all the claims
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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
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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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