Powercomm, LLC v. Holyoke Gas & Electric ( 2011 )

United States Court of Appeals
For the First Circuit
No. 10-2327
POWERCOMM, LLC,
Plaintiff, Appellant,
v.
HOLYOKE GAS & ELECTRIC DEPARTMENT;
JAMES M. LAVELLE; BRIAN C. BEAUREGARD;
JEFFREY BROUILLARD; MICHAEL COSTELLO; CHARLES L. MARTEL,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
Before
Boudin, Selya and Dyk,*
Circuit Judges.
Geoffrey M. Bohn with whom Robert A. Battey, Bohn & Kouretas,
PLC, and Steven S. Albro were on brief for appellant.
John J. Ferriter with whom Ferriter & Ferriter LLC was on
brief for appellees.
September 14, 2011
*
Of the Federal Circuit, sitting by designation.
BOUDIN, Circuit Judge. PowerComm, LLC--plaintiff in the
district court and appellant here--is a small, family-owned firm
which, among other things, does construction and related work on
electrical utility lines. It is owned by Olga Bruce and her son
David Kwasnik. Bruce and her son David are of Puerto Rican
extraction and the firm employs other Puerto Rican workers among
its diverse workforce. Defendant-appellant Holyoke Gas & Electric
Department ("HG&E") operates a municipally-owned utility in
Holyoke, Massachusetts.
Starting in 2003, PowerComm was awarded four successive
annual contracts to do electrical work, such as line repair, for
HG&E. HG&E is directed by three commissioners, appointed by the
city's mayor, who have final authority to award such contracts.
The final PowerComm contract with HG&E--the 2006 contract--ran from
August 27, 2006, to August 25, 2007. On June 21, 2007, a PowerComm
employee was severely electrocuted and burned in an electrical
accident that occurred while working on an HG&E project.
In response to the accident, James Lavelle, the Senior
Manager of HG&E, ordered a work stoppage, or "stand-down," for
PowerComm on HG&E projects until investigations into the accident
could be completed. The federal Occupational Safety and Health
Administration ("OSHA") investigated and ultimately fined
PowerComm. HG&E also hired an independent engineering firm to do
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its own investigation, which was completed in late September 2007
by which time the 2006 contract had expired.
Contemporaneously, HG&E put the 2007 annual contract out
to bid, inviting PowerComm and thirteen other contractors to
participate. HG&E's Purchasing Coordinator, Yocelyn Delgado,
evaluated the resulting six bids and her spreadsheet analysis
concluded that the lowest bid--from Williams Construction
("Willco")--was $70,000 (or about 19 percent) lower than
PowerComm's, which was the second lowest. Under state law, the
winner must be "the lowest responsible and eligible bidder." Mass.
Gen. Laws ch. 30, § 39M(a) (2011).
Delgado recommended to Lavelle that HG&E award the
primary contract to Willco and the secondary contract to PowerComm;
the secondary contract covers any work that the primary contractor
cannot do. About a week after Delgado made her recommendation,
which Lavelle endorsed, the commissioners approved the awards as
recommended. However, Willco could not post the required surety bond
within the statutory time limit, Mass. Gen. Laws ch. 30, § 39M(c)
(2011), and eventually the commissioners voted to re-bid the contract.
By this time, PowerComm had already declined to accept
the secondary contract. It now refused to participate in the
January 2008 re-bidding process, having already given notice of
claims against HG&E charging it with discrimination and breach of
contract. After an unsuccessful administrative claim on these
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charges, PowerComm in July 2009 filed an eight-count complaint
against HG&E and individual defendants in federal district court in
Massachusetts.1
The counts charged that racial discrimination against
Puerto Ricans had led to early termination of the 2006 contract,
rejection of PowerComm's bid on the 2007 contract and creation of
a hostile work environment. The charges were underpinned by
remarks allegedly made by some of the named defendants. Certain of
the comments were general in character (for example, that "Puerto
Ricans are taking over HG&E" and "Puerto Ricans destroyed the City
of Holyoke.") but one set, discussed below, were directed against
David Kwasnik.
Counts I-III of the complaint, based on 42 U.S.C.
§ 1981, specifically alleged unlawful termination of the final,
2006 PowerComm contract and unlawful failure to award it the new,
2007 one along with creation of the hostile work environment;
counts IV and V, under 42 U.S.C. § 1983, alleged equal protection
and due process violations; count VI rested on state law, Mass.
Gen. Laws ch. 12, § 11I (2011), and concerned two alleged threats
against David Kwasnik; count VII, based on 42 U.S.C. § 1985,
1
The named defendants are all HG&E employees. In addition to
Lavelle, they are Brian Beauregard, Superintendent of the
Electrical Division; Jeffrey Brouillard, Senior Electrical
Engineer; Michael Costello, General Foreman for Electric
Distribution; and Charles Martel, Facilities and Environmental
Health and Safety Coordinator.
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charged conspiracy to deprive PowerComm of its civil rights; and
count VIII invoked state law prohibiting unfair or deceptive acts
and practices, Mass. Gen. Laws ch. 93A, §§ 9, 11 (2011), and
related to all of the charged conduct.
HG&E sought summary judgment and obtained dismissal of
all counts. PowerComm, LLC v. Holyoke Gas & Elec. Dep't., 746 F.
Supp. 2d 325 (D. Mass. 2010). The district court assumed as fact
that the alleged racial remarks by HG&E personnel had occurred but
--applying the customary summary judgment standard--the court ruled
that the 2006 contract had not been terminated early; that no
reasonable jury could find that the 2007 contract award was tainted
by animus; and that the derogatory remarks, if made, fell short of
creating a hostile work environment.2
On PowerComm's appeal, our review is de novo both as to
conventional issues of law and as to the question, common in
summary judgment cases, of whether the disputed evidence gave rise
to a genuine issue of material fact that should be submitted to a
jury. We take the facts alleged and all reasonable inferences
therefrom in favor of the non-moving party--and may affirm only if
the record reveals no genuine issue as to any material fact and the
movant is entitled to judgment as a matter of law. URI Student
Senate v. Town of Narragansett, 631 F.3d 1, 7 (1st Cir. 2011).
2
The court also rejected the claims brought under 42 U.S.C.
§ 1983, neither of which is appealed here, as well as the other
less central claims discussed below.
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The appeal primarily turns on whether a reasonable jury
could decide in plaintiff's favor. PowerComm does argue that the
district court misunderstood the proper legal standard, citing one
instance where the court used the word "would" in place of "could."
But the court used the correct locution throughout the opinion and
the single "would" was a meaningless slip. Anyway, our own review
of the state of the evidence is without deference to the district
court's evaluation.
PowerComm also alleges as legal error that its first two
claims should be judged under mixed-motive analysis, Price
Waterhouse v. Hopkins, 490 U.S. 228 (1989), because there is
"direct evidence" of racial discrimination. Id. at 277 (O'Connor,
J., concurring). However, "direct evidence" refers to "a smoking
gun" showing that the decision-maker relied upon a protected
characteristic in taking an employment action. Smith v. F.W. Morse
& Co., 76 F.3d 413, 421 (1st Cir. 1996). PowerComm has adduced no
such evidence here.
Claims alleging racial discrimination can, as in this
case, be asserted under various overlapping federal and state
provisions, varying in their formulation of elements, with further
embroidery added by judicial precedent.3 Much of the parsing
3
E.g. Conward v. Cambridge Sch. Comm., 171 F.3d 12, 18-19 (1st
Cir. 1999) (employment discrimination under Title VII and 42 U.S.C.
§ 1981); T & S Serv. Assocs., Inc. v. Crenson, 666 F.2d 722, 723-24
(1st Cir. 1981) (employment discrimination in public bidding under
42 U.S.C. 1981); Danco, Inc. v. Wal-Mart Stores, Inc., 178 F.3d 8,
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sometimes required can be bypassed here simply by positing that
PowerComm would have a case for the jury either if its 2006
contract were arguably terminated early because of racial bias or
if it could somehow connect the selection of another contractor in
2007 to any such animus.
On neither branch of these two theories was there
sufficient evidence to create a genuine issue and send the case to
the jury. PowerComm did an adequate job of creating a jury issue
on the question of whether some HG&E employees displayed racial
animus over the life of the PowerComm contracts. We assume too
that a jury could find that HG&E in some corporate sense was
arguably aware, from advertising and otherwise, that the family
that owned PowerComm was of Puerto Rican extraction even though
many of its employees were not Puerto Rican.
But no evidence indicates that the 2006 contract was
terminated early or that the stand-down after the accident--which
PowerComm equates with termination--was initiated, conducted or
prolonged based on racial animus. The contract ran out while
HG&E's consultant was completing its investigation after an
accident requiring several weeks of hospitalization for the injured
10 (1st Cir. 1999) (hostile work environment claim under 42 U.S.C.
§ 1981), cert denied, 528 U.S. 1105 (2000); Swanset Dev. Corp. v.
City of Taunton, 668 N.E.2d 333, 335 (Mass. 1996) (Mass. Gen. Laws
ch. 12, § 11I); Aulson v. Blanchard, 83 F.3d 1 (1st Cir. 1996) (42
U.S.C. § 1985(3)); Quaker State Oil Refining Corp. v. Garrity Oil
Co., 884 F.2d 1510 (1st Cir. 1989) (Mass. Gen. Laws ch. 93A).
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worker.4 Lavelle, who ordered the stand-down, is not alleged to
have made derogatory remarks or to have been aware of them.
PowerComm suggests that there was something suspicious
about the hiring of an independent engineering consultant to
evaluate the situation instead of having government regulators and
HG&E do their own assessment, as was previously done. In fact, the
record reveals that, given the serious injury, HG&E was concerned
about litigation and also that HG&E had employees conducting
similar work, making even more important an explanation and remedy.
PowerComm has not connected the stand-down with racial animus.
As for the bidding on the 2007 contract, HG&E's evidence
was that Willco's bid was significantly lower and, in addition to
its obligations under state law, Holyoke citizens would benefit
from using the lowest cost qualified provider of services. The
recommendation was made by Delgado, endorsed by Lavelle, and
approved by the commissioners; again, nothing connects any of them
with racial animus. PowerComm has not demonstrated that the
decision was affected by input from Brouillard and Costello, both
of whom are alleged to have made remarks demonstrating
discriminatory animus.
4
PowerComm contends that the contract was terminated
prematurely because the contract contained an option for an
additional year of work. While the option provision does not
clearly specify which party has the right to extend the contract,
neither party alleges that either side took any steps to exercise
the option.
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PowerComm suggests that HG&E acted in a suspect manner
because, when Willco could not post the required bond in time, HG&E
initially agreed that it could instead secure an irrevocable letter
of credit. This, the Attorney General's office ultimately advised,
was not permissible and--as a result--the contract was rebid. But
this ruling replaced earlier contrary advice from that office and
there is nothing suspicious about taking reasonable steps to secure
a lower price. There is no evidence that HG&E acted in bad faith
or out of discriminatory animus in attempting to assist Willco in
obtaining the required bond or exploring the possibility of
substituting a letter of credit, even though neither initiative was
ultimately successful.5
In the meantime--while Willco's bond status was being
resolved--PowerComm had declined to become the secondary supplier
on the contract. PowerComm then resisted entreaties from HG&E to
bid in the reopened bidding process. As with the alleged
termination of the 2006 contract, nothing beyond supposition and
innuendo connects PowerComm's failure to receive the 2007 contract
with racial animus.
5
Similarly, while the bond was required to be posted within a
specified period, HG&E employees have stated without contradiction
that they believed--based on training conducted by the state
Attorney General's office--that it was acceptable to provide Willco
this additional time in order to finalize the contract and achieve
substantial savings for HG&E's ratepayers.
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Finally, PowerComm alleges that it was subjected to a
hostile work environment based on disparaging comments made by HG&E
employees or officials about Puerto Ricans. It is common ground
that hostile work environment claims, charging violation of § 1981
or Title VII, can be based on racial bias. Lattimore v. Polaroid
Corp., 99 F.3d 456, 463 (1st Cir. 1996). To succeed, a claimant
must establish harassment "sufficiently severe or pervasive so as
to alter the conditions of plaintiff's employment and create an
abusive work environment." Douglas v. J.C. Penney Co., 474 F.3d
10, 15 (1st Cir. 2007).
Although many cases involve egregious conduct, e.g.,
Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 59-60 (1986), the
Supreme Court has taken "a middle path between making actionable
any conduct that is merely offensive and requiring the conduct to
cause a tangible psychological injury." Harris v. Forklift Sys.,
Inc., 510 U.S. 17, 21 (1993). Without describing the offensive
remarks in detail, they might well be sufficient in some
circumstances to make out a case for a jury.
Here, the only PowerComm employee who might plausibly
claim to have been subjected to an abusive work environment is
PowerComm employee and part-owner David Kwasnik. PowerComm
employee Altagege Perez submitted a brief affidavit alleging that
he heard Costello and Brouillard make disparaging comments about
Puerto Ricans; this affidavit falls far short of adequate support
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for a hostile work environment claim by Perez but it slightly
bolsters David Kwasnik's more focused account.
As to David Kwasnik, PowerComm employee Michael Sharp
alleged that Costello had expressed dislike of Puerto Ricans and
told him to make sure that David Kwasnik stayed away from HG&E work
sites. Kwasnik, saying that another PowerComm employee had
confirmed this to be Costello's view, alleged that such threats led
him to stay away from the HG&E site. The suggestion is that this
caused him to be deprived of earnings from working on HG&E
projects.
We will assume that the evidence was sufficient so that
David Kwasnik might show that the racially-based threats subjected
him to an abusive work environment and to both psychological and
economic harm. However, David Kwasnik is not a named plaintiff and
cannot recover for harm to himself in a case to which he is not a
party. Indeed, as he himself had no actual or potential
contractual relationship with HG&E, his ability to bring a section
1981 claim is highly doubtful in this circuit. Danco, Inc. v. Wal-
Mart Stores, Inc., 178 F.3d 8, 14 (1st Cir. 1999), cert denied, 528
U.S. 1105 (2000). Compare Domino's Pizza, Inc. v. McDonald, 546
U.S. 470, 476 n.3. (2006)(reserving the question of suit by a non-
contracting party).
PowerComm, however, is a named plaintiff and has the
requisite contractual relationship with HG&E on which to ground a
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claim under section 1981. Conceivably, a company could be injured
by a hostile work environment inflicted on its employees because
this might in some cases be shown to impair its own ability to do
its contractual work. We assumed in Danco that this might be a
basis for liability but did not have to resolve the question there.
Danco, 178 F.3d at 14, 16. Nor do we have to resolve it here.
In this case PowerComm's only serious assertions of harm
to it rest on the alleged termination of its 2006 contract and
failure to win the 2007 contract. Even if David Kwasnik was driven
from the site and lost earnings, nothing suggests that the total
work available for PowerComm was diminished. Its own economic
damage testimony, tendered at the summary judgment stage, was
devoted to loss of provider status and other alleged harms, but did
not assert lost revenue based on David Kwasnik's absence.
PowerComm's remaining claims do not require separate
discussion. PowerComm advanced a conspiracy charge under 42 U.S.C.
§ 1985 and a claim that HG&E engaged in unfair or deceptive acts or
practices under Mass. Gen. Laws ch. 93A (2011), but both are
presented in wholly conclusory terms on appeal and are therefore
forfeited. United States v. Zannino, 895 F.2d 1, 17 (1st Cir.),
cert denied, 494 U.S. 1082 (1990).
PowerComm's charge of improper threats under Mass. Gen.
Laws ch. 12, § 11I (2011) never identified the legal rights against
which the threats were directed. PowerComm cites Lecrenski Bros.
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Inc. v. Johnson, 312 F. Supp. 2d 117 (D. Mass. 2004), for the
proposition that it need not identify such rights in its complaint,
id. at 122-23; but PowerComm has now gone through summary judgment
and briefing on appeal and has still not identified the supposed
right or offered any other explanation of how this claim adds
anything significant to its battery of charges.
PowerComm also alleges that it was denied adequate
discovery but both claims of error are inadequately developed in
the opening brief on appeal and so are not properly preserved for
review. KPS & Assoc., Inc. v. Designs by FMC, Inc., 318 F.3d 1,
25 (1st Cir. 2003). If they were considered, the district judge's
rulings would be reviewed for abuse of discretion, Boston Gas Co.
v. Century Indem. Co., 529 F.3d 8, 17-18 (1st Cir. 2008), a
discretion rarely overturned in matters of discovery.
Affirmed.
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