Northeast Data v. Microdata Corp. ( 1994 )

[Not for Publication]
United States Court of Appeals
For the First Circuit
No. 94-1266
NORTHEAST DATA SYSTEMS, INC.,
Plaintiff, Appellant,
v.
MICRODATA CORPORATION,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert B. Collings, U.S. Magistrate Judge]
Before
Cyr and Stahl, Circuit Judges,
and Zobel,* District Judge.
Roger S. Davis with whom Cheri L. Hoff and Davis, Rubin & Parker,
P.A. were on brief for appellant.
Frederick W. Rose with whom Gianfranco A. Pietrafesa and Cooper,
Rose & English were on brief for appellee.
*Of the District of Massachusetts, sitting by designation.
Per Curiam. Plaintiff-appellant Northeast Data
Per Curiam.
Systems appeals the district court's denial of its motion for
sanctions against defendant-appellee McDonnell Douglas
Computer Systems Company. We affirm.
I.
PRIOR PROCEEDINGS
Plaintiff originally commenced this action in 1983
in state court against Microdata Corporation.1 Defendant
removed this action to the United States District Court for
the District of Massachusetts where plaintiff subsequently
filed an amended complaint charging defendant with breach of
contract, interference with contractual and advantageous
relationships, deceit, breach of the implied covenant of good
faith and fair dealing, breach of fiduciary duty, bad faith
termination, antitrust law violations, and violation of Mass.
Gen. L. ch. 93A 11. Defendant filed an answer and a
counterclaim containing, inter alia, claims for breach and
tortious breach of the implied covenant of good faith and
fair dealing, breach of fiduciary duty, bad faith
termination, antitrust violations, and violation of Mass.
Gen. Laws ch. 93A 11.
Post judgment, plaintiff filed with the district
court a motion seeking sanctions against defendant pursuant
1. Microdata Corporation was acquired by McDonnell Douglas
Corporation in 1979 and renamed McDonnell Douglas Computer
Systems Company during the pendency of this litigation.
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to Fed. R. Civ. P. 11 (1988), 28 U.S.C. 1927, and the
inherent powers of the court. In a lengthy written order,
the magistrate judge denied plaintiff's motion and this
appeal was taken.
II.
DISCUSSION
DISCUSSION
Defendant concedes that the only issue on appeal is
whether the lower court erred in denying sanctions. More
specifically, plaintiff argues that the magistrate judge
erred in failing to find that defendant 1) filed its
counterclaims solely for the purpose of delay and harassment;
2) knew at the time of its filing, and subsequently, that the
claims lacked merit; and 3) filed false answers to
interrogatories to mislead and obstruct plaintiff. Plaintiff
primarily offers as evidence the interrogatories of two
individuals who defendant claimed had knowledge of the
factual basis for its counterclaims, and the subsequent
deposition testimony of these same two witnesses which
plaintiff claims show that neither actually possessed any
such factual knowledge. Plaintiff argues that these
allegedly inconsistent statements prove that defendant failed
to conduct a sufficient pre-filing inquiry with respect to
its counterclaims and that such failure should merit
sanctions.
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Because all of the events animating this appeal
occurred prior to December 1, 1993, the magistrate judge
relied upon Fed. R. Civ. P. 11 (1988) and not the 1993
amended version.2 We review a district court's denial of
sanctions for abuse of discretion. See Navarro-Ayala v.
Nunez, 968 F.2d 1421, 1425 (1st Cir. 1992) ("[A] party
protesting an order in respect to sanctions bears a
formidable burden in attempting to convince the court of
appeals that the district judge erred in finding that Rule 11
was, or was not, violated.").
In his order denying plaintiff's motion, the
magistrate judge observed that this same argument served as
the focal point for plaintiff's March 1987 motion to strike
the counterclaims and for sanctions, a motion denied by the
court. Before reaching the merits of plaintiff's second
request for sanctions, the magistrate judge noted that
plaintiff never filed a motion for reconsideration of the
first denial. He then held that "based upon the factual
recitation incorporated in the affidavit of [defendant's
counsel] as well as a review of the complete transcripts of
the [two] depositions, it cannot be found that Microdata
answered the interrogatories in bad faith, attempted to
mislead plaintiff or failed to conduct an adequate pre-filing
investigation."
2. Neither party has challenged this decision on appeal.
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A comprehensive review of the lengthy history of
this litigation and the careful and full review given by the
magistrate judge of the latest request for sanctions not only
satisfies us that there was no abuse of discretion, manifest
or otherwise,3 but that this appeal is frivolous.
III.
CONCLUSION
For the foregoing reasons, we affirm the district
court's denial of sanctions.
Affirmed. Double costs.
3. The magistrate judge also separately reviewed and, after
careful consideration, dismissed each of plaintiff's
additional evidentiary offers, i.e., that defendant 1)
improperly delayed the completion of a deposition; 2)
obstructed defendant's motion for summary judgment; 3)
frivolously reopened discovery; and 4) failed to prosecute
its counterclaims. Because we agree with the magistrate
judge's finding that none of these allegations merit
sanctions in this case, we need not regurgitate his
discussion here.
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