Advanced Testing Technologies Inc. v. CDI Corp.

PER CURIAM:

Advanced Testing Technologies, Inc. appeals the district court’s grant of summary judgment in favor of CDI Corporation and the M&T Company (collectively, CDI), in this tortious interference action. Exercising plenary review, see Weeks v. Harden Mfg. Corp., 291 F.3d 1307, 1311 (11th Cir. 2002), and with the benefit of oral argument, we affirm.

I

Because we write for the parties, we assume familiarity with the underlying facts of the case and recite only what is necessary to resolve this appeal.

ATTI and CDI are government defense contractors. ATTI’s three counts of tor-tious interference—with contractual relations (Count I), business relations (Count II), and potential business relations (Count III)—share the same factual basis. ATTI alleged that the United States Air Force decided not to purchase seven newly redesigned Phase Noise Measurement Modules (PNMMs) from ATTI because Robert Buckley (a CDI engineer who previously worked at ATTI and who had been involved in the design of the PNMMs), led the Air Force to believe that the PNMMs that ATTI had sold to the Air Force in the early 1990s could be repaired to meet the calibration.requirements of the Radar System Improvement Program (RSIP). ATTI asserted that Mr. Buckley was aware, from his employment at ATTI in 2007, that the existing PNMMs were not repairable because they could not be consistently calibrated to RSIP standards and were therefore unusable by the Air Force.

After the conclusion of briefing on CDI’s motion for summary judgment, the district court held a telephone conference regarding one of CDI’s assertions of undisputed fact, which stated as follows:

Mr. Buckley advised the Air Force that the PNMMs could not consistently test out to the particular -158dBc at 500 kHz noise floor (required by two of the Units Under Test), but he also advised the Air Force that a commercially-available device known as the Agilent E5052B could be used as a workaround to solve this problem. When used in combination with the Agilent E5052B ... Mr. Buckley believed that the existing PNMMs would meet the remaining RSIP specifications.

D.E. 56 at ¶ 27. As summarized by the district court, “[a]t this conference, ATTI acknowledged that it had no basis for denying that [Mr.] Buckley made this disclosure,” and, “[a]fter the conference, ATTI, in a letter to the Court, ‘acknowledge^] that several witnesses did generally testify that [Mr. Buckley] made a verbal suggestion ... of using the [Agilent] to augment the [PNMMs].’ ” D.E. 74 at 19.

In granting summary judgment for CDI, the district court concluded that there were no misrepresentations made by CDI (through Mr. Buckley) to the Air Force. “ATTI has based its claim almost entirely on the suggestion that [Mr.] Buckley told the Air Force he could fix the PNMMs without telling them that they could not measure the 158 without using the Agilent. But, as it turns out, it is undisputed that [Mr.] Buckley was upfront with the Air Force about this” and “the Air Force knew all along what [Mr.] Buckley was propos-ing_” Id. at 20. The district court rejected what it perceived to be an attempt by ATTI in its post-conference letter to “offer up a new Buckley misrepresentation”—that Mr. Buckley did not explain to the Air Force the technical work and costs required to incorporate the Agilent workaround. Id. at 19. In addition, the district court concluded that there was no evidence the Air Force was misled by any material misrepresentations or omissions and that CDI was entitled to the fair competition privilege. See id. at 22.

ATTI argues the district court “missed that the 158’ issue was not the only thing that [Mr.] Buckley knew was wrong with the PNMMs.” Br. for Appellant at 36. “[J]ust as crucial,” ATTI says, is 'that, “even if calibrated[,] the PNMMs could not keep calibration because of component degradation—and so they functioned intermittently" Id: at 38. Accordingly, ATTI submits there are disputed issues of material fact that should be presented to a jury.

II

To succeed on its tortious interference claims under Georgia law, ATTI must show “(1) improper action or wrongful conduct by [CDI] without privilege; (2) [that CDI] acted purposely and with malice with the intent to injure; (3) [that CDI] induced a breach of contractual obligations or caused [the Air Force] to discontinue or fail to enter into an anticipated business relationship with [ATTI]; and (4) [that CDI’s] tortious conduct proximately caused damage to [ATTI].” Tribeca Homes, LLC v. Marathon Inv. Corp., 322 Ga.App. 596, 745 S.E.2d 806, 808-09 (2013) (footnote call number and citation omitted). At bottom, ATTI’s claims are based on the assertion that Mr. Buckley’s alleged misrepresentations caused the Air Force not to buy its replacement PNMMs.

As noted, ATTI argues that there is a genuine issue of fact regarding whether Mr. Buckley misrepresented his ability to repair the PNMMs in light of “the inter-mittency issue.” But, as we read the record, the district court correctly concluded that ATTI did not properly raise this theory of liability. See D.E. 74 at 20 n.16. Indeed, despite the parties’ summary judgment briefing, the telephone conference regarding the critical question of what the evidence showed Mr. Buckley represented (or misrepresented) to the Air Force, and follow-up communications from the parties post-conference, it was still not clear to the district court whether ATTI was arguing that Mr. Buckley made a misrepresentation to the Air Force regarding the inter-mittency issue. Therefore, the district court saw fit to dispose of any suggestion of such an argument in a footnote. We have consistently rejected attempts by appellants to obtain reversal on a theory which was not properly asserted below, see, e.g., Irving v. Mazda Motor Corp., 136 F.3d 764, 769 (11th Cir. 1998) (refusing to consider an argument not raised in the district court and.observing that “[t]oo often our colleagues on the district courts complain that the appellate cases about which they read were not the cases argued before them”), and we see no reason to depart from this general rule here.

Even if we assume that ATTI created a genuine issue of material fact as to whether Mr. Buckley made misrepresentations, we nevertheless affirm the district court’s grant of summary judgment in favor of CDI. We can affirm on any ground supported by.thé record, see Lucas v. W.W. Grainger, Inc., 257 F.3d 1249, 1256 (11th Cir. 2001), and CDI argues that there was a lack of evidence as to the element of inducement. See Br. for Appellees at 25-26. We agree with CDI about inducement, and without inducement there cannot be causation.

As the district court explained in its summary judgment order, the Air Force “was not being led blindly by [Mr.] Buckley.” D.E. 74 at 22. The Air Force knew as early as 2007, and again in 2010, from ATTI’s own statements and presentations that their PNMMs had deteriorated and that Mr. Buckley’s work might have limitations. See, e.g., D.E. 56 at ¶¶ 57-58, 64, 103-105.

Tortious interference is based on the premise that a defendant’s false representation induced a third party to not do business with the plaintiff. It follows that there cannot be any liability if the third party to whom the defendant made the representation knew the representation was inaccurate and nevertheless still refused to do business with the plaintiff. In such a scenario, there is no causal nexus between the alleged misrepresentation and the plaintiffs lost business opportunity. See generally Restatement (Second) op ToRts § 547 (1977) (“[T]he maker of a fraudulent misrepresentation is not liable to another whose decision to engage in the transaction that the representation was intended to induce is not caused by his belief in the truth of the representation but is the result of an independent investigation made by him.”).

Here, the Air Force was not satisfied with ATTI’s claims that the existing PNMMs were beyond economic repair. See D.E. 52 at 46:1-7, 90:11-15, 92:21-93:8, 114:6-115:2, 116:13-22; D.E. 68 at 16:25-17:4. Given the Air Force’s budgetary issues, trying to repair the existing PNMMs at an initial cost of $36,500, and a final cost of $135,000, see D.E. 56 at ¶¶ 88, 98, was simply “[a] lot more cost effective,” D.E. 45 at 116:6, than buying additional new ones from ATTI at a cost of $3.2 million, see D.E. 59-3; D.E. 42 at 141:9-11. See also D.E. 45 at 64:9; D.E. 47 at 124:22-125:9; D.E. 49 at 94:14-18, 121:3-122:7.

Moreover, the Air Force was satisfied with the work Mr. Buckley performed. See D.E. 46 at 37:4-6; D.E. 49 at 118:25-119:7; D.E. 68 at 19:20-24, 74:4-7. And Mr. Buckley was up front about the need to use some workarounds for the PNMMs to achieve the desired level of operability. See D.E. 46 at 103:8-104:4; D.E. 47 at 137:9-138:7; D.E. 49 at 116:18-24, 122:8-24, 138:19-140:1; D.E. 50 at 44:15-45:14. Tellingly, when any Air Force witness was asked directly whether or not Mr. Buckley made any false representations as to his ability to repair the PNMMs, the answer was always “no.” See D.E. 45 at 115:13-16; D.E. 46 at 37:7-14; D.E. 47 at 141:2-8; D.E. 49 at 122:8-24; D.E. 51 at 44:5-13; D.E. 52 at 117:8-16; D.E. 68 at 75:3-11, 77:17-25, 83:13-17. We note, as well, that although the Air Force did buy three new PNMMs from ATTI in 2008, it never used them. See D.E. 51 at 32:9-11.

On this record, we conclude there is no triable issue of fact on the elements of inducement or proximate causation. ATTI -has not created a juiy question as to whether, but for Mr. Buckley’s alleged misrepresentations, the Air Force would have bought the new PNMMs. See, e.g., Smith v. Morris, Manning & Martin, LLP, 293 Ga.App. 153, 666 S.E.2d 683, 694 (2008) (“We find that Smith and Premier cannot establish that the law firm’s alleged actions interfered with their business relationship with Schoenbaum because they cannot establish that these actions influenced Schoenbaum’s decisions in negotiating with Smith, leading him to offer Smith a ten percent profit participation, rather than the figure referenced in the pro for-ma.”); Tribeca Homes, LLC, 745 S.E.2d at 808-09 (“And, any damage claimed to have been suffered by a plaintiff does not proximately result from the defendants’ alleged misconduct, if the damage would have occurred notwithstanding their misconduct.”) (internal quotation marks, footnote call number, and citation omitted).

Ill

In sum, we affirm the district court’s grant of summary judgment in favor of the defendants.

AFFIRMED.