
USCA1 Opinion

	




          June 16, 1994                              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.                                   _____________________                                       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.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Robert E. Keeton, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                         Torruella and Stahl, Circuit Judges.                                              ______________                                 ____________________            Edwin A. McCabe with  whom Karen Chinn Lyons, Joseph P. Davis, III            _______________            _________________  ____________________        and The McCabe Group were on brief for appellant.            ________________            Allan  van Gestel with whom Marie P. Buckley,  John B. Daukas, and            _________________           ________________   ______________        Goodwin, Procter & Hoar were on brief for appellee.        _______________________                                 ____________________                                     May 25, 1994                                 ____________________                       BREYER,  Chief Judge.   The appellant,  Cool Light                                ___________             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.                                         -3-                                          3                                         -4-                                          4                                          I                                      Background                                      __________                                          A                           The Dispute Between the Parties                           _______________________________                       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                                 ____________________                       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                                         -5-                                          5             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.                                         -6-                                          6                       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.,                                     ______________     ________________             973 F.2d  31 (1st Cir. 1992), cert.  denied, 113 S. Ct. 1417                                           _____________             (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                                         -7-                                          7                            Cool Light's Rule 60(b) Motion                            ______________________________                       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                                         -8-                                          8             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.             ______________     _________________             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                                                      ___             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                                          ___             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.                               ___                       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                                       ___                                         -9-                                          9             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                              __________________________                       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,                                             ___ ______    _____________             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.                                                                 _____                                         -10-                                          10             United States, 993 F.2d 274, 277 (1st Cir. 1993); Teamsters,             _____________                                     __________             Chauffeurs, Warehousemen  & Helpers  Union, Local No.  59 v.             _________________________________________________________             Superline Transp. Co., 953 F.2d 17, 19 (1st Cir. 1992).             _____________________                                         -11-                                          11                                          A                       The Parties' Contract and Fraud Disputes                       ________________________________________                       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                                __________     _____             (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                                         -12-                                          12             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                                                                _________             Dep't Stores, Inc. v. Moitie, 452 U.S. 394,  398-402 (1981);             __________________    ______             Sidney  v. Zah, 718 F.2d 1453, 1457-58 (9th Cir. 1983); Itel             ______     ___                                          ____             Capital Corp. v. Cups Coal Co., 707 F.2d 1253, 1260-61 (11th             _____________    _____________             Cir. 1983);  Hurley v. Beech  Aircraft Corp., 355  F.2d 517,                          ______    _____________________             522  (7th Cir.), cert. denied, 385  U.S. 821 (1966).  As far                              ____________             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.                      _____                   _________                       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                                         -13-                                          13             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,                                 __________                                         -14-                                          14             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.             __________                       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                               _______________________                       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                                         -15-                                          15             upon that alleged theft.  See,  e.g.,  Plaintiff's Complaint                                       __________             Count IV (Taking of a  Trade Secret, Mass. Gen. L. ch.  93               42); id. Count  VII (Unjust Enrichment).  As was true of the                  ___             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                                                                     ____             judge  and jury found against  Cool Light on  all the claims                    ___ ____             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                                                      _________             at  20, or  that a  new trial  on  the trade  secret related             counts would be  other than  "an empty exercise,"  id.   For                                                                ___                                         -16-                                          16             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.                       _________                                         -17-                                          17
