
USCA1 Opinion

	




                                 NOT FOR PUBLICATION                                 NOT FOR PUBLICATION                                 ___________________                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 96-1745                                CARL M. BERKE, ET AL.,                               Plaintiffs, Appellants,                                          v.                                   TAMBRANDS, INC.,                                 Defendant, Appellee.                                 ____________________        No. 96-1830                                    DAVID A. FOX,                                Plaintiff, Appellant,                                          v.                                   TAMBRANDS, INC.,                                 Defendant, Appellee.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Robert B. Collings, U.S. Magistrate Judge]                                             _____________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________            James  E.  Grumbach  with  whom  Marc  E.  Verzani  and  Zimble  &            ___________________              _________________       _________        Brettler, LLP were on consolidated briefs for appellants.        ________  ___            Roger E.  Podesta with  whom Harry Zirlin,  Debevoise &  Plimpton,            _________________            ____________   _____________________        Richard  L.  Nahigian   and  Sullivan,  Sullivan   &  Pinta  were   on        _____________________        ______________________________        consolidated brief for appellee.                                 ____________________                                    April 24, 1997                                 ____________________                 Per Curiam.  Plaintiffs appeal from the district court's                 __________            summary judgment dismissal of their claims,  most importantly            that stock options and other incentive compensation  promised            by   their  employer,   Tambrands  Inc.,  should   have  been            accelerated--rather than forfeited--when  Tambrands sold  its            subsidiary Hygeia  Sciences, Inc., the company  for which the            plaintiffs directly worked.   Plaintiffs dispute the district            court's  reading  of  the  underlying  contracts;  they  also            challenge several discovery rulings.                 After reviewing  the briefs and the  record, we conclude            that the district court's thorough opinion correctly analyzed            and  resolved  the  questions   presented.    We  affirm  for            substantially  the reasons given below, separately discussing            below only three points which  were not squarely addressed in            the  district court.   Some  of the  issues presented  by the            appeal are fairly debatable,  but we see no reason  to repeat            in our words explanations that have been ably provided by the            district court.                   1.  Plaintiffs argue on appeal that three plaintiffs who            continued  working for Hygeia  until the date  on which their            options would have vested if  they had remained in Tambrands'            employ completed  the requisite vesting period.   They assert            that the  contractual  requirement of  two  years'  continued            employment with "the Company,"  defined as "Tambrands and its            subsidiaries," should  be understood  to  mean employment  by                                         -2-                                         -2-            Tambrands  and/or  the subsidiaries  it had  at the  time the            options were granted--not at the time of exercise.                 This theory,  although mentioned in  the complaint,  was            not discussed at length by the magistrate judge, who directed            his  attention to  a  broader claim,  namely,  that the  sale            triggered an acceleration of  the options.  However, assuming            that  the present theory was  fully preserved, at  the end of            two  years the plaintiffs  were no longer  working either for            Tambrands or  a subsidiary of Tambrands,  and therefore their            options  lapsed under  the  contract, which  allowed exercise            "only during the continuance of that Participant's employment            by the Company."                 2.   In  the  district  court,  in addition  to  express            contract claims,  the  plaintiffs pressed  implied  contract,            unjust  enrichment and  quantum  meruit claims.   They  based            these latter claims  on their allegation  that they had  made            unusual efforts  in  support of  the planned  sale of  Hygeia            during  1989  and  1990 and  as  a  result  deserve, or  were            impliedly  promised, the  reward  of  acceleration  of  their            options.   On appeal,  they have recast  this theory, arguing            that   their   contracts    were   impliedly   modified,   or            alternatively that Tambrands'  continuation of its  incentive            compensation programs  during  1989 and  1990  either  estops            Tambrands from refusing acceleration or constitutes a  waiver            of any right to refuse acceleration.                                         -3-                                         -3-                 However, we agree  with the district court's  conclusion            that  the plaintiffs could  not prove either  that they could            reasonably have expected acceleration, or that the defendants            promised acceleration, in  exchange for their  sales efforts.            We  think   that  this   conclusion  supports  dismissal   of            plaintiffs' modification,  estoppel and waiver  arguments, as            well as the  implied contract and related claims more clearly            asserted  in   the  district  court  and   addressed  by  the            magistrate judge's opinion.                 3.   Finally, plaintiffs  contend on appeal  that public            policy  considerations  justify  accelerating their  options.            They  cite an  Iowa  case involving  somewhat similar  facts,            Hilgenberg v. Iowa Beef Packers, Inc., 175 N.W.2d 353, 362-63            __________    _______________________            (Iowa  1970).   In  that case,  a  company that  had promised            options to employees  sold one  of its plants  to new  owners            before the options  vested.  In  the subsequent lawsuit,  the            court permitted  the  employees of  the plant  to exercise  a            portion of  their options,  even though the  supposed vesting            occurred after sale of  the plant.  The court  relied heavily            upon public policy.                 The difficulty is that the present agreement is governed            by New York law  as to the contract claims  and Massachusetts            law  as  to   noncontractual  claims.    The   New  York  and            Massachusetts  cases that are cited  to us are  not in point,            and our independent  research suggests that  the case law  in                                         -4-                                         -4-            these two states  does not carry  the public policy  argument            quite  as far  as Hilgenberg.   See  Carlson v.  Viacom Int'l                              __________    ___  _______     ____________            Inc., 566 F. Supp. 289, 290-91 (S.D.N.Y. 1983); McCone v. New            ____                                            ______    ___            England Tel. & Tel. Co., 471 N.E.2d 47, 49-50 (Mass. 1984).            _______________________                 Affirmed.                 ________                                         -5-                                         -5-
