
USCA1 Opinion

	




                                [Not for Publication]                                [Not for Publication]                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                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.                                          I.                                          __                                  PRIOR PROCEEDINGS                                  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.                                          -2-                                          2            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.                                         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.                                         -3-                                          3                      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.                                         -4-                                          4                      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.                                         III.                                         ____                                      CONCLUSION                                      CONCLUSION                                      __________                      For the foregoing reasons,  we  affirm the district            court's denial of sanctions.                       Affirmed.  Double costs.                      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.                                         -5-                                          5
