
USCA1 Opinion

	




                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                ______________________          No.  96-1430                                    JOHN R. KIELY                                Plaintiff, Appellant,                                          v.                                  RAYTHEON COMPANY,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                  [Hon. George A. O'Toole, Jr., U.S. District Judge]                                                ___________________                                 ____________________                                        Before                            Torruella, Chief Circuit Judge,                                       ___________________                          Bownes, Senior Circuit Judge, and                                  ____________________                                Stahl, Circuit Judge,                                       _____________                                 ____________________               William  F. Green with whom  Robert A. Rossi,  Law Office of               _________________            _______________   _____________          William  F. Green  and  George  E.  Brankey  were  on  brief  for          _________________       ___________________          appellant.               James F.  Kavanaugh, Jr. with  whom Christine G.  Messer and               ________________________            ____________________          Conn, Kavanaugh, Rosenthal,  Peisch & Ford, L.L.P.  were on brief          __________________________________________________          for appellee.                                 ____________________                                   January 28, 1997                                 ____________________                      Per  Curiam.  This is an appeal from a dismissal of                      Per  Curiam.                      ___________            two   contract  claims.    See  Fed.  R.  Civ.  P.  12(b)(6).                                       ___            Plaintiff John  R. Kiely ("Kiely") was  employed by defendant            Raytheon  Company ("Raytheon")  from 1967 to  1990.   Part of            Kiely's job  was to  obtain classified Department  of Defense            ("DOD") documents.  Some of those documents were  released by            DOD to representatives of  defense contractors like Raytheon,            and  some were not officially  released.  The  receipt of the            latter  documents is  a  federal crime,  and  both Kiely  and            Raytheon have been convicted  thereof.  Those convictions are            not at issue here.                      Raytheon's sentence required the corporation to pay            fines and damages of  $1,000,000.  It was not  precluded from            entering into  government contracts.  Kiely  was sentenced to            two  years imprisonment, with all but  six months, which were            to be served  in a halfway house, suspended.  He was debarred            from  working on government  contracts for a  period of three            years.                      Kiely sued  Raytheon, asserting five claims.  Three            tort claims were dismissed  on statute of limitations grounds            and  have not been appealed to this court.  Kiely's other two            claims sounded in contract:   promissory estoppel relating to            Kiely's "forced"  retirement, and breach of  a mutual defense            agreement  that was  allegedly made  when Kiely  and Raytheon            learned  that  they  were   targets  of  a  federal  criminal                                         -2-                                         -2-            investigation.  The district court  granted Raytheon's motion            to dismiss both claims.  We now affirm.                      On appeal, we "review[] the granting of a motion to            dismiss de novo, applying the same criteria that obtained  in                    __ ____            the court below."   Garita Hotel Ltd. v. Ponce Fed. Bank, 958                                ____________________________________            F.2d 15, 17 (1st Cir. 1992).   We must accept the complaint's            allegations as  true, indulging all reasonable  inferences in            favor of Kiely.  Id.  Dismissal is proper only if it is clear                             ___            that no relief could be granted, under any theory, "under any            set  of  facts  that  could  be proved  consistent  with  the            allegations."  Hishon  v. King  & Spalding, 467  U.S. 69,  73                           ___________________________            (1984); Vartanian v. Monsanto Co., 14 F.3d 697, 700 (1st Cir.                    _________________________            1994).                               I.  Promissory Estoppel                               I.  Promissory Estoppel                                   ___________________                      Kiely's promissory estoppel claim is that Raytheon,            "by requesting Kiely to  commit acts in violation of  the DOD            security  laws  (receiving  unreceipted  classified  .  .   .            documents) over  the course  of Kiely's employment  from 1967            through 1985, [was] implicitly  promising Kiely that he could            commit these acts  without being coerced at some  future time            into taking early retirement"  or suffering other employment-            related detriment.   Am. Compl.   43.  Kiely  alleges that he            "relied on this promise to his detriment, as Raytheon in fact            did  coerce  him  into  taking  early  retirement   effective            January 2,   1990."     Kiely  asserts  that   "Raytheon  is,                                         -3-                                         -3-            therefore, estopped from  denying the unenforceability  [sic]            of this promise which it made to him."  Id.,    45-46.                                                    ___                      This claim fails.  The applicable Massachusetts law            recognizes  that  a  promisee's  reasonable  and  detrimental            reliance  on  a  promise  may   serve  as  a  substitute  for            consideration and render the promise "enforceable pursuant to            a traditional contract  theory," but only if the promisee can            prove  "all the necessary  elements of a  contract other than            consideration."    Rhode  Island  Hosp. Trust  Nat.  Bank  v.                               __________________________________________            Varadian, 647  N.E.2d 1174, 1178-79  (Mass. 1995)  (quotation            ________            omitted).                      The district court held  that Kiely failed to state            a valid promissory  estoppel claim.   First, the court  found            that  Kiely  failed  to  meet the  first  requirement  for  a            promissory estoppel  cause of action, namely,  that a binding            promise be  made.   Id.; Santoni v.  FDIC, 677 F.2d  174, 179                                ___  ________________            (1st Cir. 1982).   The  court agreed with  Raytheon that  the            company's alleged  promise  was  not  definite,  certain,  or            explicit enough to bind the company  to any specific actions.            Santoni, 677 F.2d  at 179.  Raytheon asserts,  in particular,            _______            that  the  promise alleged  by Kiely  in  this case  does not            carry,  even implicitly,  manifestations of  an intent  to be            bound, so that it  would be binding under a  contract theory,            i.e.,  so that it would "justify  a promisee in understanding            ____            that  a commitment had been  made."  Rhode  Island Hosp., 647                                                 ___________________                                         -4-                                         -4-            N.E.2d at 1179 (quoting  Restatement (Second) of Contracts  2            (1981)).   Raytheon also  avers that it  was unreasonable for            Kiely to rely on such a  vague, implicit promise, so he fails            to meet the reasonable  reliance requirement for a promissory            estoppel  claim.   See Restatement  (Second) of  Contracts,                                 ___            90(1) & cmt.  b; cf. United States  v. Maling, 988 F.2d  242,                             ___ ________________________            245  (1st Cir. 1993) (estoppel  in criminal sentencing).  The            district  court also  agreed with  Raytheon that  the alleged            agreement was to violate  the law, which is unenforceable  as            against public policy.   See  Green v.  Richmond, 337  N.E.2d                                     ___  __________________            691, 695 (Mass. 1975).                      We reach a different  conclusion than the  district            court did  as to its first  ground for dismissal.   Under the            applicable standard of review,  we must accept as established            that  Raytheon  hired  Kiely  and requested  him  to  perform            certain  tasks  as  part  of  his  job,  including  receiving            unreceipted classified  documents.  Based  upon such  factual            allegations,  it  seems  to  us  sufficiently  "definite  and            certain" that Raytheon was implicitly promising that it would            not  terminate   or  discipline   Kiely  for   following  his            superiors' orders.1   The  key is the  parties' understanding                                            ____________________            1.  Kiely  is not  claiming a  contractual right  to lifetime            employment,  as  Raytheon misstates  his  position.   Rather,            Kiely  appears to  claim that,  while Raytheon  can fire  him            without stating any reason  at all, if Raytheon does  state a            reason, it cannot be an improper one.  And Kiely asserts that            it  is improper to  fire him solely  for following Raytheon's            instructions  to   co-conspire  with   the  company   in  the                                         -5-                                         -5-            and  intent:    were   they  merely  engaged  in  preliminary            negotiations, with  details to  be worked out  later, or  did            their  minds meet  on a  firm commitment?   Here,  it appears            closer  to  a firm  commitment.   There  was nothing  left to            negotiate;  the parties  were not  engaged in  mere "inchoate            negotiations"  that  failed  to  rise  to  the  level   of  a            commitment  to be  bound, from  which Kiely  could reasonably            develop no  more  than a  "well-founded hope"  that he  could            perform  his job  functions without  fear of reprisals.   See                                                                      ___            Hall v. Horizon  House Microwave, Inc.,  506 N.E.2d 178,  184            ______________________________________            (Mass. App.  Ct.  1987).   An  "explicit" statement  to  that            effect  is not necessary to  create a contract.   An employee            may reasonably rely on  an employer's instructions to perform            certain tasks  as including an  implicit promise that  he can            perform  those  tasks  without  fear of  being  fired  solely            because he performed them.                      On the other hand, we agree with the district court            that the  alleged contract was an agreement to achieve mutual            benefit from  the parties' cooperative violation  of the law.            Such a  contract,  even  if  explicitly  agreed  to  by  both            parties, is void and unenforceable as against public policy.2                                            ____________________            commission of a crime.            2.  Kiely  relies  on the  Restatement  to  render this  rule            inapplicable.  If an  agreement contains an illegal provision            that  is  not  central  to  the  agreement  and  the  illegal            provision  does  not  involve  serious  moral  turpitude, the            illegal  portion  of  the  agreement is  discarded,  and  the                                         -6-                                         -6-            See Green, 337 N.E.2d at 695.  "[C]ourts will  not lend their            ___ _____            aid  to relieve parties from the results of their own illegal            adventures."   Tocci  v.  Lembo, 92  N.E.2d  254, 256  (Mass.                           ________________            1950).  It would have been unreasonable for Kiely to  rely on            such an  illegal contract.  Cf.  American Viking Contractors,                                        ___  ____________________________            Inc. v. Scribner Equip.  Co., 745 F.2d 1365, 1372  (11th Cir.            ____________________________            1984) (promise  which is  unenforceable cannot  be reasonably            relied upon).    We reject  Kiely's  contention that  it  was            reasonable  to commit  a  crime in  reliance  on an  implicit            promise that he would not be fired for doing so.                                 II.  Breach of Contract                               II.  Breach of Contract                                    __________________                      Kiely's  breach  of  contract  claim  alleges  that            Raytheon  "entered  into  an   oral  agreement"  with  Kiely,                                            ____________________            balance  of the  agreement is  enforceable.   See Restatement                                                          ___            (Second)  of Contracts,   184.  In the instant case, however,            the  illegal conduct is not minor  or incidental, which might            remove it  from the rule forbidding  enforcement of contracts            that are against  public policy.   See Green,  337 N.E.2d  at                                               ___ _____            695.  The very essence of the contract alleged in Kiely's own            complaint  is  that  Raytheon  asked him  to  commit  acts in            violation  of national  security laws.   Indeed, this  is the            only  reason why Kiely claims  to be in  a position different            from any  at-will employee, who  would be terminable  for any            reason  or  for no  reason.   He  claims that  his employment            cannot  be   interfered  with   solely  on  account   of  his            involvement  in   this  illegal  activity.     As  a  result,            ironically, he is claiming  that his employment status, which            would  otherwise  be  at-will,  was  strengthened  because he            engaged in  criminal acts (or that  his employer's management            prerogatives  were diminished because the company joined with            its  employee  in committing  such acts).    This is  more an            equitable  estoppel claim  -- that  the employer  is estopped            from exercising its normal management prerogatives because it            conspired with its employee to commit criminal acts -- than a            promissory  estoppel  contract-based  claim.    But  the only            claims before us are the contract claims.                                         -7-                                         -7-            "fiduciary  in  nature, where  each  party  placed trust  and            confidence  in the other and promised mutually to support and            defend each other  with respect to any and all  claims by the            [United  States] Government" in its investigation of unlawful            use of documents.  Am.  Compl.   64.  The complaint  does not            mention  any written  agreement.3   It alleges  that Raytheon            "undertook a  clandestine course  of action against  Kiely in            breach of these promises" (without  any further specification            of  which  "promises" were  broken),  "whereby  it sought  to            exculpate  itself and  its  officers and  directors from  any            actionable wrongdoing or debarment from bidding on government            contracts,  by  falsely  and  in bad  faith  stating  to  DOJ            officers and by falsely and in bad faith giving oath before a            U.S. District  Judge that Kiely  acted alone and  contrary to            Raytheon  policy,  and  without  the  knowledge  of  Raytheon            management  in knowingly obtaining  and conveying  secret DOD            [documents]."   Id.  at     65.    The  complaint  adds  that                            ___            Raytheon's "clandestine campaign"  in breach of  its promises            "culminated"   in  its   plea  agreement,   "without  Kiely's                                            ____________________            3.  Kiely  moved  to amend  his  complaint  again  to  add  a            reference to a  written mutual defense agreement  of which he            claims he had been unaware at the time he drafted his initial            complaint.  He  asserts that he  only recently learned  about            this written agreement when his prior lawyer (on the criminal            case) provided him  a copy.  The  inconsistencies between the            oral  and  written agreements  need not  detain us  here, nor            should any implications (such  as credibility questions noted            by  Raytheon) which might flow  from the series  of events as            recounted by Kiely.                                         -8-                                         -8-            knowledge or participation," in which  plea Raytheon "falsely            and in bad faith blamed the entire matter on Kiely."4  Id. at                                                                   ___              66.                      This  breach of  contract claim  has no  more merit            than  the  promissory estoppel  claim.    The district  court            dismissed  the breach  of contract  claim for  three reasons:            the alleged contract is  unenforceable because it is contrary            to  public policy; Kiely has  not alleged any  harm for which            redress  is  available; and  there  is  no causal  connection            between Raytheon's alleged conduct and Kiely's claimed harm.                      In accepting Raytheon's public policy argument, the            district  court misinterprets  Kiely's claim.   As  worded by            Raytheon in its brief,  "in essence plaintiff's allegation is            that   the  agreement  prohibited   Raytheon  from  providing            information to the government or conducting plea negotiations            without  his knowledge or  participation."  Defendant's Brief            at 35-36.    Having set up this straw man, Raytheon knocks it            down by asserting that  such an agreement cannot be  enforced            because it would violate public policy by restricting parties                                            ____________________            4.  Kiely  also alleged that  Raytheon breached its agreement            by sending to its own professional staff a memorandum stating            that the  criminal charge to  which Raytheon had  pled guilty            was the result of  one former employee's  conduct.  Id. at                                                                   ___            69.  We cannot  understand how this memorandum --  sent after            entry of the plea agreement -- could conceivably constitute a            breach of  the alleged  agreement to mutually  defend against            government claims, especially where those claims  had already            been  concluded as  to  Raytheon.   The  agreement cannot  be            deemed  to  survive  Raytheon's  entry  of  a  separate  plea            agreement and Kiely's learning of that plea agreement.                                         -9-                                         -9-            from negotiating with the government and discouraging parties            from providing  true information  to the government  and from            entering into  plea agreements, all  of which are  favored by            public policy.                      Kiely,  however, does  not assert  that  the mutual            defense  agreement should  be  understood  to preclude  those            worthy  goals.    He  claims  only  that  the  agreement  (1)            precluded Raytheon from  making false statements about  Kiely                                            _____            and  (2) required  Raytheon  to notify  him  that the  mutual                                            ______            defense agreement was  terminated so he  would be aware  that            Raytheon was pursuing its own defense separately and possibly            in conflict  with his.   Kiely apparently takes  the position            that, if he had received  such notice, he might have  taken a            different  course in  his own  defense.   So framed,  Kiely's            claim  for enforcement  of the  agreement would  not prohibit            Raytheon  from  pursuing its  own  separate  defense or  from            negotiating a plea bargain.  Nor would it restrict Raytheon's            ability to  provide true information to the government in its            criminal investigation.  The notice to  which Kiely claims he            was entitled under the agreement would simply permit Kiely to            defend   himself   most   effectively   under   the   changed            circumstances.   Such a mutual defense agreement  is not void            as against public policy.                      On  the  other hand,  we  agree  with the  district            court's second  reason for dismissing the  breach of contract                                         -10-                                         -10-            claim:   that the damages alleged  by Kiely are "not the kind            of  specific,  demonstrable  harm  for which  remedy  can  be            given."  A. 294-95.  Kiely  alleges that Raytheon's breach of            contract --  through its  allegedly false statements  and its            failure  to notify  him that  it was  terminating the  mutual            defense  agreement  -- caused  him  to  suffer the  following            harms:  (1) he  refrained from effectively defending himself;            (2)  he was denied the  opportunity to plea  bargain with the            government; (3) he was  denied the de facto immunity  granted                                               ________            to  other Raytheon employees; (4) he was indicted; and (5) he            suffered emotional  injuries  resulting from  the  foregoing.            Am. Compl.     27, 33, 35,  36, 40.  These  alleged harms are            too  speculative to  be legally  cognizable and  redressable.            See  Johnson v.  Comm'r of  Correction, 652  A.2d 1050,  1057            ___  _________________________________            (Conn. App.),  cert. denied, 659  A.2d 183 (Conn.  1995); cf.                           _____ ______                               ___            Veranda  Beach Club v. Western Sur. Co., 936 F.2d 1364, 1380-            _______________________________________            81 (1st Cir. 1991) (tort and promissory estoppel claims).                      As  to the  first alleged  harm, Kiely had  as much            legal  right  as  Raytheon  did  to pursue  his  own  defense            separately,  whether or not he thought it immoral.  Kiely was            represented  by counsel  during  the course  of the  criminal            investigation and his trial; indeed, Kiely's attorney was one            of  the  architects  of  the mutual  defense  agreement  with            Raytheon.  Presumably, his counsel advised him in some detail            as  to  the  advantages  and  disadvantages,  the  risks  and                                         -11-                                         -11-            pitfalls  of each  possible course  of action,  including the            possibility that  his  alleged partner  in  crime,  Raytheon,            might  at  some  point  decide to  pursue  its  own  separate            interests  which  might  not   coincide  with  Kiely's.    In            addition, Kiely  was no doubt  aware, through counsel  if not            otherwise, that the mutual  defense agreement did not deprive            the  parties of  the right  to make  strategic  decisions for            themselves  regarding their respective  defenses, since their            interests were similar but not identical.  Kiely himself made            his  own decisions and took his chances, for his own reasons.            Kiely has  not alleged any ineffectiveness  in the assistance            he received from counsel, nor  any conflict of interest based            on the fact that his counsel was chosen and paid by Raytheon.                      As  for Kiely's  second  and  third alleged  harms,            Kiely did  not have  a legal  right to a  plea bargain  or to            immunity.     Those  were   within  the  discretion   of  the            prosecutor, which this court  will not second-guess.5  Virgin                                                                   ______                                            ____________________            5.  It  appears to us that Kiely's real complaint is with the            prosecutors and the Pentagon  for prosecuting him and letting            Raytheon  off the hook with what Kiely considers to be a slap            on  the wrist,  permitting  Raytheon not  only to  avoid some            forms of  criminal punishment  (incarceration for any  of its            officers or employees  other than Kiely) but also to continue            to  bid on government contracts.   Kiely may be right that he            might have been able to arrange a favorable plea bargain with            the  prosecutors  in  exchange  for  his  testifying  against            Raytheon,  if the  government  had wanted  to  pursue such  a            course  against the "bigger fish."   Kiely may  also be right            that his chances  of obtaining  such a deal  might have  been            enhanced if he had pursued that course from the outset rather            than relying on his "mutual defense agreement" with Raytheon.            But  it is  not the  role  of this  court  to second-guess  a                                         -12-                                         -12-            Islands  v.  Scotland,  614 F.2d  360,  365  (3d Cir.  1980).            _____________________            Moreover,  Kiely's indictment  for a  crime  of which  he was            later  convicted surely  does  not rise  to  the level  of  a            legally  cognizable harm.    Finally, Kiely's  claim that  he            suffered emotional harm as  a result of the first  four types            of harm  is not legally  cognizable because  the four  events            underlying the emotional harm are not cognizable.                      Kiely's allegations are  doubly speculative:  that,            if Raytheon had not  breached their agreement, he might  have            had  some opportunity to plea  bargain; and that  such a plea            might have been more advantageous to him than the sentence he            received  after  trial.    The  basic  assumption  underlying            Kiely's  claim  is  that  he  would  have  received  a lesser            sentence  had he  plea  bargained rather  than exercised  his            right to go to trial.6  This assumption is too speculative to            be enforceable.  See Bush v. United States, 765 F.2d 683, 685                             ___ _____________________            (7th Cir.), cert. denied,  474 U.S. 1012 (1985).   After all,                        ____________            Kiely's    obtaining    unreceipted   classified    documents            constituted a  crime, with  or without Raytheon's  knowledge.            If Kiely  had  thought it  helpful,  he could  have  provided                                            ____________________            prosecutor's decision  as to  which defendant to  pursue more            vigorously  or what sentence to seek in each case.  Moreover,            having chosen one course of action, Kiely cannot now complain            about what might have been if he had made a different choice.            6.  We  leave aside  here the  fact that  Kiely had  the same            legal  right  that  Raytheon  exercised  to  take independent            _____            action that best served his own interests.                                         -13-                                         -13-            information -- to the  prosecutors after he was  indicted, to            the  jury at  trial, or to  the court prior  to sentencing --            contradicting Raytheon's "rogue employee" statements.  He has            offered no  reason to believe that his  sentence was enhanced            because  of Raytheon's  alleged statements  that  Kiely acted            alone  rather than in concert with Raytheon.  In short, Kiely            _____            has  failed to allege that he has suffered cognizable harm as            required  in order to state a claim  upon which relief may be            granted.7                      Moreover,  Kiely has  not  alleged a  valid  causal            connection  between  Raytheon's  breach  and  the  damage  he            suffered.   Raytheon  argues that:   "To  sustain a  contract            claim based on  the allegation of  a convicted criminal  that            someone else, rather than his  own conduct, was the proximate            cause of his conviction would entirely subvert the policy and            societal interests inherent in criminal punishment.  Allowing            a convicted  criminal to  receive civil compensation  for the            harm  caused by his conviction would lessen the effect of the            punishment determined by the  criminal justice system,  allow                                            ____________________            7.  Thus, while Raytheon's provision of false  information to            DOJ or  the  court  might subject  the  company  to  criminal            liability  (if the  government  believes the  information was            false  and  exercises  its discretion  to  prosecute),  civil            liability to  third parties  like Kiely does  not necessarily            flow  from such conduct.   Such liability is  not embraced by            Kiely's  contract claims  which are  now before  us.   To the            extent that Kiely  sought to  impose civil  liability in  his            claims  of  defamation,   negligent  misrepresentation,   and            intentional  interference  with  business   relations,  those            causes of action have not been appealed.                                          -14-                                         -14-            him to profit from  his own wrongful acts, and  undermine the            deterrent  and retributive purposes  of criminal punishment."            Defendant's  Brief  at  47.   We  need  not  address  whether            Raytheon  is estopped from arguing this point, either because            it too  was convicted  for its  role in  the  same crime,  or            because of the unseemly cynicism of Kiely's partner  in crime            relying on such  a position  to escape civil  liability.   In            circumstances such  as these,  the law presumes  that Kiely's            conviction  was  based  on  his  own  illegal  acts,  not  on            Raytheon's breach of a mutual defense  agreement.  The breach            of contract claim was properly dismissed.                      In  conclusion, it  is not  for us  to say  whether            Raytheon's  treatment  of  Kiely   was  immoral  or  "nasty."            Plaintiff's Brief, Addendum at 54.  Nor are we presented with            the  question of whether Kiely might  have a legitimate legal            claim against anyone  not a party to this litigation.  All we            decide today is that Kiely's claims against  Raytheon in this            appeal are without merit.                                          Affirmed.                                          Affirmed.                                          ________                                         -15-                                         -15-
