Cimorelli v. General Electric

Opinion

USCA1 Opinion

February 4, 1994
                                [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

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        No. 93-1549

                               SALVATORE A. CIMORELLI,

                                Plaintiff, Appellant,

                                          v.

                              GENERAL ELECTRIC COMPANY,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. Joseph L. Tauro, U.S. District Judge]
                                            ___________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
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                            Bownes, Senior Circuit Judge,
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                              and Boudin, Circuit Judge.
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                                 ____________________

            Evan  T. Lawson  with  whom Caroline  E.  DeStefano and  Lawson  &
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        Weitzen were on brief for appellant.
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            Steven A. Kaufman  with whom  Clayton S.  Marsh and  Ropes &  Gray
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        were on brief for appellee.

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Per  Curiam.   Salvatore Cimorelli,  a long-time  former
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            employee of General Electric Company, brought suit against GE

            in 1989  under the  False Claims Act,  31 U.S.C.     3729-33.

            The gist  of Cimorelli's  complaint was  that at  GE aircraft

            engine  operations in  Lynn, Massachusetts, GE  employees had

            altered  pencilled  labor  records in  order  to  shift labor

            charges  from government contracts  that were over  budget to

            government  contracts  that  were   under  budget.    Similar

            alterations  were charged with respect to steam turbines made

            by GE  in Lynn.   Cimorelli claimed that the  alterations had

            occurred from the early 1970s until around 1985.

                 The False Claims Act imposes civil penalties plus treble

            damages for inter alia presenting a false or fraudulent claim
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            to  the  federal  government  or  using  a  false  record  or

            statement  to  obtain payment  or  approval  of  a  false  or

            fraudulent claim.  Id.   3729(a).  False Claims Act suits may
                               ___

            be brought by private parties on behalf of the United States,

            although  government   attorneys  may  take   charge  of  the

            litigation  if the  government so  chooses.   Id.    3730(b).
                                                          ___

            Here, after  reviewing the litigation, the federal government

            declined  to participate.   Accordingly,  the  suit has  been

            conducted  by Cimorelli who,  if any recovery  were obtained,

            would share in it to the extent provided by the False  Claims

            Act.  Id.   3730(c).
                  ___

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The district court  in December 1991 set a  deadline for

            discovery of May 29, 1992.  Extensive discovery was conducted

            by Cimorelli during the first half of 1992.  GE says, without

            dispute from  Cimorelli, that  it produced  a vast  number of

            labor vouchers and  other records.  On the  day the discovery

            ended,  Cimorelli   filed  various  motions  accusing  GE  of

            hindering   discovery.    The  motions  were  referred  to  a

            magistrate  judge  who  denied them  in  June  1992,  and the

            district  court affirmed the  magistrate judge in  July 1992.

            New discovery motions  made by Cimorelli in August  1992 were

            denied by the district court in September 1992.

                 In  July 1992  GE moved  for  summary judgment,  arguing

            among other  points that there  was no evidence of  any false

            claim  against the government, normally a critical element in

            a  suit under  the False  Claims Act.   See United  States v.
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            McNinch,  356  U.S.  595,  598-600 (1958).    In  addition to
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            seeking   further   discovery,  Cimorelli   opposed   summary

            judgment,  relying  centrally  on   deposition  testimony  of

            Christy  Chipouras, another former employee of GE at the Lynn

            facility.     Chipouras  had   given  deposition   testimony,

            described  below,  and  was apparently  promised  a  share of

            whatever reward Cimorelli might obtain.  

                 On April 9, 1993, the district court granted GE's motion

            for  summary judgment and  issued a memorandum  setting forth

            the  court's  reasons.     The  district  court   found  that

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Chipouras' testimony  was "largely  conclusory, and  fails to

            identify specific  incidents of  voucher falsification  which

            can  be linked  to  false  claims  against  the  government."

            Accordingly, the court found that there would be insufficient

            evidence to  submit the case to  a jury even on  the premise,

            which  the  court  tentatively adopted,  that  Cimorelli need

            prove his  case only by  a preponderance of the  evidence (as

            opposed to  clear and  convincing evidence).   Cimorelli  now

            appeals  the grant  of  summary  judgment  and  the  district

            court's refusal to allow further discovery.

                 Reserving the discovery issue for later discussion,  the

            propriety  of  summary judgment  turns  on whether  Cimorelli

            pointed the district court to sufficient evidence to permit a

            reasonable jury to find that  a false or fraudulent claim was

            presented  to the  federal government  relating  to the  Lynn

            aircraft  engine  or  turbine operations.    See  Anderson v.
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            Liberty  Lobby, Inc.,  477 U.S.  242, 252 (1986).   Appellate
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            review of the grant of summary judgment is plenary.  Sarit v.
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            U.S. Drug  Enforcement Admin.,  987 F.2d 10,  13 (1st  Cir.),
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            cert. denied, 114 S.Ct. 241  (1993).  Inferences are normally
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            drawn in favor  of the party opposing summary  judgment.  Id.
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            On the other hand, more than mere suspicion or speculation is

            required to justify a trial.  See Liberty Lobby, 477 U.S.  at
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            249-50.

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In this  instance, Chipouras testified in  general terms

            that  GE  systematically charged  labor  costs  to government

            contracts  when  the   labor  had  been  expended   on  other

            government  contracts.   This was  accomplished  in part,  he

            said,  by having labor vouchers initially completed in pencil

            and  then having them  altered by other  personnel, including

            Chipouras.   He could  remember only one  specific mischarged

            contract--a case  in which  time on  a  private contract  was

            charged instead to a federal  government contract number--but

            he said that alterations were widespread and systematic.

                 GE  offered various  benign  explanations for  preparing

            labor   vouchers  initially   in  pencil  and   making  later

            alterations.   We agree  with Cimorelli  that, if  this issue

            were dispositive, choosing between explanations might well be

            an issue  for a  jury.   However, we  agree with  GE and  the

            district court that  whatever the  explanation for  pencilled

            labor  vouchers and later  alterations, there is  no evidence

            whatever  that any false  or fraudulent claims  were actually

            presented  to  the government.    Although Cimorelli  charged

            pervasive fraud and conducted extensive discovery,  Cimorelli

            was unable to point to proof of  a single instance in which a

            false  or  fraudulent  claim was  actually  presented  to the

            federal government.

                 Perhaps where a  contractor's record-keeping conduct  is

            unambiguously  sinister, an inference might be drawn that the

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misconduct must have been translated into fraud.  But in this

            instance the objective conduct--namely, changes in  pencilled

            records--is  ambiguous,   despite  the   conclusory  epithets

            offered by Chipouras.  Under  these circumstances and on this

            record, we  agree that there  was inadequate  evidence for  a

            jury as to at least  one critical element, namely, the actual

            submission of false  or fraudulent claims to  the government.

            We  do not  reach  GE's further  contentions  that clear  and

            convincing evidence  was the  required standard  of proof  or

            that  Chipouras'  testimony  should be  disregarded  entirely

            because it was improperly purchased.

                 Cimorelli counters the claim that evidence is lacking by

            arguing that a negative inference  should be drawn against GE

            because  it  engaged  in  "suppression"  of  evidence  during

            discovery,  and Cimorelli  further argues  that the  district

            court  abused its  discretion in  failing  to permit  further

            discovery  and  failing  to hold  an  evidentiary  hearing on

            contested   issues   concerning    GE's   alleged   discovery

            misconduct.    Cimorelli's  opening brief  included  specific

            claims  that GE did not produce certain information requested

            by Cimorelli and specific claims that GE deliberately removed

            items  sought by Cimorelli  from boxes of  materials actually

            produced.

                 We  think it unnecessary to discuss these allegations in

            detail.   In  its answering  brief, GE  offered an  extremely

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detailed  refutation of these allegations, taking them one by

            one.   In answer to each one,  it pointed to record materials

            to support its version of events.  For the most part, GE said

            that the specific materials sought (1) were actually produced

            by  GE but overlooked by Cimorelli  or (2) were nonresponsive

            materials that did not have to be produced.   GE responded in

            similar detail  to other allegations by  Cimorelli concerning

            supposed problems with the logistics of discovery.

                 On the face of this facially  thorough refutation by GE,

            we turned to Cimorelli's reply brief naturally expecting that

            it would show  where GE's version of  events was wrong or  at

            least that factual  disputes existed as to some,  if not all,

            of  the GE  explanations.   Instead, the  reply brief  simply

            ignored  GE's   detailed  answers  and  confined   itself  to

            discussing the  standard  of  proof on  the  merits  and  the

            admissibility   of   the   Chipouras'   allegedly   purchased

            testimony.   If Cimorelli  is not  prepared  to dispute  GE's

            answering  brief by  pointing out  where it  is wrong  on the

            discovery issues,  we are  certainly not  going to  undertake

            that task  ourselves.  Cf.  United States v.  Innamorati, 996
                                   ___  _____________     __________

            F.2d 456, 468 (1st Cir. 1993) (issues not briefed will not be

            addressed).

                 Two further facts reinforce our sense that Cimorelli has

            not been unjustly  treated in relation to discovery.   One is

            that  there  is  no  indication  that  Cimorelli  sought  any

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extension  of the discovery  deadline until the  day that the

            discovery period  expired.   The second  is that  despite the

            present  claim that an  evidentiary hearing should  have been

            held  to resolve disputes pertaining to discovery, it appears

            that  Cimorelli never made such a  request for an evidentiary

            hearing to the district court.  In  sum, we have no basis for

            finding  that  the  district court  abused  its  considerable

            discretion in the management of discovery in this case.

                 Affirmed.
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