UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 92-1886
FRANK X. LOSACCO,
Plaintiff, Appellant,
v.
F.D. RICH CONSTRUCTION CO., INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Frank H. Freedman, U.S. District Judge]
Before
Breyer, Chief Judge,
Torruella and Boudin, Circuit Judges.
Paul F. Kelly, with whom Shelley B. Kroll, and Segal,
Roitman & Coleman, were on brief for appellant.
Lewis G. Schwartz, with whom Gary S. Klein, and Schatz &
Schatz, Ribicoff & Kotkin, were on brief for appellee.
May 10, 1993
TORRUELLA, Circuit Judge. At trial, appellant claimed
that appellee ended his employment improperly. The jury
determined that appellant was terminated for just cause and
therefore found no violation of his employment contract.
Appellant now claims that the district court gave the jury an
erroneous instruction as to "just cause" and wrongly excluded
admissible relevant evidence at trial. Appellant thus asks this
court to vacate the judgment and order a retrial. Because we
find no error in the district court's instructions or evidentiary
rulings, we do not grant appellant his requests.
THE FACTS
Appellant is a structural engineer with an expertise in
pre-cast concrete construction. He worked as a consultant on
matters involving pre-cast concrete at appellee's Stamford,
Connecticut headquarters. Appellee soon determined that it would
be more profitable to make pre-cast products instead of buying
them from outside vendors. The company thus set up a factory
for this purpose in Pittsfield, Massachusetts and hired appellant
to manage it.
The details of the employment contract are in sharp
dispute. Appellant contends that he agreed to manage the
Pittsfield facility for a minimum of three years, in exchange for
salary and benefits including housing in Pittsfield for the three
year term. Appellee, on the other hand, contends that appellant
was an at-will employee, as were all other employees of the
company. In any event, appellant began work in Pittsfield in
-2-
August, 1987.
In October 1987, the company's senior managers visited
the plant, announced its immediate closure, and terminated all
employees, including appellant. Appellant claims that appellee
closed the plant to thwart union activity. Appellee, however,
contends that it decided to close the plant because the sharp
downturn in the Northeast real estate market affected its
construction projects. Appellee also claimed that appellant's
performance was inadequate.
Appellant sued, claiming that appellee was bound by
contract to employ him for three years. Appellee responded that
no contract was formed, but that even if one existed, the
termination was for "just cause" and therefore proper under
Massachusetts law. During the trial, appellant attempted to
cross-examine a former supervisor about testimony at a National
Labor Relations Board hearing to the effect that there was plenty
of work at the plant. The hearing occurred shortly before the
plant's closing. The district court judge disallowed this
questioning, finding it beyond the scope of direct examination,
and more prejudicial than probative.
At the close of evidence, the district court instructed
the jury that if a contract existed, termination for "just cause"
would be proper. The district court judge defined "just cause"
as 1) poor performance by appellant on the job or 2) a good faith
determination that the economic needs of the business required
appellant's discharge. During deliberations, the jury asked the
-3-
judge to repeat its definition of "just cause." The jury finally
found that a contract for fixed-term employment existed between
the parties, but that "just cause" allowed appellee to fire
appellant. This appeal followed in which appellant seeks a
retrial on only the breach of contract claims.
DISCUSSION
Appellant urges two errors in the jury instruction.
First, he contends that the instruction does not reflect the law
in Massachusetts as to the definition of just cause. Second, he
claims that the instruction improperly invaded the province of
the jury, by settling a question of fact, in violation of
Massachusetts law. As appellant claims that the jury instruction
incorrectly stated Massachusetts contract law, we review it de
novo. Salve Regina College v. Russell, 111 S. Ct. 1217 (1991)
(mandating de novo review of a district court's state law
determinations).
The suspect instruction reads as follows:
An employer has just cause to discharge an employee if, one, there is a reasonable basis for employer dissatisfaction with an employee, for reasons such as lack of capacity or diligence, failure to conform to usual standards of conduct, or other culpable or inappropriate behavior. Or two, the discharge is reasonably related, in the employer's honest judgment, to the economic needs of his business.
The district court derived this instruction almost verbatim from
a duo of Massachusetts cases, Goldhor v. Hampshire College, 521
N.E.2d 1381, 1385 (Mass. App. Ct. 1988), and Klein v. President
-4-
and Fellows of Harvard College, 517 N.E.2d 167, 169 (Mass. App.
Ct. 1987). Although those cases stated the entire just cause
definition, they focussed on the first prong, holding that the
employee either did or did not meet the performance standard.
Because the holdings did not invoke the second prong of the
definition, appellant argues that the economic needs standard is
not a part of Massachusetts law but rather dicta by intermediate
state courts. As such, it cannot support a jury instruction.
We disagree. When the highest state court has not
issued a definitive ruling on the precise issue at hand, the
federal courts may refer to analogous decisions, considered
dicta, scholarly works, or other reliable sources to ascertain
how the highest court would rule. Redgrave v. Boston Symphony
Orchestra, Inc., 855 F.2d 888, 903 (1st Cir. 1988) (en banc),
cert. denied, 488 U.S. 1043 (1989). The decisions of
intermediate state appellate courts are trustworthy data for
ascertaining state law. CPC International, Inc. v. Northbrook
Excess & Surplus Insurance Co., 962 F.2d 77, 91 (1st Cir. 1992).
The Massachusetts Supreme Judicial Court has not
answered the precise issue at hand -- whether an employer may
terminate a fixed-term employee due to economic considerations.
The plaintiffs in Goldhor and Klein were fixed-term employees and
therefore similarly situated to appellant. As such, the
considered dicta in those cases concerning terminations due to
economic necessity represents a reliable statement of the law in
Massachusetts. The district court did not err in relying on it.
-5-
There is no indication that the highest court of Massachusetts
would define just cause any differently.
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UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 92-1886
FRANK X. LOSACCO,
Plaintiff, Appellant,
v.
F.D. RICH CONSTRUCTION CO., INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Frank H. Freedman, U.S. District Judge]
Before
Breyer, Chief Judge,
Torruella and Boudin, Circuit Judges.
Paul F. Kelly, with whom Shelley B. Kroll, and Segal,
Roitman & Coleman, were on brief for appellant.
Lewis G. Schwartz, with whom Gary S. Klein, and Schatz &
Schatz, Ribicoff & Kotkin, were on brief for appellee.
May 10, 1993
TORRUELLA, Circuit Judge. At trial, appellant claimed
that appellee ended his employment improperly. The jury
determined that appellant was terminated for just cause and
therefore found no violation of his employment contract.
Appellant now claims that the district court gave the jury an
erroneous instruction as to "just cause" and wrongly excluded
admissible relevant evidence at trial. Appellant thus asks this
court to vacate the judgment and order a retrial. Because we
find no error in the district court's instructions or evidentiary
rulings, we do not grant appellant his requests.
THE FACTS
Appellant is a structural engineer with an expertise in
pre-cast concrete construction. He worked as a consultant on
matters involving pre-cast concrete at appellee's Stamford,
Connecticut headquarters. Appellee soon determined that it would
be more profitable to make pre-cast products instead of buying
them from outside vendors. The company thus set up a factory
for this purpose in Pittsfield, Massachusetts and hired appellant
to manage it.
The details of the employment contract are in sharp
dispute. Appellant contends that he agreed to manage the
Pittsfield facility for a minimum of three years, in exchange for
salary and benefits including housing in Pittsfield for the three
year term. Appellee, on the other hand, contends that appellant
was an at-will employee, as were all other employees of the
company. In any event, appellant began work in Pittsfield in
-2-
August, 1987.
In October 1987, the company's senior managers visited
the plant, announced its immediate closure, and terminated all
employees, including appellant. Appellant claims that appellee
closed the plant to thwart union activity. Appellee, however,
contends that it decided to close the plant because the sharp
downturn in the Northeast real estate market affected its
construction projects. Appellee also claimed that appellant's
performance was inadequate.
Appellant sued, claiming that appellee was bound by
contract to employ him for three years. Appellee responded that
no contract was formed, but that even if one existed, the
termination was for "just cause" and therefore proper under
Massachusetts law. During the trial, appellant attempted to
cross-examine a former supervisor about testimony at a National
Labor Relations Board hearing to the effect that there was plenty
of work at the plant. The hearing occurred shortly before the
plant's closing. The district court judge disallowed this
questioning, finding it beyond the scope of direct examination,
and more prejudicial than probative.
At the close of evidence, the district court instructed
the jury that if a contract existed, termination for "just cause"
would be proper. The district court judge defined "just cause"
as 1) poor performance by appellant on the job or 2) a good faith
determination that the economic needs of the business required
appellant's discharge. During deliberations, the jury asked the
-3-
judge to repeat its definition of "just cause." The jury finally
found that a contract for fixed-term employment existed between
the parties, but that "just cause" allowed appellee to fire
appellant. This appeal followed in which appellant seeks a
retrial on only the breach of contract claims.
DISCUSSION
Appellant urges two errors in the jury instruction.
First, he contends that the instruction does not reflect the law
in Massachusetts as to the definition of just cause. Second, he
claims that the instruction improperly invaded the province of
the jury, by settling a question of fact, in violation of
Massachusetts law. As appellant claims that the jury instruction
incorrectly stated Massachusetts contract law, we review it de
novo. Salve Regina College v. Russell, 111 S. Ct. 1217 (1991)
(mandating de novo review of a district court's state law
determinations).
The suspect instruction reads as follows:
An employer has just cause to discharge an employee if, one, there is a reasonable basis for employer dissatisfaction with an employee, for reasons such as lack of capacity or diligence, failure to conform to usual standards of conduct, or other culpable or inappropriate behavior. Or two, the discharge is reasonably related, in the employer's honest judgment, to the economic needs of his business.
The district court derived this instruction almost verbatim from
a duo of Massachusetts cases, Goldhor v. Hampshire College, 521
N.E.2d 1381, 1385 (Mass. App. Ct. 1988), and Klein v. President
-4-
and Fellows of Harvard College, 517 N.E.2d 167, 169 (Mass. App.
Ct. 1987). Although those cases stated the entire just cause
definition, they focussed on the first prong, holding that the
employee either did or did not meet the performance standard.
Because the holdings did not invoke the second prong of the
definition, appellant argues that the economic needs standard is
not a part of Massachusetts law but rather dicta by intermediate
state courts. As such, it cannot support a jury instruction.
We disagree. When the highest state court has not
issued a definitive ruling on the precise issue at hand, the
federal courts may refer to analogous decisions, considered
dicta, scholarly works, or other reliable sources to ascertain
how the highest court would rule. Redgrave v. Boston Symphony
Orchestra, Inc., 855 F.2d 888, 903 (1st Cir. 1988) (en banc),
cert. denied, 488 U.S. 1043 (1989). The decisions of
intermediate state appellate courts are trustworthy data for
ascertaining state law. CPC International, Inc. v. Northbrook
Excess & Surplus Insurance Co., 962 F.2d 77, 91 (1st Cir. 1992).
The Massachusetts Supreme Judicial Court has not
answered the precise issue at hand -- whether an employer may
terminate a fixed-term employee due to economic considerations.
The plaintiffs in Goldhor and Klein were fixed-term employees and
therefore similarly situated to appellant. As such, the
considered dicta in those cases concerning terminations due to
economic necessity represents a reliable statement of the law in
Massachusetts. The district court did not err in relying on it.
-5-
There is no indication that the highest court of Massachusetts
would define just cause any differently.
To the contrary, we note that Massachusetts courts have
defined just cause, or similar language, in a virtually identical
manner in other contexts. Goldhor and Klein derived the
definition of just cause from G & M Employment Service, Inc. v.
Commonwealth, 265 N.E.2d 476 (Mass. 1970). In that case, the
highest court in Massachusetts defined just cause for the
purposes of a statute regulating private employment agencies.
The court's definition in that case was the direct precursor to
the definition used in Goldhor and Klein. Other Massachusetts
cases validating premature terminations due to economic need
include Amoco Oil Co. v. Dickson, 389 N.E.2d 406 (Mass. 1979)
(franchise agreement) and Karcz v. Luther Manufacturing Co., 155
N.E.2d 441 (Mass. 1959) (collective bargaining agreement). See
also Foreign Motors, Inc. v. Audi of America, Inc., 755 F. Supp.
30 (D. Mass. 1991) (franchise agreement). Appellant has directed
us to, and we have found, no cases involving just cause which
prohibit economically-motivated terminations. Given the weight
of authority, we believe that the jury instruction, taken from
Goldhor and Klein, correctly set forth Massachusetts law.
Appellant's second attack on that instruction claimed
that the instruction improperly invaded the province of the jury.
Consistent with the law on economically-based discharges,
however, the jury could decide whether appellee made an honest
business judgment to close the plant. Appellant cannot contend
-6-
that the parties contemplated just cause to have a different
meaning in this context because there was no evidence indicating
the existence of such an alternate meaning. The court thus
properly relied on the implied Massachusetts definition. We
decline appellant's invitation to remand the case for retrial or
to certify the state law question due to the jury instruction.
We turn now to appellant's arguments concerning the
exclusion of certain evidence. Appellant sought to cross-examine
a witness to show that there was plenty of work at the plant
shortly before its closing. Appellant hoped that an officer of
appellee would relate testimony from an NLRB hearing to this
effect. To elicit this testimony, appellant asked "[i]t was a
matter of some concern to you that the employees were going to
organize, wasn't it?" Appellee promptly objected to the
relevance of the question, and the judge held a bench conference.
Appellant there indicated that he wished to elicit the testimony
concerning the amount of work at the plant. The district court
excluded the testimony because the supervisor did not testify on
direct as to the motivation behind the plant closing or the
economic woes troubling the company.
We review a district court's evidentiary rulings only
for abuse of discretion, e.g., Willhauck v. Halpin, 953 F.2d 689,
717 (1st Cir. 1991), and the district court did not commit such
abuse in this instance. The new line of questioning sought to
establish that the plant was not closed for honest business
reasons. The witness, however, did not testify as to the
-7-
motivation for the company's action on direct examination. The
district court therefore properly refused to entertain the new
line of questioning pursuant to Fed. R. Evid. 611(b).
Of course, trial judges, within their discretion, may
disregard Rule 611(b). Fed. R. Evid. 611(b). We cannot say,
however, that the district court's decision to follow the rule
constitutes an abuse of discretion. The district court
reasonably believed that the question threatened prejudice in
that it would ascribe an unfair anti-union animus to appellee.
Even if appellant sought to show that the plant closing was
motivated by such animus, this single question supported by
minimal explanation or proffer cannot overcome Rule 611(b).
Appellant should have presented a more coherent rationale for
pursuing the questioning, or revived the questioning when a
witness testified as to such motivation.
Because we have found no cause to remand the case for a
new trial, we need not address whether that trial should be
limited to the breach of contract issues or should encompass all
issues in the case.
Affirmed.
-8-