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Kiely v. Raytheon Company, 96-1430 (1997)

Court: Court of Appeals for the First Circuit Number: 96-1430 Visitors: 6
Filed: Jan. 28, 1997
Latest Update: Mar. 02, 2020
Summary: 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. The agreement cannot be, deemed to survive Raytheon's entry of a separate plea, agreement and Kiely's learning of that plea agreement.
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



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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,



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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 ___________________



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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

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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

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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.

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"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.

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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.

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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



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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



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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

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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.

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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.

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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. ________













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