Opposition Brief — CSC Consulting, Inc. v. Tingley Systems, Inc.

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Supreme Court, U.S.

ea FILED

No. 99-765 a

ULERA

In The ee

Supreme Court of the United States eae

CSC CONSULTING, INC.,

Petitioner,

TINGLEY SYSTEMS, INC.,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The First Circuit

RESPONDENT'S BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

G. Donovan CONWELL, JR.

Counsel of Record

GUILLERMO A. PERNAS, JR.

Fow.er, Wuits, GILLEN, Bocas,

VILLAREAL AND BANKER, P.A.

Post Office Box 1438

Tampa, Florida 33601

(813) 228-7411

and

EDWARD P. LEIBENSPERGER

CHRISTA VON DER LUFT

Nutter, McCLennen & Fisu, LLP

One International Place

Boston, Massachusetts 02110-2699

(617) 439-2000

Attorneys for Respondent

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (302) 342-2831

QUESTIONS PRESENTED FOR REVIEW

Respondent disagrees with the questions presented by

the Petitioner. The only issue presented for review is

whether the First Circuit correctly applied the doc-

trine of res judicata to the particular facts of this case.

CORPORATE DISCLOSURE STATEMENT

Pursuant to this Court’s Rule 29.6, Respondent, Tin-

gley Systems, Inc., discloses that it is a privately held

corporation, has no parent corporation, no subsidiary and

no publicly held company owns any stock in Tingley

Systems, Inc.

ili

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........... i

CORPORATE DISCLOSURE STATEMENT ........__ ii

Pre CATERING ia 5 5 sia do's cack cc... iii

PO Ae ARITIMOMITTED 66.) osha os nosed iv

STATEMENT OF JURISDICTION................... 1

STATUTORY AND OTHER PROVISIONS

NEE oie Ce at

pomsumeerts OF Ie CASE... oc 1

REASONS FOR DENYING THE WRIT............. 7

I. The First Circuit’s Decision Is Consistent with

FOP OE TUMOR a 66ko oo ve osc, 7

Il. The First Circuit Correctly Applied the Res

PONE TIN 5 oon ee occ 12

III. The First Circuit Never Addressed or

Resolved the Co-Conspirator Issue, and Thus,

the Issue Should not be Reviewed by This

Ae hGas Selb sho6 ode vind ss bs oa 16

TABLE OF AUTHORITIES

Page

FEDERAL CASES

Allen v. McCurry, 449 U.S. 90 (1980).............. 12, 13

Bay State HMO Management, Inc. v. Tingley Systems,

Inc., 181 F.3d 174 (ist Cir. 1999). ....... 9, 10, 11, 16

Calderon Rosado v. General Elec. Circuit Breakers, 805

Faas. beet COR Ce FI ak ch nde sdcianesanuoieeres 15

Chase Manhattan Bank, N.A. v. Celotex Corp., 56 F.3d

See Cee SNe SPE 0.08 dada es akas hen cds tened eas 11

Devlin v. Transportation Communication Int'l Union,

B70 Te Bas GAO Ce Bee ei cccencecRi<caccenan 9, 11

Federal Dep’t Stores v. Moitie, 452 U.S. 394

CRORES os oni tae eve gnne cnaen sy acs ante apeiees 7, 15, 16

Hagee v. City of Evanston, 729 F.2d 510 (7th Cir.

NI) 6 os ds vss tannins ean bn sens Medes eee anes eo 9

Heck v. Humphrey, 512 U.S. 477 (1994)...........205. 13

Johnson v. Manhattan Ry. Co., 289 U.S. 479 (1933)... 7, 8, 9

Keith v. Aldridge, 900 F.2d 736 (4th Cir. 1990)........ 15

Langston v. Ins. Co. of N. Am., 827 F.2d 1044 (5th

COP, SIE 6 cic caddcnassecenss b4050bapuee eC 9

Mutual Life v. Hillmon, 145 U.S. 285 (1892) ........ 7, 10

United States v. Mendoza, 464 U.S. 154 (1984) ........ 13

STATUTES

pp Eee Bs eer reer err erry eC erry Tere ns 1

Bia oe | ere rr eee a tee ree Fale 3

pk a Ee er prem Een E ar rE Te vir 3

A A ee eee a ee 3

TABLE OF AUTHORITIES - Continued

Page

RuLes

lige linniathe SEE ELE NTer Peo 8

Fed. R. Civ. P. WO Sots isberctsacccei ie ee 10

ONE MIAN tae waist 8, 17

OTHER AUTHORITIES

RESTATEMENT (SECOND) oF JUDGMENTS § 26 (1982)....... 15

ee ae LS ae ee OF ae

PRR ge RE ee NL Re RO

RESPONDENT'S BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

Respondent, Tingley Systems, Inc., respectfully asks

that this Court deny the petition for writ of certiorari

seeking review of the judgment and opinion entered by

the United States Court of Appeals for the First Circuit in

this case on June 30, 1999.

STATEMENT OF JURISDICT ION

The jurisdiction of this Court is invoked pursuant to

28 U.S.C. § 1254(1).

STATUTORY AND OTHER

PROVISIONS INVOLVED

The Respondent disagrees with the Petitioner’s state-

ment of the statutory and other Provisions involved. Res

judicata is a judicial doctrine, and as such, no Statute or

rule of procedure is directly involved in this Petition.

STATEMENT OF THE CASE

Tingley Systems, Inc. (“Tingley”) sued one of its cus-

tomers, Bay State HMO Management, Inc. (“Bay State”),

in June 1993 for breach of contract and misappropriation

of trade secrets in Tingley’s computer software. (Petition

p. 3.)! About the same time, Bay State sued Tingley in the

United States District Court in Boston, Massachusetts

seeking a declaratory judgment concerning the parties’

rights in the software. Id. The Tingley case was trans-

ferred to the federal district court in Boston and the cases

were consolidated. Id.

In December 1993, during discovery in the consoli-

dated Bay State/Tingley cases, Tingley served a Sub-

poena Duces Tecum upon CSC Consulting, Inc. (“CSC”),

one of the consultants which provided computer consult-

ing services for Bay State. (Response App. pp. 1-3.)2 CSC

furnished documents to Tingley in January 1994, which it

claimed were all of the documents responsive to the

subpoena. Id. On November 15, 1994, Tingley deposed

Victoria Gifford (“Gifford”), a key employee of CSC who

worked on the Bay State project. During the deposition,

Tingley learned that Gifford had documents related to the

Bay State project. Tingley then served a Subpoena Duces

Tecum on Gifford for those documents during her deposi-

tion. (Response App. pp. 4-6.) In mid-December 1994,

after the November 30 discovery cut-off in the Bay State/

Tingley case, CSC produced documents responsive to

both Tingley’s December 1993 and November 1994 sub-

poenas to CSC and Gifford. (Response App. pp. 7-9.) The

documents revealed that CSC and Gifford had obtained

1 Tingley’s citations to CSC’s Petition are in the following

form: Petition p. x. If the citation is to the Petition’s Appendix,

the citation is Petition App. p. x. Citations to the Appendix to

this Response are in the following form: Response App. p. x.

2 The documents comprising Tingley’s Appendix are not

reproduced in their entirety. Only the portions relevant to this

Response have been reproduced.

Cs eee, eee

Tingley’s Proprietary file structures from Tingley’s soft-

ware, studied them and loaded them into software which

CSC was developing for Bay State. Id. Although the

incriminating CSC documents were due to be produced

under both subpoenas Prior to the discovery cutoff, CSC

did not produce the documents until after the discovery

cutoff. Id.

On February 9, 1995, based upon the information

revealed in the CSC documents, Tingley sued CSC for

secrets. (Response App. Pp. 10-11.) Tingley filed its suit

against CSC in the same court in which the consolidated

Bay State/Tingley cases were pending. Id. Tingley noti-

fied the clerk of that court that the CSC case was a

“related case” to the consolidated Bay State/Tingley

cases, resulting in the assignment of the CSC case to the

district court judge who was handling the Bay State/

Tingley case. (Response App. Pp. 46, 49-50.) On February

10, 1995, Tingley moved to consolidate the CSC case with

the Bay State/Tingley cases. (Response App. pp. 12-14.)

On July 11, 1995, Tingley’s motion to consolidate was

granted and the court consolidated the CSC and Bay State

cases into “one Proceeding.” (Petition App. p. 4.)3 There-

after, everything filed in the CSC and Bay State cases was

entered on the docket by the district court as if it had

been filed in each case. For example, CSC’s Answer and

Counterclaim, filed on July 25, 1995, was entered by the

3 The district court’s jurisdiction over the consolidated case

was based on 28 U.S.C. § 1332. Because the case involved

U.S.C. § 1331 and 28 U.S.C. § 1338.

court in the dockets of both the Bay State and CSC cases,

and CSC was identified on the docket sheet in the Bay

State/Tingley cases as the “consolidated defendant.”

(Response App. p. 16.)

Even before the CSC and Bay State cases were consol-

idated, the district court held joint hearings on motions

pending in the cases, for the convenience of both the

court and the parties. (Response App. pp. 20-22.) Also,

the court entered an order on September 12, 1995 provid-

ing that all the discovery taken in the Bay State/Tingley

cases could be used in the CSC case as if the discovery

had heen obtained in the CSC case. (Response App. pp.

23-26.) The court also commented, before it consolidated

the cases, that it viewed these related cases as just “one

big case.” (Petition App. p. 16.)

CSC’s answer to the Amended Complaint denied that

CSC had access to Tingley’s software and documentation,

that CSC copied the software and documentation, and

denied that CSC had conspired with Bay State to misap-

propriate the Tingley software. (Response App. pp.

27-30.) On July 25, 1995, Tingley filed a Second Amended

Complaint in the consolidated cases, pleading additional

allegations of fraud against Bay State. (Response App. pp.

31-34.) The Second Amended Complaint captioned both

the Bay State/Tingley cases and the CSC case. (Id.; Peti-

tion App. pp. 37-38.)

In September 1995, Tingley and Bay State reached a

settlement of the claims between them. (Petition App.

p- 5.) The Settlement Agreement specifically acknowl-

edges Tingley’s intent and right to continue its suit

against CSC, makes arrangements that bear out that

intent, and specifically states Tingley’s refusal to release

any claims that Tingley has against CSC and contem-

plates that the CSC action will continue. (Petition App. p.

24.) Attached to the Settlement Agreement was the Stipu-

lation and Order of Dismissal, which Tingley and the Bay

State defendants signed and which was entered as an

order by the Court on September 12, 1995. (Petition App.

P. 5.) The Stipulation and Order of Dismissal, which

captions both the Bay State/Tingley cases and the CSC

case, dismissed the claims between Tingley and the Bay

State defendants only. Id.

On October 17, 1995, CSC filed a motion for summary

judgment, seeking the dismissal of Tingley’s claims

against CSC on the basis of res judicata. (Petition App. p.

5.) CSC argued, among other things, that Tingley brought

its lawsuit against CSC for the purpose of obtaining

discovery to use in the Bay State/Tingley litigation. (Peti-

tion App. pp. 17-18.) The district court granted CSC’s

Motion for Summary Judgment. (Petition App. p. 5.) The

district court did not state that it agreed with CSC’s

accusation that Tingley had sued CSC for the purpose of

obtaining discovery in the Bay State cases and it noted

that granting CSC’s Motion for Summary Judgment

“seemed harsh.” (Petition App. pp. 32-33.)

Tingley timely appealed to the First Circuit Court of

Appeals. Tingley argued that the Summary Judgment

should be reversed because, among other reasons, the

court should treat the consolidated cases as a single

action for res judicata purposes under the facts of this

case. (Petition App. p. 6.) Tingley also argued that CSC

was not in privity with Bay State and that CSC had

consented to the alleged claim splitting. Id.

In its Response, CSC argued that the consolidated

cases should not be treated as a single case for res judi-

cata purposes because, according to CSC, Tingley sued

CSC in the second suit for the purpose of obtaining

discovery to use in the Bay State lawsuit. (Response App.

pp. 35-43.) CSC argued that such motivation made the

case “cry out” for the application of res judicata. (Id. at

p. 42.) CSC has suggestec the same equitable argument in

its Petition for Writ of Certiorari (the “Petition”) to this

Court, unnecessarily appending to its Petition a copy of

Tingley’s Motion to Extend Discovery Cutoff, filed in the

Bay State/Tingley cases, and the district court order

denying the motion. (Petition p. 4; Petition App. pp.

96-116; 117-18.) However, CSC failed to inform this Court

that when Tingley sued CSC, its motion to take additional

depositions in the Bay State/Tingley cases had been

denied “without prejudice.” Tingley was permitted to

renew its motion to take additional depositions after the

court decided Tingley’s motion to compel production of

documents, which was not decided until months after

Tingley sued CSC. (Response App. pp. 44-45)

The First Circuit Court of Appeals reversed the deci-

sion of the district court, holding that “under the limited

circumstances presented here, the consolidated cases

should have been treated as a single action for res judi-

cata purposes. ...” and that “the application of res

judicata was inappropriate.” (Petition App. p. 18.)

REASONS FOR DENYING THE WRIT

The issue raised in the Petition is whether the First

Circuit Court of Appeals incorrectly applied the doctrine

of res judicata to the unique facts of this case. The peti-

tioner does not challenge the First Circuit’s statement of

the res judicata doctrine. Instead, the petitioner contends

that the First Circuit did not correctly apply res judicata

because the First Circuit considered equity and the policy

considerations underlying the res judicata doctrine, when

applying the doctrine in this case. (Petition at pp. 22-26).

The petitioner contends that under this Court’s decision

in Federal Dep't Stores v. Moitie, 452 US. 394 (1981), policy

and equity considerations are irrelevant to the applica-

tion of res judicata. The petitioner also argues that the

First Circuit’s decision is at odds with Johnson v. Manhat-

tan Ry. Co., 289 U.S. 479 (1933) and Mutual Life v. Hillmon,

145 U.S. 285 (1892), which hold that consolidation does

not merge cases into a single cause or change the rights of

the parties.

The Petition should be denied. The First Circuit's

decision is consistent with Johnson, Hillmon and Moitie.

Moreover, the First Circuit properly considered policy

and equity considerations when deciding whether to treat

the consolidated cases as a single action for res judicata

purposes.

I. The First Circuit’s Decision Is Consistent with John-

son and Hillmon.

At the outset, it is important to note that the First

Circuit expressly restricted the scope of its decision to the

“limited circumstances presented here.” (Petition App.

p- 18.) This is simply not the type of decision that war-

rants review in this Court. See Sup. Ct. R. 10 (“A petition

for writ of certiorari is rarely granted when the asserted

error consists of erroneous factual findings or the misap-

plication of a properly stated rule of law.”) Moreover, the

limited issue decided by the First Circuit - whether “the

consolidated cases should have been treated as a single

action for res judicata purposes” — does not conflict with

any other case.

The issue on appeal in Johnson was the authority of a

specially assigned judge to entertain an application for

the appointment of receivers in a suit in equity. In decid-

ing that question, the Court mentioned the effect of con-

solidation made pursuant to a federal statute, even

though the issue of consolidation was not directly on

appeal. This Court wrote:

Under the statute, 28 U.S.C. §734, consolidation

is permitted as a matter of convenience and

economy in administration, but does not merge

the suits into a single cause or change the rights

of the parties or make those who are parties in

one suit parties in another.

Id. at 496-497.

Significantly, this Court did not address in Johnson

whether consolidated cases could be treated as a single

cause for certain purposes. Clearly, once cases are consol-

idated under Rule 42 of the Federal Rules of Civil Pro-

cedure, they are treated as a single cause for some

purposes, including trial and discovery.

The First Circuit addressed Johnson in its decision

and stated, consistent with Johnson, that the consolidation

of cases does not merge two separate actions into a single

cause. The First Circuit further recognized, however, that

Johnson said nothing about whether consolidated cases

could be treated as a single action for res judicata pur-

poses. The First Circuit’s decision, therefore, is not incon-

sistent with Johnson. Johnson did not address the issue of

whether there were circumstances under which consoli-

dated cases could be treated as a single cause for res

judicata purposes.

Nor is the First Circuit’s decision inconsistent with

the decisions of any other federal court of appeals. As the

First Circuit correctly pointed out, there are only three

other federal circuit courts which have considered this

issue, either directly or indirectly, and each is consistent

with the decision of the First Circuit in this case. Bay State

HMO Management, Inc. v. Tingley Systems, Inc., 181 F.3d

174, 177-178 (1st Cir. 1999). The Second Circuit Court of

Appeals, in Devlin v. Transportation Communication Int'l

Union, 175 F.3d 121, 129-130 (2d Cir. 1999), recognized

that the policies supported by res judicata would not be

served by applying the res judicata doctrine to the plain-

tiff in the related cases before it, which were pending in

the same court, at the same time and before the same

judge. Similarly, the Fifth Circuit, in Langston v. Ins. Co. of

N. Am., 827 F.2d 1044, 1048 (5th Cir. 1987), suggested that

consolidation would have prevented the application of

res judicata in that case. Finally, the Seventh Circuit, in

Hagee v. City of Evanston, 729 F.2d 510, 514 (7th Cir. 1984),

stated that res judicata is “tantamount to a rule requiring

parties to consolidate all closely related matters into one

suit.” (emphasis added). Thus, the only federal circuit

courts which have considered res judicata in this factual

context are in agreememt with each other.* The Petition

should be denied because the decision to be reviewed is

consistent with the decisions of this Court and the other

federal circuit courts.

The First Circuit’s decision is also not inconsistent

with this Court’s decision in Mutual Life. In Mutual Life,

where three cases had been consolidated for trial, this

Court held that the consiolidation did not cause any party

to lose its right to three peremptory challenges in jury

selection. If the cases had been tried separately, each

defendant would have had a statutory right to three

peremptory challenges. The Court held that the consol-

idation of the cases did mot deprive the defendants of that

right. The Court stated tthat consolidation cannot deprive

a defendant “without its consent, of any right material to

its defense, whether by way of challenge of jurors, or by

objection to evidence, to which it would have been enti-

tled if the cases had been tried separately.” Mutual Life,

145 U.S. at 293.

In contrast to the facts in Mutual Life, consolidation in

the present case did not deprive the petitioner of any

material right to its defense that it already had before the

consolidation. When the cases were consolidated in July

4 The petitioner’s exttensive discussion of different rules

among the federal circuit courts regarding the appealability of

consolidated cases under IRule 54(b) Fed. R. Civ. P. is irrelevant

to the issue here, which iis whether the First Circuit correctly

determined that these consolidated cases should be treated as a

single cause for res judicatta purposes. The First Circuit did not

decide this case based upon the effect of consolidating cases on

Rule 54(b) and, in fact, poismted out that this case did not involve

any Rule 54(b) issue. See Bay State, 181 F.3d at 178-79.

1995, CSC had no res judicata right because there was not

a judgment entered in the first suit.5

In addition, the petitioner had no res judicata rights

regardless of consolidation. As the First Circuit correctly

pointed out, the res judicata doctrine did not apply

because the cases were pending at the same time, in the

same court, before the same judge. See Bay State, 181 F.3d

at 181. Thus, none of the policy considerations of res

judicata were implicated. Id. Similarly, the Second Circuit

in Devlin overturned the application of res judicata, even

though there had been no consolidation, where the cases

under review were pending in the same court, at the

same time, on the active docket of the same judge. See

Devlin, 175 F.3d at 129-130. See also Chase Manhattan Bank,

N.A. v. Celotex Corp., 56 F.3d 343, 347 (2d Cir. 1995)

(describing the use of res judicata as “somewhat of an

ambush” where the first and second closely related

actions proceeded together before the same court, absent

only a formal consolidation order).

The facts in this case present an even more compel-

ling argument than the facts in Devlin for treating such

related cases as a single action for res judicata purposes

because (1) the cases in the present case were consoli-

dated, removing any possibility of inconsistent results;

(2) even before consolidation, the lower court viewed the

cases as just “one big case,” and heard motions in the Bay

State/Tingley/CSC cases at joint hearings for the conve-

nience of the court and of the parties; and (3) the court

5 Nor could there have been, because if judgment had been

entered in the first case there would net have been a case with

which to consolidate the second case.

consolidated the discovery in the cases. None of the

policies supporting the res judicata doctrine would have

been served by treating these consolidated cases as sepa-

rate cases for res judicata purposes.

The rights protected by applying res judicata to pre-

clude a case are the rights to not have to endure the cost

and vexation of multiple lawsuits and to avoid the possi-

bility of inconsistent results. See Allen v. McCurry, 449

U.S. 90, 94 (1980). CSC never lost these rights because the

CSC case always was pending in the same court, at the

same time, on the active docket of the same judge who

presided over the Bay State/Tingley cases and was con-

solidated with those cases. Therefore, as the First Circuit

correctly pointed out, there was no costly and vexatious

litigation and no possibility of inconsistent results.

CSC argues that it has lost the right to “assert” res

judicata as a defense. (Petition p. 9.) CSC has not lost the

right to assert the defense or have it applied because CSC

never had that right. There is no right to have the res

judicata doctrine applied when one of the requirements

for applying res judicata has not been satisfied.

li. The First Circuit Correctly Applied the Res Judicata

Doctrine.

The petitioner finds fault with the First Circuit for

assessing the preclusive effect of a judgment by looking

to the policies supported by the res judicata doctrine.

This Court, however, has instructed courts to do just that.

In Allen v. McCurry, 449 U.S. 90, 96 (1980) this Court

instructed that, in assessing the preclusive effect of a

judgment under the res judicata doctrine, a federal court

“may look to the common law or to the policies support-

ing res judicata and collateral estoppel...” This Court

also has instructed that, in the federal courts, res judicata

is “almost entirely judge-made” and in developing rules

regarding res judicata, the court should be guided by

federal policies. Heck v. Humphrey, 512 U.S. 477, 489 n.9

(1994). See also United States v. Mendoza, 464 U.S. 154

(1984) (recognizing exceptions to general principles of res

judicata in light of overriding federal policy concerns).

The policies supporting res judicata are (1) to relieve

parties of the cost and vexation of multiple lawsuits, (2)

to conserve judicial resources, and (3) to encourage

reliance on adjudication by preventing inconsistent deci-

sions. See Allen v. McCurry, 449 U.S. at 94. This Court has

looked to those policies for guidance in determining the

scope of both res judicata and collateral estoppel. See id.;

United States v. Mendoza, 464 US. 154, 158 (1984). The

First Circuit correctly identified those policies and con-

sidered them in its decision, solely to determine whether

to treat these consolidated cases as a single action for res

judicata purposes:®

First there was no “cost and vexation of multi-

ple lawsuits.” At the time of the settlement,

these cases were proceeding as if one case had

been filed against co-defendants CSC and Bay

State. The continuance of the case against CSC

when only Bay State chose to settle is not the

type of cost or vexation with which the res

judicata doctrine is concerned. Second, Tingley’s

® Contrary to CSC’s argument, the First Circuit never

purported to weigh “public policy” against the res judicata

doctrine to determine whether to apply res judicata in this case.

actions did nothing to waste judicial resources.

In asserting its claims against CSC, it mattered

little in terms of judicial efficiency whether Tin-

gley amended its pending Bay State action or

filed a new action and immediately consolidated

them. The cases still proceeded as if only one

case existed. Finally, there was no concern for

inconsistent decisions here because the cases

were consolidated. This was not a situation in

which one case was filed and proceeded to judg-

ment, only to have another case come along

threatening a contrary result. There was no

greater risk of inconsistency here than would

have existed if all claims had been brought by

Tingley in one comprehensive complaint. As

demonstrated above, one purpose of the res

judicata doctrine is to prevent a plaintiff from

raising claims that should have been raised in

an earlier action. Thus, when a plaintiff consoli-

dates two actions in order to ensure that all

claims will be adjudicated together, it makes

little sense to bar the later-filed claims once the

original claims are settled.

(Petition App. pp. 16-17.) After explaining why none of

the policies supported by the application of res judicata

were served by treating the consolidated cases as a single

action for res judicata purposes, the court of appeals held

solely that, under the “limited circumstances of this case,

these consolidated cases should have been treated as a

single action for res judicata purposes.” (Petition App. p.

18.)

CSC argues that the policies supported by the res

judicata doctrine are irrelevant to determining whether

an element of the res judicata doctrine applies in a given

case. This is tantamount to an argument that there should

not be any exception to the res judicata doctrine which is

justified on the basis that it advances the policies sup-

ported by res judicata. Such an argument ignores well

established law. For example, when a party consents to

claim splitting, the res judicata bar will not be applied.

See RusTaTEMENT (SECOND) OF JUDGMENTS § 26(a)(1) (1982).

See also Calderon Rosado v. General Elec. Circuit Breakers,

805 F.2d 1085, 1087 (1st Cir. 1986); Keith v. Aldridge, 900

F.2d 736 (4th Cir. 1990), cert. denied, 498 U.S. 900 (1990).

The Restatement explains that the justification for this

exception, is to advance “the main purpose” of the rule of

bar, which is to “protect the defendant from being

harassed by repetitive actions based on the same claim.”

See RESTATEMENT (SECOND) OF JUDGMENTS § 26(a)(1), cmt. a

(1982). See also id. § 26(a)(1), cmt. j (Comment j states that

“[a] defendant cannot justly object to being sued on a part

or phase of a claim that the plaintiff failed to include in

an earlier action because of the defendant’s own fraud.”)

(emphasis added). Moitie was not so broad, as CSC sug-

gests, to render null and void all exceptions to the appli-

cation of res judicata, which may be based upon policy

considerations or equity.

Finally, the petitioner has criticized the First Circuit

for discussing equitable issues in reaching its decision.

The petitioner’s criticism is remarkable, given the fact

that the petitioner raised equitable issues in response to

Tingley’s arguments in CSC’s brief to the First Circuit

Court of Appeals. (Response App. pp. 35-43.) The peti-

tioner attempted to mischaracterize the record to per-

suade the First Circuit that the respondent filed a second

lawsuit in the same court for the sole purpose of obtain-

ing discovery which it could not obtain in the first suit,

and argued that such motivation made this case “cry out”

for the application of res judicata. (Response App. pp.

35-43, 46-54.) While neither the district court nor the First

Circuit Court of Appeals accepted the petitioner’s accusa-

tion that the respondent brought the second suit to obtain

discovery for use in the first suit, the Court of Appeals

did respond to CSC’s equitable argument and addressed

the equities of the case in deciding whether to treat the

consolidated cases as a single suit for res judicata pur-

poses.

The First Circuit did not create an equitable excep-

tion to an otherwise valid application of the res judicata

doctrine and its decision is not inconsistent with Moitie.

In Moitie, the intermediate appellate court found that all

of the elements of res judicata were present, but that an

exception should be created due to equitable consider-

ations. 452 U.S. at 401. In contrast, in this case, the First

Circuit found that at least one of the elements of res

judicata, a final judgment on the merits in an earlier

action, was missing. To the extent the First Circuit consid-

ered equity, it did so only to determine whether the

consolidated actions should be treated as a single action

for res judicata purposes. Bay State, 181 F.3d at 182. Moitie

did not consider or decide this issue.

III. The First Circuit Never Addressed or Resolved the

Co-Conspirator Issue, and Thus, the Issue Should

not be Reviewed by This Court.

The third question presented for review in the Peti-

tion provides absolutely no basis for the issuance of a

writ of certiorari. The First Circuit’s decision was based

solely on its conclusion that the first element of res judi-

cata — a final judgment on the merits in an earlier action —

was not present. The First Circuit expressly did not

address any other element of the doctrine: “CSC and

Tingley dispute the first and third elements. . . . Because

we find that the first element is not satisfied, we do not

address Tingley’s other contentions.” (Petition App. p. 6.)

That is, the court of appeals did not rule on the issue

raised in CSC’s third question — whether there was suffi-

cient identity of the parties in the two suits to warrant

application of res judicata. CSC has not cited to any

authority that supports its contention that an issue that

was not addressed or resolved by the First Circuit Court

of Appeals may serve as the basis for the issuance of a

writ of certiorari. With respect to that question, then,

there is simply nothing for this Court to review.

In addition, one of the bases for Tingley’s appeal to

the First Circuit Court of Appeals was whether there

were disputed issues of material fact regarding the issue

of privity between CSC and Bay State. Disputed issues of

fact are not a proper grounds for invoking the jurisdiction

of this court in a petition for writ of certiorari. See Sup.

Ct. R. 10. The First Circuit did not decide the question of

whether there are disputed issues of material fact because

that issue was mooted. Therefore, addressing the third

question raised by CSC in its Petition would be nothing

more than an academic exercise as it relates to the merits

of this case, because in the event of a remand by this

Court, the First Circuit could still reverse on the basis

that there are disputed issues of material fact.

CONCLUSION

The First Circuit correctly applied the res judicata

doctrine to the special facts and circumstances of this case

and its decision does not conflict with decisions from this

or any other federal appellate court. Therefore, the Peti-

tion for Writ of Certiorari should be denied.

Respectfully submitted,

G. Donovan CONWELL, JR.

Counsel of Record

GuILLeRMO A. PERNas, Jr.

Fow er, Wuire, GILLEN, Boccs,

VILLAREAL AND BANKER, P.A.

Post Office Box 1438

Tampa, Florida 33601

(813) 228-7411

and

Epwarp P. LEIBENSPERGER

CHRISTA VON DER LUFT

Nutter, McCLennen & Fisu, LLP

One International Place

Boston, Massachusetts 02110-2699

(617) 439-2000

Attorneys for Respondent

Dated: January 21, 2000

App. 1

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

BAY STATE HMO

MANAGEMENT, INC.,

Plaintiff,

v. C.A. NO. 93-11283-RCL

TINGLEY SYSTEMS, INC.,

Defendant.

TINGLEY SYSTEMS, INC.,

Plaintiff,

Vv. C.A. NO. 93-12230-RCL

BAY STATE HEALTH

MANAGEMENT, INC. f/k/a

BAY STATE HMO

MANAGEMENT, INC. and

BLUE CROSS/BLUE SHIELD

OF MASSACHUSETTS, INC.,

Defendants.

TINGLEY SYSTEMS INC.’S REPLY TO CSC’S

OPPOSITION TO TINGLEY SYSTEMS, INC.’S

MOTION FOR CONSOLIDATION

OF RELATED ACTIONS

Tingley Systems, Inc. (“TSI”), hereby replies to CSC’s

Opposition to TSI’s Motion for Consolidation of Related

Actions (“CSC’s Opposition”), as follows:

TSI, after obtaining highly incriminating evidence of

CSC Consulting, Inc.’s, f{/k/a CSC Partners, (“CSC”)

App. 2

participation in Bay State’s misappropriation of its trade

secrets contained in the TSI software system, sued CSC.

CSC, although not yet a party to this action, filed an

opposition to TSI’s Motion to Consolidate. TSI has not

opposed CSC’s request to file such Opposition based

upon CSC’s agreement that TSI may reply to the Opposi-

tion. Because

+ * oa

CSC points to the timing of TSI’s initiation of litiga-

tion against CSC as its evidence that TSI sued CSC only

to get discovery concerning TSI’s claims against Bay State

and BCBS. Their argument ignores the fact that TSI’s suit

against CSC is based largely on the Gifford documents,

which CSC withheld from production in January, 1994

and which TSI did not obtain until December, 1994. CSC,

not TSI, controlled when TSI obtained this information.

This, in turn, significantly influenced when TSI would

sue CSC. This is not the only instance of CSC’s delay in

producing subpoenaed documents. Within the last ten

days, CSC produced over 2,000 more documents to TSI

which are directly responsive to TSI’s December, 1993

subpoena to CSC. Although some of these documents are

duplicates of others previously produced, many are not.

Many of these new documents bear directly on testimony

of witnesses already deposed in this case and bear

directly on the issues raised in TSI’s Complaint against

CSc.

If CSC had fully complied with the TSI subpoena in

January, 1994, and produced all of the documents

requested, then TSI would have sued CSC sooner. CSC,

not TSI, is to blame for withholding the information

App. 3

which TSI relied upon to bring its suit against CSC. TSI’s

decision to sue CSC on February, 1995, therefore, cannot

reasonably be viewed as merely some device to obtain

additional discovery.

* * *

App. 4

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

TINGLEY SYSTEMS, INC.,

Plaintiff,

CSC CONSULTING, INC., f/k/a

CSC PARTNERS, INC.,

Defendant.

Civil Action No.

95-10284-RCL

Ne ee ee ee ee ee ee ee

TSI’S OPPOSITION TO CSC’S

MOTION FOR SUMMARY JUDGMENT

Plaintiff, TINGLEY SYSTEMS, INC. (“TSI”), hereby

files this Opposition to the motion of Defendant, CSC

CONSULTING, INC. f/k/a CSC PARTNERS, INC.

(“CSC”), for summary judgment and alleges:

STATEMENT OF THE CASE AND FACTS

TSI is a family run business that creates, sells and

supports computer software for the Health Maintenance

Organization (“HMO”) industry. TSI and one of its cus-

tomers, Bay State HMO Management, Inc. (“Bay State”)

had a dispute concerning Bay State’s alleged use of the

TSI software to create software to which Bay State

claimed ownership. When TSI indicated that they would

be suing Bay State concerning this dispute, Bay State

sued TSI in United States District Court in Boston, Massa-

chusetts seeking a declaratory judgment that Bay State

owned the new software. TSI then immediately sued Bay

State in the United States District Court for the Middle

App. 5

District of Florida alleging misappropriation of TSI’s

trade secrets in the file structure of its proprietary soft-

ware and breach of the software license agreement. Bay

State successfully

+ + *

deposition that copies of these weekly status reports had

been distributed to multiple levels of management within

CSC and that she had retained copies of the weekly status

reports that she had prepared. Id. None of her status

reports were produced by CSC in January, as required by

the subpoena, although some weekly reports had been

produced for some other CSC consultants. TSI served

Gifford with a subpoena for her status reports during the

deposition. (Ex.2). CSC produced Gifford’s Status reports

to TSI in mid-December, weeks after the date they were

due in response to the Gifford subpoena and eleven

months after the due date of the first subpoena.?

Gifford’s weekly status reports revealed that she had

obtained access to the TSI trade secret file layouts, “stud-

ied” them and then “loaded” them into the software

which CSC was creating for Bay State. (Ex.3). Armed with

this strong evidence, TSI decided to sue CSC. This was a

difficult decision to make, given the fact that TSI already

was in very expensive litigation with two well-financed

defendants, and CSC, a billion dollar corporation,

undoubtedly would make the litigation even more expen-

sive. Given the fact that the pretrial and trial dates in the

2 CSC’s production also was after the discovery cut-off date

in the consolidated cases.

siecle

App. 6

Bay State litigation were quickly approaching, TSI

brought a second action in federal court in Boston.

TSI filed a motion to consolidate the TSI suit against

CSC with the consolidated cases between TSI, Bay State

and BCBS. CSC

App. 7

UNITED STATES SISTRICT COURT

DISTRICT OF MASSACHUSETTS

TINGLEY SYSTEMS, INC.,

Plaintiff,

Vs. C.A. NO. 95-10284

CSC CONSULTING, INC., f/k/a

CSC PARTNERS, INC.,

Defendant.

DECLARATION OF G. DONOVAN CONWELL, JR.

IN OPPOSITION TO MOTION

FOR SUMMARY JUDGMENT

My name is G. Donovan Conwell, Jr., I am over 21

years of age, I have personal knowledge of the matters set

forth in this declaration and am otherwise qualified to

make this declaration.

1. I am one of the attorneys for Tingley Systems,

Inc. (“TSI”), a party in this cause and in Bay State HMO

Management, Inc. vs. Tingley Systems, Inc., Civil Action

No. 93-11283 RCL and, Tingley Systems, Inc. v. Bay State

Health Management, Inc. f/k/a Bay State HMO Manage-

ment, Inc. and Blue Cross/Blue Shield of Massachusetts,

Inc., Civil Action No. 93-12230-RCL

2. In mid-December, 1994 CSC Consulting, Inc

(“CSC”) produced documents to TSI, including Status

Reports of Vicky Gifford that are attached as Exhibit 3 to

TSI’s Opposition to CSC’s Motion for Summary Judg-

ment. These documents are responsive to a subpoena

App. 8

served on CSC by TSI in December 1993, as well as to a

subpoena served on Vicky Gifford on November 15, 1994.

The documents admit that CSC had obtained, and then

studied TSI’s file layouts. After TSI read and evaluated

these documents, TSI decided to sue CSC for misap-

propriation of TSI’s trade secrets.

3. In August, 1995 counsel for Bay State HMO Man-

agement, Inc. and Blue Cross Blue Shield of Massa-

chusetts, Inc. (the “Bay State Defendants”), Marc Temin,

and I agreed to discuss settling the cases between TSI and

the Bay State Defendants.

4. TSI made a demand that would have settled all

three consolidated cases if accepted. I told counsel for the

Bay State Defendants that I would leave it to him to

contact CSC’s counsel about their client’s contribution.

He reported back to me that CSC was not interested in

discussing settlement at this time and that CSC was will-

ing to continue litigating with TSI. He then argued that

since TSI’s claims against CSC would continue to be

litigated if TSI settled only with the Bay State Defendants,

then TSI’s settlement demand should be reduced. On that

basis, TSI substantially reduced its settlement demand.

The parties continued to have settlement discussions for

weeks on the basis that TSI’s claims against CSC would

not be impaired by the settlement with the Bay State

Defendants.

5. TSI and the Bay State Defendants reached a set-

tlement agreement which is attached as Exhibit “8” to

TSI’s Opposition to CSC’s Motion for Summary Judg-

ment. The agreement specifically acknowledges the par-

ties’ intent, and TSI’s right, to continue TSI’s suit against

SAL LL IRIEL BIA ie A aa ERA NAN STE RY

spate abe

ees piso ne eS TEER ee peer

App. 9

CSC. Special provisions are included to make sure that

TSI’s suit against CSC would continue unimpaired by the

settiement and agreed upon dismissal. For example, the

Agreement

App. 10

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

TINGLEY SYSTEMS, INC., '

Plaintiff,

we: C.A. NO.

CSC CONSULTING, INC., f/k/a

CSC PARTNERS, INC.,

Defendant.

COMPLAINT

INJUNCTIVE RELIEF REQUESTED

Plaintiff, Tingley Systems, Inc. (“TSI”), sues the

defendant, CSC Consulting, Inc., f/k/a CSC Partners, Inc.

(“CSC”) and alleges:

Parties

1. TSI is a Florida corporation with its principal

place of business in San Antonio, Florida. TSI creates,

supports and distributes computer software for the

healthcare management organization (“HMO”) industry.

2. CSC is a Massachusetts corporation with its prin-

cipal place of business in Waltham, Massachusetts. CSC is

a subsidiary corporation of Computer Sciences Corpora-

tion and a sister corporation of CSC COMTEC, one of

TSI’s largest competitors. CSC provides computer tech-

nology consulting services and systems design, develop-

ment and integration services.

App. 11

Jurisdiction

3. The matter in controversy exceeds the sum of

Fifty Thousand Dollars ($50,000), exclusive of interest

and costs, and

* * *

should be required to compensate TSI and pay a license

fee to TSI for CSC’s use and enjoyment of the TSI Soft-

ware and documentation.

WHEREFORE, TSI requires that this Court award TSI

compensatory damages, attorneys fees, costs, interest and

such other and further relief as this Court deems just and

proper.

JURY TRIAL DEMAND

TSI demands a trial by jury on all issues so triable.

/s/ G. Donovan Conwell, Jr. /s/ Laurence H.

G. Donovan Conwell, Jr. Reece, III

Fla. Bar No. 371319 — urence H. Reece,

Guillermo A. Pernas, Jr.

Fla. Bar No. 0000574 Ay No.: 414460

Brent J. Gibbs Heidlage & Reece,

Fla. Bar No. 986348 rx

Fowler, White, Gillen, One Liberty Square

Boggs, Villareal & Boston,

Banker, PA. Massachusetts 02109

501 E. Kennedy Blvd., (617) 423-1200

Tampa, FL 33601

(813) 228-7411

Counsel for

Tingley Systems, Inc.

Local Counsel for

Tingley Systems, Inc.

Dated: February 9, 1995.

App. 12

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

TINGLEY SYSTEMS, INC.,

Plaintiff,

C.A. NO.

Vs.

95-10284

CS? CONSULTING, INC., f/k/a

CSC PARTNERS, INC.,

Defendant.

TINGLEY SYSTEM, INC.’S MOTION

FOR CONSOLIDATION OF RELATED ACTIONS

AND SUPPORTING MEMORANDUM

Plaintiff, Tingley Systems, Inc. (“TSI”), pursuant to

Rule 42(a) of the Federal Rules of Civil Procedure, hereby

moves that the related actions styled Bay State Bay State

[sic] HMO Management, Inc. v. Tingley Systems, Inc.

(C.A. No. 93-11283-RCL), and Tingley Systems, Inc. v. Bay

State Health Management, Inc., f/k/a Bay State HMO

Management, Inc. and Blue Cross/Blue Shield of Massa-

chusetts, Inc. (“BCBS”) (C.A. No. 93-12230-RCL) (the

“Consolidated Actions”) be consolidated with the above-

captioned Civil Action. In support of its motion, TSI

states as follows:

1. Civil Action 93-11283-RCL of the above-refer-

enced Consolidated Actions commenced in this Court on

June 11, 1993. On June 17, 1993, TSI commenced the

action styled Tingley Systems, Inc. v. Bay State HMO

Management, Inc. in the United States District Court for

App. 13

the Middle District of Florida. That case was subse-

quently moved to this Court and assigned Civil Action

No. 93-12230-H, and then consolidated with Civil Action

No.

* * *

WHEREFORE, TSI respectfully requests that the

related actions styled Bay State Bay State [sic] HMO

Management, Inc. v. Tingley Systems, Inc. (C.A. No.

93-11283-RCL), and Tingley Systems, Inc. v. Bay State

Health Management, Inc., f/k/a Bay State HMO Manage-

ment, Inc. and Blue Cross/Blue Shield of Massachusetts,

Inc. (C.A. No. 93-12230-RCL) be consolidated with the

above-named Civil Action.

Respectfully submitted,

/s/ Guillermo A. Pernas

G. Donovan Conwell, Jr.

Florida Bar No. 371319

Guillermo A. Pernas

Florida Bar No. 0000574

Fowler, White, Gillen, Boggs,

Villareal and Banker, P.A.

Post Office Box 1438

Tampa, Florida 33601

(813) 228-7411

Counsel for Tingley Systems, Inc.

Laurence H. Reece, III

Bar No.: 414460

Heidlage & Reece, P.C.

One Liberty Square

Boston, Massachusetts 02109

(617) 423-1200

Local Counsel for

Tingley Systems, Inc.

App. 14

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of

the foregoing has been furnished to counsel for CSC at

Five Cambridge Center, Cambridge, MA 02142 by U.S.

Mail this 10 day of February, 1995.

/s/ Guillermo A. Pernas

Attorney

App. 15

CourtLink Details for ** Case: 1:93cv12230 **

Date Printed: 1/27/99 9:59:35 AM

Court: Federal District Court — District of Massachusetts

(Boston)

Case: Tingley Systems v. Bay State Health, et al

Judge: Judge Reginald C. Lindsay

Filed On: 10/14/93

Note: Dkt # in Middle Dist FL: is 93-993

Names

Litigant Litigant’s Attorney

TINGLEY SYSTEMS Edward P. Leibensperger

Plaintiff [COR LD NTC]

Christa von der Luft

[COR LD NTC]

Nutter, McClennen & Fish

One International Place

Boston, MA 02110-2699

617-439-2000

George D. Conwell, Jr.

[COR LD NTC]

Guillermo A. Pernas, Jr.

[COR LD NTC]

Brent J. Gibbs

[COR LD NTC]

Fowler, White, Gillen

P.O. Box 1438

Tampa, FL 33601

813-228-7411

Laurence H. Reece, III

[term 05/28/98]

[COR LD NTC]

Heidlage & Reece

One Liberty Square

Boston, MA 02109

617-423-1200

a a aaseiandember hae ee

App. 16

Vv.

BAY STATE HEALTH

MANAGEMENT, INC.

fka

Bay State HMO

Management, Inc.

Defendant

CSC CONSULTING, INC.

fka

CSC Partners, Inc.

Consolidated Defendant

Richard W. Benka

Kathryn Partridge

[term 03/30/95]

[COR LD NTC]

Marc K. Temin

[COR LD NTC]

Foley, Hoag & Eliot

One Post Office Square

Boston, MA 02109

617-832-1000

Andrew C. Griesinger

[COR LD NTC]

Michael A. Walsh

[COR LD NTC]

Choate, Hall & Stewart

Exchange Place

Boston, MA 02109

617-227-5020

Federal District Court - District of Massachusetts (Bos-

ton)

Tingley Systems v. Bay State Health, et al

Docket as of July 14, 1998 10:49 pm

1 10/14/93 Original file, certified copy of transfer

order and docket sheet received from

District of Middle Florida (Tampa) (bdb)

[1:93cv12230]

2 10/15/93 Judge Edward F. Harrington - FINAL

PRETRIAL CONFERENCE ORDER: set

pretrial conference for 2:00 10/17/94

(mb) [Entry date 10/18/93]

{1:93¢v12230]

10/19/93

11/8/93

12/17/93

4/25/94

6/28/94

8/15/94

8/29/94

9/15/94

App. 17

Answer to Complaint by Bay State

HMO Manage (mb) [1:93cv12230]

Amended Answer to Complaint by Bay

State HMO Manage: amends [3-1]

answer (mb) [Entry date 11/12/93]

[1:93cv12230]

Consolidated Member Case — Lead Case

Number: 93cv 11283 (mb) [1:93cv12230]

Letter by Marc K. Temin dated: April 25,

1994 to: Leann Ouellette re: copy of let-

ter to Laurence Reece that hearing set

for 4/27/94 is cancelled, filed. (wbs)

[Entry date 04/28/94] [1:93cv12230]

Letter dated: June 28, 1994 to: Lisa

Hourihan re: Tingley Systems will be

filing a sur-reply to the reply memoran-

dum by Bay State, filed. (wbs)

[1:93cv12230]

Motion by Tingley Systems for leave to

file amended complaint and add par-

ties, filed c/s. (wbs) [Entry date

08/16/94] [1:93cv12230]

Response by Bay State HMO Manage to

[7-1] motion for leave to file amended

complaint and add parties, filed c/s.

(wbs) [Entry date 08/30/94]

[1:93cv12230]

Motion by Tingley Systems to modify

scheduling order, filed (See 93-11283

Lead Case). (wbs) [Entry date 09/16/94]

[1:93cv12230] 3

9/15/94

9/16/94

7/25/95

App. 18

Affidavit of George D. Conwell Jr., re:

[0-1] motion to modify scheduling

order, filed (See 93-11283 Lead Case).

(wbs) [Entry date 09/16/94]

[1:93cv12230]

Motion by Tingley Systems to compel

production of

* + 4

cc/cl. (wbs) [Entry date 08/10/95]

[1:93cv11283 1:95cev10284]

Motion by Bay State HMO Manage in

1:93-cv-11283, Bay State Health in 1:93-

cv-12230 for reconsideration of [145-1]

order in 1:93-cv-11283, [0-1] order in

1:93-cv-12230 and order allowing Ting-

ley Systems additional deposition dis-

covery pursuant to amended complaint

with oral argument, filed c/s. Referred

to Mag. Judge Marianne B. Bowler

(wbs) [Entry date 08/09/95]

[1:93cv11283 1:93cv12230]

Answer by CSC Consulting, Inc. in 1:93-

cv-11283, CSC Consulting, Inc. in 1:95-

cv-10284 to amended complaint, filed

c/s.; jury demand (wbs) [Entry date

08/09/95] [1:93cv11283 1:95cv10284]

Counterclaim by CSC Consulting, Inc.

in 1:93-cv-11283, CSC Consulting, Inc.

in 1:95-cv-10284 against Tingley Sys-

tems in 1:93-cv-11283, Tingley Systems,

Inc. in 1:95-cv-10284, filed c/s. (wbs)

[Entry date 08/09/95] [1:93cv11283

1:95cv 10284]

“4

By,

“4

7/25/95

7/26/95

App. 19

Objections and Motion by CSC Consult-

ing, Inc. in 1:93-cv-11283, CSC Consult-

ing, Inc. in 1:95-cv-10284 for

reconsideration of [145-1] order in 1:93-

cv-11283, [0-1] order in 1:95-cv-10284,

filed c/s. (wbs) [Entry date 08/09/95]

[1:93cv11283 1:95cv10284]

Objections by CSC Consulting, Inc. in

1:93-cv-11283, CSC Consulting, Inc. in

1:95-cv-10284 to [47-1] report and rec-

ommendations in 1:95-cv-10284, filed

c/s. (wbs) [Entry date 08/09/95]

[1:93cv11283 1:95cv10284]

Second Amended complaint by Tingley

Systems, Inc in 1:93-cv-11283, Tingley

Systems in 1:93-cv-12230, Tingley Sys-

tems, Inc in 1:95-cv-10284 filed. [Answer

due 8/5/95 for CSC Consulting, Inc. in

1:93-cv-11283, for Blue Cross & Blue in

1:93-cv-11283, for Bay State Health in

1:93-cv-11283, for Tingley Systems in

1:93-cv-11283, for CSC Consulting, Inc.

in 1:93-cv-12230, for Bay State Health in

1:93-cv-12230, for Blue Cross & Blue in

1:93-cv-12230, for CSC Consulting, Inc.

in 1:95-cv-10284). Amended complaint

amends [0-1] amended complaint in

1:93-cv-11283, [10-1] amended com-

plaint in 1:93-cv-12230, [48-1] amended

complaint in 1:95-cv-16284; jury

demand. (wbs) [Entry date 08/09/95]

[1:93cv11283 1:93cv12230 1:95cv10284]

Objections by Tingley Systems in 1:93-

cv-11283, Tingley

+ om

App. 20

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

TINGLEY SYSTEMS,

INC.,

Civil Action No.

Plaintiff, 95-10284-RCL

Vv.

CSC CONSULTING,

INC., f/k/a CSC

PARTNERS, INC.,

Defendant.

TSV’S OPPOSITION TO CSC’S MOTION

FOR SUMMARY JUDGMENT

Plaintiff, TINGLEY SYSTEMS, INC. (“TSI”), hereby

files this Opposition to the motion of Defendant, CSC

CONSULTING, INC. f/k/a CSC PARTNERS, INC.

(“CSC”), for summary judgment and alleges:

STATEMENT OF THE CASE AND FACTS

TSI is a family run business that creates, sells and

supports computer software for the Health Maintenance

Organization (“HMO”) industry. TSI and one of its cus-

tomers, Bay State HMO Management, Inc. (“Bay State”)

had a dispute concerning Bay State’s alleged use of the

TSI software to create software to which Bay State

claimed ownership. When TSI indicated that they would

be suing Bay State concerning this dispute, Bay State

sued TSI in United States District Court in Boston, Massa-

chusetts seeking a declaratory judgment that Bay State

App. 21

owned the new software. TSI then immediately sued Bay

State in the United States District Court for the Middle

District of Florida alleging misappropriation of TSI’s

trade secrets in the file structure of its proprietary soft-

ware and breach of the software license agreement. Bay

State successfully

+ * +

opposed the motion, representing, among other things,

that the claims in the suits were not the same. (Ex.5). CSC

also said in its Opposition that “ . . . Bay State and CSC

are entirely independent of one another... ”. (Ex.5). At

the hearing on the motion, CSC represented:

... the issues [in the Bay State and CSC cases]

are not the same . . . The main issue [in the Bay

State case] is the contract claim. . . . which

doesn’t involve us [CSC] at all. The software

which is at issue is the extraction software

which CSC had nothing to do with wri-

ting . .. There are some common issues . . . but

most of it has nothing to do with us [CSC]... .

they’re not the same cases by any stretch of the

imagination. (Ex.6).

The order consolidating the CSC case with the Bay

State cases provides that the cases will be tried together.

Even before consolidation, all hearings in the Bay State

cases and this case were set and conducted at the same

time. The parties stipulated to an Order that all discovery

in the Bay State cases could be used in the CSC case as if

taken in that case. (Ex.7). The Bay State cases and this

case became one case for all practical purposes.

App. 22

In August, 1995, counsel for TSI and the Bay State

defendants agreed to have settlement discussions. (Con-

well Decl. Ex.4). TSI made a demand that would have

settled all three consolidated cases if accepted and told

counsel for the Bay State defendants that he would leave

it to him to contact CSC’s counsel about their client’s

contribution. Id. He reported back that CSC was not

interested in discussing settlement at this time and that

CSC was willing to continue litigating with TSI. Id. He

then argued that since TSI’s claims against CSC would

continue to be litigated if TSI settled only with the Bay

State defendants, then TSI’s settlement demand

* + +

App. 23

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

BAY STATE HMO

MANAGEMENT, INC.,

Plaintiff, CIVIL ACTION

NO. 93-11283-RCL

“3 (Filed Sept. 7, 1995)

)

TINGLEY SYSTEMS, INC.,

Defendant. )

TINGLEY SYSTEMS, INC., ‘

Plaintiff, )

v. )

BAY STATE HEALTH CIVIL ACTION

MANAGEMENT, INC., NO. 93-12230-RCL

)

f/k/a BAY STATE HMO

MANAGEMENT, INC.,

Defendant.

TINGLEY SYSTEMS, INC.,

Plaintiff,

CIVIL ACTION

NO. 95-10284-RCL

Vv.

CSC CONSULTING, INC.,

f/k/a CSC PARTNERS,

INC.,

Defendant.

App. 24

STIPULATION AND ORDER

REGARDING USE OF DISCOVERY

The plaintiff, Tingley Systems, Inc. (“TSI”), and the

defendant, CSC Consulting, Inc. (“CSC”), stipulate and

agree as follows:

1. All depositions taken in the Bay State cases (Case

numbers 93-12230 and 93-11283) may be used in the

litigation between TSI and CSC (Case number 95-10284)

(hereinafter the “CSC case”), as if taken in the CSC case.

To the extent that CSC did not receive notice of, have

representation at or participate in such depositions, such

fact shall not be a ground for objecting to the use or

admission into evidence of the transcripts of, and exhibits

to, such depositions at trial in the CSC case. All other

grounds for objecting to the use or admissibility of the

transcripts of, or exhibits to, such depositions which are

available to any party under the Federal Rules of Evi-

dence and the Federa’ Rules of Civil Procedure shall be

preserved without prejudice.

2. CSC may depose any witnesses deposed in the

Bay State cases for the purpose of conducting further

examination of that witness. TSI shall be permitted to

conduct re-direct or cross-examination (whichever

applies) of any such witnesses, if CSC conducts further

examination. The right of CSC or TSI to move for a

protective order to protect against undue repetition or

harassment or any other alleged abuse of the deposition

is preserved.

3. All objections of CSC, including objections as to

form, to any question posed to any witness deposed in

the Bay State cases shall be reserved until time of trial.

fale a tla

2 i es Li a tS OE OO

e Pigicsabata rise tah aas aes Sear Ter ey

puede

BARE CNR Ne SARNIA DS it

= 4

App. 25

All motions to strike of CSC which otherwise would be

required to be made during the deposition shall be

reserved until time of trial.

4. If either party makes any deposition designations

for use at trial, the opposing party shall be required to

assert any objections as to form with regard to each of

those designations by any court-imposed deadline.

For Tingley Systems, Inc.:

/s/ G. Donovan Conwell, Jr.

G. Donovan Conwell, Jr.

Florida Bar No. 371319

Fowler, White, Gillen, Boggs,

Villareal and Banker, P.A.

P.O. Box 1438

Tampa, FL 33601

(813) 228-7411

/s/ Laurence H. Reece, III

Laurence H. Reece, III

BBO #414460

Heidlage & Reece, P.C.

One Liberty Square

Boston, MA 02109

(617) 423-1200

For CSC Consulting, Inc.

/s/ Michael Arthur Walsh

Michael Arthur Walsh

BBO #514875

CHOATE, HALL & STEWART

Exchange Place

53 State Street

Boston, MA 02109

(617) 248-5000

App. 26

DONE and ORDERED this 12th day of September,

1995.

/s/ Marianne B. Bowler

Marianne B. Bowler, U.S.M.].

—.

ati:

“6

ee.

% 3

App. 27

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

BAY STATE HMO

MANAGEMENT, INC.,

Plaintiff, CIVIL ACTION

NO. 93-11283-RCL

TINGLEY SYSTEMS, INC.,

Defendant.

TINGLEY SYSTEMS, INC.,

Plaintiff,

BAY STATE HEALTH

)

) CIVIL ACTION

MANAGEMENT, INC.,

)

NO. 93-12230-RCL

f/k/a BAY STATE HMO

MANAGEMENT, INC.,

Defendant.

TINGLEY SYSTEMS, INC Ss

Plaintiff,

CIVIL ACTION

NO. 95-10284-RCL

CSC CONSULTING, INC.,

f/k/a CSC PARTNERS,

INC.,

Defendant.

App. 28

DEFENDANT CSC CONSULTING, INC.’S ANSWER

TO PLAINTIFF’S AMENDED COMPLAINT

AND COUNTERCLAIM

ANSWER

As and for its answer and defenses to the Amended

Complaint (the “Complaint”) filed by plaintiff, Tingley

Systems, Inc. (“TSI”), in this civil action, defendant, CSC

Consulting, Inc. (“CSC”), alleges as follows:

* + *

24. In response to the allegations in paragraph 24 of

TSI’s Complaint, CSC states that the provisions of the

License speak for themselves.

25. CSC denies that it integrated or copied any

information concerning TSI software in the design of

POS, DSS or BayStar. CSC admits that some of its

employees received and reviewed limited information

concerning what Bay State data was stored by the system

which operated the TSI software, that, after CSC had

developed a logical data model for the BayStar system,

some of its employees did some rudimentary data map-

ping work to determine what existing Bay State data

would be available for conversion into that logical data

model, and that one or more of them created one or more

rudimentary hand sketches showing where some of Bay

State’s data might be stored in the information system

then used by Bay State. To the extent not specifically

admitted herein, the allegations set forth in paragraph 25

of the Complaint are denied.

26. Paragraph 26 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

App. 29

required. To the extent that paragraph 26 of TSI’s Com-

plaint alleges any fact, CSC denies that allegation.

27. CSC admits the first sentence of paragraph 27 of

the Complaint. CSC admits that for a limited period of

time, certain of its employees worked on the same floor

as members of Bay State’s MIS staff. CSC admits that

some of its personnel had access to terminals which were

connected to computers which did not operate the TSI

software, which computers, in turn, were connected by

an ethernet connection to a mainframe computer which

did operate the TSI software. CSC denies, however, that

any of its personnel had the ability or means to operate or

gain access to any programs on the

* * *

43. Paragraph 43 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required. To the extent that paragraph 43 of TSI’s Com-

plaint alleges any fact, CSC denies that allegation.

44. Paragraph 44 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required.

45. Paragraph 45 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required.

Count III

46. CSC realleges and incorporates herein its

answers to the allegations made in paragraphs 1 through

33 above.

App. 30

47. Paragraph 47 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required. To the extent that paragraph 47 of TSI’s Com-

plaint alleges any fact, CSC is without knowledge or

information sufficient to form a belief as to the truth of

that allegation, except that CSC admits that TSI has not

authorized it to copy, reproduce, manufacture, duplicate,

disseminate, distribute, make derivative works or use the

TSI software.

48. Paragraph 48 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required. To the extent that paragraph 48 of TSI’s Com-

plaint alleges any fact, CSC denies that allegation.

49. Paragraph 49 of TSI’s Complaint states conclu-

sions of law as to which responsive pleading is not

required. To the extent that paragraph 49 of TSI’s Com-

plaint alleges any fact, CSC denies that allegation.

> * >

ty = =, era ~ tes

be A Ras eet’) | Li Ant pte

App. 31

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

BAY STATE HMO

MANAGEMENT, INC., C.A. NO.

Plaintiff, 93-11283-RCL

TINGLEY SYSTEMS, INC.,

Defendant.

TINGLEY SYSTEMS, INC., i

Plaintiff,

BAY STATE HEALTH C.A. NO.

MANAGEMENT, INC. £/ k/a 93-12230-RCL

BAY STATE HMO

MANAGEMENT, INC. and

BLUE CROSS/BLUE SHIELD

OF MASSACHUSETTS, INC.,

Defendants.

TINGLEY SYSTEMS, INC.,

Plaintiff,

CSC CONSULTING INC.,

f/k/a CSC PARTNERS, INC., C.A. NO.

Defendant. 95-10284

App. 32

SECOND AMENDED COMPLAINT

(CONSOLIDATED CASE) INJUNCTIVE

RELIEF REQUESTED

Plaintiff, Tingley Systems, Inc. (“TSI”), sues the

defendants, Bay State Health Management, Inc. f/k/a

Bay State HMO Management, Inc. (“Bay State HM”) and

Blue Cross and Blue Shield of Massachusetts, Inc.

(“BCBSMA”), and alleges:

Parties

1. TSI is a Florida corporation with its principal

place of business in San Antonio, Florida. TSI creates,

supports and

* + *

in their possession, custody or control, including but not

limited to the POS and DSS software. TSI further requests

that this Court (1) award TSI damages; (2) award TSI its

attorney’s fees pursuant to 17 U.S.C. § 505, the cost of suit

and interest; and (3) award TSI such other and further

relief as the Court deems just and proper.

Count V

(Fraud - Bay State HM and BCBSMA)

75. TSI realleges and incorporates herein the allega-

tions made in paragraphs 1 through 47 above.

76. Bay State HM and BCBSMA intentionally made

certain representations to TSI as alleged in paragraphs

29-32 and 42 above.

77. Said representations were false.

App. 33

78. Bay State HM and BCBSMA knew that said rep-

resentations were false.

—_ oy 4 Ta L

PER Aas Mahan Sine poe ess van pata 5

PR EEE Oe POR See PR ee a es NG sw ittar

79. Bay State HM and BCBSMA made said represen-

tations to TSI with the intent that TSI rely thereon.

OR nite oe Sa es &

Se eee

80. TSI did rely upon said representations to its

detriment.

- ere ae

iss piaishteh Shee

81. As a result thereof, TSI suffered damages in an

amount to be determined at trial.

WHEREFORE, TSI requests that this Court award TSI

compensatory and punitive damages, attorney’s fees,

costs,

Count VI

(Fraud — Bay State HM)

82. TSI realleges and incorporates herein the allega-

tions made in paragraphs 1 through 47 above.

. bs Sh Os SPA Bk OS a Pee 2 ir

= Pie Re Dh Cte Sei ee P hin SP Pe a

83. Between April and December, 1990, Bay State

HM negotiated with TSI to purchase rights to utilize the

TSI software to develop its own software packages. Mar-

gie Tingley sent a letter to James Carmona of Bay State

| HM informing him that the right to use the TSI software

for these purposes would cost $5,000,000, with the under-

Standing that such an agreement would not affect TSI’s

84. Jim Carmona represented to TSI on behalf of

Bay State, in April or May, 1990 and in October of 1990,

that a “Chinese wall” and clean room development

approach were being utilized by Bay State to develop Bay

State-owned software, and that no one who worked with

App. 34

or had access to the TSI system would be developing Bay

State-owned software. He represented that all Bay State-

owned software was being created through “independent

development”.

85. Despite the representation by Bay State that it

was using “Chinese wall” and clean room development

procedures to develop its own software, no such pro-

cedures were used. Bay State programmers who worked

regularly on the TSI software were the developers of

BayStar. TSI’s file structures, which are part of the TSI

software, were disclosed to CSC. Bay State gave CSC

personnel access to confidential and proprietary informa-

tion about the TSI system including, but not limited to,

the file structures, data

» > *

CERTIFICATE OF SERVICE

| HEREBY CERTIFY that on this 25th day of July,

1995, a true and correct copy of the foregoing was fur-

nished by U.S. Mail to Andrew C. Griesinger, Esquire of

Choate, Hall & Stewart, Exchange Place, 53 State Street,

Boston, Massachusetts 02109-2891 and to Marc Temin,

Esquire of Foley, Hoag & Eliot, One Post Office Square,

Boston, Massachusetts 02109.

/s/ Guillermo A. Pernas

Attorney

Porson eat

Fe ip ta Age ea Rit a eek ht ag

Re atte

TR OVO Py DS

App. 35

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Case No. 98-2334 Case No. 96-1574

TINGLEY SYSTEMS, TINGLEY SYSTEMS,

INC., INC.,

Plaintiff-Appellant, Defendant-Appellant,

v. v.

CSC CONSULTING, BAY STATE HMO

INC., f/k/a CSC MANAGEMENT, INC.,

PARTNERS, INC. ET AL.,

Defendant-Appellee. Plaintiffs-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF MASSACHUSETTS

BRIEF OF APPELLEE CSC CONSULTING, INC.

Michael Arthur Walsh

Eric J. Marandett

Laura M. Scott

Choate, Hall & Stewart

Exchange Place, 53 State Street

Boston, MA 02109-2891

(617) 248-5000

Attorneys for Appellee, CSC

Consulting, Inc.

App. 36

* * *

stipulation; TSI instead proceeded (correctly) as if the Bay

State Case and the CSC Case were not the same action.*

In short, TSI knew perfectly well at the time it stipulated

to the dismissal of the Bay State Case that the CSC Case

was a separate and distinct civil action, and it acted in

accordance with this knowledge.° Its argument on appeal

that this Court should nevertheless disregard the separate

identify of the CSC Case in construing the effect of the

dismissal to which TSI stipulated in the Bay State Cases is

undercut by its own conduct in entering into that stipula-

tion.

TSI’s argument that the CSC Case and the Bay State

Case lost their status as separate actions upon the district

court’s consolidation of the cases must be rejected for a

third reason. TSI claims that “[t]here are sound policy

reasons for treating the consolidated Bay State and CSC

cases as a single action for res judicata purposes.” TSI’s

* Had CSC been a party to the same action in which other

parties sought the entry of a final judgment upon their claims,

those parties would have been required to seek the entry of such

a judgment by way of a motion under F. R. Civ. P. 54(b), instead

of by stipulation.

5 In fact, the record before the district court was

uncontradicted that the fact that the CSC Case and the Bay State

Case were separate and district actions was brought to the

attention of TSI’s counsel before TSI stipulated to the dismissal

of the Bay State case. TS] was informed by counsel to Bay State

that CSC’s signature upon the stipulation of dismissal in the Bay

State Case “was not required . . . because [CSC] was a party toa

separate, albeit consolidated action.” App. 2284.

App. 37

Principal Brief at 24. Specifically, TSI claims that the con-

solidation of the CSC Case with the Bay State Cases

served the same interests which are Protected by the res

judicata doctrine. Id. 24. This contention is premised upon

TSI’s view that, due to the consolidation of the two cases,

“[flor all practical purposes, CSC and Bay State were co-

defendants in a single lawsuit.” Id. 25. One need look no

further than the record of the Proceedings before the trial

court in the consolidated cases for a complete rebuttal of

this argument.

Discovery in the Bay State Case was originally sched-

uled to be completed by October 1, 1994. App. 148. Pur-

suant to TSI’s motion, on September 21, 1994 the district

court extended the date for the completion of all discov-

ery in the Bay State Case to November 30, 1994. App.

48-49, 194. At the same time, the district court scheduled

trial to commence on May 30, 1995. App. 49, 194-95. On

December 2, 1994, after the discovery period in the Bay

State Case had expired, TSI filed a motion to extend

discovery in the case so that it could conduct certain

additional discovery, and so that it could complete certain

other discovery which it had already commenced. App.

50, 237-54. It characterized this discovery as “critical to

TSI’s case.” App. 254. On December 12, 1994, almost two

weeks after the expiration of the discovery period, TSI

filed a motion seeking leave to take in excess of fifteen

depositions in the Bay State Case. App. 51, 326-46. In this

motion, TSI claimed that it needed to depose certain

additional CSC employees, as well as a number of addi-

tional Bay State employees, in order to prepare its case

for trial. TSI characterized these additional depositions as

“essential” and “crucial” to its case. App. 342.

App. 38

By orders dated December 16 and December 21, 1994,

respectively, the district court denied TSI’s motions to

further extend the discovery period in the Bay State Case

and for leave to take in excess of fifteen depositions. App.

347, 348. TSI then moved for reconsideration of these

orders. App. 349-55. On February 9, 1995, with fifteen

weeks remaining until trial was scheduled to commence

in the Bay State Case and while its motion for recon-

sideration of the district court’s orders terminating dis-

covery in the case was pending, TSI filed its separate civil

action against CSC. App. 86, 1622-61.

TSI filed the CSC Case without ever having sought

leave to amend its complaint in the Bay State Case in

order to add CSC as a party defendant to that case. TSI’s

claims against CSC were instead filed in a separate civil

action. On February 21, 1995, TSI filed a motion in the

CSC Case seeking leave to take expedited discovery in

that case on the purported ground that such discovery

was necessary to support a motion for a preliminary

injunction which TSI said that it intended to file against

CSC.° App. 86, 1671-96. Pursuant to this motion, TSI

sought leave to conduct in the CSC Case, on an expedited

basis, the very discovery which the district court had

forbidden it from conducting in the Bay State Case. On

February 27, 1995, TSI filed a motion seeking to consoli-

date the CSC Case with the Bay State Case so that the

discovery which it obtained on an expedited basis in the

CSC Case could be used at the trial of the Bay State Case,

filed in the CSC Case.

App. 39

which at that time remained scheduled for May 30, 1995.7

App. 86.

This record bespeaks TSI’s motivation for filing its

claims against CSC in a separate action. By seeking leave

to amend its complaint in the Bay State Case to add CSC

as a defendant in that case, TSI would have avoided

improper claim-splitting, but it would have been left

bound by the court’s orders terminating discovery in the

Bay State Case. TSI instead consciously chose a course of

action which, though requiring it to improperly split its

claims against CSC, allowed it to circumvent the district

court’s discovery orders in the Bay State Case. In its order

allowing TSI’s consolidation motion, the district court

observed that

[bjoth CSC and Bay State legitimately point out

that TSI is attempting to obtain, through insti-

tuting the CSC action, the discovery it was

denied in the fall of 1994 in the TSI action. TSI

did not Satisfactorily address the question posed

at the June 5, 1995 hearing about why it chose

not to seek leave to amend its complaint in the

TSI action to add CSC as a party.

App. 1888. TSI belatedly tries, on appeal, to contrive an

explanation that would be responsive to the question

which it was unable to satisfactorily address at the hear-

ing before the district court upon its consolidation

” Thus, in support of its motion for expedited discovery in

the CSC Case, TSI argued that “[iJf, as expected, the Court

grants TSI’s Motion to Consolidate, it will be necessary for

discovery to be expedited and completed in this action in

advance of the trial in the Bay State actions. ... ” App. 1740-41.

App. 40

motion. TSI now says that a motion to amend its com-

plaint in the Bay State case to add CSC as a party defen-

dant in that litigation would have been futile. TSI's

Principal Brief at 29.

Although, under F. R. Civ. P. 15(a), TSI could not, as a

matter of right, have amended its complaint in the Bay

State Case to add CSC as a defendant to that case in

December, 1994 (which is when it now claims to have

learned of its cause of action against CSC, TSI’s Principal

Brief at 28), it most certainly could have moved for leave

to amend its complaint at that juncture.® TSI’s suggestion

that, as of December, 1994, it was too late even to move to

amend its complaint in the Bay State Case is, once again,

flatly contradicted by events which actually occurred. On

February 17, 1995 — two months after it claimed to have

learned of the facts underlying its suit against CSC and

one week after it filed its separate case against CSC — TSI

in fact filed a motion to amend its complaint in the Bay

State Case. App. 11, 394-406. That motion, which sought

to assert additional claims against the defendants in the

Bay State Case, was allowed. App. 1916-23. It is difficult

to accept TSI’s contention that, as of December, 1994, it

was too late for TSI to file a motion requesting leave to

amend its complaint to add CSC as a defendant to the

Bay State Case, when, two months later, it was not too

late for TSI to file a motion to amend its complaint to

8 It seems unlikely that the defendants in the Bay State

Case, who presumably would have welcomed a co-defendant to

share the burden of defending the case and the risk of exposure

to liability (not to speak of the concomitant contribution to any

settlement of the case), would have opposed such a motion.

App. 41

allege additional claims against the existing defendants in

that case. It is equally difficult to understand why, as of

December, 1994, it could have been too late for TSI to

seek to add CSC as a defendant to the Bay State Case,

when, two months later, it was not too late for TSI to file

an entirely separate case against CSC and thereupon

move to consolidate this newly filed case with the Bay

State Case for purposes of a trial then scheduled to com-

mence only three months later.

TSI cannot have it both ways. Having chosen to

institute a new civil action against CSC for the purpose of

achieving litigation objectives that could only be achieved

by virtue of the fact that its suit against CSC was separate

and district from the Bay State Case (and therefore not

subject to the discovery orders entered in the Bay State

Case), TSI cannot now plausibly argue that the consolida-

tion of the CSC Case with the Bay State Case served the

res judicata doctrine’s policy of “ ‘reliev[ing] parties of the

cost and vexation of multiple lawsuits, [and] conserv[ing]

judicial resources.’” TSI’s Principal Brief at 24 (quoting

Apparel Art, 48 F.3d at 583). The filing of TSI’s separate

action against CSC, in lieu of an amendment to TSI’s

complaint adding CSC as a defendant to the Bay State

Case, most certainly did not serve the interest of prevent-

ing repetitious lawsuits. To the contrary, that action gave

rise to a repetitious lawsuit. Nor did the filing of a sepa-

rate action against CSC, in lieu of adding CSC as a

defendant to the Bay State Case, conserve judicial

resources. To the contrary, the filing of the CSC Case was

the device by which TSI sought to conduct the additional

discovery which it regarded as “essential” and “crucial”

in the Bay State Case. The filing of the CSC Case therefore

App. 42

required the trial court to supervise what was in effect an

entirely new round of discovery for use in the Bay State

Case. These deleterious effects of the filing of TSI’s claims

against CSC in a separate action did not somehow disap-

pear simply because the CSC Case was consolidated with

the Bay State Case five months later.

In conclusion, there is no merit to TSI’s argument

that the policies underlying the res judicata doctrine

would not be served by the doctrine’s application to TSI’s

claims against CSC in this case due to the consolidation

of the CSC Case with the Bay State Case. To the contrary,

those policies cry out for such an application of the

doctrine in the CSC Case notwithstanding the trial court’s

consolidation order. The district court correctly deter-

mined that the CSC Case was a separate action notwith-

standing its consolidation with the Bay State Case.

B. The District Court Correctly Determined That

CSC Was In Privity With Bay State Within The

Meaning Of The Res Judicata Doctrine.

1. The District Court Correctly Determined

That CSC And Bay State Were Privies For Res

Judicata Purposes Because They Were Alleged

To Be Co-Conspirators And Co-Perpetrators

Of Joint Harms.

“Under res judicata, a final judgment on the merits

bars further claims by parties or their privies based on the

same-cause of action.” Montana v. United States, 440 U.S.

147, 153 (1979) (emphasis added) (citations omitted).

Thus, “a non-party defendant [in a subsequent case] can

assert res judicata so long as it is in ‘privity’ with the

App. 43

named defendant [in the earlier case].” Russell v. Sun-

America Sec., Inc., 962 F.2d 1169, 1173 (5th Cir. 1992)

(citations omitted).

CSC is a privy of Bay State within the meaning of the

res judicata doctrine under the principle of nonmutual

claim preclusion. That Principle originated in cases

decided by the Third Circuit Court of Appeals. In Gam-

bocz v. Yelencsics, 468 F.2d 837 (3d Cir. 1972), the Third

Circuit construed its earlier ruling in Bruszewski v. United

States, 181 F.2d 419 (3d Cir.), cert. denied, 340 U.S. 865

(1950), which “held that res judicata may be invoked

against a plaintiff who has previously asserted essentially

the same claim against

t * *

App. 44

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

BAY STATE HMO ,

MANAGEMENT, INC., , C.A. NO.

ae ; 93-11283-RCL

Plaintiff,

TINGLEY SYSTEMS, INC.,

Defendant.

TINGLEY SYSTEMS, INC., C.A. NO.

Plaintiff, : 79-12230-RCL

BAY STATE HEALTH

MANAGEMENT, INC. f/k/a

BAY STATE HMO

MANAGEMENT, INC. and

BLUE CROSS/BLUE SHIELD

OF MASSACHUSETTS, INC.,

Defendants.

: (Filed Dec. 19, 1994)

PLAINTIFF, TINGLEY SYSTEMS, INC.’S, MOTION

TO TAKE IN EXCESS OF FIFTEEN (15)

DEPOSITIONS AND SUPPORTING MEMORANDUM

Plaintiff, Tingley Systems, Inc. (“TSI”), pursuant to

Federal Rules of Civil Procedure 26(b)(2) and 30(a)(2),

and Local Rule 26.1, moves this Court for the entry of an

order allowing TSI to take in excess of fifteen (15) deposi-

tions. The motion should be allowed because (1) This

action is complex. It involves two consolidated cases,

App. 45

involving multiple parties, numerous legal claims and

nearly 50,000 documents. Nearly 100 witnesses and mul-

tiple computer consulting firms have been identified who

played a part in the misappropriation of TSI’s proprietary

software and related system structure and architecture.

Three different computer systems, known as POS, DSS

and Baystar, valued at twenty six million dollars

* a *

[Motion denied without prejudice to its being renewed

once the court has ruled on Tingley’s Motion to Compel

Production of Documents.

/s/ Reginald C. Lindsay

12/21/94

App. 46

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

No. 98-2334 No. 97-1574

TINGLEY SYSTEMS, INC., TINGLEY SYSTEMS, INC.,

Plaintiff, Appellant, Defendant, Appellant,

v. v.

CSC CONSULTING, INC., BAY STATE HMO

f/k/a CSC PARTNERS, MANAGEMENT, INC.,

INC. ET AL.,

Defendant, Appellee. Plaintiffs, Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF MASSACHUSETTS

REPLY BRIEF OF APPELLANT,

TINGLEY SYSTEMS, INC.

G. Donovan Conwell, Jr.

(Fla. Bar No. 371319)

Guillermo A. Pernas, Jr.

(Fla. Bar No. 0000574)

Fowler, White, Gillen, Boggs,

Villareal & Banker, P.A.

501 E. Kennedy Blvd., Suite 1700

Tampa, Florida 33602

(813) 228-7411

App. 47

Edward P. Leibensperger

(BBO#292620)

Christa von der Luft

(BBO#600362)

Nutter, McClennen & Fish, LLP

One International Place

Boston, Massachusetts 02110-2699

(617) 439-2000

Attorneys for Appellants

» * *

F.2d 768, 771 n. 7 (5th Cir. 1982); Cablevision Sys. Dev. v,

Motion Picture Assn., 808 F.2d 133, 136 n. 3 (D.C. Cir.

1987). Tingley explained this in its Initial Brief and CSC,

once again, was unable to, and did not, respond to it.

Tingley contends that the Order consolidating the

Bay State and CSC cases into one proceeding and Tin-

gley’s reliance on that Order, are sufficient reasons for

treating the Bay State and CSC cases as one action for res

judicata purposes. But there are additional reasons for

giving them such treatment, which are found in the poli-

cies served by the res judicata doctrine. Res judicata, after

all, is a judge-made doctrine created and applied to serve

specific purposes. Diversified Foods, Inc. v. First Nat’i Bank

of Boston, 985 F.2d 27, 31 (Ist Cir. 1993). Tingley contends

that those purposes were served by consolidating the

cases into one proceeding. (Initial Brief, pp. 24-25).

CSC never disagrees with Tingley’s argument that

consolidating cases into one proceeding serves the judi-

cial goals sought to be achieved by the res judicata doc-

trine. Instead, CSC argues that those goals were not

App. 48

served in this case because Tingley allegedly filed a sec-

ond lawsuit and consolidated them for an improper pur-

pose, i.e., to circumvent discovery orders. To make this

argument, however, CSC omitted and misstated key facts

relevant to CSC’s theory.

CSC’s argument is premised upon CSC’s conclusion

that Tingley must have believed when it sued CSC that it _

could not get important discovery in the Bay State case,

and that the CSC lawsuit would enable Tingley to get that

discovery. CSC concludes Tingley had such a belief,

because on December 16 and 21, 1994, the district court

denied Tingley’s motions for extending the discovery

cutoff and for taking additional depositions. (CSC Brief,

p- 15). CSC, however, misstated the dates of Tingley’s

discovery motions. Tingley’s motions were served on

November 23 and November 30, 1994, respectively (R.256

and 346). CSC’s references to those motions being filed

“on December 2, 1994, after the discovery period in the

Bay State case had expired,” and “on December 12, 1994,

almost two weeks after the expiration of the discovery

period” is misleading, because it suggests that Tingley

had the Gifford documents when it submitted its discov-

ery motions. (Brief, p. 15). Tingley did not obtain the

Gifford documents until December 9, 1994, well after

Tingley served its discovery motions in November.

The timing of when Tingley received the Gifford

documents and when it prepared and sent its discovery

motions is important to Tingley’s December 30, 1994

motion for reconsideration and Tingley’s state of mind

regarding the probable outcome of that motion. Tingley’s

motion for reconsideration was based primarily upon the

just-produced Gifford documents and Tingley believed

App. 49

that this newly obtained and important information

would persuade the court to allow Tingley’s discovery

motions. (R349-393). This would not have been the case if

Tingley already had the Gifford documents when it ini-

tially submitted its discovery motions in November.

CSC’s use of the December 12 date to suggest that Tingley

had the Gifford documents when it brought its November

30 motion to take more than 15 depositions is misleading.

Curiously, CSC also failed to point out to this Court

that the December 21 order denying Tingley’s discovery

motions expressly provides that it is “without prejudice

to its being renewed” after the court ruled on Tingley’s

motion to compel production of documents. (R.348). The

court did not rule on Tingley’s motion to compel until

June 5, 1995. (R.0023).

In light of these facts, Tingley did not believe on

February 9, 1995, when it sued CSC, that the door had

been closed on discovery in the Bay State cases. When

Tingley sued CSC, both Tingley’s motion for reconsidera-

tion and its motion to compel production of documents

were pending. Tingley fully expected the court to grant

these motions. With the benefit of knowing all of the

facts, this Court can see that CSC’s assertion that the door

was closed on discovery in the Bay State case simply is

not true and CSC’s conjecture that Tingley brought a

second suit to circumvent discovery orders is baseless.

CSC’s speculation that Tingley filed another lawsuit

against CSC, solely to avoid discovery orders entered by

the court in the Bay State case, is absurd. If Tingley’s

purpose in filing a second lawsuit against CSC was to

App. 50

avoid discovery Orders in the Bay State case, then Tin-

gley would not have filed the CSC suit in the same court

as the Bay State case, knowing that it would have to

inform the court that the CSC and Bay State cases were

related, thereby ensuring that the CSC case would be

assigned to the same judge who entered the discovery

Orders. Nor would Tingley then file a motion seeking to

consolidate the cases so that they would become a consol-

idated action before the same judge who entered the

discovery Orders. But that is exactly what Tingley did.

The fact that Tingley intentionally sought to have the CSC

case brought before the same judge who entered the

discovery Orders and then consolidated with the same

case in which those discovery Orders were entered,

proves the absurdity of CSC’s accusation that Tingley was

maneuvering to avoid those discovery Orders.

CSC’s summary judgment motion, like its Answer

Brief in this Appeal, accused Tingley of filing its lawsuit

against CSC to circumvent the December 16 and 21 dis-

covery Orders. Significantly, the district judge whose

Orders CSC claims Tingley tried to avoid, disregarded

this spurious accusation and did not even bother to

address it in his Order granting CSC’s motion for sum-

mary judgment. Instead of adopting CSC’s argument, the

district court judge explained that his ruling seemed

“harsh” and that he was “constrained” by law to reach it.

These are not words of a judge who thinks Tingley has

done wrong and is getting what it deserves by an adverse

summary judgment.

On page 17 of its Brief, CSC tried to make it look like

the district court judge agreed with CSC’s accusations of

Tingley. The statement that “TSI did not satisfactorily

App. 51

address the question posed at the June 5, 1995 hearing

about why it chose not to seek leave to amend its com-

plaint in the TSI action and add CSC as a party,” actually

was made by the magistrate judge. In any event, the

statement is inconsequential. With all due respect to the

Magistrate Judge, that question never was posed to Tin-

gley at the June 5, 1995 hearing. (R.1125-1410). In any

event, Tingley addressed that issue in its reply to CSC’s

Opposition to the motion to consolidate. Tingley

explained there that the case against CSC was premised

primarily upon the Gifford documents that CSC had

withheld from discovery. (R.1014-15, see also, R. 2163).

CSC, by withholding these incriminating documents until

after the close of discovery and until the eleventh hour of

the Bay State case, put Tingley in a procedural predica-

ment and significantly decreased the likelihood that the

court would allow Tingley to amend its pleadings to add

CSC as a party. Id. Tingley’s safest course of action was to

sue CSC and then seek to consolidate.

CSC also pondered why Tingley would move to

amend its complaint against Bay State in February, 1995,

if Tingley thought it was too late in February to move to

amend to add CSC as a party. Tingley answered that

question in its Initial Brief (pp. 28-29). The Bay State

amendment was based upon evidence Tingley learned in

discovery and Tingley believed it would not require fur-

ther efforts by the parties. (R.401). Moreover, it merely

added nine new paragraphs to Tingley’s already existing

complaint against Bay State. (R.401). This is significantly

different than bringing a multi-count complaint against a

new party. Under the criteria that govern amendments of

pleadings, the court was much more likely at that late

App. 52

date to permit such a limited amendment against an

existing defendant than to allow the addition of a new

party and the assertion of multiple new claims against

that party.

Finally, CSC argued on page 20 of its Brief that Tin-

gley’s filing of a second action against CSC and moving

to consolidate it with the Bay State case did not serve the

interests of preventing repetitious lawsuits and conserv-

ing judicial resources. This argument is fatally flawed

because it incorrectly assumes that if the court had

allowed Tingley to amend to add CSC as a party, then the

judicial labor would have been less than it was when

Tingley sued CSC in a second case, which the court then

consolidated. Except for the motion to consolidate, all of

the motions filed in the CSC case would have been filed

in the Bay State case, if CSC had been added as a party

there. The way in which the court heard the motions

would not have changed either. As a convenience to

counsel, the court scheduled hearings in both cases to

take place at the same time, even before the cases were

consolidated (R.1007, 2126). Moreover, the need for the

court to “surpervise . . . a new round of discovery”

(CSC’s Brief, p. 20) would exist even if Tingley had been

permitted to amend to add CSC as a party. CSC insisted

that it needed its own discovery from Tingley. (R.1700,

1704, 2174, 2176). No matter how Tingley brought CSC

into the case, CSC would have sought its own discovery.

Nor can CSC assume that the district court would not

have allowed Tingley discovery as to CSC, notwithstand-

ing its December discovery Orders, if Tingley had

amended its complaint and added CSC as a party. When

multiple new claims are asserted against a new party, a

App. 53

court normally would allow discovery as to the new

claims. This is likely what would have happened here, as

evidenced by the fact that, after the court allowed Tingley

to amend its complaint against Bay State in 1995 to add a

fraud count, the court ordered further discovery on the

new allegations. (R.0029-0030).

There is simply no support for CSC’s argument that

the purposes of res judicata were not served by consol-

idation here or that Tingley did anything improper. CSC,

having been caught by the Gifford documents, obviously

is the wrongdoer here. CSC’s underlying tortious con-

duct, followed by its concealment and withholding of the

Gifford documents (R.250, 351, 2150, 2163, 1309-10),

leaves it in a poor position to argue that this Court is

doing the right thing by affirming the judgment in CSC’s

favor. CSC’s manipulation of the facts to make Tingley

look like the wrongdoer have not improved CSC’s posi-

tion.

II. Bay State and CSC Were Not in Privity Within the

Meaning of the Res Judicata Doctrine.

“Privity,” in a broad sense, is a flexible tool used by

courts to accomplish the purposes of the res judicata

doctrine. Whether the parties are found to be in privity

turns ultimately on whether they have a sufficiently close

relationship such that the court believes they should have

been sued in the same action, if they were sued at all. As

this Court said in In re El San Juan Hotel, 841 F.2d 6 (1st

Cir. 1988), the question to be answered is whether “the

new party can show good reasons why he should have

App. 54

been joined in the first action and the old party cannot

show any good

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.