# Opposition Brief — Bikinian v. Astra USA, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1684%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2010 - **Citation:** 560 U.S. 904 ## Text “Supreme Court, U.S. FILED APR 2- 2010 OFFICE OF THE CLERK No. 09-1057 IN THE Supreme Court of the GAnited States LARS P. E. BILDMAN, Petitioner, ¥. ASTRA USA, INC., Respondent. On Petition For A Writ Of Certiorari To The Massachusetts Supreme Judicial Court RESPONDENT'S BRIEF IN OPPOSITION TO THE PETITION FOR WRIT OF CERTIORARI JEFFREY S. ROBBINS A. W. PHINNEY, III* JOSEPH D. LIPCHITZ MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C One Financial Center Boston, MA 02111 (617) 542-6000 AWPhinney@mintz.com *Counsel of Record for April 2, 2010 Respondent WILSON-EPES PRINTING CO , INC. — (202) 789-0096 — WASHINGTON, D.C. 20002 QUESTIONS PRESENTED 1. Whether the Massachusetts Supreme Judicial Court erred in applying this Court’s precedent to the record in this case and ruling that Petitioner, the former Chief Executive Officer of a major pharma- ceutical company who had first assembled a team of public relations consultants to manage an emerging BusinessWeek cover story about his misconduct and then, after publication of the BusinessWeek story and widespread media stories about former employees’ public allegations against him and an EEOC investi- gation, contacted media outlets to comment on the controversy, qualified as a limited purpose public figure with respect to this matter. 2. Whether by failing to raise his argument that corporations are not entitled to First Amendment protection in the Massachusetts courts, Petitioner has waived his right to raise that argument here, and whether, even if not waived, his argument is erroneous. 3. Whether, even if the Supreme Judicial Court had erred in applying this Court’s limited purpose public figure precedent to the record before it, there were adequate and independent state grounds under Massachusetts law for the judgment in favor of Respondent on Petitioner’s negligent libel claims. (i) li PARTIES TO THE PROCEEDING The Petitioner in this case is Lars P.E. Bildman, who was Astra USA, Inc.’s President and Chief Executive Officer from 1981 until his termination in 1996. The Respondent is Astra USA, Inc. (“Astra”), which at all relevant times during the underlying litigation was a wholly-owned American subsidiary of Astra AB, a Swedish publicly-traded company. Although Bildman brought claims in the trial court against Astra AB and two of its corporate officers, as well as Astra, the trial court dismissed Astra AB as a party before summary judgment for lack of personal jurisdiction. The two officers were Dr. Haken Mogren and Carl-Gustaf Johansson, who were also members of Astra’s Board of Directors. Bildman sued them for libel and tortious interference with contrac- tual relations. The trial court dismissed the libel claims against Mogren and Johansson at summary judgment. At trial, the jury found in favor of Mogren and Johansson on Bildman’s tortious interference claims. In his Amended Notice of Appeal dated October 24, 2007, which was filed with the Massachusetts Appeals Court, Bildman withdrew his appeal of the various rulings and judgments in favor of Astra AB, Mogren and Johansson. As a result, only Astra and Bildman were parties to the appeal before the Massa- chusetts Supreme Judicial Court and are the only parties before this Court. lll CORPORATE DISCLOSURE STATEMENT In accordance with United States Supreme Court Rule 29.6, Respondent Astra USA, Inc. states that it is a wholly-owned subsidiary of AstraZeneca Trea- sury Limited, which is, in turn, owned by Astra- Zeneca UK Limited, a subsidiary of AstraZeneca Intermediate Holdings Limited. AstraZeneca PLC, a publicly-traded company, owns AstraZeneca Inter- mediate Holdings Limited and, through the subsidi- aries identified above, indirectly controls more than 10% of the stock of Astra USA, Inc. TABLE OF CONTENTS Page QUESTIONS PRESENTED ................0..cccesceeeees i PARTIES TO THE PROCEEDING.................... il CORPORATE DISCLOSURE STATEMENT..... ill py Fe hy 8 cy: eae Viil STATEMENT OF THE CASE ........................200 3 BusinessWeek Investigates Allegations That Bildman Had Sexually Harassed Astra SN Rie AN a NSC A Ae RN ERODE D Bildman Assembles A Media “Task Force” In I rg ni iad a purcdlatondnanienieinnnesrs 5 In April 1996, Bildman Directs His Task Force To Meet With BusinessWeek To Influence The Emerging Story..................... 6 Astra Suspends Bildman And Begins Its ee tres estntericcenbnniapernioriens 7 After Bildman’s Suspension, Numerous Media Articles Are Published Concerning Bildman’s Suspension And The Numerous Public Lawsuits That Had Been Filed Alleging Sexual Harassment By Bildman... 8 Before The BusinessWeek Publication, Bild- man Actively Communicates With The Media To Influence The Public SAME APES ROTI A TTP 8 The Publication Of “Abuse Of Power” Gene- rates Media Stories To Which Bildman Responds, As Well As An EEOC i Go 9 vl TABLE OF CONTENTS—Continued Astra’s Internal Investigation Reveals Extensive Misconduct By Bildman Lead- ing To His Termination For Cause.............. Astra Commences The Underlying Lawsuit Against Bildman, And Bildman Counter- claims, Inter Alia, For “Negligent Libel”..... The SJC Affirms The Trial Court’s Grant Of Summary Judgment On Bildman’s Negli- gent Libel Claim PT TIE oisiccihsctencecnicsniineigcionseme I. THIS CASE DOES NOT MERIT RE- VIEW BECAUSE THE SJC PROPERLY STATED AND APPLIED THIS COURT'S PRECEDENT IN HOLDING THAT BILDMAN WAS A LIMITED PURPOSE POPPE © FR Ris 0r008000sse0e Il. THIS CASE DOES NOT MERIT RE- VIEW BECAUSE BILDMAN’S CON- TENTION THAT THE FIRST AMEND- MENT DOES NOT PROTECT ASTRA (1) HAS BEEN WAIVED AND (2) IS FEUER PTET Os orien scvarcivnnssesdecceae lil. THIS CASE DOES NOT MERIT RE- VIEW BECAUSE THERE ARE TWO ADEQUATE AND INDEPENDENT STATE GROUNDS UNDER MASSA- CHUSETTS LAW FOR THE SJC’S RE- JECTION OF BILDMAN’S NEGLI- GENT LIBEL CLAIMG. ................cceseseess ee eee eee eee eee. Page 12 13 14 15 15 24 26 Vill TABLE OF CONTENTS—Continued A. The Jury’s Answers To Special Ques- tions Established Astra’s Conditional Privilege To Comment On Its Investiga- tion Into Its Former CEO’s Misconduct, And Imposed An Independent Burden On Bildman To Adduce The Requisite Evidence Of Actual Malice. ...................... B. The Jury Verdict And Its Answers To Special Questions Also Established The Substantial Truth Of Astra’s Purpor- tedly Actionable Statements. ................... Neen ia ceceensansinenieenaeanwenes ea aii a aisnliskabanedhescasbhceveencweeserestes APPENDIX A: Memorandum Of Decision And Order On Parties’ Motions For Sum- mary Judgment, dated October 29, 2001 .... APPENDIX B: Suffolk Superior Court Spe- cial Question Verdict Form, dated Febru- Neen nie in sa usuetedadvwubiwite ace APPENDIX C: Final Judgment After Re- script, dated January 6, 2010...................... Page 29 la Vill TABLE OF AUTHORITIES CASES Page Astra USA, Inc. v. Bildman, 455 Mass. 116, 914 N.E. 2d 36 (2009) ...................+00. passim Bratt v. International Business Machines Corp., 392 Mass. 506 (1964) ........0000000.0.... 28, 29 Brewster Wallcovering Co. v. Blue Moun- tain Wallcoverings, Inc., 68 Mass. App. i I cectecetice nna liacnuloniecogubatenmieneis 32 Broomes v. Blue Cross Blue Shield of Mas- sachusetts, Inc., 74 Mass. App. Ct. 1123, 2009 WL 1953006 (Mass. App. Ct. July iy coi caticitcedetiednarctaksmebcimmuineltadtas 29 Citizens United v. Federal Election Com- mission, —U.S.—, 130 S.Ct. 876 (2010)... 25 Dragonas v. School Committee of Melrose, 64 Mass. App. Ct. 429 (2005)........cccceceeee. 30 First Nat. Bank of Boston v. Bellotti, 435 Be ee i citindscakssconstceluntcaniestide diamant: 25 Florida v. Powell, —U.S.—, 130 S.Ct. 1195 SEITE Sicksntccchinstesoasiitersunntinssonpeneeiauaniineaiacemematnet. 27 Gertz v. Robert Welch, Inc., 418 U.S. 323 CE incicieusiescentecedenmibedie Zz, 13, 16, 16, 20, 21, 23 Gray v. St. Martin’s Press, Inc., 221 F.3d Be © RAs Se ithskickenencutadeclahonesnckavanieae 18 Herb v. Pitcairn, 324 U.S. 117 (1945).......... 27 Hutchinson v. Proxmire, 443 U.S. 111 |. he SRE Ie ARE CRE Ret 21. 22, 23, 27, 3 Kyle v. Mongan, 72 Mass. App. Ct. 1111, 2008 WL 2951800 (Mass. App. Ct. Aug. © SEE cntilucnviinancvsdisnavbcdnmicemaneniraaue aaa 29, 30 1x TABLE OF AUTHORITIES—Continued Page Lazzara v. Wyle Electronics Co., 56 Mass. App. Ct. 1112, 2002 WL 3169483 (Mass. Pa, Sc SE bide tentanpa ssa touaribavsemtreurats 24 Mason v. New Yorker Magazine, Inc., 501 BF Be TE iar deesdevesucs eaievarddeetstcadeceniee 33 Michigan v. Long, 463 U.S. 1032 (1983)...... 26, 27 Plucket v. United States, —U.S.—, 129 S.Ct. ESR aber oa Ree LEA PLN LARA 24 Reilly v. Associated Press, 59 Mass. App. oe Fee III oasis. or ceca pnude senscmumnensouusnadeaes 33 Sklar v. Beth Israel Deaconess Medical Center, 59 Mass. App. Ct. 550 (2003)....... 30 Time, Ine. v. Firestone, 424 U.S. 448 ), | RIESE REDE RRR eae os enen oh aRenn soar enane 20, 22, 23 Tripoli v. Boston Herald-Traveler Corp., UI BO CEE ED dri sscenvecsesiverercerevertinee 19 Wolston v. Readers Digest Association, 443 ee ee Ci iairsoratsconensseneursnennceues 20, Zi, 2a, Zi Zortman v. Bildman, 1999 WL 1318959 (Mass. Super. Ct. Jan. 15, 1999).............. 9 CONSTITUTION Rp SERRE aies Me Reale te at 2.4, 25 RULES is Wis, Si iccatecnipanseaicendanakceaianmmetansscousnie 2, 15 Xx TABLE OF AUTHORITIES—Continued Page OTHER AUTHORITIES E. Gressman, K. Geller, S. Shapiro, T. Bishop, E. Hartnett, Supreme Court FES Cre Gs Bee ED cscecensoctecncnsovccssesccess 26 Justice Brennan, State Court Decisions and the Supreme Court, 31 Penn. Bar. FR SE, ee CREE dennstccdcisrsecscescenseD series 26 IN THE Supreme Court of the Anited States No. 09-1057 LARS P. E. BILDMAN, Petitioner, Vv. ASTRA USA, INC., Respondent. On Petition For A Writ Of Certiorari To The Massachusetts Supreme Judicial Court RESPONDENT'S BRIEF IN OPPOSITION TO THE PETITION FOR WRIT OF CERTIORARI Pursuant to United States Supreme Court Rule 15, Astra opposes Bildman’s petition for a writ of certiorari. Bildman seeks to have this Court review the Massachusetts Supreme Judicial Court’s decision, published as Astra USA, Inc. v. Bildman, 455 Mass. 116 (2009), which affirmed the trial court’s grant of summary judgment dismissing Bildman’s negligent libel claims against Astra. Bildman’s libel claims were based on statements made by Astra concerning its investigation into Bildman’s misconduct as its CEO after BusinessWeek published a cover story about allegations that Bildman had sexually harassed numerous female employees. 2 The Massachusetts Supreme Judicial Court (“SJC”) affirmed the trial court’s ruling that Bildman was a limited purpose public figure at the time of Astra’s statements under the standard articulated in Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974), and that he had failed to sustain his burden at summary judgment of adducing evidence sufficient to satisfy the actual malice standard imposed on_= such plaintiffs. Bildman did not below, and does not here, challenge the trial court’s ruling that he had failed to adduce evidence of actual malice, but rather confines his appeal to the SJC’s ruling that he was a limited purpose public figure. Bildman’s petition should be denied based on four separate grounds, each of which demonstrates that there is no compelling reason to justify review of this matter. See S. Ct. R. 10. First, Bildman’s petition rests on the alleged misapplication of the properly- stated rule of law governing limited purpose public figures. Id. (a “petition...is rarely granted when the asserted error consists of...the misapplication of a properly stated rule of law”). Second, the SJC in fact properly applied this Court’s precedent in holding that Bildman was a limited purpose public figure on the record in this case. Third, Bildman has waived his contention that the First Amendment’s protections do not extend to corporations, which, in any event, is without merit. Fourth, there exist two adequate and independent state grounds under Massachusetts law that fully support the SJC’s decision affirming the dismissal of Bildman’s negligent libel claims. 3 STATEMENT OF THE CASE On February 21, 2002, a Massachusetts jury returned a special verdict answering the Court’s twenty-five (25) special questions, doing so in Astra’s favor in the case of all but one. It found that Bildman, while Astra’s President and CEO, had committed fraud, waste, conversion of Astra’s assets and breaches of his fiduciary duty to Astra, and that he had also engaged in sexual harassment of, and improper retaliation against, Astra employees. The jury also upheld Astra’s 1996 termination of Bildman for cause. It awarded Astra a total of $1,040,842 in damages.’ See R5658; R6680. Astra adopts and incorporates by reference the factual summary contained in the SJC’s opinion (hereinafter “the SJC decision”) at 455 Mass. 116, 119-127, 914 N.E. 2d 36, 40-45 (2009). The SJC’s factual summary was based “on the evidence pre- sented to the jury and the judge’s findings on the remainder, which we supplement with uncontroverted material from the record.” Jd. at 119.’ Because Bildman did not challenge the jury verdict in Astra’s favor on appeal, and does not here challenge any aspect of the SJC decision except that which upheld summary judgment in Astra’s favor on Bildman’s negligent libel claims, Astra summarizes herein only that portion of the record most germane to Bildman’s petition, which is confined to one issue 1 The jury also found that Bildman was entitled to a stock grant in the amount of $203,691, which amount was subsequently set off against Astra’s verdict. Astra USA, Inc. v. Bildman, 455 Mass. 116, 117-118 (2009). 2 References to the record before the SJC are cited herein as “R by 4 determined by the trial court in entering summary judgment for Astra on those claims. That issue is whether the SJC properly applied this Court’s precedent on when a defamation plaintiff qualifies as a limited purpose public figure to the record before it.° Astra also sets forth the factual background germane to the question of whether, even if Bildman was not a limited purpose public figure consistent with this Court’s precedent, judgment in Astra’s favor was supported in any event under two (2) adequate and independent state grounds under Massachusetts law. As the SJC stated, Astra is incorporated in New York.* During the relevant period of this litigation, * In his petition, Bildman casts himself as a whistleblower and asserts that the “nexus of the conflict” between Astra and himself was his “disapproval of [Astra AB’s] actions in disregard of F.D.A. rules,” including asserting that Astra AB concealed from the F.D.A. “severe fetus defects in a pregnant monkey on a drug Petitioner was preparing.” (Pet. Br. at 5-6). Such an alle- gation finds no support in the record. Indeed, any assertion that Bildman was terminated for any reason other than his own mis- conduct was expressly rejected by the jury in its answers to spe- cial verdict questions. See R5658-5664. Moreover, Bildman’s unsubstantiated assertions are not related in any way to the four (4) alleged libels that are the subject of the SJC’s decision or his petition before this Court. * Astra, 455 Mass. at 119. Bildman never contended that Astra USA is a foreign corporation, which it is not. Thus, the entire premise of one of Bildman’s two grounds for seeking review by this Court; namely, that the First Amendment does not protect “a foreign multi-national drug company” is misplaced. See Pet. Br. at p.i—Questions Presented And Reasons For Granting The Petition; pp. 21, 23 (“lhe protection of and sup- port of foreign non-media companies’ intervention in the US. legal system circumventing the U.S. rule to try cases inside the courts is bound to severely damage the U‘S. trial process”); and pp. 24-25 (“the lower court’s vesting in a non-media foreign 5 Astra’s principal place of business was Westborough, Massachusetts. BusinessWeek Investigates Allegations That Bildman Had Sexually Harassed Astra Employees In December 1995, Bildman learned that a Business- Week reporter named Mark Maremont was conduc- ting an investigation into allegations by current and former Astra employees that he and senior manage- ment at Astra had engaged in sexual harassment. Indeed, over the prior decade Bildman had received numerous complaints from Astra employees about his own conduct and that of his direct reports. Bildman had in fact authorized the payment of several hundred thousand dollars of Astra funds to settle demands or claims made by female employees who asserted that he had coerced them into unwanted sexual relations, made sexually inappropriate com- ments, kissed or attempted to kiss them, touched their necks and buttocks, and danced with them in a sexually provocative way. Each of the settlement agreements obtained at Bildman’s direction con- tained confidentiality provisions. Bildman did not disclose to Astra’s Board of Directors that Astra, under his management, had a sexual harassment problem. Astra, 455 Mass. at 120-122. Bildman Assembles A Media “Task Force” In December 1995 Upon learning that BusinessWeek was conducting an investigation into sexual harassment by him and his senior managers, and knowing of his own conduct, corporate defamation defendant...such protection and support of foreign influence cannot be read into the language of the First Amendment...”) (emphasis supplied). 6 and, inter alia, of the settlements he had authorized to resolve claims and demands centered on his own conduct, Bildman in December 1995 created what he termed a “task force” consisting of public relations consultants and attorneys in order “to determine BusinessWeek’s sources of information and to control the flow of information to BusinessWeek and Astra AB.” Id. at 121; R576. In January 1996, shortly after learning of the BusinessWeek investigation, Bildman authorized a new payment of $100,000 in Astra’s funds to another female employee to settle her sexual harassment claims against him. Astra, 455 Mass. at 121. In April 1996, Bildman Directs His Task Force To Meet With BusinessWeek To Influence The Emerging Story On April 16, 1996, BusinessWeek wrote a letter to Astra asking to speak with Bildman about “serious allegations of sexual harassment” at Astra, including by Bildman. - Bildman directed Astra’s General Counsel to send a letter to BusinessWeek denying the allegations and offering to meet with BusinessWeek if it provided more details to Astra. BusinessWeek thereafter provided a seven-page letter to Astra AB on April 18, 1996 further detailing the allegations of sexual harassment against Bildman. /d. at 121-122. Once Bildman knew that BusinessWeek had provided Astra’s parent with detailed allegations against him, he “decided, at Maremont’s request, to arrange a meeting with Maremont and BusinessWeek magazine at Astra USA headquarters [on April 22, 1996] ... to rebut the allegations contained in the April 18, 1996 letter.” R580; Astra, 455 Mass. at 122-123. Bildman’s task force informed him that, as a result of its 7 meeting with Maremont, BusinessWeek would not immediately publish the story. R581-582. Bildman also attempted to influence the brewing controversy internally at Astra. “[F)Jrom December, 1995 through March, 1996, Bildman apparently also [had] orchestrated a campaign to direct female and minority Astra employees to write letters of support for him to Astra AB.” Astra, 455 Mass. at 122, n.11. Bildman assured Astra AB that Astra had nothing “to be ashamed of” and had a “good record concerning sexual harassment.” Jd. at 122. Astra Suspends Bildman And Begins Its Own Investigation Upon receiving BusinessWeek’s detailed letter, Astra AB sent Johansson, Astra AB’s General Counsel, Goran Lerenius, and Thomas Clauss, Jr., a partner in the law firm of Winthrop, Stimson, Putnam & Roberts (“Winthrop Stimson”) to Astra’s headquarters to conduct an initial investigation. On April 28, 2006, Astra’s Board of Directors, after having inter- viewed Astra employees, including Bildman, about the BusinessWeek allegations, voted unanimously to suspend Bildman with pay, to create a special com- mittee to investigate allegations of sexual harassment and other improprieties and report its findings to the Board, and to retain Winthrop Stimson to conduct a full investigation. Jd. at 123. 8 After Bildman’s Suspension, Numerous Media Articles Are Published Concerning Bildman’s Suspension And The Numerous Public Lawsuits That Had Been Filed Alleging Sexual Harassment By Bildman On April 30, 1996, the Boston Globe published an article about Bildman’s suspension. Boston Globe, “Astra Chief Suspended After Harassment Charge: Westborough Firm to Probe Employee Allegations”, 1996 WLNR 2200474 (April 30, 1995). It reported that Bildman’s suspension came “on the heels of recent allegations of sexual harassment at Mitsu- bishi” to the effect that up to 500 female Mitsubishi workers were subjected to “groping, demands for sex and sexually explicit drawings.” Jd. The Boston Herald and Worcester Telegram & Gazette also pub- lished stories on the sexual harassment allegations against Bildman on April 30, 1996. See 1996 WLNR 252282 and 1996 WLNR 5869843. The next day, May 1, 1996, the Boston Globe published an article entitled “Suit Alleges a Wild- Party Tone At Astra” about a new lawsuit filed by a former Astra employee against the company. R875-877. It reported that this lawsuit was the sixteenth sexual discrimination and/or harassment action brought against Astra or its executives by present or former employees, and quoted a Commissioner of the Massa- chusetts Commission Against Discrimination as stating that this was an “unusually large number.” /d. Before The BusinessWeek Publication, Bildman Actively Communicates With The Media To Influence The Public Controversy As of May 1, 1996, the BusinessWeek story had not yet been published. On May Ist, the same day as the 9 front page Boston Globe story on the most recent lawsuit against Astra, Bildman once again took affirmative steps to influence the BusinessWeek story before its publication. His personal counsel sent two letters to the BusinessWeek reporter, Mark Maremont. The first referred to a conversation between Bildman’s counsel and Maremont earlier that day, in which Bildman’s counsel requested the opportunity to address the allegations prior to the story’s publication. R707- 08. The second letter contained a “Statement of Lars Bildman” responding to the allegations contained in Maremont’s letter. See R712-713. The Publication Of “Abuse Of Power” Generates Media Stories To Which Bildman Responds, As Well As An EEOC Investigation The next day, May 2, 1996, BusinessWeek published a cover story entitled “Abuse of Power: The Aston- ishing Tale of Sexual Harassment at Astra USA.” BusinessWeek reported that it had interviewed more than 70 former and current employees and found “a disturbing pattern of complaints during much of Bildman’s 15-year tenure, including a dozen cases of women who claimed they were either fondled or solicited for sexual favors by Bildman or other Astra executives.” Astra, 455 Mass. at 125. © The article itself is dated May 13, 1996, but the record shows that the issue in which the article appeared was published on May 2, 1996. R911 at 16; Zortman v. Bildman, 1999 WL 1318959, *4 (Jan. 15, 1999) (Hinkle, J.) (“On May 2, 1996, Business Week published as its cover story an article by Maremont entitled “Abuse of Power”). 10 The undisputed record on summary judgment was that the cover story generated both local and interna- tional media coverage, and that during May and June, 1996 alone, over one hundred and fifty articles concerning Bildman and Astra were published throughout the world. Jd. at 124; R1027. In his petition, Bildman asserts that Astra “approved the publication of the BusinessWeek article after the magazine’s editorial board had turned it down.” Bildman then contends that the “court below left this fact unnoticed.” (Pet. Br. at 6 and n.3). There is no evidentiary support for this assertion.® After the BusinessWeek article was published on May 2, 1996, Bildman continued to actively contact and interact with the media. As the SJC found: The judge found that Bildman, through counsel, repeatedly contacted and used the media, including BusinessWeek, the Boston Globe, and the Boston Herald, to comment on the investiga- tion, deny and rebut Astra’s allegations, and influence the resolution of the investigation in the public eye. In addition, Bildman sent press releases to various media outlets, including the New York Times, Wall Street Journal, Reuters, United Press, New England Cable News, CBS News, WCVB-TV, WLVI-TV, and WHDH-TV in Boston. Bildman also entered into unsuccessful © Indeed, the record citation that Bildman provides the Court for this assertion is merely his Amended Counterclaim and Third-Party Complaint. However, even that document fails to allege that Astra in any way “approved the publication” of the BusinessWeek article, which was, of course, highly critical of Astra. See R581-582. ll negotiations with CBS News to be interviewed on its evening news program in New York and appeared in an interview on a Swedish television program. Astra, 455 Mass. at 145, n.44; R1026-1030. Media reports on the controversy also contained Bildman’s counsel’s extensive comments on it. On May 20, 1996, BusinessWeek published a follow-up article entitled “Aftershocks Are Rumbling Through Astra: An EEOC Sexual Harassment Probe Could Be In The Works.” That article quoted Bildman’s counsel as stating that “there is nothing independent about the investigation and the results have been predeter- mined.” R725. Commenting on a lawsuit filed by former Astra employees asserting that Bildman had “covered-up” allegations of sexual abuse, Bildman’s counsel was quoted in a Boston Herald article, entitled “Six Former Astra Workers File Sex Suit” and published on May 31, 1996, as saying “This is the most reprehensible piece of drivel I’ve ever seen in 17 years of practicing law.... I can’t believe an attorney licensed to practice law in the Commonwealth would even file it.” R727. In a June 3, 1996 letter to the Producer of CBS Evening News, Bildman’s counsel wrote: “I am looking forward to hearing from you further with respect to my request that I be given the opportunity to respond on camera to the allegations which have been made against my client.” R745. In a press release dated June 4, 1996 issued through his counsel, Bildman stated: “Since the beginning of this case, I and my family have been outraged at the irresponsible alle- gations that have been made against me.” R783. In a June 13, 1996 letter to CBS News, Bildman’s counsel wrote on Bildman’s behalf: “He has authorized me to 12 speak for him and I am requesting the opportunity to go on-camera to respond to the allegations set forth in your letter of June 12th.” R797. The Equal Employment Opportunity Commission (“EEOC”) also initiated an investigation in May 1996 into the allegations of sexual harassment at Astra. R721-722, 724. In February 1998, the EEOC filed its formal complaint against Astra alleging a pattern and practice of sexual harassment of Astra employees since “at least January 1, 1993 and continuing.” Astra, 455 Mass. at 124-125. Astra entered into a consent decree with the EEOC, which established a $9,850,000 fund to compensate victims of sexual harassment at the company. /d. Astra’s Internal Investigation Reveals Extensive Misconduct By Bildman Leading To His Termination For Cause Winthrop Stimson’s two-month investigation uncovered “evidence of pervasive sexual harassment of female Astra employees by Bildman and others in management,” evidence that Bildman had threatened employees who spoke to investigators, destroyed and/or ordered the destruction of company documents, and “evidence of...serious financial and other improprie- ties.”’ Astra, 455 Mass. at 123-124, n.13. On June 25, 1996, Astra’s Board of Directors voted to terminate Bildman’s employment for cause. Id. 7 In March 1997, Bildman was indicted for various felonies relating to the conduct in question and, in January 1998, he pleaded guilty to three counts of willfully filing false federal tax returns. Jd. at 125, n.15. Both Bildman’s indictment and his subsequent guilty plea received considerable media attention. See R899-909. 13 Astra Commences The Underlying Lawsuit Against Bildman, And Bildman Counterclaims, Inter Alia, For “Negligent Libel” In February 1998, Astra commenced the under- lying lawsuit against Bildman for fraud, conversion, waste and breaches of his fiduciary duties. Bildman responded by suing Astra and two of its Board members, Mogren and Johansson, inter alia, for tor- tious interference with his employment agreement and for libel. Prior to trial, the judge granted Astra’s summary judgment motion on all of Bildman’s libel claims, applying this Court’s analysis in Gertz uv. Robert Welch, Inc., 418 U.S. 323 (1974) to find that Bildman was a limited purpose public figure and that, quite apart from whether the statements in question were true, Bildman had not adduced the requisite evidence of actual malice to survive summary judgment.® After a seven week trial, a jury found Bildman liable to Astra for fraud, conversion, waste and breach of fiduciary duty by “making affirmative misrepresentation or failing to disclose to Astra material information which he had a duty to disclose,” and for “improper use of Astra funds.” The jury also found that Bildman engaged in sexual harassment of Astra employees, that he retaliated against Astra employees who had exercised their rights to make complaints under Astra’s sexual harassment policy and that he had violated Astra’s sexual harassment policy. Astra, 455 Mass. at 126. ® At summary judgment, the trial court found that close to ten purportedly defamatory statements were either true or non- defamatory as a matter of law. Bildman did not appeal these findings or the trial court’s dismissal of his “malicious libel” or “libel per se” claims. Astra, 455 Mass. at 144, n.42. 14 The jury found that in terminating its employment agreement with Bildman for cause Astra had not breached that agreement, and that Mogren and Johansson had not interfered with Bildman’s employment agreement. In answering a_ special question about the reasonableness of Astra’s conduct, the jury found that “[alt the time Astra terminated Mr. Bildman, [ ] Astra [had] a reasonable good faith basis for believing Mr. Bildman had engaged in conduct justifying his termination ‘for cause’ under the 1993 employment contract.” R5662. The jury found that Bildman was liable to Astra for fraud, conversion, corporate waste, and breaches of his fiduciary duties. Astra, 455 Mass. at 117-118. The trial court reserved Astra’s claim for forfeiture of the compensation paid to Bildman during the period of his disloyalty, ultimately ordered a bench trial on that issue, and found that notwithstanding the strict forfeiture law under the law of New York where Astra was incorporated, Astra was not entitled to forfeiture. The parties each appealed certain issues to the Massachusetts Appeals Court; the SJC, sua sponte, took the matter for direct review. The SJC Affirms The Trial Court’s Grant Of Summary Judgment On Bildman’s Negligent Libel Claim In his appeal, Bildman did not challenge the jury verdict against him. Rather, he confined his appeal to the trial certs denial of his bid for legal fees under the em»*»vment agreement and its grant of summary jJudgi **+ on his libel claims. His appeal of the summary judgment was limited to the trial 15 court’s determination that he was a limited purpose public figure; he did not challenge the trial court’s determination that he had failed to adduce the requisite evidence of actual malice. The SJC held that Astra was entitled to forfeiture of Bildman’s compensation during the period of his disloyalty, and upheld the trial court’s grant of sum- mary judgment for Astra on Bildman’s defamation claims, applying the rule set forth in Gertz and holding that, under the circumstances of this case and based on the undisputed record, Bildman did indeed qualify as a limited purpose public figure. ARGUMENT I. THIS CASE DOES NOT MERIT REVIEW BECAUSE THE SJC PROPERLY STATED AND APPLIED THIS COURT’S PRECE- DENT IN HOLDING THAT BILDMAN WAS A LIMITED PURPOSE PUBLIC FIGURE. In his Petition, Bildman concedes that the SJC properly stated the legal standard under Gertz in determining when an individual becomes a limited purpose public figure, but contends that it then “ignored all instructions in Gertz and its progeny as to the existence of a public controversy and the characteristics of a limited purpose public figure.” (Pet. Br. at p.9). Bildman’s challenge to the applica- tion of a properly-stated rule of law to the record is precisely the type of petition that this Court’s Rules indicate rarely justifies review. See S. Ct. R. 10. Not only did the SJC properly state the applicable legal standard for determining whether an individual is a limited purpose public figure, the SJC’s decision is entirely faithful to and consistent with the 16 Gertz holding that extended public figure status to those who “have brought themselves to the forefront of particular controversies in order to influence the resolution of the issues involved” and who, therefore, have “invite[d] attention and comment.” Gertz, 418 U.S. at 345. The SJC properly applied that standard to hold that Bildman was a limited purpose public figure as of the time of the four (4) purportedly actionable statements that were made by Astra on May 3, 1996, May 13, 1996, June 26, 1996 and February 5, 1998. See Astra, 455 Mass. at 143, n.42 (“The judge determined as to most of {the alleged defamatory statements] that they were either true or nondefamatory as a matter of law”).° As the statement of the case demonstrates, by May 3, 1996, the earliest of those dates, Bildman had ° As discussed infra, these four statements were: (1) a May 3, 1996, article in the Wall Street Journal in which an Astra spo- kesperson described Bildman as “not forthcoming” to Astra AB about the BusinessWeek investigation; (2) a speech Mogren gave to Astra employees on May 13, 1996, in which he stated: “[Slome people have tried to put themselves above the rules, at the same time that they have made great efforts to cover up what has happened’; (3) a June 26, 1996 Astra news release and press release that made identical statements that Bildman “had engaged in inappropriate behavior at company functions, that he had disregarded company rules and procedures, that he had failed to keep the company apprised, that he had rented outside office space for the purpose of keeping information from the parent company, that he had used company funds for family vacations and that he had used approximately $2 million for personal expenses”; and (4) an Astra statement appearing in the February 5, 1998 Boston Globe, after Astra’s settlement with the EEOC, that Bildman’s “actions-asking people to destroy records and the like-are in our estimation an attempt to cover up and keep things from his superiors in the company.” Astra, 455 Mass. at 143, n.42. 17 already engaged in extensive communications with the media in an effort to influence how they portrayed him in the emerging controversy that centered on his conduct as CEO. Indeed, five (5) months earlier, Bildman had assembled a public relations team for the purpose of influencing the publication of the emerging BusinessWeek story prior to its publication. Then, in April 1996, Bildman had orchestrated a meeting of his “task force” with the BusinessWeek reporter in order to influence the story shortly before its publication. In addition, on May Ist, after he was suspended but the day before the BusinessWeek story was published, Bildman had his counsel speak with the BusinessWeek reporter to see if he could affect its content, and then faxed the reporter a “Statement of Lars Bildman.” On that day, Bildman was already the subject of Boston Globe and Boston Herald stories relating to sexual harassment allegations against him by former Astra employees. By the next day, May 2, 1996, Bildman was also the subject of a BusinessWeek cover story, which, in turn, generated some one hundred and fifty additional stories about Bildman and Astra around the world. There is no evidence in the record that Astra was responsible for these stories. Bildman’s sexual harassment of employees at Astra was indeed a public controversy. As an initial matter and as reflected in the BusinessWeek article itself, the revelation of Bildman’s conduct at Astra came several months after the revelation of another high-profile corporate sexual harassment scandal, which had generated a governmental investigation by the EEOC: 18 The Astra example comes on the heels of the sexual harassment scandal at the Norman (IIl.) factory of Mitsubishi.... The [EEOC], which brought its largest suit of this kind against the company, alleges that Mitsubishi did not respond to the repeated complaints.... While Mitsubishi and Astra are extraordinary for the breadth and depth of their problems, many companies are struggling with sexual harassment claims. R919. As recognized by the SJC, “the issue of sexual harassment in the workplace is a focus of a consider- able body of State and Federal law and regulation and a matter of frequent and often heated public debate.” Astra, 455 Mass. at 145-146. Such was certainly the case when it came to Bildman’s miscon- duct at Astra: The topic of Bildman’s actions echoed far beyond Astra, its employees, and their families. For many months, it wove its way into the national and international discourse about permissible conduct in the workplace and the place and treatment of women in the private sector. Id. Not only was sexual harassment at Astra a public controversy by May 1996, but it was Bildman’s conduct which was the controversy, as the trial court properly found based on the undisputed summary judgment record. R1233-1235—Summary Judgment Decision at 45-47 (“Bildman was at the center of a federal sexual harassment investigation of a publicly traded phar- maceutical company employing over 1,000 people in Westborough, Massachusetts”). See Gray v. St. Martin’s Press, Inc., 221 F.3d 243, 251 (1st Cir. 2000) (holding 19 that plaintiff was “central figure” in the public controversy concerning the influence of lobbyists and had been the subject of articles by Time Magazine and Newsweek). Bildman was not only the central figure in the public controversy concerning Ais sexual harassment of employees at Astra, he voluntarily and affirmatively sought first to influence the BusinessWeek story before it was published, and then to influence the public’s view of the public controversy centering on his conduct that was generated by the BusinessWeek story and the immediate print and electronic media stories about lawsuits and other allegations of his misconduct. Based on Bildman’s press releases and public statements, and his counsel’s repeated com- munications with news outlets denouncing those who had made these allegations, the trial court found “on the undisputed record, that Bildman was neither a victim nor an unwitting participant in the broad media coverage of his dispute with Astra.” Astra, 455 Mass. at 145. The SJC agreed: His is not a case in which the libel plaintiff is a “bit player” in a media drama created by forces over which he had no control. Bildman played a central role, with “access to the channels of effec- tive communication” that most private individuals do not enjoy.... Jt is readily apparent to us, as it was to the judge, that Bildman “palpably engineered efforts to project himself into the pub- lic limelight.” Astra, 455 Mass. at 145-146 (quoting Gertz, 418 U.S. at 344 and Tripoli v. Boston Herald-Traveler Corp., 359 Mass. 150, 156 (1971) (emphasis added)). 20 Bildman’s assertion that the SJC’s decision is at odds with this Court’s precedent since Gertz is incorrect. He relies on three cases in support of his argument, each sharply different from the record in this case. In Time, Inc. v. Firestone, 424 U.S. 448 (1976), the defamation plaintiff was a private litigant whose divorce proceeding was covered by the media by virtue of her social status and the evidence of adultery by the parties. Indeed, there was no “public controversy.” As this Court recognized, “|dJissolution of a marriage through judicial proceedings is not the sort of ‘public controversy’ referred to in Geriz, even though the marital difficulties of extremely wealthy individuals may be of interest to some portion of the reading public.” Jd. at 545. Nor was there the requisite evidence that the plaintiff had thrust herself to the forefront of any controversy beyond the litigation between herself and her husband. I/d. (wife did not “choose to publicize issues on the propriety of her married life. She was compelled to go to court...to obtain legal release from the bonds of matrimony”). As a result, the plaintiff was a private figure for purposes of her libel claims. Similarly, in Wolston v. Readers Digest Association, 443 U.S. 157 (1979), the defamation plaintiff had failed to respond to a grand jury subpoena in connection with the government’s investigation into Soviet espionage in 1958. Then, close to twenty years later, the defendants published a book contending that the plaintiff was a Soviet agent in the United States and had been indicted for espionage. In reversing the lower court’s ruling that plaintiff was a limited purpose public figure in 1958, the Court recognized that the plaintiff had “not in any way [sought] to 21 arouse public sentiment in his favor and against the lgovernment] investigation.” Jd. at 168. Although the plaintiffs failure to respond to the grand jury subpoena caused significant media attention in 1958, the Court focused on the plaintiffs role in the public controversy and his interaction with the media. We emphasize that a court must focus on the “nature and extent of an individual’s participa- tion in the particular controversy giving rise to the defamation.”... Similarly, petitioner never discussed this matter with the press, and limited his involvement to that necessary to defend him- self against the contempt charge. It is clear that petitioner played only a minor role in whatever controversy there may have been concerning the investigation of Soviet espionage. Id. at 167 (emphasis added) (quoting Gertz, 418 U.S. at 352)). Because the plaintiff was the passive recipient of media attention, and did nothing to seek to shape or influence it, and his conduct was limited to his failure to appear in response to a grand jury subpoena, this Court held that he was not a limited purpose public figure. In the third case relied upon by Bildman, Hutch- inson v. Proxmire, 443 U.S. 111 (1979), the defen- dant’s argument that the plaintiff qualified for limited purpose figure status rested principally on the fact that plaintiff, a scientist, had: (1) successfully applied for and received federal grants and (2) re- sponded publicly to the defendant United States Senators public announcement of the “Golden Fleece” award that chastised federal agencies for funding the plaintiffs research. This Court rejected 22 the defendant’s argument because it found that the plaintiffs research only became a matter of public controversy because of the defendant’s conduct and plaintiff did not “thrust himself or his views into the public controversy to influence others.” Id. at 112- 113 (“Those charged with defamation cannot, by their own conduct, create their own defense by making the claimant a public figure”). Bildman’s role in the public controversy and his attempt to influence it stands in stark contrast to the passive behavior of the defamation plaintiffs in Firestone, Wolston, and Proxmire. First, as the SJC stated, Bildman was not a “bit player” in the public controversy concerning the allegations of sexual harassment at Astra in 1996. Rather, he was the public controversy, playing a “central role” in creating, trying to suppress, and then attempting to influence the coverage of a sexual harassment scandal whose wide-ranging impact is best reflected by the international attention that it generated. Astra, 455 Mass. at 145-146 and n.45 (“We add that the media storm that swept over Bildman originated in his own wrongful conduct as a corporate officer and director beginning years before BusinessWeek began its investigation”) (emphasis added). Second, unlike the plaintiffs in Firestone and Wolston, Bildman actively sought out the media, directly and through his counsel, before Astra pub- lished any of the four statements that he asserts were actionable, in an effort to shape the media’s reporting of his alleged sexual harassment of female employees. Indeed, Bildman had: (1) established a public relations task force in December 1995 in an effort to thwart, or shape, the BusinessWeek inves- tigation; (2) directed his task force to meet with 23 BusinessWeek in April 1996 in an effort to persuade the magazine not to publish its exposé; (3) after his suspension, but before the BusinessWeek article’s publication, directed his counsel to communicate, on his behalf, with BusinessWeek and to provide the “Statement of Lars Bildman”; and (4) after the BusinessWeek article’s publication on May 2, 1996, continued to actively and repeatedly communicate with the numerous media outlets. See Astra, 455 Mass. at 146 (“It is readily apparent to us, as it was to the judge, that Bildman ‘palpably engineered efforts to project himself into the public limelight’). Third, unlike in Firestone and Proxmire, in which the defendants dragged the plaintiffs into the media spotlight, Astra had nothing to do with Business- Week’s publication of “Abuse of Power” or of the subsequent news stories published in the Boston Globe and other newspapers in the spring and summer of 1996 concerning the various sexual harass- ment lawsuits that had been filed against Bildman. Put simply, by the time Astra made the four statements which are the subject of this petition, Bildman had not only generated a public controversy concerning his own conduct, but had actively ensured that he stayed at the forefront of that controversy by attempting to use the media to influence the public’s perception of him and his role in the controversy. See Astra, 455 Mass. at 145-146 (“Bildman played a central role, with ‘access to the channels of effective communication’ that most private individuals do not enjoy”) (quoting Gertz, 418 U.S. at 344). The SJC properly held that Bildman was a limited purpose public figure for purposes of his negligent libel claims against Astra. 24 Il. THIS CASE DOES NOT MERIT REVIEW BECAUSE BILDMAN’S CONTENTION THAT THE FIRST AMENDMENT DOES NOT PROTECT ASTRA (1) HAS BEEN WAIVED AND (2) IS ERRONEOUS. In his petition, Bildman asserts for the first time in over twelve years of litigation that “the First Amendment does not invest in foreign multinational corporations the same immunities as it guarantees a media defendant against liability in defamation actions.” (Pet. Br. at 21-22). As a threshold matter, it is worth noting that the trial court dismissed Bildman’s claims against Astra AB (a foreign multinational corporation) well before summary judgment and Bildman withdrew his appeal of all rulings in favor of Astra AB. Moreover, Bildman’s libel claims at the summary judgment stage were against Astra USA, Inc., which is a New York corporation. As a result, Bildman had no libel claims against a “foreign multinational drug company” in the trial court, and his appeal before the SJC similarly did not involve Astra AB. In any event, Bildman never asserted that Astra was unprotected by the First Amendment either before the trial court or the SJC. As a result, Bildman has waived this issue. See Plucket v. United States,—U.S.—, 129 S.Ct. 1423, 1428 (2009) (“No pro- cedural principle is more familiar to this Court than a right may be forfeited in criminal as well as civil cases by the failure to make timely assertion of the right before a tnbunal having jurisdiction to determine it”); Lazzara v. Wyle Electronics Co., 56 Mass. App. Ct. 1112, 2002 WL 3169483, at *4 and n.13 (Mass. App. Ct. 2002) (“We do not consider arguments or 25 issues not advanced below in opposition to summary judgment, but raised for the first time on appeal”). Moreover, this Court ruled less than two months ago that the “Government may not suppress political speech on the basis of the speaker’s corporate identity.” Citizens United v. Federal Election Commission,— U.S.—, 130 S.Ct. 876, 913 (2010). The Court made it clear that it has long recognized that “First Amend- ment protection extends to corporations.” Jd. at 889- 900 (citing approximately twenty cases). We thus find no support in the First Amendment, or in the decisions of this Court, for the proposition that speech that otherwise would be within the protection of the First Amendment loses that protection simply because its source is a corporation.... Id. at 902 (quoting First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 784-785 (1978)). Further, Bildman’s attempt to draw a Constitutional distinction between corporations and “media defen- dants” in terms of the scope and protection afforded by the First Amendment has similarly been rejected by this Court. There is no precedent supporting laws that attempt to distinguish between corporations which are deemed to be exempt as media corporations and those which are not. We have consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers. Id. at 905. Bildman fails to offer any contrary legal authority. Bildman’s argument does not merit review by this Court. 26 Ill. THIS CASE DOES NOT MERIT REVIEW BECAUSE THERE ARE TWO ADEQUATE AND INDEPENDENT STATE GROUNDS UNDER MASSACHUSETTS LAW FOR THE SJC’S REJECTION OF BILDMAN’S NEGLIGENT LIBEL CLAIMS. This Court has tended to deny petitions seeking review of state court decisions where adequate and independent state grounds exist supporting those decisions. E. Gressman, K. Geller, S. Shapiro, T. Bishop, E. Hartnett, Supreme Court Practice at 4.25 (9th ed. 2007); Justice Brennan, State Court Decisions and the Supreme Court, 31 Penn. Bar. Assn. Q. 393, 399-400 (1960) (where substantial ques- tions are presented and were properly raised in state court, “even then we may not take the case if the state court’s judgment can be sustained on an independent ground of state law”). While this Court presumptively has jurisdiction to review the SJC’s decision under the standard articu- lated in Michigan v. Long, 463 U.S. 1032 (1983), it should decline the petition for certiorari since adequate and independent state grounds exist that support the SJC’s decision on Petitioner’s libel claims." As this Court explained over sixty-five years ago: [O]ur power is to correct wrong judgments, not to revise opinions. We are not permitted to render an advisory opinion, and if the same judgment 1° In Long, the Court held that it will presume that it has jurisdiction to review a state court decision when the decision “fairly appears to rest primarily on federal law, or to be inter- woven with federal law, and when the adequacy and indepen- dence of any possible state law ground is not clear from the face of the opinion.” Long, 463 U.S. at 1040-1041. 27 would be rendered by the state court after we corrected its views of federal laws, our review could amount to nothing more than an advisory opinion. Herb v. Pitcairn, 324 U.S. 117, 125-126 (1945). As Justice Stevens recently stated: “[e]ven if the state court opinion does not include the magic words set forth in Long, or some similarly explicit sentence, we lack jurisdiction if it is nonetheless apparent that the decision is indeed supported by an adequate and independent state ground.” Florida v. Powell,—U.S.—, 130 S.Ct. 1195 (2010) (Stevens, J. dissenting).” Iiere, and as Astra argued to the SJC, the jury’s verdict, as reflected by its answers to special questions, supported the SJC’s decision upholding dismissal of Bildman’s negligent libel claims on two state law grounds entirely independent of whether Bildman qualified as a limited purpose public figure based on this Court’s precedent and the record.” ’ Indeed, even where the Court accepts a petition for review of a state court decision, its “practice is to avoid reaching consti- tutional questions if a dispositive non-constitutional ground is available.” Proxmire, 443 U.S. at 122; Wolston, 443 U.S. at 160, n.2 (“(Tjhe general principle [is] that dispositive issues of statutory and local law are to be treated before reaching constitutional issues”). 12 See Astra’s Reply Brief at pp. 10-13. The SJC had no need to reach these arguments, however, since it upheld the trial court’s ruling that Bildman was a limited purpose public figure for purposes of the allegedly defamatory statements. Where Bildman did not appeal from the trial court’s ruling that he had not adduced the requisite evidence of actual malice to survive summary judgment under the New York Times standard, the Court’s ruling that Bildman was indeed a limited purpose public figure alone dictated that the trial court’s decision granting 28 First, where the jury expressly found that Astra (1) had not breached the employment agreement in terminating Bildman for cause and (2) had undertaken its investigation reasonably and in good faith such that Astra had “a reasonable good faith basis for believing that Mr. Bildman had engaged in wrongful conduct justifying his termination ‘for cause’ under the 1993 employment contract,” Astra had an independent conditional privilege under Massachusetts law to comment about its investigation of its CEO and his conduct because it was reasonably necessary to do so in order to protect its legitimate interests. See Bratt v. International Business Machines Corp., 392 Mass. 508, 512-513 (1984) (“a person may possess a conditional privilege to publish defamatory material if the publication is reasonably necessary to the protection or furtherance of a legitimate business interest”). Under Massachusetts law, this conditional privilege imposed the same burden on Bildman to adduce trial- worthy evidence of actual malice as he was required to adduce as a limited purpose public figure. Jd. at 515-516. Accordingly, judgment was warranted for Astra on the entirely independent state-law basis of its conditional privilege, coupled with Bildman’s inability to adduce evidence of actual malice on Astra’s part. Second, the specific jury findings that Bildman defrauded Astra, converted and wasted its assets, falsely misrepresented facts to it and/or withheld material facts from it, breached his fiduciary duties to it by misappropriating its funds, sexually harassed summary judgment to Astra on Bildman’s negligent libel claims be upheld. 29 Astra employees, retaliated against Astra employees and violated Astra’s sexual harassment policy established that the allegedly defamatory statements that underlie this appeal were “substantially true,” at the very minimum. Therefore, whether or not Bildman qualified as a limited purpose public figure on the basis of the applicable precedent and the record, the jury verdict has effectively established that Astra’s statements were true and could not support a defamation claim even if this Court were to disagree with the conclusion that Bildman were a li- mited purpose public figure on the record in this case. A. The Jury’s Answers To Special Questions Established Astra’s Conditional Privilege To Comment On Its Investigation Into Its Former CEO’s Misconduct, And Imposed An Independent Burden On Bildman To Adduce The Requisite Evidence Of Actual Malice. Under Massachusetts law, an employer has a conditional privilege to comment on its reasons for terminating an employee as long as its communica- tions are made principally for the purpose of furthering its legitimate interests. The conditional privilege protects an employer from liability unless the employee can establish that it acted with actual malice or acted recklessly by unnecessary, unrea- sonable or excessive publication of the allegedly defamatory material. See, e.g., Bratt, 392 Mass. at 512-516; Broomes v. Blue Cross Blue Shield of Massachusetts, Inc., 74 Mass. App. Ct. 1123, 2009 WL 1953006, *9 (Mass. App. Ct. July 9, 2009) (affirming summary judgment on defamation claims; “the employee bears the burden of demonstrating that the employer has lost the privilege”); Kyle v. Mongan, 30 72 Mass. App. Ct. 1111, 2008 WL 2951800, *2-3 (Mass. App. Ct. August 4, 2008) (affirming summary judgment dismissing defamation claim because the defendant president of a hospital under public scrutiny for terminating employee “had a conditional privilege to publish defamatory material about Kyle in order to protect MGHI’s legitimate business interests”); Sklar v. Beth Israel Deaconess Medical Center, 59 Mass. App. Ct. 550, 558 (2003) (affirming grant of summary judgment because supervisor’s publication of information about employee’s possible ethical violations was conditionally privileged); Dragonas v. School Committee of Melrose, 64 Mass. App. Ct. 429, 438-439 (2005) (conditional privilege is lost “only if publication is not made chiefly for the purposes of furthering the [business] interest”). Astra moved for summary judgment on Bildman’s negligent libel claims not only on the basis of Bild- man’s status as a limited purpose public figure, but on the alternative ground that it was conditionally privileged to comment on Bildman’s suspension and termination in order to protect its legitimate business interests in the context of the extraordinary public controversy surrounding the allegations of sexual harassment by Astra management and the highly- publicized EEOC investigation into the company that ensued. See R1242-1243. In opposing Astra’s motion for summary judgment, Bildman did not assert that Astra’s statements were published “excessively.” Rather, he argued that Astra had published the state- ments based on an improper motive and with ill will. While the trial court agreed that Bildman was a limited purpose public figure and granted summary judgment on that basis, it found that, because Bildman contended that Astra’s investigation was a 31 wrongful one, Astra’s entitlement to the conditional privilege was a matter of dispute, and therefore not one that could be determined as a matter of law. R1244-1247. However, the subsequent jury verdict in Astra’s favor and in favor of the two Astra executives who Bildman contended had tortiously interfered with his employment agreement, and the jury’s answers to the special questions posed to it, have conclusively resolved that dispute in Astra’s favor. They establish that Astra was indeed conditionally privileged to comment on the discipline of its CEO. See R5658- 5664. Specifically, the jury found that Astra’s inves- tigation into Bildman’s conduct leading to his termi- nation for cause produced substantial evidence that he had misappropriated corporate funds for personal purposes, engaged in inappropriate conduct toward employees and been dishonest with Astra’s Board of Directors. The jury expressly found that Bildman had, indeed, defrauded Astra, wrongfully converted and misappropriated its funds, engaged in sexual harassment of Astra employees and _ retaliated against them, and made false representations of fact or failed to disclose material facts to Astra’s Board. And, unsurprisingly given its findings that Bildman had actually engaged, inter alia, in fraud, misappro- priation of corporate funds, misleading conduct and sexual] harassment, the jury also expressly found that “laJt the time Astra terminated Mr. Bildman, Astra [had] a reasonable good faith basis for believing Mr. Bildman had engaged in conduct justifying his termination ‘for cause” under his employment agree- ment. See R5662 at Q.19 (emphasis added). 32 Similarly, the jury expressly found that Mogren and Johansson had not tortiously interfered with Bildman’s employment agreement, effectively consti- tuting a finding that they did not act in bad faith or out of an improper motive. See R5663; Brewster Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass. App. Ct. 582, 608 (2007) (reversing verdict on tortious interference claim; “the ‘improper motive or means’ element requires proof of actual malice, i.e. ‘a spiteful, malignant purpose, unrelated to the legitimate corporate interest”). In short, the jury verdict answered the very dispositive question that the trial court found was unanswerable at the summary judgment stage on the applicability of the conditional privilege under Massachusetts law: Astra’s actions were fair, in good faith and not based on improper motive. Accordingly, Astra was conditionally privileged to comment on its investigation of and disciplinary actions against its former CEO. Bildman did not and does not challenge the trial court’s finding that, assuming that Astra had stated anything about him that was actually untrue, he had failed to adduce evidence at the summary judgment stage that Astra had acted in reckless disregard of the statement’s untruth. B. The Jury Verdict And Its Answers To Special Questions Also Established The Substantial Truth Of Astra’s Purportedly Actionable Statements. The SJC’s judgment would be proper on yet another independent state ground, even if Bildman was not a limited purpose public figure, for the most fundamental reason of all. Astra’s purportedly actionable statements were true or substantially true, as established by the jury’s verdict in Astra’s favor. 33 See Mason v. New Yorker Magazine, Inc., 501 U.S. 496, 516-517 (1991) (Law of libel “concentrates upon substantial truth..... Minor inaccuracies do not amount to falsity so long as the substance, the gift, the sting, of the libelous charge be justified”); Reilly v. Associated Press, 59 Mass. App. Ct. 764, 770-771 (2003) (Statements “were essentially true, albeit with minor inaccuracies, and so were not defamatory”). A comparison of the statements that formed the basis of Bildman’s appeal first to the SJC and now to this Court, on the one hand, with the jury’s express findings, on the other, demonstrates that the jury has adjudicated the truth or substantial truth of each of these statements—all in Astra’s favor. The SJC summarized Bildman’s negligent defamation claim as follows: On appeal, Bildman’s negligent libel claim focuses on the following statements: (a) a May 3, 1996, article in the Wall Street Journal in which an Astra spokesperson described Bildman as “not forthcoming” to Astra AB about the Business- Week investigation; (b) a speech Mogren gave to Astra employees on May 13, 1996, in which he stated, among other things: “{[Slome people have tried to put themselves above the rules, at the same time that they have made great efforts to cover up what has happened’; (c) a June 26, 1996, Astra news release and press release that made identical statements that, as Bildman summarized on appeal, he “had engaged in inappropriate behavior at company functions, that he had disregarded company rules and pro- cedures, that he had failed to keep the company apprised, that he had rented outside office space 34 for the purpose of keeping information from the parent company, that he had used company funds for family vacations and that he had used approximately $2 million for personal expenses”; and (d) an Astra statement appearing in the February 5, 1998, Boston Globe that Bildman’s “actions— asking people to destroy records and the like— are in our estimation an attempt to cover up and keep things from his superiors in the company.” Astra, 455 Mass. at 143, n.42. The jury’s verdict that Bildman had defrauded Astra, misappropriated its funds and made material misrepresentations or withheld material facts from its Board conclusively establishes the truth of statements (a) and (b). Its express findings that Bildman had sexually harassed and retaliated against Astra employees, had violated Astra’s sexual harassment policies, had defrauded Astra out of $1,042,000 and had converted that amount for personal use, confirmed at a mini- mum the “substance” of statements (b) and (c). As for statement (d), as the SJC pointed out: The jury also heard evidence that at Bildman’s direction and without the knowledge of Astra’s Board, Magnusson [an individual hired by Bild- man] set up a five-employee satellite office from which he shredded corporate documents; that he and Bildman removed Astra documents, inclu- ding financial documents from Bildman’s office; and that after receiving a telephone call from Bildman, Magnusson had company computers ‘erased’. Id. at 123. 35 Although the jury was not asked to answer a specific question on the precise issue of whether Bildman had “ask[ed] people to destroy records,” the jury was asked to make an express finding of whether or not he had misrepresented material facts to, and/or had withheld material facts from, Astra’s Board of Directors, which clearly encompasses the “substance” or the “gist” of the alleged defamatory statement, namely, that Bildman had engaged “in our estimation [in] an attempt to cover up and keep things form his superiors in the company.” This statement was not merely supported by extensive evidence, but also established by the jury’s express findings. Bildman has not challenged any of the jury’s express findings or, indeed, any other aspect of the verdict. In short, the unchallenged jury verdict established the truth or, at a minimum, the substan- tial truth of every one of the purportedly actionable statements. Therefore, the SJC’s judgment is correct for this additional reason. Given the independent state-law grounds that support the SJC’s rejection of Bildman’s negligent libel claims, the Court should decline review of this case. See Proxmire, 443 U.S. at 122 (“Our practice is to avoid reaching constitutional questions if a dispositive nonconstitutional ground is available.... If the District Court correctly decided the state law question, resolution of the First Amendment issue would be unnecessary” ). 36 CONCLUSION For the foregoing reasons, Respondent Astra USA, Inc. respectfully requests that this Court deny the petition for certiorari. April 2, 2010 Respectfully submitted, JEFFREY S. ROBBINS A. W. PHINNEY, III* JOSEPH D. LIPCHITZ MINTZ, LEVIN, COHN, FERRIS, (GLOVSKY AND POPEO, P.C One Financial Center Boston, MA 02111 (617) 542-6000 AWPhinney@mintz.com *Counsel of Record for Respondent APPENDIX TABLE OF CONTENTS TO APPENDIX Page APPENDIX A: Memorandum Of Decision And Order On Parties’ Motions For Summary Judgment, dated October 29, 2001.................. la APPENDIX B: Suffolk Superior Court Special Question Verdict Form, dated February 21, EE ecnsevoreceveerseeccsvseevedeeesees davaeseeece eee 102a APPENDIX C: Final Judgment After Rescript, Gates Janwaxry G6, DID os cesesescsssescseeee 109a la APPENDIX A COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTIONS No. 98-0580-C No. 99-1942-G ASTRA USA, INC., Plaintiff, VS. LARS BILDMAN, Defendant, VS. HAKAN MOGREN & another’, Third-Party Defendants LARS BILDMAN, Plaintiff, vs. HAKAN MOGREN. & another’, Defendants ' Carl-Gustaf Johansson. 2 Carl-Gustaf Johansson. 2a MEMORANDUM OF DECISION AND ORDER ON PARTIES’ MOTIONS FOR SUMMARY JUDGMENT This case arises out of the 1996 termination by Astra USA, Inc. of Lars Bildman as its President and Chief Executive Officer. Cross motions for summary judgment are before the court. BACKGROUND The undisputed facts and the disputed facts viewed in the light most favorable to the nonmoving party, as revealed by the summary judgment record, are as follows. Swedish company Astra AB, together with its 50 subsidiaries in approximately 40 countries (“the Astra Group”), is engaged in a worldwide pharma- ceutical business employing over 20,000 people. Astra U.S.A. is a New York corporation which until 1999 was a wholly-owned subsidiary of Astra AB and operated through its own Board of Directors. In 1981, Lars P.E. Bildman (*“Bildman”) became Astra U.S.A.’s President, Chief Executive Officer and a member of its Board of Directors. Hakan Mogren (“Mogren”) joined the Astra Group in 1988 when he became President and Chief Executive Officer of Astra AB. In addition, Mogren served as a director of Astra U.S.A. beginning in 1988. Car]-Gustaf Johansson (“Johansson”) joined the Astra Group in 1963 and in 1995 was elected to the Astra U.S.A Board of Directors and became Astra’s Regional Director for North America. Initially, Bildman’s employment with Astra U.S.A. was as an Astra AB expatriate, under an agreement dated April 30, 1981. This expatriate agreement provided for the payment of specifically enumerated expenses related to employment abroad. According to Bildman, the expatriate employment agreement did not set forth all the terms he had negotiated 3a with Astra AB’s CEO and President at the time, Ulf Widengren (“Widengren”). (7/30/01 Bildman Aff. ] 2)° Between 1981 and 1993, the terms of the expatriate employment agreement changed many times, based on negotiations between Bildman and the President and CEO of Astra AB; however, these changes were not memorialized. When Bildman moved to Astra U.S.A. as an expa- triate, Widegren and Astra AB’s CFO, Peter Sjostrand (“Sjostrand”), authorized payment by Astra U.S.A. of routine legal services for Bildman’s benefit. (Tully Dep., pp. 25-26). The expatriate employment agreement itself is silent as to legal services. Bildman believed that as an expatriate he was entitled to have Astra U.S.A. pay for his personal legal services, and he charged personal legal fees involving real estate, disputes with a neighbor and traffic violations to Astra U.S.A. As a Swedish citizen, Bildman was concerned that a traffic violation in the United States would cause him to lose his driver’s license. Jan B.A. Janson, the President of Astra Japan, lost his license due to a traffic violation and Astra had to pay for a chauffeur to drive him around while his license was suspended. Bildman therefore believed it was an appropriate business expense and in accordance with the terms of his expatriate employment agreement to have Astra U.S.A. pay for his personal legal fees in connection with a speeding ticket he received. Bildman never obtained the authorization of Astra U.S.A.’s Board of Directors for these personal legal expenses. ° In addition, according to Bildman, the agreement produced by Astra in this litigation is incomplete and is missing a page after the signature page which dealt with Bildman’s compensa- tion. (7/30/01 Bildman Aff. { 2). 4a In 1976, Bildman was provided with a copy of the Astra Group General Conditions for Foreign Service (“General Conditions”) which applied to expatriate employees. The General Conditions provided that remuneration and benefits specified in the employee’s written contract “shall be the total compensation to which the Employee is entitled.” The General Condi- tions further provided that the employee could receive a housing allowance if jointly approved in advance by the receiving company and Human Resources, but that “fiJf the Employee purchases a house or other accommodation in the Country of Ser- vice, all costs and/or losses in connection with the buying and selling thereof will be the responsibility of the Employee” Bildman never asked Astra AB to pay for the purchase of his home or for any renovations or improvements to his home when he was employed as an expatriate. According to Bildman, the General Conditions applied only to mid or lower level employees and did not apply to him or other Presidents of Astra AB subsidiaries. When he received the revised version of the General Conditions from Gunnar Chnistiani (“Christiani”) in 1991, Bildman informed Christiani and Sjostrand, then Astra’s Regional Director of North America, that the General Conditions did not apply to him as President and CEO of Astra U.S.A. Sjostrand confirmed that the General Conditions did not apply to Bildman. Bildman refused to sign the General Conditions. Around 1992, Johansson, who was then responsible for Astra AB’s subsidiaries in Southern Europe, advocated that Astra AB transfer its right to market Pulmicort Turbuhaler in the United States to Schering-Plough in return for Schering-Plough 5a transferring its rights to sell the Pulmicort Turbuhaler in Italy, France and Spain to the Astra AB subsidiaries there. (Solvell Dep. Vol V, pp. 692- 693). Bildman was strenuously opposed to this pro- posal. (Solvell Dep. Vol. V, pp. 694). At a meeting in Boston, Johansson and Bildman were in such strong disagreement that they were screaming at each other and almost came to blows. (Solvell Dep. Vol. V, pp. 693-697; Testen Aff. 9 10). In the end, Astra retained the marketing rights to Pulmicort Turbuhaler, and Johansson’s proposal was not adopted. (Solvell Dep. Vol. V, p. 694). In September of 1992, Bildman approved an Astra U.S.A. Administrative Expense Report completed by Stefan Solvell (“Solvell”) which, in addition to 21 other entries, contained a $500 contribution to the Hatch Election Committee. In approving expense reports, Bildman did not read the reports or assess each individual item included; he merely signed them. Bildman did not seek any legal advice as to whether reimbursement of campaign contributions was legal before authorizing the report, nor did he disclose his authorization of such reimbursement to the Board of Directors. On June 15, 1993, Bildman entered into a direct employment agreement with Astra U.S.A. (“the Employment Agreement”). Mogren signed the Employ- ment Agreement in his capacity as an authorized representative of the Astra U.S.A. Board of Directors’ Compensation Committee. According to Bildman, although Mogren signed a portion of the agreement, he did not sign a portion relating to financial compen- sation. Bildman repeatedly requested that Mogren provide him with a signed copy, but Mogren never did. 6a The Employment Agreement states that it is effective July 1, 1993 and shall remain in full force and effect indefinitely until terminated in accordance with the provisions of Paragraph 4. The Agreement further states that “all prior agreements and under- standings governing the Employee’s employment shall be deemed to have terminated and be of no further effect, whether such agreements and under- standings were between the Employee and the Com- pany or between the Employee and any parent, subsidiary or affiliated corporation or entity of the Company.” Under Paragraph 2 of the Employment Agreement, Bildman agreed: to assume such duties and responsibilities as are commensurate with the customary duties of President and Chief Executive Officer and a member of the Company’s Board of Directors, and as may be assigned to the Employee by the Company’s Board of Directors or by the by-laws of the Company from time to time, subject to the supervision, direction and control of the Company’s Board of Directors, to whom the Employee shall be responsible. (Ex. 1 to Mogren Aff. J 2(a)). Paragraph 3 of the Employment Agreement sets forth Bildman’s base salary and provides for annual bonus compensation to be paid in accordance with the formula set forth in the Company’s annual incentive bonus plan. Paragraph 3 also provides that Astra “shall reimburse the Employee for all reasonable travel, entertainment, and other business expenses incurred by him in the performance of his duties and responsibilities, subject to such reasonable re- quirements with respect to substantiation and docu- 7a mentation as may be specified by the Company or its auditors.” Paragraph 4 of the Employment Agreement sets forth the various ways in which either party can terminate the Agreement Paragraph 4(f) provides in relevant part: The Employee’s employment hereunder may be terminated for cause by the Company, effec- tive immediately, by a vote of a majority of all of the members of the Board of Directors, on writ- ten notice to the Employee setting forth in reasonable detail the nature of such cause. For purposes of this \greement, “cause” means only: (i) the willful commission by the Employee of theft; embezzlement, fraud or other serious and substantial crimes against the Company, or (ii) other acts or omissions materially evidencing bad faith toward the Company, or (iii) conviction of the Employee of any criminal offense involving dishonesty or breach of trust or any felony. The Agreement further provides that “[i]n the event of the termination of the Employee under this Paragraph, the Company shall have no further obli- gation to the Employee hereunder, except any obliga- tion under any compensation or benefit plan in which the Employee is then a participant” (Ex. 1 to Mogren Aff. 71 4(f). Paragraph 8 of the Employment Agreement provides: The Company agrees to indemnify the Employee in his capacity as an officer and member of the Board of Directors of the Company, all to the maximum extent permitted under the laws of the Commonwealth of Massachusetts, from and against any and all claims, damages, suits, costs, 8a or liabilities, arising out of or relating to the performance of his duties and responsibilities as President and Chief Executive officer. The provi- sions of this Paragraph 8 shall survive expiration or termination of this Agreement for any reason. Paragraph 9 provides: The Company shall pay to the Employee all reasonable legal fees and expenses incurred by him in contesting or disputing any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by this Agreement. In no event shall the Employee be required to reimburse the Company for any legal fees or expenses incurred by it in connection with this Agreement. The Employment Agreement states that it consti- tutes the entire agreement between the parties with respect to its subject matter and can only be amended or modified by a writing executed by the employee and an authorized representative of the company. (Ex. 1 to Mogren Aff. {J 11, 13). The Agreement also states that it shall be construed and enforced in all respects in accordance with Massachusetts law. (Ex. 1 to Mogren Aff. 7 15). According to Bildman, the Employment Agreement did not contain all the terms of his employment. (7/30/01 Bildman Aff. { 7). Bildman claims that during negotiations, Mogren agreed to a three year written severance period, but at the time of execution, Mogren told Badman that he could not give more than two years severance in writing because of the Swedish political climate. (7/30/01 Bildman Aff. ¥ 7). Upon signing the agreement, Mogren orally agreed to give Bildman a third year of severance, and the two men had a separate handshake agreement to that 9a effect in front of Clauss Wilhelmson (“Wilhelmson’”), who was then Astra AB’s Regional Director for North America. (7/30/01 Bildman Aff. J 7). In addition, although the Employment Agreement provided that the Astra U.S.A. Directors would determine Bildman’s compensation, Mogren told Bildman that he and Wilhelmson would determine Bildman’s compensation, which they did. (7/30/01 Bildman Aff. J 8). Similarly, although the agreement provided that Bildman would serve subject to the supervision, direction and control of Astra U.S.A.’s Board, Mogren told Bildman that he would be subject to the supervision, direction and control of Astra AB. During Bildman’s tenure as President of Astra U.S.A., he was subject to direct supervision and control by Mogren and Astra AB, through Johansson and other Astra AB executives. (7/30/01 Bildman Aff. 7 6). Astra U.S.A.’s Travel and Expense Policy and Guidelines, dated October 1, 1994, state that it is “Astra’s policy to reimburse employees for actual expenses that are reasonable and necessary for car- rying out the Company’s business.” Personal meals in non-travel status and personal entertainment are specifically listed as non-reimbursable expenses. The Travel and Expense Policy provides: Reasonable entertainment expenses are reim- bursable, and the expenditure should be incurred on a common sense basis. These expenses are reimbursable only if they are directly related to the active conduct of the company’s business when directly preceding or following a business discussion, or are necessary to accomplish some useful purpose connected with the company’s business. 10a ¢ To qualify as a business expenditure, enter- tainment expenses cannot be lavish or extra- vagant and must be “directly related to” or “associated with” the company’s business. e Entertainment expenses must meet the “directly related test” below: 1. The company must expect to derive income or some other specific business benefit other than good will at some future time. 2. The employee/company must engage in active conduct of the business during the entertainment with the persons being entertained. 3. The active conduct of business must be the primary aspect of the combined business and entertainment activity. (Ex. 2 to Yon Dep. p. 16). According to Bildman, Astra U.S.A.’s Travel and Expense Policy did not apply to him. As President of Astra U.S.A., Bildman retained the authority to incur travel and entertainment expenses within his sole discretion, provided that such expenses were within the budget and Bildman believed they would promote some business purpose. (7/30/01 Bildman Aff. { 9; Sjostrand Aff. 19 6-8; Broere Aff. 7 9). Further, enter- taining visiting Astra AB executives with adult entertainment was encouraged, not prohibited. (7/30/01 Bildman Aft {| 9). Bildman authorized payment of several months’ salary to Nan Corcoran, a former Astra employee, after she filed a claim with the Massachusetts Commission Against Discrimination alleging sexual harassment by Bildman. In 1994, Bildman authorized lla Astra U.S.A. General Counsel Charles Yon (“Yon”) to pay $50,000 to former Astra employee Jennifer Shore in order to settle her claim that Bildman had sexually harassed her. In 1994, Bildman also authorized Yon to pay $95,000 to former Astra employee Jennifer Price to settle her claim that Bildman had terminated her in retaliation for reporting a complaint that another employee had been sexually assaulted by Astra executive George Roadman. Finally, Bildman authorized Yon to execute a Settlement Agreement and General Release dated January 5, 1996 paying former Astra employee Pamela Zortman $100,000 in settlement of her sexual harassment claims against Bildman. (Ex. P to Clauss Aff. Bildman Dep. Vol. VI, pp. 894-896; Ex. 51 to Bildman Dep.). Bildman did not personally disclose these settlements to Astra U.S.A.’s Board of Directors and did not obtain Board approval for them, at least in part because Neal Tully (“Tully”), counsel to and Secretary of Astra U.S.A.’s Board of Directors, advised him that Board approval of the settlements was not necessary. (Tully Dep., pp. 125-126). In addition, Tully himself made various presentations to the Board of Directors in which he discussed and reported various sexual harassment claims and settlements. (Tully Dep., pp. 125-130). In July of 1994, Bildman approved an Astra U.S.A. Administrative Expense Report completed by Michael Fox (“Fox”) which, in addition to 19 other entries, contained a $1,000 contribution by Fox to the Republican Party and a $100 contribution to the Blute for Congress Campaign. In approving expense reports, Bildman did not read the reports or assess each individual item included; he merely signed them. After it was discovered that the reimbursements were improper, Yon wrote Fox, stating that the com- pany had “unknowingly violated the federal election 12a laws” and instructing him to pay back Astra U.S.A. for the campaign contributions. (Bildman Ex. 48). In 1995, after Mogren promoted Johansson to the position of Astra AB’s Regional Director for North America, giving him direct supervisory authority over Astra U.S.A. and Bildman, the relationship between Bildman and Johansson became severely strained. (7/30/01 Bildman Aff. J 33; Yon Interview, pp. 107-108). Johansson and Bildman repeatedly clashed over Johansson’s insistence that he and Astra AB had responsibility for FDA contact in connection with product marketing, while Bildman maintained that Fox, Astra U.S.A.’s Vice President of Regulatory Affairs, had such authority. (2/18/00 Bildman Aff. {J 11). In addition, Bildman persistently objected that Johansson was micro-managing Astra U.S.A.’s affairs, while Johansson repeatedly criticized Bildman for acting without first obtaining his approval. (2/18/00 Bildman Aff. {J 13, 16). The relationship between Johansson and Bildman worsened in early 1996, when Astra AB began exploring the possibility of a merger between Astra U.S.A. and Astra-Merck, Inc., a merger to which Bildman was vehemently opposed. (7/30/01 Bildman Aff. J 32). In a December 19, 1995 telephone conference, Bildman, Yon and Astra U.S.A.’s outside employment counsel William Joy (“Joy”) informed Johansson and Staffan Ternby, Astra AB’s Director of Public Rela- tions, that Business Week was investigating allegations of sexual harassment at Astra U.S.A. (5/11/98 Bildman Aff. J 12). Bildman then assembled a task force to monitor and investigate Business Week’s investigation of Astra. (5/11/98 Bildman Aff. J 13). The members of the task force were Yon; Joy; Arnold Zenker, a Boston media consultant; Attorney John 13a Walsh, a New York media and First Amendment lawyer; Ken Rabin, President of InterScience, a national public relations firm and Attorney Andrew Culbert, who had previously worked for Astra AB. On January 15, 1996, Bildman wrote Mogren and Johansson, stating that a Business Week reporter was questioning former and current Astra U.S.A. employees about allegations of incidents of sexual harassment at the company. (Johansson Aff. J 6). Bildman stated that Astra U.S.A. did not have any problems with sexual harassment and that it was unlikely that any article would be written. (Johansson Aff. J 6). Mogren and Johansson did not know and Bildman did not inform them that several claims of harassment had been made against him personally. (Mogren Aff. 7 5; Johansson Aff. J 9). On or about January 16, the task force prepared a report concluding that Astra U.S.A. had a good record concerning sexual harassment and that a competitor such as Astra-Merck, Inc. might be behind or involved in Business Week’s inquiry. (5/11/98 Bildman Aff. {| 15). This report was sent to Mogren and Johansson. (Second Set Ans. to Inter. No. 15; Bildman Ex. 58). Johansson told Bildman that he believed that a different competitor, Glaxo, was behind the Business Week investigation. (5/11/98 Bildman Aff. J 18; Bildman Ex. 30). In the Spring of 1996, Leonard Decof recommended to Bildman, Yon and Lars Magnusson that they tape conversations with Astra employees and officers because of the Business Week investigation. Bildman taped several phone conversations he had with Mogren and Johansson, as well as other Astra execu- tives, after he became suspicious that they were not acting in the best interests of Astra U.S.A. The taping of conversations occurred in a hotel room in Rhode l4a Island, where it was not illegal to record conversa- tions without the other party’s knowledge. According to Bildman, such taping was standard practice at Astra. (Bildman Dep. Vol. I, p. 164). Bildman never reported his taping of conversations to Astra U.S.A.’s Board of Directors. In April of 1996, Johansson became enraged when Bildman had his staff perform an analysis of Johansson’s proposed transfer of products from Astra U.S.A. to Astra Merck, Inc. which showed that the transfer would harm Astra U.S.A. and possibly violate antitrust laws. On April 19, Mogren, Johansson and several other executives received from Yon a copy of an April 18 letter to Yon from Mark Maremont (“Maremont”) at Business Week. (Mogren Aff. {| 21; Johansson Aff. J 12). Maremont’s seven page letter contained detailed and serious allegations of sexual harassment and other misconduct at Astra U.S.A., including misconduct by Bildman. Johansson, accompanied by Astra AB’s General Counsel Goran Lerenius (“Lerenius”), and Thomas Clauss, Jr. (“Clauss”), a partner in the law firm of Winthrop, Stimson, Putnam & Roberts, went to Astra U.S.A. to try to learn more about the allega- tions. On April 22, Joy met with Johansson, Lerenius and Clauss and reviewed seven sexual harassment claims which Joy and You had previously investi- gated and, in some instances, settled. On April 23, Clauss and Lerenius interviewed Bildman concerning the allegations in the Maremont letter. Bildman denied the allegations in the letter and stated that the questions should be referred to Joy. On April 25, Johansson received a copy of a 12 page letter from Maremont to Yon containing additional details of sexual harassment at Astra U.S.A. and implicating Bildman. (Ex. 1 to Johansson Aff.). Bildman l5a spoke to Mogren, Johansson and Clauss during this time and answered their questions concerning the Business Week allegations to the best of his ability. (7/30/01 Bildman Aff. 4 13). At a meeting on April 28, 1996, the Astra U.S.A. Directors unanimously voted to establish a Special Committee to retain experts to assist in an investiga- tion of the allegations against Bildman. (Mogren Aff. { 25). Johansson was made chairman of this Special Committee. (Carling Aff. J 6). Bildman was suspended with pay, and Jan Larsson (“Larsson”) was appointed as Astra U.S.A.’s President and Chief Executive Officer. (Mogren Aff. 19 25, 26). That same day, Johansson wrote Bildman informing him of the suspension and stating: “ASTRA expects that during your suspension you will be available during normal business hours to cooperate with the Company’s efforts to investigate the allegations and otherwise act in the best interest of the Company and in accordance with the obligations of your employment agreement.” The letter further stated, “Because of the investigation, you should not contact any employees or ex-employees of the Company except for the Director of Human Resources if you have questions about health and welfare benefits and Jan Larsson or Goran Lerenius about the investigation. All other employees have or will be instructed not to communicate with you until the investigation is complete.” (Ex. 2 to Johansson Aff.). On April 29, Johansson gave a speech to Astra U.S.A. employees in which he stated: The first action is that Mr. Lars Bildman has been suspended and relieved of his corporate responsibilities pending the results of an inves- tigation into allegations of improprieties within the company that occurred during his tenure as 16a CEO. Although his future role in the Astra Group is uncertain, he will not be returning to Astra USA in any future capacity. The second action taken yesterday was that a committee of the Board of Directors of Astra USA has retained independent counsel to assist it in performing the investigation. The investigation is expected to take several weeks, and will include an examination of allegations of sexual harassment and other activities considered inap- propriate by the company. The same day, Astra issued a news release entitled “Astra Elects New President and CEO” which stated: Mr. Larsson replaces Lars Bildman, who has been suspended and relieved of his corporate responsibilities pending the results of an investi- gation into allegations of improprieties within the company that occurred during his tenure as & tS The investigation is expected to take several weeks, and will include an examination of allega- tions of sexual harassment and other activities considered inappropriate by the company. . A preliminary investigation by senior company officials resulted in the decisions announced today. Also on April 29, Astra issued a press release con- taining identical statements. The Board of Directors retained Winthrop, Stimson, Putnam & Roberts to conduct the investigation. Clauss oversaw a team of lawyers and paralegals which interviewed over 100 witnesses, including present and former Astra U.S.A. employees and officers, sub- contractors and vendors, and officers and employees 17a of other Astra Group companies. (Clauss Aff. J 2-6). In addition, the team reviewed thousands of pages of documents and other materials, including files from Astra U.S.A.’s finance, personnel and legal depart- ments, and documents from vendors and subcontrac- tors, including outside counsel who had handled the sexual harassment claims. (Clauss Aff. J] 2-6). During the investigation, Bildman contacted or attempted to contact at least 18 Astra employees, 14 of whom were individuals being interviewed by Astra’s investigators. (Bildman Dep. Vol. V, pp. 771-780; Healey Aff. 7] 5-7). On May 3, 1996, the Wall Street Journal published an article entitled “Astra USA Investigates Alleged Misuse of its Funds by Suspended CEO, Others” which stated: [spokesman] Mr. Kincannon said that Astra AB officials grew concerned when Mr. Bildman was ‘not forthcoming’ to them in handling inquiries from Business Week magazine about possible sexual harassment at Astra USA. “He assured them that nothing was wrong,” Mr. Kincannon said. That same day, the Boston Globe published an article entitled “Astra: CEO Allegedly Harassed Women: Says suspended Bildman also tried to cover up actions” which stated: “Bildman told executives at Astra USA’s Stockholm parent company last December that a reporter was looking into sexual harassment claims at its US subsidiary, said Benjamin Kincannon, Astra U.S.A. spokesman. But ‘he downplayed it,’ Kincannon said.” On May 138, 1996, Mogren addressed Astra’s Annual Meeting on the issue of “Improprieties at Astra USA, Inc.” and stated: 18a But as a result of preliminary investigation at the end of April, we were able to confirm that a violation had been made of the fundamental prin- ciples for working at Astra and of the culture that we have developed in the Group as a whole.... Concerning the sexual harassment now in question, it should be said that what has occurred is at beast a violation of good style and form. At worst, a number of our employees have also been caused inconveniences or suffering. To the extent this may have occurred, we are deeply regretful. We will do everything we can to prevent it from ever happening again... . As soon as we in Astra’s corporate management, through our preliminary investigation, were practically certain that serious had happened, we swiftly set in a number of measures. First, the CEO and two colleagues of the Ameri- can subsidiary were suspended.... What has happened is that some people have tried to put themselves above the rules, at the same time that they have made great efforts to cover up what has happened. Also on May 13, Business Week published an article by Maremont entitled “Abuse of Power: the asto- nishing tale of sexual harassment at Astra’s U.S. pharmaceutical subsidiary.” The article contained the following statements: On April 29 as Business Week was about to publish the results of a six-month investigation into allegations of rampant sexual harassment at Astra, Bildman was suspended and relieved of his responsibilities by Astra’s parent, giant Swedish drug-maker Astra AB.... 19a Senior Astra executives acknowledged that Business Week’s investigation sparked the abrupt action. Although Bildman had told superiors about the investigation months ago, Carl-Gustaf Johansson, a member of Swedish Astra’s executive committee, says the company was unaware of the full scope of the allegations until it received a lengthy letter from Business Week on April 19. “We hadn’t heard anything this detailed—and certainly not that Mr. Bildman himself was the focus” of some allegations, says Johansson. Refusing further comment on Astra’s own pre- liminary inquiries—which also now include allegations of major financial improprieties by Bildman—Johansson says Astra suspended its U.S. CEO because “we lost some trust in him.” On May 24, 1996, the Boston Globe published an article entitled “Astra AB’s chief says Bildman won’t be back,” which stated: Astra AB Chief Executive Hakan Mogren said Lars Bildman, the suspended chief executive of the company’s scandal-plagued U.S. unit in Westboro, will not return to the position he had occupied for the past 15 years. “It would be impossible to have him back in that job. How could people work together and create a good atmosphere?” Mogren said in New York. Also on May 24, the Boston Herald published an article entitled “Suspended Astra Exec Won’t Return” which contained identical statements. In May of 1996, Kincannon appeared on a CBS News “Eye on the Nation” segment concerning the allegations of sexual harassment at Astra U.S.A. 20a When asked whether Bildman would return to Astra U.S.A., Kincannon replied that he would not. Kincannon based this response on newspaper reports that, according to Mogren, Bildman would not be returning. Throughout the investigation, Bildman, through his counsel, declined to be interviewed or to answer questions in person posed by the Special Committee, either orally or in writing. (Clauss Aff. {{] 12-17). Counsel for Bildman met with the investigators, pro- vided a denial of the general allegations of misconduct and offered to produce additional information to investigators if they would state the specific basis for the allegations. Although Bildman requested that Astra provide him with a list of specific allegations being investigated so that he could respond, the investigators refused to do so. However, on June 7, 1996, Astra investigators wrote Bildman’s counsel, setting forth a list of nine specific questions for him to answer. Bildman did not respond to this letter. In refusing to cooperate, Badman consistently expressed concern about the bias and pre-ordained results of the investigation. The Special Committee presented Astra U.S.A.’s Board of Directors with a Draft Report on June 13, 1996, describing the scope of its investigation and summarizing its conclusions. The Draft Report opined that there was substantial evidence that Bildman had engaged in the sexual harassment of female employees, received personal benefits from services performed by Astra vendors and paid for by Astra, received reimbursement for improper business expenses such as personal vacations, travel, and legal fees for personal matters and attempted to impede the investigation by contacting Astra employees and Zla vendors and destroying documents. (Ex. D to Clauss Aff.). On June 25, 1996, Johansson and Clauss pre- sented the Special Committee’s final report to the Board of Directors. The Board unanimously voted to terminate Bildman’s employment for cause under paragraph 4(f) of the Employment Agreement. (Ex. E to Clauss Aff.; Johansson Aff. J] 26). Despite prior notification that the Board intended to vote on his termination, Bildman declined to attend the June 25 meeting. (Johansson Aff. 7] 24-25). On June 26, 1996, Astra AB issued a news release which stated: Astra USA today announced the termination of Lars Bildman, the former President and CEO of the company. Bildman had been suspended on April 28, 1996 pending the results of an inves- tigation into improprieties within the company that occurred during his tenure as CEO.... Bildman’s termination was announced at a press conference at which Astra officials commented on the investigation by the company into allegations of sexual harassment, financial improprieties, and other activities considered inappropriate by the company. Bildman chose not to cooperate with the investigation. “Our investigation uncovered management beha- vior under Mr. Bildman that is unacceptable to Astra,” said Executive Vice President C.G. Johansson of Astra AB, who headed the inves- tigating committee established by the Board of Astra USA.... 22a The investigation showed evidence of a variety of improper activities, including misuse of company funds, inappropriate behavior at company func- tions, disregard of established company rules and procedures, and a neglect by Mr. Bildman to keep the parent company informed of these problems at its subsidiary. There is evidence that Mr. Bildman used company funds for personal expenses, including renovations to his houses and vacations. Approximately $2 million was involved... .. According to Astra’s investigation, Bildman attempted to deflect attention away from himself by claiming that enemies of the company were behind the media’s scrutiny of Astra USA and himself. There is no evidence to support this. Astra’s investigation did show that Mr. Bildman went to great lengths to keep his behavior secret from the superiors in the Astra Group. He rented office space offsite for the purpose of keeping information from the parent company... . Astra also issued a press release on June 26 contain- ing identical statements. At a press conference on June 26, Johansson stated: In December, Mr. Bildman informed me that a journalist was making inquiries about Astra USA that included questions about alleged sexual! harassment at the company. Mr. Bildman assured me that there was nothing to worry about He also did not mention that he himself was a focal point of the inquiries. Mr. Bildman was asked on a number of occasions after that whether any of the allegations 23a involved him. He was also asked whether Astra USA had anything to be ashamed of He said no. On April 19, we received in Sweden a letter from Business Week. .. We were shocked by what we read.... Mr. Bildman refused to cooperate with the investigation. ... Mr. Bildman was terminated because he violated the trust that had been placed in him by the Astra Group. His style of leadership was unac- ceptable. And certain of his actions were unprofessional and hurtful to the morale of the employees. Our investigation also found that Mr. Bildman exhibited inappropriate behavior at company functions, primarily internal sales meetings held off company premises... . There is evidence that Mr. Bildman used company funds for personal expenses, including renovations to his houses and vacations. Approximately $2 million was involved... . Our investigation also showed that Mr. Bildman went to great lengths to keep his behavior secret from his superiors in the Astra Group. He rented office space offsite for the purpose of keeping information from the parent company. According to our investigation, Bildman attempted to deflect attention away from himself by claiming that enemies of the company were behind the media’s scrutiny of Astra USA. .d himself. There is no evidence to support this. In all of these activities, Mr. Bildman displayed a disregard for both established rules and proce- 24a dures of the Astra Group and for the high ethical principles that are implicit in our corporate culture. ... Because of the unprofessional actions of one person in one of our 45 subsidiaries, the Astra name has become associated with activities that are the complete opposite of the high ethical and moral principles for which we have been known for over eight decades... . But there is no doubt that Lars Bildman abused his power as President of Astra U.S.A. Our inves- tigation uncovered management behavior under Mr. Bildman that is unacceptable to Astra. ... This is the end of an unfortunate and distasteful chapter in the history of Astra U.S.A. Following his suspension and termination, Bildman became severely depressed. He experienced difficulty sleeping and suffered from stomach aches. (7/30/01 Bildman Aff. J 29). He met with a psychiatrist through October of 1996 and was prescribed prozac and klonopin. (7/30/01 Bildman Aff. J 29). When Bildman was terminated, Astra’s Human Resources Department determined all amounts he had earned or vested under the applicable compensation, bonus and benefit plans, and distributed said amounts according to the terms of the plans and certain orders of the Norfolk County Probate Court.‘ (Tetrault Aff. J 8). At the time of his termination, Bildman was a participant in Astra’s Long Term Management Stock Plan and its Profit Sharing Plan. Under his Employ- ment Agreement, Bildman was also entitled to participate in the Executive Bonus Program, which * Bildman was in the process of obtaining a divorce in Norfolk County Family and Probate Court Action No. 96D-2672-DIV. 25a entitled him to earn a bonus above his base salary depending on Astra AB’s performance. (6/30/01 Bildman Aff. 9] 12; Tully Dep., p. 96). Although Astra paid Bildman executive bonuses for 1993 and 1994, it never paid him executive bonuses earned for 1995 and 1996. Participants in the Long Term Management Stock Plan are eligible for annual grants of Astra AB com- mon stock but may only earn stock rights over a period of years if certain performance goals are achieved. (Ex. 2 to Tetrault Aff., p. 4). Following the expiration of the required three year holding period, on January 1, 1996, Bildman received a distribution of 7,172 shares of stock, with a value of $286,808. (Tetrault Aff. 9] 9d). A portion of Bildman’s potential executive bonus had been shifted to the Stock Plan. (Tully Dep., p. 96). Accordingly, on March 13, 1996, Bildman received a 1996 Award Statement and executed a Letter Agreement for the grant of Astra AB stock equal to $150,000 for the 1996 plan year, with 25 percent of the grant to be earned in each year in which pre-established performance goals were met. (Ex. 3 to Tetrault Aff.). Since the first performance objective was not measured until the end of 1996, Bildman did not and could not have met it as of the date of his termination. (Tetrault Aff. ] 9g). The 1996 Award Statement was also subject to the terms of the Stock Plan, which provided that upon termination for cause, “no shares shall be released to the Participant unless performance objectives and the Holding Period have been satisfied. Shares for which the perfor- mance objectives and Holding Period have not been satisfied shall be forfeited.” The Profit Sharing Plan entitled Bildman to obtain compensation based on the performance of Astra AB. 26a The Plan states that “[ilf a Participant’s employment is terminated for any reason other than his death, Disability or attainment of Normal Retirement Age, he shall be entitled to receive his vested Account balance.” (Ex. 5 to Tetrault Aff.). Bildman’s vested account balance as of June 30, 1996 was $90,917.77. (Tetrault Aff J 10c). Astra distributed this balance to Bildman and his former wife in accordance with a May 12, 1998 Order of the Norfolk Probate and Family Court. (Tetrault Aff. { 10(e)). According to Bildman, although Astra paid him profit sharing for 1993 and 1994, it never paid him profit sharing earned for 1995 and 1996. (6/30/01 Bildman Aff. 4 12). On January 26, 1998, following several days of trial in the local United States District Court before the Honorable Nathaniel Gorton, Bildman pleaded guilty to Counts 27 through 29 of a Superseding Indictment which charged him with committing the crime of willfully making and subscribing a tax return which he did not believe to be true and correct for the calendar years 1993, 1994 and 1995. Count 27 of the Superseding Indictment (False Tax Return 26 U.S.C. §7206(1)) stated: 29. The grand jury realleges and incorporates by reference paragraphs one through seven and ten through twenty-one of this indictment, and further charges that: 30. On or about April 15, 1994, in the District of Massachusetts and elsewhere, defendant LARS BILDMAN a resident of Brookline, Massachu- setts, did willfully make and subscribe a joint United States Individual Income Tax Return, for the calendar year 1993, which was verified by a written declaration that it was made under the penalties of perjury and was filed with the 27a Internal Revenue Service, which said income tax return he did not believe to be true and correct as to every material matter in that said return reported an adjusted gross income of $1,008,548.00, whereas, as he then and there well knew and believed, he received compensa- tion in the form of goods and services in addition to that reported on his filed income tax return. All in violation of Title 26 United States Code, Section 7206(1). Count 28 of the Superseding Indictment (False Tax Return 26 U.S.C. § 7206(1)) stated: 31. The grand jury realleges and incorporates by reference paragraphs one through seven and ten through twenty-one of this indictment, and further charges that: 32. On or about October 24, 1995, in the Dis- trict of Massachusetts and elsewhere, defendant LARS BILDMAN a resident of Brookline, Mas- sachusetts, did willfully make and subscribe a joint United States Individual Income Tax Return, for the calendar year 1994, which was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which said income tax return he did not believe to be true and correct as to every material matter in that said return reported an adjusted gross income of $1,030,916.00, whereas, as he then and there well knew and believed, he received compensation in the form of goods and services in addition to that reported on his filed income tax return. All in violation of Title 26 United States Code, Section 7206(1). 28a Count 29 of the Superseding Indictment (False Tax Return 26 U.S.C. § 7206(1)) stated: 33. The grand jury realleges and incorporates by reference paragraphs one through seven and ten through twenty-one of this indictment, and further charges that: 34. On or about April 14, 1996, in the District of Massachusetts and elsewhere, defendant LARS BILDMAN a resident of Brookline, Massachu- setts, did willfully make and subscribe a joint United States Individual Income Tax Return, for the calendar year 1995, which was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which said income tax return he did not believe to be true and correct as to every matcrial matter in that said return reported an adjusted gross income of $1,124,.373.00, whereas, as he then and there well knew and believed, he received compensa- tion in the form of goods and services in addition to that reported on his filed income tax return. All in violation of Title 26 United States Code, Section 7206(1). Paragraphs 1 through 7 and 10 through 21 of the Superseding Indictment allege a conspiracy whereby Bildman and Lars Magnusson obtained over one million dollars worth of personal benefits, including home improvements, landscaping, home furnishings, personal vacations and prostitutes, which were allegedly paid by Astra under the guise of business expenses. In a change of plea hearing on January 26, 1998, an Assistant United States Attorney (“AUSA”) told 29a the court that “Mr. Bildman is offering a plea to Counts 27, 28 and 29, Paragraph 30, 32 and 34 contained in those.” The AUSA then stated that “the full conversation in chambers was that the preliminary paragraph in each of those counts incorporates by reference some of the earlier language in the indict- ment. The Government does not understand Mr. Bildman to be pleading to the fraud language but is relying upon the language which is—which lays out the items of income which Mr. Bildman received, and in that extent alone the Government is relying upon that introductory paragraph.” Bildman’s attorney stated that he understood, “Not as to each and every item, but certainly the substantial number of items which constitute the false statement in the tax return.” When the court asked the AUSA what facts the Government would prove if the matter proceeded through trial, the AUSA stated: as the government outlined in its opening statement and so as to not repeat each and every thing that was said during the opening state- ment, I will rely upon that; but as the Govern- ment set forth in its opening statement, Your Honor, the Government would prove beyond a reasonable doubt that should this trial continue to a verdict, that Defendant Bildman received goods and services which were taxable to him, that he knew that those goods and services were to be reported on his Individual Income Tax Return, Form 1040, and that he did not report the value of those goods and services on his Income ‘I'ax Returns filed with the United States under the penalties of perjury on or about the dates set forth in Counts 27 through 29 Your Honor. 30a (Ex. 6 to Bildman Dep. pp. 5-12, 5-13). Bildman agreed with this statement of the facts. (Ex. 6. to Bildman Dep., p. 5-13). At the sentencing hearing, the court found that Bildman’s unreported income was in excess of $1 million and that Bildman used a sophis- ticated means to impede the discovery of his crime. On February 4, 1998, Astra U.S.A. filed Civil Action No. 98-0580 against Bildman, alleging fraud in Count I of the complaint, breach of fiduciary duty in Count Il, waste of corporate assets in Count III and conversion in Count V. The complaint sought recission of the Employment Agreement in Count IV. Also on February 4, Ivan Rowley, President of Astra U.S.A., announced a settlement of sexual harassment charges against the company, stating: In May, 1996, the Equal Employment Opportu- nity Commission initiated its investigation into allegations of sexual harassment at Astra USA. Before that, Astra had begun its own internal investigation and had suspended the CEO and two other senior executives. Astra took these actions immediately after learning of the allega- tions. Astra’s cooperation with the EEOC investigation was a natural extension of Astra’s own investiga- tion and other steps already taken by the com- pany. Our cooperation was based on a common desire with the EEOC to get at the truth and rectify whatever damage had been done to current and former Astra employees. On February 5, 1998, Astra U.S.A. issued a press release containing identical statements. 3la Also on February 5, the Boston Globe published an article entitled “$10M Astra Settlement is Expected” which stated: A federal agency is expected today to announce that Astra USA Inc. agreed to pay $10 million to settle allegations of sexual harassment and attempts to cover it up during the scandalous tenure of ousted chief executive Lars Bildman. .. . Astra USA said it wants “any amounts paid as a result of the investigation” by EEOC. Sources familiar with the negotiations put the settlement at $10 million. ... “His actions—asking people to destroy records and the like—are in our estimation an attempt to cover up and keep things from his superiors in the company,” Astra USA’s spokesman, Benjamin Kincannon, said yesterday. The Middlesex News published an article on February 5 entitled “Astra Settles Federal Harassment Suit: Record Setting Deal Ends EEOC Probe” which reported Astra’s filing of a lawsuit against Bildman and stated: “Kincannon said that the rest of the damages would cover legal costs, including the cost of an internal investigation in early 1996. Astra’s lawsuit also demands that Bildman repay the company for any fines and settlements from the EEOC inves- tigation.” On February 6, 1998, the Boston Herald published an article entitled “Astra-Nomical: firm settles sex harass claims for $9.85 Million” which also referred to Astra’s civil suit stating: “Astra admitted the suit is partly an effort to stick the former CEO with the bill for EEOC settlement.” Thereafter, on April 28, 1999, Bildman filed Civil Action No. 99-1942 against Astra AB, Mogren and 32a Johansson, alleging intentional interference with contractual relations in Count I of his complaint and intentional infliction of emotional distress in Count II On October 12, 2000, Bildman filed an amended counterclaim and third-party complaint against Astra, Mogren and Johansson in Civil Action No. 98-0580. Count I of the counterclaim alleges breach of contract against Astra; Count II seeks indemnification from Astra for costs and expenses incurred in this action; Count II] seeks indemnification for costs and expenses incurred in connection with the 1998 indictments and Counts IV, VI and VII* allege libel against Astra, Mogren and Johansson. DISCUSSION Summary judgment shall be granted where there are no genuine issues as to any material fact and where the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community Natl Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and that the summary judgment record entitles the moving party to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). The moving party may satisfy this burden either by sub- mitting affirmative evidence that negates an essential element of the opposing party’s case or by demon- strating that the opposing party has no reasonable expectation of proving an essential element of his case at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). ° The counterclaim does not include a Count V. 33a I. Cross-Motions for Summary Judgment on Count I of Bildman’s Counterclaim Count I of Bildman’s counterclaim alleges that Astra breached the June 15, 1996 Employment Agreement by refusing to pay him bonuses and other compensation earned before his suspension on April 28, 1996 and his termination on June 25, 1996. Count I also alleges that Astra breached the Employment Agreement by refusing to pay Bildman’s reasonable legal fees and expenses incurred in challenging his termination and enforcing his rights under the agreement. Astra moves for summary judgment on this count, asserting that because it had cause to terminate Badman under the Employment Agreement, it has no further obligations to him with respect to either compensation or legal fees. It is well-established that a material breach of contract by one party excuses the other party from future performance under the contract Quintin Vespa Co. Inc. v. Construction Serv. Co., 343 Mass. 547, 554 (1962); Hastings Assoc., Inc. v. Local 369 Bldg. Fund, Inc., 42 Mass. App. Ct. 162, 171, rev. den., 424 Mass. 1108 (1997). Paragraph 4(f) of the Employment Agreement provides that upon termination for cause under that paragraph, Astra U.S.A. “shall have no further obligation to the Employee hereunder, except any obligation under any compensation or benefit plan in which the Employee is then a participant.” However, the Profit Sharing Plan entitles an employee who is terminated for cause to receive his vested account balance, and therefore Astra is not relieved of its obligations under the plan by virtue of Bildman’s alleged material breach of the Employment Agree- ment. See Walsh v. Atlantic Research Assoc., Inc., 321 Mass. 57, 62-63 (1947) (concluding that employee 34a who was justifiably terminated for materially breach- ing his employment contract [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1684%3A2. Public record. Not legal advice.