Terry v. D3 Technologies CA4/1 (2014) · DecisionDepot
Terry v. D3 Technologies CA4/1
California Court of Appeal Mar 27, 2014 No. D063395Unpublished
Filed 3/27/14 Terry v. D3 Technologies CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
BRIAN TERRY, D063395
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2011-00092814- CU-WT-CTL) D3 TECHNOLOGIES, INC. et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Diego County, Richard E.
L. Strauss, Judge. Affirmed.
Mitchell & Gilleon and James C. Mitchell for Plaintiff and Appellant.
Rukin Hyland Doria and Tindall and John Francis Hyland for Defendants and
Respondents.
Brian Terry sued his former employer (D3 Technologies, Inc.) and its parent
corporation (collectively, D3) for wrongful termination in violation of public policy and
by Terry and disregard conflicting evidence presented by D3. (See Singleton v. United
States Gypsum Co. (2006) 140 Cal.App.4th 1547, 1558.) Because we do not reach the
causation issue, we omit a detailed description of the facts related solely to this issue.
D3 provides engineering and design services to the aerospace industry. In 2005,
D3 hired Terry, an aerospace engineer who had substantial experience as a structural
analysis engineer and stress analyst of aircraft component parts. During the next four
years, Terry received raises and positive performance reviews.
In September 2009, D3 entered into a contract with Mitsubishi Aircraft
Corporation (Mitsubishi) to design the tailcone of a commercial passenger jet (the MJET
project). D3 was responsible for designing the tailcone and the systems to be installed
within the tailcone, including struts and mounts for the auxiliary power unit (APU). The
APU is used to restart the aircraft's engines if the main engines shut down, and is
essential to the safe operation of the aircraft.
1 Labor Code section 1102.5 (§ 1102.5) was amended in 2013, and the amendments became effective on January 1, 2014. (Stats. 2013, ch. 781, § 4.1.) All further references to section 1102.5 are to the former version of the statute. 2
Terry was assigned to work on the MJET project as technical coordinator for the
stress or vibration levels. One of Terry's main duties was to prepare, deliver, and "sign
off on" a vibration report that outlines the possible stress or vibration levels on the parts
and components of the tailcone assembly, including the APU mounting system. In this
report Terry was required to certify that the stress or vibration levels within the tailcone
assembly and its components were insignificant and/or covered by the specification
levels for the tailcone assembly and aircraft. In other words, Terry was required to state
and substantiate that the tailcone system is safe for the vibration and stress environment
to which it will be exposed.
The Mitsubishi contract provided for two stages of design review: (1) a
"Preliminary Design Review" (PDR); and (2) a "Critical Design Review" (CDR). As is
typical in the industry, the contract incorporated an iterative process during which the
entities work together to obtain a final design, and specified a multi-step review process
requiring that D3 submit updated progress reports, including development, refinement
and revision of the component designs. The contract provided deadlines for report
submissions, and tied progress payments to timely completion of reports. The parties
expected that throughout the design process there would be many changes to the reports,
which contain express disclaimers that the information was preliminary and subject to
modification.
During the PDR and CDR stages, if D3 could not include necessary data in a
particular report, it could, as an alternative, submit a "Closure Plan" to note the missing
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or incomplete data, outline the plan for obtaining that data, and state the expected date for
doing so. The Closure Plan serves as a placeholder for missing or incomplete data.
After the PDR and CDR stages, the process moves into the production stage,
during which the designs continue to evolve as blueprints are created and manufacturing
commences. The manufacturer (or subcontractor) then conducts extensive testing of the
entire aircraft to ensure the safety and integrity of the final aircraft design. The last stage
is the "Certification Phase" during which the regulatory authorities approve the final
aircraft design. This approval involves Federal Aviation Administration (FAA) review of
all final engineering drawings, reports and data, and observations of all required testing.
Upon successful completion of this rigorous review, the regulatory authorities issue a
" 'Type Certification' " certifying that the aircraft meets the airworthiness requirements.
In February 2010, D3 submitted a vibration report, prepared by Terry, as part of its
PDR submission to Mitsubishi. Shortly after, Mitsubishi rejected the report, concluding
the report lacked necessary data regarding the stress and vibration levels for the tailcone
assembly and its components within the actual " 'vibration environment' " (the
environment to which the parts would be exposed during the aircraft's use). Under its
contractual obligations, D3 was required to revise and resubmit all of the rejected reports
by March 31, 2010.
D3 immediately directed Terry to prepare a revised vibration report substantiating
that the tailcone assembly and its components are safe for the environment to which they
would be exposed, i.e., the system components of the tailcone assembly were properly
designed for the particular vibration environment. Based on his expertise, Terry
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concluded that this certification required data regarding the particular vibration
environment to which the tailcone would be exposed. Without the underlying data, Terry
believed he "would be falsely stating" that this portion of the aircraft "met safety
requirements."
During the next several weeks, Terry sought to obtain the necessary data from
Mitsubishi and from a subcontractor, both of which had access to this information.
However, neither the subcontractor nor Mitsubishi responded with the necessary
information. In response, Terry repeatedly informed his supervisors that he could not
prepare the requested report without the underlying data because of safety concerns.
Terry made it "very clear to management in all levels of supervision" that he would not
sign the report "without the vibration environment being defined to me."
After Terry made additional unsuccessful efforts to obtain the vibration
environment data, D3 began to pressure him to prepare and sign a report certifying that
"the system components had been properly assessed against the environment to which
they would be exposed." Terry resisted, believing such statement would be false. Terry
said: "Pressure was put on me to ignore aspects of the technical assessment, specifically,
the need to compare the specification levels of equipment to the environment and
conclude that they were safe for flight."
Terry's supervisors said the vibration environment data was not a necessary
prerequisite and that Terry could provide the required substantiation by using "the overall
generic vibration levels that all flight hardware has to meet." Terry responded that he
would not do this because Mitsubishi "required [the specific vibration data analysis] and
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it was an aircraft safety issue, and . . . I would not sign anything that might lead to a
safety concern." According to Terry, "[Mitsubishi was] asking for a complete report
which certifies, states and substantiates that the system[ ] is safe for the environment to
which it was exposed," and he could not affirmatively state that the system is safe
without the underlying data for the particular vibration environment.
On March 17, 2010, Terry wrote an email to D3's chief executive officer,
expressing concern about a communication "breakdown" between D3 and Mitsubishi and
between D3 and the subcontractor regarding the missing technical vibration data
information. He said he was "being pressured by D3 management to revise [the vibration
report] without the required customer supplied information and submit poor quality and
technically deficient content."
By the March 31 deadline, Terry had not received the vibration environment data
and thus did not prepare or deliver the requested vibration report. He instead submitted a
revised Closure Plan, stating that the vibration report revision would not be submitted
until May 1, 2010.
Mitsubishi did not pay the $5 million milestone payment based solely on the fact
that D3 did not provide the requested revised vibration report by March 31. Shortly after,
D3 terminated Terry. D3 said it terminated Terry for his "poor performance [on the
MJET project], his failure to meet a critical delivery deadline, and his ongoing
interpersonal problems and the resulting conflicts with his colleagues."
In early May 2010, D3 completed the revised vibration report and submitted it to
Mitsubishi. The revised vibration report included the additional vibration environment
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data that had been missing in the earlier report. After submitting the report, D3 continued
developing and revising its designs. It revised and resubmitted the vibration report more
than eight times after the May 2010 submission, including to respond to a complete
revision of the APU mount system design.
In April 2011, D3 submitted the final CDR vibration report, and in June 2011, D3
completed the CDR phase. The MJET project was thereafter subject to the remaining
review stages, including the production, testing, and certification phases.
Complaint and Summary Judgment Motion
About one year after he was terminated, Terry filed a complaint against D3
alleging two causes of action: (1) wrongful discharge in violation of public policy; and
(2) preemptive retaliatory termination (§ 1102.5). Terry alleged he was terminated in
retaliation for his "complaints, protests, questioning and whistleblowing about what he
believed was a deficient 'vibration report' for the tailcone assembly and components for a
commercial passenger aircraft that were essential to the safe operation of that aircraft."
He also alleged D3 "terminated his employment because they suspected and feared that
[he] intended to report them to governmental agencies, including but not limited to the
Federal Aviation Administration or related agencies administering air travel within the
United States, for violations of the law."
D3 moved for summary judgment and/or for summary adjudication. With respect
to the public policy wrongful termination claim, D3 argued the undisputed evidence
established D3's alleged wrongful conduct did not constitute protected activity or
implicate a "fundamental public policy." In support, D3 argued and submitted evidence
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that Terry's claim was based on his allegation that he was terminated for refusing to
submit an "incomplete report," and asserted that Terry did not identify any "statute,
constitutional provision, or administrative regulation" making it unlawful to "submit an
incomplete report at the preliminary design phase." (Italics added.) D3 also emphasized
the evidence showing the revised vibration report was to be submitted at a very
preliminary phase of the design process (the PDR stage), and was subject to substantial
change and numerous modifications before it reached the production and testing phase.
Based on this evidence, D3 argued the content of the vibration report was unrelated to
safety issues and was not governed by any federal statute or regulation, and thus did not
involve a fundamental public policy.2
In opposing the summary judgment motion, Terry acknowledged that reports
submitted at the PDR phase are subject to substantial update and modification, but argued
his claim was based on a violation of a fundamental public policy because: (1) he was
terminated for refusing to approve the design of the tailcone for vibration environment
purposes (not merely to submit an incomplete report); (2) there was not enough
underlying data for him to reach a conclusion as to whether the design should be
approved with respect to the vibration issues; and (3) if the revised vibration report was
unmodified during the later design and production stages, it could lead to substantial
safety problems because the conclusion in the report was based on unsubstantiated
2 D3 also argued that Terry was terminated for unrelated performance reasons. Because we do not reach the issue, we omit a discussion of this argument and the underlying facts. 8
information. Relying on Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66 (Green),
Terry argued D3's insistence that he prepare a vibration report with unsubstantiated
information, and then firing him for refusing to do so violated public policy because the
preparation of a false report on an aircraft component design is inconsistent with
applicable federal statutes and regulations, and can lead to substantial public safety
issues. In support, Terry cited to various federal statutes and regulations pertaining to
retaliate against an employee for refusing to participate in an activity that would result in
a violation of state or federal statute, or a violation of or noncompliance with a local,
state, or federal rule or regulation." Terry forfeited this contention by failing to cite this
subdivision in his opposition papers below or in his opening appellate brief. In any
event, the record does not support that D3 violated this subdivision because there is no
evidence of an underlying statutory or regulatory violation.
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DISPOSITION
Judgment affirmed. Appellant to bear respondents' costs on appeal.
HALLER, J.
WE CONCUR:
BENKE, Acting P. J.
HUFFMAN, J.
21
AI Brief
AI-generated · verify before citing
Holding. The court held that the plaintiff failed to establish a claim for wrongful termination in violation of public policy because he could not identify a specific statute or regulation violated by the submission of a preliminary design report, which is not subject to FAA oversight. Furthermore, the court affirmed the dismissal of the statutory retaliation claim because the plaintiff failed to report any alleged unlawful conduct to a government agency.
Issues
Whether the termination of an employee for refusing to sign a preliminary design report violated a fundamental public policy tethered to federal aviation safety regulations.
Whether the plaintiff established a claim for statutory retaliatory termination under Labor Code section 1102.5 absent a report to a government agency.
Disposition. Affirmed
Quotations verified verbatim against the opinion
“The public policy that is the basis of this exception must furthermore be ' "public" in that it "affects society at large" rather than the individual, must have been articulated at the time of discharge, and must be " 'fundamental' " and " 'substantial.' " '”
“It is undisputed that the FAA does not regulate, and has no involvement in, reports prepared at this design stage.”
“The California Supreme Court has made clear that the wrongful termination tort can be established if, and only if, it is based on an alleged violation of a specific statute, constitutional provision, or public safety regulation.”