Cable & Computer Technology, Inc. v. Lockheed Sanders, Inc.

United States Court of Appeals for the Ninth Circuit · Civil Procedure

52 F. App'x 20 (2002)

Updated July 19, 2026

Civil Procedurebreach of contract damagesintentional interference with prospective economic advantagefraudpunitive damagesspeculative damagesteaming contractfull compensation

Facts

A jury found that Sanders, a Lockheed subsidiary, entered into a contract with CCT to team in making a bid to Boeing for the Air Force B-1B bomber computer upgrade project, and the district court found the contract had no missing terms. During that relationship, Sanders supplied CCT's pricing information to Owego, another Lockheed subsidiary bidding on the same Boeing project. Less than two weeks before the bid deadline, Sanders broke its contract with CCT, leaving CCT without a partner or time to find one, and Owego won the contract. The jury also heard testimony and evidence that Sanders and Owego worked within Lockheed to thwart CCT and that Sanders never intended to perform its promise to team with CCT.

Issue

Whether CCT, as a party to a teaming contract rather than merely a disappointed bidder, could recover full compensatory damages for breach; whether the reduced damages for additional contracts were too speculative; whether the evidence supported liability for interference with prospective economic advantage and fraud; and whether the reduced punitive damages were proper and constitutional.

Rule

When a plaintiff is a disappointed party to an actual contract, rather than merely a disappointed bidder, it is entitled to full compensation for breach of that contract. Claimed damages based on additional contracts the plaintiff says it would later have won may be denied when they are too speculative. For interference with prospective economic advantage, the defendant may be treated as a stranger to the plaintiff's prospective relation with a third party if it interferes with that separate relation, and there must be independently wrongful conduct beyond the contract breach. Fraudulent intent at the time of a promise may be shown by circumstantial evidence, including later conduct and statements indicating the promisor never intended to perform.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In San Diego, Orion Grid Systems and Mesa Harbor Analytics signed a detailed teaming contract to pursue a Navy software project. The agreement fixed each party’s role, pricing method, and exclusivity, and a court later finds it had no missing terms. One week before bids were due, Mesa Harbor quit the arrangement and joined its affiliate’s competing bid, causing Orion to lose the project.

If Orion sues Mesa Harbor for breach, which measure of damages is most consistent with the majority opinion?

Explanation. The majority distinguished a disappointed bidder from a disappointed party to an actual contract. Where the teaming agreement is a completed contract with no missing terms, the plaintiff is entitled to full compensation for its breach rather than being limited to reliance expenses.