Primarque Prods. Co. v. Williams W. & Witts Prods. Co., Nos. 19-1463

• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)
• Writing for the Court: BARRON, Circuit Judge.
• Citation: 988 F.3d 26
• Parties: PRIMARQUE PRODUCTS CO., INC., Plaintiff, Appellant / Cross-Appellee, v. WILLIAMS WEST & WITTS PRODUCTS COMPANY d/b/a Integrative Flavors, Defendant, Appellee / Cross-Appellant.
• Docket Number: Nos. 19-1463,19-1484
• Decision Date: 12 February 2021

988 F.3d 26

PRIMARQUE PRODUCTS CO., INC., Plaintiff, Appellant / Cross-Appellee,
v.
WILLIAMS WEST & WITTS PRODUCTS COMPANY d/b/a Integrative Flavors, Defendant, Appellee / Cross-Appellant.

Nos. 19-1463
19-1484

United States Court of Appeals, First Circuit.

February 12, 2021

Andrew Lawlor, Norwood, MA, with whom Fedele and Murray, P.C. was on brief, for Appellant/Cross-Appellee.

Rodney L. Lewis, Chicago, IL, with whom Polsinelli, P.C. was on brief, for Appellee/Cross-Appellant.

Before Thompson and Barron, Circuit Judges.^*

BARRON, Circuit Judge.

988 F.3d 29

The appeal and cross-appeal at issue here stem from litigation in the District of Massachusetts that followed the termination, without advance notice, of a thirty-nine-year business relationship between a company that manufactured and supplied soup base products and a company that distributed them. Following a five-day trial, the jury awarded the distributor $255,000 in total damages for its Massachusetts-law breach of contract and tortious interference with business relations claims against the manufacturer, although the District Court denied the distributor's motion for prejudgment interest on those damages. The District Court also granted summary judgment to the manufacturer on the distributor's claim against it under Chapter 93A of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A ("Chapter 93A"), and to the manufacturer on its counterclaim for breach of contract under Massachusetts law, for which the District Court awarded the manufacturer $97,843.22 in damages, plus prejudgment interest. The distributor now appeals from various of the District Court's pre- and post-verdict rulings, while the manufacturer cross-appeals. We reverse in part and vacate in part in the distributor's appeal, and we affirm in the manufacturer's cross-appeal.

I.

A.

The following facts, which were supportably found by the District Court both at summary judgment and in its rulings on certain post-trial motions, are undisputed on appeal. Primarque Products Co. ("Primarque"), the appellant, is a Massachusetts-based distributor of food products, including soup base products. Williams West & Witts Products Co. d/b/a Integrative Flavors ("WWW"), the cross-appellant, is an Indiana-based manufacturer and supplier of soup base products that is incorporated in Illinois. Primarque and WWW have conducted business with each another since 1976.

Primarque and WWW briefly entered into written distribution agreements in, respectively, 1987 and 1990, but, by 1993, each of those agreements had terminated. After the period in which those agreements were in effect, however, the parties continued to do a large amount of business with each other.

Their repeated transactions during this period involved Primarque as a distributor sending a purchase order to WWW detailing the desired soup base type, quantity, cost, method of shipping, and delivery location; WWW as a manufacturer and supplier filling the order and invoicing Primarque; Primarque paying WWW for what it had been invoiced; and Primarque reselling

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the products that it purchased from WWW to a variety of retail customers. The parties' transactions during this period also involved what the parties referred to as the "Drop Ship Arrangement," pursuant to which WWW shipped soup base products directly to certain retail customers known as the "Drop Ship Customers" that had purchased soup base products through Primarque.

The Drop Ship Arrangement relieved Primarque, as a distributor, of the hassle of receiving, storing, and re-shipping the soup base products; and this practice, in turn, made Primarque's pricing for those products more competitive with its retail customers. WWW, however, did not during this period directly solicit business from Drop Ship Customers. Moreover, if those customers made inquiries with WWW about directly purchasing its soup base products, WWW referred them to Primarque. Primarque, for its part, did not solicit business from customers buying soup base products from WWW directly.

Primarque did sell other suppliers' soup base products to certain of its retail customers, but it still was WWW's largest purchaser of those products. WWW, in turn, was Primarque's largest supplier of them. As an indication of the scale of the business that the two parties did with each other, in 2014, Primarque purchased approximately $1,313,175.59 worth of soup base products from WWW.¹

The events that precipitated the dispute that gives rise to these appeals began in May of 2014, when Primarque, without notifying WWW, started meeting with competitors of WWW about their supplying Primarque with "replacement" soup base products for Primarque to sell to its retail customers. Primarque signed memoranda of understanding with two of those competitors, Major Foods and Eatem. As Major Foods and Eatem developed replacement products for Primarque to distribute, Primarque began relying on them to supply it with some of the soup base products that it had previously relied on WWW to supply.

On March 9, 2015, WWW reviewed its sales numbers and identified certain downward trends related to its business with Primarque. The next day, WWW sent an e-mail to Jack Barron, Primarque's owner and president, in which it inquired whether Primarque's business was down generally or whether it was transitioning some of its business away from WWW. Barron replied: "[a] combination of both."

Two days later, on March 12, 2015, WWW notified Primarque that it would no longer be selling its products to Primarque, effective that day. On the same day, WWW informed the Drop Ship Customers that Primarque was no longer distributing WWW products and that these customers could now obtain soup base products directly from WWW at lower prices. WWW thereafter began selling soup base products directly to some of the Drop Ship Customers.

B.

In response to WWW's actions, Primarque filed suit in Massachusetts state court on March 19, 2015. WWW then removed the case to the United States District Court for the District of Massachusetts based on diversity jurisdiction.

Primarque's complaint asserted four claims against WWW under Massachusetts law: breach of contract (Count I), promissory estoppel (Count II), tortious interference with business relations (Count III),

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and a violation of Chapter 93A (Count IV). Primarque sought damages based on lost profits from sales that it alleged that it would have made to the Drop Ship Customers in the absence of WWW's abrupt termination of their relationship, including sales that Primarque alleged that it would have made to those customers after the filing of the complaint.

WWW in turn filed a counterclaim under Massachusetts law for breach of contract. WWW based this claim for breach of contract on Primarque's conceded withholding of payment on a final shipment of $97,843.22 worth of goods that it had received from WWW, for which WWW sought the unpaid amount plus prejudgment interest.

C.

Following discovery, WWW moved for summary judgment in its favor as to both Primarque's claims against it and its counterclaim. On March 29, 2018, the District Court ruled that (1) WWW was entitled to summary judgment on its counterclaim for breach of contract and that it was entitled to $97,843.22 in damages plus prejudgment interest; (2) WWW was entitled to summary judgment on Primarque's Chapter 93A claim because there was not "a scintilla of evidence that WWW engaged in any unfair[ ] or deceptive act or practice"; and (3) WWW was also entitled to summary judgment on Primarque's promissory estoppel claim and as to substantial aspects of Primarque's breach of contract and tortious interference with business relations claims. See Primarque Prods. Co. v. Williams W. & Witts Prods. Co., 303 F. Supp. 3d 188, 191 & n.1, 205-07, 209 (D. Mass. 2018). But, as to those lattermost claims, the District Court stated that, even absent a written agreement, "Massachusetts law would still require WWW to provide Primarque with reasonable notice of its intent to terminate the parties' distributorship arrangement," id. at 205, and it further determined that "there is a question of fact as to whether WWW improperly terminated the parties' relationship without reasonable notice," id. at 208.

The case went to trial later that year. The District Court instructed the jury that before it could find in Primarque's favor on the issue of whether WWW had provided it with reasonable notice of termination, the jury would first have to determine "whether Primarque and WWW had a contract for the sale of soup base" "under which ... WWW would prove periodic shipments of goods to" Primarque -- a determination which the jury could make in view of the "conduct [of] both parties." On June 1, 2018, the jury unanimously found by special verdict that WWW and Primarque did "have a contract for the continuing purchase and sale of soup base" and that "WWW, without excuse, breach[ed] its contract with Primarque by failing to provide reasonable notice of its termination of that contract." The jury also found that "WWW...