943 F.3d 42
1st Cir.2019Background
- Textron (Mass.) contracted with ASASCO (Saudi consultant) from 2005–2013 under five written consulting agreements; all contained integration clauses and barred commission-based compensation.
- Textron negotiated an Offset Services Agreement (OSA) with Blenheim (U.K.) promising Blenheim up to 6% of the Supply Contract if an irrevocable waiver or offset credits were obtained; Blenheim could subcontract to ASASCO with Textron consent.
- ASASCO and Blenheim executed a subcontract (2009) entitling ASASCO to a portion of any fee Blenheim received under the OSA, but Textron never executed a separate offset agreement with ASASCO.
- Textron won the U.S. DoD award for sensor-fuzed weapons (2013) with announced offset costs (~$89.2M); Saudi Arabia never granted an offset waiver or approved offset credits, and ASASCO never produced an approved offset project after a 2011 rejection.
- ASASCO sued (multiple claims including Mass. Gen. Laws ch. 93A, fraud, misrepresentation, quantum meruit). District court granted summary judgment for Textron; First Circuit affirmed in part previously and here affirmed summary judgment in full, awarding costs to Textron.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mass. Gen. Laws ch. 93A §11 applies ("center of gravity") | ASASCO: district court misapplied law (Kuwaiti Danish) and Roche factors; Massachusetts is center because Textron and communications are in MA | Textron: alleged deception occurred mostly abroad (Egypt/France/Saudi); Roche factors properly applied in a fact‑intensive inquiry | Court: affirmed; district court properly weighed facts under Kuwaiti Danish; MA was not the center of gravity |
| Whether ASASCO reasonably relied on oral promises to receive commission/fees | ASASCO: relied on Textron representations that offsets/credits would yield compensation | Textron: written consulting agreements (integration clauses) expressly barred commission reliance | Court: affirmed; reliance unreasonable as a matter of law given written contracts that contradicted oral promises (integration clause) |
| Whether Textron promised offset compensation (e.g., 6%) unconditional on waiver/credits | ASASCO: evidence could show Textron promised offset-related payment or denied opportunity to perform after contract signed | Textron: never promised unconditional 6%; any offset fee depended on OSA contingencies and Saudi approval | Court: affirmed; no evidence Textron promised 6% absent waiver/credits and ASASCO never secured waiver/credits |
| Whether unjust enrichment/quantum meruit recovery is available | ASASCO: entitled to recovery for services rendered or lost opportunity | Textron: recovery barred because claimed fees were contingent on events that never occurred | Court: affirmed; Massachusetts bars quantum meruit for contingent fee arrangements when contingency (signing/waiver/credits) failed to occur |
Key Cases Cited
- Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 781 N.E.2d 787 (Mass. 2003) (center‑of‑gravity inquiry for c.93A §11 requires fact‑intensive balancing, not rigid factor test)
- Roche v. Royal Bank of Canada, 109 F.3d 820 (1st Cir. 1997) (factors assessing where deceptive conduct occurred for §11 analysis)
- Arabian Support & Servs. Co. v. Textron Sys. Corp., 855 F.3d 1 (1st Cir. 2017) (prior panel opinion addressing related claims)
- Textron Sys. Corp. v. Arabian Support & Servs. Co., 368 F. Supp. 3d 211 (D. Mass. 2019) (district court opinion granting summary judgment for Textron)
- Masingill v. EMC Corp., 870 N.E.2d 81 (Mass. 2007) (oral statements contradicted by written contract cannot be reasonably relied upon)
- Liss v. Studeny, 879 N.E.2d 676 (Mass. 2008) (quantum meruit recovery not allowed where contingent fee condition failed)
- Town of Westport v. Monsanto Co., 877 F.3d 58 (1st Cir. 2017) (summary judgment standard review)
- Mulder v. Kohl's Dep't Stores, Inc., 865 F.3d 17 (1st Cir. 2017) (choice‑of‑law application in diversity cases)