CNE Direct, Inc. v. Blackberry Corporation
821 F.3d 146
1st Cir.2016Background
- CNE Direct contracted with Asset Recovery (Asset) in Nov. 2013 to buy BlackBerry phone parts; Asset backed out or tried to raise price, causing CNE loss. CNE sued Asset and BlackBerry, alleging Asset acted as BlackBerry’s actual or apparent agent. District court entered default against Asset and granted summary judgment for BlackBerry; CNE appealed.
- From 2011–2013 CNE purchased excess BlackBerry inventory through Asset in multiple transactions totaling over $1.5 million; some early transactions listed BlackBerry as supplier and involved payments to BlackBerry; later transactions listed Asset as supplier and CNE often paid Asset.
- BlackBerry sometimes directed forms to list BlackBerry as supplier, paid Asset commissions in at least one transaction, and provided inventory lists to Asset; but BlackBerry retained the right to refuse sales and exercised limited commercial controls (price, buyer identity, export restrictions).
- In Oct. 2012 CNE complained to BlackBerry about Miele (Asset’s principal); BlackBerry replied that the purchase was between CNE and Stephen (Miele) and declined to intervene — a communication the majority treated as disavowal of agency.
- CNE argued prior course of dealing and conduct could support apparent or implied actual authority; BlackBerry argued it never granted actual authority and its communications and controls were insufficient to create agency or to hold Asset out as its agent for third parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Asset had actual authority to bind BlackBerry | Asset acted with implied/actual authority based on prior conduct and statements that Asset would find buyers and be compensated | No express or ongoing implied agreement; Asset bore upside/downside on spreads except one early commission transaction; BlackBerry did not control Agent closely enough | Actual authority: No — summary judgment for BlackBerry affirmed |
| Whether Asset had apparent authority to bind BlackBerry | Course of dealing, BlackBerry-listed supplier on POs, direct payments/pickups from BlackBerry, and referrals made it reasonable for CNE to believe Asset was BlackBerry’s agent | BlackBerry’s Oct. 2012 communications disclaimed involvement; BlackBerry’s limited controls are standard commercial protections not agency; CNE then listed Asset as supplier and paid Asset | Apparent authority: No — reasonable reliance was defeated by subsequent communications and conduct; summary judgment affirmed |
| Whether CNE’s commercial sophistication defeats its reasonable reliance argument | CNE: prior course of dealing could still make reliance reasonable despite sophistication | BlackBerry: CNE’s sophistication and standard commercial forms should have made it unreasonable to rely on agency | Court: CNE’s sophistication supports finding no reasonable belief in agency |
| Whether material facts required a jury on apparent authority | CNE: conflicting inferences from communications and course of dealing create a triable issue | BlackBerry: October 2012 emails and later practice making Asset the listed supplier remove any reasonable basis for belief | Court: No genuine issue of material fact; summary judgment appropriate (majority). Dissent contends a jury could resolve competing inferences |
Key Cases Cited
- Theos & Sons, Inc. v. Mack Trucks, Inc., 431 Mass. 736, 729 N.E.2d 1113 (Mass. 2000) (outlines actual and apparent authority principles and significance of principal's right to control)
- Binkley Co. v. E. Tank, Inc., 831 F.2d 333 (1st Cir. 1987) (course of dealing relevant to apparent authority for a third-party of reasonable prudence)
- Martinez v. Petrenko, 792 F.3d 173 (1st Cir. 2015) (standard of review for summary judgment on appeal; view facts in favor of non-movant)