Packgen v. Berry Plastics Corporation
847 F.3d 80
1st Cir.2017Background
- Packgen redesigned an intermediate bulk container (the "Cougar") using laminated fabric supplied by Berry; the Cougar was marketed to CRI (a major customer) and 37 refineries.
- CRI purchased thousands of Cougars in late 2007–early 2008; in April 2008 a Cougar split and other failures occurred, and Packgen traced failures to defective laminated fabric supplied by Berry.
- CRI canceled future orders and never resumed purchases; anticipated sales to the 37 targeted refineries also did not materialize.
- Packgen sued Berry for breach of contract, warranty, and negligence; Berry removed to federal court in Maine and the case went to jury trial.
- Packgen offered Mark Filler (CPA/valuation analyst) as its damages expert; the district court held a two-day Daubert hearing, denied Berry's motion to exclude, and allowed Packgen witnesses to testify about refineries' pre-failure statements of intent to purchase (admitted under Rule 803(3)).
- The jury awarded Packgen $7.2 million; Berry's post-judgment motions were denied and Berry appealed, raising Daubert, hearsay, and JMOL/new-trial arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of Filler's lost-profits testimony for the 37 refineries | Filler used reasonable assumptions (one-in-ten annual sales rate, 10-year loss period) tied to Packgen's evidence and modeled lost profits responsibly | Filler lacked empirical support (no market survey), his assumptions (1/10 rate, 10 years) were speculative and untethered to facts | Court affirmed admission: district court did not abuse discretion — assumptions had sufficient factual support and shortcomings went to weight, not admissibility |
| Admissibility of Filler's lost-profits testimony for CRI | Past six-month sales to CRI were a proper comparator to project future lost profits over ten years | No objective basis to project CRI's six-month rate forward ten years; model improperly mixed valuation and lost-profits methods | Court affirmed admission: comparable past sales and market facts supported projection; analogy to valuation did not invalidate the lost-profits calculation |
| Admissibility of Packgen employees' testimony about refineries' intent to purchase | Testimony relaying decision-makers' statements reflects declarants' then-existing intent and is admissible under Rule 803(3) | Testimony was hearsay and unreliable (unnamed declarants, timing issues) | Court affirmed admission: statements reflected refineries' collective intent, witnesses identified declarants as decision-makers, and temporal proximity supported Rule 803(3) exception |
| Sufficiency of evidence; JMOL / new trial request | Damages evidence and testimony provided a sufficient factual basis for jury to award lost profits | Errors in admitting expert and hearsay required JMOL or new trial | Court affirmed denial of post-judgment motions because evidentiary rulings were within district court's discretion and trial evidence matched Daubert hearing record |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (district courts must ensure expert testimony rests on reliable foundation)
- Milward v. Acuity Specialty Prods. Grp., Inc., 639 F.3d 11 (1st Cir. 2011) (reliability inquiry tied to facts of particular case)
- Beaudette v. Louisville Ladder, Inc., 462 F.3d 22 (1st Cir. 2006) (expert-testimony admissibility standards)
- i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) (expert calculations must meet minimal standards of relevance and reliability)
- Claar v. Burlington N.R.R., 29 F.3d 499 (9th Cir. 1994) (experts must account for obvious alternative explanations)
- Ambrosini v. Labarraque, 101 F.3d 129 (D.C. Cir. 1996) (remaining alternative causes affect weight, not admissibility)
- Cummings v. Standard Register Co., 265 F.3d 56 (1st Cir. 2001) (expert assumptions go to credibility and weight)
- Atlas Truck Leasing, Inc. v. First NH Banks, Inc., 808 F.2d 902 (1st Cir. 1987) (estimating future lost profits by examining comparable past profits is common practice)