Packgen v. BP Exploration & Production, Inc.
754 F.3d 61
1st Cir.2014Background
- After the 2010 Deepwater Horizon spill, small Maine manufacturer Packgen began producing oil containment boom and negotiated with BP to sell boom; BP never paid or placed a firm written order.
- BP employees inspected Packgen, requested tests, and Packgen procured third‑party ASTM testing that showed compliance; BP repeatedly requested design changes and field tests.
- Packgen ramped up production (tens of thousands of feet per day) and was later told it was on BP’s approved vendor list, but BP ceased large purchases after the well was capped; Packgen was left with large inventory sold at a steep loss.
- Packgen sued in federal court (diversity) on five state‑law counts: negligent and intentional misrepresentation, breach of contract (oral), unjust enrichment/quantum meruit, and promissory estoppel.
- The district court granted summary judgment for BP; the First Circuit reviewed de novo and affirmed, finding insufficient evidence to prove falsity, a signed contract, unjust enrichment/quantum meruit, or promissory‑estoppel relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misrepresentation (negligent & intentional) | BP made false present‑fact statements about specs, intent to buy, and quantity needs that induced Packgen to produce boom. | No evidence any of BP’s statements were false when made; negotiations and evolving specs do not prove false representation. | Affirmed for BP — plaintiff failed to show statements were false at the time made. |
| Breach of Contract (Statute of Frauds) | Oral commitments and BP conduct created an enforceable contract or fit exceptions to the Statute (specially manufactured goods; judicial admission). | No signed writing as required; exceptions do not apply — goods were resellable and alleged admissions (emails/denials) do not establish a contract. | Affirmed for BP — Statute of Frauds bars enforcement; exceptions inapplicable. |
| Unjust Enrichment / Quantum Meruit | Packgen conferred value (technical information, testing, product) and BP retained benefit without payment. | No evidence BP received or used a benefit such that unjust enrichment applies; negotiations were for sale of goods, not services for which payment was expected. | Affirmed for BP — no cognizable benefit or expectation of payment for services; claims fail. |
| Promissory Estoppel | BP’s promises reasonably induced Packgen’s reliance and injustice would result if not enforced, so estoppel should overcome Statute of Frauds. | Promissory estoppel cannot be used to evade the Statute absent fraud or circumstances tantamount to fraud; no such evidence exists. | Affirmed for BP — promissory estoppel fails under Maine law standards (no substantial injustice/fraud). |
Key Cases Cited
- Tolan v. Cotton, 134 S. Ct. 1861 (U.S. 2014) (summary‑judgment evidence must be viewed in nonmovant’s favor)
- Jordan‑Milton Mach., Inc. v. F/V Teresa Marie, II, 978 F.2d 32 (1st Cir. 1992) (false‑at‑time‑made requirement for negligent misrepresentation)
- Barclays Bank PLC v. Poynter, 710 F.3d 16 (1st Cir. 2013) (standard of review for summary judgment)
- Kearney v. J.P. King Auction Co., 265 F.3d 27 (1st Cir. 2001) (common element of misrepresentation claims: false present fact)
- APG, Inc. v. MCI Telecomms. Corp., 436 F.3d 294 (1st Cir. 2006) (unjust enrichment survive where plaintiff acted as middleman and defendant cut plaintiff out)
- Forrest Assocs. v. Passamaquoddy Tribe, 760 A.2d 1041 (Me. 2000) (no unjust enrichment where no evidence defendant benefitted)
- Paffhausen v. Balano, 708 A.2d 269 (Me. 1998) (distinguishing quantum meruit and unjust enrichment elements)
- Chapman v. Bomann, 381 A.2d 1123 (Me. 1978) (promissory estoppel may sometimes avoid Statute of Frauds where denial would be tantamount to fraud)
- Stearns v. Emery‑Waterhouse Co., 596 A.2d 72 (Me. 1991) (refusal to apply promissory estoppel in employment context where it would contravene Statute’s policy)