Packgen v. Berry Plastics Corporation

847 F.3d 80, 2017 WL 431412, 2017 U.S. App. LEXIS 1793
CourtCourt of Appeals for the First Circuit
DecidedFebruary 1, 2017
Docket16-1348P
StatusPublished
Cited by27 cases

This text of 847 F.3d 80 (Packgen v. Berry Plastics Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Packgen v. Berry Plastics Corporation, 847 F.3d 80, 2017 WL 431412, 2017 U.S. App. LEXIS 1793 (1st Cir. 2017).

Opinion

TORRUELLA, Circuit Judge.

Defendants-Appellants Berry Plastics Corporation and Covalence Specialty Coatings, LLC (collectively, “Berry”) appeal from a jury’s award of $7.2 million in damages to Plaintiff-Appellee Packgen resulting from the failure of material Berry had supplied to Packgen. Berry contends that the district court erred by (1) denying Berry’s motion to exclude Packgen’s damages expert, (2) allowing Packgen employees to testify concerning potential Packgen customers’ intent to purchase Paekgen’s new product, and (3) failing to correct these errors by denying Berry’s motion for judgment as a matter of law, a new trial, or to alter or amend the judgment. We affirm.

I. BACKGROUND

A. Factual Background

Packgen manufactures a polypropylene intermediate bulk container used to transport and store catalyst, a hazardous and volatile chemical agent used to refine crude oil. No other company manufactures similar polypropylene containers, but refineries also lease metal flow bins to transport and store catalyst. In the mid-2000s, Packgen redesigned its bulk containers. It made the redesigned container, called the Cougar, out of a laminated fabric. Berry *84 supplied the laminated fabric and represented that it could meet Packgen’s quality standards.

As part of the redesign, Packgen worked with CRI/Criterion (“CRI”), a catalyst manufacturer and its largest customer at the time, to modify the new Cougar to meet CRI’s specialized requirements. After a lengthy process, CRI began purchasing Cougars in October of 2007. From October 2007 to March 2008, CRI purchased 7,567 Cougars for nearly $1.5 million, and it placed an order for 1,359 Cougars to be delivered in April 2008.

Packgen also began marketing the Cougar to North American refineries in 2007, focusing on thirty-seven refineries where CRI supplied catalyst containers. Those refineries were likely customers because they would experience the Cougars CRI used, and they were all long distances from their catalyst suppliers, so they would save significant transport costs using the lighter, more compact Cougar rather than flow bins. Packgen’s sales manager testified that decision-makers at all thirty-seven refineries had told her “that they were going to be purchasing the [Cjougars on their next turnaround cycle.” Decision-makers at ten of the refineries had also told Packgen’s president that they “were willing to purchase and try [Packgen’s] containers.”

On April' 4, 2008, one of the Cougars CRI had purchased split open while being moved. Over the next weeks, Packgen learned that other Cougars had also failed, in some cases causing the catalyst inside to combust, and it began to investigate. Pack-gen determined that the Cougar had failed because some of the laminated fabric supplied by Berry was faulty, and that it had sold CRI approximately two thousand Cougars made from the faulty laminated fabric. Following the incident, CRI can-celled its order of 1,359 Cougars for the month of April, and it never ordered another Cougar. In addition, the thirty-seven refineries did not order Cougars as Pack-gen had anticipated.

B. Procedural History

Packgen filed suit against Berry in Maine Superior Court, alleging breach of contract, breach of implied and express warranties, and negligence. Berry removed the case to the United States District Court for the District of Maine.

Packgen designated Mark G. Filler, a certified public accountant and certified valuation analyst, as an expert witness on damages. Berry moved to exclude Filler’s opinions and testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and the district court held a two-day Daubert hearing. On September 12, 2014, the district court issued a forty-seven-page order denying Berry’s motion to exclude. It concluded that a variety of facts supported Filler’s ten-year projections of Packgen’s lost profits from CRI and the thirty-seven refineries, his assumption that Packgen had a one-in-ten chance each year of selling Cougars to each of the thirty-seven refineries, and his assumption that the refineries did not buy Cougars only because of the product failure, and it determined that Filler did not improperly combine forecasting methodologies from both business valuation and lost profits models.

Prior to trial, Berry filed a motion in limine seeking to exclude testimony by Packgen employees concerning CRI’s and the thirty-seven refineries’ intent to purchase Cougars and why they decided not to make those purchases. The district court reserved ruling on the motion for trial. At trial, the district court ruled that Packgen’s .president could “testify as to what a decision-maker at CRI told him *85 about what CRI’s intent [to purchase Cougars] was” but not “why [CRI was] ceasing business.” The district court applied its ruling to subsequent testimony, allowing Packgen’s president and sales manager to testify that decision-makers at the thirty-seven refineries had expressed their intent to purchase Cougars but not about why those thirty-seven refineries subsequently did not make purchases.

After a trial, on November 12, 2015, the jury returned a verdict against Berry and awarded $7,206,646.30 in damages to Pack-gen. On January 29, 2016, the district court denied Berry’s motion for judgment as a matter of law, for a new trial, or to alter or amend the judgment. 1 The district court entered judgment against Berry on March 8, 2016, and Berry timely appealed.

II. ANALYSIS

Berry argues on appeal that the district court abused its discretion by admitting Filler’s testimony regarding Packgen’s lost profits from the refineries because (1) he did not establish that the Cougar failures caused Packgen any lost profits from the refineries, (2) no facts supported his ten-year loss period, and (3) no facts supported his one-to-ten odds of selling Cougars to the refineries. Berry further argues that the district court abused its discretion by admitting Filler’s testimony regarding damages attributable to lost business from CRI because (1) no facts supported his assumption that CRI would purchase 1,261 units per month, (2) no facts supported his ten-year loss period, and (3) his analysis improperly combined lost-profit and business-valuation' methodologies. In addition, Berry asserts that the district court erred by allowing Packgen’s employees to testify about CRI’s and the refineries’ stated intent to purchase Cougars, because their testimony relied on hearsay, and that it erred by denying Berry’s motion for judgment as a matter of law, for a new trial, or to alter or amend the judgment. We address these arguments in turn.

A. The District Court Did Not Abuse Its Discretion by Admitting Filler’s Testimony

A district court must “ensur[e] that an expert’s testimony both rests on a reliable foundation and is relevant to the task at hand.” Daubert, 509 U.S. at 597, 113 S.Ct. 2786.

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847 F.3d 80, 2017 WL 431412, 2017 U.S. App. LEXIS 1793, Counsel Stack Legal Research, https://law.counselstack.com/opinion/packgen-v-berry-plastics-corporation-ca1-2017.