T G Plastics Trading Co., Inc. v. Toray Plastics (America), Inc. , 775 F.3d 31 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 14-1500
T G PLASTICS TRADING CO., INC.,
d/b/a NATIONAL PLASTICS TRADING CO.,
Plaintiff, Appellee,
v.
TORAY PLASTICS (AMERICA), INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. John J. McConnell, Jr., U.S. District Judge]
Before
Lynch, Chief Judge,
Howard, Circuit Judge,
and Saylor,* District Judge.
Sanford I. Weisburst, with whom Ryan S. Goldstein, Daniel
H. Bromberg, Quinn Emanuel Urquhart & Sullivan, LLP, Jeffrey S.
Brenner, and Nixon Peabody LLP were on brief, for appellant.
James Ratzel, with whom Michael J. Daly, Pierce Atwood
LLP, and Ratzel, Pytlik & Pezze, LLC were on brief, for appellee.
December 22, 2014
*
Of the District of Massachusetts, sitting by designation.
LYNCH, Chief Judge. In 2007, Toray Plastics (America),
Inc. ("Toray") of Rhode Island, a manufacturer of plastic film
products, and T G Plastics Trading Co., Inc. ("National Plastics"),
a Colorado-based broker of plastic film products, entered into a
Settlement Agreement to resolve a pending lawsuit. As part of the
Settlement Agreement, Toray agreed to sell certain materials
exclusively through National Plastics and to pay National Plastics
a twelve percent commission on all sales of the materials thereby
generated. National Plastics, believing that Toray had not held up
its end of the bargain, sued Toray for breach of the Settlement
Agreement. A jury found Toray liable and awarded National Plastics
over $2 million in damages. Toray appeals, arguing that National
Plastics had waived its right to a jury trial by a belated demand,
and that the evidence was insufficient as a matter of law to
support the jury's finding of liability or its calculation of
damages. We affirm, sounding a cautionary note as to delayed
demands for jury trials.
I.
Toray is a manufacturer of plastic films which are used
in various food packaging and industrial applications. Toray's
manufacturing processes produce excess materials, such as scrap
left over after rolls of film are cut to a customer's
specifications, and film that is damaged or otherwise rendered
unusable during the manufacturing process. Toray has historically
-2-
sold this material to plastics brokers. The brokers then resell
the materials, often to businesses abroad or to customers in
"secondary" or "commodities" markets, such as the floral industry.
National Plastics is a plastics broker that has purchased
excess materials from Toray since 1988. In the mid-2000s, National
Plastics allegedly fell behind on payments owed to Toray, and in
May 2006, Toray filed a lawsuit to recover approximately $1.5
million in outstanding payments ("the First Lawsuit"). National
Plastics counterclaimed, alleging, among other things, that Toray
had committed breach of contract and tortious interference with a
business relationship.
After conducting "months of discovery," the parties
eventually settled the First Lawsuit. The terms of the settlement
were memorialized in a "Settlement Agreement and Release," signed
on October 15-16, 2007, which provided that, "[i]n full and final
settlement of the [First Lawsuit] . . . Toray and National Plastics
will enter into a long term business relationship . . . and
National Plastics will pay Toray $1.5 million." As part of that
"long term business relationship," Toray agreed that, for a period
of seventeen years beginning on October 22, 2007, it would
exclusively sell to National Plastics one
hundred percent (100%) of all scrap plastic,
other scrap, second quality materials,
downgraded materials, recyclable materials not
reused internally and aged film. Because
Toray does not have direct control over the
end use or applications of these items . . .,
Toray cannot guarantee performance of this
-3-
film in any application. During the Term,
Toray will also regularly share all
information with National Plastics on all
persons or entities approaching Toray for
purchase of Toray's scrap plastic, other
scrap, second quality materials, downgraded
materials, recyclable materials and aged film.
National Plastics will be responsible for
contacting all of these possible leads and
following up with Toray on the outcome.
The Settlement Agreement further provided that, "[i]n order to
insure that Toray is receiving competitive market pricing, National
Plastics will work on a straight twelve percent (12%) of all sales
generated by National Plastics." It also contained a provision
giving each party the right to audit the other on an annual basis
in order to ensure compliance.
The parties refer to the list of items Toray agreed to
sell exclusively to National Plastics -- "scrap plastic, other
scrap, second quality materials, downgraded materials, recyclable
materials not reused internally and aged film" -- as the "agreed
materials." The principals who negotiated the Settlement
Agreement, Toray Chief Financial Officer David Jose and National
Plastics owner Torge Goderstad, did not discuss the precise meaning
of the words describing the agreed materials. In particular, the
term "aged film" was added to the Settlement Agreement near the end
of settlement negotiations and is not defined elsewhere in the
agreement.
Soon after executing the Settlement Agreement, the
parties began to dispute several aspects of its application,
-4-
including, as relevant here, Toray's duty to sell aged film
exclusively to National Plastics. In July 2009, National Plastics
sued Toray in federal court in Rhode Island, claiming damages
stemming from Toray's alleged failure to sell 100 percent of the
agreed materials to National Plastics and requesting specific
performance of the Settlement Agreement's auditing provisions. The
original complaint did not contain a jury demand.
After two years of settlement negotiations, which
ultimately proved fruitless, National Plastics moved to amend its
complaint in June 2011 to add three additional claims and a request
for a jury trial. The district court granted the motion for leave
to amend over Toray's objection. Toray counterclaimed, alleging
breach of the Settlement Agreement. However, by the time the case
was submitted to the jury in January 2014 -- roughly thirty months
after National Plastics filed its amended complaint -- the dispute
had, for all practical purposes, been narrowed to a single issue:
whether Toray had breached its duty under the Settlement Agreement
to sell aged film exclusively to National Plastics.1 National
Plastics' claim of damages was based solely on this alleged "aged
film" breach; it did not request damages based on Toray's sales of
any of the other "agreed materials."
1
The parties' other claims had either been withdrawn or
dismissed.
-5-
At trial, a primary issue in contention was whether there
had been any meeting of the minds as to the meaning of the term
"aged film." There was conflicting evidence presented regarding
that issue. Toray CEO Richard Schloesser and CFO Jose testified
that, "[f]rom an accounting standpoint," material is considered
"aged" one year after its manufacture, at which point Toray takes
a reserve against the material for financial accounting purposes.
Schloesser admitted that, in a deposition in the First Lawsuit (in
which the meaning of the term "aged material" was at issue) he had
defined "aged material" as "film generally that reaches one year"
and is "written down by the Finance Department." This description
is also consistent with e-mails Schloesser sent to Goderstad after
execution of the Settlement Agreement, in which Schloesser wrote
that "each month a report is generated that targets film that is 11
months old and will go aged in the next month." Toray's policy is
in accordance with Generally Accepted Accounting Principles, under
which companies are required to value their assets in a manner
"grounded in reality" in order to prepare accurate financial
statements. According to National Plastics' expert accountant,
Catherine Parente, Toray's inventory reserve policy
"indicat[ed] . . . that the age of the inventory significantly
affects the value of that inventory . . . . [b]y reducing it."
Schloesser also testified, however, that "from an operational stand
point, [plastic film] does not age; it's inert. . . . [Toray]
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could sell that film that we produced today three years from today
and it would work perfectly."
Matthew Brown, a General Manager at Toray, testified in
his deposition that, in his view, aged film was a "generalization"
that "specifie[d] film that [he] want[ed] the sales folks to focus
on because it's been around for a while." Like Schloesser, he also
stated at trial that "from a sales and operations point of
view . . . there is no aged film." National Plastics' Goderstad
testified that he understood "aged film" to mean generally
"material that they made and didn't go out right away, so they put
it in inventory, they held it for one reason or another." He said
he wasn't "sure" about the physical age of "aged film," but thought
it could be anywhere between three and eighteen months old.
The parties stipulated that between November 1, 2007, and
August 31, 2012, Toray sold approximately 9.2 million pounds of
film older than twelve months to entities other than National
Plastics and had earned revenue on those sales totaling
$16,836,907.91. In his closing argument, counsel for National
Plastics argued to the jury that, if the jury found that Toray had
breached the Settlement Agreement by selling aged film to entities
other than National Plastics, the jury should calculate damages by
multiplying Toray's revenue by National Plastics' twelve percent
commission under the Settlement Agreement, for a total of
$2,020,428.70. Counsel for Toray contended in his closing that
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this damages figure was "pure speculation" because National
Plastics had failed to show that it "could have sold [the aged
film] at the same prices in the same marketplace [as Toray]."
The jury found Toray liable for breach of the Settlement
Agreement and awarded National Plastics $2,020,428.95 in damages.
Since that figure is equal to twelve percent of $16,836,907.91, it
is apparent that the jury adopted National Plastics' proposed
method of calculating damages. After the verdict, Toray renewed
its earlier motion for judgment as a matter of law. The motion
rested on two grounds: (1) National Plastics failed to present
sufficient evidence that the parties intended the term "aged film"
to mean all film thirteen or more months old, and (2) the jury's
damages award was impermissibly speculative because National
Plastics failed to present evidence that it would have generated
the same revenue from selling aged film as Toray did. The district
court summarily denied the motion, finding that the jury's verdict
was "a rational determination of the credibility of the witnesses
and the facts as derived from the evidence" and "a reasonable
application of the facts to the law." The court entered final
judgment in favor of National Plastics. This appeal followed.
II.
We first address Toray's claim that the district court
erred in allowing National Plastics to amend its complaint to add
a jury demand.
-8-
Under Federal Rule of Civil Procedure 38(b), "a party may
demand a jury trial by . . . serving the other parties with a
written demand . . . no later than 14 days after the last pleading
directed to the issue is served." "A party waives a jury trial
unless its demand is properly served and filed." Fed. R. Civ. P.
38(d). However, the district court may, in its discretion, excuse
a party's waiver of a jury trial. See Fed. R. Civ. P. 39(b);
Rowlett v. Anheuser-Busch, Inc., 832 F.2d 194, 199-200 (1st Cir.
1987), abrogated on other grounds by Iacobucci v. Boulter, 193 F.3d
14 (1st Cir. 1999). "[T]he discretion under Rule 39(b) is very
broad and . . . the case would be very rare indeed where a district
court abused its discretion in denying or granting a Rule 39(b)
motion." Rowlett, 832 F.2d at 200; see also Moores v. Greenberg,
834 F.2d 1105, 1109 (1st Cir. 1987); 9 Wright & Miller, Federal
Practice and Procedure § 2334 (3d ed.) (explaining that "the
appellate courts ordinarily will not intervene or overturn the
action taken by the trial judge" on a Rule 39(b) motion). Indeed,
Toray admits in its reply brief that it can cite to no case in
which a district court's allowance of a Rule 39(b) motion "was
grounds for reversal of a jury verdict on appeal."
In deciding Rule 39(b) motions, courts have considered
various factors, such as
(1) whether the case involves issues which are
best tried to a jury; (2) whether granting the
motion would result in a disruption of the
court's schedule or that of the adverse party;
-9-
(3) the degree of prejudice to the adverse
party; (4) the length of the delay in having
requested a jury trial; and (5) the reason for
the movant's tardiness in requesting a jury
trial.
Parrott v. Wilson, 707 F.2d 1262, 1267 (11th Cir. 1983); accord
Daniel Int'l Corp. v. Fischbach & Moore, Inc., 916 F.2d 1061, 1064
(5th Cir. 1990). Any inquiry into the propriety of a Rule 39(b)
motion is thus a highly fact-specific endeavor. See 9 Wright &
Miller, supra, § 2334 ("The trial court ought to approach each
application under Rule 39(b) with an open mind and an eye to the
factual situation in that particular case . . . .").
On these facts, it was not an abuse of discretion for the
district court to allow National Plastics to amend its complaint to
add a jury demand. The district court found, and Toray does not
contest, that the issues in this case were suited to jury
determination. The allowance of the motion to amend did not
disrupt the schedule of the litigation; at the time of the
amendment, discovery was still in its early stages due to the
parties' earlier efforts "to resolv[e] the matter as opposed to
litigat[e] it." Moreover, Toray has conceded that it suffered no
prejudice as a result of the amendment in terms of its ability to
prepare for trial, since it had two and a half years after the
amended complaint was filed to ready its case.2 Cf. Rowlett, 832
2
This case is a far cry from Ypsilanti Community Utilities
Authority v. Meadwestvaco Air Systems, LLC, No. 07-CV-15280, 2010
WL 1644058 (E.D. Mich. Apr. 22, 2010), which Toray cites in its
-10-
F.2d at 200 (affirming district court's grant of a Rule 39(b)
motion after finding that defendant "was not prejudiced" because
"the trial was not delayed or extended, nor was there any unfair
surprise").
The time period that elapsed between National Plastics'
filing of the initial complaint and its demand for a jury trial was
significant, to be sure, and such a long delay would ordinarily
counsel against excusing a jury waiver. But we agree with the
district court that the reason offered for the delay -- emphasis on
settlement negotiations -- was valid in the context of this case.
In June 2010, the Magistrate Judge, sensing that the parties were
progressing toward settlement, had imposed a "moratorium" on
discovery with the goal of further facilitating negotiations, and
the judge lifted the discovery stay in July 2010 on the
brief. There, the district court denied a Rule 39(b) motion that
defendants filed "just two days before the final pre-trial
conference," after the court had denied defendants' motion for
summary judgment, and after the plaintiffs had "made several
strategic decisions in the course of preparing th[e] case for trial
based upon the belief that th[e] case would be tried to the bench."
Id. at *2-3. Here, the Rule 39(b) motion was filed two and a half
years before trial, long before any major strategic decisions had
been made.
This case is likewise distinguishable from Olympia Express,
Inc. v. Linee Aeree Italiane, S.P.A., 509 F.3d 347 (7th Cir. 2007),
also relied on by Toray. In Olympia Express, the Seventh Circuit
held that it would not excuse plaintiffs' four-year delay in
requesting a jury trial in a suit brought under the Foreign
Sovereign Immunities Act, in view of the "practical concerns of
preparation and predictability" and "[t]he purpose of foreign
sovereign immunity." Id. at 352. The doctrine of foreign
sovereign immunity is not implicated in this case, nor is there any
suggestion that the amendment disrupted Toray's preparation for
trial.
-11-
understanding that the parties would not take any steps to
"interfere with settlement negotiations." It was thus reasonable
for National Plastics to delay its request for a jury trial until
it became clear that settlement would not be forthcoming. This was
not, as Toray would have it, simply a case of an unexplained last-
minute change in tactics.
In view of these considerations, this is not one of the
"very rare" cases in which a district court abused its discretion
by granting a Rule 39(b) motion. See Rowlett, 832 F.2d at 200. We
stress, though, that a party takes a considerable risk in delaying
the making of a jury demand.
III.
In its second claim of error, Toray argues that National
Plastics' claim for breach of the Settlement Agreement should not
have gone to the jury because National Plastics failed to present
sufficient evidence to establish that the parties had a mutual
understanding of the term "aged film" as all film older than one
year. We are not persuaded.
Under Federal Rule of Civil Procedure 50, the court may
grant judgment as a matter of law to a party on an issue if "the
court finds that a reasonable jury would not have a legally
sufficient evidentiary basis to find for the [nonmoving] party on
that issue." We review a district court's denial of a Rule 50
motion de novo, "viewing the evidence in the light most favorable
-12-
to the nonmoving party." Monteagudo v. Asociación de Empleados del
Estado Libre Asociado de P.R., 554 F.3d 164, 170 (1st Cir. 2009)
(quoting Marcano Rivera v. Turabo Med. Ctr. P'ship, 415 F.3d 162,
167 (1st Cir. 2005)) (internal quotation marks omitted). "[A]
party seeking to overturn a jury verdict faces an uphill battle,"
since "[c]ourts may only grant a judgment contravening a jury's
determination when the evidence points so strongly and
overwhelmingly in favor of the moving party that no reasonable jury
could have returned a verdict adverse to that party." Id.
(quoting Marcano Rivera, 415 F.3d at 167) (internal quotation marks
omitted).
Toray cannot meet that stringent standard here. As the
jury was correctly instructed, its objective in construing the
terms of the Settlement Agreement was "to ascertain the intent of
the parties." Haffenreffer v. Haffenreffer, 994 A.2d 1226, 1233
(R.I. 2010) (citing The Elena Carcieri Trust-1988 v. Enter.
Rent-A-Car Co. of R.I., 871 A.2d 944, 947 (R.I. 2005)). There is
sufficient evidence in the trial record upon which a reasonable
jury could have concluded that the parties intended the term "aged
film" to mean all film thirteen or more months old.
First, there was evidence that Toray documents and
testimony from the First Lawsuit had defined "aged film" in such a
manner. For example, Toray's Answer to National Plastics'
counterclaim in that suit stated that "Excess Material means
-13-
material that does not meet specification and includes material
that is aged (over 12 months) or obsolete," and Schloesser
testified that "aged material" is "film generally that reaches one
year." These documents and testimony were available to National
Plastics prior to the execution of the Settlement Agreement. Thus,
contrary to Toray's argument, Toray's internal definition of the
term "aged," insofar as it became public record during the First
Lawsuit, could have influenced National Plastics' understanding of
the term "aged film" as it is used in the Settlement Agreement.
Second, Toray CEO Schloesser equated the term "aged" with
"13 months [old]" in his trial testimony. And finally, Toray CFO
Jose testified that Toray took a financial reserve against film
older than one year, and Toray Demand Manager John Angelina stated
that "aged film" was "film that a financial reserve has been taken
against." Taken together, this evidence suggests that, at the time
Toray and National Plastics were negotiating the Settlement
Agreement, both parties understood the term to mean film thirteen
months old or older -- or at least a reasonable jury could so
conclude.
IV.
Finally, Toray contends that National Plastics failed to
present sufficient evidence to allow a jury to conclude with
reasonable certainty that National Plastics suffered $2,020,428.95
in damages as a result of Toray's breach of the Settlement
-14-
Agreement. Toray makes two arguments in support of this
contention: first, that National Plastics offered no evidence
tending to show that it would have been able to sell aged film for
the same price and to the same customers as Toray sold it; and
second, that National Plastics failed to present any evidence as to
the costs it would have incurred in selling aged film.
We do not consider Toray's argument regarding National
Plastics' costs because it was not preserved. At no point in the
trial did Toray argue that the proper measure of damages involved
deducting National Plastics' operating costs from its anticipated
revenues, nor did Toray ask for such an instruction to be given to
the jury. The issue had not been raised at all, even in Toray's
motion for judgment as a matter of law under Rule 50.3 As Toray
admits, it made two, and only two, arguments in support of its Rule
50 motion: (1) National Plastics failed to present sufficient
evidence to show a mutual understanding of the meaning of the term
"aged film" and (2) National Plastics failed to present evidence
that would allow a reasonable jury to conclude that it would have
generated the same revenues from selling "aged film" as Toray did.4
3
Indeed, the parties did not even conduct discovery on
costs.
4
Toray's full argument in support of its motion for
judgment as a matter of law with respect to the damages issue, made
at the close of National Plastics' case, was as follows:
There is no evidence whatsoever as to what Mr.
Goderstad would have sold those products at,
at what pricing and to whom. He simply
-15-
Those contentions were not sufficient to preserve the
costs argument. A Rule 50 motion "must be sufficiently specific so
as to apprise the district court of the grounds relied on in
support of the motion." Monteagudo, 554 F.3d at 170 (quoting
Parker v. Gerrish, 547 F.3d 1, 12 (1st Cir. 2008)) (internal
quotation marks omitted). Arguments not "spell[ed] out . . .
squarely and distinctly" in the district court are waived. United
States v. Samboy, 433 F.3d 154, 161 (1st Cir. 2005) (quoting
Rivera–Gomez v. de Castro, 843 F.2d 631, 635 (1st Cir. 1988))
(internal quotation marks omitted); see also Monteagudo, 554 F.3d
at 170-71; Parker, 547 F.3d at 12 (noting that a Rule 50 motion
"preserves for review only those grounds specified at the time, and
no others" (quoting Zachar v. Lee, 363 F.3d 70, 73 (1st Cir. 2004))
(internal quotation marks omitted)). Toray's argument that the
evidence did not show that National Plastics would have generated
the same revenues from selling "aged film" as Toray did was not
sufficient to put the district court on notice of its costs
engaged in the pure speculation that he is
entitled to 12 percent of what Toray sold
those products to [sic] and its pricing to its
customers and its marketplaces. There's no
connection here with any evidence as to what
Mr. Goderstad's company actually could have
sold the products for, to whom, when and in
what amounts. His 12 percent is based on his
figures under the contract, not ours.
This was not enough to make clear to the trial judge the theory
that Toray now advances about deduction of operating costs.
Toray's renewed motion for judgment as a matter of law simply
reiterated this argument.
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argument. Nor was Toray's general argument that the requested
damages award was speculative sufficient; that contention was too
vague to encompass the costs argument, especially since the issue
had not been raised to the court or to the jury at any earlier
point. Toray simply did not "spell out its [costs] argument[]
squarely and distinctly" as is required to raise it on appeal. See
Samboy, 433 F.3d at 161 (internal quotation marks omitted).5
We addressed Toray's first preserved argument above; we
now turn to the second.
As the district court correctly instructed the jury,
under Rhode Island law, "'[t]he amount of damages sustained from a
breach of contract must be proven with a reasonable degree of
certainty, and the plaintiff must establish reasonably precise
figures and cannot rely upon speculation.'" Guzman v. Jan-Pro
Cleaning Sys., Inc., 839 A.2d 504, 508 (R.I. 2003) (alteration in
original) (quoting Mktg. Design Source, Inc. v. Pranda N. Am.,
Inc., 799 A.2d 267, 273 (R.I. 2002)) (internal quotation marks
omitted). "However, [p]laintiffs will not be denied recovery
merely because the damages . . . are difficult to ascertain, as
long as they prove damages with reasonable certainty." Sophie F.
Bronowiski Mulligan Irrevocable Trust v. Bridges, 44 A.3d 116, 120
5
Ordinarily, to be clear, a plaintiff seeking damages for
breach of contract is required to show evidence of lost profits, as
opposed to lost revenues. See, e.g., Troutbrook Farm, Inc. v.
DeWitt, 611 A.2d 820, 824 (R.I. 1992).
-17-
(R.I. 2012) (alterations in original) (citations omitted) (internal
quotation marks omitted); see also Smith Dev. Corp. v. Bilow
Enters., Inc., 308 A.2d 477, 483 (R.I. 1973) (noting that
"'absolute certainty in proving . . . quantum [of damages] is not
required'" and that the jury need only "be guided by some rational
standard" (citations omitted)).
There was evidence in the record upon which a reasonable
jury could conclude that National Plastics established the damages
from Toray's breach with reasonable certainty. In an e-mail that
Toray CFO Jose sent to Goderstad after the execution of the
contract, Jose stated that he understood that National Plastics had
been buying the agreed materials from Toray, invoicing its own
customer for the same amount as it had paid Toray for the
materials, then receiving its twelve percent commission based on
that amount. Jose proposed instead that Goderstad raise the prices
that National Plastics was charging to a level such that, after the
twelve percent commission was deducted, Toray would "receive the
same level of pricing (or pretty close to it) that [it] did prior
to [the Settlement Agreement]." That suggests, at a minimum, that
National Plastics could in fact sell the product for prices similar
to those of Toray. Moreover, Toray was obligated under the
Settlement Agreement to share sales leads regarding the agreed
materials with National Plastics, suggesting that the customer
bases and sales volumes of the two companies would be comparable.
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A reasonable jury could conclude from this evidence that
twelve percent of Toray's revenues from direct sales of aged film
to third parties -- sales that, under the Settlement Agreement,
should have been done through National Plastics -- was a rational
estimate of damages.
Toray resists this conclusion, arguing that it
"routinely" sold film thirteen months old or older to its regular
customers without discount and including a warranty. Because
National Plastics could not sell plastic film into primary markets
complete with warranty, Toray contends, it is not possible that
National Plastics could have earned the same revenues from sales of
the film as Toray did. But this argument rests on the premise that
film thirteen months old or older had no operational difference
from film less than one year old and could be sold into prime
markets at the prime market price. The jury did not have to accept
that premise or credit the testimony of the witnesses who testified
to its validity. Instead, the jury could have inferred, based on
the evidence that Toray took an accounting reserve against film at
age thirteen months, that the film became less valuable at that
point and thus was likely to be moved to a broker for sale into a
secondary market without a warranty.
George v. George F. Berkander, Inc., 169 A.2d 370 (R.I.
1961), the case upon which Toray places principal reliance, does
not compel a different result. In George, the plaintiff had
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licensed the defendant to use a manufacturing process invented by
the plaintiff. Id. at 370-71. The defendant agreed to pay the
plaintiff a royalty for items made and sold using the process and
to sell such items only outside of Rhode Island. Id. at 371. When
the defendant sold items in Rhode Island in contravention of the
agreement, the plaintiff sued and sought to recover the defendant's
profits as part of his damages. Id. The Rhode Island Supreme
Court, adhering to the traditional "expectation" measure of damages
famously articulated in Hadley v. Baxendale, 9 Exch. 341 (1854),
held that the plaintiff's request was impermissible because the
plaintiff had presented no evidence that it would have earned those
profits had the defendant fulfilled the terms of the contract. See
George, 169 A.2d at 372-73. George simply stands for the familiar
proposition that the proper measure of damages in a breach of
contract action is that which "will serve to put the injured party
as close as is reasonably possible to the position he would have
been in had the contract been fully performed." Id. at 372. As
explained above, in this case, a reasonable jury could have
concluded that a damages award equal to Toray's revenues from
selling film older than one year accomplished that purpose. Cf.
RBC Nice Bearings, Inc. v. SKF USA, Inc., 78 A.3d 195, 212 (Conn.
App. Ct. 2013) (holding that defendant alleging breach of a
contract under which it was the exclusive distributor of certain
products could use the plaintiffs' profits from sales of those
-20-
products to other parties as its measure of damages because "it
would be neither speculative nor too remote . . . to conclude that
the defendant, the exclusive distributor of [those products], would
have been in the position to sell the product[s] to the customers
who purchased directly from the plaintiffs").
In further support of its argument that the jury's
damages award in this case was speculative, Toray cites several
antitrust cases applying the "yardstick" method of damages
measurement, under which a plaintiff can "measure its damages with
reference to the performance of one or more closely comparable
firms in the same industry that, unburdened by the proscribed
anticompetitive activity, successfully managed to earn profits."
Home Placement Serv., Inc. v. Providence Journal Co., 819 F.2d
1199, 1205-06 (1st Cir. 1987). We find these cases unhelpful in
the present context. This is not an antitrust case; it is an
action for breach of contract, and a unique one at that. In order
to settle pending claims against each other, Toray and National
Plastics agreed to do business together over a seventeen-year
period pursuant to the terms of a Settlement Agreement honed
through extensive negotiation. And as described above, a jury
could reasonably conclude, based on evidence of the parties'
intent, that twelve percent of Toray's revenues from its breaching
the Settlement Agreement was a reasonable estimate of National
Plastics' loss as a result of Toray's refusal to do business
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according to the agreement's terms. No more is required under
Rhode Island law.
V.
We affirm the decision of the district court. Costs are
awarded to National Plastics.
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