Of the Federal Circuit, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 08-1048

NEW ENGLAND SURFACES, d/b/a DION DISTRIBUTORS, INC.,

Plaintiff, Appellant,

v.

E.I. DU PONT DE NEMOURS AND COMPANY, d/b/a DU PONT,

and PARKSITE, INC.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. George Z. Singal, U.S. District Judge]

Before

 Boudin, Selya and Dyk,*

Circuit Judges.

Paul F. Macri with whom William D. Robitzek and Berman &

Simmons, P.A. were on brief for appellant.

Raymond Michael Ripple and John C. Wyman with whom Murtha

Cullina LLP was on joint brief for appellees.

September 23, 2008
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BOUDIN, Circuit Judge. E.I. du Pont de Nemours and

Company ("DuPont"), based in Delaware, is a well-known maker of

chemical and other products. In selling its solid surface

materials, DuPont for a number of years franchised distributors,

each with an exclusive marketing area or areas (referred to as the

franchisee's "GMA"). One of these distributors--Maine based New

England Surfaces ("NES")--held the exclusive franchise for much of

New England. The present appeal follows DuPont's termination of

NES, NES' law suit against DuPont and the district court's

dismissal of NES' claims.

NES, in various corporate incarnations, had for many

years distributed DuPont solid surface materials. Under its

franchise agreements, NES purchased the raw DuPont materials and

resold them, primarily to fabricators trained by NES, who made the

final products--for example, countertops--and resold them to

retailers or customers. In the last full year before being

terminated, NES sold more than $31 million of DuPont products, $27

million of which were of Corian, DuPont's leading (and highly

profitable) solid surface countertop material.

In 2000, DuPont entered into new franchise agreements

with NES covering three main surface product lines, to continue

indefinitely until terminated by either side, which was allowed

"with or without cause, upon at least thirty days prior written

notice." The agreements were to be "governed and construed in
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accordance with the laws of the state of Delaware without giving

effect to the conflict or choice of law provisions thereof."

Although not stated in the agreements, DuPont expected that

franchisees would not carry products that competed with the DuPont

lines carried by the franchisees.

The relationship between the parties began to deteriorate

in 2002. NES then held the franchises for Maine, Rhode Island and

two northern counties in Connecticut. In 2002, at DuPont's urging

NES acquired the struggling Connecticut-based company Kilstrom,

which had the DuPont franchise as distributor for the remainder of

Connecticut as well as Western Massachusetts. The purchase

included Kilstrom's 70,000 square foot office and warehouse in

Wallingford, Connecticut; fifteen NES employees thereafter worked

primarily in Connecticut.

Following the purchase, NES began to have difficulty

meeting DuPont-determined sales goals, which had been amended to

include Kilstrom's quota. The change in performance may have owed

something both to Kilstrom's condition and to the expiration of

DuPont's patent protection on Corian, which led to Asian producers

offering identical solid surface products at lower prices. It also

appears that public tastes were shifting towards surfaces like

granite that DuPont did not offer.

Other DuPont franchisees also encountered difficulties

and, in early 2003, a group of nineteen DuPont distributors (self-
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styled as the "G-19") joined together, aiming to present a "united

front" in negotiations with DuPont. Three of these distributors

(the "G-3") were selected to deal directly with DuPont, the

chairman being George Pattee, the president of Parksite, Inc., a

large DuPont franchisee based in Illinois. But the negotiations

did not bear fruit and DuPont began to express dissatisfaction with

the performance of NES and certain other franchisees.

By Fall 2003, NES had been placed on "critical review" by

DuPont for failing to meet its revised sales goals. On December 5,

2003, DuPont required NES to create a "corrective action plan" for

its performance difficulties and provide monthly-updated purchase

forecasts. On February 11, 2004, Charles Trapani, who would later

become president of NES, recommended (unsuccessfully) that NES

begin to develop a relationship with DuPont competitors. In

Trapani's words, NES was on a "slippery slope" with DuPont that was

certain to end badly. 

In April 2004, DuPont sent another warning to NES. By

late 2004, DuPont's frustration with several distributors led it to

explore a new approach to distribution, which DuPont called its

"Route to Market Study." Parksite agreed to participate so that

the distributor point-of-view could be presented, but did not

initially disclose its role to its fellow G-19 members. Parksite

quickly became aware that the project was targeted at certain
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distributors and, fearing what would come next, initiated

discussions with DuPont, hoping that DuPont would acquire it. 

Although Parksite later revealed the study to other G-19

members, it kept its negotiations with DuPont secret. By mid-April

2005, DuPont was discussing terminating NES and replacing it with

Parksite. Later that month, DuPont held meetings with NES,

following up with a further critical letter to NES. Thereafter,

Parksite refused to enter into a proposed G-19 agreement that

distributor-members would agree not to accept any part of the GMA

of a distributor terminated by DuPont without cause. 

In October 2005, DuPont hosted a conference for

fabricators, which NES also attended, and unveiled its "Cool Deal"

promotion for 2006, which included substantial Corian price cuts

for both distributors and fabricators. NES held its own fabricator

conference in January 2006, looking toward the "Cool Deal"

promotion. By then, DuPont had already told Parksite privately

that NES would definitely be terminated. Nevertheless, in February

2006, DuPont invited all its distributors to participate in the

"Cool Deal" promotion--subject to conditions.

To participate, each distributor was required to submit

data about the retailers that the distributor was targeting for the

promotion, including the name, address, telephone number and

contact name for the retailer; and the amount of sales that the

distributor had made of a particular product series in 2005. In
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March, DuPont insisted that NES provide its complete customer list

with sales figures, claiming that the data was needed to track

results against the revised sales goals for distributors

participating in the program.

One week later, Parksite and DuPont executed an agreement

for Parksite to distribute Corian products in New England,

providing that it would take effect upon the "termination by DuPont

[of NES]." On April 4, 2006, at one p.m., DuPont notified NES that

it would be terminated as an exclusive distributor in thirty days

and be unable to distribute DuPont products at all thirty days

after that. Four hours later, DuPont sent a fax to fabricators,

retailers and builders in what had previously been NES' GMA,

announcing that NES was being terminated.

The next day representatives from both DuPont and

Parksite began visiting NES' customers, focusing attention on NES'

largest customers. NES alleges that several of its customers were

told that NES would be going out of business, although at the time

NES had no such plans. Customers were also informed that if they

wanted to ensure a continued supply of DuPont products they would

need to contract with DuPont and not NES. 

In the six months following NES' termination, Parksite

and DuPont generated $15,440,789 worth of sales in NES' old region.

NES also attempted to acquire competing surface products but, with

a limited supply of customers and an inability to supply DuPont
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products, quickly began a slide into collapse. In May 2006, NES

sued DuPont and Parksite in federal district court in Maine based

on diversity jurisdiction, seeking immediate injunctive relief to

preserve its distributorship. The district court denied temporary

relief and, in December 2006, NES went out of business and later

sold its name and customer list to its former head for only $5,000.

Thereafter, in its pending district court lawsuit NES

sought damages on numerous grounds; the theories of central

importance on this appeal included (1) tort claims for fraudulent

and negligent misrepresentation, breach of fiduciary duty and

interference with contractual and prospective economic relations;

(2) a statutory claim under the Connecticut Franchise Act, Conn.

Gen. Stat. § 42-133l; and (3) breach of the covenant of good faith

and fair dealing arising out of the franchise agreements. 

The district court dismissed certain of NES' claims as a

matter of law in October 2006 and after discovery granted

defendants summary judgment on others in mid-September 2007. In

late December 2007, the district court granted a renewed defense

motion in limine to exclude NES' proffered damages witnesses.

Based on this exclusion of evidence, the district court granted

judgment for defendants on the remaining claims, as they had

requested in the in limine motion, and this appeal followed.

On this appeal, NES first contests the district court's

in limine exclusion of NES' proposed testimony on damages and its
NES' damages expert John Berry estimated damages to NES as 1

$6,347,000--the remaining nine months of profits that it had

budgeted for sales of DuPont products in 2006. In addition, NES

pointed to DuPont's $15,440,789 in sales in the New England region

following the termination as sales that otherwise would have been

made by NES if defendants had not violated their duties to NES. 

This number was significant because it closely hewed to what NES

had budgeted in sales for the year; NES argued that this was proof

that its budgeted profits were reliable.

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consequent dismissal of NES' then-remaining claims. These

surviving claims stressed (first) DuPont's obtaining NES' customer

lists (claiming fraudulent and negligent misrepresentation and

breach of an implied covenant of good faith and fair dealing) and

(second) defendants' contacts with NES' customers after the

termination (claiming interference with contractual rights and

prospective economic advantage).

The district court's predicate for dismissing these

claims was the exclusion of NES' damages evidence, as set forth in

pretrial submissions and deposition testimony. That proposed

evidence was to be offered through John Berry, NES' chief financial

officer, whom NES designated an expert, and Robert Dion, NES' owner

and chief executive officer. This testimony was configured to 1

dovetail with NES' central contention that its termination by

DuPont was wrongful, which was the thrust of a number of its

original claims.

But those claims had already been dismissed when the

district court granted the motion in limine. By contrast, the

remaining claims which had survived that initial dismissal and
See, e.g., Lowe's Home Centers, Inc. v. General Elec. Co., 381 2

F.3d 1091, 1096 (11th Cir. 2004); Morley-Murphy Co. v. Zenith

Electronics Corp., 142 F.3d 373, 381-82 (7th Cir. 1998); General

Auto Parts Co., Inc. v. Genuine Parts Co., 979 P.2d 1207, 1212

(Idaho 1999); Szczepanik v. First S. Trust Co., 883 S.W.2d 648,

649-50 (Tex. 1994).

-9-

summary judgment asserted that Dupont and Parksite had by fraud and

misrepresentation frustrated NES' sales of DuPont products during

the sixty-day period (following notice but before termination

became effective) and lessened NES' ability to provide customers

competing products then or thereafter. In dismissing the remaining

claims, the district court explained:

Evidence of lost profits and loss of the value

of the company due to lost DuPont sales, while

relevant to any claims of unlawful termination

of the distribution agreements, is simply not

relevant to the claims that remain in this

case. 

Although trial court decisions on the exclusion of

evidence are sometimes said to be reviewed for abuse of discretion,

e.g., United States v. Guerrier, 428 F.3d 76, 79 (1st Cir. 2005),

the reality is that the standard depends on the rationale for the

exclusion, which can be a matter of fact, law or logic. Cameron v.

Otto Bock Orthopedic Indus., Inc., 43 F.3d 14, 16 (1st Cir. 1994).

Whether lost profits was a rational basis for damages for the

claims made here may be closer to the law end of the spectrum, but 2

nevertheless we agree with the district court.

NES' projection of lost profits (based on the premise of

a continued franchise) did not show what NES had lost through
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DuPont's allegedly wrongful obtaining of NES' customer lists or

alleged misrepresentations to NES' former customers. Let us assume

that NES, unhindered by fraud or falsehood, could have rebuilt its

business with a new non-DuPont product. Even so, NES' projection

of earnings as a DuPont distributor would not be a reliable

indication of what its new post-termination business would have

earned.

First, whatever substitute product NES might have

procured would not have been labeled as DuPont Corian or assured a

similar profit. Second, NES would at best have been competing with

DuPont, itself selling Corian (at a newly reduced price) to New

England customers who had long purchased it. Third, DuPont already

had names of a number of those customers even if it did not know

their sales volume and even if some fabricators had been purchasing

Corian without their names having been registered with DuPont.

Maine courts, as elsewhere, allow prospective profits as

damages only if they can be estimated with reasonable certainty.

E.g., Eckenrode v. Heritage Mgmt. Corp., 480 A.2d 759, 765 (Me.

1984). Neither NES' pre-termination projections as a DuPont

distributor nor DuPont's actual post-termination sales shows what

NES was likely to earn selling a substitute product in competition

with DuPont. In all likelihood, NES' damage calculations were not

prepared to cover the contingency that its wrongful termination

claims might fail short of trial. 
-11-

NES argues that DuPont's misrepresentations began when it

led NES to think it would participate in the "Cool Deal" promotion;

and (NES argues) had it known in late 2005 that it was on its own,

an alternative source of supply could have been procured before

DuPont terminated NES. Even if so, projected Corian profits were

not a plausible forecast of NES' profits competing with DuPont.

Nor would DuPont likely have given NES more than thirty or sixty

days to develop a new supply source had termination occurred at an

earlier time.

NES also contends that were it not for DuPont's tortious

acts, NES would have retained the exclusive use of its customer

data, implying that DuPont would not have been able to compete

effectively with NES. But DuPont already was in possession of some

(although not all) of the customer names. And NES customers

unknown to DuPont would have had good reason to seek DuPont out

once NES was terminated. NES does not argue that, absent the name

and volume information it acquired, DuPont would not have dared to

terminate NES at all.

Any such misrepresentations would likely have caused some

injury by diverting some sales during the sixty days when NES could

still sell DuPont products. Or, NES might have tried to assign a

value to the customer list information before providing it to

DuPont. Courts are fairly generous in allowing reasonable

estimates as to damages, especially where intentional torts have
-12-

occurred. See Restatement (Second) Torts, § 435B cmt. a (1965).

But no rational estimate on either theory was proffered.

Two related contentions by NES deserve brief mention:

first, that even assuming the motion in limine was properly

granted, the district court had no business moving from there to a

dismissal of the remaining claims because no summary judgment

motion or motion to dismiss was pending; and, second, that

exclusion of the damage testimony does not justify dismissal

because "lost profits would be only one method by which NES could

prove damage." 

 This might be a different case if NES had met the

dismissal with a claim of surprise, a motion for reconsideration

and a proffer as to how it expected to prove damages on the

remaining claims without the excluded testimony. It made no such

motion. Even now it does not explain what other evidence it had to

show specific dollar damages, short of the conclusory accusation

that DuPont's actions caused it to lose "goodwill." 

Further, defendants' in limine motion did say that if the

motion were granted, NES' remaining claims would fail for lack of

any proof of damages, and then asked the district court to enter

judgment for the defendants. This request for judgment effectively

reiterated the defendants' request for summary judgment on these

claims. NES thus had an obligation to respond to this motion by

presenting any available evidence, such as non-expert testimony it
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planned to offer, that would support denial of the request for

judgment.

NES argues that its customer lists could be treated as

misappropriated assets and that DuPont had independently budgeted

to purchase them. But there is no indication as to a specific

amount budgeted by DuPont, nor any proposed testimony by an NES

witness offering an expert valuation. NES says it was not required

to produce such information in advance of trial which, if expert

testimony is at issue, is wrong. See Fed. R. Civ. P. 26(a)(2)(A).

In all events, NES should have told the district judge of this

fall-back theory.

Finally, NES makes two related arguments based on its

asserted potential to receive nominal damages for the alleged

wrongs committed by defendants. Initially, it claims that the

district court recognized that it was entitled to nominal damages,

and therefore it had the right to claim those damages at trial.

Then, it says that had it been awarded nominal damages, it would

also have been entitled to secure meaningful punitive damages. 

Under Maine law, which the court applied to the remaining

claims, nominal damages may be awarded without proof of actual loss

in only two categories of tort cases neither of which are at issue

here, Horton & McGehee, Maine Civil Remedies § 15-2(d)(2), 331 (3d

ed. 1996); see also Vallely v. Scott, 138 A. 311 (1927) (stating

actual loss requirement). And, contrary to NES' argument, in Maine
Because the claim based on a fair dealing covenant sounds in 3

contract, arguably Delaware law governed (as the parties had agreed

for contract claims) and, under Delaware law, arguably punitive

damages are allowed based on nominal damages. See Marcus v. Funk,

No. 87C-SE-26-1-CV, 1993 WL 141864, at *1 (Del. Super. Apr. 21,

1993) (citing Restatement (Second) of Torts § 908 cmt. c (1979)).

However, NES did not raise this argument either on motion for

reconsideration, its briefs in this court, or at oral argument. 

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punitive damages are not available where only nominal damages are

awarded. Stacy v. Portland Publ'g. Co., 68 Me. 279 (Me. 1878); see

also Hall v. Edwards, 23 A.2d 889, 890 (Me. 1942) (noting rule in

Maine). 

3

On this appeal, NES has abandoned most of its claims

based on wrongful termination but it does rely on one closely

related claim, namely, a count asserting DuPont's liability under

the Connecticut Franchise Act. This statute protects franchisees

against termination without cause, even where the franchise

agreement allows termination in any circumstance, but applies "only

to franchise agreements . . . the performance of which contemplates

or requires the franchisee to establish or maintain a place of

business in [Connecticut]." Conn. Gen. Stat. § 42-133h. 

If the statute applies, it overrides the termination

without cause provision in DuPont's franchise agreements, Conn.

Gen. Stat. § 42-133f(f) ("Any waiver [of the statute's rights]

which is contained in any franchise agreement . . . shall be

void."); but the district court ruled on summary judgment that the

agreements did not require NES to maintain a place of business in
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Connecticut and that, whatever NES may have intended when it bought

Kilstrom, it was mere conjecture that DuPont had any belief as to

whether NES would maintain a Connecticut place of business. 

Review on a grant of summary judgment is de novo both as

to pure legal issues and as to whether the evidence created a

material issue of fact requiring a trial. McGuire v. Reilly, 386

F.3d 45, 56 (1st Cir. 2004). A threshold question is what the

statute means by saying that the "performance" of a franchise

agreement "contemplates" a place of business in Connecticut. The

district court read this language to require that DuPont, as well

as NES, have a subjective expectation of an NES presence in

Connecticut. 

It well might be enough if a reasonable party in DuPont's

position would foresee that NES would likely maintain Kilstrom's

existing place of business. The statute does not say that the

"parties" must both share a subjective intent and its main purpose

is to protect "Connecticut" franchisees, see H.R. Proc., 1972

Sess., p. 2777 (Statement of Rep. Webber). The statute's place of

business language also makes clear that a franchisee can qualify--

at least to the extent of its Connecticut operations--wherever its

headquarters. We could find no direct precedent, although case law

from other jurisdictions suggests that the place of business
Dr. Pepper Bottling Co. of Paragould v. Frantz, 842 S.W.2d 37, 40 4

(Ark. 1992) (statute did not require agreement to refer to a fixed

location in state); Crone v. Richmond Newspapers, Inc., 384 S.E.2d

77, 80-81 (Va. 1989) (statute requires merely that "the business

transacted" have a "nexus" to Virginia). 

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requirements in such statutes are generously construed in favor of

the franchisee. 

4

However, the difference between objective and subjective

intent may not matter here because what a reasonable person would

expect is relevant evidence of what DuPont did expect. And on the

present record (what the evidence at trial might show is a

different matter) a jury could believe two things: that DuPont

"knew" through those involved in its dealings with NES that

Kilstrom had a substantial physical footprint in Connecticut and

that--for NES to service customers in Connecticut far from its

Maine facility-- such a presence might well be maintained. 

Kilstrom was DuPont's principal distributor in

Connecticut and DuPont could hardly be ignorant of how it operated.

In addition, DuPont added the former Kilstrom sales quota to that

of NES, informally promising NES promotional support. Absent other

facts, a jury could reasonably conclude that DuPont expected,

whether or not it cared, that to justify the Kilstrom purchase and

to meet its revised sales goals, NES would carry on Kilstrom's

place-of-business presence in Connecticut, thus triggering the

statute. 
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DuPont says that the statute was not meant to apply to

out of state businesses like NES. But the legislative history it

cites says only that an out of state franchisee is not protected

merely because the franchisor is a Connecticut company, which is

another matter entirely. 28 S. Proc., Pt. 10, 1972 Sess., p.3240-

41 (remarks of Sen. Kevin Johnston). This hardly suggests that an

out of state franchisee is unprotected where it maintains a

Connecticut place of business, at least to the extent of its instate franchise.

The question remains whether the statute can apply, given

that the franchise agreements provide that they are to be governed

by Delaware law. DuPont argues that the district court said no,

giving rise to an alternative ground which NES cannot challenge

because it did not brief the issue. By our reading, the district

court rested on the lack of a contemplated Connecticut base,

mentioning the choice of law provision only to indicate that the

parties never contemplated that NES would maintain a place of

business in Connecticut.

Indeed, DuPont merely cites the choice of law provision

as the district court's alternative ground without seriously

briefing it, but presumably DuPont could renew the Delaware law

argument if we merely remanded; this is primarily an issue of law,

but it may not be an easy question. Nor do we think it is resolved

in DuPont's favor by Northeast Data Systems, Inc. v. McDonnell
Compare Tele-Save Merchandising Co. v. Consumers Distributing Co., 5

Ltd., 814 F.2d 1120 (6th Cir. 1987) (choice of law provision

applying law of New Jersey precluded application of Ohio Business

Opportunity Plans Act even though Ohio Act had explicit no-waiver

provision) with Modern Computer Sys., Inc. v. Modern Banking Sys.,

Inc., 858 F.2d 1339, 1342-45 (8th Cir. 1988) (agreement to apply

Nebraska law to franchise agreement would not abrogate franchisee's

right to protection under Minnesota Franchise Act). 

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Douglas Computer Systems Co., 986 F.2d 67 (1st Cir. 1993), which

was concerned only with a chapter 93A claim under Massachusetts

law, which (critically) contains no anti-waiver provision. 

Because the district court's jurisdiction is based on

diversity, the question in part is what a Maine state court would

do with the choice of law provision. Klaxon Co. v. Stentor Elec.

Mfg. Co. Inc., 313 U.S. 487, 496 (1941). Maine, in deciding a

comparable issue, Baybutt Constr. Corp. v. Commercial Union Ins.

Co., 455 A.2d 914, 918 (Me. 1983), relied on the test set forth in

the Restatement (Second) of Conflict of Laws § 187 (1971), to

resolve such problems--a test whose application to the present

problem has divided other courts.5

Under the Restatement test, a forum selection clause can

abrogate state law that would otherwise apply in two situations.

The first is when "the particular issue is one which the parties

could have resolved by an explicit provision in their agreement

directed to that issue." Restatement (Second) Conflict of Laws §

187(1) (1971). However, the Connecticut statute voids any waiver

of its protection, Conn. Gen. Stat. § 42-133f(f), and under state
Restatement, supra, § 187 cmt. g ("[A] fundamental policy may be 6

embodied in a statute ... which is designed to protect a person

against the oppressive use of superior bargaining power."); see

also Grand Light & Supply Co., Inc. v. Honeywell, Inc., 771 F.2d

672, 677-78 (2d Cir. 1985) (purpose of Connecticut Franchise Act to

"prevent a franchisor from taking unfair advantage of the relative

economic weakness of the franchisee").

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precedent this provision is construed to apply to choice of law

clauses. Pepe v. GNC Franchising, Inc., 750 A.2d 1167, 1168 (Conn.

Super. Ct. 2000).

Alternatively, a forum selection clause may be given

effect unless

application of the law of the chosen state

would be contrary to a fundamental policy of a

state which has a materially greater interest

than the chosen state in the determination of

the particular issue and which . . . would be

the state of the applicable law in the absence

of an effective choice of law by the parties.

Restatement, supra, § 187(2)(b). Connecticut's Franchise Act is a

fundamental state policy within the meaning of the Restatement, as

a directly pertinent comment makes clear. How to apply the 6

balancing test is perhaps a closer question.

Let us assume for argument's sake that Delaware's would

be "the applicable law in the absence of an effective choice of law

by the parties": does Delaware have "a materially greater

interest" than Connecticut in whether NES may be terminated without

cause? Connecticut has an affirmative policy of protecting local

franchisees from termination at will; it is far from clear that
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Delaware has any policy against such protection of franchisees

merely because the franchisor is incorporated in Delaware. 

The only precedent we could find ourselves appears to

support NES. See Carlos v. Philips Bus. Sys., 556 F. Supp. 769,

774 n. 4 (E.D.N.Y. 1983), aff'd 742 F.2d 1432 (2d Cir. 1983), but

the issue has not been briefed by either side in this court, and we

are reluctant to carry the discussion further. The ground on which

the district court decided the issue is not persuasive to us; and

the alternative ground invoked (but not developed) by DuPont is not

so clearly conclusive as to make a remand pointless. 

NES' remaining arguments as to claims not yet discussed

are readily answered. First, it says that the franchise agreements

were unconscionable insofar as they limited DuPont's liability for

termination of the agreement or for communications with prospective

customers incident to such a termination. One of the counts of the

complaint charged unconscionability, but the district judge

dismissed the claim pursuant to defendants' motion to dismiss,

saying that the controlling provision--allowing termination by

either side on thirty days notice--was reciprocal and not unfair.

Unconscionability is ordinarily a defense to a claimed

breach of contract, 8 R. Lord, Williston on Contracts § 18:1 (4th

ed. 2006), but NES may mean that the termination clause is invalid,

thereby leaving it with a contractual right to its franchise. Yet

insofar as the focus is on the right to terminate on thirty days
-21-

notice, Delaware law rejects the defense unless the terms are "so

one-sided as to be oppressive" or there is "no reasonable relation

to the business risks involved." Tulowitzki v. Atlantic Richfield

Co., 396 A.2d 956, 960 (Del. 1978). A reciprocal right to

terminate, as between competent businesses, is neither one-sided

nor oppressive nor lacking in business purpose. 

The provision immunizing communications with customers

possibly could be read so broadly as to raise unconscionablility

problems (for example, by immunizing dishonest statements about

NES); but the district court did not rely on it in rejecting the

tort claims relating to communications with NES customers, and it

was irrelevant to the outcome. The fatal flaw there was the lack

of specific damages tailored to the supposed wrong. 

Second, NES contests the district judge's initial grant

of summary judgment on one other claim: that Parksite breached a

fiduciary duty owed to NES. NES argues that Pattee's role as the

lead representative of the G-3 created a fiduciary duty owed to the

remaining members of the G-19, including NES; and it says that

Pattee breached this duty by using his role to steer the Route to

Market study in its favor and then by failing to inform NES that

DuPont planned to terminate it. 

The district judge held that there was no fiduciary

relationship between Parksite and NES, but there is a shorter route

to the same end. Whatever duty Pattee may have had to the G-19
-22-

group with respect to any negotiations on behalf of the group, his

firm--like NES--remained independent in its distributor

relationship with DuPont. In fact, Parksite refused to sign an

agreement, circulated among G-19 members, whereby each member would

have pledged not to accept any part of the GMA of a distributor

terminated by DuPont without cause.

So, if there was some fiduciary responsibility, which is

perhaps doubtful, it was narrowly focused and the conduct

complained of was not within its scope. The Route to Market study

was not a project of the G-19, nor is there any claim that Parksite

obtained information in its capacity as a G-3 member that it used

to its advantage. Limited cooperation among business rivals does

not imply any general duty to look after each other's interests

beyond the joint undertaking.

The judgment of the district court is affirmed, save for

NES' claim based on the Connecticut Franchise Act. The judgment as

to that claim is vacated and the case is remanded for further

proceedings consistent with this decision. With the case thus

narrowed, the parties ought to consider the possibility of

settlement in lieu of further costly litigation. Each party shall

bear its own costs on this appeal.

It is so ordered.