Facts
- BioMedomics, Inc. developed a rapid COVID-19 IgM/IgG antibody test intended to help identify prior infection and track the spread of COVID-19.
- Becton, Dickinson and Company (BD) and BioMedomics began a commercial relationship during the COVID-19 pandemic for BD to obtain BioMedomics’s tests.
- The parties’ dealings involved products aimed at the U.S. market and also alleged large-volume purchases for distribution outside the United States (the “export products”).
- BioMedomics alleged that BD agreed—through discussions, requests, and course of dealing—to purchase millions of tests for export, and that BioMedomics procured and/or manufactured approximately 2.5 million export products for BD in reliance on that agreement.
- The FDA did not grant BioMedomics authorization to sell and distribute the tests in the United States under an Emergency Use Authorization (EUA), and BD allegedly wrote to BioMedomics and repudiated the parties’ arrangement.
- BD never paid for the export products BioMedomics said it had procured or manufactured for BD.
- BD sued BioMedomics to recover amounts BD had already paid in connection with products intended for U.S. distribution, asserting claims including breach of contract and unjust enrichment.
- BioMedomics answered and asserted counterclaims, including breach of contract (for BD’s failure to pay for export products) and promissory estoppel.
- BD moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that BioMedomics’s export-products contract counterclaim was barred by the UCC statute of frauds because the alleged export agreement was not in a writing signed by BD.
Issues
- Whether BioMedomics’s breach-of-contract counterclaim for BD’s alleged agreement to buy export COVID-19 antibody tests was barred by the UCC statute of frauds absent a signed writing.
- Whether BioMedomics plausibly pleaded an exception to UCC § 2-201—particularly the specially manufactured goods exception—sufficient to survive judgment on the pleadings.
- Whether BioMedomics could rely on promissory estoppel to obtain relief where BD invoked the UCC statute of frauds in a sale-of-goods dispute.
Decision
- The court granted BD’s Rule 12(c) motion in part and denied it in part.
- The court denied the motion as to BioMedomics’s breach-of-contract counterclaim concerning the export products, holding that BioMedomics plausibly alleged facts that could bring the alleged oral agreement within the UCC’s specially manufactured goods exception.
- The court granted the motion as to BioMedomics’s promissory estoppel counterclaim to the extent it sought to avoid the UCC statute of frauds or obtain contract-like relief outside the UCC framework.
Legal Principles
- A Rule 12(c) motion is assessed under the same plausibility standard used for Rule 12(b)(6); the court accepts well-pleaded facts as true and draws reasonable inferences in the nonmovant’s favor.
- Under UCC § 2-201(1), a contract for the sale of goods for $500 or more is generally unenforceable unless there is a writing sufficient to indicate a contract was made and signed by the party to be charged.
- Under UCC § 2-201(3)(a), an oral sale-of-goods contract may be enforceable if (i) the goods are specially manufactured for the buyer, (ii) they are not suitable for sale to others in the seller’s ordinary course of business, and (iii) before notice of repudiation the seller made a substantial beginning in manufacture or commitments for procurement under circumstances indicating the goods were for the buyer.
- At the pleadings stage, allegations that goods were produced or packaged for a particular buyer (including buyer-specific labeling or configuration), coupled with allegations of manufacturing/procurement commitments made before repudiation, can be enough to invoke § 2-201(3)(a) and defeat a statute-of-frauds challenge.
- In North Carolina, promissory estoppel is not generally available to circumvent statutory writing requirements in a UCC-governed sale-of-goods case; equitable theories cannot be used to supply enforceability where Article 2 controls and the statute of frauds is invoked.
Conclusion
The court held that BioMedomics’s counterclaim for breach of an alleged export-products sales agreement could proceed at the pleadings stage because BioMedomics alleged facts supporting the UCC’s specially manufactured goods exception to the statute of frauds, but it limited BioMedomics’s use of promissory estoppel where that theory would function as an end run around Article 2’s statute-of-frauds requirements.