## Facts

- Black & Veatch Construction, Inc. (B&V), a general contractor on a construction project, used a fire blanket during welding/torch work to contain sparks and protect nearby property.
- The blanket was manufactured by Auburn Manufacturing, Inc. (Auburn) and distributed by Inpro, Inc. (Inpro).
- During the work, the blanket ignited or burned through, and a fire resulted.
- Although the fire itself was brought under control, the effort to extinguish it caused extensive damage, with losses alleged to be roughly $9 million.
- Reliance Insurance Company (Reliance) insured against some or all of the loss; after Reliance entered liquidation, its statutory liquidator (Koken) pursued Reliance’s interests.
- B&V and Reliance (through Koken) sued Auburn and Inpro asserting breach of Maine’s implied warranty of merchantability, claiming the blanket was unfit for its ordinary purpose because it caught fire when used as a fire blanket.
- Auburn and Inpro did not dispute, for purposes of summary judgment, that B&V was using the blanket for an ordinary purpose.
- The summary-judgment record contained mixed testimony about the blanket’s performance: some witnesses expressed surprise that it burned, while at least one construction foreman testified the blanket performed as expected and that holes of the type observed were not uncommon in such use.
- The district court granted summary judgment for Auburn and Inpro on the merchantability claim, concluding plaintiffs had not produced enough evidence for a reasonable jury to find the blanket failed to perform as reasonably expected.
- Plaintiffs appealed to the United States Court of Appeals for the First Circuit.

## Issues

1. Whether the summary-judgment record contained sufficient evidence for a reasonable jury to find that the fire blanket was unmerchantable—i.e., not fit for its ordinary purpose—under Maine’s implied warranty of merchantability.

## Decision

- The First Circuit affirmed summary judgment for Auburn and Inpro.
- The court held that, even assuming ordinary use, plaintiffs failed to present evidence from which a reasonable jury could find the blanket did not perform as a reasonable user would expect for that ordinary use.

## Legal Principles

- Under Maine’s implied warranty of merchantability, goods must be fit for the ordinary purposes for which such goods are used.
- Merchantability is assessed by an objective standard: the question is whether the product performed as a reasonable ordinary user would expect, not whether a particular user was surprised by the outcome.
- To survive summary judgment on a merchantability theory, the plaintiff must offer evidence that would allow a factfinder to conclude the product’s performance fell below ordinary, reasonable expectations for that type of product used in that manner.
- Evidence that a product “failed” in the sense that it was involved in an accident is not, by itself, enough; the record must support an inference that the product was unfit for ordinary use.
- Where the record contains testimony indicating the product performed as expected in ordinary use (for example, that certain damage is not uncommon), subjective testimony of surprise—without more—may be insufficient to create a triable dispute on unfitness.
- On summary judgment, speculation or conclusory assertions cannot substitute for evidence establishing a genuine dispute on an essential element, including unfitness for ordinary purposes.

## Conclusion

The First Circuit affirmed summary judgment for the manufacturer and distributor because, even though the blanket was used for an ordinary purpose, the plaintiffs did not produce sufficient evidence that the blanket failed to perform as a reasonable user would expect under Maine’s implied warranty of merchantability; testimony that some witnesses were surprised the blanket burned did not, standing alone and in light of contrary testimony, create a jury issue on unmerchantability.


Koken v. Black & Veatch Construction, Inc., 426 F.3d 39 (2005)