## Facts

- Lincoln Composites, Inc. manufactured composite tanks and equipment for compressed natural gas storage and transport, including “Titan Module” units.
- Firetrace USA, LLC supplied fire-detection tubing used in Lincoln’s Titan Modules.
- Beginning around 2008, Lincoln experienced recurring defects in Firetrace’s tubing, including brittleness and breakage.
- Firetrace attempted to correct the problems and supplied replacement tubing batches, but defects persisted over time.
- Lincoln stopped purchasing from Firetrace by May 2012 and sued for breach of contract and breach of express and implied warranties.
- The parties agreed a contract existed but disputed which terms governed: Lincoln’s purchase-order-referenced website terms (no remedy limitation) or Firetrace’s written terms (disclaimer of implied warranties and repair-or-replace limitation).
- A jury in the District of Nebraska returned a verdict for Lincoln and awarded approximately $900,000 in damages.
- Firetrace moved under Rule 59 for remittitur and a new trial; the district court denied the motion.
- Firetrace filed a notice of appeal while its Rule 59 motion was pending and later filed an amended statement of issues and amended record designation after the Rule 59 denial.

## Issues

1. Whether the court of appeals lacked jurisdiction because Firetrace did not file a formal amended notice of appeal after denial of its Rule 59 motion.
2. Whether the evidence permitted the jury to find that Firetrace’s repair-or-replace limited remedy failed of its essential purpose, allowing broader UCC remedies.
3. Whether the evidence permitted the jury to find Lincoln’s purchase-order-referenced terms governed the contract.
4. Whether the district court’s jury instructions warranted a new trial.
5. Whether the district court abused its discretion by denying remittitur or a new trial on the approximately $900,000 damages award.

## Decision

- The Eighth Circuit held it had appellate jurisdiction because Firetrace’s post-denial filings were construed as an amended notice of appeal under FRAP 4(a)(4)(B)(ii), and Lincoln showed no prejudice.
- The court held sufficient evidence supported the verdict, including a finding that Firetrace could not provide a workable repair within a reasonable time, so the limited remedy failed of its essential purpose.
- The court also held sufficient evidence supported an alternative basis for liability: Firetrace had notice of Lincoln’s purchase-order-referenced terms and Lincoln intended those terms to be binding.
- The court found no reversible error in the jury instructions under abuse-of-discretion review.
- The court affirmed the denial of remittitur and a new trial, concluding the damages were supported by the evidence.

## Legal Principles

- Under FRAP 4(a)(4)(B)(ii), when a notice of appeal is filed while a Rule 59 motion is pending, an amended notice is required after disposition; filings not labeled as an amended notice may suffice if they clearly express intent to appeal and cause no prejudice.
- Under UCC principles, a contractual limitation of remedy to repair or replacement may be displaced if it fails of its essential purpose, including when the seller cannot provide conforming goods through repair or replacement within a reasonable time.
- Contract terms referenced in purchase orders (including terms made available online) may bind the counterparty when the counterparty has notice and the parties’ conduct supports assent.
- Jury-instruction challenges are reviewed for abuse of discretion; instructions are upheld if, taken as a whole, they correctly state the law and allow each party to present its theory.
- A district court’s denial of remittitur or a new trial on damages is reviewed for abuse of discretion; a jury award stands where supported by sufficient evidence of loss, including reasonably supported future damages.

## Conclusion

The Eighth Circuit affirmed a jury verdict for Lincoln, holding that appellate jurisdiction existed despite the absence of a formally titled amended notice of appeal, and that the evidence supported liability and damages because the limited repair-or-replace remedy could be found to have failed within a reasonable time and, alternatively, because the jury could find Lincoln’s referenced terms governed the parties’ contract.


Lincoln Composites, Inc. v. Firetrace USA, LLC, 825 F.3d 453 (8th Cir. 2016)