Simmons Foods, Inc. v. Hill’s Pet Nutrition, Inc.

Simmons Foods, Inc. (Simmons) (plaintiff) and Hill’s Pet Nutrition, Inc. (HPN) (defendant) engaged in business dealings over the course of several years through which Simmons sold to HPN “poultry by-product meal” to be used as an ingredient in HPN’s pet food products. These dealings involved a series of output contracts and requirements contracts, usually for one-year periods. In 1995, Simmons expanded its operations and invested in new equipment in order to produce special, “low ash” poultry meal to meet HPN’s needs. In 1997, the parties met to discuss the 1998 contract. Following the meeting, Simmons faxed a document to HPN containing a list of terms, which Simmons would later claim was a three-year agreement between the parties. Instead of listing output or requirements terms, the agreement listed a specified amount of product to be sold to HPN at a specified price in 1998. HPN responded by ordering the specified amount of Simmons’ product for 1998. When the parties later met to discuss prices for 1999, the parties disagreed and ultimately ended their relationship. Simmons then sued for breach of contract, alleging a three-year agreement arising from the document faxed to HPN in 1997. Simmons also raised a promissory estoppel claim, alleging that it purchased new equipment in 1995 and 1996 in order to produce “low ash” poultry meal in reliance on an oral promise by HPN to continue the business relationship for a long period of time. Simmons sought to be compensated for this investment. The district court granted HPN’s motion for summary judgment on each claim, and Simmons appealed.