Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 1 of 21 PageID #: 38 UNITED STATES DISTRICT COURT DISTRICT OF MAINE EMEP, LLC, Plaintiff, v. NORTH AMERICAN RECOVERY MANAGEMENT, LLC, Defendant. ) ) ) ) ) ) ) ) ) ) CIVIL ACTION Docket No. __________________ EX PARTE MOTION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION COMES NOW Plaintiff EMEP, LLC (“EMEP”), by and through its undersigned attorneys, and pursuant to Fed. R. Civ. P. 65, hereby moves ex parte for the immediate entry of a temporary restraining order (“TRO”) and the subsequent entry of a preliminary injunction. I. INTRODUCTION On June 30, 2016, EMEP and North American Recovery Management, LLC (“NARM”) entered into a binding Letter of Intent (the “Letter Agreement”), whereby EMEP agreed to purchase assets owned by NARM located on the site of the former Great Northern Paper Mill in East Millinocket, Maine (the “GNP Mill”). NARM now refuses to honor their deal, claiming for the first time (after 6 months of negotiations) that the Letter Agreement expired. Because the Letter Agreement and the parties’ course of conduct indicate otherwise, EMEP seeks to enjoin NARM from conveying and/or demolishing the assets EMEP contracted to purchase. II. FACTUAL BACKGROUND EMEP, together with the Maine Department of Economic and Community Development (the “DECD”), have partnered in a $240,000,000 initiative to acquire, upgrade and operate biomass power plants located throughout the State of Maine, including facilities in West Enfield Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 2 of 21 PageID #: 39 and Jonesboro (the “Biomass Plants”), in order to produce a synthetic biofuel using biomass (namely, wood). See Decl. of William J. Harrington, ¶ 2 (“Harrington Decl.”). The centerpiece of this initiative is the construction and operation of an energy park at the site of the former GNP Mill, which will include a state-of-the-art biorefinery (the “Biorefinery”) to process the raw fuel generated by the Biomass Plants. Id. ¶¶ 2-3. Feasibility studies estimate that the Biorefinery will produce approximately 33,000,000 million gallons per year of marketable biofuel, generating annual revenue of tens of millions of dollars. Id. ¶¶ 4-5. The Biorefinery itself – which was expected to go online in September of 2019 – will create 102 full time jobs and thousands more during the 24-month construction process. Id. ¶ 5. A. EMEP and NARM’s Letter Agreement. In March of 2016, NARM, a company specializing in the demolition and salvage of obsolete assets, purchased the buildings and equipment located at the GNP Mill site. Harrington Decl. ¶ 6. In May of 2016, EMEP approached NARM about purchasing the former GNP Mill’s assets in order to construct the Biorefinery. Id. On June 30, 2016, EMEP and NARM entered into a binding Letter Agreement, whereby EMEP agreed to purchase a power plant, several mill buildings, and equipment (collectively, the “Property”), along with an option to purchase contiguous property controlled by GNP’s Bankruptcy Trustee (the “Bankruptcy Property”). See id. ¶ 7 & Ex. 2 (Letter Agreement). The Letter Agreement explicitly states that the “parties acknowledge and agree that the terms and conditions of this LOI are binding and legally enforceable agreements of NARM and EMEP.” Id. ¶ 12 & Ex. 2 § 9 (emphasis supplied). Under the Letter Agreement, EMEP agreed to purchase the Property, as well as the option on the Bankruptcy Property, from NARM for $1,750,000.000. See Letter Agreement § 2. To secure its right to close the transaction, EMEP agreed to deliver $100,000 to NARM (the 2 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 3 of 21 PageID #: 40 “Deposit”) within 10 days of the execution of the Letter Agreement, which EMEP did on July 18, 2016 by agreement of the parties. Harrington Decl. ¶ 13 & Ex. B § 3. EMEP thereafter had sixty (60) days to complete its physical due diligence on the Property (the “Due Diligence Period”). Id. ¶ 9 & Ex. B § 5. The Letter Agreement then contemplated that the parties would execute a Purchase and Sale Agreement (the “P & S Agreement”) before the Due Diligence Period ended on August 31, 2016 (60 days after the Letter Agreement’s execution). Id. The parties further agreed that the closing of the transaction would occur within the later of (i) 30 days after EMEP completed its due diligence on the Property; or (ii) 30 days after NARM completed its operations on the Property, specifically, the removal of all non-ferrous metals from the Property (i.e., equipment used in connection with the GNP Mill’s past operations that was not needed to operate the Biorefinery) (NARM’s “Operations”). Id. ¶ 10 & Ex. B § 4. 1 B. The Parties’ Course of Dealings. In reliance on the binding obligations contained in the Letter Agreement, EMEP and its development partners began securing financing for the Biomass Plants, including a federal loan guarantee from the United States Department of Energy (“DOE”) Loan Program Office. Harrington Decl. ¶ 14. In addition to performing its due diligence on the Property, EMEP also commissioned a feasibility study for the Biorefinery. Id. Because the closing of the transaction was contingent on the completion of NARM’s Operations, see Letter Agreement § 4, which were delayed and continued throughout the fall of 2016 and into November, the closing of the Property was also delayed as well, and as a result, neither EMEP nor NARM drafted a P & S Agreement by August 31, 2016. Harrington Decl. ¶ 15. EMEP and NARM nevertheless continued to discuss the details of the transaction and 1 Except with respect to these non-ferrous metals, the parties agreed that NARM would not remove any other materials or equipment from the Property without EMEP’s written approval. Letter Agreement § 1. 3 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 4 of 21 PageID #: 41 NARM’s Operations during multiple site visits, conference calls and emails throughout September, October and November of 2016, as NARM’s Operations on the Property continued. Harrington Decl. ¶¶ 16-17. During this period, NARM consistently reassured EMEP that the parties were still bound by the Letter Agreement, and NARM never once expressed or otherwise implied that their contract had expired. Id. Instead, throughout the fall of 2016 and into November, NARM regularly assured EMEP that the parties were progressing towards closing the transaction. Id. Meanwhile, EMEP continued to expend substantial resources toward their ultimate goal – a network of biomass energy producing facilities in the State of Maine. Id. In early October, 2016, NARM approached EMEP about expanding the scope of its Operations, further delaying the execution of the P & S Agreement. Harrington Decl. ¶ 18. Specifically, NARM requested EMEP’s permission to remove additional equipment that EMEP had agreed to purchase under Letter Agreement. Id. & Exs. C & D. With the understanding that the parties were still proceeding toward the close of the transaction, EMEP authorized NARM to remove this equipment, which NARM began to do on October 14, 2016. Id. Because the closing of the transaction would occur only after NARM completed its Operations, the parties’ execution of a P & S Agreement and the closing of the sale were further delayed. Id. ¶¶ 15, 18. NARM further delayed the closing on November 4, 2016, when it requested EMEP’s authorization to demolish four additional buildings (the “Additional Demolition”) that EMEP had contracted to purchase. Harrington Decl. ¶ 19. 2 Not needing these buildings to operate the Biorefinery, but desiring to close the transaction as soon as possible, EMEP agreed that NARM could conduct the Additional Demolition only on the following conditions: (i) the Additional Demolition would begin only after the closing of the transaction; (ii) the Additional Demolition 2 These buildings were 1) paper machine Building 1-4; 2) paper machine Building 5-6; 3) a building known as the “screen room”; and 4) a building known as the “disc filter building.” Harrington Decl. ¶ 19. 4 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 5 of 21 PageID #: 42 would be completed by May 1, 2017; (iii) the Additional Demolition would not alter or interfere with any other assets identified in the Letter Agreement; and (iv) the purchase price would be revised to reflect a reduced value of the Property. Id. ¶ 20. If NARM agreed with these conditions, EMEP proposed closing the transaction by November 18, 2016 and thereafter would allow NARM to conduct the Additional Demolition once EMEP took possession of the Property. Id. During the parties’ November 4, 2016 discussion, NARM never expressed or implied that the Letter Agreement had expired, and NARM’s words and conduct – specifically NARM’s request for EMEP’s authorization to conduct the Additional Demolition – led EMEP to believe that they remained bound by the Letter Agreement. Id. ¶ 21. Later on November 4, 2016, EMEP sent NARM a P & S Agreement, along with a request for confirmation of the terms of the Additional Demolition, in order “to get everything completed as we are prepared to close in accordance with the original LOI executed between the Parties.” Harrington Decl. ¶ 22 & Ex. E. NARM responded on November 16, 2016 that its attorneys were reviewing the P & S Agreement and would be back to EMEP “shortly.” Id. ¶ 23 & Ex. F. Understanding NARM’s response as confirming that the Letter Agreement remained binding, EMEP continued to expend resources on its plan to develop the Biorefinery. Id. EMEP also closed in on its financing: on November 30, 2016, the DOE informed EMEP and its partners that Part I of their loan application had been approved and that Part II – the final step before execution of the loan agreement – could be submitted. Id. ¶ 24 & Ex. G. EMEP could not complete Part II of the application, however, until it had proof of ownership of the property. Id. C. NARM Breaches the Letter Agreement. On December 12, 2016 – following several site visits EMEP made to the Property over the previous 8 days – EMEP again requested NARM’s response to the P & S Agreement and for 5 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 6 of 21 PageID #: 43 a closing date before the end of the year. Harrington Decl. ¶ 25 & Ex. F at 4. EMEP reiterated this request on December 14, 2016, reminding NARM that EMEP needed to start the process of connecting the Biorefinery to the New England ISO power grid. Id. & Ex. F at 3. NARM promised EMEP its response “shortly.” Id. & Ex. F. at 2. EMEP made the same request on December 21, 2016, informing NARM that the Biomass Plants were in jeopardy because NARM’s Operations had delayed the closing for 4 months. Id. ¶ 26 & Ex. F at 1. On January 8, 2017, the Bangor Daily News reported that NARM had moved heavy equipment to the Property and was positioning itself to begin large-scale demolition of the GNP Mill. Id. ¶ 27. Concerned, EMEP informed NARM on January 9, 2017 that it was surprised “that you are planning to substantially to [sic] demolish the buildings you sold us,” as EMEP had been “waiting for your feedback on the P&S agreement for over 2 months now, and were hoping to progress on our agreed transaction.” Id. ¶ 28 & Ex. H. On January 9, 2017, NARM confirmed that it would only demolish the four buildings previously discussed and promised a response to the P & S Agreement later in the week, blaming the state approval process for the delay. Id. ¶ 30 & Ex. H at 2. In response, EMEP sought NARM’s confirmation of the terms of the Additional Demolition. Id. ¶ 31 & Ex. H at 1. NARM did not respond. Id. On February 1, 2017, the Maine Department of Environmental Protection granted NARM a land use permit authorizing the Additional Demolition (the “Land Use Permit”). Harrington Decl. ¶ 32 & Ex. I. Given that NARM apparently had decided to proceed with the Additional Demolition without agreeing to EMEP’s terms, EMEP spoke with state officials and learned for the first time that NARM was representing that it was no longer bound by the Letter Agreement. Id. ¶ 32. Because NARM had never expressed or implied that position to EMEP – and, quite to the contrary, had consistently reassured it of its intention to close the transaction – EMEP 6 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 7 of 21 PageID #: 44 reminded NARM on February 1, 2017 that the Letter Agreement was a valid and enforceable contract that obligated NARM to sell EMEP the Property. Id. ¶ 33 & Ex. J. On February 7, 2017, the Bangor Daily News reported that NARM had begun the Additional Demolition. Harrington Decl. ¶ 34. The article quoted NARM’s COO as stating that the Additional Demolition “will not affect any future development of the site.” Id. Reassured by this statement that the parties’ agreement was not in jeopardy, EMEP sent NARM yet another request to finalize the P & S Agreement on February 8, 2017. Id. & Ex. K. On February 10, 2017, NARM informed EMEP for the first time that “the Letter of Intent . . . expired under its terms on or about August 13, 2016,” and that “while NARM is confident that the expired LOI no longer binds the parties, they remain interested in exploring a potential sale of the Property. We will be listening to offers after March 1st.” Id. ¶ 35 & Ex. L (emphasis supplied). EMEP has had no communication with NARM since February 10, 2017, and the Additional Demolition on the Property is well underway despite the fact that NARM has not executed the P & S Agreement or closed the transaction. Id. ¶ 36. In reliance on the Letter Agreement and NARM’s representations and conduct during their negotiations, EMEP and its partners have spent approximately $6 million towards implementing its plan to purchase and construct the Biomass Plants and the Biorefinery. Id. ¶ 37. In order to protect itself from further irreparable harms, EMEP asks the Court to enjoin NARM from conveying the Property to a third party or conducting activities on the Property beyond the scope of the Additional Demolition as authorized by the Land Use Permit. III. LEGAL STANDARD “To grant a preliminary injunction, a district court must find the following four elements satisfied: (1) a likelihood of success on the merits, (2) a likelihood of irreparable harm absent 7 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 8 of 21 PageID #: 45 interim relief, (3) a balance of equities in the plaintiff's favor, and (4) service of the public interest.” Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, Inc., 794 F.3d 168, 171 (1st Cir. 2015); United States v. Adams, 473 F. Supp. 2d 108, 114 (D. Me. 2007) (same four-factor analysis to a motion for a temporary restraining order). IV. ARGUMENT A. EMEP is Likely to Succeed on the Merits. Likelihood of success on the merits is “the touchstone of the preliminary injunction inquiry,” Philip Morris, Inc. v. Harshbarger, 159 F.3d 670, 674 (1st Cir. 1998), the “most important” factor. Woodhouse v. Maine Comm'n on Governmental Ethics & Election Practices, 40 F. Supp. 3d 186, 191 (D. Me. 2014). Nevertheless, the “district court is required only to make an estimation of likelihood of success and need not predict the eventual outcome on the merits with absolute assurance.” Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 10 (1st Cir. 2013) (internal quotation marks and citation omitted). EMEP seeks injunctive relief as to its breach of contract and promissory estoppel claims. 1. EMEP’s Breach of Contract Claim. There can be no question that the Letter Agreement is an enforceable contract. The parties explicitly agreed that the terms of the document are what they say they are: “binding and legally enforceable agreements of NARM and EMEP.” See Letter Agreement § 9. Accordingly, the question becomes: did NARM breach the contract by refusing to convey the Property to EMEP? The answer to that question is a resounding yes. a. NARM’s Obligation to Convey the Property Never Expired. “In order to obtain relief for a breach of that contract, the plaintiff must . . . demonstrate that the defendant breached a material term of the contract, and that the breach caused the 8 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 9 of 21 PageID #: 46 plaintiff to suffer damages.” Tobin v. Barter, 2014 ME 51, ¶ 10, 89 A.3d 1088, 1091-92. NARM apparently contends it has not breached any contract because the Letter Agreement “expired” on August 13, 2016. Harrington Decl. ¶ 35 & Ex. L. As a practical matter, however, the Letter Agreement does not say NARM’s obligation to convey the Property to EMEP will “expire” under any circumstances. See generally Letter Agreement. Rather, the document explicitly states that “[t]he parties acknowledge and agree that the terms and conditions of this LOI are binding and legally enforceable agreements of NARM and EMEP.” Id. § 9. 3 This is not a situation where the failure of some material condition of the sale – i.e., satisfaction of EMEP’s due diligence investigation or EMEP’s inability to purchase the Bankruptcy Property, id. §§ 4-5 – caused these binding agreements to expire, or where EMEP did not tender the funds to complete the transaction and thereby breached the contract. To the contrary, EMEP is prepared to tender the sale price. Harrington Decl. ¶¶ 37, 39, 42. For reasons extraneous to the contract, NARM simply refuses to do the agreed-upon deal. This also is not a situation where EMEP’s conduct delayed execution of the P & S Agreement. As a practical matter, the Letter Agreement is silent as to which party was responsible for preparing the P & S Agreement, and the only reason neither party drafted the document in August, 2016 was because NARM delayed completing its Operations on the Property until November, which in turn delayed the closing of the transaction, as the Letter Agreement provided that closing would not occur until NARM completed its Operations. Harrington Decl. ¶ 15 & Ex. B § 4. See Gove v. Career Sys. Dev. Corp., 689 F.3d 1, 5 (1st Cir. 3 The Letter Agreement’s exclusive dealing covenant is the only provision of the Agreement that expires “upon the end of the Due Diligence Period or the signing of the P & S [Agreement], whichever occurs first.” Letter Agreement § 9. NARM’s attorney explicitly extended that covenant in her letter of February 10, 2017 when she wrote “[w]e will be listening to offers after March 1st.” See Harrington Decl. ¶ 35 & Ex. L (emphasis supplied). In any event, any expiration of the exclusive dealing covenant simply means that NARM was free to secure a backup buyer in the event that EMEP backed out of the transaction, as it was authorized to do if the Property failed its due diligence scrutiny or it could not reach agreement with the Bankruptcy Trustee. See Letter Agreement §§4-5. 9 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 10 of 21 PageID #: 47 2012) (Under Maine law, “[t[he non-occurrence of a condition precedent does not render an agreement invalid. It simply means that the duty to perform does not arise”). When NARM asked to expand the scope of its Operations beyond what was contemplated by the Letter Agreement, EMEP immediately delivered a P & S Agreement to NARM and asked to set November 18, 2016 for the closing. Id. ¶¶ 20-22 & Ex. E. Thereafter, NARM further delayed the closing because (according to NARM) getting approval for the Additional Demolition “dragged [o]n for two months.” Id. ¶ 30 & Ex. H at 2. During those two months, EMEP continuously asked NARM to close the transaction by the end of 2016. Id. ¶¶ 25-26 & Ex. F. The only reason the closing did not occur was because NARM refused to close it. Because NARM’s actions have delayed the parties’ closing, it cannot claim that their Agreement expired. b. The Parties’ Course of Dealings Extended the Time for the Parties to Execute the P & S Agreement. Even assuming arguendo that the Letter Agreement as written “expired” in August, 2016, the parties’ course of dealings extended the time for the parties to execute the P & S Agreement. It is axiomatic that “parties to a written contract may change its terms by subsequent oral agreement,” Veneer Prod. Co. v. Ross, 127 Me. 442, 144 A. 207, 210 (1929), or “a course of dealing between the parties[, which] gives meaning to or supplements or qualifies their agreement.” See RESTATEMENT (SECOND) OF CONTRACTS § 223(2). 4 It is equally well-settled that “[t]he provisions of a written contract may be modified or waived . . . by conduct which naturally and justly leads the other party to believe the provisions of the contract have been modified or waived.” Berry v. Worldwide Language Res., Inc., 716 F. Supp. 2d 34, 44 (D. Me. 2010). See also Blue Rock Indus. v. Raymond Int'l, Inc., 325 A.2d 66, 76 (Me. 1974) (“The law 4 “A course of dealing is a sequence of previous conduct between the parties to an agreement which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.” RESTATEMENT (SECOND) OF CONTRACTS § 223(1). 10 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 11 of 21 PageID #: 48 gives effect to the contract recognized by the parties in their course of dealing (and course of performance), regardless of other provisions which the parties might have adopted during their negotiations if they had seen fit to do so” (internal quotation marks and citation omitted)). Importantly, “[c]ourse of dealing may become part of an agreement either by explicit provision or by tacit recognition….” Restatement (Second) of Contracts § 223, cmt. b. 5 In this case, NARM’s conduct naturally and justifiably led EMEP to believe that they had a common understanding that the Letter Agreement did not expire in August, 2016, to wit: 1. NARM did not take the express or implied the position that the Letter Agreement had “expired” until February 10, 2017, 7 months after NARM claims the Agreement expired, Harrington Decl. ¶ 36; 2. NARM and EMEP remained in constant communication concerning the details of the transaction and NARM’s Operations during September, October and November of 2016, with NARM consistently reassuring EMEP that they were progressing towards closing, id. ¶¶ 10-11, 16-17, 36; 3. NARM continued to give EMEP access to the Property after it now claims the Letter Agreement expired, id. ¶¶ 17, 25; 4. In October of 2016, NARM requested, and EMEP granted, authorization to remove certain additional equipment from the Property (as required by the Letter Agreement), authorization it would not have needed if NARM believed the Letter Agreement had expired, id. ¶ 18 & Exs. C & D; 5. In November of 2016, NARM requested EMEP’s authorization to conduct the Additional Demolition pursuant to its obligation under the Letter Agreement to request this permission, id. ¶¶ 19-21; 6. On November 16, 2016, NARM told EMEP that it was reviewing the P & S Agreement and would get back to it “shortly,” id. ¶ 22 & Ex. G; 7. On January 9, 2017, NARM informed EMEP that it would comment on the P & S Agreement by the end of the week, blaming the permitting process for delaying the transaction, id. ¶ 30 & Ex. H at 2; and 5 “There is no requirement that an agreement be ambiguous before evidence of a course of dealing can be shown, nor is it required that the course of dealing be consistent with the meaning the agreement would have apart from the course of dealing.” Restatement (Second) of Contracts § 223, cmt. b. 11 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 12 of 21 8. PageID #: 49 NARM issued a statement on February 7, 2017 that the Additional Demolition “will not affect any future development of the site,” id. ¶ 34. In other words, NARM’s actions and conduct during the fall of 2016 clearly indicated that it intended to remain bound by the Letter Agreement. In reliance on NARM’s representations, EMEP continued to move forward with its plans to construct the Biorefinery and on reaching an agreement with the Bankruptcy Trustee to purchase a contiguous property. Id. ¶ 37 & Ex. B §§ 4-5. Accordingly, to the extent the Letter Agreement originally obligated the parties to execute a P & S Agreement by August 31, 2016, that provision of the contract was waived and/or modified “by conduct which naturally and justly leads the other party to believe the provisions of the contract have been modified or waived.” Berry, 716 F. Supp. 2d at 44. See also AccuSoft Corp. v. Palo, 237 F.3d 31, 55 (1st Cir. 2001) (“It is well established that conduct indicating a willingness to continue to honor a contract, despite knowledge that the other party has failed to perform, ‘operates as a promise to perform in spite of that non-occurrence’” (quoting Restatement (Second) of Contracts § 246)); Sleepy’s LLC v. Select Comfort Wholesale Corp., 779 F.3d 191 (2d Cir. 2015) (expiring contract may be extended by parties’ course of dealings); Gemco Latinoamerica, Inc. v. Seiko Time Corp., 623 F. Supp. 912 (D.P.R. 1985) (conduct of parties in “continu[ing] their business dealings without altering the essence of their relationship” extended duration of contract); Blalock v. Perfect Subscription Co., 458 F. Supp. 123, 126 (S.D. Ala. 1978) (“It is a general rule of law that where parties who have entered into a contract continue their respective performances under the terms of the contract beyond the expiration date of the contract, the parties are deemed to have mutually agreed to a new implied contract encompassing the same terms”). 6 6 Consideration for this waiver/modification/extension was EMEP’s agreement to allow NARM to expand the scope of its Operations and continue them past the Due Diligence Period, including after EMEP took possession of the Property. Harrington Decl. ¶¶ 19-22. 12 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 13 of 21 So, to return to the original question: PageID #: 50 did NARM breach the parties’ contract, as modified by their course of dealings? NARM has not only failed to convey the Property to EMEP, an obvious breach, but also because NARM breached its agreement “not to remove any other materials or equipment [not listed in the Letter Agreement] from the Property without the prior written approval of EMEP.” Letter Agreement § 2. EMEP agreed to allow NARM to conduct the Additional Demolition only if (i) the Additional Demolition began after the closing of the transaction; (ii) it was completed by May 1, 2017; (iii) the Additional Demolition did not alter or interfere with any other assets EMEP contracted to purchase; and (iv) the purchase price of the Property was adjusted to reflect the structures that would no longer be purchased. Harrington Decl. ¶ 20. Instead, NARM began the Additional Demolition on February 6, 2017, and because the transaction had not closed and NARM had not agreed to a revised P & S Agreement, it did so without EMEP’s authority. Id. ¶¶ 32, 34. Accordingly, EMEP is likely to prevail on its claim that NARM breached the Letter Agreement. 2. EMEP’s Promissory Estoppel Claim. Even if the Court concludes that the Letter Agreement did expire in August of 2016, NARM still is bound to sell the Property to EMEP under the doctrine of promissory estoppel. Courts in Maine follow the RESTATEMENT (SECOND) OF CONTRACTS § 90: A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. Stone v. Waldoboro Bank, 559 A.2d 781, 782 (Me. 1989) (emphasis supplied). In other words, “[p]romissory estoppel is a contract doctrine invoked to enforce promises which are otherwise unenforceable.” Cottle Enters., Inc. v. Town of Farmington, 1997 ME 78, ¶ 17, 693 A.2d 330, 13 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 14 of 21 PageID #: 51 366 n.6. 7 Accordingly, even if the Letter Agreement expired, EMEP can enforce NARM’s commitment to sell the Property based on EMEP’s performance of its end of the bargain in reliance on NARM’s continual assurances that their deal was still on. In order to prevail on its promissory estoppel claim, EMEP must demonstrate that (1) “the parties did enter into a contract; (2) that the party seeking to enforce the contract partially performed the contract; and (3) that the performance was induced by the other party's misrepresentations.” Sullivan v. Porter, 2004 ME 134, ¶ 11, 861 A.2d 625, 630. In this case, following any purported “expiration” of the Letter Agreement, the parties continued to discuss the details of the transaction during multiple site visits, conference calls and emails throughout September, October and November of 2016. Harrington Decl. ¶ 17. Throughout the fall, NARM consistently reassured EMEP that they had an agreement to sell the Property and were proceeding toward a closing of the transaction. Id. ¶¶ 16-17. In addition to delivering the Deposit to NARM, and conducting its due diligence on the Property, EMEP began working with the Bankruptcy Trustee to purchase the Bankruptcy Property, a “material condition” of its agreement with NARM, and it sent NARM a comprehensive P & S Agreement. Harrington Decl. ¶¶ 10, 22, 37 & Letter Agreement § 4. In reliance on NARM’s assurances that the parties had a deal, EMEP also 1) secured equity investors in the Biomass Plants; 2) continued through the lengthy and expensive process of applying for the DOE loan; 3) completed a feasibility study on the Biorefinery and began securing the necessary permits to construct it; 4) made several site visits to the Property; 5) spent approximately $6 million on its plan to purchase and construct the 7 While it is true that a promissory estoppel claim cannot be maintained “where an enforceable contract governs the same topic as the alleged oral promise,” Bradley v. Kryvicky, 574 F. Supp. 2d 210, 224 (D. Me. 2008), NARM claims it is not obligated to sell the Property to EMEP precisely because their contract had expired and is no longer enforceable. See Harrington Decl. ¶ 35 & Ex. L (“NARM is confident that the expired LOI no longer binds the parties….”). Moreover, the partial performance doctrine is an exception to the Statute of Frauds for land contracts. See Lush v. Terri & Ruth F/V, In rem, 324 F. Supp. 2d 90, 94 (D. Me. 2004). 14 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 15 of 21 PageID #: 52 Biomass Plants and the Biorefinery; and 6) secured funds to pay the agreed-upon purchase price of the Property. Harrington Decl. ¶¶ 14, 22-24, 37, 39, 42. Meanwhile, NARM – who knew from the outset of the parties’ negotiations that the Biorefinery was critical to the overall operation of the Biomass Plants – never once informed or otherwise implied that the parties’ agreement to purchase the Property had expired. Id. ¶¶ 16, 21, 26, 36. Accordingly, because EMEP performed all of its obligations, at substantial expense, in reliance on NARM’s assurances that they parties had a deal, EMEP will easily prevail on its promissory estoppel claim. See Saverslak v. Davis–Cleaver Produce Co., 606 F.2d 208, 213 (7th Cir. 1979) (“estoppel support[s] the notion that a party to a contract may not lull another into a false assurance that strict compliance with a contractual duty will not be required and then sue for non-compliance”). 3. Likelihood of Success is Measured on a Sliding Scale. Finally, the Court must “measure irreparable harm on a sliding scale, working in conjunction with a moving party's likelihood of success on the merits.” Braintree Labs., Inc. v. Citigroup Glob. Markets Inc., 622 F.3d 36, 42–43 (1st Cir. 2010) (internal quotation marks and citation omitted). Accordingly, even if the Court finds that EMEP’s “likelihood of success is low,” it should still consider injunctive relief if EMEP can make a “very significant showing of irreparable harm.” Maine Educ. Ass'n Benefits Trust v. Cioppa, 842 F. Supp. 2d 386, 387 (D. Me.), aff'd, 695 F.3d 145 (1st Cir. 2012). EMEP can make such a showing in this case. B. There is a Strong Likelihood of Irreparable Harm Absent Interim Relief. Lost business opportunities are a widely recognized and well established form of irreparable harm. See Woodfords Family Servs., Inc. v. Casey, 832 F. Supp. 2d 88, 101 (D. Me. 2011). For this reason, “[i]njunctions in breach of contract actions are common where there is some reasonable doubt about whether damages can be sufficient,” Ross–Simons of Warwick, Inc. 15 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 16 of 21 PageID #: 53 v. Baccarat, Inc., 217 F.3d 8, 13 (1st Cir. 2000), particularly in cases involving lost business opportunities, which “are difficult, if not impossible, to quantify.” Woodfords Family Servs., Inc. v. Casey, 832 F. Supp. 2d 88, 101 (D. Me. 2011) (citing MacGinnitie v. Hobbs Group, LLC, 420 F.3d 1234, 1242 (11th Cir.2005)). With this framework in mind, EMEP easily demonstrates that it will suffer irreparable harm if NARM is not enjoined from conveying or destroying the Property EMEP contracted to purchase. It is an understatement to say that EMEP will lose a substantial business opportunity if NARM conveys the Property to a third party or destroys assets not authorized by the Land Use Permit. The Biorefinery is the centerpiece of EMEP’s plan to construct a $240,000,000 series of biofuel power plants. Harrington Decl. ¶¶ 2-3. Feasibility and cost analyses indicate that the Biomass Plants likely will generate annual revenues of approximately $110,000,000 based on an anticipated production of 33,000,000 gallons of biofuel a year. Id. ¶ 4. But without the Biorefinery, there is no marketable fuel, and without marketable fuel, the Biomass Plants have no business purpose and are valueless. Id. ¶¶ 39-40. Moreover, the business opportunity EMEP stands to lose if NARM is not enjoined from selling or otherwise demolishing the Property is not quantifiable and cannot be compensated by money damages alone. For one, whether the Biorefinery will actually produce 33,000,000 gallons (or more) a year, whether the price of the fuel will remain at currently estimated rates (or lower), whether demand will stay consistent (or higher), and whether the price and supply of the raw materials necessary to run at full capacity does not fluctuate remains to be seen. Indeed, given the current energy climate, and the increasing demand for renewable energy, it is impossible to quantify the monetary damages EMEP will suffer if it cannot construct the Biorefinery on the GNP Mill site. Because the loss of the Biorefinery’s business opportunity is 16 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 17 of 21 PageID #: 54 not “accurately measurable or adequately compensable by money damages, irreparable harm is a natural sequel” if NARM conveys the Property to a third party or further destroys the Property’s usefulness. Ross–Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 18–19 (1st Cir. 1996). Thus, the “irreparable harm” analysis weighs convincingly in EMEP’s favor. C. The Balance of Equities Weighs in EMEP’s Favor. The irreparable harm EMEP will suffer if NARM is not enjoined from selling or otherwise demolishing the Property far outweighs any conceivable injury NARM might sustain. Indeed, NARM will suffer no harm whatsoever. According to NARM’s counsel, it has not yet begun “listening to [other] offers” and will not do so until March 1, 2017. See Harrington Decl. ¶ 35 & Ex. L. Therefore, enjoining it from selling the Property to another purchaser will not cause any certain harm because (if NARM is to be believed) it has not even begun the process of entertaining other offers. Moreover, if history is any indication, the Property itself will not appreciate in value; the GNP Mill is only valuable to a purchaser (such as EMEP) which intends to repurpose and revitalize its assets. Enjoining NARM from marketing the Property will not harm NARM’s interests, as NARM already has a buyer – EMEP. NARM simply cannot claim on one hand that it will suffer economic harm if it is restrained from selling the Property while it refuses on the other to sell that same Property to a ready, willing and able buyer. Similarly, restraining NARM from expanding the scope of its Operations on the Property beyond the Additional Demolition will not cause the company any harm. For one thing, NARM is only permitted to engage in the Additional Demolition; it does not have state approval for any other conduct. See Harrington Decl. ¶ 32 & Ex. I. Because EMEP does not seek to enjoin NARM from continuing the Additional Demolition, which NARM estimates will earn it revenues in excess of $2.5 million, see id., Ex. I at 2, the requested injunctive relief will not harm 17 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 18 of 21 PageID #: 55 NARM’s existing operations at the GNP Mill site, and NARM will continue to generate the revenue it expects to for the foreseeable future. Even if NARM intends to go beyond the Additional Demolition at some future point, any delay in doing so will not interfere with its ability to generate income from the Property’s other buildings in the future. The value of those structures is in their raw materials, which have been abandoned and are not going anywhere. Put simply, enjoining NARM from selling the Property to another purchaser, or from engaging in activities outside the scope of the Additional Demolition, will only prevent NARM from engaging in conduct it has no present plans to engage in. Moreover, “[t]he more foreseeable is the plaintiff's ultimate success, the less weight is to be given to the defendant's prospective loss.” Sec. & Exch. Comm'n v. World Radio Mission, Inc., 544 F.2d 535, 541–42 (1st Cir. 1976). Given EMEP’s strong likelihood of success on the merits, the Court should heavily discount any conceivable injury to NARM. D. Interim Relief Will Strongly Serve the Public Interest. Finally, there can be no question that the requested injunction is in the public interest. The Town of East Millinocket and surrounding areas have struggled since the GNP Mill closed in 2013, and state and local leaders fervently have been looking for a way to repurpose the Mill’s assets and rescue the local economy. EMEP’s plans for the Biorefinery are of extreme public interest to the region, and they enjoy the support of the Governor’s Office, Maine’s Congressional Delegation, and the Town of East Millinocket for good reason. Harrington Decl. ¶ 39. EMEP and its affiliates, in partnership with the DECD, have developed a $240,000,000 initiative to acquire, upgrade and operate the Biomass Plants in the economically depressed eastern Maine communities of West Enfield and Jonesboro. Id. ¶ 2. The Biorefinery is the centerpiece of this plan. Id. ¶¶ 2-3. The Biomass Plants will likely generate revenue in excess 18 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 19 of 21 PageID #: 56 of $100,000,000 a year, pumping much needed funds into the local economy. Id. ¶ 4. Once operational, the Biorefinery itself will create 102 full time jobs in a region in desperate need of them. Id. ¶ 5. The economic impact of the Biorefinery also will extend well beyond its walls: during the 24-month construction process, EMEP and the DECD anticipate that the project will create 1,020 direct construction jobs, 866 indirect construction services jobs, and 652 induced jobs in Penobscot County alone. Id. And the product? A clean, consistent source of renewable energy that relies on wood products harvested here in Maine. Again, the public’s interest in the completion of this project cannot be overstated. NARM, on the other hand, is in the business of tearing down useful assets and selling them for scrap. If not enjoined, the only legacy NARM will leave this State will be rubble, the last remains of the once bustling GNP Mill, and a sense of regret of what might have been if NARM stayed true to its obligation to sell the Mill to someone who would make good use of it. V. THE COURT SHOULD NOT REQUIRE SECURITY Although Fed. R. Civ. P. 65(c) provides that courts may issue a TRO only if the Plaintiff provides sufficient security for damages sustained by a party wrongfully restrained, it is within the Court’s discretion to determine no security is required. See Crowley v. Local No. 82, Furniture & Piano Moving, Furniture Store Drivers, Helpers, Warehousemen & Packers, 679 F.2d 978, 1000 (1st Cir. 1982), rev’d on other grounds, 467 U.S. 526 (1984). In this case, NARM already has sufficient security. For one, NARM retains the $100,000 Deposit, despite breaching its agreement with EMEP. Second, as explained above, NARM will continue to generate significant revenue from its permitted operations on the Property during the pendency of this lawsuit ($2.5 million, more revenue than it will receive from actually selling the Property itself). Third, the raw materials NARM wants so desperately to harvest will still be there if the 19 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 20 of 21 PageID #: 57 Court ultimately concludes injunctive relief was not warranted. Finally, in the event NARM loses this case on the merits, it will receive compensation for the sale of the Property. Put simply, security should not be required because NARM’s economic interests will not be harmed. VI. CONCLUSION The Property is too important to the people of the State of Maine to allow NARM to wrongfully interfere with an opportunity to bring some much needed economic stability to the region. EMEP wants to pay NARM good money to buy and develop the Property. The Town of East Millinocket wants EMEP to develop the Property. The Governor’s Office wants EMEP to develop the Property. Maine’s Congressional Delegation wants EMEP to develop the Property. And the citizens of this State need EMEP to develop the Property. The benefits of this transaction are too great to allow NARM, through its deceptive business dealings, to interfere with EMEP’s plan to bring economic relief to a region in desperate need of it. WHEREFORE, EMEP respectfully requests that the Court grant its ex parte Motion for a Temporary Restraining Order and a Preliminary Injunction against the Defendant, specifically: A) An Order that the Defendant and its officers, agents, servants, employees, attorneys, and all persons in active concert or participation with them, be temporarily and preliminarily enjoined from: i) Engaging in any activities on the Property not authorized by the February 1, 2017 Land Use Permit attached to the Harrington Declaration as Exhibit I; ii) Harming, altering, or otherwise interfering with any asset of the Property not identified in the February 1, 2017 Land Use Permit; and iii) Selling, or conveying the Property, or any assets located thereon, as defined by Exhibit A to the Letter Agreement, to any other person or entity. 20 Case 2:17-cv-00077-JDL Document 4 Filed 02/28/17 Page 21 of 21 PageID #: 58 Dated at Portland, Maine this 28th day of February, 2017. /s/ Thimi R. Mina Thimi R. Mina /s/ Alfred C. Frawley IV Alfred C. Frawley IV /s/ Jay P. McCloskey Jay P. McCloskey MCCLOSKEY MINA & CUNNIFF, LLC 12 City Center Portland, ME 04101 Telephone: (207) 772-68805 Email: afrawley@lawmmc.com tmina@lawmmc.com jmccloskey@lawmmc.com Attorneys for EMEP, LLC 21