Hudson Technologies, Inc. v. RGAS, LLC

Background

Hudson Technologies, Inc. and Hudson Technologies Company, collectively called Hudson, sued RGAS, LLC for allegedly breaching a contract concerning the sale of refrigerants. RGAS had decided to liquidate its refrigerant inventory. After email discussions about pricing, Hudson sent RGAS a purchase order on September 23, 2020, listing specified gases, quantities, prices, and additional terms in an attached Schedule A. RGAS responded that “all looks good,” and the parties resolved a credit-term issue the next day.

The purchase order stated that acceptance of the products depended on inspecting the cylinders and verifying the gas weights. It also required the products to be legally packaged, compliant with Department of Transportation requirements, and properly labeled. Hudson inspected products at RGAS’s warehouses and believed some products lacked required markings. RGAS shipped some products to Hudson and relabeled certain gases, but later refused to accept additional purchase orders. RGAS did not transfer most of the remaining inventory to Hudson and later sold R-22 refrigerant to others at higher prices than Hudson’s quoted price.

Rulings on the Summary-Judgment Motions

The court granted Hudson’s motion for partial summary judgment in part and denied it in part. It held as a matter of law that Hudson and RGAS formed a valid, binding contract on September 23, 2020. The court relied on the purchase order’s specific terms, RGAS’s response, the parties’ resolution of the credit term, and their partial performance. The court also held that Schedule A was part of the contract because the purchase order incorporated it by reference.

The court rejected RGAS’s arguments that the purchase order was only a placeholder, that RGAS had not sufficiently accepted it, that later communications showed no contract existed, and that Hudson’s inspection right was a condition preventing contract formation. The court reasoned that contract formation depended on the parties’ objective words and actions, not their later statements about what they subjectively intended. It also concluded that the inspection right arose under the contract and the New York Uniform Commercial Code rather than preventing the contract from forming.

The court denied both parties’ requests for summary judgment on breach. Hudson argued that RGAS breached by failing to provide compliant products and refusing to deliver most of the agreed products. RGAS argued that Hudson breached first by improperly rejecting products that complied with the agreement or had only minor defects. The court stated that the applicable breach standard depended on whether the agreement was a single-delivery contract or an installment contract. The record and briefing did not adequately establish which type of contract it was, so neither party showed entitlement to judgment as a matter of law on breach.

The court denied RGAS’s motion for summary judgment in full, including its request to rule that Hudson could not recover lost-profit damages. The court found that deciding damages before determining liability would be premature.

Other Motions and Disposition

The court denied the specified motions concerning expert reports and damages-related evidence. The opinion explains that four of those motions were denied as moot and without prejudice to renewal at a later stage because the court did not reach the issues addressed by the expert reports or the damages theories. The court also granted the parties’ remaining motions to seal and directed the Clerk of Court to close the motions listed in the conclusion.

The ruling resolved contract formation but did not resolve which party breached the contract or whether Hudson is entitled to damages.