UNITED STATES COURT OF APPEALS July 19, 2024

Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

DAVIDSON OIL COMPANY,

Plaintiff - Appellee.

v. No. 23-2116

CITY OF ALBUQUERQUE,

Defendant - Appellant. _________________________________

Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:20-CV-00838-RB-JMR) _________________________________

Robert J. Desiderio, Sanchez, Mowrer & Desiderio, P.C., Albuquerque, New Mexico (Janette Angelica Duran, Sanchez, Mowrer & Desiderio, P.C., Albuquerque, New Mexico; Lauren Keefe and Devon King, Office of the City Attorney, Albuquerque, New Mexico, with him on the brief), for Defendant-Appellant.

Ross L. Crown, Lewis Roca Rothgerber Christie LLP, Albuquerque, New Mexico, for Plaintiff-Appellee. _________________________________

Before McHUGH, MURPHY, and CARSON, Circuit Judges. _________________________________

CARSON, Circuit Judge. _________________________________

A buyer who signs a fixed-price requirements contract knows the market price

for the commodity will fluctuate but the buyer’s obligation will remain the same. If

the market price rises, the fixed price will insulate the buyer from the market Appellate Case: 23-2116 Document: 010111081835 Date Filed: 07/19/2024 Page: 2

fluctuation. But if the commodity’s market price falls, the buyer must honor its

contract—even though the buyer could attain a better bargain elsewhere.

Defendant City of Albuquerque contracted Plaintiff Davidson Oil Company to

fulfill all of Defendant’s fuel needs at a fixed price. Fuel market prices dipped, and

Defendant terminated its contract with Plaintiff by invoking its termination for

convenience clause. But before Defendant terminated the contract, Plaintiff

protected itself against market fluctuation by signing hedge contracts with a third

party—contracts Defendant knew Plaintiff had signed. Plaintiff sued Defendant for

breach of contract, and both parties moved for summary judgment. The district court

granted Plaintiff summary judgment, awarding Plaintiff the value of its hedge

contracts as damages. We exercise jurisdiction under 28 U.S.C. § 1291 and affirm.

I.

Defendant City of Albuquerque solicited bids from fuel distributors to supply

its fleet with diesel and gasoline. Plaintiff Davidson Oil Company submitted the

winning bid, and the parties signed a requirements contract (“Supply Contract”).1

Rather than contracting for a set amount of fuel, Defendant agreed to pay a fixed

price for each gallon of diesel and gasoline Defendant ordered from Plaintiff for a

1 A requirements contract is one “in which the purchaser agrees to buy all of its needs of a specified material from a particular supplier, and the supplier agrees, in turn, to fill all of the purchaser’s needs during the period of the contract.” Mason v. United States, 615 F.2d 1343, 1346 (Ct. Cl. 1980) (quoting Media Press, Inc. v. United States, 566 F.2d 1192 at *1 (Ct. Cl. 1977)). 2 Appellate Case: 23-2116 Document: 010111081835 Date Filed: 07/19/2024 Page: 3

calendar year.2 But the Supply Contract also included a Termination for

Convenience (“TFC”) clause, providing that Defendant could “terminate the contract

at any time by giving at least [sixty] days’ written notice to [Plaintiff].”

Just days after Plaintiff signed t