Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D. Me.: Injunction bid in Maine distributor dispute involving FlipFarm products denied, (Aug 31, 2026)

By Patricia K. Ruiz, J.D.

The distributor was unlikely to succeed on claims seeking to preserve relationship after founder's death.

The federal district court in Bangor, Maine denied a request by Ocean Farm Gear & Services LLC, doing business as FlipFarm USA, for a temporary restraining order and preliminary injunction against New Zealand-based FlipFarm Systems Limited, concluding that the company had not demonstrated a likelihood of success on the merits. The dispute centers on claims under the Maine Franchise Laws and the Maine Dealership Act, as well as contract, fraud, and other causes of action arising from the termination of the parties' business relationship. The court held that the record did not support the expansive and ongoing distributorship rights sought through injunctive relief (Ocean Farm Gear & Services LLC v. Flipfarm Systems Ltd., No. 2:26-cv-00368-LEW (D. Me. Aug. 28, 2026)).

Background. Ocean Farm Gear & Services LLC is a Maine company with its principal place of business in Portland that presented itself online as FlipFarm USA. FlipFarm Systems Limited manufactures the FlipFarm oyster-farming equipment system and distributes the products through distributors in the United States and other countries. For several years, Ocean Farm Gear sold and serviced FlipFarm products for aquaculture farms on the East Coast and Gulf Coast of the United States.

The relationship began in 2019 when Keith Butterfield approached FlipFarm founder and managing director Aaron Pannell about adapting the system for his oyster farm in Maine. Butterfield later invested in and expanded the market for FlipFarm products, placing wholesale orders through Ocean Farm Gear and eventually obtaining authorization to arrange for U.S. manufacturing and to use FlipFarm's logo on the company's website. FlipFarm at one point referred to Butterfield and Ocean Farm Gear as its "US East coast distributor."

After receiving a terminal cancer diagnosis in November 2025, Keith Butterfield sought a formal distributorship agreement that would provide exclusive distribution rights along the eastern U.S. seaboard and include a buyout mechanism benefiting his family. He executed a transfer-on-death designation in March 2026 transferring his ownership interest in Ocean Farm Gear to his brother, Kevin Butterfield, effective upon his death.

The order states that shortly after Keith Butterfield's death, FlipFarm informed Kevin Butterfield that it did not intend to formalize a distributorship agreement and planned to serve the East Coast customer base directly. The company later provided a 120-day notice of termination. Ocean Farm Gear alleged that FlipFarm's actions impaired its ability to fill orders and support customers, harming the business and its goodwill.

Injunction request. Ocean Farm Gear sought a temporary restraining order and preliminary injunction that would effectively establish the terms of a distributorship arrangement between the parties. The proposed order addressed issues including supply continuity, pricing, allocation of products, technical information, referrals and other operational requirements. The court noted that none of those terms had ever been agreed to by FlipFarm.

The court first explained that ex parte temporary relief was unwarranted because FlipFarm had already provided a 120-day notice of termination, Ocean Farm Gear knew how to contact FlipFarm's counsel and there was sufficient time for the company to be heard before any ruling.

Likelihood of success. Applying the standard for preliminary injunctive relief, the court emphasized that likelihood of success on the merits is the central factor and found Ocean Farm Gear had not carried its burden.

The court characterized the parties' dealings as an indefinite but mutually beneficial commercial relationship involving the sale and servicing of FlipFarm products. However, it found that relationship had never been reduced to a written dealership or franchise agreement containing the rights Ocean Farm Gear sought to enforce through an injunction. The court further stated that the current record did not show mutual agreement on the many provisions included in the proposed order.

The court expressed skepticism toward Ocean Farm Gear's argument that it was entitled to an exclusive dealership by operation of law. In the court's preliminary view, FlipFarm's dealings were directed primarily toward Keith Butterfield because of his experience and expertise, and Ocean Farm Gear itself did not appear to hold particular significance to FlipFarm independent of Butterfield's participation.

The court said communications cited by Ocean Farm Gear tended to show that exclusive, assignable and perpetual rights had never been the subject of a mutual agreement. That assessment, the court said, undermined the company's breach-of-contract theory as well as its claims for fraud and promissory estoppel.

Statutory claims. Addressing the franchise claim, the court found it unlikely that the FlipFarm system qualified as a "good" under Maine's franchise statute. The order stated that the law applies only to equipment, machinery or appliances that use electricity, gas, wood, petroleum products or a derivative of a petroleum product for operation. Based on the preliminary record, the court found it was not apparent that the FlipFarm system contained an operational system powered by such a fuel source.

As for the dealership claim, the court noted that the Maine statute generally requires 120 days' notice before termination and found that FlipFarm appeared to have complied with that requirement. Although the statute authorizes injunctive relief, the court stated that the existence of good cause for termination would weigh against such relief.

The court concluded that the record suggested the relationship between FlipFarm and Ocean Farm Gear was closely tied to Keith Butterfield's personal knowledge and abilities and likely was expected to end upon his death. As a result, the court found it more likely than not that Butterfield's unavailability constituted good cause for termination, subject to any necessary economic reconciliation between the parties.

The Case is No. 2:26-cv-00368-LEW.

Judge: Walker, L.

Attorneys: Imothy J. Bryant (Preti, Flaherty, Beliveau & Pachios, Chartered, LLP) for Ocean Farm Gear & Services LLC. Andrew J. Bayne (Bayne Law Group LLC) for Flip Farm Systems Ltd.

Companies: Ocean Farm Gear & Services LLC; Flip Farm Systems Ltd.

Cases: FranchisingDistribution MaineNews