The U.S. Court of Appeals for the Fourth Circuit affirmed a lower court decision against Bimbo Foods Bakeries Distribution, LLC in a contractual dispute involving distribution territory rights. The court issued its unpublished opinion on January 8, 2026, following oral arguments held in October 2025.
The case, *Walter R. Davis v. Bimbo Foods Bakeries Distribution, LLC*, centered on whether Davis's distribution agreement with the bakery company extended to cover an automated fulfillment center located within his contractual territory. The U.S. District Court for the District of Maryland had previously ruled in Davis's favor, finding that the distribution agreement did encompass the fulfillment center.
Judge Nicole Thacker wrote the majority opinion for the Fourth Circuit, with Judge Allison Rushing joining. Judge Rushing also wrote a separate concurring opinion. Chief Judge Albert Diaz dissented from the majority decision.
The appellate court held that the district court "correctly considered parol evidence and reasonably construed the distribution agreement as encompassing the fulfillment center." This finding suggests the lower court properly examined evidence outside the written contract to interpret the parties' intentions regarding the scope of Davis's distribution rights.
Parol evidence typically includes oral statements, negotiations, or other communications that occurred before or during contract formation. Courts generally limit the use of such evidence when interpreting written contracts, but exceptions exist when contract terms are ambiguous or unclear.
The case appears to involve fundamental questions about territorial distribution rights in the food industry, particularly as companies increasingly rely on automated fulfillment centers to distribute products. The dispute likely has implications for how distribution agreements are interpreted when new technology or business models emerge within established territories.
Bimbo Foods Bakeries Distribution, LLC, formerly known as Bimbo Foods Bakeries Distribution, Inc., serves as the defendant-appellant in the case. The company was represented by attorneys from Morgan, Lewis & Bockius LLP, including Randall Mark Levine who argued the case, and Michael J. Puma and Shannon L.C. Ammon who worked on the brief.
Davis was represented by counsel from Akerman LLP, with Daniel Robert Miktus arguing the case and J. Travers Clark working on the appellate brief.
The original lawsuit was filed in 2022 in the U.S. District Court for the District of Maryland at Greenbelt, where Senior District Judge Peter J. Messitte presided over the case. The matter proceeded through the district court before Bimbo Foods appealed the adverse ruling to the Fourth Circuit.
The Fourth Circuit's decision to affirm suggests the appellate judges found no clear error in the district court's interpretation of the distribution agreement or its consideration of parol evidence. The court's analysis focused on contract construction principles and whether the lower court reasonably interpreted the agreement's scope.
The split decision on the three-judge panel indicates the case presented complex legal issues. Chief Judge Diaz's dissent suggests at least one judge viewed the contract interpretation differently, though the specific grounds for disagreement are not detailed in the available portion of the opinion.
Distribution agreements in the food industry typically define territorial boundaries and specify which facilities, customers, or distribution channels fall within a distributor's exclusive rights. The rise of automated fulfillment centers and e-commerce distribution has created new questions about how traditional territorial agreements apply to modern logistics operations.
The court's affirmance of the district court's ruling means Davis retains whatever rights the lower court determined he possessed regarding the automated fulfillment center. For Bimbo Foods, the decision represents a failed attempt to limit Davis's distribution rights within his territory.
The opinion was designated as unpublished, meaning it does not establish binding precedent within the Fourth Circuit. However, unpublished opinions can still provide guidance on how courts might interpret similar contractual disputes.
The case highlights ongoing challenges in commercial distribution law as traditional business relationships adapt to technological changes. Distribution agreements written before the widespread adoption of automated fulfillment centers may not have anticipated how these facilities would fit within established territorial frameworks.
The Fourth Circuit's decision to consider parol evidence suggests the written distribution agreement contained ambiguous terms requiring interpretation through external evidence. This approach allows courts to examine the parties' actual intentions and course of dealing when contract language proves unclear.
For distributors and manufacturers in the food industry, the decision emphasizes the importance of clearly defining territorial boundaries and distribution channels in agreements, particularly as new fulfillment technologies emerge. Companies may need to update standard distribution agreements to address automated facilities and e-commerce operations explicitly.
The case demonstrates how contractual disputes can arise when established business relationships encounter new operational models, requiring courts to interpret older agreements in light of contemporary business practices.