618 F. App'x 31
2d Cir.2016Background
- Keurig Green Mountain (Keurig) manufactures the Keurig 1.0 single-serve brewer and K-Cup portion packs; JBR, Inc. (JBR) makes unlicensed OneCups compatible with Keurig 1.0 and sells mainly in the at-home (AH) market, notably through Costco.
- Keurig announced the Keurig 2.0, incorporating a scanner that would reject unlicensed portion packs (a “lock-out” feature), meaning OneCups would not work in 2.0 machines.
- JBR sued Keurig asserting antitrust and unfair competition claims and moved for a preliminary injunction to (1) bar Keurig from marketing/selling Keurig 2.0 machines with the lock-out and (2) enjoin alleged false statements by Keurig about OneCups.
- The district court denied the preliminary injunction, finding JBR failed to show likely irreparable harm; JBR appealed.
- The Second Circuit reviewed for abuse of discretion and affirmed, holding JBR did not demonstrate the required likelihood of irreparable injury and thus failed at the threshold for preliminary injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JBR is likely to suffer irreparable harm from Keurig selling Keurig 2.0 with a lock-out | Keurig 2.0 will cause immediate and substantial loss of OneCup sales (notably at Costco), threatening JBR’s business and loan covenants | Any sales loss is speculative; many 1.0 owners may not replace brewers immediately; JBR’s own projections did not predict decline | Court: No irreparable harm shown; JBR’s sales-loss claims speculative and unsupported; injunction denied |
| Whether alleged false statements by Keurig about OneCups cause irreparable harm | Keurig’s messages (e.g., on-screen “This pack wasn’t designed for this brewer”) falsely blame OneCups and harmed retailer relations and sales | Statements are not shown to have caused irreparable injury; any harm is compensable by money damages | Court: No clear showing of irreparable harm from statements; injunction denied |
| Whether district court misapplied de minimis presumption for misleading-advertising antitrust claims | JBR: court improperly relied on a presumption that misleading advertising effects are de minimis | Keurig: even if presumption applied, JBR still failed to show irreparable harm | Court: Declined to decide whether presumption was misapplied because JBR failed to show irreparable harm regardless |
| Whether potential breach of loan covenants renders harm irreparable | JBR: lost sales could trigger covenant breach and threaten company survival, making harm irreparable | Keurig: speculative; JBR offered no evidence that lenders would not waive or that other remedies are unavailable | Court: Covenant-breach theory too speculative and unsupported to show irreparable harm |
Key Cases Cited
- Kamerling v. Massanari, 295 F.3d 206 (2d Cir. 2002) (standard of review for denial of injunctive relief)
- Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60 (2d Cir. 2007) (movant bears burden to prove irreparable harm for preliminary injunction)
- USA Recycling, Inc. v. Town of Babylon, 66 F.3d 1272 (2d Cir. 1995) (irreparable harm is indispensable for injunctive relief)
- Sussman v. Crawford, 488 F.3d 136 (2d Cir. 2007) (preliminary injunction is an extraordinary remedy requiring clear showing)
- Nat'l Ass'n of Pharm. Mfrs., Inc. v. Ayerst Labs., 850 F.2d 904 (2d Cir. 1988) (presumption that misleading-advertising effects are de minimis in monopolization claims)
- Nemer Jeep-Eagle, Inc. v. Jeep-Eagle Sales Corp., 992 F.2d 430 (2d Cir. 1993) (loan-covenant breach evidence required to show threat to continued existence)
- New York ex rel. Schneiderman v. Actavis PLC, 787 F.3d 638 (2d Cir. 2015) (irreparable harm defined as injury not remediable by monetary damages)