554, Docket 78-7587 | 2d Cir. | Mar 23, 1979
Lead Opinion
This appeal is from a preliminary injunction granted in a diversity action by the United States District Court for the District of Vermont, Albert W. Coffrin, Judge. Ap-pellee, Jackson Dairy, Inc., is “the exclusive distributor” of appellant’s “Schedule 3B” products under a contract dated March 7, 1967, in a certain Vermont-New Hampshire territory.
Briefly stated, the facts are as follows. Grand Union has eleven stores in the Jackson territory and Finast at least three. Since 1967, Jackson has distributed Hood products to these stores as well as other chains and a number of “Mom & Pop” stores in the territory. Jackson’s total sales to Grand Union and Finast in 1977 were in excess of $223,000. In early October 1978 Hood began supplying Grand Union and Finast with the “Schedule 3B” products at their central warehouses outside Jackson’s
The standard in the Second Circuit
Clearly, money would be adequate compensation for the loss of Grand Union, Fi-nast,
Accordingly we need not reach the other arguments that appellant raises, and we express no opinion on them. Nor do we express any opinion on whether the district court could appropriately award permanent injunctive relief at the trial on the merits if Jackson makes a sufficient showing of irreparable harm because of other injury, not before us now, for which money damages is inadequate compensation.
Judgment reversed; preliminary injunction vacated.
. The territory consists of four counties in eastern Vermont, the town of Stowe, Vermont, and a section of New Hampshire adjacent to the Connecticut River from Hanover to Littleton.
. The complaint incorrectly named H. P. Hood, Inc., as H. P. Hood & Sons, Inc.
. “Schedule 3B products” under the March 7, 1967, contract include yogurt, sour cream, cottage cheese, and orange juice.
. The district further ordered Hood to resume the sales agreements and practices in effect with Jackson before Hood began supplying the Grand Union and Finast warehouses directly. But the court noted Hood’s interest in offering the same effective price for its products to the chain stores whether they purchase directly from Hood or from Hood through Jackson. Accordingly, the court limited its injunction by requiring Jackson to sell to the stores at the price at which Hood had begun selling to them plus the cost to the stores of shipping the products themselves. Hood, in turn, was to supply the products to Jackson at a price that would allow Jackson the same percentage of net profit as it had averaged on these sales to the stores for the six months immediately preceding the transshipping arrangement. The parties were to prepare and file for the court’s consideration a schedule of the effective prices. Finally the court required Jackson to post a $10,000 bond for the payment of costs and damages to Hood, if it turned out that the injunction had issued improperly, for any injury that it might suffer by supplying Jackson at prices low enough to ensure Jackson’s continued profit margin and also the same effective prices to the chain stores. Jackson Dairy, Inc. v. H. P. Hood & Sons, Inc., No. 78 Civ. 234 (D.Vt. Nov. 13, 1978), at 4-6.
. See Castles, Preliminary Injunctions, 1 Current Problems in Federal Civil Practice 371, 375 (Practising Law Institute 1979) (referring to standard as “evolving”).
. See Caulfield v. Board of Educ., 583 F.2d 605" court="2d Cir." date_filed="1978-09-05" href="https://app.midpage.ai/document/william-caulfield-et-al-appellants-v-the-board-of-education-of-the-city-of-new-york-et-al-appellees-359624?utm_source=webapp" opinion_id="359624">583 F.2d 605, 610 (2d Cir. 1978); Selchow & Righter Co. v. McGraw-Hill Book Co., 580 F.2d 25" court="2d Cir." date_filed="1978-06-19" href="https://app.midpage.ai/document/selchow--righter-company-v-mcgraw-book-company-358151?utm_source=webapp" opinion_id="358151">580 F.2d 25, 27 (2d Cir. 1978); Sonesta Int’l Hotels Corp. v. Wilmington Assocs., 483 F.2d 247" court="2d Cir." date_filed="1973-07-03" href="https://app.midpage.ai/document/fed-sec-l-rep-p-94041-sonesta-international-hotels-corporation-v-wellington-associates-312926?utm_source=webapp" opinion_id="312926">483 F.2d 247, 250 (2d Cir. 1973); Societe Comptoir v. Alexander’s Dep’t Stores, Inc., 299 F.2d 33" court="2d Cir." date_filed="1962-02-14" href="https://app.midpage.ai/document/societe-comptoir-de-lindustrie-cotonniere-etablissements-boussac-v-alexanders-department-stores-256195?utm_source=webapp" opinion_id="256195">299 F.2d 33, 35 (2d Cir. 1962).
. New York v. Nuclear Regulatory Comm’n, 550 F.2d 745" court="2d Cir." date_filed="1977-02-14" href="https://app.midpage.ai/document/the-state-of-new-york-v-the-nuclear-regulatory-commission-343389?utm_source=webapp" opinion_id="343389">550 F.2d 745, 755 (2d Cir. 1977).
. The amount of Jackson’s Grand Union and Finast “Schedule 3B” business, for example, is readily calculable at $10,000 per month, yielding gross profits of $2,100 per month and net profits “lower than that.”
. Contract of March 7, 1967, ¶ 16.
Concurrence Opinion
(concurring):
I concur in the well-reasoned per curiam opinion but would prefer to base my decision on slightly different grounds.
I think it is unnecessary to second-guess the district court’s findings as to irreparable injury or to get into that subject at all because Jackson has failed in the first place to satisfy either of the two prongs of the merits test for preliminary relief. Nothing in the contract between Hood and Jackson for an exclusive distributorship with respect to the Vermont area obligates Hood to police its customers in other areas or to stop them from selling or transshipping goods to their own stores in Vermont. Nor is there any evidence in the record that Hood controlled, instigated, encouraged or participated in such transshipments by First National or Grand Union from their warehouses elsewhere to their chain stores in Vermont. Jackson has therefore failed to make any showing that the exclusive distributorship contract has been violated.
Faced with a similar situation the Third Circuit found no breach of contract. Parkway Baking Co. v. Freihofer Baking Co., 255 F.2d 641" court="3rd Cir." date_filed="1958-05-21" href="https://app.midpage.ai/document/the-parkway-baking-company-v-freihofer-baking-company-inc-defendant-william-freihofer-baking-company-additional-defendant-245206?utm_source=webapp" opinion_id="245206">255 F.2d 641 (3d Cir. 1958). Moreover, to imply an obligation of the type suggested by appellee, aside from its forcing Hood to run the risk of losing First National and Grand Union as customers altogether, would probably not be justifiable under Continental T. V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36" court="SCOTUS" date_filed="1977-06-23" href="https://app.midpage.ai/document/continental-t-v--inc-v-gte-sylvania-inc-109716?utm_source=webapp" opinion_id="109716">433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), see generally, The Supreme Court, 1976 Term, 91 Harv.L.Rev. 231-41 (1977), since it might unnecessarily decrease intrabrand competition without any evidence that an increase in interbrand competition would be expected to follow.
Turning to the basis for reversal advanced by the majority, I do not disagree with his conclusion that an insufficient showing of threat of irreparable injury was made below. Proof of some threat of irreparable injury, i. e., harm that cannot otherwise be measured in damages, has always been necessary to the issuance of preliminary injunctive relief, regardless of whether it be labelled “probable” or “possible,” “strong” or “weak,” “actual” or “remote.” Suggestions to the contrary appear to have been generated by semantical differences or misinterpretation of language in earlier opinions, e. g., Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738" court="2d Cir." date_filed="1953-06-30" href="https://app.midpage.ai/document/hamilton-watch-co-v-benrus-watch-co-inc-232383?utm_source=webapp" opinion_id="232383">206 F.2d 738 (2d Cir. 1953); Unicon Management Corp. v. Koppers Co., 366 F.2d 199" court="2d Cir." date_filed="1966-09-07" href="https://app.midpage.ai/document/unicon-management-corp-v-koppers-company-273088?utm_source=webapp" opinion_id="273088">366 F.2d 199 (2d Cir. 1966); Checker Motors Corp. v. Chrysler Corp., 405 F.2d 319" court="2d Cir." date_filed="1969-01-06" href="https://app.midpage.ai/document/checker-motors-corporation-v-chrysler-corporation-and-chrysler-motors-corporation-checker-taxi-company-inc-additional-on-counterclaim-282918?utm_source=webapp" opinion_id="282918">405 F.2d 319 (2d Cir.), cert. denied, 394 U.S. 999" court="SCOTUS" date_filed="1969-04-28" href="https://app.midpage.ai/document/pate-v-pugh-8966688?utm_source=webapp" opinion_id="8966688">394 U.S. 999, 89 S. Ct. 1595" court="SCOTUS" date_filed="1969-04-28" href="https://app.midpage.ai/document/united-steelworkers-v-hamilton-steel-products-inc-8966694?utm_source=webapp" opinion_id="8966694">89 S.Ct. 1595, 22 L.Ed.2d 777 (1969); Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247" court="2d Cir." date_filed="1973-07-03" href="https://app.midpage.ai/document/fed-sec-l-rep-p-94041-sonesta-international-hotels-corporation-v-wellington-associates-312926?utm_source=webapp" opinion_id="312926">483 F.2d 247 (2d Cir. 1973); see Mulligan, Foreword — Preliminary Injunction in the Second Circuit, 43 Brooklyn L.Rev. 831 (1977). As we have repeatedly observed, New York v. Nuclear Regulatory Commission, 550 F.2d 745" court="2d Cir." date_filed="1977-02-14" href="https://app.midpage.ai/document/the-state-of-new-york-v-the-nuclear-regulatory-commission-343389?utm_source=webapp" opinion_id="343389">550 F.2d 745, 750-51 (2d Cir. 1977); Caulfield v. Board of Education, 583 F.2d 605" court="2d Cir." date_filed="1978-09-05" href="https://app.midpage.ai/document/william-caulfield-et-al-appellants-v-the-board-of-education-of-the-city-of-new-york-et-al-appellees-359624?utm_source=webapp" opinion_id="359624">583 F.2d 605 (2d Cir. 1978), a grant of preliminary relief has in fact been upheld only where a threat of irreparable injury was shown.
In short, while I do not disagree with the reversal for failure to show a genuine threat of irreparable injury, I would prefer to base our decision upon the failure to show any meritorious basis for relief.