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McDonald's Corp. v. Robertson
147 F.3d 1301
11th Cir.
1998
Check Treatment

*2 MARCUS, Before CARNES and Circuit *, Judges, Judge. and MILLS Senior District MARCUS, Judge: Circuit appeal arises out of the district This entry court’s without an injunction enjoining defen- dant-appellants Roger Marilyn Robert- continuing son from to run a McDonald’s previously restaurant franchised to them plaintiff-appellee Corporation. appeal challenge the dis- On trict court’s denial of their motion for evidentiary hearing on McDonald’s motion injunction. Additionally, argue defendants the district court entering erred in because, Robertsons, according to the Mc- did not that it demonstrate had right to terminate the Robertsons’ franchise thus, agreement, and McDonald’s is not like- ly to succeed on the merits of its case. Be- cause no issues of material fact were con- troversy when the district court ruled on the preliminary injunction, motion for we find its that the district court acted well within declining not err in to hold discretion did evidentiary hearing. conclude We also that, record, based on this the district court * Mills, by designation. District Honorable Richard Senior U.S. Illinois, Judge sitting for the Central District of lease established and the contained cross-termination properly found that McDonald’s pre- which, prerequisites provisions if all under the franchise Consequently, af- liminary injunction. terminated, lease like- firm. would be and McDonald’s wise terminated *3 possession. Finally, a right would receive to

I. provided that the the documents operative facts acquire any recitation of the A detailed would not interest in a restau- similar, understanding holding. to our that of rant business McDonald’s operates a well-known McDonald’s worldwide ten fran- and within miles of the Robertsons’ Although business. it owns several fast food eighteen chise for months after termination stores, also fran- McDonald’s sells its own agreement. contract, By all of McDonald’s fran- chises. operate res- must their McDonald’s chisees B. compliance taurants in “McDonald’s with 3, 1997,' filed an On October McDonald’s System,” practices a series of business and Robertsons, complaint against amended procedures employed, part, in uni- ensure alleging infringement, claims for trademark quality Mc- restaurant and food at all form designation origin in dilution and false Donald’s locations. Act, misappropria- of the Lanham violation secrets, tion of trade and breach of the cove- A. compete. nant not to com- amended 1, 1971, ac- September the Robertsons On plaint sought declaratory judgment also quired the McDonald’s franchise restaurant terminating agreement the franchise and Blanding at 4227 Boulevard in Jack- located ejecting disputed Robertsons' sonville, operated Florida. The Robertsons premises. complaint Mc- With its amended Blanding restaurant without Boulevard contemporaneously applica- filed an Donald’s and, many years, July on incident for n injunction. preliminary Mc- tion for fran- shortly parties’ before the original application, this supported Donald’s which agreement expire, par- chise due preliminary injunctive Mc- sought relief on twenty-year into a franchise ties entered new trademark and non- Donald’s agreement, consisting of a letter franchise claims, competition covenant with the thir- agreement, agreement, oper- an license and Grass, Kathy teen-page affidavit of a Mc- property upon lease to the real ator’s in Donald’s Business Consultant McDonald’s Among pro- the restaurant located. other Region. Upon Tampa Bay receiving Mc- visions, agreement required the 1989 license injunction, motion Donald’s operate their franchise the Robertsons court on Octo- the district entered order safety, cleanli- quality, accordance with and scheduling motion for on ber (“QSC”) prescribed, by the standards ness argument. oral Addi- October limited to agreement and and McDonald’s business stated, “Any 6 order tionally, the October QSC policy manuals. standards McDonald’s the Defendants wish to submit materials govern array a wide of its franchisees’ busi- application to the Plaintiffs must opposition affairs, including, particular rele- ness and p.m. on be filed with the Court 5:00 case, procedures to be vance to Thursday, 1997.” The Robert- October cooking, storing, and preparing, followed discovery food, expedited mainte- sons filed motion for serving and the cleanliness and Mc- physical sought structure. nance of injunction. motion for Donald’s plainly Mc- agreement gave The franchise By dated October the district order right inspect the Donald’s the but Mc- denied both motions ordered “at all for com- franchise reasonable times” produce manuals certain business Donald’s QSC pliance with McDonald’s standards. agreement. incorporated into the franchise Additionally, it termi- allowed McDonald’s to 16,1997, filed the Robertsons On October if, among contingen- other the contract nate motion for opposition. to McDonald’s cies, operate the Robertsons failed their. injunction. They opposed Mc- compliance with McDonald’s restaurant materials, with, among motion other QSC franchise Donald’s standards. The (“Robert- (2) Roger tively, raising growth; the affidavit of Robertson risk of bacteria son”). cabinet, equipment, including staging a meat clean, opera- good,

was not maintained in C. repair compliance ble condition and (3) standards; towels Based on the affidavits of Grass and Rob- being were not sanitized. ertson, evidence, relevant as well as other following undisputed the record reveals the 12, 1995, September On Consultant, facts. As a Business Grass safety failed still another food audit.1 The serves as the liaison between certain Mc- auditors found several sanitation and food- and McDonald’s and en- franchisees violations, handling including following: consistently sures that the franchisees com- refrigeration temper- the sundae machine *4 ply QSC with In her McDonald’s standards. degrees ature was maintained twelve above capacity as a McDonald’s Business Consul- the maximum McDonald’s recommended tant, QSC Grass had conducted several au- temperature, increasing the risk of bacteria Through dits the Robertsons’ restaurant. (2) growth; equipment kept was not 1994, McDonald’s had rated the Robertsons’ clean, operable good, and condition and re- generally satisfactory restaurant in terms of (the it); pair bugs sundae machine had QSC compliance. (3) staff and failed to maintain and use area, grill clean and sanitized towels 24, 1995, February On McDonald’s con- thereby increasing potential for cross- safety ducted unannounced food audit of contamination. The Robertsons’ restaurant Notably, the Robertsons’ franchise. the au- also failed an audit for similar reasons on dit disclosed that the Robertsons’ restaurant deficiencies, Among March 1996. other producing patties, undercooked meat this audit cited the for failure to Robertsons interiors, patties showing pink meat or red fish, vegetable, prod- store raw and cheese patties average and meat with an internal properly, equipment ucts failure maintain temperature degrees nine below the internal clean, good, operable a condition and temperature required by re- McDonald’s to repair, prop- failure to maintain and monitor Additionally, duce the risk of bacteria. holding product, improper er times sani- audit revealed that the Robertsons’ restau- which, found, practices, tation McDonald’s complete rant had failed to and maintain posed concerns,” public “serious health fail- daily safety food checklists in accordance aspects ure to maintain various of the restau- standards, with McDonald’s had failed condition, acceptable rant in an failure to refrigeration maintain shake machine grill integrity, maintain failure to maintain temperature degrees at 38 or lower. Mc- clean, grill and use sanitized towels in the findings inspec- Donald’s of the reviewed areas, lobby failure to meet finished tion Mr. him with Robertson and sent standards, product provide and failure to results, summary advising written him timely customer service. recommending deficiencies and correc- tive action. later, days Twelve on March two representatives McDonald’s visited the Rob- later, Approximately one month on March ertsons and advised them that McDonald’s 21, 1995, McDonald’s conducted an an- purchased property approximately had one follow-up nounced audit. The Robertsons away block from their restaurant for the remedy had failed to some of the deficiencies purpose building a new restaurant. Mc- February safety identified in the 24 food Donald’s told the Robertsons that the new inspection audit. The also disclosed addi- location would be “much better” terms of others, problems. Among tional the audit visibility, physical ease of access and condi- following: revealed the cooked meat and tion. poultry products being staging held in 3, 1996, eight degrees cabinets at and three below On McDonald’s conducted October prescribed temperatures, respec- McDonald’s to the “short restaurant visit” safety 1. Failure of food audit denotes failure to dards. operational meet McDonald's minimum stan- forming that their failure received their them continued The Robertsons

restaurant.^ comply QSC overall standards only passing grade since 1994—an constituted significant no agreement. revealed mark “C.” visit material breach of franchise QSC problems. provided The notice the Robertsons with days. period sixty Additionally, it cure 31, 1996, McDonald’s offered On October advised the Robertsons that McDonald’s close opportunity them comprehen- would conduct an unannounced and to take the franchise at the restaurant sixty-day period evaluation after the sive of the increased rent new location. Because had detérmine whether restaurant new applicable fees to the fran- and service satisfactory QSC ratings chise, achieved declined the offer. Robertsons concerns, safety. Finally, acceptable of food response to the Robertsons’ Mc- evaluation that if found guarantee provided offered Robert- the notice $100,- up income at the sons’ new location operating had raised the Robertsons per year. The also declined Robertsons mini- comply with McDonald’s standards to this offer. On December Mc- standards, mum would need to purchase Donald’s offered the Robertsons’ satisfactory operations to maintain levels $300,000. Again, franchise Robert- throughout following twenty-four month refused. sons period to the default. cure *5 19, 1997, February McDonald’s con- On During sixty-day period, cure Grass _ inspection still another unannounced ducted store on two addition- Robertsons’ visited This the Robertsons’ restaurant. audit of again al Both times she observed occasions. many of deficiencies un- disclosed the same safety numerous and food sanitation other audits, during including, earlier covered period on expired, violations. After the cure others, practices among improper sanitation 1997, 26, along August with other Mc- health posed public “serious concerns.” employees, Donald’s Grass visited the Rob- Additionally, found that the Rob- McDonald’s ertsons’ to conduct an unannounced store failed raw Canadian ertsons’ store to store comprehensive graded restaurant evaluation. Also, products properly. and biscuit bacon visit, During agents McDonald’s record- refriger- audit revealed that the walk-in others, ed, among following violations: expired with ator contained several items (1) patties pat- meat and meat undercooked codes that should have been re- freshness temperature thirteen ties an internal destroyed. March moved and On after degrees required tempera- internal below the attempts to reach Mr. unsuccessful several meat, cooking of in- for raw ture the safe provid- by telephone, Robertson McDonald’s (2) creasing growth; of bacteria the risk summary ed Robertson with written handling eggs raw and the fail- improper of requested visit. restaurant Grass prepara- used in the ure sanitize utensils design plan improv- an action Robertsons egg product, creating of the risk of tion April ing operations. On Mc- (3) cross-contamination; fail- salmonella and again an unannounced Donald’s undertook spat- separate ure to use Hutzler color-coded restaurant. Once Robertsons’ visit egg product, posing ulas for and cooked raw sanitation, again McDonald’s found numerous and cross-contamina- the risk of salmonella QSC hygiene, food-handling, and violations. (4) tion; use of bare and unwashed routine Indeed, the same deficiencies Grass observed February serving sanitized tools to during 19 visit. hands instead of identified (5) supply that she failure to products; testified her affidavit asked handle food Grass grill whether he had created action Robertson and towels for in the clean sanitized use improving operations, replied (6) he plan area; but sanitary proce- failure to follow ,and not. also discussed the that he had Grass washing, rinsing, sanitizing dures for manager failure have a certi- (7) utensils; storage in a rusted of dishes safety comple- through successful fied food (8) cart; shopping failure to meat and cover (or equiva- tion of the McDonald’s ServSafe 'freezer, patties increasing the chicken in the lent) safety food course. cross-contamination; and risk freezer burn (9) holding McNugget failure to maintain May delivered a On Robertsons, which shut off without properly, in- cabinet of Default” to the “Notice notice, non-competition warning creating the risk that its claim for breach of the or Instead, drop chicken would its safe McDonald’s focused on cooked below covenant. (10) holding temperature; failure to maintain claim. The dis- its trademark grill cooking patties, meat which used in enti- trict court found that McDonald’s was notice, warning posing shut off without or sought pre- the relief and entered a tled to undercooked; patties risk that meat would be liminary enjoining the Robertsons (11) trademarks, failure to set the timer for the correct using of McDonald’s cooking patties, resulting in names, marks, dress, time for meat trade and trade service patties; preparation of undercooked meat using any signs printed goods bearing or (12) manager marks, failure to have a certified in the occupying McDonald’s names course; safety food failure ServSafe operating premis- the McDonald’s restaurant QSC standards, resulting to meet other Boulevard, Blanding es located at 4227 poor quality During food and service. using, duplicating, disclosing any or of Mc- audit, August performed McDonald’s also by operation materials received Playplace safety survey an annual Additionally, agreement. the franchise letter play reviewed the condition of the children’s required part area that was of the Robertsons’ restau- by operation return all materials received inspection rant. This revealed the existence Finally, agreement. the franchise letter exposed play piping structure that was not injunc- district court made the hard, padding, sharp plastic covered with tie- $300,000 upon posting tion effective of a strips padding protruding, down that were posted bond McDonald’s. McDonald’s “very dirty” plastic balls in the children’s ball required appeal- bond. The Robertsons then area, netting throughout crawl loose and torn ed the orders of the district court. structure, dirty padding, and torn surface presence free-standing unguard- and the of a II. eight-foot high pole. ed McDonald’s conclud- *6 We review a district court’s order posed ed that these deficiencies risks to chil- granting denying preliminary injunction or a injury strangulation. dren of serious for abuse of discretion. See Baker v. Buck 24, 1997, September (11th On McDonald’s sent 167, eye Corp., Cellulose F.2d 169 856

the Robertsons a Notice of Franchise Termi- Cir.1988) (citing United States v. Jefferson nation, which advised the Robertsons that (11th Cir.1983)). 1511, County, 720 F.2d 1519 terminated, their franchise contract had been effective at the close of the restaurant on A. September 24. The Robertsons refused to may injunc- A grant district court possession premises surrender of the following: tive relief if the movant shows the operate continued to the restaurant as a Mc- (1) substantial likelihood of success on the Donald’s, using various trade names and (2) merits; injury irreparable will be suffered registered trademarks to McDonald’s. (3) issues; injunction unless the the threat facts, Finally, reviewing the uncontested injury outweighs ened the movant to whatev affidavit, we note that in his Robertson did damage injunction proposed may er any way accuracy not in contest the of the issued, opposing party; cause the if Rather, findings. inspection he contended injunction would not be adverse to the alleged that the violations not serious public Nursing interest. See All Care Ser they pretext and that served as a for Mc- vice, Inc. v. Hospital, Bethesda Memorial ending real reason for the franchise Inc., (11th Cir.1989) 887 F.2d 1537 agreement McDonald’s wanted res- Baker, (citing (citing 856 F.2d —that Jeffer occupy

taurant to the different and better 1519)). County, son 720 F.2d at In this space at the of the end block. Circuit, injunction is an “[a] ex traordinary remedy and drastic not to be D. granted clearly unless the movant estab ” persuasion’

At the on October McDonald’s lished the ‘burden of as to the (citations omitted). request injunctive requisites.2 withdrew its relief on four Id. argue junction 2. The Robertsons in- entered in this case altered status area, challenge stopped paying the district court’s the franchisee had only they royalties Jiffy findings relate the likelihood but had as Lube continued threat of operate “Jiffy on the merits its under the of success stores name irreparable injury.3 We therefore address Lube.” The filed suit against franchisee Jif- Lube, fy in turn. claiming each breach franchise agreements. Concurrently, because of the on the Merits 1. Likelihood Success pay -royalties, Jiffy franchisee’s failure to instituted Lube franchise termi- probability of on success proceedings against nation the franchisee’s validity depends merits at trial Jiffy three then stores. Lube a mo- filed infringement trademark claim. This Cir its preliminary injunctive against tion for relief a prevail cuit has held that in order franchisee, prevent claim, seeking fran- plaintiff a trademark of its chisee further use trademark. mark in com must show that its was used Jiffy The district court mo- denied Lube’s regis merce the defendant without the tion because concluded that termi- consent and that the unauthorized trant’s dispute parties confusion, preclud- nation between deceive, likely cause use was Jiffy ed a determination of Lube’s likelihood King Burger See or result mistake. of success on the merits. The Mason, Third Circuit Corp. v. 1983) failing found that the court erred in 1114(1)(a)), district § (citing 15 U.S.C. Cir. dispute to address the termination denied, and held 465 U.S. 104 S.Ct. cert. right a franchisor’s (1984). terminate a fran- research, L.Ed.2d 130 Our how independently any chisee exists claims ever, has not case where this revealed against might the franchisee have the fran- appropriate prelim has Court addressed Thus,. found, chisor. the Third Circuit evaluating inary standard injunc- franchisor is entitled to acted the defendant without whether “if it tive relief can adduce facts sufficient registrant’s authorization where the defen indicating its termination of fran- [the franchisee who dant claims. proper.” franchises was Id. at 375. chisee’s] unlawfully fran registrant terminated its agreement. chise Computer Publishing Corp. Currents Inc., Communications, Jaye F.Supp. Circuits, as well as district courts Other (N.D.Ga.1997),the considered however, Circuit, in this have considered magazine publisher brought case where Corp. Jiffy R Lube question. In S & *7 infringement against action International, (3d trademark a for Inc., 968 F.2d 371 Cir. and in sought’ mer licensee a 1992), example, the Third re Circuit junction enjoining from the former licensee prelimi a district court’s denial of a viewed using magazine publisher’s injunction Jiffy the trademarks. nary against a franchi Lube Lube, held, Citing Jiffy court order Alleging “[I]n the had the see. that franchisor satisfy prelimi first obligations prerequisite to main a breached its contractual nary injunction of on the quality [likelihood of its other franchises success tain category mandatory Ap prohibitory quo injunction. falls of and thus tion here into the Western, Inc., 15-16; Reply injunctions. Meghrig pellants' Appellants’ See v. KFC Initial Br. at 1251, Mathews, 134 U.S. 116 S.Ct. L.Ed.2d 121 They 1-4. v. 544 516 Br. at cite Martinez Cir.1976), (stating mandatory injunction proposi or- that 1243 for the tion, relief, party prohibitory and a goes to "take action” "Mandatory preliminary ders which injunction party ac- beyond maintaining quo simply "restrains” further well the status tion). lite, disfavored, pendente particularly is and not be unless the facts and law should issued Citing possibility clearly moving party.” public harm to Appellants’ Re 3. of favor the resulting possible consumption attempt charac from the ply Br. at 3. Robertsons' issue, mandatory injunction product, court that the unsafe the district found terize as public operating prohibits balance of harms and the interest favored the Robertsons from Although entering preliminary injunction. Blanding restaurant and from us Boulevard trademarks, objections ing do these Nor not voice McDonald's incorrect. conclusions, passing note in that of the cite tend to nonetheless do cases amply supports the court's support injunction is a their that record contention Rather, mandatory preliminary injunc- finding. one. that, merits], plaintiffs un- further find that the district court must demonstrate We they Agreement, were correctly der the terms concluded on the record before Agreement to terminate the immedi- entitled that had made a McDonald’s substantial ately Id. at based on defendant’s conduct.” showing of a likelihood of success 688. merits of its claim. The record reflects that parties disagree not that did Hall, Corp. F.Supp. Burger King In inspections of the had conducted numerous however, (S.D.Fla.1991), another district Robertsons’ restaurant. And Robertson ac question court in this found the Circuit knowledged “ques alleged wrongful franchise contract termi these evaluations a motion for procedures involving cleaning, nation irrelevant to tioned the sa enjoin seeking to a former franchi control,” nitizing procedural Robertson continuing ¶ see from to use the franchisor’s QSC Reports Aff. and that he “had few determined, Rather, trademarks. alleged in 1995that McDonald’s did not meet remedy for “[A] terminated franchisee’s ¶ its standards.” Robertson Aff. 6. He fur wrongful money an action for termination is ther did not the fact that the contest audits damages, and not the continued unauthorized up in 1996 and 1997 turned additional defi use of its franchisor’s trademarks.” Id. at Indeed, nothing ciencies. in Robertson’s affi support, opinion, For this which was 638. alleged findings davit that McDonald’s dur to, thus, prior issued without the benefit ing these visits not accurate.4 The Lube, Jiffy Burger King Corp. relied on suggest closest Robertson’s affidavit came to (S.D.Fla. Austin, Case, F.Supp. ing inspection findings were fabri 1990), Perlstein, Rayco, Inc. v. Cle-Ware statement, exaggerated cated or was the “I (S.D.N.Y.1975). F.Supp. Cle- increasingly surprised by became these find turn, Rayco, in simply Ware found that the ings, operating my since I was restaurant argument compliance franchisee’s that his according the same manner and to the same by franchise was excused food, high safety, standards for service alleged prior the franchisor’s breach twenty past that I had maintained for the six agreement “has little relevance on franchise years owner/operator.” as a McDonald’s question the immediate of whether the [sic] ¶ Robertson Affidavit at 17. Even this state defendant can continue to use the [trade however, ment, not does amount to a denial Id. at 1234. mark].” allegations of McDonald’s the Robert considering issue for the first son’s restaurant failed meet McDonald’s time, require that the Lanham we find Act’s QSC during standards numerous visits ment that a franchisor demonstrate that un Moreover, McDonald’s. the statement prevail authorized trademark use occurred to safety contradicted McDonald’s food audit of a on the merits trademark findings in 1995 and which the Robert- against claim a franchisee necessitates some (cid:127) dispute, do not sons type showing properly that the franchisor safety restaurant had some serious food purporting to autho terminated contract problems proposed well before McDonald’s *8 use, resulting rize the trademarks’ thus in moving the Robertsons’ restaurant. by the unauthorized use of trademarks the Robertson instead focuses the Consequently, former franchisee. are sought fact that McDonald’s to secure his persuaded by analysis the Third Circuit’s and location, agreement to move a new and the correctly conclude that the court re district Thus, rejected Robertsons the offer. Rob quired showing McDonald’s to make a that it suggests, although safety properly agree ertson the food is terminated the franchise by inspections ment. sues identified the numerous During argument unequivocal- 4. on the mean do now.... the oral motion we’ll so I'll state preliminary injunction, ly, dispute accuracy court asked the Robertsons the the district of those portion findings.” attorneys’ counsel for the to cite the of Because Robertsons statements oral evidence, disagreeing accuracy argument the affidavit with the of the do constitute not record conceded, inspection reports. only deny evidence Counsel "We in record does not Mc- crystal didn’t make that clear in the affidavit.” Donald's contentions that the Robertsons’ restau- attempted by continuing, experienced He to save his case "I rant numerous deficiencies. cations, really important preparation methods, quality ap- not that and and audits were n facilities, McDonald’s, pearance, QSC nonetheless used and service. The safety produced alleged safety by and food standards Mc- the Robertsons’ food deficien terminating Donald’s some cies “an excuse” Rob- constitute of the “standards as agreement policies” franchise because Mc and with which McDonald’s franchi- ertsons’ Thus, money by comply. to make more sees must continued violation Donald’s wanted appears McDonald’s to an of these a moving- the Robertsons’ standards to' constitute nearby assuming, material agreement. other location. Even ar- breach of the franchise correct, Moreover, noted, allegation guendo, that this as the district a howev court as er, chain, that failure to world-wide food a we find fast McDonald’s has securing comply QSC product and food clear interest in a uniform with McDonald’s safe ty high quality and breach of service of at all of its loca- standards constituted .material agreement justify strong legal tions. McDonald’s also sufficient to has franchise termination, thus, avoiding disputes stemming interest and it does not matter safety products. the cleanliness and of its possessed an whether McDonald’s also ulteri- Accordingly, or, there can be no real doubt that terminating the improper motive for Rob- repeated continued violations5 of and serious agreement. Original franchise See ertsons’ QSC standards, safety Co., and such as those Chip Great Chocolate Cookie American alleged by by unchallenged McDonald’s and Cookies, Ltd., Valley Inc. v. River Robertsons, Cir.1992) constituted-material breach- (citing Patton v. Mid- agreement warranting es franchise Inc., Systems, Continent 841 F.2d Thus, termination.- the district court correct- (7th Cir.1988)) (“The that fact Cookie ly found that McDonald’s had a substantial may ... Company treated other fran have succeeding likelihood of of its merits leniently chisees more is no more defense claim, there was, as trademark laxity to a of contract breach than enforc dispute no that the continued to Robertsons ing speeding limit is defense to a speed trademarks, ticket____ that use the McDonald’s Liability for breach of contract is likely such use unauthorized and was was strict.”). Indeed, right “a franchisor’s ter have resulted in confusion. independently franchisee of minate a exists any against might have claims franchisee Irreparable Injury 2. The the pow franchisor. franchisor has relationship er to where the Robertsons also contend that terminate finding irreparable of the franchise are violat district court erred terms Lube, because, actions, Jiffy injury types 375. in other ed.” 968 F.2d at district courts in this Circuit have held ease, In the instant the district court cor- goodwill irrepara not loss does constitute rectly preliminarily repeated found injury. argue ble The Robertsons also alleged unchallenged violations of Mc- harm considered the district QSC safety and food standards re- thus, sufficiently speculative, not in a material breach of the franchise sulted entry concrete to warrant First, agreement by the Robertsons. injunction. disagree. Again, we contract, agreed Robertsons franchise First, cite from Sys- foundation of the McDonald’s the cases “[t]he not franchise courts do [the tem and the essence of con- Circuit pro compel [the Robertsons] is the adherence the conclusion tract] Lab., policies pound. Salsbury Merieux Inc. v. [McDonald’s] standards Inc., (M.D.Ga.1987), Lab., operation F.Supp. providing for the uniform all *9 example, employee allegedly the Mc- a former lab McDonald’s restaurants within improved vaccine for System.” They acknowledged upon plaintiff also the lab’s mula, uniformity specifi- a trade importance plaintiff the of of food which was secret. patties, argue alleged undercooking practices re 5. the cited of meat While the Robertsons that "serious," sulting possible violations were not is difficult for cross-contamination of food substantially the more Court to conceive of seri bugs products, presence the food the of jeopardize ous violations than that could those preparation equipment. patrons, the of the such the health Robertsons' as case, enjoin Obviously, in this a substantial sought the defendant lab from such lab indeed, vaccine, certainty alleg- likelihood of a continuing improved to use confusion— substand- profits of confusion —of ing that it would suffer lost and dam- products prod- ard with McDonald’s certified age reputation. to its The district Consequently, the district court ucts exists. that contentions did not state found these correctly concluded that McDonald’s made sub- irreparable harm. The instant case is injury showing irreparable sufficient of stantially plaintiff different. Whereas justify entry injunction. of the injury a result of Salsbury to suffer as stood competition allegedly another lab that Finally, of a laun the Robertsons’ citation secrets, injury that misappropriated trade dry purportedly supporting their list of cases compensated fully by looking to the could be contention that McDonald’s claimed harm profits, McDonald’s faces defendant lab’s speculative and to con was thus insufficient damage reputation and loss of to its own irreparable injury, inapposite. For stitute customers caused the Robertsons’ distri- City example, the Robertsons cite Church (and possibly allegedly inferior bution of Huntsville, 30 F.3d Cir. of 1994), dangerous) product held out be Mc- proposition party that “a has for the Customers would believe that Donald’s. injunctive only if standing to seek relief they eating McDonald’s sanctioned ultimately proves, party alleges, and a real they improperly products when consumed opposed merely and immediate-—as to a con unsanitarily cooked and maintained food jectural hypothetical in or of —threat future products from the Robertsons’ store. We jury.” challenge by Church involved a way to can conceive of no realistic determine population Huntsville’s homeless to certain damages circumstances. under these alleged policies city resulting in the arrest and harassment of homeless individu

Moreover, trademark actions “are common they merely because were homeless. The als preliminary in venues for the issuance of question whether Court considered of Tees, Inc., junctions,” Foxworthy v. Custom had not been ar homeless individuals who (N.D.Ga.1995) (cita F.Supp. standing challenge rested or harassed had omitted), that tion and this Circuit has held context, alleged policy. In that sufficiently strong showing “a of likelihood quoted made the above. Court statement infringe [caused confusion trademark Quite simply, Church is not relevant here. may by showing itself constitute a ment] Mc There has never been doubt that irreparable ... substantial threat of [a] standing against Donald’s has to file suit Remy harm.”6 E. Martin & Co. v. Shaw- preliminary injunc Robertsons and to seek Imports, Ross Int’l 756 F.2d short, against them. we find that the tion (11th Cir.1985); Test Petrole see also Power district court did not abuse its discretion Gas, um Distributors v. Calcu 754 F.2d injunction against entering (2d Cir.1985) (Irreparable harm exists the Robertsons. moving party a trademark case when rep “shows it will lose control over B. trial.”); pending utation of its trademark (“When Foxworthy, F.Supp. at 1219 Nor do we find evidentiary plaintiff prima showing not to conduct an makes court’s decision facie preliminary injunc infringement, irreparable trademark harm is on the motion omitted). (citation previ ordinarily presumed.”) tion reversal.7 As we noted warrants brief, Indeed, denying 6. 14 order in a different section their Court preliminary injunction Robertsons concede "that once the District motion is not a final or- proven der, and, concluded that McDONALD'S'had that it separately as an order issued from the reasonably likely its to succeed on trade- entering injunction, order is dis- claim, Court mark the District preliminary injunction from the and not tinct irreparable injury presumed should have part thereof. We find reviewable as no merit Appellants' Initial Br. at 36 n. 6. existed.” First, argument. there can to this be no doubt jurisdiction appeal that the Court has over the jur- 7. contends that this Court lacks McDonald's entering preliminary injunction. of the order isdiction to review the district court's denial Indeed, even concedes that 28 request evidentiary for an argue hear- the Robertsons' 1292(a)(1) appeal. § such an U.S.C. authorizes *10 ing. Specifically, they that the October

13H 1113). Finally, they fair argue the chal that “a district entered S.Ct. ously, the injunction oppose first the preliminary opportunity application” without neces- lenged Rather, evidentiary hearing. evidentiary the hearing, opposed to holding an an as sitates. materi court considered the written type “hearing” district the the of district court held argument als and conducted oral submitted Id. at the instant case. 29. 65(a), Citing Rule Fed.R.Civ. on the motion. problems with ar Several the Robertsons’ P., appeal court’s the district the Robertsons First, gument Granny exist. does not Goose evidentiary an hear to conduct decision not opponents the proposition stand for that all they the dis ing. Specifically, contend that injunctions of preliminary are entitled to evi- required to an evidentia- court was hold trict Rather, above, dentiary hearings. as stated (1) ry independent reasons: hearing for two Rule 65’s purpose requirement the of notice ex “conflicting material evidence record party prelimi provide opposing is to the the isted],” allegedly the district court injunction nary opportunity with a '“fair irreparable presumption that a of determined application prepare for oppose the and to existed, necessitating thus an eviden- harm Goose, opposition.” Granny such 415 U.S. tiary hearing. 7, long goals 432 1113. n. 94 S.Ct. So as these making argument, them met, require Rule 65 does not an eviden- are Fed.R.Civ.P., 65(a)(1), Rule first note that Indeed, tiary hearing. if the Robertsons provides, part, preliminary in relevant “No correct, preliminary injunction no could injunction issued notice to shall be without evidentiary hearing. an ever issue without party.” They then cite to- adverse plainly wrong. Nursing is See All Care This Foods, Granny Inc. v. footnote Goose Service, Hospital, Inc. v. Bethesda Memorial Teamsters, 94 415 U.S. Brotherhood of (11th Cir.1989) (“An Inc., 1535, 1538 F.2d 887 (1974), L.Ed.2d S.Ct. 39 435 hearing always required evidentiary is not required notice proposition “[t]he injunction.”). preliminary of a before issuance 65(a) preliminary injunction Rule before therefore, consider, the circumstances We implies hearing in which the can issue hearing evidentiary under under which op- given a fair opportunity defendant is necessary. Previously, have is we Rule 65 for such pose application prepare (cit- stated, injunction turns on the “Where opposition.” Appellants’ Initial Br. at 29 facts, Goose, bitterly disputed ... an ing Granny at 432 n. 94 resolution of U.S. the, Second, granting ing except as in case to review Appellee's Br. at ix. the order reviewing obviously junction preliminary injunction It is true that in inter inextri .... locutory injunctions may denying evi- we look to otherwise cably with the intertwined order order, aspects hearing injunction. nonappealable of ... but we dentiary preliminary on the summary the- of the fully question address the of whether cannot examine merits cannot We Plainly, granting prelimi judgments at time....” this foot this the district court erred considering considering bar the Court from nary injunction without whether the note does not along evidentiary hearing bound to an eviden- the denial court was conduct injunc entry tiary hearing. review of the That the district court delivered its not, Indeed, language itself rulings of the footnote in two different documents does tion. its ruling proposition suggests, necessarily supports the that the on render the McDonald's as Indeed, may along con be considered unrelated. it is difficult to orders entry preliminary injunction. period More with the what other would constitute ceive of stated, over, plainly scope denying appeal ”[T]he Court has the order appropriate time jurisdiction appeal pre of a evidentiary [on in of the court’s liminary injunction] direct during is limited to matters junction appeal of the order if not [grant] injunctive ly relief.” granting preliminary injunction. does to the Nor related Orlando, (11th (5th Corp., F.3d Laser 650 F.2d 617 Gould Control Kaimowitz Cir.), amended, 1981), Cir.), cert. B the case McDonald’s cites Cir. Unit - -, denied, proposition U.S. 118 S.Ct. Court does support order, (1998). already For the reasons jurisdiction over L.Ed.2d 1092 the October not have noted, evidentiary hear exercising jurisdiction of the motion prevent denial the Court from injunction ing evidentiary hearing. Spe the motion for the denial of over cifically, case, [grant] injunctive "directly re related to the cites 7 of that McDonald's to footnote states, Consequently, reject litigant's McDonald's part, Id. in relevant "A lief.” only jurisdictional argument to the mer interlocutory injunctions proceed right appeal itself, they were enti goes cannot of the Robertsons’ claim that and he its to the evidentiary hearing. underly- tled to an of merits of the force consideration *11 1312 deprived

evidentiary hearing normally required appellants this of a fair case credibility Nursing appel- issues.” All Care meaningful opportunity oppose decide Service, (citing F.2d at 1538 Forts v. 887 lees’ motion.” Id. at 1538. (2d Cir.1977)). Ward, 849, F.2d 851 566 Conversely, in v. Or Kaimowitz Service, Nursing the plaintiffs, All sev Care lando, (11th Cir.1997), amended, 122 41 F.3d nursing temporary agencies, eral filed suit (11th Cir.1997), 131 950 we held that the F.3d against hospitals and other the defendant in declining district court did not err to hold providers. parties agreed The health care plaintiffs evidentiary hearing an mo shortage of a nationwide nurses existed injunction tion for where the Thus, the time. defendants decided preliminary injunction sought bore no rela under of develop program which certain tionship underlying to the whatsoever action. agencies temporary service would be des effectively Because this recital exhausts ignated “preferred agencies.” partici Each jurisprudence question Court’s of give pating hospital agreed to consider first evidentiary an when to hold preferred agencies staffing ation to the hearing preliminary injunc on a motion for temporary Among of nurses. other bases tion, have considered cases from other we determining agencies be which would guidance. Circuits for additional Based on “preferred,” strongly hospitals the defendant cases, principles review of these certain are price. Additionally, agencies considered First, apparent. in All as noted Care Nurs agree had a percentage to rebate of then- Service, ing bitterly gross where facts are contest yearly income to the defendants credibility not compete hospitals with the in the ed determinations must be plaintiff hiring nursing agen injunctive nurses. The of made whether relief to decide alleged cies issue, sued violations of the Sher should must be sought man prelimi Act and received Service, Nursing held. See All Care 887 nary enjoining injunction defendants Ward, 849, 1535; F.2d 566 Forts F.2d 851 price establishing maximum standards (2d Cir.1977) (quoting Dopp v. Na Franklin adhere, agencies which must from sub (2d 873, Cir.1972) Bank, tional F.2d 879 461 stantially interfering management with the (3d Greene, (quoting 87, 161 Sims v. F.2d 88 agencies or manner individual Cir.1947))) course, (“‘Generally, judge of nurses, employ requiring their and from dispute should resolve a factual on affida not any portion them in to contribute of their depositions, merely vits or for then he is providers come in order to be considered as showing piece preference paper for “one of ’ temporary entering of nurses. Before Giles, ”); Soup Campbell to another.” Co. v. injunction, provided district court (1st Cir.1995) 467, (quoting 47 F.3d 470 SEC days’ defendants two notice of the hear (2d Cir.1968)) Frank, 491 388 F.2d ing, only argument permit oral in which (“[W]hen parties’ competing versions of Additionally, permit ted. the district court pertinent sharp events factual are ted parties to file written affidavits and dispute, propriety injunctive such support respective submissions their credibility, relief hinges on determinations of positions. We determined that the trial proceeding ‘the inappropriateness on affi in failing court its discretion to hold abused ”); davits attains its maximum.’ El [alone] evidentiary parties because Kiesewetter, (3d liott v. 98 F.3d Cir. conflicting had submitted affidavits that 1996) (citing Plan Examiners Professional “placed dispute in serious issues central to Lefante, Jersey, New Inc. v. 750 F.2d appellees’ Nursing claims.” All Care Ser (3d (“A Cir.1984)) district court cannot vice, Additionally, F.2d at 1539. in rec depends issue a ognition complexity of the facts and disputed resolution of of fact upon the issues parties before the in All number court evidentiary unless first holds an the court Service, stated, Nursing two-day Care “A Accessories, hearing.”); Ty, Inc. v. GMA notice, thirty coupled with minutes for oral Inc., Cir.1997) (cit presentations hardly be can said to constitute Locks, Swiderek, ing Security Medeco Inc. v. meaningful opportunity oppose appel- (7th Cir.1981)) (“If genuine preliminary injunction. lees’ 680 F.2d motion for determines that under the facts of issues of material fact are thus created *12 did preliminary for in court held that the district court not err to a motion response declining evidentiary hearing. in an evidentiary hearing is indeed to hold junction, an Second, material facts where required.”). We based on the here find record in dispute facts dispute, or where are not category that this case falls into the second injunction preliminary to the are not material is, above—that material of cases identified not generally courts need sought, district dispute, disputed are not in or the facts facts Maryland evidentiary hearing. See hold an injunction the are not material to Realty Advisory Casualty Board on Co. v. sought. controversy In case no real this (2d Relations, 984 Cir. 107 F.3d Labor engaged the exists over Robertsons whether Elliott, 1997); (quoting 98 F.3d at 53-54 QSC safety and food violations. repeated Ed., F.2d Bradley Pittsburgh Board 910 v. these constituted a mate violations Because (“ Cir.1990)) (3d ‘[A] 1175-76 decision rial breach franchise suffi the may an on affida order] enter be based [to termination, justify to we conclude that cient documentary if the and other evidence vits hearing required in evidentiary this no undisputed and the relevant factual facts are days had ten to matter. ”); Inc., 132 Ty, are F.3d issues resolved.’ showing provide affidavits other evidence (“[A]s any party case in regarding a material of fact issue whether evidentiary hearing, he must seeks an be actually the restaurant had com Robertsons’ the persuade to the court that issue able Mc mitted infractions described so a genuine and material and indeed Thus, they fair had Donald’s. sufficient ”). productive.... would be contending they than that notice. Rather category extremes falls Between these unsanitary QSC engaged had not and food “ dispute is little as to of-cases where ‘there however, safety procedures, the Robertsons facts but much as the inferences be raw argued that the conceded violations and ” Fair, from drawn them.’ Jackson by Mc was instead motivated termination Frank, (1st Cir.1988) (quoting F.2d open a new restaurant Donald’s desir.e 490-91). Thus, First F.2d at Circuit ulterior, im the block. Because down approach adopted an to determine has may have proper motive McDonald’s had an whether is irrelevant where a terminate the contract balancing speed “leave[s] the between that doing for so under legitimate reason exists accuracy and fairness practicality versus contract, filing created district court.” to the sound discretion relating of fact no material issues Jackson, prisoner plaintiff, a who In Id. entering and was propriety hospital from released a mental had been eviden- insufficient warrant therefore officials, pre- filed a motion corrections hearing. tiary injunction requiring him to sent liminary be contend that Additionally, the Robertsons hospital in which he had back to the mental inju- irreparable presumed the district court The court not- previously been incarcerated. so, precedent, it was ry, under this Court’s parties dispute the basic that the did not ed evidentiary required to therefore conduct events; they example, agreed, that that did hearing. We note the Robertsons bedspring after his plaintiff had swallowed Consequently, not raise this issue below. hospital mental to the cor- from the transfer Tisch, Royals argument fails. their See They de- facility. characterized the rections (11th Cir.1989). 1565, 1568 n. plaintiffs differently, how- gree. of the illness Nevertheless, if the Robertsons ever, even they disagreed whether the over timely it would lack adequate point, raised this facility care. had corrections offered First, holding in Baker v. Buck although ques- merit. that these The court found 856 F.2d 167 Cir. factual, they eye Corp., best an- Cellulose could be tions were 1988), prin the case on which expertise. with medical swered witnesses is, by rely making argument, identify cipally failed to Noting plaintiff had language, limited to the facts of injunction stage evi- its own what at the Baker, plaintiff, alleged who might dispute case. planned to offer that dence he evidence, against employer, her VII documentary violations Title the defendants’ evidentiary hear- required not to hold an injunction against her was sought engag- barring employer ing. employer

ing plaintiff as in certain actions the viewed any type, hearing of retaliatory. Without a III. preliminary in- the district court denied the therefore conclude We plaintiff junction because found *13 denying err in the Robertsons’ court did not showing irreparable had failed to make a evidentiary hearing grant- and in motion for reversed, finding that injury. This Court in- ing motion for in Title irreparable injury presumed VII is junction. Accordingly, judgment the the Although the in this Circuit. Court eases be, is, district court must and AFFIRMED. “[Wjhere statement, general there made the harm, irreparable as in presumption a CARNES, concurring Judge, Circuit case, the conduct eviden- this court should specially: denying tiary hearing granting or before motion,” opinion nonetheless id. join well written and I all of the Court’s holding limit to the an intent to evinces case, persuasive opinion except in this Indeed, stating of the case. even after facts seeking part about whether a to franchisor irreparable presumed harm is Title that enjoined continuing to have a franchisee cases, stated, “On the VII Court facts of terminated use a trademark under a now case, that the district court this we hold agreement that its termination of must show evidentiary conducting in not hear- erred proper. Resolution of was ing [the defendant] to determine whether impression in circuit is that issue of first this presumption irrepa- [the] [of could overcome disposition ap to the of this not injury], plaintiff] had [the rable or whether holds, peal. franchisor has As the Court requirements----”8 Id. at met the other (or showing, which shown made substantial added). (emphasis 169 stage) applicable standard at this that distinguishable Baker is also from the case rights it within to terminate the was its Baker, at hand. the district court failed holding, it matters agreement. Given that injunction, apparently enter a to disposition appeal of this not at all solely plaintiffs prove failure based proper a franchisor must show ter whether Baker, irreparable harm. 856 F.2d at 170. stop entitled to mination order be ease, however, In the the district instant trademark, continuing use of a franchisee’s presume irreparable injury; court did not i.e., might we have we need not decide what rather, harm, actually irreparable it found improper. if had been done the termination noting, present dispute concern- “There is no Accordingly, all of the Court’s comments ing probability that consumers will con- See, e.g., about that issue are dicta. United products pres- fuse the Plaintiffs with those 1318, 1322 n. 4 Eggersdorf 126 F.3d States ently by parties the Defendants —the served (11th Maza, Cir.1997); 983 United States Where, using are identical trademarks. as (11th Cir.1993). n. 8 F.2d 1008 here, particular- the likelihood of confusion is place pur Dicta has its and serves some ly strong, reputation, the loss of trade See, e.g., v. Plantation Pat poses. Combs flowing goodwill potentially from the contin- terns, 1519, 1524, 1527, 1532-38 106 justifies finding irrep- ued (11th Cir.1997) (using attempt in an dicta injury.” arable District Court Order at 10 added). Thus, clarify by dicta in another (emphasis court confusion caused the district hearings required prior evidentiary are 8. The Robertsons also cite to v. Orlan Kaimowitz do, 41, amended, or denial of a motion for 122 F.3d 131 F.3d 950 issuance Cir.1997). injunction only presumption support where there is a It likewise fails to the Rob- harm, employment irreparable as in a Title VII was ertsons' contention district court authority relied required evidentiary discrimination case." The sole to hold an where irreparable inju upon this deleted statement was Baker. Con- presumed had for district court disagree ry. recently original sequently, with the Robertsons' con- The Court amended opinion that this Circuit has held that in all cases to delete the sentence on tention Kaimowitz rely. irreparable presumed, an Specifically, harm is to be which the Robertsons the sen where read, question previously "Generally, must be held. tence in

1315 volved). Much is true of review leaving up to the reader to the same opinion, but successful), attempt cert. Court, grants if was Supreme decide certiorari — denied, -, 118 S.Ct. U.S. only holdings review are lower (1998). L.Ed.2d Somewhat like state- See, e.g., judgment to the in a case. essential — article written ments in a law review States, U.S. -, Rogers v. United lecture, comments judge, judge’s or a (dis 673, 677, L.Ed.2d 686 S.Ct. offering can as vehicle dicta be used missing improvidently granted as' a writ of judge’s on an the bench and bar views upon the issue which it certiorari because issue, views those are worth. whatever granted fairly presented by was not persuasiveness given rationale can Brown, record); Ticor Title Ins. Co. v. views, those weight increase accorded but 117, 121, 1359, 1361-62, U.S. S.Ct. put are formed the fact that the views (1994) (dismissing improv as L.Ed.2d 33 writ they forward in of a case which a context idently granted “it is not clear where *14 always not subtract from the do matter will question our resolution of the constitutional weight given them. any will make difference even to these liti judges, like It is nature of most human gants”). cautious, deliberative, beings, more to be judicious that should be others, reasons, among dicta in —characteristics For these important brought deciding in is- to bear opinions binding anyone for our is not on they say makes a differ- sues—when what purpose. having Because of considerations to before them. It is one ence someone name, in court’s to do with first word that thing hypo- to on an abstract offer a view or may Supreme Court be a different mat dicta put question, specula- thetical to forward ter insofar as courts” such as our “inferior comment, to quite tive another decide but and the are own district courts concerned. competing issue that will affect the interests See, Hialeah, e.g., City United States v. parties in an actual case before the (11th Cir.1998); F.3d Peterson presented by Deciding court. real issues Refractories, 124 v. F.3d BMI judicial parties focuses real 'in real time deci- (11th Cir.1997) (“Dicta Supreme from the speculative ways making making sion that something lightly is not to be cast Court pronouncements hypothetical questions about aside.”). opinions But in our dicta cannot cannot. circuit, or establish either the law even are expressed dicta less reliable Views See, e.g., the law of the case. United States holdings for another than those embodied Dayton, 981 Cir. v. F.2d judicial holdings, reason. dicta does Unlike 1993); Dredge Dock Co. Great Lakes & carry it the added assurance of not Miller, Robert Tanker Watt judiciary having what survived (11th Cir.1992). in a peer amounts a kind of review. Dicta comment, subject may panel decision be points opinion in this ease As the Court’s criticism, disapproval or member another out, in this circuit that the two district courts effectively it is insu- panel, of that same but (in published opinions) the addressed have Supreme lated from banc or Court review. en question opposite con- have reached issue strongly other members of No matter how might tempt concerning it. That us clusions panel’s that a the Court are convinced dicta subject in express our order views wrong, any suggestion that the whole is guidance,” “provide but we decide cannot grant rehearing to correct it will be Court appeal court’s view is in this which district met, response it quite properly, with the that nothing can decide the correct one. We dicta, only the issue is not is addressed more than which is decide actually presented, and so would be an Moreover, appeal. two district resources exam- improper use of en bane judges question differed over have upon R.App. it. ine and See Fed. comment sufficiently diffi- it is establishes one which 35(a) (en rehearing is not favored P. bane disagree, jurists to to cause cult reasonable except ordered when nec- and should not be withholding argues our and that in favor of essary uniformity or of decisions when presented squarely until the importance in- views issue is question exceptional depends upon resolution appeal issue. opinion in an dicta to include

Whether unnecessary a matter issues is

related but judge, to of each

within the sound discretion basis, I case exercised on case

be my colleagues in no criticism of two

intend Instead, sepa- I have written

this instance. not to

rately explain why I have chosen

join them dicta. America, Plaintiff-

UNITED STATES Cross-Appellant,

Appellee, STEELE, Defendant- O.

William *15 Cross-Appellee.

Appellant,

No. 94-3139. Appeals, States Court of

United

Eleventh Circuit.

July 1998.

Case Details

Case Name: McDonald's Corp. v. Robertson
Court Name: Court of Appeals for the Eleventh Circuit
Date Published: Jul 28, 1998
Citation: 147 F.3d 1301
Docket Number: 97-3308
Court Abbreviation: 11th Cir.
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