noting that there was “nothing in the contract ... for an exclusive distributorship ... that obligates” the manufacturer “to police its customers in other areas or to stop them from selling or transshipping goods”
How later courts described this case
- noting that there was “nothing in the contract ... for an exclusive distributorship ... that obligates” the manufacturer “to police its customers in other areas or to stop them from selling or transshipping goods”
- moving party must show, in addition to irreparable injury, either (a) likelihood of success on the merits, or (b) fair ground for litigation plus a balance of hardships tipping decidedly in his favor
- even the loss of other customers resulting from the breach of an exclusive distributorship agreement is compensable by monetary damages
- “For it has always been true that irreparable injury means injury for which a monetary award cannot be adequate compensation and that where money damages is adequate compensation a preliminary injunction will not issue”
Written by the judges who cited it.
The opinion
MANSFIELD, Circuit Judge
(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 (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 , 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 (2d Cir. 1953); Unicon Management Corp. v. Koppers Co., 366 F.2d 199 (2d Cir. 1966); Checker Motors Corp. v. Chrysler Corp., 405 F.2d 319 (2d Cir.), cert. denied, 394 U.S. 999 , 89 S.Ct. 1595 , 22 L.Ed.2d 777 (1969); Sonesta International Hotels Corp. v. Wellington Associates, 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, 750-51 (2d Cir. 1977); Caulfield v. Board of Education, 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.
*74 In my view, the nature and extent of the threat of irreparable injury required for relief in any given case will vary according to the likelihood of success on the merits; the weaker the case on the merits, the stronger must be the showing of threat of irreparable injury. For instance, where a plaintiff can only raise serious questions providing fair ground for litigation, with a balance of hardships tipping decidedly in his favor if relief is denied, a greater threat of irreparable injury must be demonstrated than where he makes a strong preliminary showing on the merits. Since this process usually calls upon the nisi prius judge to engage in careful appraisal and weighing of the proof we will not ordinarily disturb his determination except for clear abuse of discretion. United States v. W. T. Grant Co., 345 U.S. 629, 633 , 73 S.Ct. 894 , 97 L.Ed. 1303 (1953); New York v. Nuclear Regulatory Commission, supra, 550 F.2d at 750-51 ; cf. Munters Corp. v. Burgess Industries, Inc., 535 F.2d 210 , 211 n. 4 (2d Cir. 1976).
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.