Appendix — Response of Carolina, Inc. v. Leasco Response, Inc.

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RESPONSE OF CAROLINA,

Plaintiff-Appellee,

v.

LEASCO RESPONSE, INCORPORATED et al.,

Defendants-Appellants.

RESPONSE OF CAROLINA, INC.,

Plaintiff-Appellee,

v.

LEASCO RESPONSE, INCORPORATED. et al.,

Defendants-Appellants.

DATATRON CORPORATION, d/b/a

Response of Louisville.

Plaintiffs-Appellees,

v.

LEASCO RESPONSE, INCORPORATED et al.,

Defendants-Appellants.

Nos.73-3362, 73-4008, 73-4009.

United States Court of Appeals,

Fifth Circuit.

July 31, 1974.

Franchisees of computer centers brought actions

against franchisor for violation of antitrust laws and one

franchisee sought preliminary injunction prohibiting fran-

chisor from prosecuting further its state court action seek-

ing unpaid royalties and rentals and possession of leased

ne ee enn Se re ——E————E———EE—eEYEe

App. 16

computer equipment. Second franchisee sought prelimi-

nary injunction prohibiting any actions by franchisor re-

sulting in termination of its business. The United States

District Court for the Southern District of Florida,

C. Clyde Atkins, J., issued the requested preliminary in-

junctions and the franchisor appealed. The Court of

Appeals, Tuttle, Circuit Judge, held that where contract

provisions on which franchisor sued in state court did not

further alleged anticompetitive practices, franchisees were

not entitled to preliminary injunctions prohibiting fran-

chisor from prosecuting state court actions againt fran-

chisees.

Reversed and remanded.

1. Monopolies *21.1(1)

When conduct actually prohibited by antitrust laws

is sought to be enforced in a state court action, antitrust

defense is valid block to the action. Sherman Anti-Trust

Act, §§ 1, 4, 15 U.S.C.A. §§ 1, 4; Clayton Act, § 16, 15

U.S.C.A. § 26.

2. Monopolies *21.1(1)

Where recovery sought in state or federal court pro-

ceeding is premised on an obligation collateral to but in-

dependent of agreement which allegedly violates antitrust

laws and it is not necessary to depend on or enforce an

agreement violative of the antitrust laws in order to grant

the requested relief, suit is not barred on theory that agree-

ment is violative of the antitrust laws. Sherman Anti-Trust

Act, §§ 1, 4, 15 U.S.C.A. §§ 1, 4; Clayton Act, § 16, 15

US.C.A. § 26.

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App. 17

3. Courts t508(2)

If contract provisions sued on in state court by party

who is a defendant in a separate antitrust action do not

embody or further anticompetitive practices challenged in

the antitrust action, there has been no irreparable loss or

damage from alleged violation of antitrust laws and federal

court in which the antitrust action has been brought may

not issue a preliminary injunction against prosecution of

the state court action. Sherman Anti-Trust Act, §§ 1, 4, 15

US.C.A. §§ 1, 4; Clayton Act, § 16, 15 U.S.C.A. § 26.

4. Courts t508(2)

Franchisees which brought antitrust actions against

franchisor of computer centers and which alleged that

clause of franchise agreement imposed an illegal territorial

restraint and that franchisor discriminated against fran-

chises in favor of centers owned by franchisor were not en-

titled to preliminary injunctions prohibiting franchisor

from prosecuting actions against franchisees in state courts

to recover royalties and equipment rentals under franchise

and lease agreements and possession of leased equipment

where monies sought by franchisor were not due under the

clause challenged in the antitrust actions. Sherman Anti-

Trust Act. §§ 1, 4, 15 U.S.C.A. §§ 1, 4; Clayton Act, § 16,

15 U.S.C.A. § 26; 28 U.S.C.A. § 2283.

* * *

John R. Kelso, Harold L. Ward, Miami, Fla., Mor-

ton L. Ginsterg, New Cork City, for defendants-appellants.

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App. 18

Joseph W. Womack, J. Kirk Wood, Miami, Fla., for

plaintiffs-appellees.

Before TUTTLE, COLEMAN and AINSWORTH,

Circuit Judges.

TUTTLE, Circuit Judge:

Appellant-defendant, Leasco Response. Inc. {Leasco),

appeals the issuance of preliminary injunctions in these

consolidated cases by the district court as requested by

appellees-plaintiffs, Response of Carolina (Carolina) and

Datatron Corporation (Datatron). The injunctions grew

out of anti-trust actions filed by Carolina and Datatron

against Leasco.

FACTS

Carolina, a North Carolina corporation, and Data-

tron, a Kentucky corporation, entered into contracts with

Leasco, one consisting of a franchise agreement involving

certain computer programing (software) and the other a

computer equipment lease (hardware). The franchise

agreement committed Carolina and Datatron to pay to

Leasco a franchise fee ard royalty payments equal to 15%

of their gross receipts. The equipment lease provided for a

monthly rental charge with additional maintenance costs.

Carolina ceased, on approximately April, 1972, and Data-

tron on approximately July, 1973, making rental and roy-

alty payments to Leasco. Shortly after each franchisee

terminated contractual payments, they filed the instant

suits against Leasco alleging violations of the Sherman and

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App. 19

Clayton Acts and certain state laws. One anti-trust allega-

tion charges an illegal territorial restraint in the form of a

contract provision requiring a 70% royalty on sales made

by the franchisee outside of its primary area of responsi-

bility. The second contends that Leasco discriminates

against Carolina and Datatron, as franchisees, in favor of

Leasco’s company-owned computer centers (preferential

dealings).

On the day prior to Carolina’s filing its action, Leasco

brought suit on the contractual agreements in the state

courts of North Carolina seeking the unpaid royalties and

rentals and the recovery of possession of the leased com-

puter equipment. Carolina maintains that the contracts are

void under the federal anti-trust laws' and, therefore, unen-

forceable. The Antitrust iaws vest exclusive anti-trust iuris-

diction in the federal courts, 15 U.S.C.A. § 4. For that

reason, a defense based on federal antitrust laws cannot be

litigated in the state court action filed by Leasco. As part of

its relief in the anti-trust action, therefore, Carolina sought

a preliminary injunction against Leasco from prosecuting

further the state court suit, alleging that its successful effect

would be to end Carolina’s business.

As part of its relief, Datatron also sought an injunc-

tion to block any actions by Leasco which would result

in the termination of its business. No suits were pending

by Leasco against Datatron at the time of the hearing on

the preliminary injunction.

'See section 1 of the Sherman Act, 15 U.S.C.A. $1:

“Every contract, combination in the form of trust or otherwise, or

conspiracy, in restraint of trade or commerce among the several States,

or with foreign nations, is declared to be illegal.”

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App. 20

The district court agreed with Carolina and Datatron,

and issued the requested injunctions. In Carolina’s suit, the

court prohibited Leasco from prosecuting the state court

action and interfering with the ordinary course of Caroli-

na’s business.” In Datatron’s suit, the court enjoined Leasco

2The pertinent part of the injunction reads:

“The Defendant, Leasco Response, Inc., it’s retainers, attorneys,

officers, agents, servants, employees and all others in active concert or

with said Defendant, to whom notice of this order shall

personal service or otherwise, be and they are each enjoined

ond secisined enifl esther evder of the Court from:

A) Further prosecuting or calling on for hearing, any motion or

other application in Cause No. 73 — CVS 8500 styled:

a

Response ofthe Carolinas Inc., et al

in the Superior Court of Mecklenburg County, North

Car which motion or prosecutorial application has as its object

either the securing of a money judgment by Leasco against Response

or the repossession of computer hardware, attachments, parts, or com-

ponents which are by their nature essential to the continuing operation

of Plaintiff's business.

b) any act or thing the effect or probable fruition of which

will disturb status quo of the described State Court litigation in

a er

eree court.

c) Disconnecting, interrupting or otherwise rendering inoperative,

interstate telephone trunks, lines, cables or other links between Plain-

aaa al

d) Threatening, ing, obstructing, or in anywise interfering

wih the ofcer, agents, and employer o the Pant Response of

aca ordinary and customary course of its business

e) wi threatening or intimidating Plaintiff's customers in any

way. us aclididag TAS Gqutemnaes ameg, am Uhoghening, octting

cuseanesn sividiag dass Gat tee Plaiaitl will go cut of tusinem or

cease operations on a date certain, or other like conduct.”

App. 21

from failing to perfrom any act under the contracts and

from removing any equipment from Datatron’s possession.’

Leasco appeals from the issuance of these preliminary in-

junctions.

In sum, Leasco challenges the injunctions on the

grounds that enjoining the state court action in the Caro-

lina suit and apparently prohibiting the institution of any

state court action in the Datatron suit (1) have no legal

basis under anti-trust law, specifically, 15 U.S.C.A. § 26,

>The pertinent part of the injunction reads:

“The Defendant, LEASCO RESPONSE, INC.), its retainers, attor-

neve offers agents, servants, employees and all others in concert or

participation with said Defendant to whom notice of this order shall

come by personal service or otherwise, be and they are each enjoined

and restrained under further order of the Court from: ;

1. Failing or refusing to perform or do any act, deed or thing un-

der any contract or obligation between it and the Plaintiff.

2. Removing any equipment, components or parts (hardware)

from the Plaintiff's possession, control, custody or property.

3. From harassment, interruption, or interferring with Plaintiff, its

employees or business operations in any way. The Court also intends

that no such acts be done by the Plaintiff toward the Defendant.

4. From refusing within five (5) days to deliver the two drives

(described by the witnesses at the hearing) upstairs to the Plaintiff's

equipment room. In this connection and in keeping with the Defend-

ant’s request, Plaintiff may if it desires cause the drives to be moved

ape storage to the described location, the Defendant to bear the costs

of same.

5. From failing or refusing to properly disconnect the coriputers

components and parts (hardware) now in the possession of the: Plain-

tiff, preparatory to the Plaintiff's move to new premises: such mcve now

contemplated to take place on or about December 1, 1973.

6. From failing or refusing to properly connect and rende: opera-

tional the computers, parts components (hardware) after the MMaintiff

has moved to its ‘new’ premises or quarters.

7. From refusing to deal with the Plaintiff or do other busines:

pending the conclusion of the above styled litigation.”

App. 22

and are not valid under the legal standards governing the

granting of preliminary injunctions; and (2) are prohibited

by the anti-injunction statute, 28 U.S.C.A. § 2283.‘

15 U.S.C.A. § 26 AND PRELIMINARY

INJUNCTIONS

Injunctive relief is provided as a remedy by law in

anti-trust suits, 15 U.S.C.A. § 26. This provision states:

“Any person, firm, corporation, or association

shall be entitled to sue for and have injunctive

relief, in any court of the United States having

_ jurisdiction over the parties, against threatened

loss or damage by a violation of the antitrust laws,

including sections 13, 14, 18, and 19 of this title,

when and under the same conditions and princi-

ples as injunctive relief against threatened con-

- duct that will cause loss or damage is granted by

courts of equity, under the rules governing such

proceedings, and upon the execution of proper

bond against damages for an injunction improvi-

dent!y granted and a showing that the danger of

irreparable loss or damage is immediate, a pre-

liminary injunction may issue.”

“Of course, the injunction in the Datatron suit would not trample

on the dictates of section 2283 against enjoining state proceedings. The

Supreme Court explained in Dombrowski v. Pfister, 380 U.S. 479, 484

n. 2, 85 S.Ct. 1116, 14 L.Ed.2d 22 (1965), that section 2283, is not a

bar to a federal injunction preventing the institution of state court pro-

ceedings, but only prohibits stays of pending suits. See Barancik v. In-

vestors Funding Corp., 489 F.2d 933 (7th Cir. 1973).

"

App. 23

The above statutory provision also incorporates the stand-

ards for issuing a preliminary injunction established by

equity. These were set out by this Court in Canal Authority

of State of Florida v. Callaway, 489 F.2d 567, 572-573 (5th

Cir. 1974):

“. . . It [the district court] must exercise that dis-

cretion in light of what we have termed ‘the four

prerequisites for the extraordinary relief of pre-

liminary injunction.’ Allison v. Froehlke. 5 Cir.

1972, 470 F.2d 1123, 1126. The four prerequisites

are as follows: (1) a substantial likelihood that

piaintiff will prevail on the merits, (2) a sub-

stantial threat that plaintiff will suffer irreparable

injury if the injunction is not granted, (3) that

the threatened injury to plaintiff outweighs the

threatened harm the injunction may do to de-

fendant, and (4) that granting the preliminary

injunction will not disserve the public interest.

DiGiorgio v. Causey, 5 Cir. 1973, 488 F.2d 527:

Blackshear Residents Organization v. Romney,

5 Cir. 1973, 472 F.2d 1197.”

Measured under these principles and the case law and

implications flowing from the Supreme Court’s decision in

Bruce’s Juices v. American Can Co., 330 U.S. 743, 67 S.Ct.

1015. 91 L.Ed. 1219 (1947). and Kelly v. Kosuga, 358 U.S.

516, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959), we find that the

district court’s injunctions canroi stand, because there was

no irreparable loss or damage caused by a violation of the

federal anti-trust law.

PT ua eee et es eS eae te

App. 24

The appellees’ position, in which the district court con-

curred, is that the franchising and leasing agreements vio-

late the anti-trust law and are invalid. Since Leasco is suing

on these contracts in state court where there is no jurisdic-

tion to grant the relief mandated by the anti-trust law, the

district court enjoined the pending state court proceeding

against Carolina and the institution of a state court suit

against Datatron, because irreparable injury would be

accomplished by effectively terminating Carolina’s and

Datatron’s businesses. There is, however, an erroneous

assumption in appellees’ and the district court’s syllogism.

The Supreme Court postulated in Bruce’s Juices and Kelly,

and lower courts developed the rule,’ that the anti-trust

laws on the theory asserted by appellees, void for illegality,

provide no defense for actions under state law for collec-

tion of debts for sale of goods and services.

In Bruce’s Juices, a suit filed in state court, the issue

squarely presented to the Supreme Court was whether

“notes representing the purchase price of goods sold and

delivered are uncollectible if it is found that the vendor

violated the Robinson-Patman Act.” 330 U.S. at 744, 67

S.Ct. at 1015. The Supreme Court assumed that the anti-

trust violations were established and held that Congress

had not meant to provide the additional remedy requested

of allowing “a buyer to get his goods for nothing because

SDenison Mines, Ltd. v. Michigan Chemical Corp., 469 F.2d 1301,

1309 (7th Cir. 1972) ; El Salto, S.A. v. P.S.G. Co., 444 F.2d 477, 482-483

(9th Cir.), cert. denied, 404 U.S. 940, 92 S.Ct. 273, 30 L.Ed.2d 253

(1971); Dickstein v. DuPont, 443 F.2d 783, 785-787 (1st Cir. 1971);

Sunshine Packers, Inc. v. American Can Co., 395 F.2d 86 (Sth Cir.

1968) ; Lewis v. Seanor Coal Co., 382 F.2d 437, 441 (3rd Cir. 1967),

cert. denied, 390 U.S. 947, 88 S.Ct. 1035, 19 L.Ed.2d 1137 (1968).

Ml em ee

App. 25

the seller violated the Act . . .” 330 U.S. at 752, 67 S.Ct. at

1019. Likewise, in Kelly a similar effort to assert an anti-

trust defense to a suit filed in federal court for debt on

goods sold and delivered was attempted; the Supreme

Court reaffirmed the Bruce’s Juices holding:

“As a defense to an action based on contract, the

plea of illegality based on violation of the Sher-

man Act has not met with much favor in this

Court.

* * *

“In any event, an analysis of the narrow scope in

which the defense is allowed in respect of the

Sherman Act indicates that the principle of dis-

tinction is not what the petitioner claims it to be.

The leading case here in which the defense was

allowed is Continental Wallpaper Co. v. Lewis

Voight & Sons Co., 212 U.S. 227, [29 S.Ct. 280]

[53 L.Ed. 486,] much relied on by petitioner.

There the Voight Company had made purchases

from Continental, a corporation which existed

only as a selling agent for numerous wallpaper

companies doing business in a pool and selling at

prices, alleged to be excessive and unreasonable,

fixed through the pool agreement. The Court was

of the opinion that to give judgment for the exces-

sive purchase price so fixed in favor of such a

vendor would be to make the courts a party to the

carrying out of one of the very restraints forbid-

den by the Sherman Act. 212 U.S. at 261, [29 S.Ct.

280]... . Past the point where the judgment of the

App. 26

Court would itself be enforcing this precise con-

duct made unlawful by the Act, the courts are to

be guided by the overriding general policy, as

Mr. Justice Holmes put it, ‘of preventing people

from getting other people’s property for nothing

when they purport to be buying it.’ Continental

Wallpaper v. Lewis Voight & Sons Co., supra, at

271 [29 S.Ct. 280.] (dissenting opinion). Supply-

ing a sanction for the violation of the Act, not in

terms provided and capricious in its operation,

cf. Bruce’s Juices, Inc. v. American Can Co.,

supra, [330 U.S.] at 753-754, [67 S.Ct. 1015], is

avoided by treating the defense as so confined.”

358 U.S. at 518, 520-521, 79 S.Ct. at 431, 432.

[1, 2] Both Bruce’s Juices® and Kelly’ carve out an

exception under Continental Wallpaper Co. v. Lewis

Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed.

486 (1909), that when the conduct actually prohibited by

the anti-trust act is sought to be enforced in a state court

action, the anti-trust defense is a valid block.* In sum,

where recovery in the state court proceeding (or a federal

court proceeding) is premised on an obligation collateral

to but independent of the agreement which violates the

anti-trust law and where it is not necessary for the state

6330 U.S. at 754-755, 67 S.Ct. 1015.

7358 U.S. at 520-521, 79 S.Ct. 429.

8See Milsen Co. v. Southland Corp., 454 F.2d 363 (7th Cir. 1971);

Sunshine Packers, Inc. v. American Can Co., supra, 395 F.2d 86; Far-

benfabriken Bayer, A. G. v. Sterling Drug Co., 307 F.2d 207, 208-210

(3rd Cir. 1962).

App. 27

court in granting relief to depend on or enforce the agree-

ment violative of the anti-trust provisions, there is no ille-

gality to bar the state suit.’

(3, 4] Having discovered that appellees’ theory cannot

provide a defense to the state court action, unless the

Voight exception is met, the question next becomes whether

a preliminary injunction can issue under this theory of

illegality." We think not. Helfenbein v. International Indus-

tries, Inc.,438 F.2d 1068 (8th Cir. 1971); Red Rock Cola

Co. v. Red Rock Bottlers, 195 F.2d 406 (Sth Cir. 1952).

But cf. Milsen Co. v. Southland Corp.. supra, 454 F.2d 363.

If the contract provisions sued on in the state court do not

embody or further the anti-competitive practices, then

there has been no irreparable !oss or damage from a viola-

tion of the anti-trust law.

The Helfenbein case involves facts very similar to the

present situation. There was a franchise agreement between

the parties which provided for the subleasing of restaurants

and equipment, just as here Leasco is leasing computer and

related equipment to Carolina and Datatron. Upon default

*The franchise agreement expressly provided for severability of any

clause held to be invalid. Superior Bedding Co. v. Serta Associates, Inc.,

353 F.Supp. 1143 (N.D.IIl. 1972). In Kelly, the Supreme Court found

that the provision in the commodity sales contract, where the buyer and

seller illegally agreed not to sell on the future’s market, was separable

from the contractual promise to pay for the commodities. 358 U.S. at

5 pret 521, 79 S.Ct. 429. Cf. Lewis v. Seanor Coal Co.. supra, 382

F.2d 437.

"The difference between prohibiting this defense as a total block

to a state court suit as in Bruce's Juices, and, in this case, enjoining the

state proceedings until the end of the federal action, is not sufficient to

distinguish this situation. The injunction here was issued on the basis

and reasoning which was rejected in Bruce’s Juices and Kelly.

App. 28

by the franchisees, the franchisor commenced eviction

proceedings in state court. The franchisees then, just as in

this case, filed anti-trust suits under the Sherman and Clay-

ton Acts in federal court against the franchisor (alleging

illegal tying agreements) and sought a preliminary injunc-

tion from the federal court staying the state court eviction

actions. Relying on Bruce’s Juices and Kelly, the court

found no loss or damage by a violation of the anti-trust

laws as required by 15 U.S.C.A. § 26 and affirmed the

denial of the injunctive relief.

There are two important reasons for narrowly con-

struing, as the court did in Helfenbein, the plea of illegal-

ity under the anti-trust laws. First. as stressed heavily by

the Supreme Court in Bruce’s Juices and Kelly, the avail-

ability of such a defense allows contracting parties the

benefits of a contract without having to tender considera-

tion. In this case, Carolina and Datatron have accepted

from Leasco the use of their computer hardware, their

computer software, and their reputation and expertise,

without payment. “The Court has refrained from extend-

ing judicial sanction to the avoidance of private contracts

where to do so is unnecessary. See Bruce’s Juices, Inc. v.

American Can Co., 330 U.S. 743, 751-757, 67 S.Ct. 1015,

91 L.Ed. 1219 (1947); D. R. Wilder Manufacturing Co. v.

Corn Products Refining Co., 236 U.S. 165, 35 S.Ct. 398, 59

L.Ed. 520 (1915); Connolly v. Union Sewer Pipe Co., 184

U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679 (1902).” Dickstein v.

DuPont, supra, 443 F.2d at 786.

Second, the policy expressed in Bruce’s Juices and

applied in Kelly denoted that the enumerated statutory

remedies in the anti-trust law do not provide for or require

_ CRORES ERA

App. 29

such a broad anti-trust defense to contract actions. To

allow the appelles to obtain free goods and services from

Leasco as a compensatory measure in the state court and,

additionally, to award triple damages in the federal anti-

trust suit would exceed the redress established by the anti-

trust statute. 330 U.S. at 756-757, 67 S.Ct. 1015."

Nor can the injunctions be upheld under the Voight

exception. The substantial amounts owed Leasco by appel-

lees” are not argued to be monies due from appellees under

the 70% clause for selling outside their territories of pri-

mary responsibility (territorial restraint), rather the rec-

ord reflects that appellees terminated all payments. Neither

the rentals on the leased computer hardware nor the main-

tenance costs nor the unchallenged 15% royalties were

paid. The appellees contend that to dissolve the injunctions

would allow Leasco to put them out of business. We note,

In other words, for any damage inflicted by Leasco on Carolina

and Datatron which terminates their businesses, which Carolina and

Datatron can demonstrate violates the anti-trust law, triple damages can

be claimed in the anti-trust suit.

"Approximately $86,000 is owed by Datatron and $267,406 by

Carolina.

The record reveals that, at least from Datatron, Leasco never re-

ceived the 70% of the sales receipts for business outside appellees pri-

mary area of responsibility. The record does not indicate whether in the

state suit against Carolina, Leasco is claiming this 70%. In any event, we

note that the Supreme Court in Bruce’s Juices refused the illegality de-

fense even though part of the money sought by the seller represented an

illegal differential in the price of the goods. See Helfenbein v. Interna-

tional Industries, Inc., supra, 438 F.2d at 1071.

KGa. Sed oP rank

App. 30

however, that this situation is not one of a franchisor ter-

minating a franchisee because of its failure to comply with

the practices violative of the anti-trust law,"* nor that the

alleged anti-trust violation so permeated the franchise

agreement that to uphold any of its provisions would be to

countenance and enforce an anti-trust violation.’* Finally,

the dictates of Bruce’s Juices and Kelly were applied in

Helfenbein even though it was clear that the effect there

was to verminate the franchisee’s business.

In addition, the principles of comity and federalism

recognized by this Court in Red Rock Cola Co. v. Red

Rock Bottlers, supra, 195 F.2d 406, and affirmed in Amer-

ican Radio Association v. Mobile Steamship Association,

Inc., 483 F.2d 1, 6-7 (Sth Cir. 1973), mitigate against un-

necessarily interfering with pending state court proceed-

ings."° Red Rock involved a question similar to the issue in

4Sahm v. V-1 Oil Co., 402 F.2d 69 (10th Cir. 1968): Broussard v.

Socony Mobil Oil Co., 350 F.2d 346 (Sth Cir. 1965); Bergen Drug Co.,

Inc. v. Parke, Davis & Co., 307 F.2d 725 (3rd Cir. 1962): Bateman v.

Ford Motor Co., 302 F.2d 63 (3rd Cir. 1962).

5See Milsen Co. v. Southland Corp., supra, 454 F.2d 363.

'6The decision in Mitchum v. Foster, 407 U.S. 225, 243, 92 S.Ct.

2151, 32 L.Ed.2d 705 (1972), indicated that the restraints of federalism

and comity were still present even if an injunction fell within an excep-

tion to 28 U.S.C.A. §2283. See note 16, infra.

ee ———s et —

App. 31

this case, whether an injunction could issue under the anti-

trust laws to enjoin a state court suit. This Court reversed

the issuance of the preliminary injunctions on the grounds

of federalism and comity.”

We conclude, therefore, that the judgment granting

the preliminary injunctions must be set aside.

The judgment is reversed and the case is remanded for

further proceedings not inconsistent with this opinion.

Having determined that the injunctions are invalid under 15

U.S.C.A. §26 and the principles governing the granting of injunctions,

there is no necessity to reach the question of whether the anti-trust laws

constitute an exception to the anti-injunction statute, 28 U.S.C.A. §2283.

Carolina had contended that the enjoining of the state court in North

Carolina fell within the exception language in 28 U.S.C.A. §2283, either

as “necessary in aid of jurisdiction,” Atlantic C. L. R. Co. v. Engineers,

398 U.S. 281, 294-296, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970), or as

“expressly authorized by Act of Congress,” Mitchum v. Foster, supra,

407 US. at 228, 92 S.Ct. at 2154; Jennings v. Boenning & Co., 482 F.2d

1128 (3rd Cir. 1970), cert. denied, 414 U.S. 1025, 94 S.Ct. 450, 38

L.Ed 2d 316 (1973).

POO PTD 4 eG Sg remap AIOE SAN ELS SITs 10 sat, 8 OLA ETI reves rune nemmrsnennananss =

APPENDIX E

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

EDWARD W. WADSWORTH, Clerk:

OFFiCE OF THE CLERK

600 Camp Street

New Orleans, La. 70130

October 8, 1974

TO ALL COUNSEL OF RECORD

RE: 73-3362 RESPONSE OF CAROLINA V. LEASCO

RESPONSE INCORPORATED

73-4008 RESPONSE OF CAROLINA, INC. V.

LEASCO RESPONSE

73-4009 DATATRON CORPORATION V. LEAS-

CO RESPONSE INCORPORATED

Dear Counsel:

This is to advise that an order has this day been en-

tered denying the petition( ) for rehearing, and no

member of the panel nor Judge in regular active service

on the Court having requested that the Court be polled

on rehearing en banc (Rule 35, Federal Rules of Appe!late

Procedure; Local Fifth Circuit Rule 12) the petition( )

for rehearing en banc has also been denied.

App. 36

See Rule 41, Federal Rules of Appellate Procedure

for issuance and stay of the mandate. .

Very truly yours,

EDARD W. WADSWORTH

CLERK

By /s/ Anne G. Parent

Deputy Clerk

cc: Messrs. John R. Kelso

Harold L. Ward

Mr. Morgan L. Ginsberg |

Mr. J. Kirk Wood

Mr. Joseph W. Womack

APPENDIX F

et

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO. 73-1082-Civ-CA

RESPONSE OF CAROLINA, INC.,

a North Carolina corporation,

Plaintiff,

VS.

LEASCO RESPONSE, INC.,

a Delaware corporation;

JOHN DOE, TOM DOE, SAM DOE, and

RICHARD ROE,

Defendants.

PRELIMINARY INJUNCTION

WITH

FINDINGS AND CONCLUSIONS

This cause is before the Court after notice on the

application of the Plaintiff, Response of Carolina, Inc.

for a provisional and preliminary status quo order enjoin-

ing the Defendant, Leasco Response, Inc. and its retainers

from further interfering with Plaintiff’s business opera-

tions or customers at Charlotte, North Carolina or else-

where and from pursuing for the time being at least, its

present efforts to repossess certain computer hardware

and components which are necessary and essential to

Plaintiff’s business operations.

7

'

j

|

Pee Da AR ats fh EL

yt ee

App. 40

The action of the Court today implies further inquiry

and consideration pendente lite of the propriety and wis-

dom of dissolution, modification or the making perma-

nent of this writ.

The Court has prior to its oral ruling from the bench

and the issuance of this order, considered the pleadings

and motions filed, the exhibits and documentary evidence

offered, the pertinent antitrust Acts, Section 2283 of the

Code, Rules 65 and 52(a) among others and the oral

testimony of the witnesses John Wright and Joseph Mum-

maw. Further consideration has been given to the argu-

ment of counsel for both parties and to the cases cited

both in the brief and in the argument. Being advised in

the premises and in consequence of the proofs and authori-

ties, the Court finds and concludes:

First: That as to prehearing notice, counsel for the

Defendant, Leasco in both Charlotte and Miami were

notified. As to the former, Mr. Hamrick of Fairley, Ham-

rick, Montieth & Cobb was notified by long distance tele-

phone. As to the latter Mr. Ward of Fowler, White,

Humkey, Burnett, Hurley & Banick, P.A. was given

written notice and appeared for Leasco at the hearing.

Second: That as to the basic issue of entitlement to

relief, the equities are with the Plaintiff. This conciusion

is reached by the Court with due regard to the quantum

and quality of the evidence required prior to the entry

of restraint orders.

Third: Without regard to the ancillary or pendent

jurisdictional counts of the complaint, the Court con-

App. 41

cludes that, with reference to the antitrust allegations,

there is a reasonable probability Plaintiff will succeed on

the merits of it’s claim.

Fourth: Given the decisions and the Restraint of

Trade Acts which vest exclusive antitrust jurisdiction in

the Federal judiciary, the Court concludes that the State

court cannot for want of such jurisdiction grant the relief

which is indicated and is necessary in the case at bar.

Fifth: The granting of restraint will minimaily dam-

age the Defendant. In this connection the Court has duly

considered the relationship of the parties, one to the other,

and the time sequence of Leasco’s belated efforts to re-

possess its computer hardware.

Sixth: Unless restrained the Defendant’s present

course of action toward and against the Plaintiff will sub-

stantially and irreparably damage the Plaintiff’s business

and very existence.

Seventh: The effectiveness of this injunctive order

is conditioned upon the Plaintiff’s posting of a good and

sufficient bond with the Clerk of Court in the amount of

One Thousand Dollars ($1,000.00). in the event that

Plaintiff shall post the described bond in cash, the Clerk

shall receive the same and give a receipt therefor.

Eighth: The drawing down of all or any part of the

bond or monies described in Seventh above shall be done

only under the terms of a written order of the Court after

hearing.

se < a dn ROR 4

Pe ee aks

pe TREC

App. 42

Ninth: The entry of this order shall not be construed

to foreclose or prejudice any future hearing of considera-

tion by the Court of a motion to transfer under 1404(A).

Tenth: The entry of this order shall not be construed

to foreclose or prejudice any future hearing or considera-

tion by this Court or any transferee court to dissolve, = ‘|

modify or make permanent this writ.

Eleventh: The parameters of this writ do not include

the Judge or Judges of the General Court of Justice —

Superior Court Division — Mecklenburg County of the

State of North Carolina nor its authority and nothing con-

tained in my order is to be construed to in anywise impose

restraint on said officials.

The reasons, authorities and conditions imposed, it

is now thereupon ordered adjudged and decreed that:

The Defendant, Leasco Response, Inc., it’s retainers,

attorneys, officers, agents, servants, employees and all

others in active concert or participation with said Defend-

ant, to whom notice of this order shall come by personai

service or otherwise, be and they are each enjoined and

restrained until further order of the Court from:

a) Further prosecuting or calling on for hearing, any

motion or other application in Cause No. 73-CVS 8500

styled:

Leasco Response, Inc.

vs.

Response of the Carolinas Inc. et al

aad

App. 43

now pending in the Superior Court of Mecklenburg

County, North Carolina, which motion or prosecutorial

application has as its object either the securing of a money

judgment by Leasco against Response or the repossession

of computer hardware, attachments, parts, or components

which are by their nature essential to the continuing

operation of Plaintiff’s business.

b) Doing any act or thing the effect or probable

fruition of which will disturb the status quo of the de-

scribed State Court litigation in Mecklenburg County

pending further order of this Court or any transferee

court.

c) Disconnecting, interrupting or otherwise render-

ing inoperative, interstate telephone trunks, lines, cables

or other links between Plaintiff’s business and Leasco’s

computers at Bethesda, Maryland or elsewhere.

d) Threatening, intimidating, obstructing, or in any-

wise interfering with the officers, agents, and employees

of the Plaintiff, Response of Carolina, Inc. in the ordinary

and customary course of its business activities.

¢) Enticing, threatening or intimidating Plaintiff’s

customers in any way. The Court intends that Leasco and

those acting for it refrain from further soliciting Plaintiff's

customers away, from telephoning, writing or otherwise

contacting the Plaintiff’s present customers in pursuit of

any objective to encourage said customers not to do busi-

ness with the Plaintiff for whatever reason, and from call-

ing or writing Plaintiff’s customers advising them that the

ainananl

st nah Sind ada tsa andnain eh RSET aslaROA DIRE Sch ON Haeibtias an cot y

App. 44

Plaintiff will go out of business or cease operations on a

date certain, or other like conduct.

Done and ordered at Miami, Florida this 16 day of

July, 1973, nunc pro tunc as of 7:02 P.M., Friday, July 13,

1973.

/s/ CHARLES B. FULTON

Chief UNITED STATES

DISTRICT JUDGE

for C. CLYDE ATKINS

APPENDIX G

_ UNITED STATES DISTRICT COURT

SOUTHERN DISTR.’CT OF FLORIDA

NO. 73-1082-Civ-CA

RESPONSE OF CAROLINA, INC.

a North Carolina corporation

Vv

LEASCO RESPONSE, INCORPORATED,

a Delaware corporation, et al.

Filed Nov 30 1973

ORDER OF MODIFICATION

FINDINGS AND CONCLUSIONS

THIS CAUSE is before the Court on the Petition of

the Defendant, Leasco Response, Inc. to vacate or modify

the Temporary Injunction heretofore issued as of July 13,

1973. The Court has now conducted three evidentiary

hearings in these consolidated causes, which hearings were

concerned with the propriety of the granting of injunctive

relief and the balancing of the interests of the parties

pendente lite. The pleadings and admitted documents of

evidence have been considered as well as the testimony

given on oath before the Court. The Court has reviewed

and reconsidered the Code provisions of 2283, the appli-

cable antitrust Acts; the briefs of counsel the cases cited

by counsel for both sides; the representations made by

Mr. Leonard Pernick, the President of Leasco; by Mr.

oe ees |

Be ok Boule

an wale

eee wy ee ak) en eer er | ns

ne we

App. 48

Harold Ward, as counsel for the defendant; by Mr. Joseph

Womack, as counsel for the plaintiffs. The court notes

that neither side impugns the correctness of any of the

representations made to the Court. The Court has duly

taken note of the changes in the financial position of the

plaintiff since the hearing of July 13, 1973. Being advised

in the premises, the court now finds and concludes:

First: The Court has jurisdiction of the cause and

the parties thereto.

Second: With due regard to the provisions of Sec-

tion 2283 of Title 28, the Court is authorized to employ

injunctive relief in aid of its exclusive jurisdiction in anti-

trust Cases.

2. That portion of the defendant’s Petition which

asks amendment or modification of the writ is granted to

the degree and extent as follows:

(a) Beginning October 20, 1973 and on the same

day of each month thereafter, plaintiff shall deposit

into the Registry of the Court fifteen percent (15%)

of its total net revenue from whatever source derived

and without regard to any territoria! or geographical

limitation. Net revenue means all monies received

during the month preceding the month such payment

is due. The mont! y deposit as described here shall

be suitably noted as applying against the claim of

royalty payments.

(b) Begimning November 1, 1973 plaintiff shall

deposit into the Registry of the Court, ten percent

App. 49

(10%) [but not more than six hundred dollars

($600.00) in any one monthj of its total net revenue

from whatever source derived, and without regard to

any territorial or geographical limitation. Net reve-

nue means all monies received. The monthly payment

as here required to be suitably noted as applying

against maintenance.

(c) Plaintiff shail furnish monthly to the de-

ferdant a statement of its receipts in terms of its

sums in its operation. “Receipts” do not include

accounts receivable, but they include monies paid,

sums received in the operation of the business. The

statement shall be furnished simultaneously with the

deposit in the Registry of the Court with copies being

forwarded to the defendant.

(d) All supplies shipped by defendant to plain-

tiff are to be on a COD basis.

3. One the condition that the plaintiff complies from

time to time as ordered with the requirements which I

have imposed in modification, the restraint implicit in the

Preliminary Injunction as of July 13, 1973 shall be abided

by the defendant.

4. The described Preliminary Injunctive order re-

mains in full force and effect, except insofar as this order

modifies or changes its terms.

5. It is the view of the Court that the injunction as

modified shall remain in force for only so long as is neces-

sary to an orderly decision of the cause at which time the

he

App. 50

writ is to be vacated, further modified or made permanent

as the record may warrant.

6. Plaintiff may at its option deposit with the Clerk,

the monies or funds required by this order by check.

7. No monies on-deposit in the Court’s Registry are

to be disbursed or otherwise drawn down without written

order of the Court after hearing.

8. This order and the Preliminary Injunction re-

ferred to from time to time concern only the case styled

Response of Carolina, Inc. v. Leasco Response, Inc. The

Court does not intend that it affect the (3) other causes

which are consolidated therewith.

DONE AND ORDERED at Miami, Florida this 30th

day of November, 1973, nunc pro tunc as of 6:21 p.m.,

Thursday, October 18, 1973.

/s/C.Clyde Atkins

United States District Judge

cc. Joseph Womack, Esq.

Harold Ward, Esq.

wes me

Pte BEF LEY D AGL MOUS

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 73-1367-Civ-CA

DATATRON CORPORATION,

a Kentucky corporation,

d/b/a RESPONSE OF LOUISVILLE,

Plaintiff,

vs.

LEASCO RESPONSE, INCORPORATED,

a Delaware corporation; JOHN DOE,

TOM DOE, SAM DOE, and RICHARD DOE,

Defendants.

Filed

Oct 2 3:20 PM °73

PRELIMINARY INJUNCTION

WITH

FINDINGS AND CONCLUSIONS

THIS CAUSE is before the Court after 14 days notice

on the Application of the Plaintiff. DATATRON CORPO-

RATION. a Kentucky corporation. for a provisional and

preliminary status quo order enjoining the Defendant.

LEASCO RESPONSE. INC.. a Delaware corporation, its

retainers, agents. employees and others acting in concert

with said Defendant from: removing computer equipment,

parts or components (hardware) from the possession of

the Plaintiff at Louisville, Kentucky or elsewhere; from

ha NE ARs Any Loe

j

;

i

:

App. 54

harrassment, disturbing or otherwise interfering with or

disrupting Plaintiff's business operations; and from refus-

ing to deal with the Plaintiff during the pendency of the

litigation.

The action of the Court today implies further inquiry

and consideration pendente lite of changes in conditions

or circumstances which may warrant the dissolution or

modification of this order or the entry of a permanent writ.

The court has prior to its oral ruling from the bench

(at approximately 4:25 p.m., Friday, September 21, 1973)

and the issuance of this order, considered the pleadings and

motions filed; the exhibits and documentary evidence ad-

mitted, the pertinent antitrust acts; Section 2283 of the

Code; controlling case law; the stipulation of counsel con-

cerning jurisdiction and doing business; Rules 65 and

52(a) among others; the oral testimony of the witnesses

at the hearing and argument of counsel for both sides. In

consequence, the Court finds and concludes:

First: The Defendant, Leasco, is doing business with

the Southern District of Florida.

Second: The Court has jurisdiction of the parties and

the cause.

Third: That as to the basic issue of entitlement to

relief the equities are with the Plaintiff. This conclusion is

reached by the Court with due regard to the quantum and

type of evidence required by law to support the entry of

restraint orders.

App. 55

Fourth: Without regard to the pendent jurisdictional

counts the Court concludes at this stage that with reference

to the antitrust allegations, there is a reasonable probability

that the Plaintiff wili succeed on the merits of its cause.

Fifth: The granting of the restraint sought will do

minimal damage to the Defendant. given the conditions

herein imposed by the Court upon the Plaintiff to effectuate

the writ.

Sixth: Unless the Defendant is restrained, damage to

the Plaintiff will in all liklihood be substantial and irrepara-

ble. It is likely that unless the status quo is kept Plaintiff’s

business wili cease to operate.

Seventh: The effectiveness of this order is conditioned

upon the Plaintiff doing the following:

A) Within five (5) days Plaintiff shall post with

the Clerk of Court a cash or other good and sufficient

bond in the amount of $2,500.00.

B) At its next regular monthly “royalty” pay-

ment date; Plaintiff shall pay into the registry of the

Court 15% (Fifteen) of its total dollar income derived

(monies received) from the use of Leasco’s mark or

equipment.

C) After making the first payment as required

by (B) above, Plaintiff shall thereafter and once each

month make a similar payment into the registry. The

15% calculation to be made in the manner set out in

(D) below. Plaintiff shall have a reasonable time after

Warnecee rte. anil

Ea neo ace A tA rete 2

| ee

App. 56

the monthly income can be calculated in which to

transmit the funds by mail from Louisville, Kentucky

to Miami, Florida.

D) In the calculation of its income from sales

Plaintiff shall include all monies derived from all sales

without regard to territorial or geographical loca-

tion(s).

D) At the next regular due date mentioned in

the Franchise Agreement and its attached exhibits,

Plaintiff shall pay into the registry of the Court 10%

(Ten) of its total sales derived (monies received)

from the use of Leasco’s mark or equipment. The

same to be considered toward rental as distinguished

from “royalty” as contemplated by (B) above.

F) Calculation of the 10% (Ten) required in

(E) to be made as in (D) above.

G) After making the first payment as required

in (E) above Plaintiff shall thereafter on each succeed-

ing (monthly) anniversary date make a similar pay-

ment into the registry. Calculation of the 10% (Ten)

to be made as above described in (D) and (E).

H) In the event the calculated 10% (Ten) based

on sales income shall exceed the amount set out in

the contract the figure contained in the contract shall

control.

Eighth: Plaintiff will keep its billing and sales income

and payments records in an orderly way or fashion so that

at

App. 57

the Court and counsel may inspect them on reasonable

notice and as necessary from time to time. Plaintiff is to

furnish (periodically) counsel for the Defendant, Leasco,

with a copy of such records.

Ninth: Plaintiff will keep current in payments for

maintenance performed by the Defendant, Leasco. The

Court intends that these payments he made directly by

Plaintiff to the Defendant.

Tenth: The disbursement or drawing down of any

bond or registry monies described in this order shall be

done only under the terms of a written order of Court after

hearing.

Eleventh: In the event Plaintiff shall elect to post a

cash bond as required by this order, the Clerk shall give

a receipt therefor.

The reasons, authorities and conditions imposed con-

sidered and tii. Court being advised in the premises, it is

now, thereupon,

ORDERED, ADJUDGED AND DECREED THAT:

The Defendant. LEASCO RESPONSE, INC. its re-

tainers, attorneys, officers, agents, servants, employees and

all others in concert or participation with said Defendant

to whom notice of this order shall come by personal service

or otherwise, be and they are each enjoined and restrained

until further order of the Court from:

Sic ttabt bidhae dared. OM. so eh re ee SNe

— ee

App. 58

1. Failing or refusing to perform or do any act, deed

or thing under any contract or obligation between it and

the Plaintiff.

2. Removing any equipment, components or parts

(hardware) from the Plaintiff's possession, control, cus-

tody or property.

3. From harrassment, interruption, or interferring

with Plaintiff, its employees or business operations in any

way. The Court also intends that no such acts be done by

the Plaintiff toward the Defendant.

4. From refusing within five (5) days to deliver the

two drives (described by the witnesses at the hearing) up-

stairs to the Plaintiff's equipment room. In this connection

and in keeping with the Defendant’s request, Plaintiff may

if it desires cause the drives to be moved from storage to the

described location, the Defendant to bear the costs of same.

5. From failing or refusing to properly disconnect the

computers components and parts (hardware) now in the

possession of the Plaintiff, preparatory to the Plaintiff’s

move to new premises; such move now contemplated to

take place on or about December 1, 1973.

6. From failing or refusing to properly connect and

render operational the computers, parts components (hard-

ware) after the Plaintiff has moved to its “new” premises

or quarters.

App. 59

7. From refusing to deal with the Plaintiff or do other

business pending the conclusion of the above styled liti-

gation.

DONE and ORDERED at Miami, Florida the 25th

day of September 1973 nunc pro tunc as of 4:25 p.m.. Fri-

day, September 21, 1973.

/s/ C. Clyde Atkins

UNITED STATES DISTRICT

JUDGE

APPENDIX I

VO Ee OEE PP LO bat er SO re oe

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

NO. 73-1367-Civ-CA

DATATRON CORPORATION,

a Kentucky corporation, d/b/a

RESPONSE OF LOUISVILLE

Plaintiff

v

LEASCO RESPONSE, INCORPORATED,

a Delaware corporation;

JOHN DOE, TOM DOE, SAM DOE and

RICHARD DOE,

Defendants

Filed Nov 30 1973

AMENDED PRELIMINARY INJUNCTION

WITH FINDINGS AND CONCLUSIONS

THIS CAUSE has come before the Court on a mo-

tion by the Defendant, Leasco Response, Inc. to modify

the Preliminary Injunction entered by this Court on Sep-

tember 25, 1973. Upon consideration of the record in this

cause and the Court being otherwise duly advised, the

Order of September 25 (filed October 2, 1973) is amended

to read as follows:

THIS CAUSE is before the Court after 14 days

notice on the Application of the Plaintiff, DATATRON

CORPORATION, a Kentucky corporation, for a pro-

Ty

App. 64

visional and preliminary status quo order enjoining the

defendant, Leasco Response, Inc., a Delaware corpora-

tion, its retainers, agents, employees and others acting

in concert with said Defendant from: removing computer

equipment, parts or components (hardware) from the

possession of the Plaintiff at Louisville, Kentucky or else-

where; from harrassment, disturbing or otherwise inter-

fering with or disrupting Plaintiff's business operations;

and from refusing to deal with the Plaintiff during the

pendency of the litigation.

The action of the Court today implies further inquiry

and cgnsideration pendente lite of changes in conditions

or circumstances which may warrant the dissolution or

modification of this order or the entry of a permanent

writ.

~ west delay

The Court has prior to its oral ruling from the bench

(at approximately 4:25 p.m., Friday, September 21, 1973)

and the issuance of this order, considered the pleadings

and motions filed, the exhibits and documentary evidence

admitted, the pertinent antitrust acts; Section 2283 of the

Code; controlling case law; the stipulation of counsel con-

_ cerning jurisdiction and doing business; Rules 65 and

52(a) among others; the oral testimony of the witnesses

at the hearing and argument of counsel for both sides. In

consequence, the Court finds and concludes:

First: The defendant, Leasco, is doing business with

the Southern District of Florida.

Second: The Court has jurisdiction of the parties and

the cause.

amad.

eee

App. 65

Third: That as to the basic issue of entitlement to

relief the equities are with the Plaintiff. This conclusion

is reached by the Court with due regard to the quantum

and type of evidence required by law to support the entry

of restraint orders.

Fourth: Without regard to the pendent jurisdictional

counts the Court concludes at this stage that with refer-

ence to the antitrust allegations, there is a reasonable

probability that the Plaintiff will succeed on the metits

of its cause.

Fifth: The granting of the restraint sought will do

minimal damage to the defendant, given the conditions

herein imposed by the Court upon the plaintiff to effectu-

ate the writ.

Sixth: Unless the defendant is restrained, damage

to the plaintiff will in all likelihood be substantial and

irreparable. It is likely that unless the status quo is kept

plaintiff’s business will cease to operate.

Seventh: The effectiveness of this order is condi-

tioned upon the plaintiff doing the following:

A. Within five days plaintiff shall post with the

Clerk of Court a cash or other gocd and sufficient

bond in the amount of $2,500.00.

B. At its next regular monthly “royalty” pay-

ment date which for the month of September is the

10th day of October, and on the same day of each

month thereafter, plaintiff shall deposit into the Reg-

App. 66

istry of the Court fifteen percent (15%) of its total

net evenue from whatever source derived and with-

out regard to any territorial or geographical limita-

tion. Net revenue means all monies received during

the month preceding the month such payment is due.

The monthly deposit as described herein shall be

suitably noted as applying against the claim of royalty

payments.

C. At the next regular due date mentioned in the

Franchise Agreement and its attached exhibits, and

on the same day of each month thereafter, plaintiff

shall pay into the Registry of the Court Ten Percent

(10%) of its total net revenue from whatever source

derived and without regard to any territoria! or geo-

graphical limitation. Net revenue means all monies

received during the month preceding the month such

payment is due. This payment is to be considered

toward rental as distinguished from “royalty” as con-

templated in “B” supra.

D. In the event the calculated ten percent (10%)

based on sales income shall exceed the amount set

out in the contract the figure contained in the con-

tract shall control.

Eight: Plaintiff shall furnish monthly to the defend-

ant a statement of its receipts in terms of its sums in its

operations. ‘“‘Receipts” do not include accounts receiv-

able, but they include monies paid, sums received in the

operation of the business. The statement shall be furnished

simultaneously with the deposit in the Registry of the

Court with copies being forwarded to the defendant.

App. 67

Ninth: Plaintiff will keep current in payments for

maintenance performed by the defendant, Leasco. The

Court intends that these payments be made directly by

plaintiff to the defendant. All supplies shipped by defend-

ant to plaintiff are to be on a COD basis.

Tenth: The disbursement or drawing down of any

bond or registry monies described in this order shall be

done only under the terms of a written order of Court

after hearing.

Eleventh: In the event plaintiff shall elect to post a

cash bond as required by this order, the Clerk shall give a

receipt therefor.

The reasons, authorities and conditions imposed con-

sidered and the Court being advised in the premises, it is

now, thereupon,

ORDERED, ADJUDGED AND DECREED THAT:

The defendant, LEASCO RESPONSE, INC. its re-

tainers, attorneys, officers, agents, servants, employees

and all others in concert or participation with said defend-

ant to whom notice of this order shall come by personal

service or otherwise, be and they are each enjoined and

restrained until further order of the Court from:

1. Failing or refusing to perform or do any act, deed

_ Or thing under any contract or obligation between it and

the plaintiff.

2. Removing any equipment, components or parts

(hardware) from the plaintiff’s possession, control, cus-

tody or property.

App. 68

3. From harrassment, interruption, or interfering

with plaintiff, its employees or business operations in any

way. The Court also intends that no such acts be done by

the plaintiff toward the defendant.

4. From refusing within five (5) days to deliver the

two drives (described by the witnesses at the hearing)

upstairs to the plaintiff’s equipment room. In this connec-

tion and in keeping with the defendant's request, plaintiff

may if it desires cause the drives to be moved from storage

to the described location the defendant to bear the costs

of same.

5. From failing or refusing to properly disconnect

the computers components and parts (hardware) now in

the possession of the plaintiff, preparatory to the plaintiff’s

move to new premises; such move now contemplated to

take place on or about December 1, 1973.

6. From failing or refusing to properly connect and

render operational the computers, parts components

(hardware) after the plaintiff has moved to its “new”

premises or quarters.

DONE AND ORDERED at Miami, Florida this

30th day of November, 1973, nunc pro tunc as of

4:25 p.m., Friday, September 21, 1973.

/s/ C. Clyde Atkins

United States District Judge

cc. Joseph Womack, Esq.

Harold L. Ward, Esq.