Packaging Industries Group, Inc. v. Cheney

Decision Date09 May 1980
Citation405 N.E.2d 106,380 Mass. 609
PartiesPACKAGING INDUSTRIES GROUP, INC. et al. 1 v. Paul E. CHENEY.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

William J. Cheeseman, Boston, for plaintiffs.

Philip L. Berkeley, Worcester, for defendant.

Before HENNESSEY, C. J., and BRAUCHER, KAPLAN, LIACOS and ABRAMS, JJ.

ABRAMS, Justice.

Packaging Industries Group, Inc. (P. I. Group), and its subsidiary, Packaging Industries Engineering, Inc. (P. I. Engineering), commenced this action against P. I. Group's former vice president for engineering, Paul E. Cheney, 2 seeking preliminary and permanent injunctive relief, as well as damages. The plaintiffs claim (1) that Cheney has established a competing business in derogation of the goodwill of a former business allegedly sold by Cheney to P. I. Group, (2) that Cheney has appropriated to his own use the plaintiffs' trade secrets, and (3) that Cheney has violated his fiduciary duties as a former officer of P. I. Group and director of P. I. Engineering by usurping the plaintiffs' corporate opportunities. 3

The Superior Court judge, after a hearing, denied the plaintiffs' request for a preliminary injunction, nationwide in scope, barring Cheney from competing with the plaintiffs, or engaging in any way in the business of designing, engineering, manufacturing or selling packaging machinery. Pursuant to G.L. c. 231, § 118, second par., the plaintiffs appeal from this interlocutory order, arguing that the judge abused his discretion (1) in denying their request for a preliminary injunction, and (2) in refusing to hear certain additional testimony offered at the hearing. The case is before this court on our own motion. We affirm.

Availability of Appellate Review. Prior to the enactment of G.L. c. 231, § 118, second par., as appearing in St.1977, c. 405, 4 parties were not entitled to interlocutory appeals as of right from orders granting or denying preliminary injunctions. In Foreign Auto Import, Inc. v. Renault Northeast, Inc., 367 Mass. 464, 468, 326 N.E.2d 888 (1975), we held that adoption of Mass.R.Civ.P. 65, 365 Mass. 832-834 (1974), did not incorporate the "wholly statutory" Federal Practice, see 28 U.S.C. § 1292(a)(1), permitting interlocutory appeals as of right from orders granting or denying injunctive relief.

In enacting G.L. c. 231, § 118, second par., after our decision in Foreign Auto, the Legislature employed language which closely tracks that of 28 U.S.C. § 1292(a)(1) (1976). 5 Where the Legislature in enacting a statute follows a Federal statute, we follow the adjudged construction of the Federal statute by the Federal courts. Poirier v. Superior Court, 337 Mass. 522, 527, 150 N.E.2d 558 (1958). See Rollins Environmental Servs., Inc. v. Superior Court, 368 Mass. 174, 179, 330 N.E.2d 814 (1975). We look, therefore, to the interpretation of 28 U.S.C. § 1292(a)(1) to resolve questions regarding interlocutory appellate review under our statute. See Demoulas Super Mkts., Inc. v. Peter's Mkt. Basket, Inc., 5 Mass.App. 750, 752, 370 N.E.2d 719 (1977). See generally, 9 Moore's Federal Practice pars. 110.20-110.21, 110.25 (1980); 16 C.A. Wright & A.R. Miller, Federal Practice and Procedure §§ 3920-3924 (1977); 6 11 C.A. Wright & A.R. Miller, Federal Practice and Procedure § 2962 (1973).

The Federal statute, like our own, creates an exception to the normal rule that only final judgments may be subject to appeals. See Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 178, 75 S.Ct. 249, 250, 99 L.Ed. 233 (1955); Pollack v. Kelly, 373 Mass. 469, 470-472, 362 N.E.2d 525 (1977). "The exception is a narrow one and is keyed to the 'need to permit litigants to effectually challenge interlocutory orders of serious, perhaps irreparable consequence.' " Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478, 480, 98 S.Ct. 2451, 2453, 57 L.Ed.2d 364 (1978), quoting from Baltimore Contractors, Inc. v. Bodinger, supra 348 U.S. at 181, 75 S.Ct. at 252. The statute thus creates only a narrow exception to our more general policy that interlocutory rulings may not be presented piecemeal to the Appeals Court or to this court for appellate review. Pollack v. Kelly, supra. Giacobbe v. First Coolidge Corp., 367 Mass. 309, 312, 325 N.E.2d 922 (1975). "Ordinarily such appeal is possible only on the basis of a report by the judge who made the order. G.L. c. 231, § 111." National Ass'n of Government Employees, Inc. v. Central Broadcasting Corp., --- Mass. ---, --- n.2 a, 396 N.E.2d 996, 998 n.2 (1979). See G.L. c. 231, § 112; Mass.R.Civ.P. 64, 365 Mass. 831, 831-832 (1975). See also G.L. c. 211, §§ 3 & 4A. Therefore, G.L. c. 231, § 118, second par., is limited to orders that "grant or protect at least part of the permanent relief sought as an ultimate result of the action." 16 C.A. Wright & A.R. Miller, Federal Practice and Procedure § 3921 at 10 (1977).

Furthermore, failure to raise a given issue on an interlocutory appeal made available as of right by G.L. c. 231, § 118, second par., in no way prejudices a party's ability to secure review of such an issue on appeal following final judgment. Victor Talking Mach. Co. v. George, 105 F.2d 697 (3d Cir.), cert. denied, 308 U.S. 611, 60 S.Ct. 176, 84 L.Ed. 511 (1939). In this sense appeals pursuant to both our statute and the Federal statute, although available as of right, are not mandatory but permissive. Demoulas Super Mkts., Inc. v. Peter's Mkt. Basket, Inc., supra 5 Mass.App. at 752-753, 370 N.E.2d 719. 16 C.A. Wright & A.R. Miller, supra § 3921 at 11-13. Nor does the existence of an interlocutory appeal "divest the (trial court) of jurisdiction to proceed with the action on the merits." Demoulas Super Mkts., Inc. v. Peter's Mkt. Basket, Inc., supra at 753, 370 N.E.2d at 722, and cases cited. 7

We also conclude, as a matter of Massachusetts practice, that appeals pursuant to G.L. c. 231, § 118, second par., properly lie to the Appeals Court, or, in an appropriate case, to this court, rather than to a single justice of either court. Such a procedure gives full effect to the legislative judgment that orders regarding preliminary injunctions are so important as to justify a mandatory exception to the normal rule that only final judgments may be subject to appeals. 8 While in the absence of exigent circumstances, appeals pursuant to G.L. c. 231, § 118, second par., will not be heard on an expedited basis, see Demoulas Super Mkts., Inc. v. Peter's Mkt. Basket, supra, parties bringing such appeals may avail themselves of the procedures specified in Mass.R.A.P. 6(a), as amended, --- Mass. --- (1979), to request from the single justice in an appropriate case an order "suspending, modifying, restoring or granting an injunction" during the pendency of their appeal. See Foreign Auto Import, Inc. v. Renault Northeast, Inc., 367 Mass. 464, 470, 326 N.E.2d 888 (1975). In the absence of a report by the single justice, any appeal from the decision reached by the single justice under Mass.R.A.P. 6(a) must be consolidated with the appeal pending pursuant to G.L. c. 231, § 118, second par. Finally, the fact that an appeal may be taken as of right pursuant to the second paragraph of G.L. c. 231, § 118, does not prohibit a party from seeking discretionary relief from a single justice pursuant to G.L. c. 231, § 118, first par. As Foreign Auto Import, Inc. v. Renault Northeast, Inc., supra, implied, and as our subsequent decisions in Rollins Environmental Servs., Inc. v. Superior Court, 368 Mass. 174, 181, 330 N.E.2d 814 (1975), and Corbett v. Kargman, 369 Mass. 971, 343 N.E.2d 408 (1976), made clear pursuant to G.L. c. 231, § 118, first par., a party may petition a single justice for discretionary "relief" from any interlocutory order. The single justice in such a situation enjoys broad discretion to deny the petition, or to "modify, annul or suspend the execution of the interlocutory order," Rollins, supra, at 181, 330 N.E.2d at 818, or, finally, to report the request for relief to the appropriate appellate court. See e. g., National Ass'n of Government Employees, Inc. v. Central Broadcasting Corp., --- Mass. ---, --- b, 396 N.E.2d 996 (1979). Absent such a report, the decision of the single justice cannot itself be appealed on an interlocutory basis. The existence of an alternative procedure under G.L. c. 231, § 118, first par., available as to all interlocutory orders, may be particularly useful in those circumstances in which classification of the order at issue as a preliminary injunction is itself a matter of dispute. See 16 C.A. Wright & A.R. Miller, supra at §§ 3922-3924. In sum, the various avenues by which a party may challenge an interlocutory order granting or denying injunctive relief pursuant to G.L. c. 231, § 118, should provide the flexibility necessary to assure full court review as of right, and expeditious relief when circumstances warrant.

Standard of Review. Federal appellate courts have consistently indicated that "(i)n reviewing the granting or denial of a preliminary injunction, the standard is whether the district court abused its discretion. An appellate court's role is to decide whether the (trial) court applied proper legal standards and whether there was reasonable support for its evaluation of factual questions." Hochstadt v. Worcester Foundation for Experimental Biology, 545 F.2d 222, 229 (1st Cir. 1976). 9 This approach corresponds to long-standing Massachusetts practice. Foreign Auto Import, Inc. v. Renault Northeast, Inc., 367 Mass. 464, 473, 326 N.E.2d 888 (1975), and cases cited.

While our standard of review is thus framed in terms of abuse of discretion, the Legislature would not have exempted orders granting or denying preliminary injunctions from the final judgment rule "if it intended appellate courts to be mere rubber-stamps save for the rare cases when a (trial) judge has misunderstood the law or transcended the bounds of reason." Omega Importing Corp. v....

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