W S International, LLC v. M. Simon Zook, Co., 050914 FED3, 11-2574

Docket Nº:11-2574, 13-1518
Opinion Judge:SCIRICA, Circuit Judge
Party Name:W S INTERNATIONAL, LLC v. M. SIMON ZOOK, CO, d/b/a The Zook Molasses Company; GOOD FOOD, INC; L&S SWEETENERS, Appellants
Attorney:Gene M. Linkmeyer, Esq. [ARGUED] Alan M. Rosen, Esq. Neal A. Jacobs, Esq. Jacobs Law Group Counsel for Appellants Christopher M. Brubaker, Esq. [ARGUED] Joseph M. Donley, Esq. 2 Joseph M. Donley, Esq. Jonathan W. Hugg, Esq. Clark Hill Thorp Reed 2005 Counsel for Appellee
Judge Panel:Before: HARDIMAN, SCIRICA, and NYGAARD, Circuit Judges HARDIMAN, Circuit Judge,
Case Date:May 09, 2014
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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W S INTERNATIONAL, LLC

v.

M. SIMON ZOOK, CO, d/b/a The Zook Molasses Company; GOOD FOOD, INC; L&S SWEETENERS, Appellants

Nos. 11-2574, 13-1518

United States Court of Appeals, Third Circuit

May 9, 2014

NOT PRECEDENTIAL

Argued: November 12, 2013

On Appeal from the District Court for the Eastern District of Pennsylvania D.C. Civil No. 5-11-cv-03014 (Honorable Lawrence F. Stengel)

Gene M. Linkmeyer, Esq. [ARGUED] Alan M. Rosen, Esq. Neal A. Jacobs, Esq. Jacobs Law Group Counsel for Appellants

Christopher M. Brubaker, Esq. [ARGUED] Joseph M. Donley, Esq. 2 Joseph M. Donley, Esq. Jonathan W. Hugg, Esq. Clark Hill Thorp Reed 2005 Counsel for Appellee

Before: HARDIMAN, SCIRICA, and NYGAARD, Circuit Judges

OPINION

SCIRICA, Circuit Judge

Appellants M. Simon Zook Co., doing business as Zook Molasses Co., and Good Food Inc., doing business as L&S Sweeteners (together, "Zook"), and Appellee W.S. International, LLC ("W.S.I.") entered into a business relationship wherein Zook produced W.S.I.'s fondant1 line using equipment supplied by W.S.I. After their relationship soured, W.S.I. filed suit in the United States District Court for the Eastern District of Pennsylvania, claiming conversion of the equipment and seeking injunctive relief. The District Court entered a temporary restraining order, which allowed W.S.I. to retrieve its equipment. At a later stage of the case and upon W.S.I.'s motion, the District Court transferred the action to the United States District Court for the Northern District of Illinois. Zook now challenges both the entry of injunctive relief and the transfer of venue. We will affirm in part and dismiss in part for lack of jurisdiction.

I.

W.S.I. distributes fondant and other food products in the bakery industry. In 2009, W.S.I. entered into an arrangement with Zook, a food products manufacturer, whereby W.S.I. agreed to purchase its sugar from Zook, and Zook agreed to produce W.S.I.'s fondant line at its facility in Leola, Pennsylvania. In June 2009, W.S.I. purchased a fondant wheel for Zook's fondant production and had the wheel installed at Zook's facility. For various reasons, including repairs to the fondant wheel and Zook's production of allegedly substandard fondant, Zook failed to produce sufficient fondant to meet W.S.I.'s needs.

As a result, W.S.I. entered into an alternative arrangement for fondant production with the food manufacturer Royal Sugar Company, located in Swedesboro, New Jersey. In April 2011, W.S.I. sought permission to enter Zook's facility and retrieve its fondant wheel, which it intended to transfer to Royal Sugar Company's facility. Zook refused to permit access to the fondant wheel until W.S.I. paid $650, 000 in outstanding invoices. Zook also claimed liens on the wheel. Zook later acknowledged to the District Court that during this period the wheel served no use to Zook and sat dormant in its facility.

On May 6, 2011, W.S.I. filed suit against Zook in the Eastern District of Pennsylvania, claiming conversion of the fondant wheel and seeking injunctive and declaratory relief. On the same day the complaint was filed, W.S.I. moved for a temporary restraining order. The District Court held a hearing on the motion for temporary restraining order on May 9, 2011, and Zook filed a response in opposition the next day. On May 12, 2011, the District Court granted injunctive relief, which reads as follows:

(2)The defendants are enjoined and restrained, directly or indirectly, and whether alone or in concert with others, until further Order of this court from preventing the plaintiff from accessing, removing, and taking possession of its property located at the defendants' Leola facility.

(3)This Order shall remain in full force and effect until such time as this court specifically orders otherwise.

J.A. 114. There was no further extension of the order. Zook filed a notice of appeal on June 9, 2011.

After W.S.I. retrieved its fondant wheel, the case proceeded in District Court, with W.S.I. amending its complaint to raise breach of contract claims relating to an alleged confidentiality agreement between the parties. Zook filed an answer to W.S.I.'s amended complaint, specifically denying the parties had a confidentiality agreement. Then on April 2, 2012, W.S.I. sought leave to file a second amended complaint and attached what it contended was the parties' confidentiality agreement signed by Zook. On the same day, W.S.I. filed a motion to transfer the case to the Northern District of Illinois, based on the confidentiality agreement's forum selection clause directing any claims be filed in Illinois. Zook objected to the motion to transfer, continuing to contend that no confidentiality agreement had ever been formed, but did not object to W.S.I.'s filing a second amended complaint. On January 29, 2013, the District Court permitted the second amended complaint to be filed and granted W.S.I.'s motion to transfer venue based on the forum selection clause. Zook filed a notice of appeal on February 22, 2013.2

II.

Before we review the merits, we must determine whether we have jurisdiction.3We hold we have jurisdiction to review the grant of injunctive relief as an interlocutory order, but we do not have jurisdiction to review the transfer order.

In general, a temporary restraining order is not immediately appealable, while an order granting a preliminary injunction may be appealed as an interlocutory order under 28 U.S.C. § 1292(a)(1). In re Arthur Treacher's Franchisee Litig., 689 F.2d 1150, 1153 (3d Cir. 1982). Yet when an order labeled a temporary restraining order operates as a preliminary injunction, we have exercised appellate jurisdiction. See, e.g., Miller v. Mitchell, 598 F.3d 139, 145 (3d Cir. 2010) (reviewing a temporary restraining order as a preliminary injunction because it was of indefinite duration and entered after notice to the defendant and an adversarial hearing); Arthur Treacher's, 689 F.2d at 1155 n.7 (noting we "look beyond terminology to the actual content, purport, and effect" of an order to determine whether it is appealable). In this case, the District Court entered the injunctive relief for an indefinite period of time and after an adversarial hearing. Accordingly, because the order is in effect a preliminary injunction and appealable under 28...

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