Watchung Spring Water Co., Inc. v. Nestle Waters North America Inc., 122214 FED3, 14-4264

Docket Nº:14-4264
Opinion Judge:FUENTES, Circuit Judge:
Party Name:WATCHUNG SPRING WATER CO., INC., Appellant v. NESTLE WATERS NORTH AMERICA INC.
Judge Panel:Before: FUENTES, FISHER, and KRAUSE, Circuit Judges
Case Date:December 22, 2014
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

WATCHUNG SPRING WATER CO., INC., Appellant

v.

NESTLE WATERS NORTH AMERICA INC.

No. 14-4264

United States Court of Appeals, Third Circuit

December 22, 2014

NOT PRECEDENTIAL

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) December 8, 2014

On Appeal from the United States District Court for the District of New Jersey (No. 3-14-cv-04984) District Judge: Honorable Peter G. Sheridan

Before: FUENTES, FISHER, and KRAUSE, Circuit Judges

OPINION [*]

FUENTES, Circuit Judge:

Watchung Spring Water Co., Inc. ("Watchung") appeals the District Court's denial of its application by order to show cause for a preliminary injunction.

In 1994, Watchung and Nestlé Waters North America Inc. ("Nestlé") entered into a distributor agreement that provided Watchung with an exclusive right to distribute certain Nestlé water products in specific counties in New Jersey.1 After executing the agreement, Watchung relocated from northern to southern New Jersey, and opened a facility in Lakewood from which it conducts all its operations.

Article XVI of the distributor agreement provides that the agreement shall automatically renew for ten successive ten-year periods unless either party notifies the other party in writing at least six months prior to the expiration of the current term that it does not intend to renew the agreement. On May 16, 2014, Nestlé sent Watchung a letter providing notice that it did not intend to renew the agreement beyond the term ending on December 31, 2014. In the following months, Nestlé proposed that Watchung serve as a non-exclusive distributor, but the parties were unable to reach an agreement.

Watchung filed a complaint and application for a preliminary injunction on August 7, 2014, alleging that Nestlé's termination violated the New Jersey Franchise Practices Act (the "Act"), N.J. Stat. Ann. §§ 56:10-1 et seq., and breached the terms of the distributor agreement. After a hearing, the District Court denied the request for injunctive relief, concluding that Watchung had failed to establish likelihood of success on the merits.

The District Court explained that the Act applies only to a franchise "the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey." N.J. Stat. Ann. § 56:10-4(a). "Place of business, " in turn, is defined as "a fixed geographical location at which the franchisee displays for sale and sells the franchisor's...

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