ABA Distributors, Inc. v. Adolph Coors Co.

• Decision Date: 03 September 1980
• Docket Number: No. 80-0298-CV-W-1.,80-0298-CV-W-1.
• Citation: 496 F. Supp. 1194
• Parties: ABA DISTRIBUTORS, INC., Plaintiff, v. ADOLPH COORS COMPANY, Defendant.
• Court: U.S. District Court — Western District of Missouri

496 F. Supp. 1194

ABA DISTRIBUTORS, INC., Plaintiff, v. ADOLPH COORS COMPANY, Defendant.

No. 80-0298-CV-W-1.

United States District Court, W. D. Missouri, W. D.

September 3, 1980.

Harry P. Thomson, Jr., Shughart, Thomson & Kilroy, Kansas City, Mo. for plaintiff.

Kent E. Whittaker, Hillix, Brewer, Hoffhaus & Whittaker, Kansas City, Mo., Leo N. Bradley, Bradley, Campbell & Carney, Golden, Colo., for defendant.

MEMORANDUM AND ORDERS RULING AND DIRECTING FURTHER PROCEEDINGS IN REGARD TO PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

OLIVER, Chief Judge.

I.

This case pends on plaintiff's motion for preliminary injunction. Plaintiff accurately summarizes the three main arguments which it presents in support of its pending motion by stating: (A) "Coors' termination of plaintiff violates an outstanding Federal Trade Commission order which specifically prohibits the very conduct in which Coors engaged in attempting to terminate plaintiff;" (B) "Coors' attempted termination of plaintiff was invalid because it was a part of a combination and conspiracy to violate the antitrust laws;" and (C) "Coors' attempted termination of plaintiff was also invalid because it violated the terms of the distributorship agreement between the parties." Plaintiff's motion contends that it is entitled to be reinstated as defendant's distributor pending the trial of plaintiff's entire case on the merits.

We are satisfied that plaintiff's FTC and antitrust arguments do not support plaintiff's claim for the relief prayed for in its motion for preliminary injunction. We shall find and conclude, however, that plaintiff's third claim relating to defendant's alleged violation of the terms of the distributorship agreement and, specifically, the issue of whether the distributorship agreement was validly terminated by defendant Coors' March 21, 1980 letter to plaintiff, should be separated from the remainder of the case pursuant to Rule 42(b) of the Rules of Civil Procedure for separate trial and that trial of that separated issue should be advanced pursuant to Rule 65(a)(2) to the earliest convenient trial date for the Court and counsel for trial on the merits, such date to be established at the pretrial conference which will be ordered at the close of this memorandum opinion. We shall also enter an order directing that the temporary restraining order presently in effect be converted to a preliminary injunction pending the trial of the separated issue on the merits.

II.

The briefs in support and in opposition to the pending motion show that the parties are in substantial disagreement as to the standard to be applied in determining whether any preliminary injunctive relief should be granted.¹

Western District of Missouri cases involving preliminary injunction issues have frequently cited and relied upon Professor Wright's comprehensive consideration of preliminary injunctions as stated in 11 Wright & Miller's Federal Practice and Procedure § 2947 (Purpose and Scope of Preliminary Injunctions), § 2948 (Grounds for Granting or Denying Preliminary Injunctions); and § 2949 (Procedures on an Application for a Preliminary Injunction).²

Professor Wright, we believe accurately, noted that "courts use a bewildering variety of formulations" in discussing the various factors to be considered in ruling motions for preliminary injunctive relief. He noted, however, that "although these short-hand formulations aptly express the courts' general reluctance to impose an interim restraint on defendant before the parties' rights have been adjudicated, they do not take the place of a sound evaluation of the factors relevant to granting relief under Rule 65(a)."

Professor Leubsdorf in his comprehensive article The Standard For Preliminary Injunctions, 91 Harvard Law Review 525 (January, 1978), indicated his agreement with Professor Wright by stating that "the standards for the exercise of this immense power to grant preliminary injunctive relief suffers from inconsistent formulations." Id. at 525.³ Professor Leubsdorf suggests that "this dizzying diversity of formulations, unaccompanied by any explanation for choosing one instead of another, strongly suggests that the phrases used by the courts have little impact on the result in particular cases." Id. at 526.

Judge Donald D. Alsop, the district judge who denied preliminary injunctive relief in Fennell, recently commented in Woida v. United States, 446 F.Supp. 1377, 1383 (D.Minn.1978), that "until recently, the Eighth Circuit standard to be met by a party moving for a preliminary injunction was clearly defined." He added, however, that in Fennell "the Court of Appeals recently urged this Court to consider the adoption of alternative standards." Judge Alsop's prediction in Woida that "the question of the standard to be applied may not have reached its final resolution" has certainly been confirmed by the Eighth Circuit's recent opinions in Rittmiller and Dataphase.⁴

The various formulations of the standards under which a district court should grant or deny preliminary injunctive relief have been, generally speaking, developed by the various Courts of Appeal and district courts. A review of Notes of Decisions 51 through 70 relating to preliminary, temporary and interlocutory injunctions, collected in 28 U.S.C.A. Rule 65, and the current cumulative annual pocket-part of that volume, establishes that until quite recently the Supreme Court has not had any occasion to consider the standard for preliminary injunctive relief.

Doran v. Salem Inn, Inc., 422 U.S. 922, 931, 95 S.Ct. 2561, 2567, 45 L.Ed.2d 648 (1975), however, one of the recently decided Supreme Court cases, is consistent with the general thrust of other recent Supreme Court cases which emphasize that the principle stated in Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-7, 79 S.Ct. 948, 954, 3 L.Ed.2d 988 (1959), that the basis for the grant of injunctive relief "in the federal courts has always been irreparable harm and inadequacy of legal remedies," is also applicable for the granting of a preliminary injunction. Doran stated:

The traditional standard for granting a preliminary injunction requires the plaintiff to show that in the absence of its issuance he will suffer irreparable injury and also that he is likely to prevail on the merits. 422 U.S. at 931, 95 S.Ct. at 2568.

See also Brown v. Chote, 411 U.S. 452, 456, 93 S.Ct. 1732, 1735, 36 L.Ed.2d 420 (1973), wherein the district court's grant of a preliminary injunction was unanimously affirmed for the reason that:

In determining whether such relief was required, that court properly addressed itself to two relevant factors: first, the appellee's possibilities of success on the merits; and second, the possibility that irreparable injury would have resulted, absent interlocutory relief. 411 U.S. at 456, 93 S.Ct. at 1735.

We believe that the implications of Sampson v. Murray, 415 U.S. 61, 88, 94 S.Ct. 937, 951, 39 L.Ed.2d 166 (1974), may cast doubt upon the validity of a standard which would fail to include a finding of irreparable injury as a prerequisite of a grant of preliminary injunctive relief. It is not necessary for this Court to reach that question for the reason that the Eighth Circuit's discussion of the Second Circuit rule in Rittmiller and Dataphase makes clear that the Second Circuit standard, as recently changed, does not attempt to eliminate the necessity that a plaintiff seeking preliminary injunctive relief make an appropriate irreparable harm showing before such relief may properly be granted.

In the next part of this memorandum opinion we will discuss the Second Circuit cases cited in Rittmiller and Dataphase and will state the reasons why plaintiff's antitrust argument, based as it is on cases from the Second Circuit, can not be said to support plaintiff's prayer for preliminary injunctive relief.⁵

III.

Rittmiller, in its discussion of the current Second Circuit standard, appropriately noted that in Jack Kahn Music v. Baldwin Piano and Organ, 604 F.2d 755 (2nd Cir. 1979), the Second Circuit suggested that the treble damage remedy available in antitrust litigation was generally adequate to eliminate any threat of irreparable harm to a plaintiff whose claim was primarily based on alleged antitrust violations. On its facts, Jack Kahn Music involved a reversal of a district court's grant of preliminary injunctive relief which enjoined the termination of a dealership contract until the final hearing of the antitrust action on the merits. Judge Medina stated in an opening paragraph of his opinion that reversed the district court's grant of relief that:

In recent years there has been developing a substantial body of decisional law affecting a small but important segment of the law relating to the cancellation of retail dealerships by manufacturers. The procedural device employed in this group of cases is the service of a complaint in a private triple-damage antitrust action in which the retailer charges the manufacturer with various violations of the Sherman and Clayton antitrust laws and the simultaneous service of motion papers seeking a preliminary mandatory injunction preventing the manufacturer from cancelling the dealership agreement between the parties until the disposition of the antitrust suit. Id. at 757.

The practical result of the granting of preliminary injunctive relief was stated as follows:

As the conclusion of the trial on the merits of the antitrust suit will in the normal course of events in all likelihood not take place for some years, if at all, the granting of such a preliminary mandatory injunction amounts as a practical matter, as here, to freezing plaintiff's revocable and hence temporary dealership into a dealership non-revocable for a substantial period. Id.

In discussing the current Second Circuit standard for granting a preliminary injunction, it was stated in Jack Kahn Music that:

This Circuit has long provided two alternative tests for

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