Hodges v. Schlinkert Sports Associates, Inc., 95-1558

• Decision Date: 18 July 1996
• Docket Number: No. 95-1558,95-1558
• Citation: 89 F.3d 310
• Parties: 1996-2 Trade Cases P 71,480, 11 IER Cases 1791 Matthew D. HODGES, Plaintiff-Appellee, v. SCHLINKERT SPORTS ASSOCIATES, INC.; Tom Schlinkert, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 310

89 F.3d 310

1996-2 Trade Cases P 71,480, 11 IER Cases 1791

Matthew D. HODGES, Plaintiff-Appellee, v. SCHLINKERT SPORTS ASSOCIATES, INC.; Tom Schlinkert Defendants-Appellants.

No. 95-1558.

United States Court of Appeals Sixth Circuit.

Argued June 6, 1996.

Decided July 18, 1996.

Lawrence J. Acker (argued), Cheatham, Acker & Sharp, West Bloomfield, MI, Barbara F. Klarman, Tilchin, Hall, Farmington Hills, MI, James G. Gross (briefed), Gross, Nemeth & Silverman, Detroit, MI, for Plaintiff-Appellee.

Richard E. Segal, Mark D. Goldman (briefed), Segal Goldman, West Bloomfield, MI, James S. Ward (argued and briefed), Corley, Moncus & Ward, Birmingham, AL, for Defendants-Appellants.

Before: KENNEDY and NORRIS, Circuit Judges; MATIA, ^* District Judge.

KENNEDY, Circuit Judge.

Defendants, Schlinkert Sports Associates ("SSA") and its president, Tom Schlinkert, appeal the denial of their motion for a preliminary injunction to enforce a noncompete clause in plaintiff's contract, arguing that the District Court erred in its conclusion that they were unlikely to succeed on the merits of their action. We DISMISS the appeal as moot.

I. Facts

Defendant SSA, an Alabama corporation, is in the business of selling sporting goods and sports clothing as a representative for various vendors and manufacturers. In 1987, SSA hired plaintiff, Matthew Hodges, as a sales agent. At that time, and in each succeeding year during plaintiff's employment, SSA and plaintiff executed Independent Sales Representative Contracts. The last contract that plaintiff executed (the "Contract"), like previous ones, contained a noncompete clause that provided that:

for a period of one (1) year after the termination of this Agreement for any reason, Agent shall not, directly or indirectly, engage, individually or as an officer, director, employee, consultant, advisor, partner or co-venturer, or as a stockholder or other proprietor, or owning, directly or indirectly, a beneficial interest of more than one per cent (1%) in any firm, corporation or other organization, in any enterprise which is competitive with that of the Company within the then current trade area of the Company.

(Emphasis added.) The parties agree that the interpretation of the Contract is governed by Alabama law.

From 1991 until April 1994, while employed by SSA, plaintiff represented JanSport, a manufacturer of athletic and outdoor apparel and camping equipment, in the midwest. On April 7, 1994, however, JanSport terminated its relationship with SSA in that territory. On April 16, 1994, plaintiff terminated his employment with SSA. Shortly thereafter, plaintiff began directly representing JanSport in the same area in which he had previously worked as an SSA sales agent.

Plaintiff filed this suit against SSA seeking a declaratory judgment that the Contract's noncompete clause was unenforceable. SSA counterclaimed alleging that plaintiff breached his employment contract and requesting injunctive relief to enforce the Contract's noncompete clause. Defendants moved for a preliminary injunction to enforce the noncompete clause pending the outcome of this litigation. The District Court concluded that defendants were unlikely to succeed on the merits of their action and, thus, denied a preliminary injunction. Defendants appeal from that denial.

II. Discussion

Before addressing the question of whether the District Court abused its discretion in denying defendants a preliminary injunction, we must decide whether the question of preliminary injunctive relief has become moot. Article III of the Constitution limits the " 'judicial power' of the United States to the resolution of 'cases' and 'controversies.' " Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 757, 70 L.Ed.2d 700 (1982). A case becomes moot " 'when the issues presented are no longer "live" or the parties lack a legally cognizable interest in the outcome.' " United States Parole Comm'n v. Geraghty, 445 U.S. 388, 396, 100 S.Ct. 1202, 1208, 63 L.Ed.2d 479 (1980) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 1951, 23 L.Ed.2d 491 (1969)).

An appeal from the denial of a motion for preliminary injunction is mooted when the requested time period for the injunction has passed. American Tunaboat Ass'n v. Brown, 67 F.3d 1404, 1407 (9th Cir.1995); Tropicana Prods. Sales, Inc. v. Phillips Brokerage Co., 874 F.2d 1581, 1582 (11th Cir.1989). In Tropicana Prods. Sales, Inc., the plaintiff appealed the district court's denial of a motion for a preliminary injunction where the relief requested was to expire on February 13, 1989. The appeal was argued several weeks after the end-date of the requested injunction period. Id. at 1582. Because the effective period...