NutraSweet Co. v. Vit-Mar Enterprises, Inc.

• Decision Date: 25 February 1999
• Docket Number: VIT-MAR,No. 98-5027,98-5027
• Citation: 176 F.3d 151
• Parties: The NUTRASWEET COMPANY, v.ENTERPRISES, INC., a/k/a Vitmar; The Shiba Group; Romano Fashions, Inc.; Manoj Parekh; Nimisha Parekh; Hershey's Trucking & Warehouse, Inc.; Harry Oberlander; John Does, X, Y, & Z, Being Any Other Persons or Entities Participating in the Domestic Import Sale or Transport of the Subject Shipment, Tekstilschik, a "John Doe", Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 151

176 F.3d 151

The NUTRASWEET COMPANY, v. VIT-MAR ENTERPRISES, INC., a/k/a Vitmar; The Shiba Group;

Romano Fashions, Inc.; Manoj Parekh; Nimisha Parekh;

Hershey's Trucking & Warehouse, Inc.; Harry Oberlander;

John Does, X, Y, & Z, Being Any Other Persons or Entities

Participating in the Domestic Import Sale or Transport of

the Subject Shipment,

Tekstilschik, a "John Doe", Appellant.

No. 98-5027.

United States Court of Appeals, Third Circuit.

Argued Oct. 30, 1998.

Decided Feb. 25, 1999.

Before: SLOVITER, GARTH, and MAGILL, ^* Circuit Judges.

OPINION OF THE COURT

MAGILL, Senior Circuit Judge.

The NutraSweet Company (NutraSweet) obtained a preliminary injunction and writ of replevin granting NutraSweet possession of goods that were allegedly acquired by fraud. Tekstilschik (Tek), an intervenor and the purported owner of the goods, challenges both the preliminary injunction and writ of replevin. We lack jurisdiction to consider Tek's challenge to the writ of replevin and dismiss that portion of the appeal. Although we have jurisdiction to consider the validity of the preliminary injunction, we find that the issue is moot as a result of the District Court's modification of the writ of replevin. Therefore, we will reverse and remand with instructions to vacate.

I.

This is the second time these parties have appeared before this Court in this case. In deciding the previous appeal, this Court thoroughly explained the genesis of this lawsuit and the relationships and transactions between NutraSweet, Tek, and the named defendants. See Nutrasweet Co. v. Vit-Mar Enters., Inc., 112 F.3d 689 (3d Cir.1997). We recite below only those facts relevant to the disposition of this appeal.

NutraSweet produces a sugar substitute called "Equal Sweetener with NutraSweet" (Equal). In 1995, Vit-Mar Enterprises (Vitmar) and The Shiba Group (Shiba) proposed to distribute Equal to the Ukraine and Russia. NutraSweet agreed and sold several containers of Equal to Vitmar and Shiba for approximately $1.5 million.

NutraSweet shipped the Equal with bills of lading that specifically restricted distribution to Russia and the Ukraine. Despite NutraSweet's attempts to restrict distribution of the Equal to Russia and the Ukraine, several containers were allegedly imported back into the United States. ¹ In May 1996 NutraSweet learned that U.S. Customs was prepared to release a shipment of the Equal into the U.S. market. NutraSweet filed a complaint and an Order to Show Cause in federal district court, seeking a writ of replevin and temporary restraining order (TRO). NutraSweet argued that the goods were obtained by fraud and that it was likely to succeed in recovering title to the goods. The District Court granted NutraSweet's request for a TRO and writ of replevin. After NutraSweet posted a $329,000 bond, the U.S. Marshals seized the Equal.

When Tek ² learned that the goods had been seized, it intervened in this case to challenge the TRO. Initially the District Court refused to lift the TRO. After considering Tek's appeal, we instructed the District Court to vacate the TRO as to Tek because it had the effect of a preliminary injunction but had been entered without development of a preliminary injunction record and findings of fact. See Nutrasweet, 112 F.3d at 694. ³ However, we left the door open for the District Court to enter a preliminary injunction after it developed a proper record and made the requisite findings of fact. See id. at 695.

On remand, the District Court vacated the TRO, but entertained argument concerning the propriety of a preliminary injunction. After a hearing, the District Court entered a preliminary injunction, prohibiting Tek, its agents, and those acting in concert with Tek from "taking possession, control, or custody and/or marketing, selling, or otherwise distributing the shipments of Equal." In addition to opposing the preliminary injunction, Tek sought to vacate the writ of replevin, but the District Court denied its motion. The District Court later modified the writ of replevin to allow NutraSweet to take possession of the Equal, and NutraSweet increased its bond to $658,000.

II.

Tek first argues that the District Court erred in granting the preliminary injunction. We agree.

We have appellate jurisdiction to review a district court's interlocutory order granting a preliminary injunction under 28 U.S.C. § 1292(a)(1). We review a district court's order granting a preliminary injunction for abuse of discretion, its factual findings for clear error, and its determinations of questions of law de novo. See Acierno v. New Castle County, 40 F.3d 645, 652 (3d Cir.1994).

A preliminary injunction is an extraordinary remedy that should be granted only if "(1) the plaintiff is likely to succeed on the merits; (2) denial will result in irreparable harm to the plaintiff; (3) granting the injunction will not result in irreparable harm to the defendant; and (4) granting the injunction is in the public interest." Maldonado v. Houstoun, 157 F.3d 179, 184 (3d Cir.1998). A plaintiff's failure to establish any element in its favor renders a preliminary injunction inappropriate. See Opticians Ass'n of Am. v. Indep. Opticians of Am., 920 F.2d 187, 192 (3d Cir.1990).

We had serious concern about the District Court's finding that NutraSweet's relationships with its domestic customers and distributors would be irreparably harmed in the absence of a preliminary injunction. In the absence of irreparable injury, no preliminary injunction would lie, even if the other three elements, noted above, were found. Nevertheless, whether or not there was a possibility of irreparable harm to NutraSweet at the time NutraSweet applied for a preliminary injunction, it now appears that NutraSweet can suffer no harm because, as explained above, NutraSweet has obtained possession of the Equal by the District Court's order modifying the writ of replevin. Because the writ of replevin now adequately protects NutraSweet's interest in preventing distribution of the goods in the United States during the pendency of this suit, the preliminary injunction entered by the District Court now becomes an unnecessary remedy that must be vacated. See Anderson v. Davila, 125 F.3d 148, 163 (3d Cir.1997) ("An injunction is appropriate only where there exists a threat of irreparable harm such that legal remedies are rendered inadequate."). Thus, the question of whether a preliminary injunction was warranted by earlier circumstances is now moot and the preliminary injunction previously entered must be vacated. See United States v. Munsingwear, Inc., 340 U.S. 36, 39-40, 71 S.Ct. 104, 95 L.Ed. 36 (1950).

III.

Tek also contends that the District Court erred in issuing the writ of replevin. We decline to rule on Tek's challenge to the writ of replevin because we lack appellate jurisdiction. ⁴

Congress has conferred jurisdiction on the courts of appeal over interlocutory orders in limited situations. See 28 U.S.C. § 1292. Section 1292(a) allows courts of appeal to hear challenges to "[i]nterlocutory orders of the district court of the United States ... granting, continuing, modifying, refusing, or dissolving injunctions, or refusing to dissolve or modify injunctions...." 28 U.S.C. § 1292(a)(1). This Circuit has defined "injunctions" under section 1292(a)(1) as: "Orders that are directed to a party, enforceable by contempt, and designed to accord or protect some or all of the substantive relief sought by a complaint...