United States Court of Appeals 

For the First Circuit 

No. 18-1960 

NACM-NEW ENGLAND, INC., 

d/b/a BUSINESS CREDIT INTELLIGENCE, 

Plaintiff, Appellee, 

v. 

NATIONAL ASSOCIATION OF CREDIT MANAGMENT, INC., 

Defendant, Appellant. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Timothy S. Hillman, U.S. District Judge] 

Before 

Lynch, Lipez, and Barron, 

Circuit Judges. 

Michael J. Lambert, with whom Sheehan, Phinney, Bass & Green, 

P.A. was on brief, for appellant. 

Jack K. Merrill, with whom KSR Law was on brief, for appellee. 

June 11, 2019 
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BARRON, Circuit Judge. This appeal arises out of a 

breach of contract suit between a national trade association of 

credit professionals, National Association of Credit Management, 

Inc. ("NACM"), and one of its regional affiliates, NACM-New 

England, Inc., which does business under the name Business Credit 

Intelligence ("BCI"). NACM appeals from the District Court's 

September 24, 2018 order granting injunctive and declaratory 

relief to BCI. We affirm in part, vacate in part, and remand in 

part the order of injunctive relief. We vacate and remand the 

declaratory judgment. 

I. 

The following facts were found by the District Court and 

are not in dispute on appeal. NACM is a national trade association 

of commercial credit professionals that provides services, such as 

educational programs and legislative advocacy, to a series of 

regional "Affiliates." BCI is one of those Affiliates. Under the 

contract at issue, it has exclusive rights to provide credit 

services as a NACM Affiliate in the New England area. 

Affiliates have customers, called "members," to whom 

they provide "core services." These include access to credit 

information, education on credit issues, and collection services. 

Members of Affiliates are also members of NACM. NACM also provides 

education and professional certification coursework to members.
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Each Affiliate signs an identical contract with NACM. 

This appeal arises out of NACM's termination of the 2011 version 

of this agreement ("2011 Agreement") between BCI and NACM. 

The 2011 Agreement provides, among other things, that 

NACM will provide services to Affiliates on certain terms and that 

NACM will not "disclose the specific membership list, or portions 

thereof, of any Affiliate to any person or entity" that provides 

"core services." The 2011 Agreement permits either NACM or the 

Affiliate to terminate the agreement "for cause upon 90 days 

written notice to the other." 

The 2011 Agreement was automatically renewed on October 

28, 2016. Thus, it would remain in effect until October 28, 2021 

if not terminated for "cause." On May 12, 2017, however, NACM 

sent the Chief Operating Officers of the Affiliates ("Affiliate 

COOs") a new agreement to be discussed at a meeting of the NACM 

Board of Directors in June of 2017 and at a meeting of the Affiliate 

COOs that same month. 

Following those meetings, on June 14, 2017, Jon Flora, 

a member of the NACM Board, informed BCI that the NACM Board had 

approved a new Affiliate agreement. NACM circulated the new 

agreement to Affiliate COOs on July 13, 2017, and informed them 

that the NACM Board had "voted to simultaneously terminate all 

NACM Affiliated Association Agreements . . . and adopt the new 

NACM Affiliation Agreement . . . on August 18[, 2017] at 12 noon 
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ET." Affiliates were required to return signed versions of the 

new agreement by that time "in order to maintain . . . Affiliate 

status." BCI was not happy with the new agreement's terms and 

refused to sign, thus risking disaffiliation upon termination of 

the 2011 Agreement.

On August 21, 2017, NACM's President, Robin Schauseil, 

emailed BCI. She informed BCI that seventeen of the twenty-two 

Affiliates had signed the 2017 Agreement and thus that there was 

"now a super majority of support for the 2017 Agreement." In that 

email, Schauseil indicated that the 2011 Agreement would terminate 

effective November 17, 2017, pursuant to Article IV, Section 4.D 

of the 2011 Agreement. That section provides that the agreement 

may be "terminated . . . for cause upon 90 days written notice." 

Schauseil further explained that "[d]uring the 90-day termination 

period, NACM will work towards ensuring that members . . . have 

access to NACM products, services and benefits after November 

17th." In anticipation of the termination of the 2011 Agreement 

with BCI, NACM awarded BCI's territory to NACM Connect, the 

Affiliate for the Chicago area. 

On November 8, 2017, BCI filed a complaint in 

Massachusetts state court against NACM. The complaint alleged, 

among other things, breach of contract. The case was removed a 

week later to the United States District Court for the District of 
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Massachusetts on the basis of diversity jurisdiction. See 28 

U.S.C. § 1332. 

The same day that the case was removed, BCI filed an 

emergency motion for a preliminary injunction and a hearing on 

that motion. BCI sought an injunction to require NACM to continue 

to abide by the terms of the 2011 Agreement, which it claimed that 

NACM had breached. NACM filed its opposition to that motion the 

following day.

On November 17, 2017 -- the date NACM intended to 

terminate the 2011 Agreement -- the District Court granted BCI's 

request for a preliminary injunction, after a hearing, and 

scheduled a "hearing on BCI's request for permanent injunctive 

relief" for December 5, 2017. This hearing was continued multiple 

times and then canceled after NACM filed an answer. NACM's answer 

included a demand for a jury trial. 

A hearing was then set on the docket and was referred to 

as a "preliminary injunction" hearing in that docket entry. That 

hearing, in later docket entries, was referred to as a "Hearing on 

[Docket Entry] 21 Motion for Order re: Prior Preliminary 

Injunction." 

BCI's "Motion for Order re: Prior Preliminary 

Injunction" asked the District Court to address what BCI argued 

was NACM's failure to follow the terms of the preliminary 
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injunction. The hearing on that motion took place over four 

days -- specifically, April 17-19, 2018, and May 8, 2018. 

On September 24, 2018, the District Court entered an 

order granting an injunction and a declaratory judgment to BCI. 

That injunction, in relevant part, ordered that the 2011 Agreement 

remained in effect and required NACM to "continue to honor all its 

obligations thereunder, including its obligation not to share 

BCI's membership list with any entity that provides core 

services."1 The District Court declared, "as a matter of law, that 

NACM did not properly terminate the 2011 Agreement and, therefore, 

did not have 'cause' to terminate BCI's affiliation agreement on 

November 17, 2017." NACM timely appealed. 

II. 

We start with NACM's challenge to the District Court's 

order of injunctive relief. NACM contends that "[t]he text of the 

actual Order indicates the District Court issued a permanent 

injunction" because "there was no qualification [that the 

injunction] was limited to the pendency of the litigation." From 

that premise, NACM argues that the District Court committed legal 

error by analyzing the case under the preliminary injunction 

 1 The injunction does also prohibit NACM from "interfering 

with the business relationship between BCI" and another entity 

called United TranzActions, LLC, but NACM does not attack that 

portion of the injunction. Accordingly, we need not address that 

aspect of the injunction. 
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standard, which requires only a showing of likelihood of success 

on the merits rather than actual success. Compare eBay, Inc. v. 

MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (setting forth the 

standard for a permanent injunction), with Voice of the Arab World, 

Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011) 

(same for a preliminary injunction). 

Our review of a District Court's entry of an injunction 

is for abuse of discretion. Am. Bd. of Psychiatry & Neurology, 

Inc. v. Johnson-Powell, 129 F.3d 1, 2-3 (1st Cir. 1997). But, 

here, the question at issue necessarily turns on the proper 

construction of the District Court's order, which presents a 

question of law that we review de novo. See Highmark Inc. v. 

Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 563 (2014) 

("[D]ecisions on questions of law are reviewable de novo . . . ." 

(internal quotation marks omitted)). 

The text of the order of injunctive relief explains that 

it is "based on [the District Court]'s finding that NACM is 

required to continue to perform its obligations under the 2011 

agreement during the pendency of any dispute between the parties." 

That temporal limitation is most naturally read to apply to the 

remainder of the order, as that language is immediately followed 

by "[i]t is hereby ordered that . . ." and the specific terms of 

the order -- namely, that NACM must comply with the 2011 Agreement. 
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So understood, the application of the preliminary 

injunction standard is less evidence of the District Court's error 

in selecting the proper standard for assessing whether to issue an 

injunction than of the District Court's intention to issue only a 

preliminary injunction. We therefore conclude that the District 

Court did not abuse its discretion in applying the preliminary 

injunction standard, because the injunction that it issued was a 

preliminary injunction. 

NACM next contends that, even if the District Court 

issued a preliminary -- rather than a permanent -- injunction, the 

District Court still erred. NACM contends that the District Court 

did so by failing to find sufficient evidence of irreparable harm 

to support the injunction. See Winter v. Nat. Res. Def. Council, 

Inc., 555 U.S. 7, 20 (2008) (holding that a party seeking a 

preliminary injunction "must establish [1] that he is likely to 

succeed on the merits, [2] that he is likely to suffer irreparable 

harm in the absence of preliminary relief, [3] that the balance of 

equities tips in his favor, and [4] that an injunction is in the 

public interest"). Our review of the District Court's irreparable 

harm finding is for abuse of discretion. See Johnson-Powell, 129 

F.3d at 2-3. 

The general rule in our Circuit is that "traditional 

economic damages can be remedied by compensatory awards, and thus 

do not rise to the level of being irreparable." Vacquería Tres 
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Monjitas, Inc. v. Irizarry, 587 F.3d 464, 485 (1st Cir. 2009) 

(citing P.R. Hosp. Supply, Inc. v. Bos. Sci. Corp., 426 F.3d 503, 

507 (1st Cir. 2005)). Injunctive relief is permissible, however, 

"where the potential economic loss is so great as to threaten the 

existence of the movant's business." Id. (quoting Performance 

Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373, 1382 

(6th Cir. 1995)). 

As an initial matter, NACM argues that the District 

Court's analysis and explanation of the irreparable harm factor 

was so deficient as to constitute an abuse of discretion. But, 

the District Court, after hearing testimony from both parties, 

found "that BCI ha[d] demonstrated a serious risk of irreparable 

harm in the absence of an injunction." Moreover, the record shows 

that the District Court, after hearing nearly four days of 

testimony, concluded that "[d]isclosure of [BCI's] membership list 

to NACM Connect would" -- and thus not merely that such disclosure 

could -- "be devastating." (emphasis added). The District Court 

also found that BCI faced a "real threat of harm" from the 

disclosure, Matos ex rel. Matos v. Clinton Sch. Dist., 367 F.3d 

68, 73 (1st Cir. 2004), and the District Court did so after finding 

that, upon NACM's disclosure of lists of BCI members that are 

protected by the 2011 agreement to NACM Connect, BCI's competitor 

would have "all necessary information at its disposal to poach 

BCI's clients"; that NACM Connect has previously taken customers 
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away from BCI; that BCI operates on a "break even basis"; and that 

"a significant loss of members, . . . about 20%, could cause BCI 

to become insolvent" following testimony from BCI that "if we lost 

20% of our members, we will be out of business." 

Thus, at least with respect to the finding of irreparable 

harm that would flow from disclosure, we are able to discern what 

factors were weighed and "the [D]istrict [C]ourt's thought 

process[.]" Coutin v. Young & Rubicam P.R., Inc., 124 F.3d 331, 

337 (1st Cir. 1997). We thus see no abuse of discretion based on 

a failure to make the basis for the finding known. 

NACM also contends that the finding of irreparable harm 

was based on nothing "more than conjecture, surmise, or a party's 

unsubstantiated fears of what the future may have in store." 

Charlesbank Equity Fund II, Ltd. v. Blinds To Go, Inc., 370 F.3d 

151, 162 (1st Cir. 2004). But, our review is for abuse of 

discretion, and the supportable findings that the District Court 

made concerning BCI's precarious financial state and the prospect 

of poaching that would follow from the violation of NACM's 

obligations with respect to disclosure suffice to refute this 

ground of objection with respect to the finding of irreparable 

harm concerning disclosure. 

Insofar as NACM means to argue that the District Court's 

finding of irreparable harm is not sustainable because the record 

shows that BCI's membership list is not "confidential and 
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protectable," we disagree. To support the contention, NACM points 

only to the compilation of conference attendance lists that include 

members and non-members and to its own provision of BCI's 

membership list to companies like UPS for purposes of member 

discounts. That evidence, however, does not concern the 

disclosure of a complete membership list to a direct competitor in 

a manner that facilitates poaching. 

NACM also contends that, absent a finding that NACM's 

"bare-bones" list of BCI's members constitutes "the specific 

membership list, or portions thereof, of any Affiliate" within the 

meaning of the 2011 Agreement, the District Court "could not have 

determined BCI succeeded (or was likely to succeed) on the merits 

of its claim that NACM's provision of its own list to a replacement 

Affiliate violated the 2011 Agreement and should be enjoined." 

And, NACM contends, the District Court made no such finding. 

But, the District Court found that BCI was likely to 

succeed on its breach of contract claim not because of any 

disclosure that NACM had made prior to the termination of the 2011 

Agreement but because BCI was likely to succeed in showing that 

NACM breached that agreement by failing to terminate the agreement 

"for cause." And, insofar as NACM believes the scope of the 

injunction is unclear as to which lists it covers, we note that 

the relevant portion of the District Court's injunction is, by its 

terms, coextensive with the 2011 Agreement's non-disclosure 
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provision, which prohibits NACM from disclosing "the specific 

membership list, or portions thereof, of any affiliate." In any 

event, NACM may seek -- as BCI rightly points out -- clarification 

from the District Court to the extent it is not clear as to the 

scope of the injunction concerning disclosure. 

There does remain NACM's challenge to the portion of the 

District Court's injunction that orders that the 2011 Agreement 

"remain in place" and that NACM "continue to honor all its 

obligations thereunder." NACM contends that the District Court 

did not make the requisite finding that irreparable harm would 

occur if NACM were not required to honor its obligations -- other 

than its obligation not to disclose certain membership 

lists -- under the 2011 Agreement. NACM argues that, for this 

reason, the injunction is overbroad. 

Here, we agree with NACM that the record shows -- as 

BCI's counsel candidly acknowledged at oral argument -- that the 

District Court did not make any such finding of irreparable harm. 

Thus, we conclude that the District Court abused its discretion 

when it ordered as part of the injunctive relief that the 2011 

Agreement "remain in place and [that the parties must] continue to 

operate in accordance with its terms and NACM shall continue to 

honor all its obligations thereunder." See Tamko Roofing Prods., 

Inc. v. Ideal Roofing Co., 282 F.3d 23, 40 (1st Cir. 2002) 

("[I]njunctive relief should be no more burdensome to the defendant 
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than necessary to provide complete relief to plaintiffs and courts 

must closely tailor injunctions to the harm that they address." 

(alteration in original)(internal quotation marks and citations 

omitted)). We therefore vacate and remand the portion of the 

injunction that requires NACM to abide by any terms of the 2011 

Agreement other than those prohibiting disclosure of "the specific 

membership list, or portions thereof" of BCI to any person or 

entity providing "core services."

III.

We turn next to the various challenges that NACM makes 

to the declaratory relief that the District Court ordered. The 

District Court entered a declaratory judgment in favor of BCI after 

finding, "as a matter of law, that NACM did not properly terminate 

the 2011 Agreement and, therefore, did not have 'cause' to 

terminate BCI's affiliation agreement on November 17, 2017." 

NACM first challenges the District Court's "cause" 

ruling by asserting that the record fails to support the District 

Court's findings regarding the process that NACM used to replace 

the 2011 Agreement. But, in doing so, NACM takes issue with the 

District Court's credibility determinations and factual findings 

without supplying an adequate basis for us to reject them. See 

United States v. 15 Bosworth St., 236 F.3d 50, 53-54 (1st Cir. 

2001) (explaining the deferential standard of review of bench 

trials). 
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Moreover, the District Court did not ultimately base its 

conclusion that NACM lacked "cause" to terminate the 2011 Agreement 

on the findings that it made about the nature of the overall 

process that NACM used to attempt to replace that agreement with 

a new one. Rather, the District Court based that conclusion on a 

more particular finding: that NACM had failed to provide BCI with 

the kind of notice of its intention to do so that the 2011 Agreement 

required NACM to provide. Yet, insofar as NACM takes on that 

finding by the District Court, NACM merely sets forth a possible 

construction of a series of emails between NACM and BCI that the 

District Court reasonably construed differently. See id. at 53. 

Separately, NACM does contend that the District Court 

erred in its ruling as to "cause," because it evaluated whether 

NACM had "cause" to terminate the agreement without properly 

applying Maryland law, which, NACM contends, controls under the 

2011 Agreement's choice of law provision. In fact, NACM notes, 

the District Court failed to cite to any Maryland law in reaching 

its conclusion that the termination was not for "cause," as the 

District Court cited only to Massachusetts cases that applied 

Massachusetts law. 

But, even if NACM were right to contend the District 

Court did commit this "legal error," we then would merely be 

required to vacate and remand the declaratory judgment so that 

findings could be made by a proper factfinder under the proper 
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legal standard. Yet, NACM separately contends that the District 

Court erred in entering the declaratory judgment because it did so 

without submitting BCI's breach of contract claim to a jury, 

thereby depriving NACM of its right under the Seventh Amendment of 

the Federal Constitution to a have a jury make the requisite 

factual findings. Accordingly, we may proceed straight to the 

Seventh Amendment issue, given that we agree with NACM on that 

score. 

The Seventh Amendment provides: 

In Suits at common law, where the value 

in controversy shall exceed twenty 

dollars, the right of trial by jury shall 

be preserved, and no fact tried by a 

jury, shall be otherwise re-examined in 

any Court of the United States, than 

according to the rules of the common law. 

U.S. Const. amend. VII. An order of declaratory relief on a claim 

for breach of contract is "essentially legal [in] nature." Simler 

v. Conner, 372 U.S. 221, 223 (1963) (per curiam). Thus, by 

entering the declaratory judgment on the breach of contract claim 

without a jury trial, the District Court violated NACM's Seventh 

Amendment rights. Id. Moreover, NACM was prejudiced thereby, 

for, as BCI's counsel acknowledged at oral argument, the District 

Court did not itself find -- let alone supportably so -- that no 

reasonable jury could find for NACM on the breach of contract 

claim. See Fed. R. Civ. P. 50(a)(1). 
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BCI does contend that "NACM cannot now create a 

constitutional issue by insinuating . . . that it didn't know the 

merits of BCI's contract claim would be at issue in a permanent 

injunction hearing that by definition focuses on those merits." 

But, at oral argument, counsel for BCI, who was also counsel at 

the hearing in question, conceded that BCI was not sure at the 

start of that hearing whether it would be for a permanent or a 

preliminary injunction. And, NACM, at the start of that hearing, 

did object to having a "trial on the merits" -- insofar as that 

was the purpose of the hearing -- on the basis that it had demanded 

a jury trial.2 Accordingly, pursuant to the Seventh Amendment, we 

vacate and remand the entry of the declaratory judgment on BCI's 

breach of contract claim. 

IV. 

The September 24, 2018 order of the District Court 

granting injunctive and declaratory relief to BCI is vacated in 

part and affirmed in part, and the matter is remanded for further 

proceedings consistent with this opinion. Each party shall bear 

its own costs. 

 2 NACM also contends that the entry of the declaratory 

judgment violated its procedural due process rights. But, we need 

not reach this contention, as we vacate the entry of the 

declaratory judgment on Seventh Amendment grounds.