*Of the Federal Circuit, sitting by designation.

United States Court of Appeals

For the First Circuit

No. 03-1586

COADY CORP., d/b/a 495 TOYOTA,

Plaintiff, Appellant,

v.

TOYOTA MOTOR DISTRIBUTORS, INC.,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

 Boudin, Chief Judge,

Lourie* and Lynch, Circuit Judges.

Evan T. Lawson with whom J. Mark Dickison, Robert J.

Roughsedge, Michael Williams, Nicole L. Johnson and Lawson &

Weitzen, LLP were on brief for appellant.

Daniel L. Goldberg with whom David Yamin, Justin M. O'Sullivan

and Bingham McCutchen LLP were on brief for appellee.

March 18, 2004
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BOUDIN, Chief Judge. This is an appeal from the judgment

of the district court rejecting claims by Coady Corporation

("Coady") against Toyota Motor Distributors, Inc. ("Toyota").

Toyota is the regional arm of Toyota Motor Sales USA, Inc., a

national distributor of Toyota Motor Vehicles; Coady, doing

business as 495 Toyota and owned by Kevin Coady, is a Toyota dealer

based in Milford, Massachusetts. Much of the dispute revolves

around Coady's access to new vehicles from Toyota.

Toyota, like other major distributors, supplies a large

number of dealers; in its "Boston region," which includes most of

New England, there are about 71 dealerships, each with its own

primary market area. However, other dealers are free to compete

with Coady, and Coady with them. Coady's nearest competitor is

Bernardi Toyota, which is based closer to the Boston metropolitan

area. Boch Toyota is another competitor, and its primary market

area adjoins Coady's.

Coady has been a Toyota dealer since 1977 and, for most

of the period, operated under the standard Toyota dealer agreement.

Among other things, the agreement obligates Toyota to explain its

vehicle distribution methods to dealers, to use its best efforts so

dealers can meet their own obligations under the agreement, and to

allocate vehicles in a fair and equitable manner as determined by

Toyota. Statutes impose additional and more detailed obligations

on Toyota, as we discuss below. 
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Until February 1999, Coady mostly operated under six-year

agreements, and, for part of its tenure was not apparently a

successful dealer, which Coady says resulted from his unfair

treatment by Toyota. When the last of these six-year agreements

expired in 1999, Toyota--unhappy with Coady's performance and

acting against a background of quarrels between Coady and local

Toyota managers-–offered Coady only a two-year extension. The

proposed new agreement contained a non-standard provision requiring

Coady to maintain 100 percent or better "retail sales efficiency"--

a measurement used by Toyota for which 100 percent is supposed to

represent average dealer sales performance in the region. 

When the 1999 agreement expired in 2001, Toyota again

offered a new two-year agreement, even though Coady's efficiency

rating had fallen to under 40 percent. The proposed new agreement

retained the unenforced 100 percent sales efficiency requirement.

It also proposed new requirements that Coady maintain a debt to

equity ratio of no more than 1:1 and renovate the interior of its

dealership. Coady declined to sign the new agreement and has

instead operated under month-to-month extensions of its franchise.

In the meantime, Coady filed the present lawsuit in

November 1997, against Toyota asserting a host of claims under

federal and state law, including federal antitrust claims, 15

U.S.C. § 1 (2000), claims under the federal Automobile Dealers' Day

in Court Act, 15 U.S.C. §§ 1221-1225 (2000), and claims under the
1Chapter 93B was amended in 2002, see 2002 Mass. Legis. Serv.

222 (West), but both sides agreed that the pre-amendment version

controls and our citations throughout are to that version.

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so-called Massachusetts "Dealer's Bill of Rights", Mass. Gen. Laws

ch. 93B ("chapter 93B").

In due course, the district court dismissed certain of

the claims, allowed Coady to expand its complaint and then denied

cross-motions for summary judgment. Beginning on January 13, 2003,

the district court held a jury-waived trial, comprising eight days

of testimony. On April 14, 2003, the district court filed a

detailed decision over 50 pages rejecting on the merits all of the

Coady claims, and Coady now appeals.

On this appeal, Coady's main claims are directed at a set

of practices or occurrences that, in Coady's view, represent

violations of chapter 93B as it stood prior to recent amendments.1

Coady also presses claims for breach of contract. Our review of

the district court's decision is for clear error as to its findings

of fact and de novo as to questions of law, Fed. R. Civ. P. 52;

Liberty Mut. Ins. Co. v. Nippon Sanso K.K., 331 F.3d 153, 158 (1st

Cir. 2003); as to questions of characterization, the standard is

more complex. See note 3 below.

As its primary method of allocating vehicles--the socalled "balanced day's supply method"--Toyota allocates vehicles to

dealers once every two weeks (usually at the beginning and middle

of the month); the method uses a formula that assigns available
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vehicles in the region based upon each dealer's inventory and

recent sales volume. The method does not simply replace vehicles

sold on a one-to-one basis but rewards past sales performance, so

that successful dealers do better than unsuccessful ones.

In the first instance, the system relies upon self

reporting. For each sale, the dealer inputs the sale information--

including the vehicle identification number and the name and

address of the customer--into a computer network that informs

Toyota of the sale. When supplies are tight and stock can be

easily sold, as was true for much of the 1990s, there is some

incentive for dealers to misreport in the hope of increasing new

inventory.

Coady did offer evidence that its competitors had

misreported sales and Toyota was aware of the problem although the

precise effect on Coady is uncertain. How many inaccurate reports

are required to affect the allocation and how much of an effect

inaccurate reports produce is hard to summarize. Some evidence at

trial suggested that for Coady to be deprived of a single Toyota

Camry it would take 100 inaccurately reported Camry sales by other

dealers in the region during a two-week period.

Toyota monitors the accuracy of the reporting by

comparing the sales reports it receives from dealers with the

registration data provided by the R.L. Polk Company--apparently a

widely used automotive information and statistical reporting
-6-

service. When the two reports do not match for a feature such as

the customer's name or address Toyota labels this a "no-match".

No-matches can reflect either innocent reporting errors or

intentional false reporting by the dealer. All dealers, including

Coady, incur no-matches from time to time. Coady's position at

trial was that deliberately false reporting was widespread and

known to Toyota.

At trial, Coady claimed that Toyota's tolerance of false

reporting by its competitors violated chapter 93B. The statute

makes unlawful "[u]nfair methods of competition and unfair or

deceptive acts or practices," Mass. Gen. Laws. ch. 93B, §

3(a)(2001), and then lists specific forbidden practices. See Tober

Foreign Motors, Inc. v. Reiter Oldsmobile, Inc., 381 N.E.2d 908,

911-12 (Mass. 1978). Pertinently, section 4(3)(a) makes it a

violation for a distributor 

to adopt, change, establish or implement a

plan or system for the allocation and

distribution of new motor vehicles to motor

vehicle dealers which is arbitrary or unfair

or to modify an existing plan so as to cause

the same to be arbitrary or unfair.

Mass. Gen. Laws. ch. 93B, § 4(3)(a) (2001) (emphasis added).

Relying on dictionary definitions and case law relating

to a New Hampshire statute similar to chapter 93B, see N.H. Auto.

Dealers Ass'n, Inc. v. Gen. Motors Corp., 620 F. Supp. 1150, 1157

n.20 (D.N.H. 1985), aff'd in part, vacated in part, 801 F.2d 528

(1st Cir. 1986), the district court held that in this context
2Dictionary definitions of "arbitrary" do sometimes include

language referring to "bad faith" or "dishonest purpose", usually

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"arbitrary" meant a regime that is "not based in reason and is

implemented in bad faith because of a dishonest purpose." As for

"unfair," the court relied again on the dictionary and a

Massachusetts case, Levings v. Forbes & Wallace, Inc., 396 N.E.2d

149, 153 (Mass. App. Ct. 1979)(addressing Mass. Gen. Laws ch. 93A,

§ 11 (1978)), to limit the term to an allocation plan "based on

inequity, dishonesty and fraud". 

Applying this definition to allocation systems, the

district court held that: 

In the absence of any claim that Toyota itself

"cut off" Coady's supply of vehicles, in order

to show that Toyota has implemented an "unfair

or arbitrary" allocation system for the

distribution of motor vehicles to Coady

through periodic allocations, Coady must

prove, based on "all pertinent circumstances,"

that Toyota affirmatively facilitated or

encouraged fraudulent sales reporting by

dealers other than Coady. It is insufficient

for Coady to prove that dealers other than

Coady inaccurately reported sales because, to

be "arbitrary or unfair," such inaccurate

sales reporting must be shown to be fraudulent

or dishonest. Nor is it sufficient to prove

that Toyota knew about fraudulent sales

reporting by its dealers but failed to prevent

it.

We think that the district court has made the legal

standard too demanding. Based on ordinary usage, conduct can be

"arbitrary" and perhaps even "unfair" without subjective bad

faith;2 agency action taken without any whiff of dishonesty or
accompanying alternative definitions that omit the subjective

element and refer to actions performed in an "unreasonable manner",

"capriciously" or without support. Black's Law Dictionary 104 (6th

ed. 1990); Random House Webster's College Dictionary 70 (1991).

3See 5 U.S.C. § 706(2)(A) (2000); Motor Vehicle Mfrs. Ass'n of

U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983)(Agency action is arbitrary under the Administrative

Procedure Act "if the agency has relied on factors which Congress

has not intended it to consider, entirely failed to consider an

important aspect of the problem, offered an explanation for its

decision that runs counter to the evidence before the agency, or is

so implausible that it could not be ascribed to a difference in

view or the product of agency expertise.").

-8-

fraud is commonly so characterized, and overturned, under an

arbitrariness standard.3 True, as the district court said, chapter

93B finds its roots in a concern about "oppressive power" of makers

and distributors, Beard Motors, Inc. v. Toyota Motor Distribs.,

Inc., 480 N.E.2d 303, 306 (Mass. 1985); but such power can be

carelessly as well as wilfully deployed.

Admittedly, the district court's reading of the

arbitrariness standard is supported by a statement of a sister

federal court in New Hampshire construing the same term

("arbitrary") in that state's automobile-dealer statute. Relying

on Black's Law Dictionary, that case held that "arbitrary" was

synonymous with "bad faith or failure to exercise honest judgment."

N.H. Auto. Dealers Ass'n, Inc., 620 F. Supp. at 1157 n.20. But

this 20-year old definition was too narrow even then and was pure

dictum because the district court found that the challenged conduct
-9-

in that case was based on "reasonable business practices"--the same

test that we now endorse. Id. at 1157.

Nevertheless, chapter 93B (as we read it) does not demand

perfection in allocation or warrant a substitution of judicial for

business judgment. A distributor acting honestly is entitled to

latitude in making commercial judgments; and chapter 93B was not

meant to insulate dealers from the ordinary flux of pressure and

striving that is part of a free economy. Am. Honda Motor Co., Inc.

v. Bernardi's, Inc., 735 N.E.2d 348, 354 (Mass. 2000). In this

context, it is only the egregious decision that should be labeled

"arbitrary" or "unfair." Cf. Schott Motorcycle Supply, Inc. v. Am.

Honda Motor Co., Inc., 976 F.2d 58, 63 (1st Cir. 1992).

To us, this means that "[a]n allocation system is not

unreasonable simply because it is possible to subvert it, as long

as reasonable steps are taken to prevent and detect such

subversion." Cabriolet Porsche Audi, Inc. v. Am. Honda Motor Co.,

Inc., 773 F.2d 1193, 1206 (11th Cir. 1985), cert. denied, 475 U.S.

1122 (1986). And "reasonable" does not mean foolproof; there are

costs to every business endeavor, including enforcement, which are

ultimately borne by those who purchase the product.

 Here, the district court found as fact that Toyota had

sought to combat dishonest reporting: in addition to making false

reporting a ground for termination and offering periodic education

on proper reporting, Toyota conducted ground stock audits to
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reverse reported sales of vehicles found on lots; adopted a policy

to decrease allocations to dealers found to have "no match" rates

over a fixed percentage; and began to decrease district manager

bonuses for excessive no-match rates in their districts (although

Coady says that this was delayed for two years because of computer

problems).

These findings in turn led the district court to conclude

that "Toyota took reasonable steps at all relevant times to ensure

that sales were reported accurately and to reverse those sales that

were not . . . [and so] ensured that . . . periodic allocations [to

the Boston region] were neither arbitrary nor unfair." This

determination amounts, in substance, to an alternative ruling by

the district court that even if reasonable efforts by Toyota to

check fraudulent reporting were required, Toyota made those

efforts. And, this alternative view--being based on a proper

standard--justifies affirmance, assuming that the finding of

reasonableness is sound.

In substance, Coady's claim is that Toyota long knew of

the problem of false reporting, acted too casually to bring it

under control, and even now does not have anything like a foolproof

system. Coady's evidence describes flaws; Toyota responds by

pointing to its own efforts to monitor and control the problem.

Except by describing each incident and measure in the very

extensive record, there is no way to summarize the ebb and flow.
4In re Spadoni, 316 F.3d 56, 58 n.1 (1st Cir. 2003); Jackson

v. United States, 156 F.3d 230, 232 (1st Cir. 1998); In re

Extradition of Howard, 996 F.2d 1320, 1328 (1st Cir. 1993)

(degree-of-deference continuum). There are exceptions to the

affording of deference--none here relevant--based on history (e.g.,

contract interpretation, see Principal Mut. Life Ins. Co. v.

Racal-Datacom, Inc., 233 F.3d 1, 3 (1st Cir. 2000)) and policy

(e.g., Fourth Amendment, see Ornelas v. United States, 517 U.S.

690, 697-98 (1996)).

-11-

In the absence of some sharper standard, the district court had to

make an assessment as to whether Toyota had acted unreasonably.

Applying abstract labels to settled facts is, strictly

speaking, a prescriptive and therefore a legal judgment; but where

the outcome is debatable, some (and often much) deference is

normally afforded to the factfinder's evaluation, because the one

who heard the evidence is closer to the scene and better steeped in

the nuances.4 Affording such deference to the district court's

ultimate conclusion and considering the latitude the statute

permits to business managers, we cannot say that the district judge

was wrong. 

A second set of chapter 93B claims by Coady, relating to

allocation, concerns "turndowns." Dealers including Coady do not

accept every vehicle earned in a periodic allocation, and each

region has its own method of reallocating such rejected vehicles.

In the Boston region, turndowns are first offered to dealers within

the same district where they were originally assigned, and if
-12-

unclaimed they are offered to all dealers in the region as "port

stock" (a subject to which we will return). 

Coady's first claim regarding the turndowns was that this

system of allocation is "arbitrary or unfair" because Coady's two

main competitors, Bernardi and Boch, are part of a contiguous but

separate district with more turndowns, so they have access to

turndowns that Coady does not. The district court rejected this

contention, finding that the current method of allocating turndowns

is employed because it allows for rapid, lowcost distribution of turndowns based on an

individualized assessment of each dealer's

needs. It is deemed more efficient to

distribute turndowns in this manner rather

than to group all Region-wide turndowns

together and distribute them through a second

[balanced day's supply method] allocation as

was done between 1989 and 1991. 

The choice not to allocate turndowns region-wide had a

plausible business rationale; indeed, Toyota had experimented with

region-wide allocation of turndowns between 1989 and 1991 before

changing to the current system. Every system has pluses and

minuses, and a fair allocation system does not mean one without

wrinkles. Nothing in Coady's showing on this issue causes us to

second guess the district court's assessment.

Coady's second turndown complaint stems from the failure

of Toyota to have a written policy on turndowns. This is not

itself arbitrary or unfair but, as the district court noted, "the

turndown allocation system depends, to some extent, upon each
5Coady did offer expert damage evidence based primarily on a

study of how the balanced day's supply regime would, if unflawed by

dishonest reporting, have given Coady more vehicles; but, at least

on appeal, Coady points to no evidence as to damages from

individual events such as dispute with Brody. The district court

did not credit Coady's main damage evidence but, as Coady itself

recognizes, the court's main holding on the fraudulent reporting

issue rested on lack of a violation.

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district manager's discretion in offering vehicles to the dealers,"

and the court found that this discretion had been abused on at

least one occasion when then district manager Andrew Brody reduced

Coady's access to desirable turndowns due to some bad blood between

Brody and Coady. However, an occasional abuse does not

automatically require a more formal or rigid policy. As to the

incident itself, the district court found that Coady had not

offered evidence of specific damages arising from the incident.5

The vehicles rejected in the turndown process fall into

what is known as "port stock"--vehicles available to all dealers in

the region. Toyota informs dealers about the vehicles it has in

port stock by fax and dealers may claim those vehicles on a "first

come, first served" basis. Coady says that Toyota was arbitrary

because it sent such notices by fax and not e-mail, listing Coady

last on the fax list. Coady does not quantify the effect and, at

least in these circumstances, chapter 93B does not require this

kind of micro-management by courts.

Next, in a further attack on Toyota's fairness in

allocation, Coady complains about (again relying upon chapter 93B)
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Toyota's "market representation vehicle support program." Under

this program, a dealer can earn extra vehicles by becoming an

exclusive Toyota dealership, by installing qualifying branding

signs or by making improvements in new or modernized facility

improvements. To qualify for the program, dealers must document

their expenditures.

Coady says that Toyota failed to provide thirty vehicles

under the program after Coady spent $200,000 on qualifying

improvements to its facility in 1994, even though Toyota awarded

more than 900 vehicles to Bernardi for qualified improvements. The

key difference was that Coady, unlike Bernardi, failed to provide

receipts to Toyota to verify its construction expenditures, which

was a prerequisite under the program. Coady says he was relieved

of this obligation by Toyota but the district court did not credit

this claim, and on appeal Coady is silent on this point. Mass.

Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 43 (1st

Cir. 1998).

Finally, under Toyota's allocation regime, its general

manager in the region can distribute up to 10% of the cars and 15%

of the trucks to dealers at his discretion in order to help dealers

meet specific inventory and customer needs. This group of vehicles

is not included in the pool subject to the semi-monthly formula

periodic allocations. Before 1998 but not after, the percentage

limitations on this general manager's pool included any vehicles
-15-

distributed under the market representation vehicle support

program.

On appeal Coady argues (again relying upon chapter 93B)

that the change in 1998 undermined the semi-monthly formula

allocations because there is no limit to the number of vehicles

that can be assigned under the Support Program. In principle, a

very large number of assignments under the latter program might

leave few, if any, for distribution by formula. But the district

court found there was no evidence that any such distorting had

occurred. Coady offers no answer to this finding, which seems to

us preclusive on the principle of "no harm, no foul."

Coady argues that the same deficiencies in allocation

already discussed--in particular, Toyota's failure to prevent fraud

by other dealers--violated its standard agreement with Coady and so

gave rise to contract claims as well as claims under chapter 93B.

The standard agreement, in section XIII(B), does require Toyota to

use its "best efforts" to provide dealers vehicles required to

fulfill the dealer's obligations under the contract and to

"endeavor to allocate" vehicles "in a fair and equitable manner,

which it shall determine in its sole discretion."

This language is on its face less helpful to Coady than

the standard set forth in chapter 93B. "Best efforts" is

implicitly qualified by a reasonableness test--it cannot mean

everything possible under the sun, see Macksey v. Egan, 633 N.E.2d
-16-

408, 413 & n.16 (Mass. App. Ct. 1994)--and the "own discretion"

proviso is clearly more qualified than chapter 93B. Coady provides

no reason to suppose that allocation system claims that have failed

under the statute should prevail under the contract, so no more

need be said about this contract-claim perspective.

This brings us to a claim by Coady arising under a

different provision of chapter 93B which makes it a violation of

section 3 for a distributor to refuse a written request by a dealer

to disclose the basis on which the distributor allocates vehicles

in Massachusetts and to the dealer in question. Mass. Gen. Laws.

ch. 93B, § 4(3)(b) (2001). At trial Coady said that Toyota had

failed adequately to respond to Coady's written request for

information about how the general manager's pool operated and the

number of vehicles.

The district court faulted Coady for not offering

evidence of written requests having focused instead on oral

requests, but we bypass this issue. This is because the district

court also found that even if Toyota had not responded adequately

to one written request, no damages had been proved, see note 4

above, and Coady had not requested "any other relief" on this

issue. On appeal, Coady complains that the evidence did show a

written request but offers no counter to the alternative ground.

Still another subsection of chapter 93B is in issue.

Coady claimed and the district court found that Toyota had in some
6Generally, review of the denial of the injunction is for

abuse of discretion. Aponte v. Calderón, 284 F.3d 184, 191 (1st

Cir.), cert. denied, 537 U.S. 886 (2002). "In shaping equity

decrees, the trial court is vested with broad discretionary power;

appellate review is correspondingly narrow." Lemon v. Kurtzman,

411 U.S. 192, 200 (1973); Griffin v. Burns, 570 F.2d 1065, 1079

(1st Cir. 1978).

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cases offered desirable turndowns to dealers on condition that they

accept less desirable turndown vehicles as well--a practice that

antitrust lawyers would call "tying." Tying is not automatically

unlawful under the antitrust laws (new shoes contain laces), e.g.,

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 11-12

(1984); Borschow Hosp. & Med. Supplies, Inc. v. Cesar Castillo

Inc., 96 F.3d 10, 17-18 (1st Cir. 1996); but chapter 93B--a

catalogue of practices disliked by dealers--includes a precise and

seemingly unconditional ban on such tying of vehicles provided to

dealers. Mass. Gen. Laws. ch. 93B, § 4(2)(a) (2001).

On this appeal, Coady does not identify any specific

damages linked to such violations but complains that the district

court ought to have granted an injunction against continuation of

the practice. The difficulty is that the district court found that

Toyota "has not engaged in that practice with Coady since at least

1998"--several years before the trial. Given the time gap and the

absence of any other indication that Toyota would repeat this

practice, the denial was within the district court's discretion.6

This brings us finally to a set of issues that relate

primarily to the renewal of Coady's contract with Toyota and to yet
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another provision of chapter 93B. Under section 4(3)(e), it is a

violation to cancel or refuse to extend a franchise upon expiration

"without good cause" or to offer, "arbitrarily and without good

cause," a renewal agreement whose terms "substantially change or

modify the sales and service obligations or capital requirements"

of the dealer. Mass. Gen. Laws. ch. 93B, § 4(3)(e) (2001).

Further, for any such proposed change, 90 days written notice is

required including "a detailed statement of the reasons for such

action." Mass. Gen. Laws. ch. 93B, § 4(3)(e)(2) (2001).

Coady argued in the district court that the 1999 renewal

of the 1993 six-year standard agreement was illegal because it

added a requirement of 100 percent retail sales efficiency and

reduced the duration to two years but gave written notice only 59

days before the old agreement expired. In 2001, Toyota offered

Coady a further two-year renewal, again allegedly on less than 90

days notice, containing the 100 percent retail sales efficiency

clause and adding requirements that Coady maintain a 1:1 debt to

equity ratio and renovate the interior of its facility. 

When Coady complained about the deficient notice period

for the 1999 contract, Toyota said it would defer the date of the

new agreement (which Coady refused) and Coady never signed the 2001

agreement. Toyota has apparently withdrawn the 1:1 debt to equity

ratio and interior renovation demands and not enforced the 100

percent sales efficiency provision. Nevertheless, Coady requested
7Coady does cite a case that says that contract length is a

material term, Seaboard Lumber Co. v. United States, 48 Fed. Cl.

814, 832 (Fed. Cl. 2001), hardly a revelation, but nothing in the

statute says that every material alteration is covered by the

statute. While some material alterations may be unreasonable, the

statute makes actionable only those that "substantially change or

modify the sales and service obligations or capital requirements".

Mass. Gen. Laws. ch. 93B, § 4(3)(e)(2) (2001).

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an injunction pertaining to the renewal dispute and appeals from

the district court's failure to provide such relief.

The district court ruled that the shortening of the

proposed renewal period from six years to two did not violate the

statute because, although this altered the terms, it did not do so

in respect of sales and service obligations or capital

requirements. Coady may have some answer to this proposition--

perhaps unreasonable new terms amount to an arbitrary refusal to

renew--but it has not made it nor has it otherwise explained why it

is entitled to a longer renewal period.7 So we put this issue to

one side. 

As for the inadequate notice period, Toyota corrected the

error for the 1999 agreement and ordinarily a district court is not

obligated to issue an injunction absent a threat of repetition.

This is not because the issue is necessarily moot--mootness may

often require more, Friends of the Earth, Inc. v. Laidlaw Envtl.

Servs. (TOC), Inc., 528 U.S. 167, 190 (2000)--but because

injunctions are normally a matter of equity and the court is not

required to waste resources where there is no ongoing harm and
-20-

reasonable threat of recurrence. Lemon v. Kurtzman, 411 U.S. 192,

200-01 (1973); El Dia, Inc. v. Hernandez Colon, 963 F.2d 488, 498

n.12 (1st Cir. 1992). Here there is no suggestion of ongoing harm

from the unduly short notice period given five years ago.

If Toyota gave inadequate notice again in 2001, the

threat of repetition is clearly greater. But just what occurred as

to timing in 2001 is not clear to us, and in any event the proposed

changes that would seemingly trigger the need for notice (the 1:1

debt to equity ratio and renovation requirements) were withdrawn by

Toyota. Under the circumstances, the threat of recurrence is not

so clear as to require the grant of equitable relief, although

Toyota is pressing its luck if it has now made the same shortnotice mistake twice.

The most serious renewal claim involves Toyota's apparent

continued insistence on the provision requiring 100 percent sales

efficiency. Admittedly, it has not enforced this provision by

termination or refusal to renew; and, as the district court found

and Coady does not dispute, this negates any obvious damages. But

this does not explain why, if the provision is improper, Coady does

not deserve an injunction. The district court treated the lack of

past harm as defeating the injunction as well but this is not

necessarily a complete answer.

Even if the provision were not enforced, its presence

could hamper Coady's operations and impair its ability to borrow,
8The provision says that the dealer, even if it has not

suffered a loss of money or property, "may" obtain an injunction if

the practice "may" cause such a loss. Mass. Gen. Laws. ch. 93B, §

12A (2001). We read the first "may" as licencing an injunction,

perhaps even encouraging it, but not as compelling it regardless of

circumstances. Coady has not relied on the provision, so our

reading is subject to further enlightenment--by means of case law

or legislative history--in some future case.

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(although Coady has not expressly made those claims to us). There

is also remedy language in chapter 93B suggesting a lenient

standard for injunctions--the statute says the test is whether the

violation "may have the effect of causing" a "loss of money or

property", Mass. Gen. Laws. ch. 93B, § 12A (2001) (emphasis added)

--although we are not now inclined to read this provision as making

an injunction mandatory.8

Yet the threshold question remains whether the 100

percent sales efficiency provision is improper, and here Coady says

only that the notice period was inadequate. Yet there is little

risk, if Toyota has any sense at all, that its future demands for

such a clause will be pressed on less than 90 days notice. If

notice is adequate, then the question under the statute will be

whether Toyota has explained its reasons and has a non-arbitrary

basis for its request. On these points Coady is completely silent

on appeal. Thus, we are unwilling to remand for further

proceedings. 

Coady is free to sue immediately if Toyota insists on the

sales efficiency requirement as a condition of renewal and fails to
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supply the statutory statement of reasons or lacks a non-arbitrary

basis for the request. Our affirmance is without prejudice to such

a suit--but also without foreclosing Toyota from showing that its

demand is consistent with the statute. At this point we know

nothing about the reasons for the proposed efficiency requirement

in a new contract and little about Coady's basis for deeming it

arbitrary.

Toyota ought to reflect that it has enjoyed a measure of

good fortune in escaping unscathed in this lawsuit. Its allocation

practices vis à vis Coady were no model of perfection and a

factfinder who condemned them might well have been upheld.

Further, Toyota has virtually admitted to other violations of

chapter 93B (tying, short notice) even if neither damages nor a

need for any injunction were proved as to these actions.

The package of new demands ascribed to Toyota (a perhaps

unrealistic efficiency condition, the two-year extension, the extra

interior-design spending demanded) may or may not be defensible;

but they seem less likely to mend a relationship than to foreshadow

more litigation under the renewal and termination provisions of

chapter 93B. Perhaps the relationship is now beyond repair, but in

the interests of heading off further litigation, both sides may

want to consider making a fresh start in negotiating and carrying

out a new agreement.
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The judgment of the district court is affirmed.

Reflecting the closeness of the case, each side will bear its own

costs on this appeal.

It is so ordered.