Opinion ID: 513300
Heading Depth: 2
Heading Rank: 1

Heading: Summary Judgment Analogy

Text: 20 First, Formosa argues that the district court has unquestionable authority to grant final relief whenever the evidence demonstrates that a party's claim is without merit, even in the context of a preliminary injunction hearing. Formosa relies on Standard Oil Company of Texas v. Lopeno Gas Co., 240 F.2d 504, (5th Cir.1957), where this Court stated that 21 [i]t is settled beyond controversy that if, at the hearing on an application for preliminary injunction, the evidence shows clearly that the plaintiff has not stated a claim upon which relief can be granted and cannot state such a claim, the court should dismiss the plaintiff's complaint. That long established practice is akin to the more modern practice of granting a summary judgment when there is no genuine issue of material fact. 22 240 F.2d at 510 (citations omitted). Formosa is incorrect in concluding that the quoted language in Lopeno Gas validates the district court's action in this case. 4 23 Lopeno Gas is distinguishable from the present case because it presented no material issues of fact; the dispute center[ed] entirely about the validity and construction of a written contract. 240 F.2d at 509-10. In contrast, the district court here weighed the evidence presented in the preliminary injunction hearing, made determinations regarding credibility of the witnesses, and then resolved issues of material fact. After deciding the fact issues, the court concluded that Formosa was entitled to judgment on counts I and VI as a matter of law. Although the court employed the language of a summary judgment determination, its decision does not comport with the court's reasoning in Lopeno Gas or with standard summary judgment procedures. 24 Moreover, there is little support for Formosa's argument that a summary judgment ruling is appropriate following a preliminary injunction hearing without notice to the parties that a decision on the merits will occur. 5 Other courts and leading commentators question this practice. Communications Maintenance, Inc. v. Motorola, Inc., 761 F.2d 1202, 1205 (7th Cir.1985); Progress Development Corporation v. Mitchell, 286 F.2d 222, 232-34 (7th Cir.1961); C. Wright and A. Miller, 11 Federal Practice and Procedure: Civil Sec. 2950 at 492-493 (1973). The primary objection is that the court is rendering sua sponte summary judgment without providing notice or conducting a summary judgment hearing as required by Fed.R.Civ.P. 56. In addition, the issues which are considered in the preliminary injunction hearing are entirely different from the focus of a summary judgment adjudication. Thus, it is a risky approach to assume that the often incomplete evidence adduced at a preliminary injunction hearing is sufficient to determine whether a claimant is entitled to judgment as a matter of law. Communications Maintenance, 761 F.2d at 1205.