Opinion ID: 1790923
Heading Depth: 2
Heading Rank: 5

Heading: whether the judgment of the lower court is clearly erroneous and unsupported by substantial evidence.

Text: ¶ 40. TVEPA argues that the record wholly fails to support any finding of legal injury by MPGA's members upon which to base the award of a permanent injunction. The trial court found that [t]he evidence shows that since the purchase of DeSoto Gas by TVEPA, through its subsidiary ServicePlus, members of MPGA have lost customers to DeSoto Gas in service areas of TVEPA that were not formerly served by DeSoto Gas. TVEPA contends that the loss of customers to Desoto Gas is not a legally cognizable harm and cannot serve as the basis for awarding injunctive relief against TVEPA. ¶ 41. The question of whether MPGA's members suffered legally cognizable injury is closely tied to the question of standing, addressed previously. It is important that we here again observe that the basis of MPGA's standing in this action is by way of its member, Dowdle Butane, which is also an owner of TVEPA. Detrimental to MPGA's claim of injury, however, is the fact that the injury allegedly suffered by Dowdle Butane (and all its members, for that matter) does not arise from Dowdle Butane's status of member-owner of TVEPA, but from its status of competitor to DeSoto Gas. The question of whether MPGA has suffered a legally cognizable injury is a question separate from the question of standing, as explained by the Supreme Court in Davis v. Passman, 442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979): The Court of Appeals appeared to confuse the question of whether petitioner had standing with the question of whether she asserted a proper cause of action.... The nature of petitioner's injury... is relevant to the determination of whether she has alleged such a personal stake in the outcome of the controversy... And under the criteria we have set out, petitioner clearly has standing to bring this suit.... Whether petitioner has asserted a cause of action, however, depends not on the quality or extent of her injury, but on whether the class of litigants of which petitioner is a member may use the courts to enforce the right at issue. Id. at 239-40 n. 18, 99 S.Ct. at 2274 n. 18 (citations omitted). Thus, while there exists a factual injury sufficient to give MPGA standing, we must determine whether the injury is of legal significance, so as to entitle MPGA to the relief requested. ¶ 42. MPGA asserts that the operation of DeSoto Gas has caused its members to lose customers to DeSoto Gas since its purchase by TVEPA. Implicit in MPGA's argument is the assertion that because TVEPA's ownership of DeSoto Gas is unlawful, so is the competition afforded by DeSoto Gas. TVEPA admits that competitive damage to member businesses has occurred, but contends that it is not the basis of a cause of action since it is damnum absque injuria a damage not consequent upon the violation of any right recognized by law. We agree. Though their business may have suffered damage from the operation of DeSoto Gas, such damage is not legally cognizable injury which may serve as the basis for injunctive relief. ¶ 43. This principle was clearly recognized by the United States Supreme Court in Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374 (1938), in which an electric company brought suit to enjoin the Federal Emergency Administrator of Public Works from making allegedly unauthorized loans to municipal corporations in Alabama. The injury alleged was the electric company's loss of business as a result of the lawful, albeit destructive, use of the loans by the municipalities in establishing competing plants. Id. at 475, 58 S.Ct. 300. In finding that the electric company had not asserted a legally cognizable injury, the Supreme Court stated as follows: Unless a different conclusion is required from the mere fact that petitioner will sustain financial loss by reason of the lawful competition which will result from the use by the municipalities of the proposed loans and grants, it is clear that petitioner has no such interest and will sustain no legal injury as enables it to maintain the present suits.... An injury, legally speaking, consists of a wrong done to a person, or, in other words, a violation of his right. It is an ancient maxim, that damage to one, without an injury in this sense (damnum absque injuria), does not lay the foundation of an action; because, if the act complained of does not violate any of his legal rights, it is obvious, that he has no cause to complain ... Want of right and want of remedy are justly said to be reciprocal.... Parker v. Griswold, 17 Conn. 288, 302, 303, 42 Am.Dec. 739.... The only pertinent inquiry, then, is What enforceable legal right of petitioner do the alleged wrongful agreements invade or threaten? ... Nor will the subsequent application by the municipalities of the moneys derived therefrom give rise to an actionable wrong, since such application, being lawful, will invade no legal right of petitioner. The claim that petitioner will be injured, perhaps ruined, by the competition of the municipalities brought about by the use of the moneys, therefore, presents a clear case of damnum absque injuria. Stated in other words, these municipalities have the right under state law to engage in the business in competition with petitioner, since it has been given no exclusive franchise. If business be curtailed or destroyed by the operations of the municipalities, it will be by lawful competition from which no legal wrong results. What petitioner anticipates, we emphasize, is damage to something it does not possessnamely, a right to be immune from lawful competition. 302 U.S. at 478-80, 58 S.Ct. 300 (emphasis added). The Supreme Court refused to accept the assertion that A, who will suffer damage from the lawful act of B, and who plainly will have no case against B, may nevertheless invoke judicial aid to restrain a third party, acting without authority, from furnishing means which will enable B to do what the law permits him to do. Id. at 481, 58 S.Ct. 300. The Court observed that [i]t is not unlawful for any one to compete with the company, although the latter may not be authorized to engage in the same business. Id. at 482, 58 S.Ct. 300. The Court also explained that a company acting beyond the warrant of the law, in violation of its charter, does not injuriously affect the rights of its competitors. Id. at 483, 58 S.Ct. 300. ¶ 44. MPGA's assertion that it has sustained actionable injuries from TVEPA's investment in DeSoto Gas rests implicitly on the assumption that the activities of DeSoto Gas were themselves unlawful. To the contrary, as Alabama Power demonstrates, the fact that TVEPA's ownership of DeSoto Gas was unauthorized does not make the sale of gas by DeSoto Gas unlawful. A corporation is a legal entity separate and distinct from its shareholders. Skinner v. Skinner, 509 So.2d 867, 870 (Miss.1987). There was no proof offered at trial to support the trial court's refusal to treat these entities as separate, save some common management among the entities. But see Johnson & Higgins of Miss., Inc. v. Commissioner of Ins., 321 So.2d 281, 285 (Miss.1975) (common management insufficient to justify piercing the corporate veil); Murdock Acceptance Corp. v. Adcox, 245 Miss., 151, 138 So.2d 890, 895 (1962). ¶ 45. MPGA relies on Payne v. Jackson City Lines, Inc., 220 Miss. 180, 70 So.2d 520 (1954), and Campbell Sixty-Six Exp., Inc. v. J. & G. Exp., Inc., 244 Miss. 427, 141 So.2d 720 (Miss.1962), for its assertion that businesses have successfully been awarded injunctive relief in Mississippi courts against competitors. These cases are clearly distinguishable. Both cases involved franchised carriers which brought suit to enjoin the activities of other carriers operating without franchises. The franchised carriers in both cases possessed property rights arising out of their franchises. Payne, 220 Miss. at 191, 70 So.2d 520, Campbell, 141 So.2d at 723-24. Furthermore, the competition presented by the non-franchised carriers was clearly recognized the this Court to be illegal, in violation of a statutory prohibition. Payne, 220 Miss. at 190-91, 70 So.2d 520; Campbell, 141 So.2d at 726. There is nothing in the record to indicate that plaintiffs are the owners of any franchise, lawfully granted, entitling them, and no others, to sell propane gas in the territory involved. There is here no statutory or contractual right to be free from competition, as there was in Payne and Campbell. The only injury allegedly suffered is the natural opposition to having territory invaded to which they have no exclusive right. ¶ 46. Additionally, there is no evidence in the record which causally connects the alleged injury of the business concerns of the MPGA members to TVEPA's investment in DeSoto Gas. The trial court based its finding of irreparable injury to the following: The evidence shows that since the purchase of DeSoto Gas by TVEPA, through its subsidiary ServicePlus, members of MPGA have lost customers to DeSoto Gas in service areas of TVEPA that were not formerly served by DeSoto Gas. ¶ 47. Skip Graeber estimated that his company lost 20 to 25 customers to DeSoto Gas. He and that he did not know why the customers switched to DeSoto Gas. Graeber stated that his company competes with numerous other gas companies and that turnover of customers between the companies is not unusual. ¶ 48. John Dowdle testified that his company lost more than 20 customers, out of a customer base of 130,000, to DeSoto Gas. One of the counties within Dowdle's service area is Panola County, which is also within the area serviced with electricity by TVEPA. He stated that DeSoto Gas had never solicited business in Panola County prior to its purchase by TVEPA. However, he was not able to say whether DeSoto Gas had plans to enter Panola County prior to its purchase by TVEPA. Other testimony demonstrated that DeSoto Gas had, in fact, operated in Panola County prior to its purchase by TVEPA and had at least 2 customers in that county. Within the year after the purchase by TVEPA its customer base in Panola County grew to 60 customers. There is no indication in the record how many of these customers in the increase switched from Graeber's or Dowdle's companies or even how many of them were previously serviced by a gas company. Dowdle also testified that TVEPA's ownership of DeSoto Gas resulted in unfair competition in the gas industry because TVEPA could obtain loans at a lower interest rate than the other gas companies. No showing was made, however, that TVEPA had actually obtained such a loan subsequent to its purchase of DeSoto Gas or that DeSoto Gas had benefitted from such a loan. Even assuming lawful competition on the part of DeSoto Gas is actionable harm, the trial court's finding of irreparable injury on these facts, or lack thereof, is clearly erroneous.