Opinion ID: 3199884
Heading Depth: 3
Heading Rank: 1

Heading: The Framework for Analyzing Preliminary

Text: Injunctions To obtain a preliminary injunction, a plaintiff must demonstrate that: (1) it “is likely to succeed on the merits”; (2) it “is likely to suffer irreparable harm in the absence of preliminary relief”; (3) “the balance of equities tips in [its] favor”; and (4) “an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). We hold that the district court did not abuse its discretion in finding that Plaintiffs satisfied each of these requirements and granting their motion for a preliminary injunction. courts the authority to designate magistrate judges to serve as arbitrators as part of a court’s alternative dispute resolution program, nothing in the record demonstrates that magistrate judges were so authorized by the District of Oregon. The Alternative Dispute Resolution Act plainly requires the authorization to come from the “United States district court . . . by local rule,” not from a single judge of that court. 28 U.S.C. § 651(b) (“Each United States district court shall authorize, by local rule adopted under section 2071(a), the use of alternative dispute resolution processes in all civil actions . . . .”). The concurring/dissenting opinion insists “that the authorization here is based on the District of Oregon’s local rules. The local rule in question specifically permits an individual judge—‘on his/her own motion or at the request of a party’—to assign the case to arbitration.” Concur. & Dissent. Op. at 32 (quoting D. Or. Civil Local Rule 16-4(e)(4)(A)). But nothing in Local Rule 16-4(e) speaks to who may be appointed as an arbitrator and certainly does not authorize that judge to appoint an active magistrate judge to act as an arbitrator in such a case. BOARDMAN V. PACIFIC SEAFOOD GROUP 17 B. Plaintiffs Have Shown a Sufficient Likelihood of Success on the Merits
Prior Settlement Defendants argue that Plaintiffs cannot show a likelihood of success on the merits of their monopolization and unlawful merger claims because they released these claims in the Resolution Agreement. When settling the Whaley lawsuit, Plaintiffs agreed to release the following: Any and all claims for monopolization, attempted monopolization or conspiracy to restrain trade under Sections 1 and 2 of the Sherman Act that relate to the delivery of trawl-caught groundfish, whiting or pink shrimp to West Coast processors from Ft. Bragg, California north to the Canadian border between June 21, 2006 and December 31, 2011 and specifically including any claims for damages and/or injunctive relief related to those claims. As required by Oregon contract law, we interpret the above provision by examining its text; if the provision is clear, its plain text governs. See Yogman, 937 P.2d at 1021. Plaintiffs argue that the entire release is temporally limited (that is, only claims arising between June 21, 2006 and December 31, 2011 were released), while Defendants argue that the last clause of the provision (“including any claims for damages and/or injunctive relief related to those claims”) is not so limited, and thus encompasses the claims at issue in this case. We 18 BOARDMAN V. PACIFIC SEAFOOD GROUP agree with Plaintiffs and conclude that they did not release their current claims when they settled the Whaley lawsuit. Defendants read the last clause of the release expansively to mean that the Whaley plaintiffs released all claims for damages or injunctive relief related to – which Defendants define to mean “logically or causally connected to” – the claims asserted in Whaley. By this logic, the Whaley plaintiffs released their antitrust claims against Defendants that arose between June 21, 2006 and December 31, 2011, and any related claims for damages or injunctive relief arising at any time before or after. This construction would render the temporal limitation in the first clause meaningless. We decline to reach this illogical result, and we instead read the second clause in the context of the provision as a whole. The release states that the claims in the first clause, which are temporally limited, “specifically includ[e]” the claims in the second clause – the “related” claims for “damages and/or injunctive relief.” Thus, the claims in the second clause are a smaller subset of the temporally limited claims in the first clause. See, e.g., Ariz. State Bd. for Charter Sch. v. U.S. Dep’t of Educ., 464 F.3d 1003, 1007–08 (9th Cir. 2006) (“Using a common-sense construction . . . , the term ‘including’ indicates that [which follows] is an illustrative subset of the preceding principle . . . .”). The release in the Resolution Agreement is clear: the Whaley plaintiffs released their antitrust claims against Defendants that arose between June 2006 and December 2011, which specifically included plaintiffs’ claims for damages and injunctive relief that arose during the specified time period. Accordingly, we conclude that the release in the Resolution Agreement has no bearing on Plaintiffs’ likelihood of success BOARDMAN V. PACIFIC SEAFOOD GROUP 19 on the merits of their claims in this case, which arose after the Resolution Agreement was executed. 2. Plaintiffs Have Adequately Demonstrated That the Proposed Transaction Could Substantially Lessen Competition To prove an unlawful merger claim under § 7 of the Clayton Act, a plaintiff must show that the effect of the challenged acquisition “may be substantially to lessen competition, or to tend to create a monopoly.” 15 U.S.C. § 18. The plaintiff need not prove that a merger or acquisition has altered prices in the relevant market; rather, “[a]ll that is necessary is that the merger create an appreciable danger of such consequences in the future.” Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775, 788 (9th Cir. 2015) (quoting Hosp. Corp. of Am. v. FTC, 807 F.2d 1381, 1389 (7th Cir. 1986)). This Court evaluates § 7 claims “under a burden-shifting framework.” Id. at 783. “A prima facie case can be established simply by showing a high market share” would result from the proposed merger, although plaintiffs often put forth other evidence as well, because market share statistics do not conclusively prove harm to competition. Id. at 785. The burden then shifts to the defendant to “cast doubt on the accuracy of the [plaintiff’s] evidence as predictive of future anticompetitive effects.” Id. at 788 (quoting Chi. Bridge & Iron Co. N.V. v. FTC, 534 F.3d 410, 423 (5th Cir. 2008)). Plaintiffs have adduced evidence that, if Pacific Seafood were to acquire Ocean Gold, Pacific Seafood’s market power 20 BOARDMAN V. PACIFIC SEAFOOD GROUP in seafood input markets8 on the West Coast would increase significantly, to the point that the markets would become “highly concentrated.” To support their argument, Plaintiffs have utilized the Herfindahl-Hirschman Index, which is “[a] commonly used metric for determining market share,” Saint Alphonsus Med. Ctr., 778 F.3d at 786, as well as the U.S. Department of Justice’s and Federal Trade Commission’s Horizontal Merger Guidelines. Plaintiffs’ expert, Dr. Radtke, also submitted a declaration explaining that there were “multiple barriers to entry in the West Coast seafood market.” To “cast doubt” on Plaintiffs’ “evidence as predictive of future anticompetitive effects,” Defendants respond that Pacific Seafood and Ocean Gold have been cooperating for nearly 15 years, with Pacific Seafood acting as the sole buyer of Ocean Gold’s seafood output, using Ocean Gold’s seafood processing assets, and offering marketing and distribution services to Ocean Gold in return. According to Defendants, the companies’ joint efforts have improved the industry by increasing ex vessel prices9 and expanding the market. In other words, Defendants claim that Pacific Seafood’s acquisition of Ocean Gold would merely continue the companies’ joint efforts and not change the current market structure. Defendants argue that, as a result, the proposed acquisition poses no danger to competition. Plaintiffs respond that Pacific Seafood’s acquisition of Ocean Gold would indeed change the relevant market 8 “Input market” signifies seafood processors’ purchase of fish from fishermen, such as Plaintiffs. 9 “Ex vessel prices” are those prices paid to fishermen for their catches at the point of delivery. BOARDMAN V. PACIFIC SEAFOOD GROUP 21 structure, which is that of input markets on the West Coast. In West Coast input markets for trawl-caught groundfish, Pacific whiting, and Pacific coldwater shrimp, Ocean Gold and Pacific Seafood are currently competitors, though they cooperate in other respects. Thus, according to Plaintiffs, Pacific Seafood’s acquisition of Ocean Gold would substantially decrease competition in multiple seafood input markets. The district court found convincing Plaintiffs’ showing that Pacific Seafood’s acquisition of Ocean Gold would substantially reduce competition in multiple buyers’ input markets, and it found that Defendants had not sufficiently cast doubt on Plaintiffs’ evidence to meet their burden. This conclusion is supported by the evidence in the record summarized above, and it was not implausible in light of the record as a whole. The district court thus did not abuse its discretion in finding that the effect of the challenged acquisition could be to lessen competition substantially; thus, that Plaintiffs had adequately demonstrated a likelihood of success on the merits. C. Plaintiffs Are Likely to Suffer Irreparable Harm in the Absence of Preliminary Relief Next, a plaintiff must show that she “is likely to suffer irreparable harm in the absence of preliminary relief.” See Winter, 555 U.S. at 20. This Court has ruled that “[s]peculative injury does not constitute irreparable injury sufficient to warrant granting a preliminary injunction. A plaintiff must do more than merely allege imminent harm sufficient to establish standing; a plaintiff must demonstrate immediate threatened injury as a prerequisite to preliminary injunctive relief.” Caribbean Marine Servs. Co., Inc. v. 22 BOARDMAN V. PACIFIC SEAFOOD GROUP Baldrige, 844 F.2d 668, 674 (9th Cir. 1988) (citations omitted). Plaintiffs argue that Pacific Seafood’s acquisition of Ocean Gold would create a monopsony in multiple seafood input markets on the West Coast. A monopsony occurs when there is “market power on the buy side of the market” and buyers consequently pay suppliers less than they would in a competitive market. Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 549 U.S. 312, 320–22 (2007). As noted above, Plaintiffs support their argument with market concentration statistics and expert declarations. A lessening of competition constitutes an irreparable injury under our case law. See United States v. BNS Inc., 858 F.2d 456,464–66 (9th Cir. 1988) (“Koppers has demonstrated that serious questions exist regarding the possibility of irreparable harm to competition in the Irwindale aggregate market if the tender offer is consummated . . . .”). Thus, the district court did not abuse its discretion in finding that Plaintiffs adequately demonstrated a threatened irreparable injury. Defendants argue that there is no immediate danger of irreparable harm because they have terminated the proposed acquisition that led to this suit, and they have stipulated with the Oregon Attorney General that they would not enter a purchase transaction with Ocean Gold entities while the Attorney General’s investigation is pending. Defendants, however, may terminate the stipulation with 60-days’ notice to the Oregon Attorney General and the district court. Defendants’ argument is unavailing. A threat of irreparable harm is sufficiently immediate to warrant preliminary injunctive relief if the plaintiff “is likely to suffer irreparable harm before a decision on the merits can be BOARDMAN V. PACIFIC SEAFOOD GROUP 23 rendered.” See Winter, 555 U.S. at 22 (quoting 11A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2948.1 (2d ed. 1995)). Given: (1) the limited nature of Defendants’ proposed stipulation (not to enter a “purchase transaction,” when a deal with Ocean Gold could take on many different structures); (2) the expiration of Pacific Seafood and Ocean Gold’s exclusive marketing agreement in February 2016; (3) Defendants’ history of negotiating an acquisition for many months in secret before notifying Plaintiffs; and (4) the fact that Defendants may terminate their stipulation with 60-days’ notice, Plaintiffs have established a sufficient likelihood that, in the absence of preliminary injunctive relief, they would suffer irreparable harm before a trial on the merits could be held. Thus, the district court did not abuse its discretion in ruling that Plaintiffs sufficiently demonstrated a threat of irreparable harm. D. The Balance of Equities Tips in Plaintiffs’ Favor The district court likewise did not abuse its discretion in finding that the balance of equities tips in favor of Plaintiffs. Plaintiffs have demonstrated a reasonable probability that Pacific Seafood’s acquisition of Ocean Gold would substantially lessen competition in the relevant input markets on the West Coast. This decrease in competition would injure Plaintiffs, who sell fish in these markets. Defendants, on the other hand, have not established how maintaining the status quo while the district court decides the case on the merits will injure them. Accordingly, the district court’s finding as to the balance of equities in this case was not an abuse of discretion. 24 BOARDMAN V. PACIFIC SEAFOOD GROUP E. A Preliminary Injunction Is in the Public Interest A district court should consider whether a preliminary injunction would be in the public interest if “the impact of an injunction reaches beyond the parties, carrying with it a potential for public consequences.” Stormans, Inc., 586 F.3d at 1138–39. This Court has said that “the central purpose of the antitrust laws, state and federal, is to preserve competition. It is competition . . . that these statutes recognize as vital to the public interest.” Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 988 (9th Cir. 2000) (emphasis added). Again, Plaintiffs have demonstrated a reasonable likelihood that Pacific Seafood’s acquisition of Ocean Gold could substantially lessen competition in relevant input markets. Thus, the district court did not abuse its discretion in finding that a preliminary injunction is in the public interest. F. The Preliminary Injunction Is Not Overbroad Finally, Defendants argue that the district court abused its discretion by granting an overly broad preliminary injunction. “An overbroad injunction is an abuse of discretion.” LambWeston, Inc. v. McCain Foods, Ltd., 941 F.2d 970, 974 (9th Cir. 1991). The preliminary injunction provides, as follows: Defendants, their subsidiaries, affiliates, owners, officers, employees, and agents and all persons acting on their behalf are prohibited, through contractual or any other means, from undertaking any further act to acquire or control any interest in the stock, BOARDMAN V. PACIFIC SEAFOOD GROUP 25 capital assets, real property, quota, or fishing permits of Ocean Gold Seafoods, Inc. or its affiliated companies including but not limited to Ocean Gold International, Inc.; Ocean Protein, LLC; Ocean Cold, LLC; Ocean Cold Transport, LLC, and Hoquiam Riverview Properties, LLC, or their shareholders or members until further order of this Court. Defendants take issue with the fact that the district court prohibited them “from undertaking any further act to acquire or control any interest in” Ocean Gold. Defendants argue that the preliminary injunction is overbroad because it prohibits not only Pacific Seafood’s ultimate acquisition of Ocean Gold, but also any lawful preparatory conduct (such as negotiating an acquisition, signing a letter of intent, or entering into an agreement contingent on resolution of Plaintiffs’ antitrust claims). According to Defendants, such preparatory conduct was specifically contemplated by the Resolution Agreement, which states that Pacific Seafood may enter new contractual arrangements with Ocean Gold. “District courts have broad latitude in fashioning equitable relief when necessary to remedy an established wrong.” Earth Island Inst. v. Carlton, 626 F.3d 462, 475 (9th Cir. 2010) (quoting Sierra Hikers Ass’n v. Blackwell, 390 F.3d 630, 641 (9th Cir. 2004)) (internal quotation marks omitted). The “purpose of a preliminary injunction is to preserve the status quo ante litem pending a determination of the action on the merits.” Sierra Forest Legacy v. Rey, 577 F.3d 1015, 1023 (9th Cir. 2009) (quoting L.A. Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1200 (9th Cir. 1980)) (internal quotation marks omitted). “Status quo ante litem” refers to “the last uncontested status 26 BOARDMAN V. PACIFIC SEAFOOD GROUP which preceded the pending controversy.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1210 (9th Cir. 2000) (quoting Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 809 (9th Cir. 1963)). By prohibiting Pacific Seafood from undertaking any further act to acquire Ocean Gold’s stock or assets, the district court effectively preserved the parties’ last uncontested status, prior to Pacific Seafood’s attempt to acquire Ocean Gold. Pacific Seafood and Ocean Gold could combine their operations in a number of ways to lessen competition, and the district court thus did not abuse its discretion by prohibiting Pacific Seafood from undertaking any further acts to acquire Ocean Gold’s stock or assets, as opposed to prohibiting only an actual acquisition. • ! • Because the district court did not abuse its discretion in finding that Plaintiffs had satisfied the Winter requirements, we affirm the district court’s order granting Plaintiffs’ motion for a preliminary injunction.