Court Opinion

ID: 2964684
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:29:35.044139+00
Date Added: 2024-06-11T11:42:59.615372
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 96-1332

                            STARLIGHT SUGAR, INC., ET AL.,

                               Plaintiffs - Appellees,

                                          v.

                            NEFTALI SOTO, INDIVIDUALLY AND
                            AS SECRETARY OF THE DEPARTMENT
                                OF AGRICULTURE OF THE
                             COMMONWEALTH OF PUERTO RICO,

                                Defendant - Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                  [Hon. Juan M. P rez-Gim nez, U.S. District Judge]
                                               ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________
                            Coffin, Senior Circuit Judge,
                                    ____________________
                              and Stahl, Circuit Judge.
                                         _____________

                                _____________________

               Edgardo  Rodr guez-Quilichini, Assistant  Solicitor General,
               _____________________________
          Department  of  Justice,  with whom  Carlos  Lugo-Fiol, Solicitor
                                               _________________
          General, and Edda Serrano-Blasini, Deputy Solicitor General, were
                       ____________________
          on brief for appellant.
               Marcos  A. Ram rez-Lavandero,  with  whom Eduardo  A.  Vera-
               ____________________________              __________________
          Ram rez,  Janice  M.  Guti rrez-Lacourt  and  Marcos  A.  Ram rez
          _______   _____________________________       ___________________
          Lavandero & Associates were on brief for appellees.
          ______________________

                                 ____________________

                                     May 30, 1997
                                 ____________________

                    TORRUELLA, Chief Judge.   The Department of Agriculture
                    TORRUELLA, Chief Judge. 
                               ___________

          of  the  Commonwealth  of  Puerto  Rico  urges  us  to  vacate  a

          preliminary injunction issued on December 21, 1995 that  bars the

          enforcement of Section Six of its Market Regulation 13.1  Section

          Six prohibits the importation into  Puerto Rico of refined  sugar

          intended  for consumer sale that  is not prepackaged  in units of

          five pounds or less.  The district court held that the regulation

          violated the Commerce Clause in its "dormant" state and the Equal

          Protection  Clause  and  also  found  that  the  plaintiff  sugar

          importers had  met all of the grounds  for preliminary injunctive

          relief.  

                    Under our  four-part test for  determining whether  the

          grant or denial of  preliminary injunctive relief is appropriate,

          the district court must consider:

                      (1)  the  likelihood  of success  on  the
                      merits; (2) the potential for irreparable
                      harm if the injunction is denied; (3) the
                      balance  of  relevant impositions,  i.e.,
                      the hardship to the nonmovant if enjoined
                      as  contrasted with  the hardship  to the
                      movant if  no injunction issues;  and (4)

                              
          ____________________

          1  Section VI of  Regulation 13 of the Puerto Rico  Department of
          Agriculture provides in pertinent part:

                    A.   Refined sugar  to be imported  in Puerto
                    Rico  shall  come in  consumer  size packages
                    inside the corresponding shipping containers.
                    For   the  purposes  of   this  Regulation  a
                    consumer   size  package  is  one  whose  net
                    content does not exceed five (5) pounds.

                    B.    .  .   .  Imported  refined  sugar  for
                    industrial  use  shall  not  be  repacked  in
                    consumer-size  packages  for direct  sales to
                    the consumers.

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                      the effect (if any) of the court's ruling
                      on the public interest.

          Ross-Simons of Warwick, Inc.  v. Baccarat, Inc., 102 F.3d  12, 15
          ____________________________     ______________

          (1st   Cir.  1996).    On  appeal,  the  standard  of  review  is

          deferential, and we have said that "unless the appellant can show

          that  the lower  court  misapprehended  the  law or  committed  a

          palpable  abuse of  discretion,  the court  of  appeals will  not

          intervene." Id. at 16.
                      ___

                    Upon careful consideration of the briefs, arguments  of

          counsel, and  the  record  in this  case,  we find  no  abuse  of

          discretion and no error of law,  and therefore affirm in light of
                                                         affirm
                                                         ______

          the  sound  reasons provided  in  the  district court's  thorough

          opinion.   See  Starlight Sugar, Inc.  v. Soto, 909  F. Supp. 853
                     ___  _____________________     ____

          (D.P.R. 1995).

                    We  only note  the  following.    With respect  to  the

          likelihood  of success  on  the merits,  Commerce Clause  caselaw

          strongly supports the position  of the plaintiff sugar importers.

          The  Department of  Agriculture  asks that  the dormant  Commerce

          Clause  balancing test put forward in Pike v. Bruce Church, Inc.,
                                                ____    __________________

          397 U.S. 137, 142 (1970), be applied to Section Six, and it seems

          to  acknowledge  that for  Pike  to apply,  it  must characterize
                                     ____

          Section  Six as  an evenhanded  regulation  that imposes  only an

          incidental burden on interstate commerce.  Section Six is plainly

          not such a creature.  As the district court properly found, where

          a  state  law  or  regulation,  such  as  Section  Six,  facially

          discriminates against  interstate commerce,  and has as  its very

          purpose  the  protection of  local  economic  interests, it  must

                                         -3-

          withstand the most stringent form of scrutiny under the  Commerce

          Clause.  See, e.g.,  West Lynn Creamery v.  Healy, ___ U.S.  ___,
                   ___  ____   __________________     _____

          114 S. Ct.  2205, 2211-13  (1994).  Under  such strict  scrutiny,

          facially discriminatory regulations are presumptively invalid and

          are "routinely struck  down," unless  it can be  shown that  they

          serve  a  legitimate   local  interest  "unrelated   to  economic

          protectionism"    -- an  interest,  furthermore,  that cannot  be

          served  through  non-discriminatory means.    New  Energy Co.  v.
                                                        _______________

          Limbach, 486 U.S. 269, 274 (1988); see also Maine v.  Taylor, 477
          _______                            ________ _____     ______

          U.S. 131, 138  (1986) (upholding  facially discriminatory  import

          restriction as  necessary to  protect in-state wildlife).   Here,

          appellants  can  only justify  their  restriction  of bulk  sugar

          importation and subsequent packaging for consumer sale by listing

          the various  local benefits  attendant to economic  protectionism

          itself.2   "[W]here simple economic protectionism  is effected by

          state legislation, a virtually per se rule of invalidity has been
                                         ______

          erected."  City of Philadelphia v. New Jersey, 437  U.S. 617, 624
                     ____________________    __________

          (1978).

                    The district court also did not abuse its discretion in

          finding the potential for irreparable harm.  See 909 F.  Supp. at
                                                       ___

          861-62.   The  district  court found  that  irreparable harm  was
                              
          ____________________

          2  Appellants concede that Section Six has provided a competitive
          advantage  to the Puerto  Rico sugar corporation,  which owns the
          only existing refinery  in Puerto  Rico.  In  support of  Section
          Six, appellants  cite such local  interests as the  protection of
          jobs in the Puerto Rico sugar industry, the preservation of rural
          culture associated  with sugar production, and  the prevention of
          certain  demographic changes  (the movement  of unemployed  sugar
          workers from rural  areas to  urban areas) that  may result  were
          unfettered interstate competition allowed.  

                                         -4-

          threatened by  the inability of the plaintiff  sugar importers to

          take advantage of an impending shortage of sugar supply in Puerto

          Rico.  The Department of Agriculture argues that a potential harm

          cannot be deemed  "irreparable" if it  is of a  kind that can  be

          later compensated through money  damages.  While it is  true that

          injunctive  relief is generally inappropriate where money damages

          can make a plaintiff whole, we have recognized that the loss of a

          unique   or   fleeting   business   opportunity   can  constitute

          irreparable injury.  See Hyde Park Partners v. Connolly, 839 F.2d
                               ___ __________________    ________

          837,  853 (1st  Cir. 1988) (injunction  may be  appropriate where

          timing, in tender offer context,  is crucial); see also Baccarat,
                                                         ________ ________

          102 F.3d at 18-19  ("[A] plaintiff need not demonstrate  that the

          denial of injunctive relief will be fatal to its business.  . . .

          If [it]  suffers  a substantial  injury  that is  not  accurately
                                                   ________________________

          measurable   or   adequately   compensable  by   money   damages,
          __________

          irreparable  harm  is  a natural  sequel.")  (citations  omitted)

          (emphasis added).  The concern in the present situation is clear:

          although we  remain in the domain  of economic profit  or loss, a

          context  in   which  compensation  through   legal  remedies   is

          preferred,  as  a practical  matter  the  potential value  of  an

          evanescent  business opportunity  may be  extremely  difficult to

          measure, after the  fact.  The district  court did not abuse  its

          discretion, therefore, in finding that plaintiffs were threatened

          with irreparable harm through  the ongoing enforcement of Section

          Six.

                    Affirmed. 
                    Affirmed
                    ________

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