Court Opinion

ID: 9472755
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:09:40.489106+00
Date Added: 2024-06-11T17:43:07.530242
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
dissenting:
This is an appeal from a preliminary injunction order which directed appellees to “comply with the terms of the May 1978 Agreement” and, specifically, “to respect [appellants’] exclusive distribution and licensing rights in North America, South America, Japan, Germany, and Central America.” Although there is a substantial question whether this Court should give its stamp of approval to an order that so clearly violates Fed.R.Civ.P. 65(d); see Diapulse Corporation of America v. Garba, Ltd., 626 F.2d 1108, 1111 (2d Cir.1980), it is the propriety rather than the form of the order that prompts this dissent.
An injunction order is “the strong arm of equity, that never ought to be extended unless to eases of great injury, where courts of law cannot afford an adequate or commensurate remedy in damages.” Detroit Newspaper Publishers Association v. Detroit Typographical Union No. 18, International Typographical Union, 471 F.2d 872, 876 (6th Cir.1972) (quoting 3 Barron & Holtzoff, Federal Practice and Procedure (Wright ed.) § 1431, now 11 Wright & Miller § 2942), cert. denied, 411 U.S. 967, 93 S.Ct. 2149, 36 L.Ed.2d 687 (1973). It is “an extraordinary and drastic remedy which should not be routinely granted.” Medical Society of the State of New York v. Toia, 560 F.2d 535, 538 (2d Cir.1977); see Buffalo Courier-Express, Inc. v. Buffalo Evening News, Inc., 601 F.2d 48, 59 (2d Cir.1979). It should not have been granted in the absence of a clear and plain showing of irreparable injury, i.e., “the absence of an adequate remedy at law, which is the sine qua non for the grant of such equitable relief.” Buffalo Forge Co. v. Ampco-Pittsburgh Corp., 638 F.2d 568, 569 (2d Cir.1981); see United States Postal Service v. Brennan, 579 F.2d 188, 191 (2d Cir.1978). Appellees have failed to make any showing that sales of appellants’ extinguisher bearing no UL label (“unlabeled”) in countries such as Argentina, Brazil, and Japan will cause appellees irreparable injury-
Unlabeled halogenated aerosol extinguishers similar to appellants’ have been on the market for twenty years, and hundreds of thousands of aerosol units containing Halón 1211 are being sold annually throughout the world. Indeed, one device now being produced in Canada was stated without contradiction to be an “exact duplicate” of appellants’ extinguisher. Appellees’ counsel assured Chief Judge Motley time and again that appellees did not challenge the safety of appellants’ unlabeled product. Judge Motley’s response to these repeated assurances was that there was no need for appellants to prove the conceded safety of their extinguisher. In view of (1) concessions by court and counsel of product safety, (2) the undisputed testimony that appellants’ extinguisher had passed more than fifty UL tests and only one test remained to be given, (3) the undisputed expert testimony that appellants’ product, which meets Department of Transportation standards, presently is safe, and (4) the submission by appellees to UL of an extinguisher patterned after appellants’ and “almost identical” with it, Judge Motley clearly erred in basing a finding of irreparable harm upon the sale by appellants of “defective” extinguishers.
Moreover, a finding of irreparable harm cannot be predicated upon the asserted impossibility of producing an accurate money damages figure. “Damages are not rendered uncertain because they cannot be calculated with absolute exactness.” Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379, 47 S.Ct. 400, 405, 71 L.Ed. 684 (1927), quoting with approval the court below, 295 F. 98, 102 (5th Cir.1923). Their extent may be established “as a matter of just and reasonable inference, although the result be only approximate.” Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248, 250, 75 L.Ed. 544 (1931). In Perma Research & Development v. Singer *941Co., 542 F.2d 111, 115-16 (2d Cir.), cert. denied, 429 U.S. 987, 97 S.Ct. 507, 50 L.Ed.2d 598 (1976), for example, this Court affirmed an award of $7,000,000 based on the defendant’s failure to perfect a novel nonskid device which, at the time of the award, still was neither perfected nor marketable. See also Lee v. Joseph E. Seagram & Sons, Inc., 552 F.2d 447, 455-56 (2d Cir.1977); Autowest, Inc. v. Peugeot, Inc., 434 F.2d 556, 563-67 (2d Cir.1970). Chief Judge Motley found that appellants’ extinguisher is not unique and that extinguishers similar to appellants’ are being sold in a number of countries. There is no reason why, assuming a breach of contract, an adequate award of damages could not be made in this case.
Although my colleagues affirm the granting of equitable relief, they realize apparently that the result is not an equitable one. I agree. I also doubt that it represents the intent of the contracting parties.
The contract is an open-ended one, automatically renewable for one-year periods so long as none of its conditions has been violated. The district court held that the contract does not require appellees to make sales anywhere in the world prior to appellants’ success in obtaining UL listing in the United States and that the parties did not contemplate that such listing would be obtained in a short period of time. This means that, if appellants are unable to secure UL listing within ten years, fifteen years, or perhaps an even longer period, appellees, without lifting a finger, may preclude appellants from selling unlabeled extinguishers anywhere in North America, South America, Central America, Japan, or Germany.
The district court was quite correct in holding that the contract did not expressly impose any duties upon appellees prior to UL listing. The contract provides simply that appellees are required to place orders for specified quantities of extinguishers “after UL’s listing is secured.” The contract does not state, however, that appellees have no obligations whatsoever prior to such listing. In fact, it says nothing. The district court should have received parol evidence on this subject if only to determine whether the parties intended that appellees’ obligations with respect to foreign sales during the pre-listing period should be governed by the “best efforts” provision of section 2-306(2) of the Uniform Commercial Code. See Hunt Foods and Industries, Inc. v. Doliner, 26 A.D.2d 41, 42-43, 270 N.Y.S.2d 937 (1st Dept.1966); George v. Davoli, 91 Misc.2d 296, 298-99, 397 N.Y. S.2d 895 (1977); U.C.C. § 2-202(b).
It is interesting to note that, although appellees’ notice of motion for a temporary injunction asked that appellants be precluded from selling their extinguisher in any of appellees’ territories, the affidavit submitted in support of the motion by appellee Laurence Gerard, Firejet’s president, asked only that appellants be enjoined from making sales in the United States. Indeed, the parties were well into the hearing before the district court realized that appellees were seeking more wide ranging relief.
Without some time limitation, it borders on the unconscionable, see U.C.C. § 2-302, to hold that, although appellees are not obligated to sell and do not sell appellants’ unlabeled fire extinguishers in such places as Brazil or Japan, they may at the same time prevent appellants from selling them there. Article 18 of the contract provides that, if UL approval is not obtained within seven months, more or less, appellees are “commissionable” to eight percent of all appellants’ sales, except in Israel, up to a maximum of $25,000. This paragraph appears to contemplate worldwide sales by appellants after six or seven months have gone by without listing. At the very least, it creates an ambiguity that mandates clarification by parol evidence.
Because the district court refused to receive any parol evidence, because the essential requirements for injunctive relief are lacking, and because an equitable device is being used to produce an inequitable result, I respectfully dissent.