Court Opinion

ID: 8969797
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:26:32.087318+00
Date Added: 2024-06-11T17:10:25.006304
License: Public Domain

BALDOCK, Circuit Judge,
dissenting.
The court has determined that the district court’s order denying the permanent injunction sought by Tri-State and the REA should not be reversed, but merely vacated and set aside. This is in the event that the facts later justify entry of permanent injunctive relief. This accomplishes little, other than suggesting a result to the district court. Because the record supports the trial court’s decision not to grant permanent injunctive relief, I would not disturb the district court’s order. Tri-State and the REA may ask for reconsideration of the order denying permanent injunctive relief without our help.
In addition, the court has reviewed an issue (the contract issue) on which the district court granted partial summary judgment. The court decides that the all-requirements wholesale power contract contains an implied obligation for Shoshone to maintain requirements and stay in business over the life of the contract. In reviewing the denial of a permanent injunction, we may have jurisdiction to decide other non-appealable issues; however, such jurisdiction ought to be exercised only when the nonappealable issues are inextricably intertwined with reviewing the propriety of in-junctive relief. The contract issue in this case plainly does not meet that test.
The purported jurisdictional base for the court’s decision on the contract issue is pendent appellate jurisdiction. Even the prevailing view seems to be that this doctrine should be used sparingly and only for the most compelling reasons. See 16 C. Wright, A. Miller, E. Cooper & E. Gress-man, Federal Practice and Procedure § 3937 at 269-71 (1977). I would not apply the doctrine here because the exercise of such jurisdiction is directly contrary to the district court’s decision concerning interlocutory review pursuant to 28 U.S.C. § 1292(b). Though requested to do so, the district court declined to certify the partial summary judgment order containing the contract issue. But the court ignores the district court’s decision on this point, and effectively reverses it. Because we have no jurisdiction to review, let alone reverse, the district court’s refusal to certify, I would not decide the contract question.
Even assuming arguendo that the contract question is properly before us, it should be decided differently because it is doubtful that the Wyoming courts would follow the minority view adopted by this court. The weight of modern authority supports the district court’s construction of *1365the contract under Wyoming law and precludes holding Shoshone and Pacific liable as a matter of law based on an implied obligation to stay in business.
Even if this court’s interpretation of the contract was correct, though, it does not obviate the need for a new trial on some liability issues. For example, the tort claim for interference with contractual relations remains pending and is subject to the district court’s new trial order. Yet, the court has restricted the scope of the new trial only to damages. For these many reasons, I respectfully dissent.
I.
Adequate evidence in the record exists to support the trial court’s conclusion that a permanent injunction should not issue because Tri-State has not demonstrated irreparable injury. Tri-State’s expert quantified damages and the trial court, in ordering remittitur, explained that $16 million of the $22 million in compensatory damages awarded by the jury represented a multiple recovery,1 clearly supporting the idea that damages can be calculated with reasonable certainty. The trial court also found that the loss of Shoshone from the Tri-State system will not jeopardize the security of Tri-State or the REA. Shoshone contributes only three percent of Tri-State’s total revenue from electric power sales. And despite the loss of revenues from Shoshone for nearly a year, Tri-State was able to keep its loans current and implement a 6.5% rate decrease! The trial court discounted the “domino theory” repeatedly advanced by Tri-State and the REA. Essentially, Tri-State has taken steps to bind other cooperatives, and the evidence that other cooperative members will follow Shoshone’s lead, given the litigation risk and other factors, is doubtful according to the trial court.
Althoúgh the evidence is controverted on these points, as an appellate court, we are bound by the factual findings below if they are not clearly erroneous. A finding cannot be clearly erroneous if there is evidence which would support either side. Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). That is the case here. I would affirm the district court’s denial of the permanent injunction due to a lack of irreparable injury. This court’s rationale for vacating the denial of the permanent injunction — that evidence of future damages on retrial may prove them incalculable — is wholly advisory and unconvincing. The appellants certainly would seek reconsideration of the trial court’s decision on this point after retrial if such were the case. We need not school the trial court or the parties on what I suspect is a self-fulfilling appellate prophecy.
II.
The court also decides the contract issue in this case: whether Shoshone has an implied obligation to remain in business or merely an implied duty of good faith and fair dealing which would extend to any decision to discontinue operations and eliminate requirements. Relying on the great weight of authority, the district court opted for the latter interpretation under Wyoming law in granting partial summary judgment on this issue in favor of appellees Pacific and Shoshone. Rec. vol. II, doc. 210 at 4-12. This court opts for the former interpretation.
Our jurisdiction to consider this appeal from a denial of permanent injunctive relief arises under 28 U.S.C. § 1292(a)(1) which provides in pertinent part that the court of appeals has jurisdiction of appeals from interlocutory orders of the district courts “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” Consistent with the federal policy against piecemeal appeals, we have jurisdiction to consider those issues raised by the grant, denial or modification of an injunction. When courts have decided issues resolved by other non-appealable orders, it generally has been because those issues are “inextricably *1366bound up with the injunction.” Marathon Oil Co. v. United States, 807 F.2d 759, 765 (9th Cir.1986), cert denied, 480 U.S. 940, 107 S.Ct. 1593, 94 L.Ed.2d 782 (1987). The cases cited by the court are not to the contrary. Maj. op. at 1351-52.
In Takeda v. Northwestern Nat'l lAfe Ins. Co., 765 F.2d 815 (9th Cir.1985), the district court enjoined the plaintiffs from filing another state court action after the original action was removed to federal court and a motion to remand was denied. Id. at 817. In reviewing the propriety of the injunction pursuant to § 1292(a)(1), the court of appeals also resolved the removal questions because “the propriety of the underlying removal is intertwined with the propriety of granting the injunction.” 765 F.2d at 818. In the case before us, the court admits that the contract issue simply is not intertwined with the resolution of the injunction question: “This merits determination need not be decided as part of our consideration of the permanent injunction issue because of our determination below that the record presently before us does not support a finding of irreparable harm.” Maj. op. at 1352.
In Cable Holdings of Battlefield, Inc. v. Cooke, 764 F.2d 1466 (11th Cir.1985), the court of appeals reviewed a grant of partial summary judgment under § 1292(a)(1) because it “was the basis for both the dissolution of the preliminary restraint and the denial of the preliminary injunction.” 764 F.2d at 1472. The court concluded that it “could not properly exercise [its] jurisdiction under § 1292(a)(1) without also reviewing the grant of partial summary judgment.” Id. That certainly does not describe the situation here. The district court’s order denying permanent injunctive relief is firmly grounded on a lack of irreparable injury, rather than its resolution of the contract issue on partial summary judgment.
In Sierra On-Line v. Phoenix Software, Inc., 739 F.2d 1415 (9th Cir.1984), the court of appeals declined to review an order denying summary judgment, while noting that under § 1292(a)(1) it had the “power ... to review all issues underlying an injunction.” 739 F.2d at 1421. The court determined, however, that the summary judgment denial did not involve the same issues as the injunction. Id. Stated another way, the substance of the summary judgment motion was not one of the “salient issues on review of this injunction.” Id. Likewise, the partial summary judgment order on the contract issue in this case is not one of the salient issues for our review.
In Gould v. Control Laser Corp., 650 F.2d 617 (5th Cir.1981), the court recognized that it could look at otherwise nonap-pealable aspects of an order concerning injunctive relief, but declined to review the merits of a summary judgment order. “A litigant’s right to appeal interlocutory injunctions goes only to the injunction itself, and he cannot force consideration of the merits of the underlying case except as necessary to review the injunction.” 650 F.2d at 621 n. 7.
Perhaps the broadest statement of jurisdiction cited by this court may be found in Energy Action Educ. Found. v. Andrus, 654 F.2d 735, 745-46 n. 54 (D.C.Cir.1980), rev’d on other grounds, 454 U.S. 151, 102 S.Ct. 205, 70 L.Ed.2d 309 (1981). According to Energy Action, review of a nonap-pealable order is appropriate when (1) further factual development is unnecessary, (2) no purpose would be served by delay, (3) judicial economy would be served by deciding the issue, and (4) essential guidance would be furnished on remand. 654 F.2d at 745. The court of appeals concluded its exposition by saying that: “The court, however, must restrict its merits decisions to issues that are closely related to the interlocutory order on appeal.” Id. at 745-46 n. 54. The court thus resolved the legal issue that dominated the litigation and was then able to pass on the denial of injunctive relief. Id. at 745.
The court also relies upon a discussion of the scope of appellate review of interlocutory orders contained in 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure § 3921 at 16-17 (1977):
*1367Ordinarily, the scope of appellate review under § 1292(a)(1) is confined to the issues necessary to determine the propriety of the interlocutory order itself.... Review quite properly extends to all matters inextricably bound up with the remedial decision. In addition, the scope of review may extend further to allow disposition of all matters appropriately raised by the record, including entry of final judgment. Jurisdiction of the interlocutory appeal is in large measure jurisdiction to deal with all aspects of the case that have been sufficiently illuminated to enable decision by the court of appeals without further trial court development.
While our jurisdiction should be exercised to resolve those questions “inextricably bound up” with the merits of an injunction, I am not so sure that it should extend to all matters which we happen to think are appropriately raised by the record. While it may be more efficient to decide both ap-pealable and nonappealable issues at once, we must be conscious of the statute which grants us jurisdiction and careful not to displace the decisions of the parties and district court concerning interlocutory review. Specifically, a district court may now direct entry of final judgment as to less than all claims or parties, Fed.R.Civ.P. 54(b), or certify a controlling question of law pursuant to 28 U.S.C. § 1292(b). For this court to decide on an ad hoc basis which nonappealable orders will be reviewed multiplies the opportunity for inconsistent application of our jurisdiction and undermines a sense of certainty so important in the evenhanded administration of justice.
As I understand the court’s opinion, the basis for reviewing the nonappealable partial summary judgment order is that of pendent appellate jurisdiction. According to this concept, a court “may occasionally decide questions going beyond the obvious limits authorized by the appeal or the petition before it.” 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure § 3937 at 269 (1977). Thus, the contract question is reviewed, not because it is closely related to the injunction issue, but because of concerns of judicial economy.2 The main feature of the injunction appeal is whether damages are incalculable, not whether the contract imposes liability as a matter of law on Shoshone and Pacific. In the context of this appeal, the two issues are not even closely related.
Nor is it clear that judicial economy is better served by deciding the contract issue. The court’s decision does not resolve Tri-State’s damages claim against Shoshone or Tri-State’s damages claim that Pacific tortiously interfered with the contract. A new trial will be required on these issues, and a final decision on the injunction with respect to irreparable harm cannot be made until Tri-State’s claims for damages are resolved. In deciding the contract issue at this point, the court has expended far more time than merely deciding the propriety of the district court’s denial of the permanent injunction. Had the injunction issue been decided, the case remanded for retrial and then appealed after entry of final judgment, a single appeal containing all of the issues would have followed. To be sure, the court has saved some work for the district court with its resolution of the contract issue, but how much is speculative until we see the appeal that will inevitably follow. Different evidence on retrial likely will prompt Shoshone and Pacific to urge reconsideration of the contract issue, forcing the next panel to revisit the issue.
*1368The exercise of pendent appellate jurisdiction involves concerns of limited judicial power, and consistent and principled application of our appellate jurisdiction. See Garner v. Wolfinbarger, 433 F.2d 117, 120 (5th Cir.1970). An ad hoc approach to our jurisdiction is inconsistent with our limited jurisdiction. If permissible at all, pendent jurisdiction is most justified when the ap-pealable and nonappealable issues overlap. General Motors Corp. v. City of New York, 501 F.2d 639, 648 (2d Cir.1974) (“The guiding principle to inform the discretionary application of pendent appellate jurisdiction is whether review of the appealable order will involve consideration of factors relevant to the otherwise nonappealable order.”). Ironically, the court’s grounds for invoking pendent appellate jurisdiction provide the very rationale that counsels against it. While the exercise of pendent appellate jurisdiction arguably may have efficiency to recommend it, in this case it not only undercuts the district court’s discretion to deny certification of an interlocutory appeal under 28 U.S.C. § 1292(b), but also undercuts the district court’s efforts to manage the case and bring it to final judgment.
We must consider the appealability of the contract issue with respect to the certification process envisioned by 28 U.S.C. § 1292(b), because the district court was requested to certify the partial summary judgment order containing the contract question on that basis. In the alternative, the district court was requested to certify pursuant to Fed.R.Civ.P. 54(b). The district court declined to certify on either ground. This court has no power to overturn a proper exercise of discretion declining to certify the contract question pursuant to § 1292(b) or Rule 54(b). Yet the court has ignored the district court’s discretion and completely substituted its own in the guise of pendent appellate jurisdiction.
It is very nearly impossible for us to obtain jurisdiction from a denial of certification. The denial of a Rule 54(b) motion is not appealable. McCall v. Deeds, 849 F.2d 1259 (9th Cir.1988); Makuc v. American Honda Motor Co., 692 F.2d 172, 173 (1st Cir.1982) (because only the granting of a Rule 54(b) motion interferes with the policy against piecemeal review, only the grant of the motion is renewable under the abuse of discretion standard); Boer v. Borg-Warner Corp., 364 F.2d 907 (3rd Cir.1966); Miles v. City of Chandler, 297 F.2d 690, 691 (9th Cir.1961); see also Jeanette Sheet Glass Corp. v. United States, 803 F.2d 1576, 1580-81 (Fed.Cir.1986) (only mandamus would lie from a refusal to certify in an exceptional case). And it is equally doubtful that appellate review may be had of a district judge’s refusal to certify pursuant to 28 U.S.C. § 1292(b). In re Master Key Antitrust Litigation, 528 F.2d 5, 8 (2d Cir.1975) (trial judge’s refusal to certify issues pursuant to 28 U.S.C. § 1292(b) is not appealable); Pfizer, Inc. v. Lord, 522 F.2d 612, 614 n. 4 (8th Cir.1975) (“This court is without jurisdiction to review an exercise of the district court’s discretion in refusing such [§ 1292(b)] certification.”), cert. denied, 424 U.S. 950, 96 S.Ct. 1421, 1422, 47 L.Ed.2d 356 (1976); United States v. 687.30 Acres of Land, 451 F.2d 667, 670 (2d Cir.1971) (“We have no jurisdiction to review the trial court’s denial of the § 1292(b) certificate.”), cert. denied, 405 U.S. 1026, 92 S.Ct. 1291, 31 L.Ed.2d 486 (1972); D’Ippolito v. Cities Serv. Co., 374 F.2d 643, 649 (2d Cir.1967) (“[W]e cannot conceive that we would ever mandamus a district judge to certify an appeal under 28 U.S.C. § 1292(b) in plain violation of the Congressional purpose that such appeals should be heard only when both the courts concerned so desire.”). Appellate review of a § 1292(b) denial to certify would undercut the policy embodied in the statute which requires both the district court and the court of appeals to exercise their discretion in favor of interlocutory review. See S.Rep. No. 2434, 85th Cong., 2d Sess. reprinted in 1958 U.S.Code Cong. & Admin.News 5255, 5259 (letter from Judicial Conference of the United States); Milbert v. Bison Laboratories, 260 F.2d 431, 433-35 (3rd Cir.1958) (discussing legislative history). Consent of the trial judge is mandatory. Coopers & Lybrand v. Livesay, 437 U.S. 463, 474, 98 S.Ct. 2454, 2461, 57 L.Ed.2d 351 (1977). In light of the trial judge’s *1369express denial of § 1292(b) certification, this court should recognize the limitations of its jurisdiction.
III.
Turning to the merits of the contract issue, the court holds “that Shoshone has an implied obligation to remain in business and not to eliminate its requirements, as long as there are members in the Shoshone system requiring electric power.” Court’s Opinion at 33. In the appeal from the denial of a preliminary injunction in this case, we tentatively speculated that a routine bilateral requirements contract generally does not imply a good faith responsibility to have requirements, absent a take-or-pay provision or special circumstances. Tri-State Generation & Transmission Ass’n v. Shoshone River Power, Inc., 805 F.2d 351, 359 (10th Cir.1986). That speculation was in error because the duty of good faith and fair dealing extends to a buyer’s decision to maintain requirements, even in a routine bilateral requirements contract. E. Farnsworth, Contracts § 7.17 at 526-29 (1982); Wyo.Stat.Ann. § 34-21-223 (1977) (U.C.C. provision governing requirements contracts). Now, however, the court goes far beyond a buyer’s implied duty to make requirements decisions in good faith. Based on Shoshone’s participation in the Tri-State cooperative system, and the debt owed by that system to the REA, the court concludes that the contract contains an implied covenant for Shoshone to stay in business for the duration of the contract, so long as its members have a need for power.
Notwithstanding the REA's status as a third-party beneficiary, construction of the contract between Tri-State and Shoshone is governed by state, not federal, law because the government is not a party to the contract. See Sam Macri & Sons, Inc. v. United States, 313 F.2d 119, 124 n. 1 (9th Cir.1963) (prime contract with the government is governed by federal law while subcontract between private parties is governed by state law). Even if the contract was considered to be governed by federal law, traditional contract law principles would apply absent contrary legislative direction. Priebe & Sons, Inc. v. United States, 332 U.S. 407, 411, 68 S.Ct. 123, 125, 92 L.Ed. 32 (1947); S.R.A., Inc. v. Minnesota, 327 U.S. 558, 564-65, 66 S.Ct. 749, 754, 90 L.Ed. 851 (1946).
In this case, we are dealing with a simple requirements contract. The contract provides in pertinent part:
6. GENERAL. The Seller shall sell and deliver to the Member and the Member shall purchase and receive from the Seller all electric power and energy which the member shall require for the operation of the Member’s system to the extent that the Seller shall have such power and facilities available; ....
Rec. vol. I, doc. 13 (contract of June 13, 1965). At early common law, output and requirements contracts were considered unenforceable due to a lack of mutuality of obligation; a seller might not have any output to sell, or a buyer might not have any requirements to buy. R. Hillman, J. McDonnell & S. Nickles, Common Law and Equity under the Uniform Commercial Code, 113.07[2][b][ii] (1985). By applying a doctrine of good faith to such contracts, courts were able to enforce them because the quantity term became more definite when measured against the good faith commercial conduct of the parties. Id. As Judge McKay noted in Big Horn Coal Co. v. Commonwealth Edison Co., 852 F.2d 1259, 1267 n. 11 (10th Cir.1988):
Obligations arising under output and requirements contracts are also routinely subjected to good faith limitations because the buyer and seller have “some discretion” to determine their requirements and outputs. E. Farnsworth, Contracts § 7.17, at 528 (1982); see Kansas Power & Light Co. v. Burlington Northern R.R. Co., 740 F.2d 780, 789 (10th Cir.1984), cert dismissed, 469 U.S. 1200, 105 S.Ct. 1155, 84 L.Ed.2d 308 (1985) (“courts will imply a promise that the buyer’s requirements be in good faith”); Southwest Natural Gas Co. v. Oklahoma Portland Cement Co., 102 F.2d 630, 632-33 (10th Cir.1939) (“Requirements contract imposes upon the buyer *1370the obligation to act in good faith”); see also Lambert Corp. v. Evans, 575 F.2d 132, 137-38 (7th Cir.1978) (provision that buyer agreed to “pay as used” for seller’s inventory did not require buyer to use all inventory, but it did imply an obligation of good faith to use inventory amounts dictated by “business judgment” and not merely “to avoid contractual obligations”); HML Corp. v. General Foods Corp., 365 F.2d 77, 81 (3d Cir.1966) (“buyer in a requirements contract is required merely to exercise good faith in determining his requir ements”).
The panel in Big Horn Coal Co. cited Professor Farnsworth’s discussion of the rule which states clearly:
Unless the parties have provided otherwise, the court will define the obligation to maintain output or requirements in terms of good faith. Any reduction in output or requirements, including the extreme case of a complete cessation on going out of business, must be in good faith.
E. Farnsworth, Contracts § 7.17 at 528 (footnotes omitted). Big Horn Coal Co. is also notable because the court affirmed an instruction which allowed the jury to decide whether the buyer had reduced requirements in good faith in accordance with a contractual provision so allowing. 852 F.2d at 1271-73.
Whether a court should go beyond implying a duty of good faith and also imply that a buyer will have requirements (stay in business) is hardly a question of first impression. After noting that a requirements contract does not contain a specific quantity term, Professor Corbin explained it as “a promise not to buy such goods of a third party and a return promise to sell and deliver all such goods as the buyer may order in good faith.” 3 A. Corbin, Corbin on Contracts § 569 at 338 (1960). He continued:
However, another question of interpretation is often raised: Does the buyer promise “by implication” that he will have any needs or requirements, that he will send in orders during the whole stated period for the amount of goods that he has used in the past or that he can use profitably by exercise of ability and diligence, or that he will not fail to keep his business running with its accustomed needs and requirements?
Similar questions arise respecting contracts for the purchase and sale of the “entire output” of a factory or mine....
In both of these classes of cases the courts have generally answered the questions in the negative. They leave the gap unfilled; no such promises are implied.
Id. Recognizing that there may be a gap in the agreement, Professor Corbin was certain that it should not be filled in by the court, however reasonable that might be, because at formation the seller may have been quite willing to trust the buyer without further assurance. Id. Moreover, given the nature of the cooperative system, whether the REA or Tri-State would have insisted on, or Shoshone agreed to, an express provision in the contract requiring Shoshone to stay in business for the life of this contract is subject to serious doubt. Such a potentially oppressive commitment would have scared away all but the most foolhardy distribution cooperatives. And there was little reason for either Tri-State or the REA to insist on such a provision because the implied obligation of good faith was established in the law on the dates this contract was formed (1965) and extended.
Professor Williston recognized “the importance of stating clearly the limitation of a bargain of this sort,” after reviewing the various lines of authority in the area. 1 W. Jaeger & S. Williston, A Treatise on the Law of Contracts, § 104A at 409-11 (3d ed.1957). Even where courts have recognized an implied in fact promise made by a buyer to stay in business and to take requirements, there still is a recognition that the buyer may in good faith cease to have requirements. Id. at 408-11.
In this instance, the district court correctly recognized, as it would appear from Big Horn Coal Co., that
the obligation to remain in business for the period of the contract is not a separate and distinct obligation from that of *1371Shoshone’s duty to act in good faith and deal fairly under the contract. Rather, any obligation which Shoshone or any buyer may have to remain in business must go hand in hand with the duty of good faith. If Shoshone’s decision to sell its assets and cease business under all the facts and circumstances was made in bad faith, then a breach of the contract has occurred.
Rec. vol. II, doc. 210 at 8. Whether a requirements contract is analyzed under the U.C.C.3 or the common law, the general rule is “that a requirements buyer does not undertake to manage his business in such a way as to establish or maintain any particular level of requirements.” Lambert Corp. v. Evans, 575 F.2d 132, 138 (7th Cir.1978); In re United Cigar Stores Co., 72 F.2d 673, 675 (2d Cir.) ([T]he obligation on the part of a buyer in a requirements contract to continue to have requirements without substantial variance is not to be implied more strictly than to impose upon him the obligation to act in good faith.”), cert. denied, 293 U.S. 617, 55 S.Ct. 210, 79 L.Ed. 706 (1934). Accord 1 A. Squillante & J. Fonesca, The Law of Modem Commercial Practices § 3.87 at 352 (rev. ed. 1981) (“Generally, the buyer in a requirements contract does not impliedly promise that he will have needs in order to fulfill his requirements contract.”).
In HML Corp. v. General Foods Corp., 365 F.2d 77, 81 (3d Cir.1966), the court, in discussing a requirements contract, said:
The choice lies between implying a promise to correct an apparent injustice in the contract, as against holding the parties to the bargain which they have made.
The latter alternative has especial force where the bargain is the result of elaborate negotiations in which the parties are aided by counsel, and in such circumstances it is easier to assume that a failure to make provision in the agreement resulted not from ignorance of the problem, but from an agreement not to require it.
The better view, however, is that generally the buyer in a requirements contract is required merely to exercise good faith in determining his requirements even to the extent of a determination to liquidate or discontinue the business. The rule is based on a reliance on the self-interest of the buyer, who ordinarily will seek to have the largest possible requirements. Protection against abuse is afforded by penetrating through any device by which the requirement is siphoned off in some other form to the detriment of the seller.
(emphasis added). Accord 1 A. Squillante & J. Fonesca, Williston on Sales § 10-4 at 386 (1973) (“Where the buyer has no needs and terminates his business, thereby simultaneously terminating the contract, the court, in making a determination as to liability of the buyer, will look to the good faith of both of the parties to the requirements contract.”)4; E. Farnsworth, Contracts § 7.17 at 526-29.
Although the court acknowledges this rule, as it did in Big Horn Coal Co., it finds it inapplicable because the rationale for the rule purportedly does not apply to this situation. Court’s Opinion at 29. The *1372rule does apply; however, it just does not go far enough for the court. Although a buyer normally will maximize requirements consistent with self-interest, as the above passage from HML Corp. makes clear, “the requirement of good faith is the means by which this is enforced.” HML Corp., 365 F.2d at 81. Thus, a buyer who eliminates requirements by going out of business may be held liable for damages under the requirements contract, if the circumstances indicate bad faith.
Of course, when a buyer reduces or eliminates his requirements from a particular seller, the good faith inquiry is a factual one and the burden is on the seller to prove bad faith. A “buyer’s duty to continue in business ... is a matter calling for close scrutiny of motives.” 1 R. Alderman, A Transactional Guide to the Uniform Commercial Code at 75 (1983). Indeed, because good faith encompasses the requirement that a party act honestly, circumstantial evidence is essential “to see what he actually had in mind when he did what he did.” 2 W. Hawkland, U.C.C. Series § 2-306:02 at 222 (1984).
Absent a provision to the contrary, a requirements contract precludes a buyer from purchasing requirements from other than the seller. 3 Corbin on Contracts § 569 at 338; R. Anderson, Anderson on the U.C.C. § 2-306:33 at 526 (1982). Thus, a buyer’s reduction or elimination of requirements merely to procure requirements more cheaply elsewhere is classic bad faith. J. White & R. Summers, Uniform Commercial Code § 3-8 at 125 (2d ed. 1980) (“Of course, if it transpires that the buyer is actually procuring his requirements more cheaply elsewhere, this is bad faith, and the courts will find that it constitutes a breach.”). But there are situations in which decreasing or eliminating requirements may well be consistent with good faith. See, e.g., Fort Wayne Corrugated Paper Co. v. Anchor Hocking Glass Corp., 130 F.2d 471, 473-74 (3rd Cir.1942) (shutdown of plant due to lack of demand for product); In re United Cigar Stores, 72 F.2d 673 (bankruptcy eliminated requirements).
Application of the good faith rule is perfectly adequate for this case. The jury in this case had little difficulty finding Shoshone and Pacific liable under the good faith requirements standard. Perhaps on retrial no reasonable jury could fail to find bad faith given that Shoshone's customers essentially seek to purchase their requirements from Pacific. See Empire Gas Corp. v. American Bakeries Co., 840 F.2d 1333, 1341 (1988) (liability determination upheld despite erroneous jury instruction because no reasonable jury could fail to find bad faith); E. Farnsworth, Contracts § 7.17 at 527 (“Some conduct, such as subterfuge and evasion, clearly violates the duty [of good faith].”). The court simply goes too far when it reads into this contract an implied obligation of Shoshone, the buyer, to stay in business for the life of the contract. At this stage, the jury system should be allowed to determine liability by applying the duty of good faith and fair dealing to the facts.
Of course, the most serious problem with finding that the buyer has an obligation to remain in business is that no such language appears in the contract and this court-supplied obligation goes far beyond the duty of good faith and fair dealing implicit in every contract. As noted, it is unlikely that the parties ever intended to include such a term. If there is one consistent theme in the Wyoming decisions concerning contract interpretation, it is that unambiguous contracts5 are not to be rewritten by the court in the guise of interpretation. See, e.g., Arnold v. Mountain West Farm Bureau Mutual Ins. Co., 707 P.2d 161, 166 (Wyo.1985); Adobe Oil & Gas Corp. v. Getter Trucking, Inc., 676 P.2d 560, 562 (Wyo.1984); Rainbow Oil Co. v. Christmann, 656 P.2d 538, 545 (Wyo.1982); McCartney v. Malm, 627 P.2d 1014, 1020 (Wyo.1981); Quin Blair Enterprises, Inc. v. Julien Constr. Co, 597 P.2d 945, 951 (Wyo.1979); see also State Farm Mu*1373tual Auto Ins. Co. v. Petsch, 261 F.2d 331, 335 (10th Cir.1958) (applying Wyoming law). And that is what the court is doing here for an ironclad result. The REA and Tri-State could have achieved the greater protection the court provides by including a take-or-pay provision in the contract, or a provision preventing the buyer from selling its business, or a provision making the contract binding on the buyer’s successors or assigns. See Tang Tranh Trai Le & E. Murphy, Sales and Credit Transactions Handbook § 2.13 (1985) (express terms concerning quantity variation may be desirable in requirements contract to limit seller’s risk); L. Mandel, The Preparation of Commercial Agreements at 214 cl. 3 (take-or-pay provision example).
At the date of contract formation in 1965, the REA and Tri-State already had the protection of the good faith requirements rule. Merely because another provision offers greater protection in hindsight is not sufficient reason to go beyond the contract in this case. Implied provisions in contracts are unnecessary when the contract makes sense as written. The interdependent nature of the Tri-State system and long-term security for Tri-State’s REA loans do not convince me that an implied provision to stay in business was ever intended. Indeed, almost any time a buyer decreases or eliminates requirements, the seller’s other customers and creditors may be affected. No good reason exists to elevate the REA and Tri-State above the rule for ordinary litigants.
The good faith requirements rule has flexibility and precedent to recommend it. It is “an important limitation which prevents [the buyer] from acting unreasonably or dishonestly.” 2 W. Hawkland, U.C.C. Series § 2-306:01 at 221. The rule that the court crafts is unnecessary and is overly broad, as is evident by the court’s attempt to qualify it. Court’s Opinion at 31 n. 15, 33-34. Also, by holding Shoshone and Pacific liable as a matter of law, the court replaces what ought to be a factual inquiry (good faith) for a legal one. In discussing an exclusive dealing contract under the U.C.C., Wyo.Stat.Ann. § 34-21-223 (1977), the Wyoming Supreme Court quoted the entire section, which also recognizes output and requirements contracts, and concluded that “this section creates an inherent question of fact.” Meuse-Rhine-Ijssel Cattle Breeders of Canada, Ltd. v. Y-Tex Corp., 590 P.2d 1306, 1310 (Wyo.1979) (overturning grant of summary judgment). Yet the court ignores such authority. Deciding the contract issue as a matter of law at this stage seems inconsistent with Wyoming law and unnecessarily augments our appellate power at the expense of the jury.
Thus, I would uphold the district court’s denial of the permanent injunction and remand the case for a new trial on all issues as envisioned by the district court.

. The district court also determined that the $15 million punitive damage award "was improper, as well as shocking to the conscience of the Court.” Rec. vol. Ill, doc. 288 at 5.

. The court’s opinion is confusing on this point. After saying that the district court discussed the contract question in its order denying permanent injunctive relief, the court then says that the contract question does not need to be decided, insofar as permanent injunctive relief is concerned, because there is no irreparable injury to warrant such relief. Maj. op. at 1352. The court next says, however, that it is deciding the contract question because the district court mentioned it in denying permanent injunctive relief and the district court heard evidence at trial in accordance with its view of the contract. Id. at 1352 n. 7. Either the court is deciding the contract question in connection with our review of the denial of permanent injunctive relief or it is deciding the contract question for some other reason, presumably judicial economy, under principles of pendent appellate jurisdiction.

. Wyo.Stat.Ann. § 34-21-223 (1977) provides:
Output, requirements and exclusive dealings.
(a) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of any estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.
(b) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and the buyer to use best efforts to promote their sale. Good faith is defined as follows:
(xix) “Good faith" means honesty in fact in the conduct or transaction concerned:
Wyo.Stat.Ann. § 34-21-120 (1977).

. Although the authors acknowledge that one court has implied a duty to remain in business, they suggest that finding such a duty, merely because the parties have entered into a requirements contract, results in the court constructing a contract for the parties. A. Squillante & J. Fonesca, Williston on Sales § 10-4 at 386.

. An ambiguous contract is one which is obscure in its meaning because of indefinite expression or because the expression is capable of double meaning. Amoco Production Co. v. Stauffer Chemical Co. of Wyoming, 612 P.2d 463, 465 (Wyo.1980).