Opinion
Civil File No. 03-6445 (MJD/JGL)
January 13, 2004
John M. Gearin, for Plaintiff
Craig Miller, Gray, Plant, Mooty, Mooty, Bennet, P. A., for Defendant
ORDER
I. INTRODUCTION
This matter comes before the Court on the plaintiff's Motion for a Preliminary Injunction. The plaintiffs, Scott and Chris MacDonald (collectively, the MacDonalds) ask this Court to enjoin the defendant, Mark Hopps and Weston Bakeries (collectively, " Weston"), from selling the MacDonald's distribution rights. The Court heard oral argument on January 12, 2004.
II. FACTUAL BACKGROUND
The MacDonalds own a distribution company, S MacDonald Distributing, Ltd., which distributes baked goods. Weston is a wholesale distributor of baked goods. In October of 1991, the MacDonalds and Weston entered into a Distribution Agreement wherein Weston sold the MacDonalds the exclusive distribution rights to sell Weston's baked goods to various food retailers. At issue is the provision of the Distribution Agreement which states, that "repeated violations constitute a chronic breach and . . . in such event [Weston] shall be entitled to terminate [the Distribution Agreement].
In 2003, Weston issued the MacDonalds several Notices of Breach. In a time span of seven (7) months, Weston issued the MacDonalds nine (9) formal Notices of Breach. By letter dated October 16, 2003, Weston terminated the Distribution Agreement. The letter stated that "[the MacDonalds'] repeated violations constitute a chronic breach of your Distribution Agreement . . .[a]ccordingly, your Distribution Agreement is terminated effectively immediately." The letter also invoked Section 8.4 of the Agreement which forces the MacDonalds to sell their distribution rights within ninety (90) days and permits Weston to operate the MacDonalds' Distribution business for that ninety day period. If the MacDonalds failed to sell their distribution rights within the ninety days, Weston was authorized by the Distribution Agreement to sell the distribution rights for the MacDonalds. The MacDonalds' ninety day period around January 19, 2004. The MacDonalds have ask this Court to enjoin Weston from selling their distribution rights.
III. DISCUSSION
The Eighth Circuit has established a standard for considering preliminary injunctions. Dataphase Svs. Inc. v. C L Sys., Inc., 640 F.2d 109 (8th Cir. 1981)( en banc). Dataphase requires this Court to consider the following four factors before granting a preliminary injunction: (1) the threat of irreparable harm; (2) the potential harm to the non moving party if relief is granted; (3) probability of movant's success on the merits and; (4) the interest of the public at large. Id. at 114. The party moving for a preliminary injunction bears the "complete burden of proving all the factors." Gelco Corp. v. Corniston Partners, 811 F.2d 414, 418 (8th Cir. 1987).A. Irreparable Harm
Failure to show irreparable harm is sufficient grounds to deny a motion for preliminary injunction. Watkins Inc., v. Lewis, 346 F.3d 841. 844 (8th Cir. 2003). "When there is an adequate remedy at law, a preliminary injunction is not appropriate." Id.
For irreparable harm, the MacDonalds assert that "[i]f Plaintiff's Motion is not granted, [Weston] will market and sell Plaintiff's distribution rights and Defendants will continue to waste the proceeds from Plaintiffs' distribution rights." The MacDonalds also state, "[w]ithout a preliminary injunction, Defendants will irreparably harm the Plaintiffs because they will continue to lose business income and ultimately, their business."
The Court finds that there is an adequate remedy at law in that the MacDonalds may seek to have the provisions of the contract enforced by a court. The terms of the Distribution Agreement provide that the plaintiff, upon termination of the Distribution Agreement, may sell the distribution rights and retain the proceeds from the sale. The Distribution Agreement also mandates all proceeds from a sale of the MacDonalds' distribution right initiated by Weston will go to the MacDonalds. These were contractual terms, including the provisions that limit damages, were agreed to by all parties and can be enforced by the courts. This ordinary case does not merit the extraordinary remedy of a preliminary injunction.
B. Potential Harm to the Non-moving Party
The MacDonalds assert that there is no potential harm to the non-moving party, Weston. The Court disagrees. If the consumer cannot find the fresh bread product they seek on the shelves of their local grocers, the consumer will either switch bread products or switch grocers. Both of these options may negatively impact the Weston name with consumers, grocers, and current and potential distributors.
C. Probability of the Movant's Success on the Merits
"In deciding whether to grant preliminary injunction, likelihood of success on the merits is most significant." SM Constructors Inc., v. Foley Co., 959 F.2d 97, 98 (8th Cir. 1992). The MacDonalds have failed to show why the termination of the Distribution Agreement was improper or proffer any legal theory to justify the claim that they would succeed on the merits. In fact, all the evidence presented shows that the MacDonalds breached, intentionally or unintentionally, the Distribution Agreement on several occasions. The evidence also shows that the MacDonalds were notified of those breaches and given the opportunity to cure the breaches. The record reflects that Weston had some basis for deciding to terminate the Distribution Agreement.
D. The Interest of the Public at Large
The Court finds that there is no overriding public interest in favor of granting or denying the preliminary injunction.
IT IS HEREBY ORDERED that:
1. Plaintiff's Motion for a Preliminary Injunction [Docket No. 4] is DENIED.