Acquaire v. Canada Dry Bottling Co. of New York, Inc.

24 F.3d 401, 1994 WL 185103
CourtCourt of Appeals for the Second Circuit
DecidedMay 13, 1994
DocketNos. 549, 711, Dockets 93-7368, 93-7444
StatusPublished
Cited by10 cases

This text of 24 F.3d 401 (Acquaire v. Canada Dry Bottling Co. of New York, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Acquaire v. Canada Dry Bottling Co. of New York, Inc., 24 F.3d 401, 1994 WL 185103 (2d Cir. 1994).

Opinion

LEVIN H. CAMPBELL, Senior Circuit Judge:

In these appeals we review the district court’s order granting in part and denying in part a motion for a preliminary injunction. We affirm the order in its entirety.

Plaintiffs-appellants are independent distributors of soft drink products bottled and/or distributed by defendant-appellee, Canada Dry Bottling Company of New York, Inc. (“Canada Dry”).1 On November 21, 1990, they sued Canada Dry and others in the United States District Court for the Eastern District of New York, alleging, inter alia, that Canada Dry had conspired to restrain the trade of soft drink products in violation of the Sherman Act, the Clayton Act, the Taft-Hartley Act, and the Racketeer Influenced and Corrupt Organization Act.

Two days later, on November 23, 1990, Plaintiffs moved for a temporary restraining order and a preliminary injunction to prevent Canada Dry “from engaging in certain conduct, including ‘enforcing, directly or indirectly, against plaintiff-distributors any mandatory resale price [maintenance] policy or practice with respect to products distributed by [Plaintiffs’ and from committing any violations of the Sherman Act, 15 U.S.C. § 1.” Magistrate Judge’s Report and Recommendation, at 2 (Mar. 5,1993) (quoting Plaintiffs’ Memorandum of Law (Nov. 21, 1990)). Judge Sifton, who was then assigned to this case, denied Plaintiffs’ application for a temporary restraining order, and, on December 7, 1990, heard argument on Plaintiffs’ motion for a preliminary injunction. . Judge Sifton reserved judgment on Plaintiffs’ motion. Thereafter, Plaintiffs and Canada Dry, as well as the other defendants, entered into “protracted, court assisted, negotiations in an effort to settle this action.” Id. Plaintiffs’ November 23, 1990, “motion for a preliminary injunction was never decided and appears to have been abandoned.” Id.

Over two years later, on February 4,1993, Plaintiffs brought a fresh motion for a temporary restraining order and a preliminary injunction before Judge Weinstein, who was sitting as the “miscellaneous” judge. Plaintiffs say they filed this second application in response to new measures taken by Canada Dry to enforce its resale price maintenance policy. Plaintiffs assert in their appellate brief that these measures, which were associated with a funded promotional discount program implemented by Canada Dry, included

(1) Canada Dry’s requirement that customer signatures be obtained on company invoices with fixed prices pre-printed on them whenever promotional monies were used, and that participation in promotional programs be conditioned on the use of company mandated prices; and (2) the withholding of product and refusal to release trucks for distributors who did not acquiesce to Canada Dry’s promotional policy.

According to Plaintiffs, “[t]hese two enforcement mechanisms were not in place at the time of the filing of the November, 23, 1990, Motion For Preliminary Injunction.”

Judge Weinstein, who was unaware of Plaintiffs’ earlier injunctive applications in 1990, granted a temporary restraining order. He enjoined defendants Canada Dry, Harold Honickman, and Dennis Berberich (as well as their agents, servants, employees, attorneys, and all persons in active concert and participation with them) from:

1. engaging in coercive actions in order to force plaintiff-distributors into using “suggested” resale prices dictated by Canada Dry, including but not limited to, requiring the signature of customers on pre-printed invoices bearing company mandated prices printed on [them] before processing said invoices, and refusing to release loaded truek[s] of distributors who do not submit invoices with customers’ signatures on them, and
2. otherwise fixing, maintaining'and stabilizing the resale prices at which the distributors must resell soft drinks.

Judge Weinstein referred Plaintiffs’ application for a preliminary injunction to Magistrate Judge Carter.

After a hearing on February 8 and 9,1993, Magistrate Judge Carter issued a report and [406]*406recommendation on March 5, 1993. He found that Plaintiffs had established

a likelihood of success on the merits on their claim that defendant’s conduct in attempting to enforce resale price maintenance is a per se violation of the Sherman Act, but that the only irreparable harm of an imminent nature cognizable on this motion for emergency relief would be the destruction of any distributor’s business that would result from [Canada Dry] withholding or otherwise refusing to provide product to plaintiff distributors.

In specifically considering activities associated with Canada Dry’s promotional program, however, the magistrate judge found nothing wrong with Canada Dry’s purpose “to ensure that [its] funded promotional discounts are passed on to retailers.” Nevertheless, he rejected the company’s policy of withholding product from and refusing to release the trucks of distributors who failed to adhere to promotional discount procedures-practices that he had found could lead to irreparable harm-because such action provided Canada Dry with “a ready opportunity to enforce resale price maintenance in the guise of enforcing compliance with its promotional program.” Accordingly, the magistrate judge recommended that Plaintiffs’ motion for an order enjoining Canada Dry from refusing to release distributors’ “loaded trucks or otherwise withholding product from plaintiff distributors as a means of enforcing [its] promotional discount policy be granted.” But to the extent that Plaintiffs sought to enjoin Canada Dry “from engaging in other conduct designed to enforce compliance with [its] promotional discount policies, including [its] policy requiring customer signatures on pre-printed invoices,” the magistrate judge recommended that Plaintiffs’ motion for a preliminary injunction be denied.

In an order entered on April 15, 1993, the United States District Court for the Eastern District of New York adopted and affirmed Magistrate Judge Carter’s report and recommendation. The district court (1) granted Plaintiffs’ motion for an order enjoining Canada Dry from refusing to release the distributors’ loaded trucks or otherwise withholding product from the distributors, (2) denied Plaintiffs’ motion for an order enjoining Canada Dry from engaging in other conduct designed to enforce compliance with its promotional program, including its policy of requiring customer signatures on pre-printed invoices, and

[(3)] ordered that, upon a particularized showing by [Canada Dry] that it cannot adequately protect itself against the loss of promotional monies expended through the use of accounting adjustment or other means, plaintiff distributors be required to post a bond adequate to secure the repayment to [Canada Dry] of promotional discount monies provided by [Canada Dry] but not passed on to retailers by plaintiff distributors.

On April 28, 1993, Plaintiffs filed a notice of appeal in which they appealed

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Bluebook (online)
24 F.3d 401, 1994 WL 185103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/acquaire-v-canada-dry-bottling-co-of-new-york-inc-ca2-1994.