MedX, Inc. v. Ranger

788 F. Supp. 288, 1992 U.S. Dist. LEXIS 3983, 1992 WL 64598
CourtDistrict Court, E.D. Louisiana
DecidedMarch 13, 1992
DocketCiv. A. 91-3099
StatusPublished
Cited by7 cases

This text of 788 F. Supp. 288 (MedX, Inc. v. Ranger) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MedX, Inc. v. Ranger, 788 F. Supp. 288, 1992 U.S. Dist. LEXIS 3983, 1992 WL 64598 (E.D. La. 1992).

Opinion

MEMORANDUM OPINION

MENTZ, District Judge.

Before the Court is the above-styled action, presented on briefs and documents and taken under submission for consideration of the issue of permanent injunctive relief. The Court hereby issues its findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a). To the extent that any of the following findings of fact constitute conclusions of law, they are adopted as such; to the extent that any conclusions of law constitute findings of fact, they are so adopted. The findings of fact and conclusions of law contained in this Court’s opinion of October 30, 1991, are incorporated by reference into this opinion.

I. Findings of fact

On July 22, 1988, defendant Raymond T. Ranger entered into two interrelated contracts with plaintiff MedX, Inc. of Florida, a medical waste disposal company. These contracts consisted of an “Asset Purchase Agreement” and an “Employment Agreement.” In section l(a)(i) of the asset purchase contract, Mr. Ranger agreed to sell MedX his business, Specialty Waste Management, Inc. The purchase contract specifically provided that MedX was buying Specialty Waste’s name, goodwill, going concern value, and substantially all of its assets. Mr. Ranger worked for MedX under the terms of the employment contract from July 22, 1988 until March 16, 1990.

MedX has brought suit to enforce its rights under the employment contract. Section 6 of that contract contains a covenant that purports to prevent Mr. Ranger from competing with MedX, accepting employment from its competitors, soliciting its clients or employees, or revealing its trade secrets, all for a period of two years from the end of his employment with MedX. Mr. Ranger was in violation of this covenant from January 1, 1991, to at least August 27, 1991,' when this Court issued a temporary restraining order against him. 1

On October 30, 1991, this Court granted MedX a preliminary injunction “to preserve the relative positions of the parties until a trial on the merits [could] be held.” University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 1834, 68 L.Ed.2d 175 (1981). 2 MedX now demands that the Court grant permanent injunctive relief that would extend beyond the period called for by the covenant. 3 MedX asserts that Mr. Ranger competed with it for a period of some ten months, and that it is entitled to an extension of the noncompete period for an additional ten months beyond its contractual expiration date of March 16, 1992.

II. Legal background

The standard for a permanent injunction is essentially the same as the standard for the preliminary injunction that is currently in effect. Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 546 n. 12, 107 S.Ct. 1396, 1404 n. 12, 94 L.Ed.2d 542 (1987). 4 The primary difference is that the purpose of a permanent injunction is remedial: rather than locking the parties into the positions they held as of the outset of litigation, a permanent injunction should set aright wrongs that are not effectively compensable at law. See id., 480 U.S. at *290 546, 107 S.Ct. at 1404; Silvers v. Dis-Com Secs., Inc., 403 So.2d 1133, 1137 (Fla.App. 4th Dist.1981). As the parties have stipulated, MedX is clearly entitled to a permanent injunction to protect its interests until the expiration of the covenant on March 16, 1992. The question at bar is- whether MedX is entitled to an extended period of injunctive relief after that covenant expires. This question in turn raises three issues: whether extended injunctive relief is available under Florida law; whether MedX’s claim for extended relief is justicia-ble; and whether equitable defenses available to Mr. Ranger warrant denial of the relief that MedX has demanded. 5

III. Conclusions of law

A. Florida law permits extended injunc-tive relief.

“Injunctive relief has become the favored remedy in cases involving covenants not to compete [because] money damages for breach of non-competition agreements are either not susceptible to proof with the required degree of certainty, or ‘if susceptible of reasonable proof, may not compensate for all aspects of such a violation.’ ” Cordis Corp. v. Prooslin, 482 So.2d 486, 489 (Fla.App. 3d Dist.1986). 6 Accordingly, the Supreme Court of Florida has specifically approved the grant of extended injunctive relief:

Inasmuch as the appellant had been in competition with the appellee continuously since his resignation, the chancellor must have determined that this was the only way to give the appellee its two competition-free years. We can find no fault with this theory or with the result of its application. We think that the procedure followed by the chancellor is the only way by which the provisions of the contract and the statute could be effectuated.

Capelouto v. Orkin Exterminating Co., 183 So.2d 532, 535 (Fla.), appeal dism’d, 385 U.S. 11, 87 S.Ct. 78, 17 L.Ed.2d 10 (1966). 7 Denial of extended relief on the facts of this dispute might even constitute reversible error. See Kverne v. Rollins Protective Servs., 515 So.2d 1320, 1321-22 (Fla.App. 3d Dist. 1987).

Despite the authority set out above, Mr. Ranger asserts that a recent amendment to the Florida statute governing non-compete covenants requires MedX to demonstrate that he has caused it specific, ascertainable harm in order for the permanent injunction to extend beyond the contractual period. Citing Hapney v. Central Garage, Inc., 579 So.2d 127, 133 (Fla.App. 2d Dist.), review denied, 591 So.2d 180 (Fla.1991), 8 he argues:

[I]n order to be enforced in Florida, anti-competitive agreements must be reasonably related to a protection [sic] of a legitimate business interest of the employer. The implication which flows from that holding_ [is that competition] alone by the employee is not enough to warrant the courts upholding the anti-competitive contract. Instead, there must be a showing by the employer of the effect of that competition and that the competition by the former employee caused him some greater harm by virtue of the prior relationship existing between the employer and the employee. Simply put, MedX has not offered any proof that Ranger’s competition prior to the Court’s Order caused it any specific harm. The *291

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788 F. Supp. 288, 1992 U.S. Dist. LEXIS 3983, 1992 WL 64598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/medx-inc-v-ranger-laed-1992.