Starlight Sugar v. Soto

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________



          No. 96-1332



                            STARLIGHT SUGAR, INC., ET AL.,



                               Plaintiffs - Appellees,



                                          v.



                            NEFTALI SOTO, INDIVIDUALLY AND

                            AS SECRETARY OF THE DEPARTMENT

                                OF AGRICULTURE OF THE

                             COMMONWEALTH OF PUERTO RICO,



                                Defendant - Appellant.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                           FOR THE DISTRICT OF PUERTO RICO



                  [Hon. Juan M. P rez-Gim nez, U.S. District Judge]
                                               ___________________



                                 ____________________



                                        Before



                               Torruella, Chief Judge,
                                          ___________

                            Coffin, Senior Circuit Judge,
                                    ____________________

                              and Stahl, Circuit Judge.
                                         _____________



                                _____________________



               Edgardo  Rodr guez-Quilichini, Assistant  Solicitor General,
               _____________________________

          Department  of  Justice,  with whom  Carlos  Lugo-Fiol, Solicitor
                                               _________________

          General, and Edda Serrano-Blasini, Deputy Solicitor General, were
                       ____________________

          on brief for appellant.

               Marcos  A. Ram rez-Lavandero,  with  whom Eduardo  A.  Vera-
               ____________________________              __________________

          Ram rez,  Janice  M.  Guti rrez-Lacourt  and  Marcos  A.  Ram rez
          _______   _____________________________       ___________________

          Lavandero & Associates were on brief for appellees.
          ______________________


____________________



                                     May 30, 1997

                                 ____________________



TORRUELLA, Chief Judge.   The Department of Agriculture
                    TORRUELLA, Chief Judge. 
                               ___________



          of  the  Commonwealth  of  Puerto  Rico  urges  us  to  vacate  a



          preliminary injunction issued on December 21, 1995 that  bars the



          enforcement of Section Six of its Market Regulation 13.1  Section



          Six prohibits the importation into  Puerto Rico of refined  sugar



          intended  for consumer sale that  is not prepackaged  in units of



          five pounds or less.  The district court held that the regulation



          violated the Commerce Clause in its "dormant" state and the Equal



          Protection  Clause  and  also  found  that  the  plaintiff  sugar



          importers had  met all of the grounds  for preliminary injunctive



          relief.  



                    Under our  four-part test for  determining whether  the



          grant or denial of  preliminary injunctive relief is appropriate,



          the district court must consider:



                      (1)  the  likelihood  of success  on  the

                      merits; (2) the potential for irreparable

                      harm if the injunction is denied; (3) the

                      balance  of  relevant impositions,  i.e.,

                      the hardship to the nonmovant if enjoined

                      as  contrasted with  the hardship  to the

                      movant if  no injunction issues;  and (4)



                              
          ____________________



          1  Section VI of  Regulation 13 of the Puerto Rico  Department of

          Agriculture provides in pertinent part:



                    A.   Refined sugar  to be imported  in Puerto

                    Rico  shall  come in  consumer  size packages

                    inside the corresponding shipping containers.

                    For   the  purposes  of   this  Regulation  a

                    consumer   size  package  is  one  whose  net

                    content does not exceed five (5) pounds.



                    B.    .  .   .  Imported  refined  sugar  for

                    industrial  use  shall  not  be  repacked  in

                    consumer-size  packages  for direct  sales to

                    the consumers.



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the effect (if any) of the court's ruling

                      on the public interest.



          Ross-Simons of Warwick, Inc.  v. Baccarat, Inc., 102 F.3d  12, 15
          ____________________________     ______________



          (1st   Cir.  1996).    On  appeal,  the  standard  of  review  is



          deferential, and we have said that "unless the appellant can show



          that  the lower  court  misapprehended  the  law or  committed  a



          palpable  abuse of  discretion,  the court  of  appeals will  not



          intervene." Id. at 16.
                      ___



                    Upon careful consideration of the briefs, arguments  of



          counsel, and  the  record  in this  case,  we find  no  abuse  of



          discretion and no error of law,  and therefore affirm in light of
                                                         affirm
                                                         ______



          the  sound  reasons provided  in  the  district court's  thorough



          opinion.   See  Starlight Sugar, Inc.  v. Soto, 909  F. Supp. 853
                     ___  _____________________     ____



          (D.P.R. 1995).



                    We  only note  the  following.    With respect  to  the



          likelihood  of success  on  the merits,  Commerce Clause  caselaw



          strongly supports the position  of the plaintiff sugar importers.



          The  Department of  Agriculture  asks that  the dormant  Commerce



          Clause  balancing test put forward in Pike v. Bruce Church, Inc.,
                                                ____    __________________



          397 U.S. 137, 142 (1970), be applied to Section Six, and it seems



          to  acknowledge  that for  Pike  to apply,  it  must characterize
                                     ____



          Section  Six as  an evenhanded  regulation  that imposes  only an



          incidental burden on interstate commerce.  Section Six is plainly



          not such a creature.  As the district court properly found, where



          a  state  law  or  regulation,  such  as  Section  Six,  facially



          discriminates against  interstate commerce,  and has as  its very



          purpose  the  protection of  local  economic  interests, it  must



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withstand the most stringent form of scrutiny under the  Commerce



          Clause.  See, e.g.,  West Lynn Creamery v.  Healy, ___ U.S.  ___,
                   ___  ____   __________________     _____



          114 S. Ct.  2205, 2211-13  (1994).  Under  such strict  scrutiny,



          facially discriminatory regulations are presumptively invalid and



          are "routinely struck  down," unless  it can be  shown that  they



          serve  a  legitimate   local  interest  "unrelated   to  economic



          protectionism"    -- an  interest,  furthermore,  that cannot  be



          served  through  non-discriminatory means.    New  Energy Co.  v.
                                                        _______________



          Limbach, 486 U.S. 269, 274 (1988); see also Maine v.  Taylor, 477
          _______                            ________ _____     ______



          U.S. 131, 138  (1986) (upholding  facially discriminatory  import



          restriction as  necessary to  protect in-state wildlife).   Here,



          appellants  can  only justify  their  restriction  of bulk  sugar



          importation and subsequent packaging for consumer sale by listing



          the various  local benefits  attendant to economic  protectionism



          itself.2   "[W]here simple economic protectionism  is effected by



          state legislation, a virtually per se rule of invalidity has been
                                         ______



          erected."  City of Philadelphia v. New Jersey, 437  U.S. 617, 624
                     ____________________    __________



          (1978).



                    The district court also did not abuse its discretion in



          finding the potential for irreparable harm.  See 909 F.  Supp. at
                                                       ___



          861-62.   The  district  court found  that  irreparable harm  was

                              
          ____________________



          2  Appellants concede that Section Six has provided a competitive

          advantage  to the Puerto  Rico sugar corporation,  which owns the

          only existing refinery  in Puerto  Rico.  In  support of  Section

          Six, appellants  cite such local  interests as the  protection of

          jobs in the Puerto Rico sugar industry, the preservation of rural

          culture associated  with sugar production, and  the prevention of

          certain  demographic changes  (the movement  of unemployed  sugar

          workers from rural  areas to  urban areas) that  may result  were

          unfettered interstate competition allowed.  



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threatened by  the inability of the plaintiff  sugar importers to



          take advantage of an impending shortage of sugar supply in Puerto



          Rico.  The Department of Agriculture argues that a potential harm



          cannot be deemed  "irreparable" if it  is of a  kind that can  be



          later compensated through money  damages.  While it is  true that



          injunctive  relief is generally inappropriate where money damages



          can make a plaintiff whole, we have recognized that the loss of a



          unique   or   fleeting   business   opportunity   can  constitute



          irreparable injury.  See Hyde Park Partners v. Connolly, 839 F.2d
                               ___ __________________    ________



          837,  853 (1st  Cir. 1988) (injunction  may be  appropriate where



          timing, in tender offer context,  is crucial); see also Baccarat,
                                                         ________ ________



          102 F.3d at 18-19  ("[A] plaintiff need not demonstrate  that the



          denial of injunctive relief will be fatal to its business.  . . .



          If [it]  suffers  a substantial  injury  that is  not  accurately
                                                   ________________________



          measurable   or   adequately   compensable  by   money   damages,
          __________



          irreparable  harm  is  a natural  sequel.")  (citations  omitted)



          (emphasis added).  The concern in the present situation is clear:



          although we  remain in the domain  of economic profit  or loss, a



          context  in   which  compensation  through   legal  remedies   is



          preferred,  as  a practical  matter  the  potential value  of  an



          evanescent  business opportunity  may be  extremely  difficult to



          measure, after the  fact.  The district  court did not abuse  its



          discretion, therefore, in finding that plaintiffs were threatened



          with irreparable harm through  the ongoing enforcement of Section



          Six.



                    Affirmed. 
                    Affirmed
                    ________


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