Nutrasweet Co. v. Vit-Mar Enterprises, Inc. ( 1999 )

Opinions of the United
1999 Decisions States Court of Appeals
for the Third Circuit
2-25-1999
Nutrasweet Co v. Vit Mar Entr Inc
Precedential or Non-Precedential:
Docket 98-5027
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Recommended Citation
"Nutrasweet Co v. Vit Mar Entr Inc" (1999). 1999 Decisions. Paper 49.
http://digitalcommons.law.villanova.edu/thirdcircuit_1999/49
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Filed February 25, 1999
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-5027
THE NUTRASWEET COMPANY,
v.
VIT-MAR ENTERPRISES, INC., a/k/a VITMAR; THE
SHIBA GROUP; ROMANO FASHIONS, INC.; MANOJ
PAREKH; NIMISHA PAREKH; HERSHEY'S TRUCKING &
WAREHOUSE, INC.; HARRY OBERLANDER; JOHN DOES,
X, Y, & Z, BEING ANY OTHER PERSONS OR ENTITIES
PARTICIPATING IN THE DOMESTIC IMPORT SALE OR
TRANSPORT OF THE SUBJECT SHIPMENT,
Tekstilschik, a "John Doe",
Appellant.
APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. No. 96-cv-02172)
(District Judge: Nicholas H. Politan)
ARGUED: October 30, 1998
BEFORE: SLOVITER, GARTH, and MAGILL,*
Circuit Judges
(Opinion Filed February 25, 1999)
_________________________________________________________________
*Honorable Frank Magill, Senior United States Circuit Judge for the
Eighth Circuit Court of Appeals, sitting by designation.
Paul J. Dillon (ARGUED)
Bloom Rubenstein Karinja & Dillon,
P.C.
70 South Orange Avenue, Suite 215
Livingston, NJ 07039
Counsel for Appellant
Rodney A. Brown (ARGUED)
Eileen Fox
Cori Sherman
Brown & Fox, P.C.
110 East 59th Street
New York, NY 10022
Counsel for Appellee
OPINION OF THE COURT
MAGILL, Senior Circuit Judge.
The NutraSweet Company (NutraSweet) obtained a
preliminary injunction and writ of replevin granting
NutraSweet possession of goods that were allegedly
acquired by fraud. Tekstilschik (Tek), an intervenor and the
purported owner of the goods, challenges both the
preliminary injunction and writ of replevin. We lack
jurisdiction to consider Tek's challenge to the writ of
replevin and dismiss that portion of the appeal. Although
we have jurisdiction to consider the validity of the
preliminary injunction, we find that the issue is moot as a
result of the District Court's modification of the writ of
replevin. Therefore, we will reverse and remand with
instructions to vacate.
I.
This is the second time these parties have appeared
before this Court in this case. In deciding the previous
appeal, this Court thoroughly explained the genesis of this
lawsuit and the relationships and transactions between
NutraSweet, Tek, and the named defendants. See
NutraSweet Co. v. Vit-Mar Enters., Inc., 112 F.3d 689 (3d
2
Cir. 1997). We recite below only those facts relevant to the
disposition of this appeal.
NutraSweet produces a sugar substitute called "Equal
Sweetener with NutraSweet" (Equal). In 1995, Vit-Mar
Enterprises (Vitmar) and The Shiba Group (Shiba) proposed
to distribute Equal to the Ukraine and Russia. NutraSweet
agreed and sold several containers of Equal to Vitmar and
Shiba for approximately $1.5 million.
NutraSweet shipped the Equal with bills of lading that
specifically restricted distribution to Russia and the
Ukraine. Despite NutraSweet's attempts to restrict
distribution of the Equal to Russia and the Ukraine, several
containers were allegedly imported back into the United
States.1 In May 1996 NutraSweet learned that U.S.
Customs was prepared to release a shipment of the Equal
into the U.S. market. NutraSweet filed a complaint and an
Order to Show Cause in federal district court, seeking a
writ of replevin and temporary restraining order (TRO).
NutraSweet argued that the goods were obtained by fraud
and that it was likely to succeed in recovering title to the
goods. The District Court granted NutraSweet's request for
a TRO and writ of replevin. After NutraSweet posted a
$329,000 bond, the U.S. Marshals seized the Equal.
When Tek2 learned that the goods had been seized, it
intervened in this case to challenge the TRO. Initially the
District Court refused to lift the TRO. After considering
Tek's appeal, we instructed the District Court to vacate the
TRO as to Tek because it had the effect of a preliminary
injunction but had been entered without development of a
preliminary injunction record and findings of fact. See
NutraSweet, 112 F.3d at 694.3 However, we left the door
open for the District Court to enter a preliminary injunction
after it developed a proper record and made the requisite
findings of fact. See id. at 695.
_________________________________________________________________
1. NutraSweet also alleges that several containers were diverted before
leaving the United States and distributed in the domestic market.
2. Tek alleges that it acquired title to the Equal shipment at issue in
this
appeal through a barter transaction with another Russian entity.
3. Tek did not challenge the writ of replevin in its first appeal to this
Court. See NutraSweet, 112 F.3d at 691 n.3.
3
On remand, the District Court vacated the TRO, but
entertained argument concerning the propriety of a
preliminary injunction. After a hearing, the District Court
entered a preliminary injunction, prohibiting Tek, its
agents, and those acting in concert with Tek from "taking
possession, control, or custody and/or marketing, selling,
or otherwise distributing the shipments of Equal." In
addition to opposing the preliminary injunction, Tek sought
to vacate the writ of replevin, but the District Court denied
its motion. The District Court later modified the writ of
replevin to allow NutraSweet to take possession of the
Equal, and NutraSweet increased its bond to $658,000.
II.
Tek first argues that the District Court erred in granting
the preliminary injunction. We agree.
We have appellate jurisdiction to review a district court's
interlocutory order granting a preliminary injunction under
28 U.S.C. S 1292(a)(1). We review a district court's order
granting a preliminary injunction for abuse of discretion, its
factual findings for clear error, and its determinations of
questions of law de novo. See Acierno v. New Castle County,
40 F.3d 645, 652 (3d Cir. 1994).
A preliminary injunction is an extraordinary remedy that
should be granted only if "(1) the plaintiff is likely to
succeed on the merits; (2) denial will result in irreparable
harm to the plaintiff; (3) granting the injunction will not
result in irreparable harm to the defendant; and (4)
granting the injunction is in the public interest." Maldonado
v. Houstoun, 157 F.3d 179, 184 (3d Cir. 1998). A plaintiff's
failure to establish any element in its favor renders a
preliminary injunction inappropriate. See Opticians Ass'n of
Am. v. Indep. Opticians of Am., 920 F.2d 187, 192 (3d Cir.
1990).
We had serious concern about the District Court's finding
that NutraSweet's relationships with its domestic customers
and distributors would be irreparably harmed in the
absence of a preliminary injunction. In the absence of
irreparable injury, no preliminary injunction would lie, even
if the other three elements, noted above, were found.
4
Nevertheless, whether or not there was a possibility of
irreparable harm to NutraSweet at the time NutraSweet
applied for a preliminary injunction, it now appears that
NutraSweet can suffer no harm because, as explained
above, NutraSweet has obtained possession of the Equal by
the District Court's order modifying the writ of replevin.
Because the writ of replevin now adequately protects
NutraSweet's interest in preventing distribution of the
goods in the United States during the pendency of this suit,
the preliminary injunction entered by the District Court
now becomes an unnecessary remedy that must be
vacated. See Anderson v. Davila, 125 F.3d 148, 163 (3d Cir.
1997) ("An injunction is appropriate only where there exists
a threat of irreparable harm such that legal remedies are
rendered inadequate."). Thus, the question of whether a
preliminary injunction was warranted by earlier
circumstances is now moot and the preliminary injunction
previously entered must be vacated. See United States v.
Munsingwear, Inc., 340 U.S. 36, 39-40 (1950).
III.
Tek also contends that the District Court erred in issuing
the writ of replevin. We decline to rule on Tek's challenge to
the writ of replevin because we lack appellate jurisdiction.4
Congress has conferred jurisdiction on the courts of
appeal over interlocutory orders in limited situations. See
28 U.S.C. S 1292. Section 1292(a) allows courts of appeal to
hear challenges to "[i]nterlocutory orders of the district
court of the United States . . . granting, continuing,
modifying, refusing, or dissolving injunctions, or refusing to
dissolve or modify injunctions . . . ." 28 U.S.C. S 1292(a)(1).
This Circuit has defined "injunctions" under section
1292(a)(1) as: "Orders that are directed to a party,
enforceable by contempt, and designed to accord or protect
some or all of the substantive relief sought by a complaint
in more than a [temporary] fashion." Cohen v. Board of
_________________________________________________________________
4. Although the parties did not raise this Court's jurisdiction to
consider
the validity of the writ of replevin, this Court, as a court of limited
jurisdiction, must sua sponte raise the issue of appellate jurisdiction.
See
Ortiz v. Dodge, 126 F.3d 545, 547 (3d Cir. 1997).
5
Trustees of the Univ. of Med. & Dentistry of N.J., 867 F.2d
1455, 1465 n.9 (3d Cir. 1989) (en banc) (alteration in
original; quotations omitted).
We lack jurisdiction to hear Tek's challenge to the writ of
replevin because it does not fall within the definition of
"injunction." Unlike an injunction, the writ of replevin in
this case was directed to the U.S. Marshals, not to a party
to the suit against whom the order could be enforced by
threat of contempt. Cf. Santana Prods., Inc. v. Compression
Polymers, Inc., 8 F.3d 152, 155 (3d Cir. 1993) (party cannot
be held in contempt for failing to comply with an order that
contains no provision with which it must comply).
Furthermore, the writ, as modified, does accord NutraSweet
some of the relief it ultimately desires (possession of the
Equal), but it is only a provisional remedy, and the District
Court reserved the right to order NutraSweet to return the
Equal to Tek if NutraSweet does not ultimately prevail. J.A.
at 352. Because the writ of replevin is not an injunction for
purposes of section 1292(a)(1), we hold that it is not an
appealable interlocutory order. See, e.g., HBE Leasing Corp.
v. Frank, 48 F.3d 623, 632 (2d Cir. 1995) ("the provisional
remedies of attachment and replevin . . . do not constitute
injunctions for the purposes of section 1292(a)(1)"); FDIC v.
Elio, 39 F.3d 1239, 1249 (1st Cir. 1994) ("attachments are
not among the interlocutory orders appealable under 28
U.S.C. S 1292(a)"); Cohen, 867 F.2d at 1464 ("orders
attaching security for a judgment ultimately to be rendered
have been held not to fall under section 1292(a)(1), even
though such orders have a significant impact on the parties
whose property is affected" (citing cases)); United States v.
Hansen, 795 F.2d 35, 39 (7th Cir. 1986) ("Orders of
replevin and attachment are not appealable under 28
U.S.C. S 1292(a)(1)." (citing cases)); accord 16 Wright, Miller
& Cooper, Federal Practice & Procedure S 3922.3, at 116
(1996) ("Enforcement of such traditional security devices as
attachment and replevin ordinarily is thought not to involve
an injunction within the meaning of S 1292(a)(1).").
IV.
For the foregoing reasons, we will reverse and remand
6
with instructions to vacate the preliminary injunction.5 We
dismiss Tek's appeal of the writ of replevin for lack of
jurisdiction.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
5. The District Court is obviously not precluded from entering another
preliminary injunction if it develops the record and makes adequate
findings of fact that satisfy the requirements for a preliminary
injunction.
7