Liberty Lincoln v. Ford Mtr Co ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
3-17-2009
Liberty Lincoln v. Ford Mtr Co
Precedential or Non-Precedential: Precedential
Docket No. 06-3659
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Recommended Citation
"Liberty Lincoln v. Ford Mtr Co" (2009). 2009 Decisions. Paper 1623.
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 06-3659
___________
*LIBERTY LINCOLN-MERCURY, INC.; FETTE FORD
INC; CAUSEWAY FORD LINCOLN-MERCURY, INC.;
ALL AMERICAN FORD; BURLINGTON LINCOLN
MERCURY SUZUKI; CHAS S. WINNER, d/b/a Winner
Ford; COUNTRY FORD MERCURY JEEP; D'AMICO
LINCOLN MERCURY, INC.; DAYTON FORD, INC.;
DOWNS FORD, INC.; FORD OF ENGLEWOOD;
FREEHOLD FORD, INC.; GEORGE WALL LINCOLN-
MERCURY, INC.; HILLSIDE AUTO MALL, INC.; IRWIN
LINCOLN-MERCURY; JACK TREBOUR FORD; KEN
SMITH MOTORS, INC.; LARSON FORD, INC.;
LICCARDI FORD INC.; LICCARDI LINCOLN
MERCURY; LILLISTON FORD, INC.; MAGARINO
FORD-MERCURY AND DAEWOOD, LLC; MAHWAH
SALES & SERVICE, INC.; MALOUF FORD, INC.;
MALOUF LINCOLN-MERCURY, INC.; MAPLECREST
FORD OF MENDHAM; MAPLECREST LINCOLN-
MERCURY, INC.; MEDFORD FORD; MONTCLAIR-
BLOOMFIELD MOTORS, INC.; MULLANE FORD, INC.;
OASIS FORD; PALISADE MOTORS, INC. d/b/a C&C
Ford, Inc.; PARK AVENUE FORD; PISTILLI FORD, INC.;
POINT PLEASANT FORD; QUALITY LINCOLN-
MERCURY HYUNDAI, INC.; RICKLES LINCOLN-
MERCURY LLC; RIDGEWOODS VILLAGE FORD, INC.;
RITTENHOUSE-KERR FORD, INC.; ROUTE 23
AUTOMALL, SOUTH SHORE FORD INC.; STADIUM
FORD, L.L.C.; STRAUB LINCOLN-MERCURY; TOM'S
FORD; TOWN & COUNTRY MOTORS INC.; TOWN
MOTORS; VALLEY FORD; WARNOCK FORD; WAYNE
AUTO SALES; WAYNE MOTORS, INC.; WEISLEDER,
INC.; WOODBRIDGE LINCOLN-MERCURY; WYCKOFF
FORD, INC.; WYMAN FORD, INC., all New Jersey
Corporations; CAPTIAL CITY FORD, INC.; ED CARNEY
FORD, INC.; RITTENHOUSE-KERR LINCOLN-
MERCURY, INC. RIVERVIEW FORD OF PENNSVILLE,
INC., Delaware Corporations;
v.
FORD MOTOR COMPANY,
Appellant
*(Amended in accordance with Clerk's Order dated 09/06/06)
___________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 02-cv-04146)
District Judge: The Honorable William G. Bassler
___________
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ARGUED OCTOBER 31, 2008
BEFORE: McKEE, NYGAARD, and SILER,* Circuit Judges.
(Filed: March 17, 2009)
___________
Dennis R. LaFiura, Esq. (Argued)
Day Pitney
200 Campus Drive
Florham Park, NJ 07932-0905
Carla W. McMillian, Esq.
Jennifer M. Rubin, Esq.
Sutherland, Asbill & Brennan
999 Peachtree Street, N.E., Suite 2300
Atlanta, GA 30309
Counsel for Appellant
Eric L. Chase, Esq. (Argued)
Genevieve K. LaRobardier, Esq.
Bressler, Amery & Ross
325 Columbia Turnpike
*Honorable Eugene E. Siler, Jr., Senior Circuit Judge for
the United States Court of Appeals for the Sixth Circuit, sitting
by designation.
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P. O. Box 1980
Florham Park, NJ 07932
Counsel for Appellees
Kenneth S. GoodSmith, Esq.
Stephanie J. Synol, Esq.
GoodSmith Gregg & Unruh
150 South Wacker Drive, Suite 3150
Chicago, IL 60606
Counsel for Amicus, Nissan, NA, Inc.
James C. McGrath, Esq.
Bingham McCutchen
One Federal Street
Boston, MA 02110
Counsel for Amicus, Alliance Auto Mfg.
___________
OPINION OF THE COURT
___________
NYGAARD, Circuit Judge.
Ford appeals the District Court’s order granting a
preliminary injunction in favor of a group of New Jersey
franchise dealerships. The order prohibited Ford from assessing
a surcharge to its New Jersey franchisees to recoup costs arising
from a New Jersey statute that allowed franchisees to request a
higher rate of reimbursement from Ford for warranty work.
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Ford also appeals the District Court’s underlying partial
summary judgment. For the reasons that follow, we will reverse
the District Court’s preliminary injunction order and remand for
further proceedings consistent with this opinion. The partial
summary judgment is neither a final nor appealable order and
we will not review it.
I.
As part of their agreement with Ford, franchised dealers
are required to perform repair work on Ford brand vehicles,
regardless of whether the franchisee sold the vehicle. Ford
reimburses the dealers for work performed under both limited
and extended service warranty plans, and for work that must be
performed on recalled Ford vehicles. Under some
circumstances where Ford determines that it is necessary to
maintain customer satisfaction, Ford pays part of the cost of
non-warranty repair work.
The New Jersey Franchise Practices Act provides that a
“motor vehicle franchisor shall reimburse” its franchisee for
parts used in warranty repairs at the franchisee’s “prevailing
retail price,” provided that the retail price is not unreasonable.
N.J.S.A. §56:10-15(a). The prevailing reimbursement rate prior
to the statute was approximately 40% above the dealer cost. The
dispute began in 1991 when one dealer, Liberty Lincoln-
Mercury, Inc. asked Ford for a warranty part reimbursement at
its retail rate, which was 77% above costs. Ford paid the higher
rate, but it also began to add a fee to the wholesale price of cars
that it delivered to Liberty. The fee varied month to month,
depending on the reimbursement amounts claimed by Liberty.
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Liberty filed suit challenging the fee, and we affirmed the
decision of the District Court that Ford’s surcharge violated the
warranty reimbursement statute. Liberty Lincoln-Mercury, Inc.
v. Ford Motor Co., 134 F.3d 557 (3d Cir. 1998).
In 2002, Ford imposed a restructured surcharge program
to recoup increased costs incurred from its compliance with the
warranty reimbursement statute. The second fee program
applied to the wholesale price of all vehicles delivered to Ford
franchisees in New Jersey. Liberty, along with other Ford
franchisees in New Jersey, sued Ford asserting that the second
surcharge program also violated the warranty reimbursement
statute. Ford countered that it designed the second program to
be a wholesale vehicle price term, a type of fee that we
expressly stated in the first lawsuit was outside of the scope of
the New Jersey statute. Regardless, in a partial summary
judgment, the District Court ruled that Ford’s reconstituted fee
program violated the New Jersey statute.
The District Court also issued a preliminary injunction,
prohibiting Ford from imposing the surcharge while the
remaining issues are litigated. In granting the preliminary
injunction the District Court noted that the partial summary
judgment in favor of the franchisees resolved whether they were
likely to succeed on the merits. The District Court did not make
any other specific findings, but stated generally that the other
requirements for a preliminary injunction “have been satisfied.”
II.
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28 U.S.C. §1292(a)(1) provides us with appellate
jurisdiction to entertain interlocutory appeals from orders that
grant, deny, or modify injunctions. On appeal, the standard of
review of a preliminary injunction issued by a district court is
narrow. Unless an abuse of discretion is “clearly established, or
an obvious error has ocurred [sic] in the application of the law,
or a serious and important mistake has been made in the
consideration of the proof, the judgment of the trial court must
be taken as presumptively correct.” Premier Dental Products
Co. v. Darby Dental Supply Co., Inc., 794 F.2d 850, 852 (3d Cir.
1986), quoting Stokes v. Williams, 226 F. 148, 156 (3d
Cir.1915).
We must consider the following factors in determining
whether a preliminary injunction should be issued:
(1) the likelihood that the moving party will
succeed on the merits; (2) the extent to which the
moving party will suffer irreparable harm without
injunctive relief; (3) the extent to which the
nonmoving party will suffer irreparable harm if
the injunction is issued; and (4) the public
interest.
McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC, 511
F.3d 350, 356-357 (3d Cir. 2007). The franchisees assert that
the preliminary injunction was a consent order. There is no
evidence of such consent. In fact, the District Court’s order
expressly reserved Ford’s right to appeal the order.
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Ford argues that the District Court erred by finding that
the franchisees are likely to succeed on the merits. In reality,
Ford is attempting to appeal the partial summary judgment order
that declared the surcharge program was a violation of New
Jersey’s warranty reimbursement statute. Where a preliminary
injunction has been appealed under the collateral order doctrine
we have, in some cases, exercised pendant jurisdiction to review
an inextricably intertwined partial summary judgment order.
Kos Pharmaceuticals v. Andrx Corp., 369 F.3d 700, 708 (3d
Cir. 2004). Citing Kos Pharmaceuticals, however, Ford takes
it one step further by arguing that we must review the partial
summary judgment in this case. Ford is mistaken that we are
under any such requirement. 28 U.S.C. § 1291.
Ford’s citation to Kos Pharmaceuticals glosses over a
critical distinction between that case and this one. That case
focused upon an alleged trademark infringement in which the
plaintiff claimed non-monetary injury. Kos Pharmaceuticals,
369 F.3d at 708. In fact, non-monetary damages were at issue
in the entire line of cases from our court leading up to Kos
Pharmaceuticals, except where a statute specifically authorized
a preliminary injunction under other criteria.1 This is also true
1.
Apple Computer, Inc. v. Franklin Computer Corp., 714
F.2d 1240 (3d Cir. 1983) (District Court erred in finding that
copyright infringement did not exist.); Weiss v. York Hospital,
745 F.2d 786 (3d Cir. 1984) (District Court erred in holding
that, under Clayton Act, there was insufficient evidence of a
“threat of injury.”); John F. Harkins Company, Inc. v.
(continued...)
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of decisions from Courts of Appeal in other circuits.2 We
reaffirm that we have pendant jurisdiction to review underlying
orders that are inextricably intertwined with a preliminary
injunction, and that in such a review it may be necessary to
consider whether the movant is likely to succeed on the merits.
In this case, however, we do not need to reach the issue of
whether the franchisees are likely to succeed on the merits,
making the exercise of pendant jurisdiction unnecessary.
We have repeatedly insisted that “the preliminary
injunction device should not be exercised unless the moving
party shows that it specifically and personally risks irreparable
harm.” Adams v. Freedom Forge Corp., 204 F.3d 475, 487 (3d
1.
(...continued)
Waldinger Corporation, 796 F.2d 657 (3d Cir. 1986) (District
Court’s denial of stay for arbitration reversed due to erroneous
interpretation of contract’s arbitration clause.); Merchant &
Evans, Inc. v. Roosevelt Building Products Company, Inc., 963
F.2d 628 (3d Cir. 1992), overruled on other grounds by Two
Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) (District
Court erred in finding that plaintiff was likely to succeed in
trademark infringement claim.); American Telephone and
Telegraph Company v. Winback and Conserve Program, Inc.,
42 F.3d 1421 (3d Cir. 1994) (District Court erred in finding
there was insufficient evidence of trademark confusion.).
2.
See e.g. LaForest v. Former Clean Air Holding Co.,
Inc., 376 F.3d 48, 55 (2d Cir. 2004); Delaware & H. Ry. Co. v.
United Transp. Union, 450 F.2d 603, 619 (D.C. Cir. 1971).
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Cir. 2000). We have also stressed that “[b]efore granting a
preliminary injunction, a district court must consider the extent
to which the moving party will suffer irreparable harm without
injunctive relief.” (Emphasis added.) Novartis Consumer
Health, Inc. v. Johnson & Johnson-Merck Consumer
Pharmaceuticals Co., 290 F.3d 578, 595 (3d Cir. 2002).
Here, the District Court made no finding of irreparable
harm, stating only that all of the requirements for a preliminary
injunction have been satisfied. We have long held that an injury
measured in solely monetary terms cannot constitute irreparable
harm. Bennington Foods LLC v. St. Croix Renaissance, Group,
LLP., 528 F.3d 176, 179 (3d Cir. 2008); see also In re Arthur
Treacher's Franchisee Litigation, 689 F.2d 1137, 1145 (3d
Cir.1982) (“[W]e have never upheld an injunction where the
claimed injury constituted a loss of money, a loss capable of
recoupment in a proper action at law.”). We do not see in the
record before us any evidence of a non-monetary injury and we
conclude that the District Court was wrong when it stated that
all of the requirements for a preliminary injunction have been
met.
The reason that this preliminary injunction is before us is
readily apparent. Strategically, the order appeared to provide an
accelerated pathway for Ford to obtain review of the partial
summary judgment, a non-final order. Yet, we have consistently
stated that exceptions to the final judgment rule must be
construed narrowly to ensure that the exceptions do not swallow
the rule itself. United States v. Wecht , 537 F.3d 222, 244 (3d
Cir. 2008). This case demonstrates the reason for such caution.
The final judgment rule exists to protect both the litigants and
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the court from potential inconsistencies and inefficiencies
arising from piecemeal litigation. See Frederico v. Home Depot,
507 F.3d 188, 192 (3d Cir. 2007). We strongly disfavor any
attempt to willfully circumvent this rule, particularly where, as
here, the record lacks any evidence that a preliminary injunction
was needed to prevent irreparable harm. Accordingly, we
conclude that the District Court erred by granting the
preliminary injunction.
III.
For the reasons set forth above, we will reverse the Order
of the District Court granting a preliminary injunction in favor
of the franchisees and remand the cause to the District Court.
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