The Original Great American Chocolate Chip Cookie Company, Incorporated v. River Valley Cookies, Limited, Robert M. Sigel, Paula Sigel ( 1992 )

CUDAHY, Circuit Judge,

dissenting.

The majority opinion is notable for one thing at least: it fails throughout even to mention that the district court has broad discretion to issue or deny a preliminary injunction. Hoosier Penn Oil Co. v. Ashland Oil Co., 934 F.2d 882, 884-85 (7th Cir.1991). Our review, intended to be deferential, has become in this case plenary, and its tone suggests a detailed and certain knowledge of the equities which I think is wholly lacking at this level of review. The fact is that a respected magistrate judge examined the elements of this controversy in painstaking detail and her work was approved after a de novo review by a conscientious district judge. Close as they are to the events and the actors, it ill behooves us to brush aside their efforts with hardly a passing nod. Nor does their invocation of “commercial reasonableness” seem to me in any way out of step with Illinois law. See, e.g., Dayan v. McDonald’s Corp., 125 Ill.App.3d 972, 81 Ill.Dec. 156, 171, 466 N.E.2d 958, 973 (1984) (observing that “the test used by most courts in defining good cause [to terminate a franchise agreement] seems to center on a determination of commercial reasonability”).

I find the majority’s discussion of the balance of harms highly implausible. The majority's decision puts the Sigels out of business. The majority speculates that the Sigels will be able to salvage something economically, but this is only speculation. The decision of the district court, on the other hand, would merely have preserved the status quo pending full consideration of the merits. It seems to me obvious — painfully so — that the Sigels have far more to lose than does the Cookie Company.

The majority’s review of the facts here is so lopsided as to be almost droll — if it were not serious business. For example, the majority states that the Sigels “flunked several inspections by the company’s representatives.” Ante at 278. But the Sigels were never informed that their operation of their franchise fell so far below acceptable standards of cleanliness and quality as to constitute an event of default. In fact, the magistrate judge found no evidence that the Sigels even knew what constituted a passing (or failing) grade on such an inspection. The magistrate judge’s detailed probing of all these points is considerably more balanced and fair than that of the majority.

The discussion of the Illinois Franchise Disclosure Act is equally one-sided. Illinois did not enact this law because it thought franchisors were being abused by their franchisees, as the majority seems to believe. Apparently, the legislators had not read enough scholarly musings to realize that any efforts to protect the weak against the strong would, through the exhilarating alchemy of economic theory, increase rather than diminish the burden upon the powerless. I agree that the thumb of judges ought not be placed on the scales of justice. But judges have no obligation to ignore the numerous thumbs already put down on the side of economic power, nor the thumb of the legislature on the other side.

Finally, while I do not in principle approve the use of “counterfeit” cookie batter, I would not single this out as a leading social evil of our time. As a matter, of fact, the majority makes considerably more fuss about it than does the Cookie Company. Apparently, the batter used by the Sigels was of unquestioned quality, and they turned to it in desperation when they were cut off from their contract source.

I would affirm the judgment of the district court and I respectfully dissent.