DocketNumber： 95-1737
Filed Date： 8/3/1995
Status： Precedential
Modified Date： 9/21/2015
[NOT FOR PUBLICATION] UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
____________________
No. 95-1737
GERBER RADIO SUPPLY CO., INC.,
d/b/a GERBER ELECTRONICS,
Plaintiff, Appellant,
v.
PHILIPS SEMICONDUCTORS, INC., ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge] ___________________
____________________
Before
Selya, Cyr and Boudin,
Circuit Judges. ______________
____________________
Stephen Schultz and McGowan, Engel, Tucker, Garrett & Schultz on _______________ __________________________________________
Memorandum of Law for appellant.
E. Jeffrey Banchero, Banchero & Lasater, Sabin Willett, Peter J. ___________________ __________________ _____________ _________
Mancusi, and Bingham, Dana & Gould on Memorandum of Law for appellee _______ _____________________
Philips Semiconductors, Inc.
Raymond R. Randall and Ryan, Boudreau, Randall and Kirkpatrick on __________________ _______________________________________
Memorandum of Law for appellee Wyle Electronics.
____________________
August 3, 1995
____________________
Per Curiam. Before us is a motion to restore a ___________
preliminary injunction pending appeal. For almost six years,
appellant Gerber Radio Supply Co. (Gerber), a Massachusetts-
based distributor of electronic components, was a non-
exclusive distributor in the northeast region for Philips
Semiconductors, Inc. (Philips), a California-based
manufacturer of integrated circuits. In March 1995, Philips
exercised its contractual option to terminate the
distributorship agreement, effective the following month. It
thereafter sent to most or all of its remaining local
distributors a computerized printout identifying some 520
customers that had bought Philips products from Gerber in
1994, along with their respective volume of purchases.
Gerber proceeded to file suit against Philips and various of
the distributors in Massachusetts state court, claiming inter _____
alia that the disclosure of its customer list (1) breached a ____
confidentiality obligation contained in the distributorship
agreement and (2) was a misappropriation of trade secrets.
A superior court justice denied Gerber's request for a
preliminary injunction, finding no likelihood of success on
the merits. A single justice of the appeals court, however,
agreed to enter a narrow injunction requiring defendants to
return all copies of the customer list and precluding them
from disclosing the contents thereof to third parties.
Gerber's further request to bar defendants from soliciting
the listed customers was denied.
Shortly thereafter, the case was removed to federal
court. In response to Gerber's motion to extend the
preliminary injunction to several defendants recently added
to the case, Philips moved for its dissolution, arguing that
it was defective on both substantive and procedural grounds.
Gerber replied that the district court was constrained to
adhere to the single justice's ruling, but that, if any
modification were to be undertaken, the injunction should be
extended to preclude solicitation of its customers. The
district court agreed to dissolve the injunction on the basis
that irreparable harm had not been established. Gerber has
appealed from this order, and now asks that we restore the
preliminary injunction issued by the single justice pending
such appeal. For the following reasons, we deny the motion
to restore and summarily affirm the order of the district
court.
Gerber acknowledges that a district court is authorized
under 28 U.S.C. 1450 to modify or dissolve a state court
injunction following removal. See, e.g., Hyde Park Partners, ___ ____ ___________________
L.P. v. Connolly, 839 F.2d 837, 842 (1st Cir. 1988). It ____ ________
contends, however, that this power does not extend to a state
appellate court order. In its view, such an injunction
becomes "federalized" once the case is removed and is thereby
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converted into a federal appellate court order binding on the _________
district court. We note that such a view diverges from the
approach adopted in recent removal cases arising in an
analogous context. See, e.g., RTC v. Bayside Developers, 43 ___ ____ ___ __________________
F.3d 1230, 1238 (9th Cir. 1994); LeMaire v. FDIC, 20 F.3d _______ ____
654, 655 & n.3 (5th Cir. 1994), cert. denied, 115 S. Ct. 723 ____________
(1995); In re 5300 Memorial Investors, Ltd., 973 F.2d 1160, ____________________________________
1162-63 (5th Cir. 1992). Yet we need not resolve this
question since Gerber's argument fails for a separate reason.
It is undisputed that federal rather than state
procedural requirements govern the future course of
proceedings in a removed case. See, e.g., Granny Goose ___ ____ _____________
Foods, Inc. v. Brotherhood of Teamsters, Local 70, 415 U.S. ____________ ___________________________________
423, 437 & n.10 (1974); FDIC v. Bay Street Dev. Corp., 32 ____ ______________________
F.3d 636, 639 (1st Cir. 1994). Here, there is no indication
that the single justice, in granting equitable relief,
required the posting of a bond or at least considered whether
a bond was necessary--as mandated by Fed. R. Civ. P. 65(c).
See, e.g., In re Kingsley, 802 F.2d 571, 578 (1st Cir. 1986). ___ ____ ______________
Given this omission, and considering that the single
justice's ruling was provisional in nature and lacked written
findings, we think the district court was entitled to
undertake a review of the state court injunction.
-4-
We likewise conclude that the district court was
warranted in dissolving the injunction. In so concluding, we
express no view as to the merits of Gerber's underlying
action. Instead, we rely on three considerations. First, we
are inclined to agree that irreparable harm has not been
demonstrated under the circumstances. Gerber does not
suggest that its economic viability is threatened; indeed,
sales of Philips products accounted for only seven to eleven
percent of its business in recent years. Instead, it
contends that it faces the potential loss of all 520
customers identified on the list (said to represent
approximately twenty-five percent of its customer base).
Yet, having advanced no challenge to the termination of its
Philips distributorship, Gerber cannot complain of the
inevitable loss of those customers who retain loyalty to
Philips products. The extent to which such customers might
also take their non-Philips business elsewhere is speculative
at this point, but presumably subject to reasonable
quantification in the future. Most important, Gerber goes on
to explain that it is concerned only with those customers who
previously bought Philips products exclusively from Gerber.1 ___________
And the number of such customers--although not specified in
the record--appears relatively small. Gerber acknowledges
____________________
1. Gerber has not requested that the defendant distributors
be enjoined from contacting those customers on the list with
whom they were already doing business.
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that approximately two-thirds of its customers were also
those of another distributor (defendant Wyle Electronics).
Nor has it disputed that other distributors, as well as
Philips itself, have also dealt with various of its
customers. These considerations, we think, militate against
any finding of irreparable harm.
Second, restoration of the narrow injunction imposed by
the single justice would accomplish little at this point.
Defendants have now been in possession of the customer list
for nearly five months. Indeed, partly because of Gerber's
failure to seek an appropriate protective order, the list has
been publicly available for most of that period--having been
submitted (in unsealed format) as part of the record in this
case. Under these circumstances, we fail to see how Gerber
would benefit from any renewed order barring disclosure of
the customer list to third parties. Cf. CMM Cable Rep., Inc. ___ ____________________
v. Ocean Coast Properties., Inc., 48 F.3d 618, 621 (1st Cir. _____________________________
1995) (noting that an appeal from the denial of a motion for
preliminary injunction is moot if the appellate court can no
longer preserve, or feasibly restore, the status quo).
Finally, the district court's decision not to extend the
injunction to bar the solicitation of customers is one we are
not prepared to disturb. As just mentioned, the number of
customers to whom such an injunction would apply is
relatively small, and much of the activity that would thereby
-6-
be enjoined has already occurred. Moreover, Gerber has now
been denied such broader relief by three separate judges.
Having reviewed the record and the parties' submissions in
full, we are not inclined to reach a different assessment,
especially given the deferential standard of review that
governs this appeal. See, e.g., Narragansett Indian Tribe v. ___ ____ _________________________
Guilbert, 934 F.2d 4, 5 (1st Cir. 1991). ________
The motion to restore injunction pending appeal is ________________________________________________________
denied, and the order of the district court is summarily _____________________________________________________________
affirmed. See Loc. R. 27.1. ____________________________
-7-
FDIC v. Byrne, Jr. , 32 F.3d 636 ( 1994 )
Cmm Cable Rep., Inc., D/B/A Creative Media Management, Inc. ... , 48 F.3d 618 ( 1995 )
In the Matter of the Application of Michael J. Kingsley for ... , 802 F.2d 571 ( 1986 )
Narragansett Indian Tribe v. Paul E. Guilbert , 934 F.2d 4 ( 1991 )
harry-lemaire-hilmar-r-zeissig-v-the-federal-deposit-insurance , 20 F.3d 654 ( 1994 )
hyde-park-partners-lp-and-hyde-park-holdings-inc-v-michael-j , 839 F.2d 837 ( 1988 )
in-the-matter-of-5300-memorial-investors-ltd-debtor-5300-memorial , 973 F.2d 1160 ( 1992 )
Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto ... , 94 S. Ct. 1113 ( 1974 )