Professional Documents
Culture Documents
A.M. Capen's Co. v. American Trading, 1st Cir. (1996)
A.M. Capen's Co. v. American Trading, 1st Cir. (1996)
February 9, 1996
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________
No. 95-1870
Plaintiff, Appellee,
v.
Defendants, Appellants.
____________
ERRATA SHEET
The opinion of
this court
issued on January
18, 1996,
is
amended as follows:
to "P.R.
____________________
No.
95-1870
Plaintiff, Appellee,
v.
Defendants, Appellants.
____________________
Before
_____________
Bownes, Senior Circuit Judge,
____________________
and Stahl, Circuit Judge.
_____________
____________________
____________________
from a
preliminary injunction
issued by the
Corp.
("ATAPCO")
from
This is
an appeal
district court
Trading and
Production
terminating plaintiff-appellee
A.M.
Puerto
Rico of
ATAPCO's
products.
action
Capen's
had filed
an
tit. 10,
of the distributorship.
Notwithstanding
the
dealer's contract of
to
Ann.
the parties
existence
a clause
the existing
principal
or
grantor
reserving
the unilateral
terminate
in
right to
relationship, no
may
directly
or
said
contract
on
its
normal
In
any litigation
directly
or
in which
indirectly
there is
involved
the
in
established
prejudice
between
of
the
the
relation
principal
or
grantor and
grant,
the
dealer, the
Court
may
pending solution,
or
interdictory nature to
measure of an
do or to desist
the
abstain
the relation
dealer's
contract,
from performing
-22
in
established
and/or
any act
to
or any
omission
in prejudice
case
which
in
consider
In any
provisional
remedy
requested, the
Court
the
herein provided is
shall
thereof.
the
interests
of
all
There
1978,
Capen's
predecessor,
of
is no
entered
an
and Steelmaster
South America.
to the
basic facts.
agreement
with
In
ATAPCO's
office
products in
Puerto
Although confirmed in
on
into
Sheller-Globe, to be
Globe-Weiss
date.
dispute as
contain an expiration
a written letter,
would apply to
the contract.
the parties
not agree
When ATAPCO
ATAPCO,
Missouri,
wanted
with its
principal place
Missouri law
to
apply
of
business in
to the
contract.
business in
formal contract.
did
sell
As
in which
ATAPCO
to
others.
ATAPCO made
Blas
Rossy Asencio
a sales
-33
The
the
Magistrate
district court
Judge that
adopted the
the
recommendation of
provisional
remedy in
the
full-blown opinion
for its
action.
It
the merits."
Supp. 36,
38 (D.P.R.
1995).
held:
Capens
business
has
also
shown
will suffer
if the injunction
that
his
irreparable injury
Mr.
the
had
the
exclusivity
competitive
with
advantage
will
business
will
added
Asencio
by ATAPCO.
obviously mean
market
the
for
continue to sell
be
of
The
that Capens'
significantly
irreparably diminished.
outweighs
the
ATAPCO's
business area
benefits,
Asencio
or
suffer most
possible
will
remain
Central and
ATAPCO will
continue
either through
through A.M.
Mr.
Capens;
It then
business
Asencio
market
continue
should Mr.
to interfere
will
Rossy
with the
customers.
Id.
___
at 38-39.
Finally, the
court
held that
the
public
____________________
1.
Capen's
has
sued
Blas
Rossy
-44
Asencio
for
tortious
interest
-55
would
not
injunction.
be
adversely
affected
by
the
preliminary
Id. at 39.
___
It is
obvious that
what we
are reviewing
is not
but
preliminary injunction
that
meets,
at least
prima
_____
reviewing a
preliminary injunction
is abuse
of discretion.
Analysis
Analysis
________
We
of success on the
merits.
two
that Puerto
contentions:
Defendant's appeal is
posited on
statute.
matter."
As the
Id.
___
district court
noted,
this is
"a close
That
Rico
and has
Island.
neither
a warehouse
It sells exclusively to
does
not have
a showroom
on
the
sends an agent
resident agent
qualified to do business
nor
on the
to Puerto Rico,
Island and
in Puerto Rico on a
it
is not
regular basis.
-66
of
ATAPCO products
for the
five-year period
spanning from
The
first
issue
is
what
law
applies.
This
Contract Factors
Contract Factors
________________
applied Puerto
Rico choice of
law rules to
the facts.
It
stresses
that
none
____
contract, performance
of
the
acts
--
negotiation
of
the
It points out
in Puerto Rico.
The Supreme
actions.
F.
Supp.
79, 82
(D.P.R. 1990).
Thus, "the
issue should
apply."
this
recourse
the
Conflict
of the
to the disputed
question,
laws
745
to
of Laws is appropriate.
Id.
___
In
Restatement
determining
(Second)
of
___
188).
Under
Section
188 of
the
Restatement, absent
-77
contractual
choice
of law,
the contacts
to be
taken into
(a)
(b)
(c)
(d)
subject matter
of
the contract, and
(e)
place
of
corporation
and
place
of
The
places
of
contracting
contract
in question
States.
discuss the
occurred
contract; they
"[s]tanding alone,
in
188 (1971).
and
the
continental
met in St.
also spoke
Id.
the
United
Louis, Missouri, to
by phone.
insignificant contact."
negotiating
188 cmt. e.
However,
is a relatively
___
The
part, in
performance of
ATAPCO's
customer
Missouri.
The goods
to the point of
trailer
contract takes
to purchase products
or
the
to
merchandise.
the
from ATAPCO,
service
it places
offices
in
an order
Pennsylvania
embarkation.
Pennsylvania
Sometimes
office
-88
place, in
with
or
in New Jersey
Capen's sends a
to
pick
up
the
in Puerto Rico --
to sell
state
where
practice
is to
contract
See Id.
___ ___
provides
be pursued
has an
that
given
obvious interest
business
in the
business practice.").
view.
If the
products
________
sold
by ATAPCO,
and
subject matter,
(and
then by
they start
Capen's,
are considered
out in Pennsylvania
or Missouri
are
the
shipped to
Puerto
contracts between
Rico,
they
become the
subject
of
in Puerto Rico.
out
The
status of
other subject
Capen's as
merchandise.
matter of
This, it
seems clear,
Rico.
than,
say, the
price of
delivery to Capen's.
the contract
the goods or
is the
of ATAPCO's
is located
in Puerto
is in dispute, rather
the manner
of their
exclusive
distributor-ship was
to enable Capen's to
The
-99
does
not
point
to
Puerto
Rico.
ATAPCO,
Missouri
corporation,
and
also
apparently
Kentucky.
of
conducts
in Pennsylvania
business
in
and Missouri
Maryland
and
business
there.
Capen's
does
not have
any
offices,
have
however,
regularly send
or phone number.
employees
to Puerto
Capen's does,
Rico to
take
Tort Factors
Tort Factors
____________
F.
Supp. ___,
1995).
___ 1995
WL 707412,
at
2 (D.P.R.
Nov. 28,
"[i]f no
shall have
for the
executed a
termination . .
tortious act
. the
principal
and
The Restatement of
in
tort
action the
Conflict of Laws
law
of
the
state
provides that
with
the
most
controls.
of Conflict
(1971).
Restatement (Second)
The
following
contacts
should
of Laws
be
taken
consideration:
(a)
(b)
-1010
145
into
(c)
place
incorporation
and
place
of
(d)
between
the
parties
is
centered.
Id.
___
where the
terminated.
The
Puerto Rico
274
F.
market.
Supp.
corporation
719, 722
(D.P.R.
1967)
(where an
Illinois
disposal of
the . . .
dealer" is a tortious
in Puerto Rico").
terminations,
Puerto Rico,
the site
manner
of the
Additionally,
for wrongful
injury,
. . .
termination of
has a
See Restatement
___
plaintiff"
of the
145
of the
its distributorship,
the
defendant
executed the
tortious act
within Puerto
Rico.).
General Considerations
General Considerations
______________________
Section 6 of
-1111
of Conflict
Where
considered:
(a)
international systems,
(b)
(c)
interested
interests
states
of
and
those
the
states
relative
in
the
(d)
tions,
(e)
(f)
(g)
Taking
the
policy
of
commercial
issues
6 (1971).
first,
courts
distributors
working
in
Puerto
103,
Law 75 is
have
interests
Rico."
F. Supp.
in their strength.'"
F.
Superior,
________
-1212
The
Puerto
Dealer's Act
Rico
economic
was enacted
Legislature to
exploitation of
by the
prevent the
local dealers.
Puerto
vulnerable
Rico
to
were
particularly
summary termination
a favorable
once
market
Id. at 843-44.
___
embodying
a "strong
public
policy."
Country Pride Foods, Ltd., 858 F.2d 817, 820 (1st Cir. 1988)
__________________________
(response
question
Puerto
of
Puerto
Supreme
Rico
has
distributorships
are,
Rico
that "due
The
substantial
Court
certified
interest
reparation" is
to
in
seeing
that
provided to
them.
Bonn v.
_______
(1st Cir.
1975).
in the
a dealer to
be a
resident of
Puerto
Rico,
to
be
Commonwealth,
or
to have
office,
authorized
to
a place
of
do
business
business such
ested
Dealer:
in a dealer's
contract because of
Rico
the
in his charge
distribution,
concession or representation
merchandise or service;
-1313
of a
the
as an
Section 278 of
(a)
in
in
agency,
given
(b)
Dealer's contract:
established
principal
between
or
relationship
dealer
grantor
and
whereby
a
and
relationship,
effectively
distribution of a
the former
takes
charge
actually
of
the
merchandise, or of the
rendering of a service, by
concession or
P.R.
Laws Ann.
tit.
Accordingly, Capen's
10,
278
appears to
(1976
satisfy
and
Supp.
1989).
the definition
of
protecting
Missouri provides
notice
to
agreement
that a
that,
407.410
franchisee of
and
(1974
in
the
termination
absence
damages.
and Supp.
of
ninety days'
of
a franchise
such
notice,
1975).
The law,
407.405,
however,
only
of "franchise").
It
no franchise
presence in Missouri.
New
Jersey
termination
of
has a
Franchise
(60 days)
franchise
Practices Act
must be given
agreement
and
which
prior to
that
such
the
Stat.
be based
56:10-5 (1971).
on "good cause."
N.J.
Rev.
-1414
to
Jersey.
Id.
___
56:10-4.
Because
policy of
all three
jurisdictions evince
or
New
Jersey.
By
New Jersey
markets
are concerned
to
only those
offend Missouri
restricting protection
a general
have established
which Capen's
2403 (1989),
informational
documents
statement
Department
of assets
(certificate
and liabilities)
of State to
of
incorporation,
with the
qualify as doing
Puerto Rico
business in Puerto
Rico.
Section 2403
otherwise
the orders
and fill
Puerto Rico
Section
business
from the
2403 exempts
orders by mail
shipping the
ATAPCO argues
or
goods into
that because
to qualify
to do
protecting the
presents
outside.
by
those corporations
no
status of Capen's
cases in
support
-1515
as a distributor.
of this
contention
ATAPCO
and, as
is nothing in
giving
This
injunctive
is
relief.
an appeal
When
from
an appeal
of
grant of
comes
to us
law of
in
that
injunction are to be
preliminary
understood as
as
the case.
F.2d 4,
6 (1st
rather than
Narragansett
____________
Cir. 1991);
______ ____________________________________
consideration, the
to
this
hybrid
contract/tort
district
court properly
Dealer's
Act for
the
action
and,
made reference
purpose of
the
perforce,
the
to the
Puerto Rico
motion to
impose
provisional remedy.
Because ATAPCO
other factors
note, however,
after reviewing
that
we agree
the district
with
considered in issuing
we need not
must
consider them.
the record
court's
irreparable harm
carefully,
findings:
unless a
We
that
preliminary
by
ATAPCO
interest
by reason
would not
of such
relief;
be adversely
-1616
injunction.
Affirmed.
Affirmed.
_________
and that
affected by
the public
a preliminary
-1717