The Circuit has towed a similarly strict line on what constitutes irreparable injury. In Frank's GMC, the court stated that "the availability of adequate monetary damages belies a claim of irreparable injury." 847 F.2d at 102; accord Morton, 822 F.2d at 372. In Instant Air, the court stated: "We have never upheld an injunction where the claimed injury constituted a loss of money or loss capable of recoupment in a proper action at law." 882 F.2d at 801 (quoting Arthur Treacher's, 689 F.2d at 1145); see also Morton, 822 F.2d at 372 (no injunction to prevent termination of plaintiff's employment despite fact that significant cash flow problems and financial distress could follow).
Frank's GMC involved a dispute arising from the obligations of a franchise relationship. Frank's GMC had been a franchisee of General Motors Corp. ("GM") since 1937, and since 1973 had sold a full line of GM trucks. 847 F.2d at 100. In 1986, GM advised Frank's GMC that it had entered into a joint venture with Volvo. Id. Pursuant to this venture, GM was no longer going to manufacture or supply parts for its former line of heavy-duty trucks. Id. Frank's GMC was directed by GM to cease taking orders for GM heavy-duty trucks and was advised that requests for parts would only be filled on a case-by-case basis. Id. Moreover, Frank's GMC was not selected to market or sell the new line of trucks that was to be manufactured jointly by GM and Volvo. Id.
Frank's GMC sued GM for damages and for an injunction preventing GM from discontinuing its supply of heavy-duty trucks and parts. Id. Frank's GMC asserted that it had lost and would continue to lose significant sales because it could not sell a full line of GM trucks. Id. at 102. According to Frank's GMC this loss of sales would cause a corresponding decrease in service contracts, exacerbating the loss to its service business that had already been caused by GM's failure to supply parts and warranty support. Id. All of these facts and results, Frank's GMC claimed, would cause irreparable harm to its ongoing business. Id.
The district court granted the injunction in favor of Frank's GMC; the Circuit reversed. The Circuit noted that "what clearly stands out in all of Frank's GMC's arguments is that, absent the ad interim relief provided by the district court, Frank's GMC would stand to lose sales and service customers, and therefore profits." Id. The court continued: "Even assuming for purposes of argument that Frank's GMC's assertions are true and that it will in fact suffer substantial lost profits as a result of GM's withdrawal from the heavy-truck market, the harm flowing therefrom is compensable by money damages ... and cannot satisfy the irreparable injury requirement." Id.
A similar result was reached in Instant Air Freight, 882 F.2d 797. In that case, Instant Air Freight ("Instant Air") and C.F. Air Freight ("C.F.") entered into a four year contract under which Instant Air would provide air freight handling services for C.F. Id. at 798. Handling C.F.'s freight constituted eighty percent of Instant Air's business. Id. Before the contract had expired, C.F. informed Instant Air that its Elizabeth, New Jersey terminal would be closed. Id. It was through this terminal that all of the C.F. freight handled by Instant Air passed. Id.
In seeking a preliminary injunction, Instant Air argued that (1) its business would be completely destroyed, (2) it would be required to lay off most, if not all of its seventy employees and (3) its goodwill and business reputation would be destroyed. Id. at 801. In short, Instant Air argued, it would "lose everything it has built over the past two decades." Id.
Recognizing that absent an injunction Instant Air would "undoubtedly be forced to shutdown or significantly curtail its operations," the district court granted the injunction. Id. at 798-99. On appeal, the Circuit reversed, stating: "The bottom line in this case, as in Frank's GMC, centers on the loss of money which Instant [Air] will suffer as a result of the contract termination. Here the money damages which Instant [Air] alleges it is suffering are capable of ascertainment and award at final judgement if Instant [Air] prevails. These money damages will fully compensate Instant [Air] for its losses." Id. at 801.
In Arthur Treacher's, the plaintiff also argued that it would go out of business without an injunction requiring one of its franchises to pay $ 200,00.00 in over due royalties. 689 F.2d at 1141. In granting the injunction, the district court reasoned: "'If Arthur Treacher's ultimately prevails at trial, any award of money damages could hardly compensate it if it is bankrupt and without a franchise system which took years to develop.'" Id. (quoting district court). The Circuit rejected this argument and denied the injunction.
Finally, the Circuit has indicated that "'establishing a risk of irreparable harm is not enough. A plaintiff has the burden of proving a clear showing of immediate irreparable injury.'" Hoxworth, 903 F.2d at 205 (quoting Ecri v. McGraw-Hill, Inc., 809 F.2d 223, 225 (3d Cir. 1987)).
In the present context, the Circuit explained that a union satisfied its burden of showing irreparable harm because
even if the union succeeds at arbitration against [the employer,] it is likely to receive only an award of money damages . .. for [the employer's] breach of the collective bargaining agreement. A complete dissolution and distribution of [the employer's] assets prior to the arbitration, however, would render such an award meaningless, essentially frustrate the arbitration process, and effectively allow [the employer] to escape its contractual promise to arbitrate disputes over interpretation of the collective bargaining agreement.
Sky Vue, 759 F.2d at 1099.
In the instant case, the Union relies on Panoramic to support its allegation of irreparable injury. Moving Brief at 8 ("The instant case is nearly on all fours with Panoramic in that both involve the sale of company assets.... The logic of that decision finding irreparable injury applies with equal if not greater force in the instant matter."). The facts of Panoramic are, however, distinguishable from the instant action.
In Panoramic, a corporation sought to sell off an entire division despite an ongoing collective bargaining agreement with employees who were not guaranteed employment by the purchaser. 668 F.2d at 278. The union sought a status quo injunction to halt the sale prior to arbitration to determine whether a clause in the collective bargaining agreement required the corporation to secure from the purchaser an assumption of the labor agreement. Id. at 279. Under these circumstances, the Panoramic court, which explained that it followed "the practice of most courts and focus[ed] into a single concept the twin ideas of irreparable injury and frustration of arbitration," held the "sale of the ... division, were it not for the preliminary injunction issued by the district court, would have resulted in a frustration of the arbitral process and would have threatened irreparable injury to the union and its members." Id. at 286. The court based its decision on the speculative nature of the relief, assuming the union prevailed in arbitration, against the purchaser. Id. at 288.
In the instant case, however, there is no allegation that Harrison is dissolving its assets. It appears that, as Harrison contends: "Harrison and its parent corporation are ongoing fully capitalized corporations with no present intent to divest themselves of assets or dissolve." Opp. Brief at 5. It appears, therefore, Harrison would be able to pay an award, if an arbitrator rules that it breached the Agreement. Moreover, despite the Union's contention at the Hearing that Harrison purports to be selling its assets in a manner that they claim is final and permanent," see Hearing Tr. at 4, such sales would add to the companies balance sheet and, therefore, its ability to pay future damages.
As discussed, a status quo injunction does not appear to be necessary to prevent frustration of the arbitration process. Most of the sales and transfers complained of occurred prior to the Union's institution of the Order To Show Cause. Additionally, it appears the injunctive relief sought in the instant case will not merely maintain the status quo, as did the relief in Panoramic. See 668 F.2d at 279. Instead, the requested relief in the instant case seeks to change the status quo by rescinding previous sales and transfers of routes prior to arbitration. Such preliminary relief is not appropriate, nor is it necessary to preserve the arbitral process. The Union can have its dispute with Harrison arbitrated, as provided in the Agreement, and it appears the available remedies will not change in the absence of injunctive relief.
E. Expedited Arbitration
While the Union has not satisfied the requirements for an award of injunctive relief in this action, this does not impact its request for expedited arbitration. As discussed, it is undisputed that the instant dispute is arbitrable. See supra 15-17. At the Hearing, counsel for the Union reminded the court that the Union was seeking expedited arbitration, and would "very much appreciate" such relief, even if the injunctive relief it sought was denied. Hearing Tr. at 29.
Harrison has not in its opposition brief, nor at the Hearing, articulated any opposition to the Union's request for expedited arbitration. Moreover, it appears to be in the interest of both parties to resolve their dispute in a timely manner. This does not end the inquiry, however.
While expeditious arbitration may be appropriate, the Union has provided no authority to justify such relief. It appears the decision as to the appropriate manner and speed of arbitration should be left up to the arbitrator. To do otherwise, may intrude upon, disrupt or usurp the function and perhaps effectiveness of the arbitrator and the proceedings. Accordingly, the Union's request for an order directing expedited arbitration is denied.
For the reasons set forth above, the Union's motion for injunctive relief is denied; the Union's request for expedited arbitration is denied.
Dated: 6 December 1994