Pampered Chef, Ltd., The v. Alexanian

Filing 284

MEMORANDUM Opinion and Order Signed by the Honorable Jeffrey Cole on 10/7/2011. (gmr, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

THE PAMPERED CHEF,
Plaintiff,
vs.
SANDY ALEXANIAN, DON FUNT,
CHRISTINE LAURICH, LORI MITCHELL,
VALERIE NEWTON, and SHANNON PELL,
Defendants.

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No. 10 C 1399

Magistrate Judge Jeffrey Cole

MEMORANDUM OPINION AND ORDER

On May 7, 2010, Ms. Alexanian, acting through counsel – but not present counsel for her
and the other defendants – agreed to the entry of an “Agreed Preliminary Injunction” barring her
from, among other things, soliciting any person who is then under contract as a member of the
company’s independent contractor sales force to sell products or services for any other company
until February 1, 2012.1 Ms. Alexanian’s new counsel says that she agreed to the preliminary
injunction “[t]o avoid the hardships of Plaintiff’s scorched earth litigation tactics....” The agreed
preliminary injunction provided that “[e]ach of the parties may file a motion to modify or vacate this
Agreed Preliminary Injunction.” Quite apart from that provision, the court would have had the
power to do so anyway.
Thereafter, on July 14, 2011, following a several day evidentiary hearing and extensive

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This two-year period matched the two-year period in the non-solicitation clause in Ms.
Alexanian’s contract with Pampered Chef.

briefing, I denied The Pampered Chef’s motion for preliminary injunction. The Pampered Chef v.
Alexanian, _F.Supp. 2d_, 2011 WL 2746460 (N.D.Ill. 2011). By this time, Ms. Alexanian was no
longer the only defendant – as she was when the case was filed. There were now seven other
defendants. Not surprisingly, following the denial of the plaintiff’s motion for preliminary
injunctive relief, Ms. Alexanian wanted the agreed preliminary injunction, to which she voluntarily
consented, to be vacated. The Pampered Chef has objected, contending that Ms. Alexanian made
a deal and she should be required to live up to it.
The parties argue at some length over the appropriate standard to be applied in ruling on the
motion. But, even permanent injunctions entered by consent may be modified in response to
changed circumstances. See United States v. Swift & Co., 286 U.S. 106, 114 (1932)(Cardozo, J.).
See also Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367, 393 (1992). It is Ms. Alexanian’s
contention that to continue the injunction against her in light of the denial of the motion for
preliminary injunction sought against her co-defendants would be exceedingly unfair since the
agreed findings in the preliminary injunction against her “are inconsistent with the Court’s recent
findings set for in the Court’s opinion denying Plaintiff’s motion for preliminary injunction against
Defendants Mitchell and Pell.” To maintain the injunction against Ms. Alexanian, it is argued,
would also be inconsistent with the refusal to enjoin Ms. Pell and Ms. Mitchell from engaging in the
same conduct that Ms. Alexanian cannot engage in.
The Pampered Chef understandably takes a different view, arguing that while consent
decrees are judicial acts, they have often been recognized as having many of the attributes of a
contract voluntarily undertaken, when parties have chosen to submit to a consent decree instead of
seeking a more favorable judgment upon litigation, “‘their burden under Rule 60(b) is perhaps even

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more formidable than had they litigated and lost.’” W.L. Gore & Associates, Inc. v. C.R. Bard, Inc.,
977 F.2d 558, 561 (Fed. Cir. 1992). Gore, like other cases cited by The Pampered Chef involved
a final order under Rule 60(b) and thus have limited utility here. In this case, what is involved is an
interlocutory order that is subject to modification at the court’s discretion.
At first blush, Ms. Alexanian’s argument is appealing. After all, why should she be enjoined
from engaging in the kind of solicitation that her co-defendants are free to pursue until some further
order of court. The argument would be unanswerable if the July 14th Memorandum Opinion and
Order had finally resolved the enforceability of The Pampered Chef’s non-solicitation clause. But
it was not, and it is important to underscore the limited nature of the determinations made in that
opinion and in any denial of a motion for preliminary injunction.
A preliminary injunction is preliminary, and involves “significantly different” inquiries than
resolution of a case on the merits. University of Texas v. Camenisch, 451 U.S. 390, 393(1981).
“The purpose of a preliminary injunction is merely to preserve the relative positions of the parties
until a trial on the merits can be held.” Id. at 395. Consequently, a plaintiff is not required to prove
its case in full at the preliminary injunction stage, and the findings of fact and conclusions of law
made by a court granting or denying a preliminary injunction are not binding at a trial on the merits.
Id. Thus understood, the seeming unfairness of requiring Ms. Alexanian to live up to the agreement
she voluntarily made at the beginning of the case – an agreement which she and her counsel had
concluded was beneficial to her interests – vanishes. No one can anticipate events still in the womb
of time. It is for that reasons that requiring compliance with voluntarily assumed obligations does
not assume or require clairvoyance. Parties disappointed by the unfolding of events following those
undertakings are not relieved from their obligations.
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But, Ms. Alexanian argues, Judge Zagel’s opinion in Tempel Steel Co. v. Bayer, 1997 WL
899753 (N.D.Ill. 1997) counsels that her motion to vacate the injunction be granted. There, the
parties agreed to a Consent Temporary Restraining Order on April 11, 1996, which enjoined
defendants from selling certain products. “A preliminary injunction hearing was set to determine
whether Defendants misappropriated any trade secrets in the Original Epstein Tester and whether
injunctive relief of the Consent Temporary Restraining Order should be continued.” Id. at *1.
(Emphasis supplied). At the end of the hearing, Judge Zagel concluded that there was no trade
secret, no misappropriation and that the circuitry that was in question could be readily duplicated
from the public domain. He also concluded that there is no violation of common law fraud and no
unfair competition under the Lanham Act with respect to the New Epstein Tester. Id. at *6.
Based on these findings, Judge Zagel vacated certain of the injunctive relief in the Agreed
TRO of October 11. However, other portions of the TRO remained in effect, as part of the
preliminary injunction. Id. His vacating of those portions of the agreed TRO occurred because the
very purpose of the preliminary injunction hearing was to determine what should and what should
not survive the TRO. The present case is thus not comparable to Tempel Steel.
The Motion to Vacate Agreed Preliminary Injunction [No. 265] is denied.

ENTERED:_____________________________________
UNITED STATES MAGISTRATE JUDGE
DATE: 10/7/11

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