Thermo Pressed Laminates, LLC v. Arclin USA LLC et al

Filing 69

ORDER: Granting in Part Denying in Part Amended Motion for a Preliminary Injunction 31 ). Defendants are restrained from refusing to sell saturated melamine paper to Plaintiff consistent with the terms and conditions that prevailed between the parties immediately prior to August 2, 2013. Plaintiff is ordered to provide security in the amount of $100. This order is effective October 25, 2013 at 12:00 p.m., consistent with my ruling from the bench. It will remain in effect pending resolution of this action or until otherwise ordered by the court. Signed on 10/28/2013 by Judge Owen M. Panner. (dkj)

IN THE UNITED STATES DilTRICT COURT
I

FOR THE DISTRICT OF OREGON
I

MEDFORD DIVISION
THERMO PRESSED LAMINATES
LLC, an Oregon Corporation,
Plaintiffs,

No. 1:13-cv-01330-CL

ORDER

v.
ARCLIN USA LLC, a Delaware
limited liability company,
ARCLIN SURFACES, LLC, a
Delaware limited liability
company,
Defendants.

PANNER, J.
Plaintiff moves for a preliminary injunction ordering
Defendants to continue selling saturated melamine paper to
I

Plaintiff and to sell those products at the same price
Defendants provide to their most favorld customer.

th~t

Plaintiff's

motion is GRANTED in part and DENIED ih part.

Background
Plaintiff owns and operates a manufacturing plant in Klamath
Falls, Oregon.

Plaintiff produces thekmo-fused melamine and
I

laminated panels for resale throughout the United States.
1 - ORDER

Defendants produce saturated melamine paper, a vital component in
the production of thermo-fused melamine and laminated panels.
Defendants are alleged to have acquired a dominant position in
the North American market for melamine paper.
For over 13 years,

Plaintiff has purchased saturated

melamine paper from Defendants.

Melamine paper is one of the

largest costs associated with Plaintiff's operation.

For the

most part, Plaintiff operated profitably until the 2008
recession.

For the last several years, Plaintiff has operated at

a loss.
In April, 2013, Plaintiff discovered that Defendants had
been selling melamine paper to one of Plaintiff's competitors at
a price lower than Plaintiff received.

Plaintiff then brought

this action alleging price discrimination and seeking preliminary
and permanent injunctions, as well as damages.
Shortly after Plaintiff filed its motion, Defendants
informed Plaintiff that, because of this action, Defendants had
decided not to accept any orders for melamine paper from
Plaintiff.

Defendants also imposed new conditions on the payment

of outstanding orders.
In response, Plaintiff sought and obtained a temporary
restraining order requiring Defendant to continue to supply
melamine papei consistent with the terms and conditions
prevailing between the parties immediately before the
commencement of litigation.
Legal Standards

The party seeking a preliminary injunction "must establish

2 - ORDER

that he is likely to succeed on the merits, that he is likely to
suffer irreparable harm in the absence of preliminary relief,
that the balance of equities tips in his favor,
injunction is in the public interest."

and that an

Winter v. Natural

Resources Defense Council, Inc., 555 U.S. 7, 20 (2008).

The

plaintiff "must establish that irreparable harm is likely, not
just possible."

Alliance For The Wild Rockies v. Cottrell,632

F. 3d 1127, 1131 (9th Cir. 2011).

The Ninth Circuit has "glossed

that standard by adding that there is a

'sliding scale' approach

which allows a plaintiff to obtain an injunction where he has
only shown serious questions going to the merits and a balance of
hardships that tips sharply towards the plaintiff so long as the
plaintiff also shows that there is a likelihood of irreparable
injury and that the injunction is in the public interest."
Developmental Serv. Network v. Douglas,

666 F.3d 540, 544

(9th

Cir. 2011) (internal quotes and citations omitted) .
A preliminary injunction can take two forms.

A "prohibitory

injunction" prevents a party from taking action and preserves the
status quo pending a trial on the merits.

Marlyn Nutraceuticals,

Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 878-79 (9th Cir.
2009).

By contrast, a "mandatory injunction" requires a party to

take some action.

Id.

A mandatory injunction "goes well beyond

simply maintaining the status quo Pendente lite,

[such

injunctions are] particularly disfavored, and should not be
issued unless the facts and law clearly favor the moving party."
Anderson v. United States, 612 F.2d 1112, 1114

(9th Cir.

1979) (quoting Martinez v. Matthews, 544 F.2d 1233)
1976).

(5th Cir.

Such injunctions should not be granted "unless extreme or

3 - ORDER

very serious damage will result and are not issued ln doubtful
cases or where the injury complained of is capable of
compensation in damages."

Id. at 1115 (quoting Clune v.

Publishers' Ass'n of New York City, 214 F.Supp. 520, 531)
(S.D.N.Y. 1963).
The findings of fact and conclusions of law made by a court
ln granting a preliminary injunction are not binding at trial on
the merits.

Univ. of Texas v. Camenisch, 451 U.S. 390, 395

( 1981) .
Discussion

Plaintiff's Amended Motion for a Preliminary Injunction
requests two distinct forms of relief.

First, Plaintiff moves

that Defendants be required to continue selling melamine paper to
Plaintiff.

Second, Plaintiff moves that Defendants be required

to provide melamine paper to Plaintiff at the prices offered to
Defendants' "most favored customers."
I. Likelihood of Success on the Merits

Plaintiff alleges that Defendants' refusal to sell violates
the Robinson-Patman Act and Section 2 of the Sherman Act.
To prevail on a motion for preliminary injunction, Plaintiff
must show "serious questions going to the merits."
F.3d 544.

Douglas, 666

Although likelihood of success may be outweighed by

other elements under the sliding scale approach, "if a plaintiff
fails to show that he has some chance on the merits, that ends
the matter."

Id.

I conclude that Plaintiff has made a sufficient showing of
serious questions going to the merits.

4 - ORDER

II. Likelihood of Irreparable Harm

The record suggests that, without a preliminary injunction
to enforce the status quo,

Plaintiff will be forced to cease

operations in the near future.

It is clear that if Plaintiff is

forced to cease operations, the

comp~ny

will go out of business.

The record makes it clear that monetary damages will not be
sufficient to repair that injury.

I therefore conclude that

Plaintiff is likely to suffer irreparable harm if a preliminary
injunction is not granted requiring Defendants to continue doing
business with Plaintiff.
III. The Balance of Equities

Based on the record it appears that, for the time being,
Plaintiff cannot carry on its business without access to melamine
paper from Defendants.

Allowing Defendants to cut off

Plaintiff's access to melamine paper would likely force Plaintiff
out of business relatively quickly.
The harm posed to Defendants on this issue is, by contrast,
relatively slight.

Although they have an acknowledged interest

in choosing their customers, the record does not suggest that
continuing to do business with Plaintiff pending a trial on the
merits will impose any severe hardships on Defendants.

I

conclude that the balance of equities tips sharply ln favor of
the Plaintiff on the issue of requiring Defendants to continue to
do business with Plaintiff.
On the preferential pricing issue, I note that Plaintiff has
apparently done business with Defendants for many years on the
existing terms.

It would undoubtably be to Plaintiff's benefit

if Defendants were required to extend it preferential pricing,
5 - ORDER

but that must be weighed against the harm to Defendants.

I find

that the equities do not tip in Plaintiff's favor on that issue.
IV. The Public Interest
The record establishes that Plaintiff's continued operation
is economically significant to the City of Klamath Falls, both in
terms o.f the workers employed by Plaintiff and the loans extended
to Plaintiff by the city and state governments.

Those public

entities would be harmed by Plaintiff going out of business.

I

conclude that the public interest weighs in favor of Plaintiff on
this point.
V. Security

"The court may issue a preliminary injunction or a temporary
restraining order only if the movant gives security in an amount
that the court considers proper to pay the costs and damages
sustained by any party found to have been wrongfully enjoined or
restrained."

Fed. R. Civ. P. 65(c).

The court is invested with

broad discretion in determining whether a bond is necessary, as
well as the amount required.

See Johnson v. Courturier, 572 F.3d

1067, 1086 (9th Cir. 2009).
As Defendants are enjoined only from refusing to do business
with Plaintiff consistent with the terms and conditions under
which the parties have historically operated, I conclude that a
large bond is not necessary.

Plaintiff is therefore ordered to

provide security in the amount of $100.
Conclusion

Plaintiff's Amended Motion for Preliminary Injunction (#31)
is GRANTED in part arid DENIED in part.

Defendants are restrained

from refusing to sell saturated melamine paper to Plaintiff

6 - ORDER

consistent with the terms and conditions that prevailed between
the parties immediately prior to August 2, 2013.
ordered to provide security in the amount of $100.
eff~ctive

Plaintiff is
This order is

October 25, 2013 at 12:00 p.m., consistent with my

ruling from the bench.

It will remain in effect pending

resolution of this action or until otherwise ordered by the
court.
IT IS SO ORDERED.
DATED this

~ day of October, 2013.

tjJ.'f!)O C(, ")/{.

Owen M. Panner
United States District Judge

7 - ORDER