Woodman's Food Market, Inc. v. The Clorox Company et al

Filing 91

ORDER that plaintiff Woodman's Food Market, Inc.'s 2 Motion for a Preliminary Injunction is DENIED. Signed by Magistrate Judge Stephen L. Crocker on 5/28/15. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
________________________________________________________________________________________
WOODMAN’S FOOD MARKET, INC.,
OPINION AND ORDER
Plaintiff,
v.

14-cv-734-slc

THE CLOROX COMPANY and
THE CLOROX SALES COMPANY,
Defendants.

In this antitrust case, plaintiff Woodman’s Food Market, Inc. has moved for a
preliminary injunction to “maintain the status quo” in its business dealings with defendants The
Clorox Company and The Clorox Sales Company (“Clorox”).

Until October 1, 2014,

Woodman’s had purchased a variety of “large pack” products from Clorox. In September 2014,
Clorox informed Woodman’s that it was sorting its retailer customers into categories such as
“general market” and “club” stores. Starting October 1, 2014, only club stores could buy certain
large pack products from Clorox. Because Clorox had classified Woodman’s as a general market
store, Woodman’s no longer could purchase large pack products from Clorox.
Unable to persuade Clorox to change its mind, Woodman’s filed this lawsuit under the
price discrimination provisions of the Robinson-Patman Act, 15 U.S.C. §§ 13(a), (d) and (e).
Dkt. 1. Clorox parried by unilaterally ending all business dealings with Woodman’s on February
24, 2015. Clorox then moved to dismiss Woodman’s complaint for lack of jurisdiction, arguing
that Woodman’s was no longer a “purchaser” under the Act. On April 27, 2015, this court
found that Woodman’s may still qualify as a purchaser with standing under the Act because
Woodman’s continues to purchase Clorox products through wholesalers. Dkt. 77. I also

permitted Woodman’s to amend its complaint to add a claim of conspiracy to restrain trade
under § 1 of the Sherman Act. See Am. Compl., dkt. 78.
Woodman’s has clarified that its request for a preliminary injunction is limited to its
claims under the Robinson-Patman Act. Woodman’s asks that this court order Clorox to
“mak[e] available to Woodman’s products which Clorox sold to Woodman’s until September
30, 2014, and which Clorox continues to sell to other retailers competing with Woodman’s in
the distribution of Clorox products.” Dkt. 83.
I am declining to enter a preliminary injunction because Woodman’s has failed to show
that it will have no adequate remedy at law and it has failed to show that it will be irreparably
harmed if an injunction is not issued.

OPINION
A preliminary injunction is an extraordinary remedy that is “never to be indulged in
except in a case clearly demanding it.” Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the USA,
Inc., 549 F.3d 1079, 1085 (7th Cir. 2008) (internal citations and quotations omitted). The party
seeking a preliminary injunction must clearly demonstrate that it is entitled to the relief it seeks.
Goodman v. Ill. Dep't of Fin. & Prof'l Regulation, 430 F.3d 432, 437 (7th Cir. 2005).
To obtain a preliminary injunction, the moving party must meet these threshold
requirements: (1) it has no adequate remedy at law; (2) it will suffer irreparable harm if a
preliminary injunction is denied; and (3) there is some likelihood of success on the merits of the
claim. Girl Scouts, 549 F.3d at 1086 (citing Ty, Inc. v. The Jones Group, Inc., 237 F.3d 891, 895
(7th Cir. 2001)). If the moving party fails to establish any one of these requirements, then the

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court must deny the injunction. Id. (citing Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11
(7th Cir. 1992)). If the moving party meets the threshold burden, then the court proceeds to
the balancing phase, where it weighs the competing harms to the parties if an injunction is
granted or denied and also considers which outcome would be in the public interest. Id.; Planned
Parenthood of Ind., Inc. v. Comm'r of the Ind. State Dep't of Health, 699 F.3d 962, 972 (7th Cir.
2012); Ezell v. City of Chicago, 651 F.3d 684, 694 (7th Cir. 2011).
In this case, after the parties had completed their briefing on the preliminary injunction
motion, Woodman’s filed a motion to unseal documents that Clorox had filed under seal along
with Clorox’s response to the preliminary injunction motion. Dkt. 39. Clorox replied that it
was withdrawing its reliance on the sealed documents and dropping the related “meeting
competition defense” that it had raised in opposing the preliminary injunction. Dkt. 43 at 2-3.
Clorox contended that if this court reached the preliminary injunction motion, then it would
need to decide only two questions: (1) whether Plaintiff has stated a claim as a matter of law
under Section 2(e) of the Robinson-Patman Act and (2) whether Plaintiff is likely to incur
irreparable harm unless the Court orders Clorox to sell the products at issue to Plaintiff.”.1 Dkt.
43 at 2-3. Because I determined in the April 2015 order that Woodman’s has stated a claim
under § 2(e), it appears that the only remaining disputed issue is whether Woodman’s will suffer
irreparable harm if a preliminary injunction is not issued.

1

Although Clorox does not discuss whether W oodman’s has an adequate remedy at law, I note
that this requirement is closely related to that of irreparable harm, and courts often analyze the two
factors as one. M ilwaukee County Pavers Ass’n v. Fiedler, 707 F. Supp. 1016, 1033 (W .D. W is.) modified,
710 F. Supp. 1532 (W .D. W is. 1989) (citing Roland M achinery Co. v. Dresser Industries, Inc., 749 F.2d
380, 383-86 (7 th Cir. 1984)).

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To show irreparable harm, Woodman’s must establish that monetary damages are
“seriously deficient as a remedy for the harm suffered” and that the harm “cannot be prevented
or fully rectified by the final judgment after trial.” Roland Machinery Co. v. Dresser Industries, Inc.,
749 F.2d 380, 386 (7th Cir. 1984). See also 11A C. Wright, A. Miller & M. Kane, Federal Practice
and Procedure § 2948.1 at p. 129 (“[A] preliminary injunction usually will be denied if it appears
that the applicant has an adequate alternative remedy in the form of money damages or other
relief.”).
Woodman’s contends that an award of damages would not adequately compensate it for
its losses because it may forever lose current customers who wish to purchase large packs of
Clorox products. Woodman’s fears these customers will turn to club stores not only for the
large-pack items that Woodman’s no longer can provide but also their overall grocery needs.
Woodman’s argues that because it will not be able to measure such losses “with any degree of
certainty,” money damages cannot be an adequate remedy.
As Clorox observes, however, Woodman’s has presented no evidence to support its
position. Woodman’s relies solely on the affidavit of Clinton Woodman, vice president of
Woodman’s, who states that
Woodman’s is justifiably concerned that its current large pack
purchasers will stop buying their Clorox products from
Woodman’s once Woodman’s is forced to sell the smaller, more
expensive packs of those products and raise its prices on those
products due to the higher unit cost.
Woodman's is further concerned that those same customers, upon
learning that the large packs they prefer to purchase are still
available at Sam's Club and Costco, will stop shopping at
Woodman's and start purchasing those products, and other
products that, until now, they have been purchasing from
Woodman's, at Sam's Club and Costco.

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It would be extremely difficult, if not impossible, to calculate the
damages flowing from a realization of the concerns identified
above.
The loss of these large pack customers to their competitors, Sam's
Club and Costco, will irreparably harm Woodman's because it will
be impossible for Woodman's to determine and prove what
additional products those customers will purchase from Sam's Club
and Costco that, until now, they have purchased at Woodman's.
Dkt. 3 at ¶¶ 37-40.
Mr. Woodman undoubtedly believes what he says, but his conclusory and self-serving
statements are too conjectural to provide to support a finding of irreparable harm. See S & S
Sales Corp. v. Marvin Lumber & Cedar Co., 457 F. Supp. 2d 903, 908 (E.D. Wis. 2006) (finding
same with respect to distributor’s assertion that some dealers it served would go out of business
if manufacturer not enjoined from selling directly to dealers).
A plaintiff seeking preliminary relief must demonstrate that irreparable injury is likely in
the absence of an injunction. “Issuing a preliminary injunction based only on a possibility of
irreparable harm is inconsistent with [the] characterization of injunctive relief as an
extraordinary remedy that may only be awarded upon a clear showing.” Winter v. Natural
Resources Defense Council, Inc., 555 U.S. 7, 22 (2008) (emphasis added). See also East St. Louis
Laborers' Local 100 v. Bellon Wrecking & Salvage Co., 414 F.3d 700, 704 (7th Cir. 2005)
(“Speculative injuries do not justify this extraordinary remedy.”); Tom Doherty Associates, Inc. v.
Saban Entm't, Inc., 60 F.3d 27, 37 (2d Cir. 1995) (cited with approval in East St. Louis, 414 F.3d
at 704) (plaintiff cannot obtain preliminary injunction by “speculating about hypothetical future
injuries”).

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As Clorox points out, Woodman’s has not explained why it would not be able to calculate
its lost sales of large pack products by looking at past sales of these products and any decline in
its sale of similar products in alternative sizes. Also, why does Woodman’s believe that
customers who had bought large-pack Clorox products along with their other groceries would
cease all purchases of all other groceries from Woodman’s in favor of shopping exclusively at
club stores simply because those stores offered larger packages of a narrow range of goods?
Clinton Woodman states that Woodman’s competes with club stores for retail customers
“because of the large size of its stores.” Dkt. 3 at ¶ 12. But club stores specialize in sales of
large-sized products, not regular groceries. Although Woodman’s might lose its sales of large-pack
items without a preliminary injunction—a damage that is easily calculable—there is no evidence
from which this court may reasonably infer that Woodman’s also would lose sales of regularsized products. In fact, it is possible that sales of regular-sized Clorox products will increase if
customers remain loyal to Woodman’s and substitute more of the regular-sized packages for the
missing large packs. We just don’t know. Without some actual evidence from Woodman’s, it
is not reasonable to conclude that customers who purchase regular-sized packages of non-Clorox
products from Woodman’s will alter their shopping habits to Woodman’s detriment and begin
purchasing large-sized packages of these products from a club store when they are seeking largesized Clorox products.
Because Woodman’s has failed to meet the threshold requirement of irreparable harm–
and arguably the requirement of no adequate remedy at law–Woodman’s is not entitled to a
preliminary injunction. Girl Scouts, 549 F.3d at 1086.

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That’s pretty much the end of it, but in Girl Scouts, the Court of Appeals for the Seventh
Circuit stated that when a district court decides that a party moving for a preliminary injunction
has not satisfied one of the threshold requirements, the court nonetheless is encouraged to
conduct at least a cursory examination of all the other preliminary injunction considerations in
order to expedite appellate review and to protect the interests of the parties. Girl Scouts, 549
F.3d at 1087 (citations omitted). It is difficult to analyze the other factors in this case because
the parties have focused on the threshold requirement of irreparable harm, but I will quickly
review some of the other considerations.
The parties assume that because the court has determined that Woodman’s has stated
a claim under the Robinson-Patman Act, Woodman’s has some likelihood of success on the
merits—at least on the limited record currently before the court. However, this finding alone
does not outweigh the fact that Woodman’s has failed to establish either of the other two
threshold factors of irreparable harm or an inadequate remedy at law. The same is true of the
considerations related to the competing harms to the parties and the public interest. Although
Clorox appears to have abandoned its original arguments related to the competitive harm that
Clorox will suffer if it is forced to sell large-pack products to Woodman’s,2 this factor is at best
a wash because both parties describe their prospective harm in a speculative and conclusory
manner. Finally, the public interest that Woodman’s identifies is the desire for “unfettered
competition between all retailers” and the assurance that “all consumers can obtain Clorox’s
products at the least expense.” According to Woodman’s vice president, because club store

2

As previously noted, Clorox had included evidence related to the harm it would suffer from
the issuance of a preliminary injunction but later withdrew its reliance on that evidence when plaintiff
moved to unseal it. Dkt. 43.

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membership fees are $55 to $110 per year, customers will either be forced to pay higher prices
for large-pack Clorox products or will not be able to afford them at all. But if this is true, then
why would Woodman’s customers abandon Woodman’s in order to pay more for the larger
packages at Costco or Sam’s Club? This observation would seem to indicate that Woodman’s
customers are not going anywhere. In any event, Woodman’s has failed to adduce any evidence
to support its “concerns.”

It is unclear what large-pack products would be available to

customers, what these products would cost, whether there would be acceptable substitutes for
these products available at Woodman’s for similar prices and how consumers would calculate,
weigh and implement their shopping options.
In sum, because Woodman’s has failed to make the requisite showing on several key
factors, I am denying its motion for a preliminary injunction.

ORDER
IT IS ORDERED that plaintiff Woodman’s Food Market, Inc.’s motion for a preliminary
injunction, dkt. 2, is DENIED.

Entered this 28th day of May, 2015.
BY THE COURT:
/s/
STEPHEN L. CROCKER
Magistrate Judge

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