Civil Procedure — preliminary injunctions

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure — preliminary injunctions

In a dispute between a franchisor and a franchisee over pricing policies, the franchisee was properly granted a temporary injunction pending resolution of the case.

“Steak N Shake argues that its current pricing policy is not like that of the hypothetical because its current pricing policy would not harm Stuller’s business and might actually be a more successful business model. Stuller strongly disagrees, and presents evidentiary support for the position that Steak N Shake’s policy would harm its business. The district court did not analyze these competing claims, and it did not address whether the implementation of Steak N Shake’s policy would harm Stuller’s business.1 The district court should have engaged in this analysis, but regardless, we can consider the record ourselves. See, e.g., Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., 549 F.3d 1079, 1087 (7th Cir. 2008) (completing the preliminary injunction analysis if the record contains sufficient evidence); Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc., 128 F.3d 1111, 1120 (7th Cir. 1997) (same); see also Kidwell v. Eisenhauer, 679 F.3d 957, 965 n.1 (7th Cir. 2012) (‘[W]e may affirm on any basis that appears in the record.’). Here, the record contains sufficient evidence to find, as a threshold matter, that Stuller would suffer irreparable harm if it was forced to implement Steak N Shake’s pricing policy. Specifically, Stuller has presented evidence that the policy would be a significant change to its business model and that it would negatively affect its revenue, possibly even to a considerable extent. We acknowledge that Steak N Shake contests the validity and strength of the evidence presented by Stuller, but that argument goes to the “sliding scale analysis” conducted by a court in deciding to grant or deny a preliminary injunction, and not to Stuller’s threshold requirements. In addition, if Stuller implemented Steak N Shake’s policy and subsequently prevailed on the merits of its case, it would be difficult to reestablish its previous business model without a loss of goodwill and reputation. Because this is harm that cannot be ‘fully rectified by the final judgment after trial,’ it is irreparable. Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir. 1984).”

Affirmed.

11-2656 Stuller, Inc., v. Steak N Shake Enterprises, Inc.

Appeal from the United States District Court for the Central District of Illinois, Myerscough, J., Manion, J.