Mandatory Injunction • Immediate and Irreparable Harm • Breach • Adequate Compensation by Damages

Coffee Serv. Int’l Co. v. SXB Acquisitions, LLC, PICS No. 14-0034 (C.P. Philadelphia Aug. 1, 2013) Glazer, J. (6 pages).

Plaintiff, primary supplier of coffee products to defendant, did not establish that termination of agreement between the parties would cause it to suffer immediate and irreparable harm that could not be adequately compensated by money damages. Petition for mandatory injunction denied.

Plaintiff, CSI, a supplier of roasted coffee, entered into a “Roasting Agreement” with defendant, SXB, the franchisor of a chain of coffee shops. Pursuant to the agreement, CSI was to exclusively supply all coffee products to all the franchises of SXB. However, SXB notified CSI by letter that it was terminating the agreement because of numerous, unresolved defaults that were material breaches of the contract, and because CSI’s sole owner was declared insolvent by the bankruptcy court.

CSI filed a complaint against SXB, asserting claims of injunctive relief and breach of contract. It then filed a petition for a special and preliminary injunction, arguing that termination of the contract and SXB’s entering into business with a third party to provide substantially similar coffee products would cause CSI to suffer immediate and irreparable harm. CSI alleged that 100 percent of its business comes from SXB, and that termination of the agree-ment would force CSI to shut down its business, and fire 13 employees.

CSI requested the court to enter a mandatory injunction compelling SXB to maintain it business relations with CSI, and “to continue to require its franchisees to purchase all coffee products from CSI” pursuant to the agreement. The court of common pleas denied the petition.

A mandatory injunction commands the enjoined party to perform a specific act that will maintain the relationship between the parties, as opposed to a preventative injunction that forbids an act to preserve the status quo. Given this distinction, mandatory injunctive relief is subject to greater scrutiny, and must be issued more cautiously than a preventive injunction.

One of the six elements that a petitioner seeking mandatory injunctive relief must establish is that an injunction is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by damages. CSI asserts that it will be forced to close its doors permanently, and 13 of its employees may lose their jobs if SXB is not compelled to reinstate the Roasting Agreement and require its franchisees to purchase all coffee products from CSI. Although such a scenario is possible, CSI has not shown that it will suffer irreparable harm, which cannot be adequately compensated by money damages. SXB may not be compelled to continue to do business with CSI.