
USCA1 Opinion

	




          April 6, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-2301                         COASTAL FUELS OF PUERTO RICO, INC.,                                Plaintiff, Appellant,                                          v.                       CARIBBEAN PETROLEUM CORPORATION, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                  [Hon. Juan M. Perez-Gimenez, U.S. District Judge.]                                               ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Selya and Cyr, Circuit Judges.                                           ______________                                 ____________________            Michael  S.  Yauch  with whom  John  F.  Malley,  III,  McConnell,            __________________             ______________________   __________        Valdes, Kelly, Sifre, Griggs  & Ruiz-Suria and Neil O.  Bowman were on        __________________________________________     _______________        brief for Coastal Fuels of Puerto Rico, Inc.            Ruben T. Nigaglioni with whom  Jorge A. Antongiorgi,  and Ledesma,            ___________________            ____________________       ________        Palou & Miranda were on brief for Caribbean Petroleum Corporation.         _______________            Juan F. Doval  with whom Jorge R. Jimenez and Miguel Garcia Suarez            _____________            ________________     ____________________        were  on brief for  Harbor Fuel Service,  Inc. and Caribbean  Fuel Oil        Trading, Inc.                                 ____________________                                    April 6, 1993                                    April 6, 1993                                 ____________________                                          1                       BREYER, Chief Judge.  Coastal Fuels of Puerto Rico                               ___________             buys marine fuel  oil in San  Juan and resells  that oil  to             ocean-going  liners at berth in San Juan Harbor.  It brought             this antitrust  action against its local  fuel oil supplier,             Caribbean Petroleum Corporation  ("CAPECO"), and two of  its             competitors,   both  of  whom   CAPECO  supplies.    Coastal             basically claims that ever  since October 1991, when Coastal             entered the  San Juan  market, CAPECO has  charged Coastal's             two competitors prices that are significantly lower than the             prices  it   charges  Coastal.     This   unjustified  price             difference, says Coastal, violates the  Robinson-Patman Act,             15 U.S.C.   13, and the Sherman Act, 15 U.S.C.   1.  Coastal             asked the  district court to enter  a preliminary injunction             "requiring CAPECO  to provide fuel  oil to Coastal  on terms             and conditions no less  favorable than those made available"             to Coastal's competitors.  The district court decided not to             enter the  injunction.   Coastal  appeals.   We  affirm  the             decision.                       In  deciding  whether   to  issue  a   preliminary             injunction, a district court  must ask whether the plaintiff             is likely  to succeed on  the merits, whether  the plaintiff             will otherwise suffer irreparable harm, whether the benefits             of an injunction will, on balance, outweigh the burdens, and             whether   an  injunction  is  consistent  with  the  "public             interest."  Planned Parenthood  League v. Bellotti, 641 F.2d                         __________________________    ________             1006, 1009 (1st Cir. 1981);  Boston Celtics Ltd. Partnership                                          _______________________________             v. Shaw, 908  F.2d 1041, 1048 (1st  Cir. 1990).  This  court                ____             will normally give the district court considerable leeway in             making  its decision, at least where,  as here, the decision             rests  upon an  exercise of  judgment and  a record  that is             incomplete.   Indeed, normally we will  reverse the district             court's decision  on such matters  only if we  are convinced             that it "abused its discretion" or committed a "clear error"             of fact or related  law.  See, e.g., Massachusetts  Ass'n of                                       ___  ____  _______________________             Older Americans  v. Sharp,  700 F.2d  749, 751-52  (1st Cir.             _______________     _____             1983).  We can find no such error in the present case.                       For one thing, Coastal's "likelihood of success on             the  merits,"  is, at  best, uncertain.    On the  one hand,             Coastal   presented   witnesses  who   testified   to  facts             indicating significant price differences.  They said that:                       (1) After Coastal entered the San Juan market, the                       resale prices charged  by its competitors  (to the                       ships) dropped by nearly $1 per barrel;                       (2) Coastal's competitors' resale prices  were at,                       or below, the prices CAPECO charged Coastal;                       (3)  Coastal,  though  it  had  expected  to  earn                       profits,  lost $1.3  million during its  first ten                       months of operations;                                         -3-                                          3                       (4)  CAPECO (perhaps by mistake) once sent Coastal                       an  invoice showing  a price  of $1.45  per barrel                       less than the price CAPECO charged Coastal;                       ____                       (5) Two CAPECO  executives told Coastal executives                       that  CAPECO  was  charging Coastal's  competitors                       lower prices than CAPECO charged Coastal.                       On  the  other hand,  the  record  is not  at  all             specific about the prices charged.  Nowhere does  it contain             figures,  or even  estimates,  of the  actual prices  either             Coastal, or Coastal's competitors paid for fuel oil.  At the             same time, it contains other evidence that militates against             an eventual finding of unlawful behavior.  Cross-examination             of Coastal's witnesses revealed  that, when CAPECO officials             told  them  CAPECO charged  Coastal's competitors  less, the             officials  immediately  added  that  the  price  differences             reflected  "different contract"  terms.   The  evidence also                         __________________   _____             shows  that  CAPECO's   per  barrel  prices   diminished  as             customers ordered in  greater volumes --  a kind of  volume-             related pricing apparently commonplace  in the oil industry.             Coastal apparently  paid "spot sales" prices for oil, and it             may have bought  in somewhat lower  volumes.  The  Robinson-             Patman   Act   does   not   prohibit   volume-related  price             differences that  reflect genuine cost differences.   See 15                                                                   ___             U.S.C.    13(a); FTC  v. Morton  Salt Co., 334  U.S. 37,  48                              ___     ________________             (1948); Frederick  M. Rowe,  Price Discrimination Under  the                                          _______________________________                                         -4-                                          4             Robinson-Patman  Act, ch. 10 at 265-321 (1962).  Nor does it             ____________________             prohibit price  differences between spot sales and long-term             contract  sales that  reflect  different market  conditions.             See Texas Gulf  Sulphur Co. v. J.  R. Simplot Co., 418  F.2d             ___ _______________________    __________________             793, 806-08 (9th  Cir. 1969); Rowe, supra,    4.2 at 50, ch.                                                 _____             11 at 322-29.                       It  may  well be  that,  at  trial, Coastal  would             produce more specific  price information, CAPECO  would fail             to  demonstrate  "cost  justification," and,  the  potential             cost,  or market,  related  differences  between "spot"  and             "contract" sales would evaporate. But, the opposite may also             prove true.  At this stage, a court could reasonably want to             see  more evidence  -- insisting that  the plaintiff  make a             somewhat  stronger,  more  specific,  showing  of  a  likely             violation of law, including a probability of overcoming what             the  evidence  now shows  as  plausible  defenses --  before             finding  a likelihood of  success on the  merits. See, e.g.,                                                               ___  ____             Atari  Games Corp.  v. Nintendo  of America, Inc.,  975 F.2d             __________________     __________________________             832, 837  (Fed. Cir. 1992) (plaintiff  must show "likelihood             that  it will overcome . . . defense"); New England Braiding                                                     ____________________             Co.  v. A.W. Chesterton Co., 970 F.2d 878, 882-83 (Fed. Cir.             ___     ___________________             1992) (same).  But cf. Dallas Cowboys Cheerleaders, Inc.  v.                            _______ _________________________________                                         -5-                                          5             Scoreboard  Posters, Inc.,  600  F.2d 1184,  1188 (5th  Cir.             ________________________             1979).                       For another thing, the  district court did not err             in finding that Coastal  would not suffer "irreparable harm"             that a later damage award could not avoid.  On the one hand,             Coastal presented two witnesses  who testified to such harm.             These Coastal executives said, for example, that:                       (1) "[F]uel from CAPECO  is the only practical way                       to purchase fuel in the harbor."                       (2)  "[I]t's absolutely  imperative that  you have                       the  supply from  CAPECO  refinery  it's the  only                       locally produced product from San Juan harbor, and                       without that access on  equal basis to that supply                       you cannot compete in San Juan harbor."                       (3) "[W]e are sustaining  losses in here, . .  . I                       feel it's  damaging our trade mark,  and our brand                       and  our  reputation, and  I  don't  think we  can                       continue doing business like this."                        (4) Withdrawal from  San Juan Harbor  "would serve                       irreparable damage upon Coastal's name  which goes                       back to 1915 in the form of serving [marine] . . .                       fuel in 20 other ports that we supply. . . ."                       On the other hand, cross-examination revealed that             Coastal is  a subsidiary of a large  firm (of the same name)             that sells marine  fuel in 20 other ports; that, on at least             three  occasions, Coastal  has imported  marine fuel  to San             Juan  (for resale)  from  its parent  company's refinery  in             Aruba;  that CAPECO  stored at  least some of  this imported             fuel oil for Coastal  in CAPECO's San Juan  facilities; that                                         -6-                                          6             Coastal also, on at  least one occasion, purchased  fuel oil             from  Sun Oil, apparently in Puerto Rico; and that Coastal's             witnesses (despite their assurances that importation was not             possible) were not familiar with the relevant prices.                         Given  this  record,  we  cannot  second-guess the             district court's judgment that  Coastal had shown neither an             inability to  survive (during the course  of the litigation)             on imported oil, nor  a potential loss of "goodwill"  that a             later damage award could not readily compensate.  Appellants             presently point out  that the  courts possess  the power  to             issue  a business-preserving  injunction, at  least where  a             future damage  remedy may prove inadequate.   Compare, e.g.,                                                           _______  ___             Semmes Motors, Inc. v.  Ford Motor Co., 429 F.2d  1197, 1205             ___________________     ______________             (2d Cir. 1970) (injunction  proper to prevent termination of             business) and Jacobson & Co. v. Armstrong Cork Co., 548 F.2d                       ___ ______________    __________________             438,  444-45 (2d  Cir. 1977)  (injunction proper  to prevent             loss of customers) with Kenworth  of Boston, Inc. v.  Paccar                                ____ _________________________     ______             Financial  Corp., 735 F.2d 622, 625 (1st Cir. 1984) (no real             ________________             threat of business closure)  and Goldie's Bookstore, Inc. v.                                          ___ ________________________             Superior  Court of California,  739 F.2d 466,  472 (9th Cir.             _____________________________             1984) (insufficient  evidence of "goodwill" loss).   But, we             also agree with the district court that plaintiff failed  to                                         -7-                                          7             demonstrate   the  existence  of  circumstances  that  would             require the exercise of that power in this case.                        The upshot is a preliminary injunction record that             tends  to  show price  differences,  that  is unclear  about             amounts,   that  suggests   the  existence   of  significant             defenses, and that is not particularly convincing in respect             to  "irreparable   harm."    Were   "price  differences"  an             unmitigated  evil,  the case  for  a preliminary  injunction             would be stronger.  But, as we have previously stated, those             who wrote  the Robinson-Patman  Act had  pro-competitive (as                                                                 ____             well as  pro-competitor) objectives in mind.   See Monahan's                                  __                        ___ _________             Marine Inc. v. Boston  Whaler, Inc., 866 F.2d 525,  529 (1st             ___________    ____________________             Cir.  1989).    And,  price  differences,  based  upon  cost             savings, will sometimes have  a pro-competitive impact.  Cf.                                                                      ___             id.  (recognizing  anti-competitive  dangers  of  forbidding             ___             selective,  but  non-predatory,  price cutting).    Thus, we             understand  the  district  court's   hesitancy  to  issue  a             preliminary injunction, not only  without a stronger showing             of "irreparable  harm," but also without  knowing more about             the  facts of  the  case.   Its decision,  in  our view,  is             lawful.                       We add  two  further  points.    First,  Coastal's             complaint also asserts that CAPECO and Coastal's competitors                                         -8-                                          8             violated  the Sherman Act, 15 U.S.C.   1.  Coastal's request             for   a  preliminary  injunction,   however,  rested  almost             entirely upon its Robinson-Patman  Act claim.  And, Coastal,             on  this  appeal,  does not  contend  that  it  has made  an             evidentiary  showing  sufficient  to  warrant  a preliminary             injunction on the Sherman Act claim.  Cf.  Monahan's Marine,                                                   ___  ________________             866 F.2d at 529  ("evidence of a violation of  the Robinson-             Patman  Act, showing  injury only  to competitors,  does not             automatically show a violation of the Sherman Act as well").                       Second, all three defendants (CAPECO and Coastal's             two  competitors)  asked  the   district  court  to  dismiss             Coastal's  Robinson-Patman  Act claims  on  the  ground that             Coastal could  not show  that  either a  high-price sale  to             Coastal, or a low-price sale to a competitor, took place "in             [interstate] commerce."  15 U.S.C.   13(a); Standard Oil Co.                                                         ________________             v.  FTC, 340 U.S. 231, 236-37 (1951); Mayer Paving & Asphalt                 ___                               ______________________             Co. v. General Dynamics  Corp., 486 F.2d 763, 766  (7th Cir.             ___    _______________________             1973), cert.  denied, 414 U.S. 1146 (1974); I Phillip Areeda                    _____________             &  Donald F.  Turner, Antitrust  Law,    233 at  248 (1978);                                   ______________             Rowe, supra,    4.9 at  79.   The district court  denied the                   _____             motion.  The defendant  competitors ask us now to  say that,             in doing so, the court was wrong.                                           -9-                                          9                       We do not  reach the interstate  commerce question             in the context  of this appeal.   The legality of  the order             from which Coastal appeals --  the denial of the preliminary             injunction -- does not depend upon the "in commerce"  issue.             The parties that  wish to raise the  issue, the competitors,             are defendants; and, they have not filed a notice of appeal.             Fed. R. App. P. 3, 4.  And, in any event, the order of which             they complain, the refusal to grant their motion to dismiss,             is not an appealable order.  See Rodriguez v. Banco Central,                                          ___ _________    _____________             790  F.2d  172,  177  (1st  Cir.   1986)  (criteria  for  an             appealable collateral order).                                         For  these reasons, the  decision of  the district             court is                       Affirmed.                       ________                                         -10-                                          10
