USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 96-1332
STARLIGHT SUGAR, INC., ET AL.,
Plaintiffs - Appellees,
v.
NEFTALI SOTO, INDIVIDUALLY AND
AS SECRETARY OF THE DEPARTMENT
OF AGRICULTURE OF THE
COMMONWEALTH OF PUERTO RICO,
Defendant - Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. P rez-Gim nez, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Coffin, Senior Circuit Judge,
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and Stahl, Circuit Judge.
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Edgardo Rodr guez-Quilichini, Assistant Solicitor General,
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Department of Justice, with whom Carlos Lugo-Fiol, Solicitor
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General, and Edda Serrano-Blasini, Deputy Solicitor General, were
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on brief for appellant.
Marcos A. Ram rez-Lavandero, with whom Eduardo A. Vera-
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Ram rez, Janice M. Guti rrez-Lacourt and Marcos A. Ram rez
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Lavandero & Associates were on brief for appellees.
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May 30, 1997
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TORRUELLA, Chief Judge. The Department of Agriculture
TORRUELLA, Chief Judge.
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of the Commonwealth of Puerto Rico urges us to vacate a
preliminary injunction issued on December 21, 1995 that bars the
enforcement of Section Six of its Market Regulation 13.1 Section
Six prohibits the importation into Puerto Rico of refined sugar
intended for consumer sale that is not prepackaged in units of
five pounds or less. The district court held that the regulation
violated the Commerce Clause in its "dormant" state and the Equal
Protection Clause and also found that the plaintiff sugar
importers had met all of the grounds for preliminary injunctive
relief.
Under our four-part test for determining whether the
grant or denial of preliminary injunctive relief is appropriate,
the district court must consider:
(1) the likelihood of success on the
merits; (2) the potential for irreparable
harm if the injunction is denied; (3) the
balance of relevant impositions, i.e.,
the hardship to the nonmovant if enjoined
as contrasted with the hardship to the
movant if no injunction issues; and (4)
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1 Section VI of Regulation 13 of the Puerto Rico Department of
Agriculture provides in pertinent part:
A. Refined sugar to be imported in Puerto
Rico shall come in consumer size packages
inside the corresponding shipping containers.
For the purposes of this Regulation a
consumer size package is one whose net
content does not exceed five (5) pounds.
B. . . . Imported refined sugar for
industrial use shall not be repacked in
consumer-size packages for direct sales to
the consumers.
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the effect (if any) of the court's ruling
on the public interest.
Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 15
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(1st Cir. 1996). On appeal, the standard of review is
deferential, and we have said that "unless the appellant can show
that the lower court misapprehended the law or committed a
palpable abuse of discretion, the court of appeals will not
intervene." Id. at 16.
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Upon careful consideration of the briefs, arguments of
counsel, and the record in this case, we find no abuse of
discretion and no error of law, and therefore affirm in light of
affirm
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the sound reasons provided in the district court's thorough
opinion. See Starlight Sugar, Inc. v. Soto, 909 F. Supp. 853
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(D.P.R. 1995).
We only note the following. With respect to the
likelihood of success on the merits, Commerce Clause caselaw
strongly supports the position of the plaintiff sugar importers.
The Department of Agriculture asks that the dormant Commerce
Clause balancing test put forward in Pike v. Bruce Church, Inc.,
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397 U.S. 137, 142 (1970), be applied to Section Six, and it seems
to acknowledge that for Pike to apply, it must characterize
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Section Six as an evenhanded regulation that imposes only an
incidental burden on interstate commerce. Section Six is plainly
not such a creature. As the district court properly found, where
a state law or regulation, such as Section Six, facially
discriminates against interstate commerce, and has as its very
purpose the protection of local economic interests, it must
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withstand the most stringent form of scrutiny under the Commerce
Clause. See, e.g., West Lynn Creamery v. Healy, ___ U.S. ___,
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114 S. Ct. 2205, 2211-13 (1994). Under such strict scrutiny,
facially discriminatory regulations are presumptively invalid and
are "routinely struck down," unless it can be shown that they
serve a legitimate local interest "unrelated to economic
protectionism" -- an interest, furthermore, that cannot be
served through non-discriminatory means. New Energy Co. v.
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Limbach, 486 U.S. 269, 274 (1988); see also Maine v. Taylor, 477
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U.S. 131, 138 (1986) (upholding facially discriminatory import
restriction as necessary to protect in-state wildlife). Here,
appellants can only justify their restriction of bulk sugar
importation and subsequent packaging for consumer sale by listing
the various local benefits attendant to economic protectionism
itself.2 "[W]here simple economic protectionism is effected by
state legislation, a virtually per se rule of invalidity has been
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erected." City of Philadelphia v. New Jersey, 437 U.S. 617, 624
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(1978).
The district court also did not abuse its discretion in
finding the potential for irreparable harm. See 909 F. Supp. at
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861-62. The district court found that irreparable harm was
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2 Appellants concede that Section Six has provided a competitive
advantage to the Puerto Rico sugar corporation, which owns the
only existing refinery in Puerto Rico. In support of Section
Six, appellants cite such local interests as the protection of
jobs in the Puerto Rico sugar industry, the preservation of rural
culture associated with sugar production, and the prevention of
certain demographic changes (the movement of unemployed sugar
workers from rural areas to urban areas) that may result were
unfettered interstate competition allowed.
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threatened by the inability of the plaintiff sugar importers to
take advantage of an impending shortage of sugar supply in Puerto
Rico. The Department of Agriculture argues that a potential harm
cannot be deemed "irreparable" if it is of a kind that can be
later compensated through money damages. While it is true that
injunctive relief is generally inappropriate where money damages
can make a plaintiff whole, we have recognized that the loss of a
unique or fleeting business opportunity can constitute
irreparable injury. See Hyde Park Partners v. Connolly, 839 F.2d
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837, 853 (1st Cir. 1988) (injunction may be appropriate where
timing, in tender offer context, is crucial); see also Baccarat,
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102 F.3d at 18-19 ("[A] plaintiff need not demonstrate that the
denial of injunctive relief will be fatal to its business. . . .
If [it] suffers a substantial injury that is not accurately
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measurable or adequately compensable by money damages,
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irreparable harm is a natural sequel.") (citations omitted)
(emphasis added). The concern in the present situation is clear:
although we remain in the domain of economic profit or loss, a
context in which compensation through legal remedies is
preferred, as a practical matter the potential value of an
evanescent business opportunity may be extremely difficult to
measure, after the fact. The district court did not abuse its
discretion, therefore, in finding that plaintiffs were threatened
with irreparable harm through the ongoing enforcement of Section
Six.
Affirmed.
Affirmed
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