BERLINER FOODS CORP. v. PILLSBURY CO.
633 F.Supp. 557 (1986)
BERLINER FOODS CORPORATION, et al.
v.
The PILLSBURY COMPANY, et al.
Civ. No. JFM-86-1040.
United States District Court, D. Maryland.
April 22, 1986.
James P. Ulwick, Kramon & Graham, Baltimore, Md., and Brendan V. Sullivan, Jr., Williams & Connolly, Washington, D.C., for plaintiffs.
Shelly E. Mintz, Joseph, Greenwald & Laake, Hyattsville, Md., and Stanley M. Gorinson, Pillsbury, Madison & Sutro, Washington, D.C., for defendants.
MEMORANDUMMOTZ, District Judge.
This action arises from defendants' termination of Berliner Foods Corporation as a distributor of Haagen-Dazs Ice Cream after the Berliner family sold Berliner Foods to Dreyer's Grand Ice Cream, Inc. Plaintiffs seek injunctive relief as well as monetary damages. On March 31, 1986 this Court denied a temporary restraining order which would have prohibited defendants from terminating the distributorship. Since that time the parties have engaged in expedited discovery and on April 17th a preliminary injunction hearing was held.
Initially, when they requested the temporary restraining order, plaintiffs were seeking an order naming them as the exclusive distributor for Haagen-Dazs in the geographic area which they had previously served. The preliminary injunction for which they pray would be more limited in scope, requiring defendants to maintain them only as a non-exclusive distributor.
The motion for preliminary injunction will be denied.
In or about 1974 Berliner Foods first became a distributor for Haagen-Dazs Ice Cream.1 It is undisputed that the agreement was oral. According to plaintiffs, Reuben Mattus, then the owner of the Haagen-Dazs Company, promised that they would remain as Haagen-Dazs distributors as long as they met Haagen-Dazs' performance standards. Plaintiffs concede that the subject of a transfer of the ownership of the distributorship was not discussed between Mattus and themselves. Over the next decade both parties flourished through their relationship. The concept of manufacturing and marketing high quality and high priced ice cream took hold (despite initial resistance to it) and the Berliners successfully promoted the sale of Haagen-Dazs to supermarket chains and other retailers in the Baltimore-Washington area. In 1983 the Pillsbury Company acquired Haagen-Dazs. Although the Berliners (as well as other Haagen-Dazs distributors throughout the country) were concerned as to whether Pillsbury would adhere to the oral distribution agreements which they had made with Reuben Mattus, Berliner Foods remained as a distributor for Haagen-Dazs. It was notably successful, and Pillsbury indicated interest in buying the Berliners out. However, in December 1985 the Berliners entered into a contract to sell Berliner Foods not to Pillsbury but to Dreyers, the manufacturer of a premium ice cream which has heretofore been sold primarily in the western part of the United
States. Dreyers is attempting to expand its market to the east and chose to purchase Berliner Foods as the means to effect distribution in the mid-Atlantic region.2
1. The first agreement related to the distribution of Haagen-Daz pints. In 1982, a subsequent agreement was entered into under which the Berliners were to store and distribute two and a half gallon and one and a half gallon bulk ice cream products. The 1982 agreement provides that it is terminable upon the will of either party upon thirty days' written notice.
2. Because of the similarity of the name "Dreyers" with the name "Breyers," Dreyers' chief competitor in the east, Dreyers has decided to sell its ice cream under the name "Edy's" there.
3. There is a threshold question in this case as to whether the Blackwelder analysis should even be applied. Although the standards for issuing a preliminary injunction have arguably been weakened over the years, a preliminary injunction remains an extraordinary remedy, the sine qua non for which should be the inadequacy of any remedy at law. See Roland Machinery Co. v. Dresser Indus.,749 F.2d 380, 386 (7th Cir. 1984). Here, plaintiffs have themselves belied a contention that monetary relief cannot effectively be had. The contract between Dreyers and the Berliners for the sale of Berliner Foods provides that the basic sales price is 4.6 million dollars and that an additional 3.7 million dollars is to be paid in the event that it is determined that the Haagen-Daz distribution rights can be transferred. The 3.7 million dollar figure provides a basis — at least an outside basis — for an award of monetary damages in the event that plaintiffs should ultimately prevail. 4. Plaintiffs also argue a theory of promissory estoppel. Assuming that under Maryland law promissory estoppel can be applied to make enforceable an agreement which is unenforceable under the law of contracts, there is no promissory estoppel here. First, on the facts as they have thus far been developed, the Court does not find that the Berliners were promised that they could sell their distributorship to a Haagen-Dazs competitor. Second, the Berliners have been handsomely paid by Dreyers for the reliance damages which they claim — capital investment in their business — and Dreyers has obtained an active distributorship in exchange. Third, Berliner Foods' most recent investment in the expansion of storage space — which plaintiffs heavily stressed in first advancing their promissory estoppel argument — was made in contemplation of the sale of the distributorship to Dreyers.