WATERMAN, Circuit Judge:
Plaintiff, Checker Motors Corporation (Checker), is a New Jersey corporation engaged principally in the production and sale of the familiar "Checker" taxicabs. The defendants, Chrysler Corporation, the third largest automobile manufacturer in the United States, and its wholly owned sales subsidiary, Chrysler Motors Corporation (Chrysler), are competitors of Checker in the taxicab market. In April 1964 Checker, pursuant to §§ 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, commenced a private suit for treble damages and injunctive relief, alleging numerous violations by the defendants of the antitrust laws. The instant appeal, however, deals only with the legality of a national rebate plan (Commercial Fleet Value Program) employed by Chrysler since 1962 whereby the purchase of a taxicab from any authorized Chrysler dealer entitles the buyer to receive an automatic cash rebate.
In the court below Checker moved for partial summary judgment. It claimed that the rebate plan as used in the New York City market
The district court held that the charge that Chrysler's rebate plan violates the Robinson-Patman Act is a question of fact to be determined at trial. Checker does not quarrel with that part of the decision below, and therefore we need not concern ourselves with the district court's disposition of the Robinson-Patman claim. Rather, in reviewing the propriety of the district court's denial of Checker's request for a preliminary injunction, only two questions warrant our attention:
(1) Is Chrysler's rebate plan a price-fixing arrangement, and thus, illegal per se under § 1 of the Sherman Act; if so plaintiff may have been entitled to final judgment on the merits;
(2) If the plan is not illegal per se did the district court abuse its discretion in declining to enjoin use of it pending a further test of the plan's legality at trial. For the reasons to follow, we answer both questions in the negative and affirm the decision below.
A lengthy discussion is unnecessary. The per se illegality of price-fixing agreements under the Sherman Act is a principle to which our courts have consistently adhered. See United States v. New Wrinkle, Inc., 342 U.S. 371, 377, 72 S.Ct. 350, 96 L.Ed. 417 (1952); United States v. National Ass'n of Real Estate Boards, 339 U.S. 485, 489, 70 S.Ct. 711, 94 L.Ed. 1007 (1950); United States v. Masonite Corp., 316 U.S. 265, 274, 62 S.Ct. 1070, 86 L.Ed. 1461 (1942); United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, 50 A.L.R. 989 (1927). The Supreme Court has said that any arrangement which in any manner "tampers with price structures" constitutes unlawful price-fixing, Socony-Vacuum, supra, 310 U.S. at 221, 60 S.Ct. 811. See cases collected by Judge Mansfield below, 283 F.Supp. at 882. Nevertheless,
In Susser v. Carvel Corporation, 332 F.2d 505, 510 (2 Cir.), cert. granted, 379 U.S. 885, 85 S.Ct. 158, 13 L.Ed.2d 91 (1964), cert. dismissed as improvidently granted, 381 U.S. 125, 85 S.Ct. 1364, 14 L.Ed.2d 284 (1965), we held that an ice cream manufacturer's practice of recommending a retail price to its franchised dealers was lawful where "the franchise provisions explicitly reserved to the individual dealer the right to set whatever price he desired" and where no attempts to enforce the price structure were shown. Similarly, in the case at bar, the district court declined to find that Chrysler's rebate plan is unlawful per se under § 1 of the Sherman Act for there is an absence of proof that the plan tends to "affect the exercise of competitive pricing discretion, or to affect or tamper with the range, level, scale, or amount of the price paid for Chrysler taxicabs. * * *." Rather, the court viewed the plan as a mere promotional device, reasoning as follows:
Indeed, all of the evidence indicates that the Chrysler dealers are free to sell at their own prices and that the manufacturer's rebate plan is in the nature of an advertising expedient. Contrary to appellant's contentions, the plan lends no assurance to Chrysler that the
There remains for discussion the issue of whether Checker might be entitled to a preliminary injunction even though Chrysler's rebate plan is not an illegal price fixing arrangement per se.
The district court's denial of injunctive relief was premised on its findings that there was serious doubt as to whether Checker will ultimately prevail in this action; that a review of the involved hardships and equities did not disclose a balance favoring injunctive relief; and that plaintiff's rights to recover treble damages, if successful, constituted an adequate remedy at law.
An application for a preliminary injunction is most frequently addressed to the judicial discretion of the district court. 7 Moore's Federal Practice, ¶ 65.04, at 1625 (2d ed. 1966). A clear abuse of discretion in such cases, not present in this case, must be shown to an appellate court in order to obtain a reversal of the trial court's denial of temporary injunctive relief. Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., 366 F.2d 373, 374-375 (2 Cir. 1966); Ideal Toy Corp. v. Fab-Lu Ltd., 360 F.2d 1021 (2 Cir. 1966); Moore, supra at 1626.
The purpose of a preliminary injunction is to maintain the status quo pending a final determination of the merits, Unicon Management Corp. v. Koppers Co., 366 F.2d 199, 204 (2 Cir. 1966); Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738, 742 (2 Cir. 1953); 7 Moore's Federal Practice, ¶ 65.04, at 1625 (2d ed. 1966). It is an extraordinary remedy, and will not be granted except upon a clear showing of probable success and possible irreparable injury. Clairol, Inc. v. Gillette Co., 389 F.2d 264, 265 (2 Cir. 1968); Societe Comptoir De L'Indus. etc. v. Alexander's Department Stores, Inc., 299 F.2d 33, 35, 1 A.L.R.3d 752 (2 Cir. 1962). However, "the burden [of showing probable success] is less where the balance of hardships tips decidedly toward the party requesting the temporary relief." Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., supra, at 375. In such a case, the moving party may obtain a preliminary injunction if he has raised questions going to the merits so serious, substantial, and difficult as to make them a fair ground for litigation and thus for more deliberate investigation. Unicon Management Corp. v. Koppers Co., 366 F.2d 199, 205 (2 Cir. 1966); Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., supra; Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2 Cir. 1953).
Quite clearly, with the per se price-fixing issue resolved against it, the chance of Checker's ultimate success is dim here. It is one thing for the Sherman Act and the Robinson-Patman claims raised by Checker to contain questions ripe for litigation, and quite another thing for those issues to receive a determination favorable to plaintiff upon trial. With respect to the Sherman Act charge, Judge Mansfield's appraisal of the factors a trial court applying the rule of reason is likely to rely upon is a noteworthy appraisal. He considered that Checker's loss of dominion over the 1,600 of the 11,000 taxicab medallions it previously controlled in New York City and the unfriendly relationship between Checker's president, Morris Markin, and the city's fleet owners were more probable causes of Checker's declining sales in New York City than any possible anti-competitive effect created by Chrysler's rebate plan. Moreover, though Chrysler's
The success of Checker's Robinson-Patman claim depends upon the propriety of applying the "indirect purchaser" doctrine
Checker argues that it will suffer irreparable injury in the form of loss of former customers during the pendency of this action. In Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., supra, we held that the difficulty in computing "damages to reputation, credibility or goodwill" may justify a grant of a preliminary injunction. Our holding there was based upon finding "a sufficient showing of probable success on trial" and "a lack of likelihood of irreparable injury" to the other party if the injunction is granted. 366 F.2d at 376, 377. In the present case, while the losses to Checker through competition with Chrysler may indeed be irreparable, unless Checker can show that Chrysler has engaged in some illegal activity, Checker will not be entitled to recover compensatory damages or to obtain injunctive relief. The district court was of the belief that Checker will be unable to prove its allegations of Chrysler wrongdoing and refused to grant Checker a temporary injunction. We hold that the court's order was a proper exercise of its discretion.
Of the Southern District of New York, sitting by designation.