Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

GPA INC. v. LIGGETT GROUP

August 30, 1994

GPA INCORPORATED, Plaintiff,
v.
LIGGETT GROUP, INC., Defendant.



The opinion of the court was delivered by: ALLEN G. SCHWARTZ

 ALLEN G. SCHWARTZ, DISTRICT JUDGE:

 This is an action by GPA Incorporated ("GPA"), a middleman *fn1" in the chain of distribution of cigarettes, against Liggett Group Inc. ("Liggett"), a manufacturer of private label and control label cigarettes, for breach of the March 1, 1993 Controlled Label Manufacturing Agreement (the "Agreement") between the parties, tortious interference in customer relationships, violations of Section 43(a) of the Lanham Act and the return of certain monies (the "Rebate Fund") allegedly held by Liggett as an agent and fiduciary for GPA. GPA moves for preliminary injunctive relief pursuant to Rule 65 of the Federal Rules of Civil Procedure. Specifically, GPA seeks an order: (1) directing Liggett to return the Rebate Fund, (2) directing Liggett to continue to supply GPA with cigarettes pursuant to the Agreement, (3) enjoining Liggett from disclosing GPA's confidential business information, (4) enjoining Liggett from dealing with GPA's customers with respect to the products subject to the Agreement, and (5) directing that all papers filed in this action be under seal. *fn2" Liggett contends that injunctive relief is inappropriate because GPA has failed to demonstrate irreparable injury or likelihood of success on the merits and the negative effects of an injunction to Liggett outweigh the benefits to GPA.

 The Court has considered the substantial submissions of the parties (including numerous affidavits, declarations and post-hearing submissions), the arguments of counsel and the testimony of the witnesses at a hearing conducted on GPA's motion on August 16 and 22, 1994 (the "Hearing"). For the reasons set forth below, GPA's request for preliminary injunctive relief is denied.

 FACTS

 A. The Parties

 Liggett is a Delaware Corporation with its principal place of business in North Carolina. According to Liggett, it is the leader in developing a market for discounted cigarettes including private label and control label cigarettes. Private label cigarettes are typically manufactured by one of the major cigarette companies, but the trademark is held by the customer of the manufacturer. Private labels are sold at a deep discount to co-op grocery organizations, chain grocery stores and distributors, and other chain retailers. A "control label" is a trademark held by the manufacturer but sold using the same concept as a private label. It is not disputed that Liggett is continuing to sell EAGLE and EPIC cigarettes to GPA's former customers at prices below those charged by GPA.

 B. The Agreement

 It is undisputed that GPA and Liggett entered into a Controlled Label Manufacturing Agreement (defined above as the "Agreement") on March 1, 1993. The Agreement describes its "general purpose" as follows:

 
. . . Liggett, licensee of the trademarks "EAGLE 20's" and "EPIC" (the "Marks") herein sublicenses to GPA the right to use the Marks and Property (as hereinafter defined) for the purpose of selling cigarette "Product" (defined in § 4(a) hereof [as "cigarette products bearing the Marks of the varieties shown on Appendix C"]) manufactured exclusively by Liggett. In addition to providing manufacturing services, Liggett will also take orders, ship and invoice the Product to GPA Customers (as hereinafter defined), bear a portion of the liability for returned Product, and bear the entire credit risk for invoices for Product unpaid by GPA Customers. GPA will develop an "area-exclusive distributor network" to market and sell the Product, and generally promote the sale of the Product. GPA will not take title to the Product. GPA and Liggett will set the GPA Price (as hereinafter defined) at which the Product is sold to GPA Customers.

 Agreement at § 2(a). *fn3" The Agreement further provides that ". . . Liggett shall, as GPA's manufacturer, receive orders from and bill GPA Customers for Product at the GPA Price; and pay to GPA monthly a 'GPA Rebate' . . ." Agreement at § 14(a).

 The Agreement contains separate provisions with respect to termination with and without cause. Notably, the Agreement contemplates different rights and obligations depending on whether termination is with or without cause. Certain of the provisions concerning termination are set forth in the margin. *fn4"

 The Agreement also contains annual "Sales Targets". Specifically, the Agreement provides:

 
The production and sales targets ("Sales Targets") for the first five years of this Agreement are as follows, with "Contract Years" being that 12-month period commencing with the first day of the month following the date of the first shipment of the Product and each succeeding 12-month period thereafter; and "Unit" being one single cigarette . . .

 Agreement at § 11(e). The Agreement provides that the Sales Target for the first Contract Year is 600 million units. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.