United States District Court, W.D. North Carolina, Statesville Division
COGBURN, JR. UNITED STATES DISTRICT JUDGE.
MATTER is before the court on plaintiff's
Emergency Motion for a Temporary Restraining Order (#3),
which converted to a motion for preliminary injunction, and
defendant's associated Motion to Alter or Amend Judgment
(#16). After considering the motions and reviewing the
pleadings, the court enters the following Amended
Swift Beef Company is a meat company that offers a range of
brands and programs designed to meet the needs of purchasers.
One such program is known as “Case Ready, ” which
provides fresh meat cut and packaged to customer
specifications and made ready for placement in coolers or
freezers, such as at local grocery stores. Plaintiff offers
beef, pork, and poultry options in its Case Ready business
line. (Emergency Motion for TRO, #4 at 3-4). Defendant Alex
Lee, Inc., is a privately held company with two primary food
distribution and retail operating companies: Merchants
Distributors, Inc. and Lowes Foods, LLC. They service
customers in North and South Carolina, Virginia, West
Virginia, Georgia, Alabama, Florida, Tennessee, Ohio,
Pennsylvania, and Kentucky. Defendant owns a plant in Lenoir,
North Carolina, which is used as a meat processing and
packaging facility that defendant leases out to operators. On
April 21, 2014, defendant and plaintiff entered into a Lease
Agreement and a Purchase Agreement (“the
Agreements”). The Agreements had defendant lease the
Lenoir plant to plaintiff, and required plaintiff to supply
defendant with certain Case Ready products. The Agreements
have a ten year term and are linked; if a party fails to
perform under one, both may be terminated. (#4 at 4-8).
contends that a material breach of the Agreements is
imminent, arguing that defendant is attempting to evict
plaintiff from the Lenoir plant without cause. (#4 at 10-11).
In doing so, plaintiff claims irreparable harm will result in
the form of loss of goodwill, sales, customers, and business
opportunities, as well as denial of property rights. (#4 at
18). Defendant argues that they are not attempting to evict
plaintiff, but if they did, they would be within their rights
given certain alleged breaches in performance by plaintiff.
(Defendant's Response, #13 at 7-8). Further, defendant
notes that an eviction is impossible without commencing
summary ejectment proceedings in state court, and suggests
that a preliminary injunction is unwarranted given
defendant's ability to make their case in ejectment
proceedings instead. (#13 at 5-6).
to grant injunctive relief is within the sound discretion of
the district court. See Hughes Network Sys. V.
InterDigital Commc'ns Corp., 17 F.3d 691, 693
(4th Cir. 1994). However, granting a preliminary
injunction “requires that a district court, acting on
an incomplete record, order a party to act, or refrain from
acting, in a certain way. The danger of a mistake in this
setting is substantial.” Scotts Co. v. United
Indus. Corp., 315 F.3d 264, 284 (4th Cir.
2002) (citations and internal quotations omitted).
Consequently, a preliminary injunction is “an
extraordinary remedy . . . which is to be applied ‘only
in [the] limited circumstances' which clearly demand
it.” Direx Israel, Ltd. V. Breakthrough Med.
Corp., 952 F.2d 802, 811 (4th Cir. 1992)
(quoting Instant Air Freight Co. v. C.F. Air Freight,
Inc., 882 F.2d 797, 800 (3rd Cir. 1989)). The
injunction must “be tailored to restrain no more than
what is reasonably required to accomplish its ends.”
Consolidation Coal Co. v. Disabled Miners of S.
W.Va., 442 F.2d 1261, 1267 (4th Cir. 1971).
seeking a preliminary injunction must establish (1) that it
is likely to succeed on the merits; (2) that it is likely to
suffer irreparable harm in the absence of preliminary relief;
(3) that the balance of equities tips in its favor; and (4)
that an injunction is in the public interest. See Winter
v. Natural Resources Defense Council, Inc., 555 U.S. 7
(2008). While a balancing test was previously used, today
every preliminary injunction factor must be “satisfied
as articulated” and courts “must separately
consider each Winter factor.” Pashby v.
Delia, 709 F.3d 307, 320 (4th Cir. 2013)
(citing The Real Truth About Obama, Inc. v. FEC, 575
F.3d 342, 347 (4th Cir. 2009)). The Court will,
therefore, deem defendant's Motion to Alter or Amend
Judgment a Motion for Reconsideration (inasmuch as defendant
seeks reconsideration of an Order rather than a Judgment) and
grant that motion. In considering the Winter
elements, the Court will consider each factor separately and
delve into why each factor has been satisfied as articulated,
particularly the element requiring plaintiff to show that it
is likely to succeed on the merits.
Likelihood of Success on the Merits
the court considers the likelihood of plaintiff's success
on the merits. Plaintiff must make a “clear
showing” they are likely to succeed at trial. Real
Truth, 575 F.3d at 345. However, plaintiff “need
not show a certainty of success.” Pashby, 709
F.3d at 321 (citing 11A Charles Alan Wright et al.,
Federal Practice & Procedure § 2948.3 (2d
ed. 1995)). Furthermore, “the possibility of
irreparable harm does not constitute a ‘clear
showing' that the plaintiff is entitled to relief.”
Di Biase v. SPX Corp., 2017 U.S. App. LEXIS 18757,
*21 (4th Cir. Sept. 28, 2017). When plaintiff has
produced undisputed evidence on the issue at hand, they have
established a clear showing that they are likely to succeed
at trial. See League of Women Voters of N. Carolina v.
North Carolina, 769 F.3d 224, 246 (4th Cir.
conducting this inquiry, the Court first considers the nature
of the substantive claim asserted by plaintiff in its
Complaint. Here, plaintiff contends that defendant, in
threatening to prematurely terminate the lease, is
anticipatorily breaching the contract that exists between the
parties. Under North Carolina law, “the elements of a
breach of contract claim are (1) existence of a valid
contract and (2) breach of the terms of that contract.”
Wooton v. CL, LLC, No. 2:09-CV- 34-FL, 2010 WL
3767308, at *5 (E.D. N.C. 2010) (citing Lake Mary Ltd.
P'ship v. Johnston, 145 N.C.App. 525, 536 (2001)).
Similarly, the elements of a valid contract are “mutual
assent, legal capacity, consideration, and a legal
bargain.” Orthodontic Ctrs. of Am., Inc. v.
Hanachi, 151 N.C.App. 133, 135 (2002). It does not
appear that either party challenges the validity of the
underlying contract; thus, the issue is whether plaintiff
will likely show by a preponderance of the evidence that
defendant has anticipatorily breached that agreement.
of contract occurs when a party fails to perform a
contractual duty which has become absolute.” Millis
Constr. Co. v. Fairfield Sapphire Valley, 86 N.C.App.
506, 510 (1987). In contrast, an anticipatory breach occurs
when “[a] breach is committed before there is a present
duty of performance, and is the outcome of words evincing
intention to refuse performance in the future.”
Cook v. Lawson, 3 N.C.App. 104, 107 (1968) (citation
omitted) (internal quotations omitted). In considering
whether plaintiff has made a clear showing, the Court has
closely reviewed both the allegations of anticipatory breach
and the proffer of evidence plaintiff contends supports such
assertions under the applicable standard, highlighted by the
defense's instant motion seeking reconsideration.
has presented evidence that defendant, through communications
by its president and then its counsel, has threatened to
terminate the lease. That evidence tends to show that on July
3, 2017, defendant's President and CEO, Brian George,
issued an email to Swift stating that “it will be best
for our respective companies to end the case ready plant
relationship by terminating the lease.” Bode Decl. at
¶ 20 (Plaintiff's Exhibit “A”). Mr.
George did not, however, preface that assertion with any
claim that plaintiff had defaulted under the Agreements in
any manner. Id. Plaintiff's evidence then shows
that four days later, it offered to buy the plant from
defendant for $30 million, id. at ¶ 21, which
was met with an “Offer Notice” from defendant to
sell the plant for $50 million. Offer Notice (#1-5 at 2).
According to plaintiff, defendant mistakenly characterized
plaintiff's “Right of First Refusal” under
Section 31 of the ...