NOT PRECEDENTIAL
`
`UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`_____________
`
`Nos. 22-1710 & 22-1885
`_____________
`
`GOLDEN FORTUNE IMPORT & EXPORT CORPORATION,
`
`
`
` v.
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`MEI-XIN LIMITED; MAXIM CATERERS LIMITED
`
`Appellants
`
`______________
`
`On Appeal from the United States
`District Court for the District of New Jersey
`(Civil No. 2:22-CV-01369)
`District Judge: Honorable Julien Xavier Neals
`_____________
`
`Submitted Under Third Circuit L.A.R. 34.1(a)
`August 4, 2022
`______________
`
`Before: GREENAWAY, JR., MATEY, and NYGAARD, Circuit Judges.
`
`
`(Opinion Filed: August 5, 2022)
`
`______________
`
`
`OPINION
`
`______________
`
`
`
`
`
`
`
`
`
`
`* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
`does not constitute binding precedent.
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`_____________
`
`Nos. 22-1710 & 22-1885
`_____________
`
`GOLDEN FORTUNE IMPORT & EXPORT CORPORATION,
`
`
`
` v.
`
`MEI-XIN LIMITED; MAXIM CATERERS LIMITED
`
`Appellants
`
`______________
`
`On Appeal from the United States
`District Court for the District of New Jersey
`(Civil No. 2:22-CV-01369)
`District Judge: Honorable Julien Xavier Neals
`_____________
`
`Submitted Under Third Circuit L.A.R. 34.1(a)
`August 4, 2022
`______________
`
`Before: GREENAWAY, JR., MATEY, and NYGAARD, Circuit Judges.
`
`
`(Opinion Filed: August 5, 2022)
`
`______________
`
`
`OPINION
`
`______________
`
`
`
`
`
`
`
`
`
`
`* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7,
`does not constitute binding precedent.
`
`
`
`
`
`GREENAWAY, JR., Circuit Judge.
`
`
`When evaluating a motion for a preliminary injunction, the gatekeeping issues to
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`resolve are whether the movant is likely to be successful on the merits and is more likely
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`than not to suffer irreparable harm should we deny its request. Here, Golden Fortune
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`Import & Export Corporation (“Golden Fortune”) argues that it satisfies every
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`requirement to secure a preliminary injunction against the termination of its Distribution
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`Agreement (“Agreement”) with Mei-Xin (Hong Kong) Limited (“Mei-Xin”). We
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`disagree. We will reverse based on Golden Fortune’s failure to show a likelihood of
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`success on the merits and irreparable harm.
`
`I.
`
`BACKGROUND
`
`Plaintiff-Appellee Golden Fortune is a distributor of Asian groceries—and quite a
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`successful one at that. Boasting over “40 years of experience sourcing high quality
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`products,” it imports and distributes 1,599 products from over 150 brands, including its
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`own stand-alone brand, throughout the United States. J.A. 723 ¶¶ 4-5. It also offers
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`service logistics, marketing, and warehousing services to its customers.
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`Defendant-Appellant Mei-Xin is a Hong Kong company that manufactures
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`internationally renowned mooncakes1 and other pre-packaged bakery products. When
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`
`
` 1
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` A mooncake “is the quintessential food consumed and/or gifted during one of China’s
`most important holidays—the Mid-Autumn Festival”—which “takes place annually,
`falling sometime between September and October.” J.A. 179 ¶ 17.
`2
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`
`
`
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`
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`Mei-Xin decided to expand to the United States in 2000, it engaged Golden Fortune
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`along with another company2 to distribute its products and to develop a market for the
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`brand there. Through their two-decade-long business relationship, Golden Fortune has
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`enabled Mei-Xin to become the number one mooncake brand in the eastern United States.
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`Golden Fortune has benefited as well. In the only fiscal year for which Golden Fortune
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`provided its financial information (September 1, 2018 to August 31, 2019), Mei-Xin
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`products accounted for $3,959,887—or 8.6%—of Golden Fortune’s $45,720,201 in gross
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`sales.
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`In 2021, the parties entered their most recent Distribution Agreement, which is the
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`subject of this appeal. As relevant here, the Agreement provides that Golden Fortune will
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`sell Mei-Xin “Mooncakes and Pre-packaged Bakery Products” in the eastern United
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`States and Panama. J.A. 225 §§ 4-5. It covers the period from May 1, 2021 to April 30,
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`2022. There are two means for early termination. First, either party has the “right to
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`terminate this Agreement during the Term by giving the other thirty-day (30) day [sic]
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`written notice.” J.A 229 § 7.1. Second, Mei-Xin has the unilateral right to “terminate . . .
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`immediately without notice” if Golden Fortune fails to comply with “any provision.”
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`J.A. 229 § 7.2(a). In addition, the Agreement contains an arbitration clause providing for
`
`
`
` 2
`
` Chevalier International (USA) Inc. was responsible for the western United States, while
`Golden Fortune was responsible for the eastern United States.
`3
`
`
`
`
`
`
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`the arbitration of “[a]ny dispute, controversy or claim arising out of or relating to this
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`Agreement, or the breach, termination or invalidity thereof.” J.A. 231 § 20.
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`In 2017, Golden Fortune’s annual sales growth of Mei-Xin’s products began
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`experiencing a significant decline. In 2020, Mei-Xin warned Golden Fortune that it
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`would exercise its discretion to replace Golden Fortune with another distributor if there
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`was not adequate improvement. When that improvement did not occur, Mei-Xin
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`purported to terminate the Agreement via email on January 21, 2022. Golden Fortune
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`asserted that the termination was insufficient under Sections 7.1 and 11 of the
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`Agreement, prompting Mei-Xin to send another notice of termination on March 3, 2022.
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`This time, Golden Fortune claimed that the termination was invalid under the New
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`Jersey Franchise Practices Act (“NJFPA”). The NJFPA “define[s] the relationship and
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`responsibilities of franchisors and franchisees in connection with franchise
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`arrangements.” N.J. Stat. Ann. § 56:10-2 [hereinafter § 56:10-2]. It was enacted “to
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`protect franchisees from unreasonable termination by franchisors that may result from a
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`disparity of bargaining power[.]” Id. Consistent with its protective purpose, it prohibits
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`franchisors from terminating a franchise “without good cause.” § 56:10-5. In Golden
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`Fortune’s view, Mei-Xin failed to satisfy the good cause requirement.
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`Asserting that the NJFPA is inapplicable, Mei-Xin reiterated its purported
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`termination and engaged a replacement distributor. In response, Golden Fortune
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`commenced this action in the District Court for the District of New Jersey on March 14,
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`
`
`4
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`
`
`
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`2022 against Mei-Xin and its parent company, Maxim’s Caterers Limited (“Maxim’s”).
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`Golden Fortune alleged three causes of action: (1) violation of the NJFPA, (2) breach of
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`the implied covenant of good faith and fair dealing, and (3) tortious interference. In
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`addition, Golden Fortune sought a declaratory judgment that it continues to be Mei-Xin’s
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`exclusive distributor and that all previous termination efforts were invalid. Lastly,
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`Golden Fortune filed a motion for a preliminary injunction seeking to prohibit Mei-Xin
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`and Maxim’s from terminating the Distribution Agreement and from engaging any other
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`distributor in the eastern United States.
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`Although it found that the dispute was arbitrable, the District Court granted
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`Golden Fortune’s motion for a preliminary injunction. The District Court ordered that
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`the parties enter an “alternative security arrangement” under which Golden Fortune
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`would purchase 17% more product annually from Mei-Xin. J.A. 44-45. The preliminary
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`injunction and security agreement are to remain effective until the parties complete
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`arbitration. On April 18, 2022, Mei-Xin and Maxim’s filed a timely notice of appeal.
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`II.
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`JURISDICTION AND STANDARD OF REVIEW
`
`
`
`The District Court had subject matter jurisdiction pursuant to 28 U.S.C.
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`§ 1332(a)(2). This Court has jurisdiction pursuant to 28 U.S.C. § 1292(a).
`
`“In reviewing the grant or denial of a preliminary injunction, we employ a
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`tripartite standard of review: findings of fact are reviewed for clear error, legal
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`conclusions are reviewed de novo, and the decision to grant or deny an injunction is
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`
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`5
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`
`
`
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`reviewed for abuse of discretion.” Osorio-Martinez v. Att’y Gen. U.S., 893 F.3d 153, 161
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`(3d Cir. 2018) (quoting Del. Strong Families v. Att’y Gen. of Del., 793 F.3d 304, 308 (3d
`
`Cir. 2015)).
`
`III. DISCUSSION
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`We disagree with the District Court’s grant of a preliminary injunction in favor of
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`Golden Fortune. Golden Fortune has not shown a likelihood of success on the merits or
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`that it will more likely than not suffer irreparable harm in the absence of the grant of a
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`preliminary injunction.
`
`A.
`
`Preliminary Injunction
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`
`
`Preliminary injunctive relief is an “extraordinary remedy” that “should be granted
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`only in limited circumstances.” Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d
`
`Cir. 2004) (quoting Am. Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d
`
`1421, 1427 (3d Cir. 1994)). In determining whether to grant a request for injunctive
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`relief, courts consider four factors. These factors are: (1) whether the movant has shown
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`“a reasonable probability of eventual success in the litigation”; (2) whether the movant
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`“will be irreparably injured . . . if relief is not granted”; (3) “the possibility of harm to
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`other interested persons from the grant or denial of the injunction”; and (4) whether
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`granting the preliminary relief will be in “the public interest.” Reilly v. City of
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`Harrisburg, 858 F.3d 173, 176 (3d Cir. 2017) (quoting Del. River Port Auth. v.
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`Transamerican Trailer Transp., Inc., 501 F.2d 917, 919-20 (3d Cir. 1974)).
`
`
`
`6
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`
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`The first two factors are the “most critical.” Id. at 179. They are “gateway
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`factors,” meaning that failure to satisfy them ends the inquiry. Id. Once the gateway
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`factors are met, the court, “in its sound discretion,” should balance all four factors. Id. at
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`176.
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`i. Likelihood of Success on the Merits
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`A likelihood of success “requires a showing significantly better than negligible but
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`not necessarily more likely than not.” Id. at 179 (citing Singer Mgmt. Consultants, Inc. v.
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`Milgram, 650 F.3d 223, 229 (3d Cir. 2011) (en banc)).
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`Here, Golden Fortune has alleged that Mei-Xin’s termination of the Distribution
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`Agreement violates the good cause standard under the NJFPA. See § 56:10-5. This
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`claim turns on whether the NJFPA applies to Golden Fortune. The District Court
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`concluded it does. We disagree for two primary reasons. First, Golden Fortune and Mei-
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`Xin do not share the requisite community of interest. See § 56:10-3(a). Second, 20% of
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`Golden Fortune’s annual gross sales are not derived from Mei-Xin. See § 56:10-4(a).
`
`1. Community of Interest
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`The NJFPA defines franchise as “a written arrangement for a definite or indefinite
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`period, in which a person grants to another person a license to use a trade name, trade
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`mark, service mark, or related characteristics, and in which there is a community of
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`interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or
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`
`
`7
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`
`
`
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`otherwise.” § 56:10-3(a) (emphasis added). Golden Fortune cannot satisfy the
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`“community of interest” element.
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`The lynchpin of the community of interest element—and the NJFPA more
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`generally—is the vulnerability of the purported franchisee. See, e.g., N.J. Am., Inc. v.
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`Allied Corp., 875 F.2d 58, 65 (3d Cir. 1989) (observing that the New Jersey legislature
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`enacted the NJFPA to protect the “vulnerable position” of franchisees); Westfield Ctr.
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`Serv., Inc. v. Cities Serv. Oil Co., 86 N.J. 453, 466 (N.J. 1981) (explaining that
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`“[r]estoration of the loss accords with the legislative desire to protect the innocent
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`franchisee when the termination occurs at the franchisor's convenience”). We consider
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`several factors bearing on the purported franchisee’s vulnerability in determining whether
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`this element is satisfied. They include: the “(1) [the] licensor’s control over the licensee,
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`(2) the licensee’s economic dependence on the licensor; (3) disparity in bargaining
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`power, and (4) the presence of a franchise-specific investment by the licensee.” Cassidy
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`Podell Lynch, Inc. v. SnyderGeneral Corp., 944 F.2d 1131, 1140 (3d Cir. 1991).
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`The first factor—control—requires that the purported franchisee act at the “whim,
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`direction and control of a more powerful entity whose withdrawal from the relationship
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`would shock a court’s sense of equity.” Colt Indus. Inc. v. Fidelco Pump & Compressor
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`Corp., 844 F.2d 117, 120–21 (3d Cir. 1988). Indicators of control include sales quotas
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`
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`8
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`
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`and whether advertising and promotional materials provided to the purported franchisee
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`are merely suggested as opposed to required. Id.
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`The second factor—economic dependence—refers to “the complex of mutual and
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`continuing advantages which induced the [purported] franchisor to reach his ultimate
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`consumer through entities other than his own which, although legally separate, are
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`nevertheless economically dependent upon him.” Cassidy Podell Lynch, Inc., 944 F.2d at
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`1141 (quoting Neptune T.V. & Appliance Serv., Inc. v. Litton Microwave Cooking Prods.
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`Div., 462 A.2d 595, 600-01 (N.J. Super. Ct. App. Div. 1983)). Relying on a “single
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`supplier” does not “automatically” render a distributor economically dependent on that
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`supplier for purposes of the NJFPA. Id. at 1141-42. The parties must intend to create a
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`franchisor-franchisee relationship when entering the business agreement. Id.
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`The third factor—disparity in bargaining power—means that the purported
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`franchisor has “become[] dependent as a result of the relation itself.” Id. at 1142. It does
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`not exist ex ante. Instead, it occurs when the purported franchisee has been “induce[d] or
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`require[d] . . . to invest in skills or assets that have no continuing value to” the franchisee
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`if the business relationship is terminated. Id. The fourth and final factor refers to “any
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`significant specific investment in capital equipment [by the purported franchisee] that
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`could only be used” for the benefit of the purported franchisor. Id.
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`The District Court concluded that a community of interest existed between Golden
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`Fortune and Mei-Xin. In doing so, it relied primarily on perceived mutual advantages:
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`
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`9
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`
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`Golden Fortune developed a client base for Mei-Xin in the eastern United States, and
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`Mei-Xin gained access to Golden Fortune’s supermarkets and wholesale customers. In
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`our view, these allegations do not suffice and the above factors weigh against finding a
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`community of interest.
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`We begin with control. The Distribution Agreement is an ordinary commercial
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`contract, and not “so burdensome as to create the unfettered control typically present in a
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`franchise relationship.” Id. at 1141. While Mei-Xin did provide some guidance to
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`Golden Fortune as to marketing, these were not requirements. Instead, Golden Fortune
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`kept its promise to “work together with [a] brand’s in-house marketing team.” J.A. 724 ¶
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`13.
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`As for economic dependence, the District Court correctly identified some mutual
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`advantages stemming from the Distribution Agreement. However, that Golden Fortune
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`came to rely exclusively on Mei-Xin for its mooncakes does not transform the Distributor
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`Agreement into a franchisor-franchisee relationship where that intent did not appear to
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`exist for either party in the first place. Cassidy Podell Lynch, Inc., 944 F.2d at 1141-42.
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`The facts here indicate a lack of economic dependence: Golden Fortune distributes
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`approximately 1,598 products aside from Mei-Xin’s mooncakes, and Mei-Xin products
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`account for only 8.6% of Golden Fortune’s annual revenue.
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`Nor has Golden Fortune become so dependent on Mei-Xin as to create a disparity
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`in bargaining power. Golden Fortune did not invest in skills that have no continuing
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`
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`10
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`
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`value beyond the Distribution Agreement. Indeed, the Agreement offered Golden
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`Fortune one of many opportunities to “sourc[e] high quality products”—a practice that
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`Golden Fortune has been engaged in for 40 years. J.A. 723 ¶ 4. Nor did Mei-Xin require
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`Golden Fortune to invest in assets. Lastly, although Golden Fortune has invested in
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`marketing programs specific to Mei-Xin, those alone do not warrant a different result.
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`Taken together, these factors indicate that Golden Fortune and Mei-Xin do not share the
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`community of interest required under the NJFPA. See § 56:10-3(a).
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`2. 20% Gross Sales Requirement
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`Further, Golden Fortune does not meet the 20% gross sales requirement. The
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`NJFPA applies only “(2) where gross sales of products . . . between the franchisor and
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`franchisee . . . have exceeded $35,000.00 for the 12 months next preceding the institution
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`of suit pursuant to this act, and (3) where more than 20% of the franchisee’s gross sales
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`are intended to be or are derived from [the] franchise.” § 56:10-4(a)(2)-(3).
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`We must decide whether the “12 months next preceding the institution of suit”
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`clause applies to both subsections (a)(2) and (a)(3). We interpret the provision
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`“consistent with its plain meaning.” Oberhand v. Dir., Div. of Taxation, 193 N.J. 558,
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`568 (N.J. 2008) (citation omitted). We must also construe remedial statutes like the
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`
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`11
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`
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`
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`NJFPA “broadly to give effect to their legislative purpose.” Liberty Lincoln–Mercury v.
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`Ford Motor Co., 134 F.3d 557, 566 (3d Cir. 1998).
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`While the District Court concluded no temporal limitation applies, we think the
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`better reading is that “20% of a franchisee’s gross sales over a 12-month period are
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`intended to be or are derived from the franchise.” Unlike § 56:10-4(a)(2), which places a
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`12-month limitation on the $35,000 gross sales requirement, § 56:10-4(a)(3) contains no
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`temporal limitation. Nonetheless, the canon of consistent usage indicates that we should
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`also apply the 12-month limit to subsection (a)(3). Pursuant to that canon, “[a] term
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`appearing in several places in a statutory text is generally read the same way each time it
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`appears.” United States v. Scott, 14 F.4th 190, 197 (3d Cir. 2021) (quoting Ratzlaf v.
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`United States, 510 U.S. 135, 143 (1994)). Both subsections (a)(2) and (a)(3) reference
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`“gross sales” requirements. Because “gross sales” in subsection (a)(2) refers to gross
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`sales over a 12-month period, we should read “gross sales” in subsection (a)(3) as
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`referring to a 12-month period as well.
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`If there were any ambiguity, the context confirms our interpretation. See King v.
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`Burwell, 576 U.S. 473, 486 (2015) (explaining that we “read the words [of a statute] ‘in
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`their context’” and do not construe “isolated provisions”) (citations omitted). Section
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`56:10-3(a) defines a “franchise” as “a written arrangement for a definite or indefinite
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`
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`12
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`
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`
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`period.” Here, the Distribution Agreement is for a term of 12 months. It follows that we
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`should consider “gross sales” over that period for purposes of the 20% requirement.
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`Lastly, our interpretation is consistent with the purpose of the NJFPA, which is to
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`“protect franchisees from unreasonable termination by franchisors that may result from a
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`disparity of bargaining power[.]” § 56:10-2. Reading a 12-month limitation into the 20%
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`gross sales requirement does just that: it offers security to franchisees that depend on a
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`franchisor for the success of their business. By contrast, distributors who rely on several
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`different supply streams are less likely to need protection if one supplier terminates the
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`business relationship.
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`Applying the 12-month limitation, Golden Fortune has not satisfied the 20% gross
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`sales requirement. Between September 1, 2018 and August 31, 2019, Golden Fortune
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`derived $3,959,887—or 8.6%—of its $45,720,201 in gross sales from Mei-Xin. Golden
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`Fortune urges us to focus only on the “peak sales season for MX Mooncakes”—namely,
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`the three-month period surrounding the Mid-Autumn Festival during which 24% of
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`Golden Fortune’s gross sales were derived from Mei-Xin. J.A. 192 ¶ 91. We decline to
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`do so. That approach poses an inconsistent usage problem. It disregards that the
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`Distribution Agreement covers a 12-month period and contemplates distribution of a
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`myriad of non-seasonal Mei-Xin products apart from the mooncake. Lastly, it does not
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`13
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`
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`further the protective purpose of the NJFPA: without the Mei-Xin mooncake, Golden
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`Fortune can still make 91.4% of its gross sales and distribute 1,598 other products.
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`ii. Irreparable Harm
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`The District Court held that Golden Fortune’s allegations of irreparable harm were
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`sufficient. J.A. 36. Specifically, Golden Fortune alleged that it was set to lose (1) its
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`investment in the promotion of Defendants’ products, entire good will and market share
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`for MX Mooncakes; and (2) all the sales of its other products that routinely are purchased
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`by Asian supermarkets alongside their mooncake orders. We disagree.
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`To establish irreparable harm, there must be “a ‘clear showing of immediate
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`irreparable injury,’ or a ‘presently existing actual threat.’” Acierno v. New Castle Cnty.,
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`40 F.3d 645, 655 (3d Cir. 1994) (citation omitted). The mere “risk of irreparable harm is
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`not enough.” ECRI v. McGraw–Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987). Further, the
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`alleged harm “must be of a peculiar nature, so that compensation in money cannot atone
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`for it.” Acierno, 40 F.3d at 653 (internal quotation marks and citation omitted).
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`It follows that economic loss, including a “temporary loss of income, ultimately to
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`be recovered, does not usually constitute irreparable injury.” Sampson v. Murray, 415
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`U.S. 61, 90 (1974); see also Acierno, 40 F.3d at 653. For instance, in Frank’s GMC
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`Truck Center, Inc., we reversed the grant of a preliminary injunction where a franchisor
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`ceased supplying some of its products, and a franchisee argued that its inability to sell
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`those products would make potential customers “more reluctant” to purchase the
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`
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`14
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`
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`remaining products. Frank’s GMC Truck Ctr., Inc. v. Gen. Motors Corp., 847 F.2d 100,
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`102 (3d Cir. 1988). We concluded that the loss of “sales and service customers, and
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`therefore profits,” was not irreparable harm. Id.
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` Such losses can rise to the level of irreparable harm only where they would
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`“force[] [the business] to shut down.” Instant Air Freight Co. v. C.F. Air Freight, Inc.,
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`882 F.2d 797, 802 (3d Cir. 1989). As our precedent makes clear, this threshold is a
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`significant one. In Instant Air Freight Co., we concluded that there was no irreparable
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`harm where a company stood to lose 80% of its business from the termination of a
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`business agreement. Id. That 20% of the business survived meant that the company
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`would not be “forced into bankruptcy.” Id. We also noted that the company was “free to
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`secure other business,” and the contract at issue would terminate in under two years
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`regardless of our decision. Id.
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`Even where allegations of economic injury are coupled with allegations of non-
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`economic injury, a preliminary injunction is nonetheless inappropriate where money
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`damages are adequate. Id. Apart from losing a substantial portion of its business, the
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`plaintiff in Instant Air Freight Co. also alleged the loss of “many if not all of its
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`employees, and its goodwill and reputation in the industry.” Id. at 798-99, 801. In
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`holding that money damages were sufficient in Instant Air Freight Co., we relied on three
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`factors. First, that “[m]oney damages . . . should be provable with reasonable certainty
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`given the” two-decades-long business relationship. Id. at 802. Second, we considered
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`15
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`
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`that the company could “procur[e] suitable substitute performance by means of money
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`awarded as damages,” which would “compensate [the business] fully for its lost profits
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`and other injuries it may prove.” Id. (quoting Rest. (Second) of Contracts § 360 (Am. L.
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`Inst. 1981)). Third, we concluded that the money damages were collectable given the
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`supplier’s high annual revenue. Id.
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`At bottom, Golden Fortune argues that it “stand[s] to lose sales and . . . customers,
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`and therefore profits,” which does not qualify as irreparable harm. Frank’s GMC Truck
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`Ctr., Inc., 847 F.2d at 102. Further, this is not a scenario where termination of the
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`Distribution Agreement would “force[] [Golden Fortune] to shut down.” Instant Air
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`Freight Co., 882 F.2d at 802. Golden Fortune imports and distributes at least 1,599
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`products and sells over 150 brands as well as its own brand. In all, Mei-Xin products
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`constitute only 8.6% of its $45 million in annual revenue. In light of our prior holding
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`that losing 80% of one’s business does not constitute irreparable harm, we are hard
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`pressed to hold that Golden Fortune has made the requisite showing here. See id.
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`To be sure, the “loss of control of reputation, loss of trade, and loss of goodwill”
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`may constitute irreparable harm in some contexts. See, e.g., Pappan Enters., Inc. v.
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`Hardee’s Food Sys., Inc., 143 F.3d 800, 805 (3d Cir. 1998) (citing Opticians Ass’n of
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`Am. v. Indep. Opticians of Am., 920 F.2d 187, 195 (3d Cir. 1990)). To the extent that a
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`plaintiff alleges these harms, we require it to demonstrate that its business “is different
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`from other types of commerce in such a way that normal breach of contract remedies
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`16
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`could not provide a remedy.” Bennington Foods LLC v. St. Croix Renaissance, Grp.,
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`LLP, 528 F.3d 176, 179 (3d Cir. 2008); see also Pappan Enters., Inc., 143 F.3d at 807
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`(holding that the “right of the public not to be deceived or confused” warrants a
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`preliminary injunction where two parties were using the same trademark) (quoting
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`Opticians Ass’n of Am., 920 F.2d at 197); Novartis Consumer Health, Inc. v. Johnson &
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`Johnson-Merck Consumer Pharms. Co., 290 F.3d 578, 589-90, 596 (3d Cir. 2002)
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`(holding that a preliminary injunction is warranted where a false or misleading ad would
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`produce consumer confusion, resulting in a “loss of market share” “[i]n a competitive
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`industry where consumers are brand-loyal”).
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`Where the alleged harms stem from the termination of a business agreement, we
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`require evidence that the moving party has not been able to perform on contracts with
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`third parties because of the loss, or for it to point to a loss of goodwill or reputation with
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`specific customers. See Bennington Foods LLC, 528 F.3d at 179. Indeed, the harm
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`caused must be direct. It is not enough for the claim to be “two-step,” meaning (1)
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`because the supplier is not distributing, the distributor cannot distribute, and (2) the lack
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`of the delivery harms the reputation with third parties who do not receive the distribution.
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`Id. at 180. That is a standard breach of contract case, and “there is no reason to make the
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`extended causal inferences necessary to find irreparable harm to reputation.” Id.
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`Although Golden Fortune has also alleged non-economic harms, such as the loss
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`of good will and market share, the adequacy of monetary damages weighs against a
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`17
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`finding of irreparable harm. Money damages are readily ascertainable given the two-
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`decades-long history between Golden Fortune and Mei-Xin. Id. Money damages would
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`allow Golden Fortune to seek substitute performance, which will fully compensate it—
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`especially because other companies have mirrored the quality of Mei-Xin mooncakes,
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`“narrowing [] the gap between MX Mooncakes and competitor brands” over the years.
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`J.A. 873 ¶ 13. Lastly, there is a high likelihood that money damages will be collectable
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`given the international success of Mei-Xin and Maxim’s. See Instant Air Freight Co.,
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`882 F.2d at 802.
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`Because Golden Fortune has failed to demonstrate that its business “is different
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`from other types of commerce” or cite specific instances of the loss of good will from its
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`inability to distribute Mei-Xin products, we have no reason to depart from our general
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`rule. Bennington Foods LLC, 528 F.3d at 179. Any allegations of a loss of good will are
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`exactly the kind of “two-step” claims we have previously rejected. See id. at 180.
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`IV. CONCLUSION
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`For these reasons, we will reverse the order of the District Court based on Golden
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`Fortune’s failure to satisfy the requirements for a preliminary injunction.
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`18
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