MEMORANDUM AND ORDER
HANNUM, District Judge.
In this diversity action, plaintiff, Keystone Floor Products Co. (Keystone) seeks injunctive relief and damages alleging that the defendants engaged in the following unlawful conduct: (1) breach of contract by defendant Beattie Manufacturing Co. (Beattie); (2) malicious interference with contract by defendant Beattie; (3) unfair competition by defendant Beattie; and (4) antitrust violations by both defendants. Presently before the Court is plaintiff's motion for a preliminary injunction based upon plaintiff's first three allegations.
On May 8, 1973, after notice to defendants, a temporary restraining order was issued prohibiting defendants from:
(1) Inducing or attempting to induce any of plaintiff's customers from purchasing carpet from any other, than plaintiff.
(2) Inducing and interfering in any manner whatsoever with plaintiff's present or prospective contractual relations with plaintiff's customers.
(3) Interfering in any manner whatsoever with plaintiff's employees present or past, specifically as to disclosure of plaintiff's confidential information and trade secrets.
(4) Using, disclosing or attempting to use or disclose for the benefit of themselves or any other person directly or indirectly any confidential information acquired by defendants Levenkron and Wittenberg while in plaintiff's employ. The temporary restraining order was modified during the course of the hearing on plaintiff's application for a preliminary injunction, and at the conclusion of the hearing it was extended, as modified, with Beattie's consent.
For the reasons set forth herein, the temporary restraining order will be dissolved and plaintiff's motion for a preliminary injunction will be denied.
Breach of Contract
Defendant Beattie is engaged in the manufacture and nationwide distribution of carpeting. Beattie sells its brand-name products to approximately 20 to 25 carpet distributors throughout the country and, in some markets, sells its brand-name carpet directly to retail commercial outlets. In 1966 Beattie appointed Keystone as distributor of certain lines of Beattie brand-name carpets in the Philadelphia, Baltimore and Washington, D.C. areas. In 1971, Keystone was also appointed Beattie's distributor in northern New Jersey. Although there was no written agreement between Beattie and Keystone, Beattie did publish a list of "General Terms and Policies for Distributors" in May 1970. Paragraph 15 of this writing provided as follows:
"The mill-distributor relationship may be discontinued without cause, provided 60 days notice is given by either party. This practice will be considered as common usage and both parties will be notified where the communication was made as was this by certified mail, return receipt requested."
The May 1970, statement of general terms and policies also included paragraphs relating to credit terms and claims handling. The Testimony of Richard A. Freed, President of Keystone, and John Beattie, President of Beattie, indicated that policies of credit and claims were subject to negotiation and change. Keystone was formally advised of its sole distribution rights in the area of its distributorship on January 17, 1972 by letter from John A. Beattie. In July 1972, plaintiff moved its place of business to obtain increased warehouse space. Beattie carpet comprised a substantial portion of Keystone's inventory in this new warehouse, although Keystone also distributed carpet manufactured by several other companies.
On April 25, 1973, Beattie notified Keystone that its distributorship would be discontinued,
but agreed to continue to supply Keystone for 60 days, or slightly longer if Keystone believed it necessary, on a C.O.D. basis only. Immediately after giving this notice Beattie commenced soliciting business in the Philadelphia and northern New Jersey areas.
Keystone concedes that Beattie could terminate its distributorship without cause, but contends that Beattie breached a valid contract between the parties by the following acts and conduct:
(a) Defendant failed to give plaintiff 60 days' notice of the discontinuance of the mill-distributor relationship, as required by Paragraph 15 of the May 25, 1970 writing.
(b) Defendant's purported notice of discontinuance of the mill-distributor relationship was not made by "certified mail, return receipt requested" as required by Paragraph 15 of the writing of defendant dated May 25, 1970.
(c) By changing the terms of payment for defendant's products by plaintiff from "5% 30 days, net 31, or 4% 60 days, net 61," as set forth in Paragraph 5 of defendant's writing dated May 25, 1970, to "a C.O.D. basis only," defendant breached the terms of the agreement establishing the distributorship.
(d) Since approximately the middle of April 1973, through various of its agents and representatives, defendant has itself acted as a distributor of its carpet in the geographic area of plaintiff's distributorship and has thereby violated the contract or agreement establishing plaintiff as defendant's sole distributorship in that area.
Keystone contends that as a result of Beattie's alleged breaches of contract, it is suffering immediate and irreparable harm for which there is no adequate remedy at law. Accordingly, it seeks a preliminary injunction restraining defendant from continuing these alleged breaches.
Assuming, arguendo, the existence of a valid contract, which could be enforced at law like any other, the Court cannot conclude that equitable relief in the nature of a preliminary injunction is also available to Keystone. Initially, Keystone has not made a sufficient showing that in the absence of an injunction it will suffer immediate and irreparable harm which could not be compensated by damages. There was evidence that Keystone had traditionally distributed carpets of several other manufacturers and that Keystone had sent an emissary to the South in February 1973, for the purpose of replacing existing lines of Beattie products with carpet lines of other manufacturers. While it is apparent that plaintiff has and will continue to suffer economic injury caused by Beattie's refusal to continue selling to Keystone other than on a C.O.D. basis and by Beattie's competition in certain areas of the market, the severity, in fact, of such injury has been left largely unproven. More important, however, in the circumstances of this case, is the rule that equitable relief should not be granted if it will involve repeated recourse to the court in order to do justice to both parties.
Keystone seeks to have Beattie enjoined from selling its carpet in competition with Keystone for the 60 day period allegedly required by a contract between the parties. Any such injunction would, of course, be conditioned upon Keystone continuing to devote its efforts to distribution of Beattie carpet in the area of its distributorship. Too much would depend on cooperation that could not be expected from the parties engaged in the present litigation. There was testimony that Keystone submitted fraudulent claims to Beattie, that it had passed off other carpeting as a Beattie product, and that in February 1973, it was seeking replacement lines for Beattie products. As Judge Learned Hand stated in Bethlehem Engineering Export Co. v. Christie, 105 F.2d 933 (2d Cir. 1939):
"It would indeed be easy to forbid the defendant to contract with anyone else, and that might force them to go on with the plaintiff's contract. But the continuance of such an injunction would depend upon the continuance of the defendant's obligation to the plaintiff; and the continuance of that obligation would in turn depend upon the plaintiff's continued performance of its duties under the contract. . . They involve, not only the faithful prosecution of the business in general (which of itself might involve constant scrutiny) but cooperation with the defendants . . . Every reason which makes a specific performance of the defendants' obligation impracticable applies equally to an injunction conditional on the plaintiff's performance, since the two performances are so mutually interwoven." (p. 935)