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CHEYENNE SALES v. WESTERN UNION FIN. SERVS. INT'L

June 1, 1998

CHEYENNE SALES, LTD.
v.
WESTERN UNION FINANCIAL SERVICES INTERNATIONAL



The opinion of the court was delivered by: DALZELL

MEMORANDUM

 Dalzell, J.

 June 1, 1998

 Plaintiff Cheyenne Sales, Limited, a Jamaica business, seeks to enjoin Western Union from terminating, on one-day's notice, its "Quick Collect" money transfer service. The parties have filed cross-motions for summary judgment. For the reasons stated below, we will grant defendant's motion and enter judgment against plaintiff.

 I. Factual Background1

 The parties agree on the following facts. Cheyenne Sales, Ltd. ("Cheyenne") contracted with Western Union Financial Services International ("Western Union") to set up a "Quick Collect" account, which is "designed to assist commercial business entities in receiving direct payments from their various account debtors." Joint Stip. at P3. In both applications for the service, *fn2" Cheyenne represented that it was a garment and haberdasher wholesaler, id. at ex. A, at 3-4, and also estimated that it would conduct 500-999 Quick Collect transactions per month. Id. at ex. A, at 1, 5. The service contract between the parties provided that it could be "terminated by either party on thirty days' written notice." Joint Stip. at ex. A, at 7.

 Cheyenne now admits that "its only business was receiving money through the Quick Pay Service," id. at P8; see also Mem. Supp. Prelim. Inj. at 2, presumably for distribution to customers such as English Sports Betting, with whom Cheyenne admits it shares a "symbiotic relationship." Id. ; see also Joint Stip. at P14. Between April and November, 1997, Cheyenne received in excess of 18,200 Quick Collect transactions from all over the United States -- an average of more than 2,275 per month -- including more than 2,000 transactions from the state of Florida. Id. at P15.

 The Florida Attorney General, concerned that citizens of that state were using Western Union's service to transmit funds for illegal offshore gambling, see Fla. Stat. §§ 849.14, 849.25; see also 18 U.S.C. § 1084, "contacted Western Union sometime prior to December 22, 1997, and requested that Western Union voluntarily terminate a number of its customers, including Cheyenne." Joint Stip. at P9. On December 22, 1997, Western Union entered into an "Agreement of Voluntary Cooperation" with the state of Florida whereby, inter alia, Western Union "agreed to implement procedures designed to prevent funds from being transferred from Florida through Western Union's Quick Pay service to" a list of Western Union Quick Pay subscribers that Florida provided. Joint Stip. at ex. C, at 3. That same day, "Western Union issued Cheyenne a letter informing Cheyenne of the Agreement with the Florida Attorney General, and notifying Cheyenne that effective December 23, 1997, Western Union no longer would permit payments to be sent from persons within the United States to Cheyenne via Western Union's Quick Pay service." Def.'s Br. Supp. Summ. J. at 7 (citing Joint Stip. at P 11).

 On December 29, 1997, believing Western to be acting in an "arbitrary and capacious manner," *fn3" Compl. at P 12, Cheyenne filed this action, seeking first to preliminarily enjoin Western Union from terminating Cheyenne's Quick Pay account "during the penance of this action." *fn4" Id. at 4, at P1. On December 30, 1997, Judge Eduardo C. Robreno, sitting as Emergency Judge in our stead, denied plaintiff a temporary restraining order. Cheyenne now seeks a permanent injunction reversing Western Union's termination of its service, and "such other and further relief as the Court deems proper." Id. at 5, at P4. Since we conclude otherwise, we will enter judgment in defendant's favor.

 II. Legal Analysis5

 "'In deciding whether a permanent injunction should be issued, the court must determine if the plaintiff has actually succeeded on the merits (i.e. met its burden of proof). If so, the court must then consider the appropriate remedy.'" ACLU v. Black Horse Pike Reg'l Bd. of Educ., 84 F.3d 1471, 1477 n.3 (3d Cir. 1996)(quoting CIBA-GEIGY Corp. v. Bolar Pharm. Co., Inc., 747 F.2d 844, 850 (3d Cir. 1984)). *fn6" In addition, other district courts in our District have also considered whether "the court's exercise of equity jurisdiction is proper," Ruscavage v. Zuratt, 821 F. Supp. 1078, 1081 (E.D. Pa. 1993); see also Bess v. Correctional Officers c/o Sgt. Brent Post, 1997 U.S. Dist. LEXIS 12305, No. Civ. A. 96-6315, 1997 WL 509817, at *1 (E.D. Pa. Aug. 14, 1997)(citing Ruscavage), a prerequisite we also think logical and therefore adopt.

 A. Equity Jurisdiction and Choice of Remedy

 We have equity jurisdiction over this action if there is no adequate remedy at law, there is actual threatened injury, and no equitable defense precludes our exercise of jurisdiction. Ruscavage, 821 F. Supp. at 1081.

 Western Union argues that Cheyenne has an adequate remedy at law because (1) Cheyenne has alleged that it is losing $ 1,500 a day due to termination of the Quick Collect service, see Joint Stip. at P16; and (2) the contract between the parties that governs the Quick Collect service provides that it "can be terminated by either party on thirty days' written notice." Id. at ex. A, at 7, at P9. Thus, Western Union argues that the damages, if any, that ...


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