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Caterpillar Inc v. Esco Corporation

January 26, 2012

CATERPILLAR INC., PLAINTIFF,
v.
ESCO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Joe Billy Mcdade United States Senior District Judge

E-FILED

Thursday, 26 January, 2012 04:27:20 PM

Clerk, U.S. District Court, ILCD

OPINION and ORDER

Before the Court is the Motion for Temporary Restraining Order and/or Preliminary Injunction filed by Plaintiff, Caterpillar Inc., on January 12, 2012 (Doc. 5). The Motion is denied insofar as it requests a temporary restraining order, and taken under advisement insofar as it requests a preliminary injunction.

BACKGROUND

On January 12, 2012, Plaintiff Caterpillar Inc. ("Caterpillar"), a manufacturer of heavy equipment used in construction, mining, and other applications, filed a Verified Complaint (Doc. 1) with this Court. In its Complaint, Caterpillar alleges that ESCO Corporation ("ESCO"), a manufacturer of ground engaging tools capable of being incorporated in products manufactured by Caterpillar, has breached its contract with Caterpillar. Specifically, Caterpillar alleges that ESCO has failed to live up to its obligations under the Master Purchase Agreement ("MPA"), which, according to Caterpillar, requires ESCO "to provide Caterpillar with all of Caterpillar's requirements" for a ground engaging tool system known as the K-Series. (Doc. 1 at 1). Caterpillar maintains that it holds a privileged status with respect to ESCO's production capacity as a result of a provision in the MPA which states that ESCO will give Caterpillar's "Firm Orders" for K-Series products "first priority on ESCO's production capacity." (Doc. 1 at 2). However, Caterpillar does not believe that it has been receiving "first priority" treatment, and that, as a result, Caterpillar's supply of the K-Series product has been significantly disrupted. Caterpillar alleges that by the end of 2011, "ESCO was behind on 2,511 tons" of K-Series product that Caterpillar had ordered. (Doc. 12 at 14).

Also on January 12 Caterpillar filed the present Motion seeking a temporary restraining order and/or a preliminary injunction "in order to protect its supply chain of a component part (the K-Series ground engaging tool) that is critical to its business." (Doc. 5 at 1). According to Caterpillar, if ESCO fails to supply Caterpillar with its K-Series requirements, the consequences would be dire: "Production lines would shut down. Caterpillar would not be able to supply its customers . . . with new machines that dealers in turn sell to end users." (Doc. 5 at 2). Additionally, because the "tips" of the K-Series product wears out with use, Caterpillar claims that "[i]f the supply of K-Series [replacement] parts were cut off, end users around the world would be deprived of the use of their machines, causing sweeping injuries that may lead to litigation against Caterpillar, its dealers, ESCO and others."*fn1 (Id.) Both of these types of harms, Caterpillar alleges, will "damage Caterpillar's reputation, harm its good will[,] and result in lost profits." (Id.) Caterpillar maintains that a temporary restraining order is appropriate, because the harm which would be caused is of a type "for which there would be no adequate remedy at law." (Id.)

A hearing on the present Motion was held on January 24, 2012, in which both parties were represented by counsel. For the purposes of the present Motion, the Court notes that it will not consider Caterpillar's Reply (Doc. 23) to ESCO's Response, as that document was stricken from the record.

DISCUSSION

A temporary restraining order ("TRO") is an "emergency remedy," which, generally speaking, is used to "maintain the status quo until a hearing can be held on an application for a preliminary injunction." Crue v. Aiken, 137 F. Supp. 2d, 1076, 1082 (C.D. Ill. 2001). A TRO is therefore a form of preliminary relief used "to minimize the hardship to the parties pending the ultimate resolution of the lawsuit." Platinum Home Mortgage Corp. v. Platinum Financial Group, Inc., 149 F.3d 722, 726 (7th Cir. 1998). In the Seventh Circuit, the standards for a TRO and a preliminary injunction are functionally identical. Crue, 137 F. Supp. 2d at 1082-83.

Federal Rule of Civil Procedure 65 provides for the issuance of a TRO with or without notice. Notice was given in this case, and, as mentioned above, a hearing was held. In order for a TRO to issue, a party must make a threshold showing that:

(1) it has some likelihood of success on ...


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