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Cont'l Airlines, Inc. v. Intra Brokers - 24 F.3d 1099 (9th Cir. 1994)

Rule:

Irreparable injury is required for preliminary injunctions, but once actual success on the merits has been established, a party is entitled to relief as a matter of law irrespective of the amount of irreparable injury which may be shown. Irreparable injury is not an independent requirement for obtaining a permanent injunction as opposed to a preliminary injunction or temporary restraining order; it is only one basis for showing the inadequacy of the legal remedy.

Facts:

Plaintiff Continental Airlines, Inc. published discount coupons in 1991 and 1992. They were redeemable with Continental for various discounts, such as $ 100 off on a roundtrip airfare of $ 351 or more. Defendant Intra Brokers, Inc. acquired the coupons and sold them to travel agents, for resale to their customers. In 1991, Continental wrote to Intra and informed the latter that it will begin to although it had not enforced its rule against transfer of the coupons before, it would begin to do so with the 1992 coupon book. In 1992, Continental’s attorney wrote Intra, again demanding that Intra stop selling the coupons. Intra responded through its attorney that the restrictions on transfer were invalid, and refused to assure Continental that it would cease selling the coupons. Thereafter, Continental sued for damages, declaratory relief, and an injunction. Intra counterclaimed, alleging fraud, negligent misrepresentation, and interference with prospective economic advantage. The district court dismissed the counterclaims on the basis of federal preemption and granted summary judgment to Continental on its claims for declaratory and injunctive relief. The permanent injunction commanded Intra not to sell Continental coupons.

Intra appealed the injunction, claiming that Continental waived or was estopped from asserting non-transferability.

Issue:

In its action alleging, inter alia, interference with prospective economic advantage, could plaintiff Continental Airlines, which had not previously enforced an anti-assignment provision on discount coupons, begin to enforce it and obtain an injunction?

Answer:

Yes.

Conclusion:

The United States Court of Appeals for the Ninth Circuit affirmed the district court's order granting plaintiff Continental Airlines a permanent injunction against defendant broker. The Court held that neither waiver nor estoppel barred plaintiff's claim and that plaintiff had no adequate remedy at law. The Court held that Continental Airlines was entitled to control its own discounting policies, including assignment of discounting coupons, and to change those policies. According to the Court, in the absence of evidence to support any affirmative defense, a prospective injunction enabling Continental to exercise that control was appropriate.

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