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Specific performance is a remedy that is available only when "there is no adequate remedy at law, i.e., damages." Sashti, Inc. v. Glunt Industries, Inc., 140 F.Supp.2d 813, 817 (N.D. Ohio 2001) (citing Gleason v. Gleason, 64 Ohio App.3d 667, 672, 582 N.E.2d 657, 661 (Ohio Ct. App. 1991)). This principle is reflected in the Uniform Commercial Code with the concept of the "commercial feasibility of replacement." U.C.C. § 2-716, Off. Cmt. 2. Ohio Revised Code § 1302.90(A) states, "Specific performance may be decreed where the goods are unique or in other proper circumstances." The Official Comment to the statute provides that the "inability to cover is strong evidence of 'other proper circumstances.'" O.R.C. § 1302.90, Off. Cmt. 2.
This contract dispute was before the court on the motion of plaintiff Mirion Technologies (Canberra), Inc. for a preliminary injunction. Mirion alleged that it entered into a supply agreement with defendant Sunpower, Inc., whereby Sunpower would produce and supply cryocoolers, a device used in nuclear radiation detectors. Mirion asserted that it placed a valid purchase order for 250 cryocoolers but Sunpower breached the agreement by refusing to fill the purchase order. Mirion sought a preliminary injunction requiring specific performance of the supply agreement, such that Sunpower would be ordered to manufacture 250 cryocoolers and supply them to Mirion. The court conducted an evidentiary hearing on September 25, 2017. For the reasons that follow, the motion for a preliminary injunction was denied.
Are Sunpower’s cryocoolers unique under the definition of Ohio commercial law, such that their alleged breach of contract warranted the relief of specific performance?
Courts have said that a good is unique if it is rare, "one of a kind," or nearly impossible to replace. See, e.g., King Aircraft Sales, Inc. v. Lane, 68 Wash. App. 706, 711, 717, 846 P.2d 550, 553, 556-57 (Wash. Ct. App. 1993). Other courts look to the "uncertainty of valuing" the good, in keeping with the precept that specific performance is available only when there is no adequate remedy at law. Van Wagner Advert. Corp. v. S & M Enterprises, 67 N.Y.2d 186, 193, 492 N.E.2d 756, 760, 501 N.Y.S.2d 628 (N.Y. 1986). The U.C.C. provided that "test of uniqueness . . . must be made in terms of the total situation which characterizes the contract." The court found no support for Mirion's claim that Sunpower's CryoTel GT cryocooler is unique. It might have been that high-purity germanium detectors were one of a kind, in comparison to other radiation detectors, in their sensitivity to radioactivity. It might have been that hybrid cryostats were the best option available for cooling germanium crystals. And it might have been that cryocoolers, which make the detectors and cryostats operational, were devices which reflect sophisticated design and technology. But within the nuclear energy industry in which the parties operate, cryocoolers were not unique or rare goods, nor were they incapable of being valued. As a matter of fact, Mirion's own witness, James Colaresi, testified that when Sunpower terminated the prior supply agreement with Canberra in 2013, Canberra "came up with a fairly long list of potential companies" with whom it could approach about supplying a cryocooler for Canberra's Cryo-Cycle II. During the hearing, the court heard of no material changes in the marketplace from 2013 to present day. Sunpower remains one of many potential suppliers of cryocoolers. Indeed, the reason Mirion pursued Sunpower over Thales (another cryocooler manufacturer) in early 2017 was not the uniqueness of Sunpower's product but the higher costs associated with Thales.