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Pure Wafer Inc. v. City of Prescott

United States District Court, D. Arizona

July 31, 2017

Pure Wafer Incorporated, Plaintiff,
v.
City of Prescott, et al., Defendants.

          ORDER AND PERMANENT INJUNCTION

          James A. Teilfefirg Senior United States District Judge

         Pending before the Court is Pure Wafer, Inc.'s (“Pure Wafer's”) Motion for Judgment on Remand (“Motion”). (Doc. 135). The City of Prescott (the “City”) and the City's individual administrators in their official capacities filed a Response to Pure Wafer's Motion. (Doc. 139). Pure Wafer has filed a Reply, (Doc. 141), and the City has filed an Objection to Pure Wafer's Reply, (Doc. 145). The Court now rules on Pure Wafer's Motion.

         I. BACKGROUND

         The Court previously detailed the factual and procedural background in its Findings of Fact and Conclusions of Law and Permanent Injunction (“Findings and Conclusions”). (See Doc. 87 at 1-13). After a bench trial, the Court found that the City violated the Contract Clause of the U.S. Constitution when it declared that its sewage treatment plant would no longer accept effluent discharged by Pure Wafer. (See Id. at 13- 29). Because the Court found in favor of Pure Wafer on its Contract Clause claims, it did not reach the merits of Pure Wafer's alternative claims for breach of contract and the implied covenant of good faith and fair dealing resulting from the parties' obligations under a Development Agreement. (Id. at 29). The Court also granted Pure Wafer's request for a permanent injunction, enjoining the City from enforcing various provisions of the City's Ordinance No. 4856-1313 (the “Ordinance”) against Pure Wafer. (See Id. at 29-32). The Court finally entered a final judgment in Pure Wafer's favor. (“Judgment, ” Doc. 88).

         The City appealed the Findings and Conclusions as well as the Judgment. (Doc. 95). The Ninth Circuit Court of Appeals (the “Ninth Circuit”) affirmed-in-part and reversed-in-part and remanded for further proceedings. Pure Wafer Inc. v. City of Prescott, 845 F.3d 943, 959 (9th Cir. 2017). In particular, the Ninth Circuit held:

[W]hile the City prevails on its appeal of the Contract Clause issue, judgment for Pure Wafer can be sustained on the alternative ground that the City has breached its contract with Pure Wafer. We leave it for the district court on remand to decide the appropriate remedy.

Id. at 958. The Ninth Circuit also affirmed the Court's judgment on the City's counterclaim. Id. at 958 n.14.

         After reviewing the parties' Joint Status Report on Remand, the Court continued to exercise supplemental jurisdiction over Pure Wafer's breach of contract claims and deemed Pure Wafer's complaint amended to conform to the evidence presented at trial. (Doc. 134 at 1-2). The Court also ordered supplemental briefing on the appropriate remedy in light of the Ninth Circuit's opinion. (Id.).

         II. LEGAL STANDARD

         A plaintiff must satisfy the following four-factor test before a court may grant permanent injunctive relief: (1) the plaintiff must suffer irreparable injury; (2) legal remedies, such as money damages, are inadequate; (3) an equitable remedy is warranted in light of the balance of hardships between the parties; and (4) a permanent injunction would not disserve the public interest. Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 156-57 (2010) (citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). “[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and . . . such discretion must be exercised consistent with traditional principles of equity.” eBay, 547 U.S. at 394.

         III. ANALYSIS [1]

         Pure Wafer argues that the Court should grant its request for a permanent injunction that (1) enjoins the City from enforcing portions of the Ordinance against Pure Wafer; and (2) orders the City to comply with specific portions of the Development Agreement. (See Doc. 135-1 at 28-29). The City argues that Pure Wafer's request is duplicative, and the Court should only order it to comply with specific portions of the Development Agreement. (See Doc. 139-1 at 2-3). Because the basis justifying Pure Wafer's remedy is different from the basis the Court relied upon in its Findings and Conclusions, the Court will re-analyze the four factors necessary to issue a permanent injunction consistent with the Ninth Circuit's mandate.

         A. Specific Performance or a Permanent Injunction

         As a threshold matter, the parties disagree whether the Court should order specific performance and/or grant Pure Wafer's request for a permanent injunction. In particular, Pure Wafer argues that both remedies are appropriate, (Docs. 135 at 5-10; 141 at 2-3), while the City argues that only specific performance is an ...


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