Court Denies Kraft Foods' Request For Preliminary Injunction

The injunction would have stopped Starbucks from its attempt “to unilaterally end its strategic partnership with Kraft before the conclusion of an arbitration process."

1/31/2011 --- Kraft Foods has announced that the U.S. District Court for the Southern District of New York denied Kraft's request for a preliminary injunction against Starbucks Coffee Company. Kraft Foods intends to appeal the decision to the U.S. Court of Appeals for the Second Circuit on an expedited basis.

The injunction would have stopped Starbucks from its attempt “to unilaterally end its strategic partnership with Kraft before the conclusion of an arbitration process that is required under the companies' long-standing contract. That arbitration process will continue over the next several months and is not affected by today's Court decision.”

After the ruling, Marc Firestone, Executive Vice President, Corporate and Legal Affairs and General Counsel at Kraft, stated:

“We're disappointed the judge decided not to grant a preliminary injunction. While we've always acknowledged that there are certain legal hurdles for obtaining a preliminary injunction, we avidly believe this case justifies an injunction and will argue that point vigorously on appeal.”   
   
“Importantly, however, today's decision is not a ruling on the core question of whether Starbucks can terminate our contract without compensating us as the contract requires. That question will be decided in arbitration.”    
   
“Without proof of material breach, Starbucks only legitimate termination mechanism is to pay Kraft fair market value for the business, plus a premium. We believe more strongly than ever that such a payment is the appropriate outcome in this dispute.”   

Source: Kraft