Girl Scouts of Manitou Council v. Girl Scouts of the United Stat

In the

United States Court of Appeals
For the Seventh Circuit

No. 08-2488

G IRL S COUTS OF M ANITOU C OUNCIL, INC.,

Plaintiff-Appellant,
v.

G IRL S COUTS OF THE U NITED S TATES OF A MERICA, INC., et al.,

Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 08 C 184—J.P. Stadtmueller, Judge.

A RGUED S EPTEMBER 8, 2008—D ECIDED S EPTEMBER 11, 2008 1
O PINION D ECEMBER 15, 2008

Before P OSNER, K ANNE, and T INDER, Circuit Judges.
K ANNE, Circuit Judge. Girls Scouts of the United States
of America (GSUSA) first chartered Girl Scouts of
Manitou Council, Inc. as a local Girl Scout council in 1950.

1
With notation that an opinion would follow.
2 No. 08-2488

Now, almost sixty years later, GSUSA, acting pursuant to
a new organizational strategy, is in the process of merging
many of its local councils to form larger regional councils.
Manitou has declined to participate in the proposed
restructuring, which has prompted GSUSA to undertake
proceedings to unilaterally reduce Manitou’s chartered
territory. Manitou filed suit against GSUSA and sought
a preliminary injunction to prevent any changes to its
jurisdiction pending final resolution of its claims. The
district court denied Manitou’s motion for a preliminary
injunction, concluding that Manitou would not suffer
the requisite irreparable harm, and Manitou appealed.
We have found the district court’s determination that
Manitou would not suffer irreparable harm between now
and resolution of its claims to be clearly erroneous. Because
Manitou has also satisfied the other requirements for a pre-
liminary injunction, on September 11, 2008, this court
issued an order, with an opinion to follow, reversing
the district court. The order enjoined GSUSA from
making any changes to, or interfering with, Manitou’s
current jurisdiction. This opinion sets forth the rationale
for our order of September 11.

I. B ACKGROUND
In 1912, Juliette Gordon Low founded the Girl Scouts in
Savannah, Georgia. Nearly four decades later, in 1950,
Congress incorporated the organization as the Girl Scouts
of the United States of America. See Pub. L. No. 460, 64 Stat.
22 (1950) (codified as amended at 36 U.S.C. § 80301 et seq.).
Today, as GSUSA approaches its 100th birthday, its
No. 08-2488 3

membership stands at approximately 3.7 million and
includes satellite organizations in ninety countries.
The stated purposes of GSUSA are “to promote the
qualities of truth, loyalty, helpfulness, friendliness, cour-
tesy, purity, kindness, obedience, cheerfulness, thriftiness,
and kindred virtues among girls,” 36 U.S.C. § 80302(1), and
to instill “the highest ideals of character, patriotism,
conduct, and attainment,” id. § 80302(3). Notwithstanding
these virtuous aspirations, however, “Girl Scouting” is
big business. In Fiscal Year 2006, GSUSA reported operat-
ing revenues of nearly $123 million. Of that number,
$35 million derived from membership dues,2 while
another $13.5 million came from the sales of Girl Scout
merchandise.3 Notably, these figures do not include
direct revenues from sales of the organization’s famous
cookies, which accrue entirely to the local councils that
conduct the sales.4
GSUSA is led by the National Council of Girl Scouts,
which consists of delegates from its various member

2
Every Girl Scout is required to pay annual membership dues
of $10. These dues accrue to GSUSA, not to the local councils.
A more complete explanation of the financial relationship
between GSUSA and its local councils follows.
3
GSUSA sells Girl Scout-branded merchandise to the local
councils at wholesale, who then resell the products to their
members.
4
Although GSUSA does not receive direct revenues from the
sale of Girl Scout cookies, it does receive royalties paid from
the bakeries approved and licensed by GSUSA to produce
Girl Scout cookies.
4 No. 08-2488

organizations. The National Council meets every three
years to elect its board of directors (the “National Board”)
and various corporate officers. The National Board ap-
points other corporate officers, including the chief execu-
tive officer. GSUSA is governed by the Blue Book of Basic
Documents, a compilation of organizational documents
that includes GSUSA’s congressional charter, constitution,
bylaws, policies, and so forth. GSUSA periodically up-
dates the Blue Book; it issued the current version in 2006.
To provide Girl Scouting to the masses, GSUSA has
developed an extensive network of local councils. In 2005,
GSUSA’s organizational structure featured approximately
315 of these councils. Each local council is governed by
its own independent board of directors, employs its own
officers and professional staff, and is responsible for
its own financial health. A local council’s primary
revenue sources include private donations, sales of Girl
Scout cookies, sales of other Girl Scout products and
services, 5 and fees and charges from the use of council-
owned camps and facilities.
The relationship between GSUSA and a local council
is defined by that council’s Girl Scout charter. For a
nominal fee, GSUSA issues a charter to the local council,
which grants to that council “the right to develop, manage,
and maintain Girl Scouting throughout the areas of its
jurisdiction,” including the right to use GSUSA’s names

5
In addition to cookies, Girl Scouts sell candy, nuts, calendars,
and magazine subscriptions, as well as Girl Scout-licensed
apparel and equipment.
No. 08-2488 5

and protected marks. In the charter application, which
the charter incorporates by its terms, the local council
agrees “to operate as a council in accordance with and to
be limited by policies so identified, published, and distrib-
uted to councils by Girl Scouts of the United States of
America, accepting them as binding on the Council, on
all its members, officers, employees, and those affil-
iating with it.” Each charter designates the council’s
jurisdiction and remains valid for a stated length of time.

A. Girl Scouts of Manitou Council, Inc.
The plaintiff in this case, Girl Scouts of Manitou Council,
Inc., a Wisconsin nonprofit corporation, is one of GSUSA’s
local councils. Manitou’s headquarters are in Sheboygan,
Wisconsin. Its current jurisdiction consists of all or part
of seven counties located in eastern Wisconsin, 6 and its
membership exceeds 7,000 individuals. GSUSA originally
chartered Manitou in 1950 and has routinely renewed its
charter, with the most recent renewal taking effect on
January 1, 2006. The present charter is to run for “up to
four years.”
Manitou, like GSUSA, is no small organization. It is
managed by an independent board of directors and
employs a full-time staff of seventeen people. It owns
significant real property, including two large Girl Scout

6
Manitou’s jurisdiction extends into all or part of the Wiscon-
sin counties of Calumet, Dodge, Fond du Lac, Manitowoc,
Ozaukee, Sheboygan, and Washington.
6 No. 08-2488

camps and a corporate office building. The first camp,
Camp Evelyn, is a 240-acre development in Plymouth,
Wisconsin, that includes more than forty buildings and
features an Olympic-sized swimming pool. The second
camp, Camp Manitou, covers 140 acres near Two Rivers,
Wisconsin. Manitou states that the two properties have a
combined fair market value of more than $12 million. The
corporate headquarters, which include administrative
offices and meeting and activity rooms, are located in
Sheboygan and have a fair market value in excess of $3
million.
Manitou asserts that nearly 100% of its annual revenues
derive from the sale of Girl Scout merchandise and ser-
vices, private donations, and investment income from
Manitou’s reserve funds. Girl Scout cookie sales alone
generate more than $1 million in revenue each year.
Manitou states that less than 0.2% of its revenues come
from renting its facilities to third parties unaffiliated
with the Girl Scouts.

B. GSUSA’s National Realignment Strategy
In 2004, in response to what it cites as declining member-
ship, fading brand image, and “waning program effective-
ness,” GSUSA commenced a thorough evaluation of its
organization to determine how, moving forward, it could
remain both viable and relevant. GSUSA, aided by a
consultant from Columbia University, concluded that a
“fundamental transformation” was necessary. In a
strategy introduced in the summer of 2005, GSUSA an-
nounced a plan to reduce, by the end of 2009, the number
No. 08-2488 7

of local councils from approximately 315 to 109, merging
the local organizations to form larger, “high capacity”
councils. These larger councils, according to GSUSA,
would no longer compete for top local sponsors and
media attention, would have the resources to hire profes-
sionally trained staff members, and would be positioned
to take advantage of economies of scale in programming,
training, fund-raising, and branding. GSUSA’s realign-
ment plan was nationwide in scope and involved virtually
every council, regardless of size or past performance.
The National Board approved the realignment plan in
September 2005. That winter, CEOs and chairs of the
boards from the various local councils met in Orlando to
discuss the realignment process. From that meeting, in
which Manitou’s representatives actively participated,
came the initial realignment strategy for Wisconsin. The
final proposal (the “Wisconsin Realignment Plan”),
formally submitted by Denise Schemenauer, Manitou’s
CEO, on behalf of the affected councils in May 2006,
would have reduced the fifteen local councils located in
Wisconsin and the Upper Peninsula of Michigan to three.
Manitou would have merged 60% of its territory with the
territories of six other councils in northern Wisconsin
and the Upper Peninsula7 to form a new council, the Girl

7
The other six councils involved in the proposed realignment
were the Girl Scouts of the Fox River Area, Inc.; Girl Scouts of
the Peninsula Waters, Inc.; Girl Scouts of Lac-Bale Council, Inc.;
Girl Scouts of Woodland Council, Inc.; Girl Scouts of Birch Trails
Council WI, Inc.; and Girl Scouts of Indian Waters Council, Inc.
(continued...)
8 No. 08-2488

Scouts of Northwestern Great Lakes. The remainder of
Manitou’s territory would have been divided between
the other two new Wisconsin councils, which were to
be situated to Manitou’s south and southwest. The Na-
tional Board approved the Wisconsin Realignment Plan
in August 2006.
Not long thereafter, Manitou’s leadership began having
second thoughts about the proposed realignment. Between
May and October 2007, while continuing to avow its
intentions to follow through with the merger, Manitou
proposed three separate amendments to the Wisconsin
Realignment Plan. GSUSA’s leadership rejected each in
turn, choosing instead to reaffirm its support for the
Wisconsin Realignment Plan. In a letter to the chair of
Manitou’s Board, Liesl Rice, dated October 3, 2007, GSUSA
denied Manitou’s third such proposal and stated that “[w]e
will not again reconsider the jurisdictional boundaries, as
approved by the National Board on August 24, 2006.” The
letter concluded by directing Manitou’s leadership to
sign the written agreements necessary for the merger to
proceed. If Manitou failed to do so, warned GSUSA, “the
National Board will take all necessary and further action
in accordance with the Blue Book of Basic Docu-
ments 2006.”

7
(...continued)
Notwithstanding Manitou’s refusal to participate, these
councils have continued with merger plans and now operate as
a single council located in northern Wisconsin and the
Upper Peninsula of Michigan.
No. 08-2488 9

In three separate communications dated January 9,
2008, Manitou and its legal counsel informed GSUSA
leadership that Manitou’s board of directors had con-
cluded “that a merger with the other Councils currently
suggested by [GSUSA] is not in the best interest of Manitou
Council and its members.” Faced with Manitou’s resistance
to the realignment merger, GSUSA initiated procedures
later that same month to unilaterally remove more than
half of Manitou’s jurisdiction. These procedures had been
outlined for the first time in the Blue Book of Basic Docu-
ments 2006, which contained a new section establishing
steps to change a council’s jurisdiction under a variety of
circumstances, including when involved councils were
unable to reach a merger agreement. See Girl Scouts of
the U.S. of Am., Blue Book of Basic Documents 2006, at 28-29
(2006) [hereinafter Blue Book]. After several delays,
GSUSA established June 15, 2008, as the date on which
the National Board would make a final decision re-
garding Manitou’s jurisdiction.

C. Procedural History
On February 29, 2008, Manitou filed a diversity action
against GSUSA in the United States District Court for the
Eastern District of Wisconsin, seeking equitable relief on
a variety of grounds, including violation of the Wisconsin
Fair Dealership Law, breach of contract, tortious inter-
ference, economic coercion, and conspiracy. Manitou
sought to have the court permanently enjoin GSUSA from
altering Manitou’s existing jurisdiction. The same day,
Manitou also filed a motion requesting a preliminary
10 No. 08-2488

injunction against GSUSA. The district court, without
conducting an evidentiary hearing, denied this motion
in an order dated June 5, 2008. The district court rested
its decision on a single finding: that Manitou had failed
to meet its threshold burden of demonstrating that it
would suffer irreparable harm in the absence of a pre-
liminary injunction. It is this order that Manitou ap-
pealed. After hearing oral arguments from the parties, this
court issued an order on September 11, 2008, in which we
reversed the district court and enjoined GSUSA “from
making any changes to, or interfering with, the current
council jurisdiction of appellant Girl Scouts of Manitou
Council, Inc., pending final resolution on the merits in
the district court.”

II. A NALYSIS
An equitable, interlocutory form of relief, “ ‘a preliminary
injunction is an exercise of a very far-reaching power,
never to be indulged in except in a case clearly demanding
it.’ ” Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380,
389 (7th Cir. 1984) (quoting Warner Bros. Pictures, Inc. v.
Gittone, 110 F.2d 292, 293 (3d Cir. 1940) (per curiam)). To
determine whether a situation warrants such a remedy, a
district court engages in an analysis that proceeds in two
distinct phases: a threshold phase and a balancing phase.
To survive the threshold phase, a party seeking a pre-
liminary injunction must satisfy three requirements. See
Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001);
Lawson Prods., Inc. v. Avnet, Inc., 782 F.2d 1429, 1433 (7th
Cir. 1986). First, that absent a preliminary injunction, it
No. 08-2488 11

will suffer irreparable harm in the interim period prior
to final resolution of its claims. Ty, 237 F.3d at 895. Second,
that traditional legal remedies would be inadequate.
Id. And third, that its claim has some likelihood of suc-
ceeding on the merits. Id. If the court determines that the
moving party has failed to demonstrate any one of these
three threshold requirements, it must deny the injunction.
Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir.
1992). If, however, the court finds that the moving party
has passed this initial threshold, it then proceeds to the
balancing phase of the analysis. Id.
In this second phase, the court, in an attempt to mini-
mize the cost of potential error, see Am. Hosp. Supply Corp.
v. Hosp. Prods. Ltd., 780 F.2d 589, 593-94 (7th Cir. 1986),
“must somehow balance the nature and degree of the
plaintiff’s injury, the likelihood of prevailing at trial, the
possible injury to the defendant if the injunction is
granted, and the wild card that is the ‘public interest,’ ”
Lawson Prods., 782 F.2d at 1433. Specifically, the court
weighs the irreparable harm that the moving party would
endure without the protection of the preliminary injunc-
tion against any irreparable harm the nonmoving party
would suffer if the court were to grant the requested relief.
Abbott Labs., 971 F.2d at 11-12. In so doing, the court
employs a sliding scale approach: “[t]he more likely the
plaintiff is to win, the less heavily need the balance of
harms weigh in his favor; the less likely he is to win, the
more need it weigh in his favor.” Roland Mach., 749 F.2d
at 387; see also Ty, 237 F.3d at 895; Abbott Labs., 971 F.2d
at 12. Where appropriate, this balancing process should
also encompass any effects that granting or denying the
12 No. 08-2488

preliminary injunction would have on nonparties (some-
thing courts have termed the “public interest”). Ty, 237
F.3d at 895; Roland Mach., 749 F.2d at 388. Taking into
account all these considerations, the district court must
exercise its discretion “to arrive at a decision based on a
subjective evaluation of the import of the various factors
and a personal, intuitive sense about the nature of the
case.” Lawson Prods., 782 F.2d at 1436.
We review a district court’s decision to grant or deny
a preliminary injunction for an abuse of discretion. Id. at
1437. A district court abuses its discretion when, in con-
ducting its preliminary injunction analysis, it commits a
clear error of fact or an error of law. Ty, 237 F.3d at 896;
Abbott Labs., 971 F.2d at 13; see also Lawson Prods., 782
F.2d at 1437 (“Clearly, a factual or legal error may alone
be sufficient to establish that the court ‘abused its dis-
cretion’ in making its final determination.”). A district
court’s finding of fact is clearly erroneous when “ ‘the
reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been
committed.’ ” Anderson v. City of Bessemer City, N.C., 470
U.S. 564, 573 (1985) (quoting United States v. U.S. Gypsum
Co., 333 U.S. 364, 395 (1948)). The question is “whether
the judge exceeded the bounds of permissible choice in
the circumstances.” Roland Mach., 749 F.2d at 390. Absent
such errors, we accord a district court’s decisions during
the balancing phase of the analysis great deference.
Abbott Labs., 971 F.2d at 13.
Where, as here, a district court decides that a party
moving for a preliminary injunction has not satisfied one
of the threshold requirements, we have encouraged the
No. 08-2488 13

court to conduct at least a cursory examination of all the
aforementioned preliminary injunction considerations.
Platinum Home Mortgage Corp. v. Platinum Fin. Group, Inc.,
149 F.3d 722, 730 (7th Cir. 1998); Meridian Mut. Ins. Co. v.
Meridian Ins. Group, Inc., 128 F.3d 1111, 1121 (7th Cir. 1997).
Doing so expedites our review and helps to protect the
interests of the parties. Platinum Home Mortgage, 149
F.3d at 730; Meridian Mut. Ins., 128 F.3d at 1121. If the
district court declines to do so and chooses instead to rest
its entire decision on one factual finding—here, the
absence of irreparable harm—we review that finding of
fact, as we do any finding of fact, for clear error. See
Stewart v. Taylor, 104 F.3d 965, 970 (7th Cir. 1997); Meridian
Mut. Ins., 128 F.3d at 1114. Should we determine the
district court’s factual finding to be erroneous, we then
may complete the preliminary injunction analysis if the
record contains information sufficient for us to assess
the remaining factors. See, e.g., Meridian Mut. Ins., 128
F.3d at 1120.
In the present case, the district court never reached the
balancing phase of the preliminary injunction analysis;
instead, it ceased its analysis and denied Manitou’s
motion once it determined that Manitou had failed to
demonstrate that it would suffer irreparable harm
without the preliminary injunction. We begin our
analysis with that finding.

A. Irreparable Harm
In its order denying Manitou’s motion for a pre-
liminary injunction, the district court concluded that
14 No. 08-2488

Manitou had not demonstrated that it would suffer
irreparable harm without injunctive relief. The court
based this finding on four grounds. First, because GSUSA
had not reached a final decision regarding Manitou’s
future jurisdiction at the time of the court’s order, the
court found that any alleged harm to be suffered by
Manitou as a result of GSUSA’s realignment strategy was
mere speculation. The court noted that as a result of
GSUSA’s review process, “the realignment may not even
occur.” Second, the district court found that Manitou “has
not demonstrated that it would lose any assets, employees,
or the ability to provide Girl Scouting.” Third, the court
determined that should a final judgment on the merits be
in Manitou’s favor, it simply could have its jurisdiction
restored. These three grounds we shall refer to as “merits-
based,” because they involve the question of whether
Manitou will actually suffer irreparable harm.
As a fourth ground for its decision, the district court
found unavailing Manitou’s attempts to seek protection
as a “dealer” under the Wisconsin Fair Dealership Law
(“WFDL”), Wis. Stat. § 135 et seq. The WFDL protects
dealers from grantors who wish to “terminate, cancel, fail
to renew or substantially change the competitive cir-
cumstances of a dealership agreement without good
cause.” Id. § 135.03. Importantly for present purposes, the
WFDL also provides for a presumption of irreparable
harm when its terms are violated. Id. § 135.065. Here,
the court refused to “improperly expand” the definition
of a “dealer” under the WFDL to include Manitou, a
nonprofit corporation. Because the court concluded
Manitou was not a dealer, it was not entitled to the statu-
tory presumption of irreparable harm.
No. 08-2488 15

We first address the court’s merits-based conclusions
that any harm was speculative, that Manitou would suffer
no harm, and that any harm Manitou might suffer would
be rectifiable following trial, i.e., not irreparable. We then
proceed to the court’s statutory conclusions regarding
Manitou’s arguments for protection under the WFDL.

1. The District Court’s Merits-Based Findings
The district court concluded that any injuries suffered
by Manitou were speculative because the National Board
had not yet formally required Manitou to cede portions
of its jurisdiction. On June 15, 2008, ten days after the
district court entered its order, the National Board man-
dated that Manitou deliver, no later than September 15,
2008, 60% of its jurisdiction to the six councils with
which it was to merge originally, which have since suc-
cessfully merged into one large council. Thus, it is clear
that any harm Manitou might suffer, the existence of
which we discuss below, is no longer mere speculation.
Next, the district court found that Manitou did not
demonstrate that the changed jurisdiction would result
in a loss of its assets, the termination of any of its em-
ployees, or an impairment on its ability to provide Girl
Scouting. The facts in the record, however, tell a different
story. By removing the majority of Manitou’s jurisdiction,
GSUSA is reducing Manitou’s ability to generate reve-
nues—revenues that Manitou needs to cover its annual
budget, which is largely fixed and was established based
on Manitou’s existing membership levels.
16 No. 08-2488

Manitou, like many nonprofit organizations, relies on
the people comprising it to remain viable. With fewer
people come fewer resources. As Schemenauer, Manitou’s
CEO, stated in her affidavit, removing 60% of Manitou’s
jurisdiction would result in a commensurate reduction
in the number of current child and adult members, pro-
spective members, volunteers, and current and potential
donors. Because members’ annual participation fees
accrue to GSUSA and not to Manitou, fewer participants
will not directly impact Manitou’s bottom line. However,
every source of Manitou’s revenue is derivative of the
number of members active in its council. Cookie sales,
from which Manitou nets more than $1 million in profits
each year, would be reduced by 60%. With a smaller
jurisdiction, there are fewer girls to do the selling and
fewer community members to do the buying. Similarly,
while the girls themselves are perhaps not soliciting
donations, it is the relationships of these girls to inter-
ested community members that prompts donors to direct
their charitable dollars toward Manitou. Fewer members
means fewer relationships, which results in a reduced
donor base.
Manitou operates on an annual budget of approximately
$2 million. GSUSA argues that smaller membership will
allow Manitou to cut this budget and reduce its expenses
in accordance with its reduced revenues, resulting in
Manitou’s continued financial viability. While it is true
that a smaller membership will reduce certain variable
costs, many of Manitou’s largest expenses are fixed,
meaning that they will remain unchanged regardless of
Manitou’s membership level. Manitou’s two camps, for
No. 08-2488 17

example, Camp Evelyn and Camp Manitou, feature over
360 acres of land, swimming pools, dining halls, and
dozens of other buildings. The overhead to operate these
two camps will vary little based on the size of Manitou’s
jurisdiction. Manitou also owns and operates a corporate
headquarters building; like the overhead at the camp-
grounds, expenses incurred in running the building are
not contingent on the size of Manitou’s membership.
Working inside the headquarters are seventeen full-time
staff members. Again, Manitou must pay the salaries
and benefits of its employees regardless of how many
individuals are currently participating in Girl Scouting
within Manitou’s jurisdiction.
Faced with drastically reduced revenue streams and
fixed expenses, it is clear that taking a large portion of
Manitou’s jurisdiction would impose severe financial
stress on Manitou that could ultimately force Manitou
into insolvency. In addition, without ample resources to
continue supporting its organizational infrastructure,
Manitou may be forced to terminate portions of its pro-
fessional staff or relinquish pieces of real property.
Beyond these tangible concerns, Manitou makes clear
that removing its jurisdiction also poses a serious risk to
the organization’s significant goodwill, which we have
recognized can constitute irreparable harm. See, e.g.,
Meridian Mut. Ins., 128 F.3d at 1220; Gateway E. Ry. Co. v.
Terminal R.R. Ass’n of St. Louis, 35 F.3d 1134, 1140 (7th
Cir. 1994); Reinders Bros., Inc. v. Rain Bird E. Sales Corp., 627
F.2d 44, 53 (7th Cir. 1980). Manitou, like all Girl Scout
councils, relies heavily on goodwill to advance its mis-
18 No. 08-2488

sion. For fifty-eight years, Manitou has developed relation-
ships within its community that are vital to its continued
existence. These relationships manifest themselves in the
form of memberships, which we have already discussed;
volunteers; and cash and in-kind donations.
In her affidavit, Schemenauer stated that Manitou has
recruited and trained tens of thousands of adult volun-
teers. Under the proposed realignment, many of these
volunteers will, without question, begin donating their
time to the new council governing their location. Manitou’s
investment in these people, in both time and money, will
be lost, as will their accrued knowledge and work capacity.
Perhaps the most significant area in which Manitou
will feel a loss of goodwill is in its pursuit of charitable
donations. Manitou has received tens of millions of dollars
in donations, in both cash and in-kind gifts, to help Mani-
tou provide experiences for its members. These gifts come
from individuals, businesses, foundations, and other
charitable organizations. By removing 60% of its juris-
diction, Manitou would undoubtedly lose or damage
many of these relationships. Donors now located in the
new jurisdiction will be inclined to donate to the local
council administering to that jurisdiction, not Manitou.
And donors within Manitou’s remaining jurisdiction
may become disillusioned with Manitou’s shrinking
territory or, worse still, believe that Manitou has done
something wrong that warrants GSUSA’s reduction in
its jurisdiction. In contrast with American Hospital Supply,
in which we found similar harm to goodwill speculative,
780 F.2d at 595, here such damages have already become
No. 08-2488 19

evident. Schemenauer provided figures in her affidavit
demonstrating that donors have already withheld nearly
$30,000 in contributions based on mere speculation
within the community regarding Manitou’s forced merger
or loss of territory. The situation promises only to worsen
once that speculation becomes reality.
The district court’s final merits-based conclusion was
that any harm Manitou might suffer before final resolution
of its claims would not be irreparable. A harm is “irrepara-
ble” if it “cannot be prevented or fully rectified by the
final judgment after trial.” Roland Mach., 749 F.2d at 386.
The district court found not only that Manitou had failed
to demonstrate it would be injured absent a preliminary
injunction, but also that any alleged injuries were not
irreparable, i.e., that any injuries would be rectifiable
following a final judgment on the merits by simply restor-
ing the taken jurisdiction to Manitou.
As we have shown, however, simply returning the
territory to Manitou following trial will not account for the
incalculable losses Manitou risks in the interim—namely,
the potential loss of property, employees, or its entire
business, as well as damage to its goodwill. These harms
are both real and irreparable. See Pelfresne v. Vill. of
Williams Bay, 865 F.2d 877, 883 (7th Cir. 1989) (“As a
general rule, interference with the enjoyment or
possession of land is considered ‘irreparable’ since land
is viewed as a unique commodity . . . .”); Gateway E. Ry., 35
F.3d at 1140 (recognizing that although economic losses
generally will not sustain a preliminary injunction, there
are exceptions where, as here, a remedy may come “ ‘too
20 No. 08-2488

late to save plaintiff’s business’” (quoting Roland Mach.,
749 F.2d at 386)); Meridian Mut. Ins., 128 F.3d at 1120
(“[T]he plaintiff has suffered injury to its goodwill . . . .
Such damage can constitute irreparable harm . . . .”); cf.
Kinney ex rel. NLRB v. Int’l Union of Operating Eng’rs, Local
150, 994 F.2d 1271, 1279 (7th Cir. 1993) (noting that, from
an employee’s perspective, termination was an
irreparable injury for which money damages were an
inadequate remedy).
Given these findings, we are “ ‘left with the definite and
firm conviction that a mistake has been committed.’ ”
Anderson, 470 U.S. at 573 (quoting U.S. Gypsum Co., 333
U.S. at 395); see also Roland Mach., 749 F.2d at 390 (question-
ing “whether the judge exceeded the bounds of permissible
choice in the circumstances”). Manitou clearly risks
irreparable harm if it is not granted the protection of a
preliminary injunction. The district court’s finding to the
contrary is clearly erroneous, and the court therefore
abused its discretion by relying on that erroneous
finding as the basis for its decision to deny the pre-
liminary injunction.

2. The District Court’s Statutory Conclusions
As further support for its conclusion that Manitou would
not suffer irreparable harm, the district court disagreed
with Manitou’s argument that it was a “dealer” protected
by the Wisconsin Fair Dealership Law, Wis. Stat.
§ 135.02(2), and, as such, enjoyed a statutory presumption
of irreparable harm, id. § 135.065. Whether an organiza-
No. 08-2488 21

tion qualifies for protection as a dealer under the WFDL is
question of law that we review de novo. Simos v. Embassy
Suites, Inc., 983 F.2d 1404, 1411 (7th Cir. 1993).
The Wisconsin legislature enacted the WFDL to promote
“fair business relations between dealers and grantors, . . .
the continuation of dealerships on a fair basis,” Wis. Stat.
§ 135.025(2)(a), and “[t]o protect dealers against unfair
treatment by grantors, who inherently have superior
economic power and superior bargaining power in the
negotiation of dealerships,” id. § 135.025(2)(b). Specifically,
the WFDL makes it illegal for any grantor to “terminate,
cancel, fail to renew or substantially change the competi-
tive circumstances of a dealership agreement without
good cause.” Id. § 135.03. A party properly seeking pro-
tection under the WFDL enjoys a statutory presumption
of irreparable harm. Id. § 135.065.
The WFDL protects only a “dealer,” defined as an
organization that is the grantee of a dealership. Id.
§ 135.02(2). The statute specifies three requirements for a
dealership to exist. See id. § 135.02(3)(a). First, that there be
a contract or agreement between the two parties. Id.
Second, that the agreement provide the grantee the right
to do one of three things: (1) sell goods or services;
(2) distribute goods or services; or (3) use the grantor’s
trademarks, names, logos, or other commercial symbols.
Id. Third, that there exist a “community of interest”
between the parties “in the business of offering, selling or
distributing goods or services at wholesale, retail, by
lease, agreement or otherwise.” Id. Applying the facts to
these requirements, we conclude that Manitou is a
dealer and therefore falls within the purview of the WFDL.
22 No. 08-2488

a. Agreement Between the Parties
For a dealership to exist, the first requirement is that
there be an agreement between the parties. The form of this
agreement is of little concern. See id. § 135.02(3)(a) (noting
that the agreement can be “either expressed or implied, . . .
oral or written”). GSUSA does not contest the presence
of an agreement between GSUSA and Manitou. Although
the contours of that agreement remain somewhat in
dispute, that an agreement exists in one form or another
is without question.

b. Sale or Distribution of Goods or Services; Use of Protected
Marks
The second requirement for a dealership is that the
agreement must grant to Manitou “the right to sell or
distribute goods or services, or use a trade name, trade-
mark, service mark, logotype, advertising or other com-
mercial symbol.” Id. Although any one of these three
functions would suffice to satisfy the requirement,
Manitou succeeds on all three grounds.
First, Manitou sells and distributes goods. Manitou’s
primary revenue stream derives from its annual sale of
Girl Scout cookies, which nets Manitou a yearly profit in
excess of $1 million. During this process, Manitou’s
members both solicit sales and distribute the products. Cf.
Moodie v. Sch. Book Fairs, Inc., 889 F.2d 739 (7th Cir. 1989)
(holding that although a book distributor did not sell
goods or use protected marks, its distribution activities
qualified it as a dealer under the WFDL); Bush v. Nat’l Sch.
No. 08-2488 23

Studios, Inc., 407 N.W.2d 883, 888 (Wis. 1987) (noting that
a “prepackaged business format dictated by the franchisor
and identified with the franchisor’s trademark” was
“clearly covered by the WFDL”); Siegel v. Leer, Inc., 457
N.W.2d 533, 536 (Wis. Ct. App. 1990) (finding that the
sale of “pick-up truck caps” satisfied the “sale of goods”
requirement of a dealership).
Second, Manitou distributes services—namely, educa-
tional and community services afforded by participation in
Girl Scouting. Cf. Bush, 407 N.W.2d at 891 (finding this
second prong of the dealership test satisfied by a dis-
tributor of student photography services); Bakke
Chiropractic Clinic, S.C. v. Physicians Plus Ins. Corp., 573
N.W.2d 542, 545-47 (Wis. Ct. App. 1997) (listing factors
the court found persuasive in reaching its decision in
Bush). As GSUSA reiterates throughout its arguments, the
mission of Girl Scouting is one of education. Absent
Manitou’s relationship with GSUSA, it loses the ability to
provide Girl Scouting services, a fact that Wisconsin
courts have found important in addressing whether
“services” are being offered under the WFDL. See Bakke,
573 N.W.2d at 546; Pollack v. Calimag, 458 N.W.2d 591, 596
(Wis. Ct. App. 1990) (finding it important that a doctor
retained the ability to provide health services regardless
of whether he was associated with a particular clinic).
Third, Manitou makes exhaustive use of GSUSA’s names
and marks. These names and marks, which are the
essence of Manitou’s identity, provide Manitou with its
entire reason for being. The Wisconsin Supreme Court has
contemplated sufficient use of the mark where “the
24 No. 08-2488

trademark of the grantor or of the dealership is . . . promi-
nently displayed for several purposes, including as an
implicit guarantee of a certain quality of product and
service.” Foerster, Inc. v. Atlas Metal Parts Co., 313
N.W.2d 60, 66 (Wis. 1981). Manitou uses GSUSA’s marks,
logos, and names on virtually everything it produces or
sells, including advertisements, newsletters and other
publications, uniforms, and merchandise. It is clear that
Manitou “has made a substantial investment in the trade-
mark.” Moodie, 889 F.2d at 743 (finding only de minimis
investment in the protected marks relevant to that case).
Despite these facts, GSUSA continues to argue that the
WFDL is inapplicable. Its grounds for this argument,
however, remain murky. It ignores that local Girl Scout
councils sell millions of dollars of cookies each year
and states that the mission of Girl Scouts is “an educa-
tional one,” that local councils are not “ ‘dealers’ in any-
thing,” and reiterates that the local councils are nonprofit
entities.
But we remain guided by the statute. The WFDL ex-
presses no concern for the “mission” or other motivation
underlying the sales in question; it asks only whether
sales occur. Nor does the statute draw any distinction
between “for-profit” and “not-for-profit” entities. Its
stated concern is with “fair business relations,” Wis. Stat.
§ 135.025(2)(a) (emphasis added), and it is beyond
dispute that nonprofit corporations can be substantial
businesses. Indeed, both GSUSA and Manitou, notwith-
standing their status as nonprofits, are multimillion-dollar
businesses possessing substantial assets and liabilities.
No. 08-2488 25

GSUSA even conceded at oral argument that the WFDL
does not contain a blanket exemption for nonprofit organi-
zations. But, aside from its argument regarding the educa-
tional mission, which we find largely irrelevant and
wholly unpersuasive, GSUSA is unable to state a reason
that this nonprofit should be exempt while it admits
that others are not.
Finally, GSUSA’s argument that the Girl Scouts are not
“ ‘dealers’ of anything,” emphasizing the word “dealer” as
if its members are accused of selling drugs on the street
corner, is unavailing. It matters not whether we would
call the Girl Scouts “dealers” in everyday conversation;
what matters is only how the statute defines the term,
and the activities of Manitou clearly fall within its defini-
tion.
In concluding that Manitou was not a dealer, the dis-
trict court, quoting the Wisconsin Supreme Court’s deci-
sion in Kania v. Airborne Freight Corp., 300 N.W.2d 63, 76
(Wis. 1981), said it would not adopt an “expansive
interpretation of the definition of ‘dealership.’” As we have
shown, however, finding that Manitou qualifies as a
dealer requires no expansion of the WFDL. Manitou is a
business. It sells and distributes goods. It distributes
services. It makes extensive use of GSUSA’s marks and
names. These requirements satisfy the statute’s plain
language, which the Wisconsin Supreme Court has recog-
nized was designed “to encompass an extraordinarily
diverse set of business relationships not limited to the
traditional franchise.” Ziegler Co. v. Rexnord, Inc. (Ziegler I),
407 N.W.2d 873, 878 (Wis. 1987) (discussing broader
26 No. 08-2488

statutory objectives in the context of the “community
of interest” dealership requirement).

c. Community of Interest
Having determined that Manitou has satisfied the first
two requirements for “dealership” status under the WFDL,
we turn to the final inquiry, which is whether there
exists the necessary “community of interest” between
Manitou and GSUSA. See Wis. Stat. § 135.02(3)(a) (requir-
ing “a community of interest in the business of offering,
selling or distributing goods or services at wholesale, retail,
by lease, agreement or otherwise”); see also id. § 135.02(1)
(defining “community of interest” as “a continuing finan-
cial interest between the grantor and grantee in either the
operation of the dealership business or the marketing of
such goods or services”).
The Wisconsin Supreme Court has established two
“guideposts” to inform our analysis of whether a commu-
nity of interest exists within a business relationship. See
Ziegler I, 407 N.W.2d at 878-79; see also Home Protective
Servs., Inc. v. ADT Sec. Servs., Inc., 438 F.3d 716, 719 (7th
Cir. 2006). The first is a “continuing financial interest”
between the parties. Cent. Corp. v. Research Prods. Corp.,
681 N.W.2d 178, 187 (Wis. 2004); Ziegler I, 407 N.W.2d
at 878. The second is the level of “interdependence,” or
“the degree to which the dealer and grantor cooperate,
coordinate their activities and share common goals in
their business relationship.” Ziegler I, 407 N.W.2d at 879.
Considered together, these two guideposts indicate
No. 08-2488 27

whether the alleged dealer’s stake in the business rela-
tionship is great enough to threaten its financial health
if the grantor exercises its power to terminate. Cent.
Corp., 681 N.W.2d at 188.
The Wisconsin Supreme Court has also noted that the
community of interest analysis involves “a wide variety of
facets” of the business relationship. Ziegler I, 407 N.W.2d
at 879. It has identified a non-exhaustive list of factors
that courts should consider, including (1) the duration of
the business relationship; (2) the nature and extent of the
parties’ contractual arrangement; (3) the proportion of
time and revenue the alleged dealer devotes to the
alleged grantor’s products or services; (4) the percentage
of gross profits that the alleged dealer derives from the
alleged grantor’s products or services; (5) the nature and
extent of the alleged grantor’s territorial grant to the
alleged dealer; (6) the nature and extent of the alleged
dealer’s uses of the alleged grantor’s proprietary marks;
(7) the nature and extent of the alleged dealer’s invest-
ment in facilities, inventory, and goodwill in furtherance
of the alleged dealership; (8) the personnel devoted by
the alleged dealer to the alleged dealership; (9) the
amount spent by the alleged dealer on advertising or
promotions for the alleged grantor’s products and
services; and (10) the nature and extent of any supple-
mentary services provided by the alleged dealer to con-
sumers of the alleged grantor’s products and services. Id.
at 879-80; see also Home Protective Servs., 438 F.3d at 719-20.
Given these many considerations, GSUSA and Manitou
share a continuing financial interest and the interdepen-
28 No. 08-2488

dence necessary to find the requisite “community of
interest” for a dealership relationship to exist. Manitou
has been a local Girl Scout council since GSUSA first
chartered it in 1950. The contractual relationship between
the two organizations is extensive. Manitou devotes 100%
of its time and resources to providing Girl Scouting to its
jurisdiction. Manitou derives virtually 100% of its profits
from offering Girl Scouting products and services. GSUSA
has granted Manitou a broad territory that includes
seven counties and over 7,000 active members. Manitou
makes extensive use of GSUSA’s proprietary marks.
Manitou has substantial investments in real property
and goodwill within its community, all of which were
made in the name of Girl Scouting. Manitou devotes 100%
of its personnel to providing Girl Scouting to its juris-
diction. All of Manitou’s advertisements or promotions
are intended to build interest and support for Girl Scout-
ing.
Only one of GSUSA’s arguments against finding a
community of interest bears mentioning—once again, the
question of “profits” earned by Manitou. GSUSA con-
tinues to speak out of both sides of its mouth regarding
the WFDL’s applicability to nonprofit organizations. At
oral argument, GSUSA conceded that all nonprofits are
not exempt from protection by the WFDL; in its brief,
however, GSUSA remains focused on the for-profit/not-for-
profit distinction, arguing that because Manitou, as a
nonprofit, earns no “profits,” it cannot be a dealer under
the statute. In this regard, however, GSUSA is simply
wrong. “For-profit” and “not-for-profit” are shorthand
No. 08-2488 29

classifications, not literal labels. A “profit” is an excess of
revenues over expenditures. What distinguishes a for-
profit from a not-for-profit is what the company does
with these excess revenues. GSUSA understands this
distinction. Quoting from Essential Elements of a Girl
Scout Corporation, a GSUSA publication:
The term “nonprofit organization” does not mean (as
is most often incorrectly assumed) an organization that
cannot enjoy a profit. Rather, the term means that the
organization’s profit may not be distributed to its
members, officers, or directors in their private capaci-
ties. Profit is defined as excess revenue over expenses, and
commonly known in Girl Scouting as a surplus . . . .
Nonprofit organizations are permitted to generate profits
but cannot pass profits on to persons as equity owners.
Girl Scouts of the U.S. of Am., Essential Elements of a Girl
Scout Corporation 10 (1999) (emphasis added). Indeed, the
record indicates that both GSUSA and Manitou, although
“nonprofits,” operate at a substantial surplus.
* * * * *
To summarize this portion of the analysis, Manitou is
a “dealer” within the meaning of the term as defined by
the WFDL. First, a contractual relationship exists
between Manitou and GSUSA. Second, Manitou sells or
distributes GSUSA’s products or services and makes
extensive use of GSUSA’s proprietary marks. And third, a
community of interest exists between Manitou, the dealer,
and GSUSA, the grantor. We next turn to the practical
implications that Manitou’s dealership status has on its
prayer for interlocutory relief.
30 No. 08-2488

The WFDL presumes that a dealer has been irreparably
harmed when the dealer seeks to preliminarily enjoin
a grantor’s alleged violations of the statute. Wis. Stat.
§ 135.065. The statute does not make clear, nor have
the Wisconsin courts addressed, whether this statutory
presumption of irreparable harm is rebuttable or
irrebuttable. But see S & S Sales Corp. v. Marvin Lumber &
Cedar Co., 435 F. Supp. 2d 879, 884-86 (E.D. Wis. 2006)
(examining the issue before ultimately concluding that
the WFDL provides for a rebuttable presumption of
irreparable harm). We need not attempt to decide how
the Wisconsin Supreme Court would decide that issue
today, because even if we are to assume that the pre-
sumption is rebuttable, GSUSA has not rebutted it. As
we discussed at length above, Manitou will be irreparably
harmed by GSUSA’s attempts to unilaterally remove a
large portion of its jurisdiction, even without the protec-
tion of the WFDL. It would be nonsensical for us to
make such findings but agree with GSUSA that it has
rebutted the WFDL’s presumption of irreparable harm.
For the foregoing reasons, we conclude that Manitou
would be irreparably harmed between now and resolu-
tion of Manitou’s claims on the merits if we permitted
GSUSA to alter Manitou’s jurisdiction during the
interim period. Because the record contains ample infor-
mation to evaluate the remaining factors in the pre-
liminary injunction analysis—indeed, everything that
the district court used to make its decision, given that
the court declined to hold an evidentiary hearing—we
now turn to the question of the adequacy of legal remedies.
See Meridian Mut. Ins., 128 F.3d at 1120.
No. 08-2488 31

B. Inadequacy of Legal Remedies
In addition to irreparable harm, a second threshold
requirement that an injured party must meet to obtain
interlocutory relief is to demonstrate that traditional legal
remedies, i.e., money damages, would be inadequate. Ty,
237 F.3d at 895; Lawson Prods., 782 F.2d at 1433; Roland
Mach., 749 F.2d at 386. A damages remedy need be “seri-
ously deficient,” but not “wholly ineffectual.” Roland
Mach., 749 F.2d at 386. In Roland Machinery, we dis-
cussed four general circumstances that could result in
an inadequate legal remedy, at least two of which are
applicable here.8 Id.
The first is when a damages award may come too late
to save the plaintiff’s business. Id. As we discussed
above, there is a substantial risk in this case that Manitou,
given a drastically reduced jurisdiction, will lack the
cash flow necessary to sustain the fixed costs of operating
its business. Additionally, we have recognized that a
longstanding business often has a vested interest in
continuing in that business, not simply in receiving the
monetary equivalent of its operation. See id.; see also
Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1205

8
In addition to the two situations discussed above, the other
two instances we cited in Roland Machinery that could lead to
inadequate legal remedies are, first, if the plaintiff’s lost reve-
nues would make it impossible to finance its lawsuit, and
second, if the plaintiff would be unable to collect damages
from the defendant at a later time because of the defendant’s
subsequent insolvency. 749 F.2d at 386.
32 No. 08-2488

(2d Cir. 1970) (noting that a terminated family auto-
mobile dealer had a “right to continue a business in
which [he] had engaged for twenty years and into
which his son had recently entered” that was “not measur-
able entirely in monetary terms”). Manitou wants to
provide Girl Scouting to the young women living within
its jurisdiction in eastern Wisconsin, not trade its opera-
tion for a sum of GSUSA’s money. Cf. Semmes Motors, Inc.,
429 F.2d at 1205 (“[T]he Semmes want to sell automobiles,
not to live on the income from a damages award.”).
A second circumstance leading to an inadequate legal
remedy is when the nature of the loss incurred by the
plaintiff makes it difficult to calculate damages. Roland
Mach., 749 F.2d at 386. In this situation, Manitou’s
damages would be virtually impossible to compute. This
conclusion is based on the potential loss of institutional
knowledge accompanying the unwanted termination of
employees, cf. Local Lodge No. 1266, Int’l Ass’n of Machinists
& Aerospace Workers v. Panoramic Corp., 668 F.2d 276, 286-87
(7th Cir. 1981) (noting that “[w]here, as here, employer
action threatens a permanent loss of jobs, a damage
remedy is inadequate” and concluding that reinstate-
ment of terminated employees would be, “at best, im-
practicable”); loss of real property, see Pelfresne, 865 F.2d
at 883 (“[L]and is viewed as a unique commodity for
which monetary compensation is an inadequate substi-
tute.”); and damage to goodwill, Ty, 237 F.3d at 902 (“ ‘[I]t
is virtually impossible to ascertain the precise economic
consequences of intangible harms, such as damage to
reputation and loss of goodwill . . . .’” (quoting Abbott Labs.,
971 F.2d at 16)).
No. 08-2488 33

For these reasons, it is apparent that only an equitable
remedy would provide Manitou with effective relief.
Having concluded that Manitou has satisfied two of the
three threshold requirements for us to issue a preliminary
injunction, we now turn to the third: Manitou’s likeli-
hood of success on the merits of its claims.

C. Likelihood of Success on the Merits
To succeed in its attempt to preliminarily enjoin GSUSA
from interfering with its jurisdiction, Manitou must
show that it has a “better than negligible” chance of
success on the merits of at least one of its claims. Ty, 237
F.3d at 897; Omega Satellite Prods. Co. v. City of Indianapolis,
694 F.2d 119, 123 (7th Cir. 1982). This is an admittedly
low requirement and is simply a threshold question.
Roland Mach., 749 F.2d at 387. Only after we clear the
threshold inquiries and proceed to the balancing phase
of the analysis must we determine how likely Manitou’s
success must be for us to issue the requested injunction.
Id.; see also Ty, 237 F.3d at 895; Abbott Labs., 971 F.2d at 12.
Manitou’s complaint contains ten causes of action
against GSUSA. Count I alleges violations of the WFDL.
The WFDL provides that “[n]o grantor, directly or through
any officer, agent or employee, may terminate, cancel, fail
to renew or substantially change the competitive circum-
stances of a dealership agreement without good cause.”
Wis. Stat. § 135.03. In defense of its actions, GSUSA argues,
first, that it is not changing the competitive circum-
stances of Manitou’s agreement with GSUSA, and, alter-
34 No. 08-2488

natively, that if GSUSA is doing so, it is with good cause.
For the following reasons, we conclude that Manitou has
a better-than-negligible chance of succeeding on the
merits of its WFDL claim. Because Manitou surpasses
the threshold on at least one of its causes of action, we
need not discuss Manitou’s likelihood of success on its
remaining nine claims.

1. Substantial Change of the Competitive Circumstances of
the Dealership Agreement
GSUSA first contends that stripping Manitou of 60%
of its jurisdiction does not alter the competitive circum-
stances of Manitou’s agreement with GSUSA. Section
135.03 prohibits a grantor from substantially changing “the
competitive circumstances of a dealership agreement
without good cause.” Id. (emphasis added). Citing the
Wisconsin Court of Appeals’s decision in Super Valu Stores,
Inc. v. D-Mart Food Stores, Inc., 431 N.W.2d 721 (Wis. Ct.
App. 1988), in which a food wholesaler sought to terminate
its agreement with a grocer, GSUSA claims that the
terms of its agreement with Manitou preclude finding
any change in competitive circumstances. First, GSUSA
argues that, like the agreement in Super Valu Stores, its
agreement with Manitou is nonexclusive. Second, GSUSA
contends that because Manitou’s charter application
provides that its jurisdiction is “subject to change at the
discretion of the GSUSA,” it acted within the conduct
contemplated by the agreement, not as a substantial
change to it. We find both arguments unpersuasive
No. 08-2488 35

because of ambiguities attending the relevant provisions
of the agreement.9
It is doubtful that the agreement here is nonexclusive. In
Super Valu Stores, the court relied heavily on the agree-
ment’s express nonexclusivity provision in reaching its
conclusions. Id. at 725 (“Compliance with the express
terms of the dealership agreement cannot, under the cir-
cumstances of this case, give rise to a violation of sec. 135.03.”
(emphasis added)). In this case, neither the charter nor
the application—nor any of the other documents, for
that matter—contain such a provision. In fact, language
in the charter and application arguably indicates that
the parties intended that the agreement would be exclu-
sive. In the charter application, for example, Manitou
agreed “to develop, manage, and maintain Girl Scouting
throughout the area of its jurisdiction.” Further, the Blue
Book of Basic Documents 2006, which GSUSA cites at
length, contains the following policy statement: “When a

9
Unlike in Super Valu Stores, where there was an express
agreement that unequivocally defined the bounds of the
questioned relationship, see 431 N.W.2d at 723, it is unclear what
exactly constitutes the agreement in this case. GSUSA, for
example, continues to argue on one hand that there is no formal
contract between the parties, while on the other hand claiming
that Manitou is bound by the terms of the agreement to ad-
here to GSUSA’s constitution, bylaws, and policies. Having
already decided that there is an agreement between the
parties, we assume, without deciding, that the contract in-
cludes, at a minimum, Manitou’s charter and its charter ap-
plication, which the charter incorporates by its own terms.
36 No. 08-2488

Girl Scout council is chartered and the territory in which
it is to operate has been decided upon, all Girl Scout
troops in all the communities within that territory shall
be under its jurisdiction . . . .” Blue Book, supra, at 20.
Assuming, as only makes sense, that a Girl Scout troop
reports to only one local council at a time, and assuming
that GSUSA adheres to its own policies, this statement
makes it logically impossible that multiple local councils
might be assigned the same jurisdiction. GSUSA’s long-
standing practice of assigning non-overlapping territories
to the local councils supports this conclusion. That the
agreement did not contain an express nonexclusivity
agreement, and was even arguably exclusive, is a signifi-
cant difference from the facts in Super Valu Stores.
Next, GSUSA encourages us to adopt an expansive
interpretation of Super Valu Stores, which, according to
GSUSA, establishes that any action taken by a grantor
that is specifically contemplated by the terms of the
relevant agreement cannot be a “substantial change in
competitive circumstances.” Id. As we discuss below,
ambiguities surrounding the relevant provision in the
charter application make it unnecessary for us to decide
the scope of the Super Valu Stores decision today. How-
ever, we note that such an expansive interpretation
would conflict with the WFDL’s directions to construe
its protections liberally, Wis. Stat. § 135.025(1), and to
counteract attempts to skirt the WFDL’s protections by
contractual agreement, id. § 135.025(3).
Manitou’s charter application contains the following
provision:
No. 08-2488 37

[Manitou], now having jurisdiction over the area
described in the official record of the council’s juris-
diction on file with [GSUSA] . . . , hereby applies for a
charter for the same jurisdiction, subject to change
at the discretion of GSUSA, for the term January 1,
2006, through December 31, 2009.
The most straightforward interpretation of this provi-
sion, which does not appear in Manitou’s charter but
in the application to renew its charter, is that GSUSA
reserved the right to change Manitou’s jurisdiction only
during the application process. It says nothing about
GSUSA’s ability to alter Manitou’s jurisdiction once the
charter has issued. The charter itself further supports
this interpretation. Manitou’s actual charter states that
GSUSA grants Manitou the right to administer Girl Scout-
ing “within the area of jurisdiction agreed upon with
[GSUSA].” The only way to read these two statements
together is if one, the application, relates to the time
during the application process, while the other, the
charter, deals with the time after GSUSA issues the charter.
A second discrepancy between the charter application
and the charter itself provides additional support for this
conclusion. As noted above, the charter application
states that the charter is to run from January 1, 2006, to
December 31, 2009. The charter that GSUSA issued,
however, remains valid not until December 31, 2009, but
for “up to four years.” This provides additional evidence
that the above-cited provision pertained only to the
pending application, which was subject to change and not
finalized until GSUSA issued the charter itself. Thus, the
38 No. 08-2488

charter, once issued, does not, by its terms, grant GSUSA
the right to change Manitou’s territory.
Because it is possible to evaluate the present situation
and conclude, first, that GSUSA’s agreement was exclu-
sive, and, second, that the agreement did not provide
GSUSA the right to amend Manitou’s jurisdiction, this
presents quite a different case from Super Valu Stores. There
is at least a better-than-negligible chance that GSUSA
has substantially altered the competitive circumstances
of its agreement with Manitou.

2. Good Cause
GSUSA’s final argument during this phase of the analysis
is that if in fact it is attempting to substantially change the
competitive circumstances of its dealership agreement
with Manitou, it does so with good cause. See Wis. Stat.
§ 135.03 (“No grantor . . . may terminate, cancel, fail to
renew or substantially change the competitive circum-
stances of a dealership without good cause.” (emphasis
added)). We evaluate the presence of good cause on a case-
by-case basis, Wis. Music Network, Inc. v. Muzak Ltd. P’ship,
5 F.3d 218, 224 (7th Cir. 1993), with the burden of showing
good cause on the grantor, Morley-Murphy Co. v. Zenith
Elecs. Corp., 142 F.3d 373, 376 (7th Cir. 1998). The statute
defines “good cause” in the following way:
Failure by a dealer to comply substantially with
essential and reasonable requirements imposed upon
the dealer by the grantor, or sought to be imposed
by the grantor, which requirements are not discrim-
No. 08-2488 39

inatory as compared with requirements imposed on
other similarly situated dealers either by their terms
or in the manner of their enforcement.
Wis. Stat. § 135.02(4)(a). A dealer also provides good cause
if it acts in bad faith “in carrying out the terms of the
dealership.” Id. § 135.02(4)(b).
The Wisconsin Supreme Court liberally addressed the
issue of good cause in Ziegler Co. v. Rexnord, Inc. (Ziegler II),
433 N.W.2d 8 (Wis. 1988). In that case, Rexnord, a manufac-
turer of industrial equipment, declined to renew its
agreement with Ziegler, one of its distributors, prompting
Ziegler to sue for alleged violations of the WFDL. Id. at 10.
In defense, Rexnord argued that although Ziegler had
done nothing wrong according to the letter of the statute,
Rexnord’s substantial economic losses justified its deci-
sion. Id. at 11. The court concluded that a “grantor’s
economic circumstances may constitute good cause to
alter its method of doing business with its dealers, but
such changes must be essential, reasonable and nondis-
criminatory.” Id. Under the court’s rationale, for good
cause to exist, there must be (1) an “objectively ascertain-
able” need for the proposed change, (2) the change
must be a proportionate response to that need, and
(3) the change must be nondiscriminatory. Id. at 13; see
also Morley-Murphy, 142 F.3d at 378.
This court interpreted the Ziegler II decision in Morley-
Murphy, 142 F.3d 373, in which we found that Zenith
Electronics might have had good cause for instituting a
nationwide change to its distribution system. Zenith’s
40 No. 08-2488

proposed change was similar in some respects to GSUSA’s
nationwide restructuring to form large, “high capacity”
councils. Zenith, faced with operating losses in nine out of
ten years and over $320 million in losses during the
previous five years, sought to implement a new nationwide
distribution strategy that would result in the termination
of Morley-Murphy, a successful Zenith dealer for more
than fifty years. Id. at 374-75. This court, following the
instructions of the Wisconsin Supreme Court in Ziegler II,
found it possible that Zenith’s economic losses justified
Morley-Murphy’s termination and remanded the case for
further proceedings on that issue. Id. at 378.
In this case, unlike in Ziegler II and Morley-Murphy, we
question both the objective need and the proportionate
response of GSUSA’s attempt to unilaterally reduce Mani-
tou’s jurisdiction. This is because the circumstances
confronting GSUSA differ markedly from those facing
Rexnord and Zenith, both of which were reacting to
extended periods of substantial economic losses.
GSUSA arguably presents no objective economic need
for its proposed action; at the very least, its financial
circumstances are a far cry from the dire economic straits
confronted by Rexnord, see Ziegler II, 433 N.W.2d at 10-11,
and Zenith, see Morley-Murphy, 142 F.3d at 374-75. GSUSA’s
financial statements indicate that GSUSA’s operating
revenues exceeded its operating expenses in Fiscal Years
2005 and 2006, earning operating profits of $886,000 and
$2.5 million, respectively. Further, we find little support
for GSUSA’s argument that intangible concerns such as
“fading brand image” and “waning program effective-
ness,” without a tangible effect on the bottom line,
No. 08-2488 41

present the types of concerns Wisconsin courts have
contemplated by the “good cause” provision of the WFDL.
See Ziegler II, 433 N.W.2d at 12 (“If the grantor is demon-
strably losing substantial amounts of money under the
relationship, it may constitute good cause for changes to
the contract.”).
Even if the need for change were objectively ascertain-
able, we also question the proportionality of GSUSA’s
response. GSUSA is attempting to form fewer councils,
each with a larger size. In the present situation, however,
if GSUSA succeeds in removing 60% of Manitou’s territory,
we fail to see how this will help GSUSA advance its
strategy. Because Manitou will continue to exist, albeit on
a smaller scale, following GSUSA’s removal of most of
its jurisdiction, the number of councils in Wisconsin will
remain the same. In addition, Manitou, as a still-existing
council, will be 60% smaller than it was before the
change. So instead of fewer councils with higher capacity,
GSUSA will be left with the same number of local councils,
at least one of which will have a reduced capacity. We
do not believe that this method of implementing GSUSA’s
realignment strategy is a proportionate response to its
need to address “unfavorable trends” in “membership,
brand image and program effectiveness.” 1 0 We therefore

10
We should note that we view with skepticism GSUSA’s
unilateral removal proposition. If GSUSA succeeds in removing
60% of Manitou’s jurisdiction, there is no reason to believe that
GSUSA will continue to allow Manitou, by then only 40% of
its original size, to continue long-term operations. Doing so
(continued...)
42 No. 08-2488

find that chances are better than negligible that a jury
could conclude that GSU SA lacked an objec-
tively ascertainable need for its proposed change, or
that it failed to respond proportionately to that need.
Based on these findings, we conclude that Manitou has
a better-than-negligible chance of success on the merits of
its claims. This completes the threshold portion of our
analysis. In addition to showing that it has some likeli-
hood of succeeding on the merits of its claims, Manitou
has also demonstrated that traditional legal remedies
would be inadequate and that it would suffer irreparable
harm in the absence of a preliminary injunction. See
Lawson Prods., 782 F.2d at 1433. We now proceed to the
balancing phase of the preliminary injunction analysis. Id.

D. Balancing Irreparable Harms Using the Sliding Scale
During the balancing phase of the preliminary injunction
analysis, the goal of the court is to choose the course of
action that minimizes the costs of being mistaken. Am.
Hosp. Supply, 780 F.2d at 593. To do so, the court must
compare the potential irreparable harms faced by both
parties to the suit—the irreparable harm risked by the
moving party in the absence of a preliminary injunction
against the irreparable harm risked by the nonmoving

10
(...continued)
would fly in the face of GSUSA’s ongoing initiative: to com-
bine and grow its local councils. Instead, this appears to be
only the first step in a multi-step process to remove all of
Manitou’s territory.
No. 08-2488 43

party if the preliminary injunction is granted. Ty, 237 F.3d
at 895. We evaluate these harms using a sliding scale
approach. Id. The more likely it is that Manitou will win
its case on the merits, the less the balance of harms
need weigh in its favor. Abbott Labs., 971 F.2d at 12; Roland
Mach., 749 F.2d at 387. Conversely, if it is very un-
likely—albeit better than negligible, as we have already
determined—that Manitou will win on the merits, the
balance of harms need weigh much more in Manitou’s
favor. Abbott Labs., 971 F.2d at 12; Roland Mach., 749 F.2d
at 387. When conducting this balancing, it is also appro-
priate to take into account any public interest, which
includes the ramifications of granting or denying the
preliminary injunction on nonparties to the litigation.
Lawson Prods., 782 F.2d at 1433; Ty, 237 F.3d at 895. This
analysis is “ ‘subjective and intuitive, one which permits
district courts to weigh the competing considerations and
mold appropriate relief.’” Ty, 237 F.3d at 896 (quoting
Abbott Labs., 971 F.2d at 12 (citations and internal quota-
tion marks omitted)).
The balance of harms in this case strongly weighs in
Manitou’s favor. We have discussed at length the irrepara-
ble harms that Manitou faces if it is denied injunctive
relief. Conversely, GSUSA risks virtually zero irreparable
harm. GSUSA is in the midst of a national reorganization
that is not scheduled for completion until the end of 2009.
With realignment efforts ongoing across the country, a
delay in eastern Wisconsin poses little short- or long-term
risk for GSUSA. And, in stark contrast to Manitou, any
harms GSUSA does face are certainly not irreparable,
but are instead fully rectifiable following resolution on
44 No. 08-2488

the merits.
The public interest here also favors Manitou. On
GSUSA’s side are the six councils to which Manitou is
supposed to cede its jurisdiction. These councils have
already combined, however, and have begun operating as
a unified council, so we fail to see how they would
suffer significant harm by waiting on this litigation’s
outcome. Thousands of other people have an interest in
this case. It has become an emotional debate for those
intimately involved, as well as those watching from the
sidelines. In our view, the best way to protect these indi-
viduals and families is to offer them finality. The worst
thing that could happen to the Manitou community is to
have it broken apart, only to try to piece it back together
again at a later time. Manitou’s members, parents, and
community leaders deserve an outcome in this case,
regardless of whether it ultimately favors GSUSA or
Manitou, that will not later be changed. By maintaining
the status quo, we ensure that the final resolution of
this case on the merits will be just that—final.
Because the balance of irreparable harms, including the
public interest, weighs entirely in Manitou’s favor, we
need not conduct a lengthy examination to quantify the
likelihood of Manitou’s success on the merits of its
claims. We express no opinion, in fact, on how likely we
believe it is that Manitou will succeed on the merits. Given
the drastic imbalance of the irreparable harms, we con-
clude only that Manitou’s chances of success, even if they
are scarcely greater than “better than negligible,” are
sufficient to sustain our grant of injunctive relief in this
No. 08-2488 45

case. See Menominee Rubber Co. v. Gould, Inc., 657 F.2d
164, 167 (7th Cir. 1981).

III. C ONCLUSION
For the foregoing reasons, our order of September 11,
2008, R EVERSED the decision of the district court and
E NJOINED GSUSA “from making any changes to, or inter-
fering with, the current council jurisdiction of appellant
Girl Scouts of Manitou Council, Inc., pending final resolu-
tion on the merits in the district court.”

12-15-08