The choice between damages and an injunction requires a practical comparison of the costs and benefits of each remedy. Appellate review is deferential: the question is whether the district judge exceeded the bounds of permissible choice, not whether the appellate court would have made the same choice in the first instance.
An injunction can improve accuracy by allowing the parties to negotiate the value of Walgreen's right. If Phar-Mor's lease would create more value for Sara Creek than it would cost Walgreen in lost business, Sara Creek could offer Walgreen an amount to waive the injunction that would benefit both sides. Private bargaining may determine the real value of Walgreen's competitive loss more accurately and less expensively than a judicial contest between damages experts.
Injunctions also have costs. They may require continuing judicial supervision, burden third parties, or create a bilateral monopoly in which the parties must bargain only with each other. That bargaining arrangement can lead to costly strategic behavior, holdouts, or failed negotiations. Conversely, damages avoid those costs but can demand expensive litigation and may produce inaccurate valuations.
Here, calculating damages would have required speculative projections over the remaining ten years of Walgreen's lease: its future sales and costs, Phar-Mor's likely competitive effect, and the present value of the resulting losses. Forecasting the performance of a retail store over a decade, and isolating the effect of one nearby competitor, was inherently uncertain. Although Sara Creek offered evidence from other malls where Phar-Mor and Walgreen both operated, the district court reasonably questioned whether those malls were sufficiently comparable to Southgate.
The discovery necessary to develop a damages model also supported the conclusion that damages would be burdensome. Sara Creek sought extensive confidential Walgreen data, and the expense and complexity of that discovery were themselves costs of choosing a damages remedy.
By contrast, the injunction was simple: Sara Creek could not lease Southgate space to Phar-Mor during Walgreen's lease term. It did not require ongoing court supervision, and no unrepresented third party was shown to be harmed. Phar-Mor's and consumers' interests would be reflected indirectly in the value that Phar-Mor and Sara Creek placed on the proposed lease and thus in Sara Creek's willingness to bargain with Walgreen.
The potential bargaining costs were also far less severe than in cases where an injunction could shut down a major, highly valuable operation and create an enormous bargaining range. Sara Creek did not show that Phar-Mor was its only possible anchor tenant or that barring this lease would force the mall to close. On balance, the district court acted within its discretion in finding the injunction less costly than an uncertain damages award.