966 F.2d 273 (7th Cir. 1992)
Walgreen Co. v.
Whether a permanent injunction enforcing a lease's exclusivity clause is appropriate (rather than limiting the tenant to money damages) where damages would be difficult to measure and would require ongoing judicial supervision, and where the landlord argues that an injunction imposes greater hardship by jeopardizing an anchor tenancy.
A permanent injunction is appropriate when the plaintiff demonstrates that legal remedies are inadequate (e.g., damages are difficult to compute or would require repeated proceedings), the balance of hardships favors equitable relief, and the public interest would not be disserved. In choosing between injunction and damages, courts consider comparative institutional competence: if damages would be highly speculative or necessitate ongoing supervision, and if an injunction would better induce efficient private bargaining to price the entitlement, an injunction may be the superior remedy. The grant or denial of a permanent injunction is reviewed for abuse of discretion.
The Seventh Circuit affirmed the district court's grant of a permanent injunction barring Sara Creek from leasing space in the shopping center to a tenant that would operate a pharmacy in violation of Walgreen's exclusivity right.
Walgreen is a staple in Remedies for its law-and-economics framing of the injunction-versus-damages choice. It teaches that the "adequate remedy at law" inquiry is not formalistic; it turns on institutional competence, information costs, and error risk. The case also offers an accessible template for balancing hardships and for recognizing when a property-rule remedy (injunction) can induce efficient private bargaining better than a liability-rule remedy (damages). For students, it clarifies how courts analyze negative covenants in leases and when the promisee's entitlement should be protected by an injunction despite the availability of theoretical money damages.