♫ Conjunction “injunction,” what’s your function? ♫
Preliminary injunctions and temporary restraining orders can prove useful in a counsel’s attempt to preserve evidence, prove irreparable harm, protect trade secrets, stop violations of either building codes or health care laws, and much more.
In this episode of Speaking of Litigation, Epstein Becker Green attorneys Scheherazade Wasty, Jonathan Brollier, and David Jacobs delve into the recipes for success in these legal motions and emphasize the importance of an experienced counsel when seeking or opposing injunctive relief.
Video: YouTube, Vimeo.
[00:00:00] Scher Wasty: Hi, today on Speaking of Litigation, we're discussing the practical issues surrounding when to seek and how to resist temporary restraining orders and preliminary injunctions. I'm Scher Wasty and I will be your host today. I'm a health care litigation and business disputes attorney in Epstein Becker Green's litigation practice and I'm based out of our Princeton, New Jersey office.
[00:00:23] Scher Wasty: When seeking a preliminary injunction or a TRO, there are a number of factors that a party needs to establish, including the substantial likelihood of success on the merits, the likelihood of irreparable harm, the unavailability of an adequate remedy at law, the threatened injury outweighs the possible harm, and that the issuance of the temporary injunction will not disserve the public interest.
[00:00:46] Scher Wasty: While all of these factors are important, we were recently reminded of the significance of the likelihood of irreparable harm. A few weeks ago, we were opposing a preliminary injunction application seeking millions of dollars surrounding what was essentially a breach of contract claim. The judge in that case correctly determined that where the plaintiff's injury was limited to money damages, ordering a defendant to pay money was not appropriate on a preliminary injunction application.
[00:01:12] Scher Wasty: This was a good reminder that there must be irreparable harm in order to succeed on these motions. During today's podcast, we will be discussing the reasons for seeking a preliminary injunction or temporary restraining order, as well as what to consider when opposing these applications. Before we jump into our discussion, if you like the information we're sharing today, please subscribe to the show. Speaking of Litigation is available on YouTube and wherever you get your podcasts.
[00:01:36] Scher Wasty: Joining our discussion today is Jonathan Brollier, a health care litigation and business disputes attorney out of Epstein Becker Greene's Columbus office. Hi, Jonathan.
[00:01:43] Jonathan Brollier: Hi, Scher.
[00:01:44] Scher Wasty: And also joining us is David Jacobs, an employment and commercial litigation attorney and the managing shareholder of Epstein Becker Greene's Los Angeles office. Hi, David.
[00:01:54] David Jacobs: Hi, Scher.
[00:01:55] Scher Wasty: Deciding when to seek or oppose preliminary injunctions and temporary restraining orders is a complex dance requiring a strategic approach from both the client and their attorneys. When filing these applications, it is important to understand your client's objectives and ultimate goal.
[00:02:13] Scher Wasty: Since these tend to be done on an expedited basis, it is really important and good to have a plan and team ready to go. So David and Jonathan, we'll start with a question for both of you. When have you filed preliminary injunctions or TROs and what were you trying to achieve on behalf of your respective clients?
[00:02:31] David Jacobs: I filed them to preserve evidence, to stop trade secret or confidential information theft, to stop violations of either building codes or health care laws, and I filed them in connection with corporate raiding of employees for those jurisdictions that will permit that.
[00:02:53] Scher Wasty: And Jonathan, what about you?
[00:02:54] Jonathan Brollier: Very similar circumstances to what David's described. We also see them used in situations involving construction, where perhaps someone's building a building on property they shouldn't be, where money damages wouldn't be sufficient to repair the harm, or other sorts of cases where really you can show irreparable harm, that's what these cases boil down to. Being able to show it quickly is the key, so whenever there's something, a harm being done, where money alone won't make the wrong right, is perhaps a situation where you should be considering injunctive relief.
[00:03:32] Scher Wasty: And Jonathan, just a follow up to what you were just saying, would you, in your experience, say that irreparable harm is one of the more important factors that the courts are looking at?
[00:03:41] Jonathan Brollier: There's four factors. I mean, they're all important, but this, irreparable harm seems to be the rocks on which these cases founder.
[00:03:50] Jonathan Brollier: If you can't show irreparable harm, even if you have a chance of winning, prevailing on the merits, that's all well and good, but the court may not buy what you're selling. So really having a cogent ability to show what the irreparable harm is, and then a pretty narrowly tailored request for what you're asking the court to enjoin, rather than being too broad or wide ranging think about making your request, making the injunction specific.
[00:04:19] Scher Wasty: Got it. And David, are there particular types of cases where preliminary injunctions and temporary restraining orders seem to be more frequent?
[00:04:27] David Jacobs: Well, certainly in the trade secret area. Also in the trademark area, they're very frequent.
[00:04:33] Scher Wasty: And another question for both David and Jonathan, what's your strategy in filing these applications?
[00:04:40] Jonathan Brollier: Really having the facts as clear as you can get them is critical. One doesn't want to make a misstep or make a representation to the court in your filings that then turns out to be mistaken after you talk to more employees of your client. And this can best be achieved by having frequent open communication.
[00:04:59] Jonathan Brollier: These things happen on a short timeframe. So you need to have the right people with the client ideally altogether talking to you, so that you can get quickly to get to the bottom and figure out while someone might perceive that they're being harmed irreparably, if their colleague can't back that up or has contradictory facts, you want to know all of that at the outset as you get your ducks in a row.
[00:05:21] David Jacobs: I just want to underscore it is important to get everybody on the phone that has the relevant facts at the same time, so we're sure that one of our witnesses isn't going to contradict the other. So it helps getting the story straight and everybody's on the same page.
[00:05:36] Scher Wasty: And a follow up question for both of you, is this a good instance in which you would need your legal team together that you have worked with before, since you're moving on multiple fronts at once?
[00:05:47] Jonathan Brollier: Absolutely. My experience is that having at least two, probably three or four people who you've worked with and you trust, who you can collaborate with, is really important.
[00:06:02] Jonathan Brollier: You might have a team of two people writing and preparing the filings, but then you might have someone obviously liaising with the client, gathering all the facts, talking to the client and their leaders about what are the strategic objectives we're trying to accomplish here. What bad behavior are we trying to enjoin? And then mustering all the facts together. You might have somebody else, you know, talking to the bonding company.
[00:06:25] Scher Wasty: And David, could you tell us a little bit about using injunctions in aid of arbitration and your experience with that?
[00:06:32] David Jacobs: Sure, we've used that many times. It's often the case, you'll have an arbitration agreement for any disputes. But most of those agreements, most of the ones I've seen, do carve out an exception if you need to get equitable relief from the court.
[00:06:47] David Jacobs: And we've done that in cases of trade secret theft, of corporate raiding. We've gone in to seek a TRO because you can't really wait for the arbitration to get the immediate relief. Now, while arbitration providers like AAA or JAMS may offer injunctive relief, they're not going to do it as fast as the court.
[00:07:14] David Jacobs: And you really can't wait. If you wait too long, you're not going to have much left to adjudicate. So you need to preserve the evidence. You need to get what you, what you can get from a court. And then you can proceed, you know, at your leisure with the arbitration.
[00:07:28] Scher Wasty: So am I correct that in the instance of a trademark case, for instance, or a trade secret case rather, if you are waiting for the AAA, you might have lost all the information that you would need in order to prosecute your case?
[00:07:44] David Jacobs: Well, you certainly would have lost a great deal of it, especially in a trade secret case. I mean, once the toothpaste is out of the tube, you're in a very unhappy place. So you want to, you want to stop that as soon as you can. And the best way to do that is with a court order.
[00:07:58] Scher Wasty: Understood. What would you both say are some of the nuances that you've seen in implementing these types of applications? Jonathan, we can start with you this time.
[00:08:09] Jonathan Brollier: Again, I think it's taking care to quickly get your paperwork together and quickly muster your facts and present them clearly. You want to have taken the time to diligently prepare your case to get your ducks in a row and to have, candidly, just the logistical pieces ready, whether it's getting the paperwork filed. If you're in a remote county and they have different filing practices, make sure that you understand what those are. But also making sure that you've had that extensive communication with all of the key stakeholders so that you're not taken unawares by any late emerging facts. You need several people to do that and it takes long hours.
[00:08:53] Jonathan Brollier: The other side of the coin is if you take too long to get your ducks in a row, then very easily the other side can say back to the court, well look, this isn't really a matter of irreparable harm. They've taken so long to come and present their matter. Just let the lawsuit proceed on an ordinary course.
[00:09:10] Scher Wasty: And also, is this a situation where you want to be thoughtful with the client as to what exactly we're trying to stop?
[00:09:19] David Jacobs: You do, and that just goes into careful drafting of your order to show cause for your temporary relief. You want it to be complete, but not so broad as the court is likely to deny it because the relief you're seeking is too broad.
[00:09:36] David Jacobs: So, you need to be clear with the client, exactly what are we trying to prevent, make sure everybody's on board with that.
[00:09:42] Jonathan Brollier: And the specificity requirement is important, even if, that your trial court grants you all the injunctive relief that you sought, if your request was overbroad and not specific…
[00:09:55] Jonathan Brollier: I was just reading a decision from an appellate court here in Ohio reversing a trial court's granting of injunctive relief for the reason that instead of enjoining only a couple of provisions of a statute, the trial court had enjoined the application of the entire statute across the board.
[00:10:12] Jonathan Brollier: So again, be careful what you ask for and be specific about it.
[00:10:16] Scher Wasty: Now, David, could you talk to us a little bit about corporate guarantees from bonding companies and undertakings and the importance of those?
[00:10:25] David Jacobs: Certainly. One of the things you're going to need to do if you're seeking equitable relief is to make sure that you have a bond at the ready.
[00:10:34] David Jacobs: Most courts will, even if you get your TRO, will not implement the TRO until a bond is filed with the court. You should, as part of your team, not only the trial team that's crafting the TRO papers or preliminary injunction papers, but you should have your bonding broker on speed dial so that you can have everything except the amount done for the bond.
[00:11:02] David Jacobs: You're not going to know what the bond amount is until you're in court arguing with the judge about what the bond amount should be. So you can't file it beforehand. You won't know until you get your TRO and then the next stage is arguing about what the amount should be. Then you need to get in touch with the bond broker, have that filled in and get that filed because your TRO will not be in effect, or your preliminary injunction won't be in effect, until the bond is filed.
[00:11:31] David Jacobs: So that's one of the things that needs to be done up front as much as it can be.
[00:11:37] Scher Wasty: And if it were to not be done, then you will essentially risk being delayed in getting your injunction. Is that correct?
[00:11:45] David Jacobs: Right. It would be a Pyrrhic victory because you want speed, you want to stop something immediately.
[00:11:52] David Jacobs: And if you're waiting for the bonding company to review the financial statements of your client before it will issue a bond, then you're just wasting time and all of that could have been taken care of up front.
[00:12:05] Scher Wasty: And along the lines of having your bonding company on speed dial, you should probably also have your client's public relations team on speed dial if you're expecting media attention, correct?
[00:12:17] David Jacobs: Absolutely. Absolutely. I mean if you are, if what is at stake will get media attention you absolutely have to have either the company's internal PR people or external PR people also on speed dial.
[00:12:31] Scher Wasty: And David, is there anything unique with respect to opposing preliminary injunctions or temporary restraining orders in California?
[00:12:40] David Jacobs: Well, we do have a little wrinkle here. We're one of the few states that allows you to peremptory challenge a judge. And all you need to do is file a paper, and it's automatic if you file it correctly. So you need to be, if you're seeking a TRO or preliminary injunction, you need to be aware that that may be filed and you may need to hunt for another judge right away if that gets filed.
[00:13:04] David Jacobs: Or if you're on the receiving end of a TRO or preliminary injunction, you take your little 170.6 form with you, not with the name of the judge filled in yet, but when you're in front of the judge, so you know which judge you have, you fill in the name and you file it. And then the other side has to go find another judge.
[00:13:26] Scher Wasty: And is this simply a strategic move or is, you know, have you had instances where you had other reasons for seeking the peremptory challenge?
[00:13:36] David Jacobs: It depends on where you are in California if you're doing this. There can be both strategic reasons and personal experience in front of a judge. So they're not mutually exclusive. Just to be clear, you don't need to prove anything, you just need to file the paper. It's not, I mean, unless you're late, it can't be challenged.
[00:13:58] Scher Wasty: Understood. And Jonathan, is there anything unique with respect to opposing these applications in Ohio?
[00:14:05] Jonathan Brollier:Well, we don't have an analog to what David's described with peremptory challenges to individual judges.
[00:14:12] Jonathan Brollier: Ohio's Rule 65 tracks the federal rules. The burden that you have to prove is with clear and convincing evidence as to the four factors, including the irreparable harm. But while you can't individually challenge a court, there are sometimes, the option might be available to pursue, of choosing what county in which to bring your action.
[00:14:37] Jonathan Brollier: Obviously, you're always choosing what venue to be in. Some counties in Ohio have as few as one common police court judge. And so, if you think that your case might be well suited to a particular judge, at times you may have a sense of who that would be or who will hear your case. On the other hand, in larger counties, sometimes who will be in the hot seat to hear emergency motions varies or will rotate.
[00:15:05] Jonathan Brollier: And you may be able to get a sense of that if you do your homework down at court. So sometimes you can get an inkling as to who your audience will be if you plan ahead carefully.
[00:15:15] Scher Wasty: And David, do you have any particular applications that stand out?
[00:15:21] David Jacobs: Yeah, a couple. We had an instance where one of our clients was being raided by a competitor, and we went into court in aid of arbitration to make sure that all the confidential information and trade secret information that was running out the door with the employees was protected.
[00:15:43] David Jacobs: And we got that against several of the employees and the raiding company, and then proceeded along with the arbitration, which was very successful.
[00:15:52] Scher Wasty: Great. And Jonathan, what about you? Any particular applications that have stood out?
[00:15:57] Jonathan Brollier: Yeah, I had one that was, I think, worthy of discussion or of interest. In our preparations, we talked about generally being reluctant to give your opponents too much of a heads up about what you intend to file, rather, sending it to them after you filed.
[00:16:15] Jonathan Brollier: I had one case where we were representing a governmental entity, a school district that had agreed to certain incentives for a real property developer who was developing a big mall, and in exchange for receiving the incentives, the developer had agreed not to file any administrative actions to reduce the value of the mall once it built it.
[00:16:40] Jonathan Brollier: In other words, it promised that its mall would always be worth at least let's say 90 million. And that was important to the school district because it had issued bonds, and the stream of income from that tax revenue was securing the bonds. And so lo and behold, the property owner developer did file an administrative action to contest the county's valuation of its property.
[00:17:03] Jonathan Brollier: It sought to reduce the value from, let's say 90 million to 20 million dollars, or something like that. Which would have really denuded the stream of revenue that the schools had relied on when they issued these bonds. And so we found out that the hearing on that tax appeal was just about to happen, maybe a couple of days before it was scheduled.
[00:17:22] Jonathan Brollier: And after a polite request to the developer's lawyer to withdraw their tax appeal, they said no, go fly a kite. So we quickly sprung into action, prepared our paperwork, and the night before we were ready to file, I was going to have a car take me up to Toledo, Ohio to file the paperwork.
[00:17:45] Jonathan Brollier: And we sent it at about 4:30 PM the night before to the tax appeal lawyer representing the developer, and an hour later he called me back, ran up the white flag, said we were withdrawing the tax appeal in the morning, and we achieved our client's objectives without even having to file. You know, ordinarily you want to be careful about not tipping your hand. In that circumstance, given the timing issue with the administrative appeal, it ended up working out well to kind of fire a shot across their bow.
[00:18:12] Scher Wasty: That sounds like great work by you and your team. A question for David, what would you say is the most challenging aspect of preparing the application?
[00:18:20] David Jacobs: Usually you get word like on a Friday night that something untoward has happened and so you're hopping on the phone with the client and all of the relevant personnel over the weekend.
[00:18:32] David Jacobs: For some reason it always happens on a Friday night. And the most challenging part is getting everybody on the same page at the same time, quickly. So, the declarations or affidavits can be done, and done correctly. Everybody's on the same page in terms of what the facts are. So that's the hard part, obviously.
[00:18:52] David Jacobs: Also, again, with the, with respect to making sure that you have somebody online that you can get a hold of even over the weekend if you need to.
[00:19:00] Scher Wasty: And I guess that Friday night TRO or preliminary injunction application that has to be drafted is a perfect example of when you need legal team in place and ready to go, right?
[00:19:13] David Jacobs: Not only your legal team. For those of us who've been doing this a while, we have, I don't want to call them forms, but we certainly have templates that we can use that are, you know, that need to be fleshed out obviously because the facts in each case are different, but it's always good to have those templates so that you're not starting from scratch.
[00:19:33] Scher Wasty: And Jonathan, what would you say is the most challenging aspect of opposing the preliminary injunction application or TRO application?
[00:19:41] Jonathan Brollier: Well, I think if the lawyers and the parties seeking the TRO feel like it's a fire drill and everything's happening fast, if you're on the receiving end, you know, unless you knew that it was coming, then your time constraints may be even more severe.
[00:19:57] Jonathan Brollier: You need to quickly muster the client, the stakeholders, the people who have actual knowledge of what went on, and then muster your response to what you know is coming. Really, the time compression can be the most challenging part.
[00:20:11] Scher Wasty: And I suppose, Jonathan, when you're opposing and you're on a compressed time schedule, this again is a great time when you need 24 access, 24-hour access to your clients, employees who are involved in whatever's going on, right?
[00:20:26] Jonathan Brollier: Yeah, that's exactly right, Scher. I mean, this is not the time to let the client put this matter on the back burner. So, again, it emphasizes the importance, as in all litigation cases, but it really sets it in stark relief that you need access to information, access to employees, and it's not good enough that that happens in 72 hours.
[00:20:48] Jonathan Brollier: You need it whenever you ask for it. And so being up front with the client at the outset about those expectations is so important.
[00:20:56] Scher Wasty: And David, have you found the outcome of preliminary injunction applications to be useful in facilitating early settlements in certain cases?
[00:21:07] David Jacobs: Very often. If you're seeking a TRO or preliminary injunction and you get it, it often results in a settlement very quickly.
[00:21:16] David Jacobs: On the other hand, if you're trying to get it and it's not successful, you know, then not so much. [laughter]
[00:21:24] Scher Wasty: And I guess in those instances, it might embolden the other side, right?
[00:21:28] David Jacobs: Look, I mean, you're going to get, if you're not successful, you're going to get an order that says you're probably not likely to succeed on the merits.
[00:21:36] David Jacobs: And that certainly would embolden the other side. So you need to be very thoughtful about going in and seeking a TRO or a preliminary injunction because if you're not successful, you're going to get that order and the client needs to be prepared for that. You shouldn't go in unless you’re 99% sure you're going to succeed.
[00:21:54] Scher Wasty: Understood. I totally agree. And Jonathan, in your experience, what are the biggest pros and cons to filing preliminary injunction applications and opposing them?
[00:22:04] Jonathan Brollier: Substantively, obviously they're critical if you're, if the evidence is being disappeared or the client lists or the other trade trade secrets are being made off with.
[00:22:15] Jonathan Brollier: But I think as you think about the arc of litigation, of the course of a lawsuit, a great benefit can be that these actions will set everything in stark relief very quickly. And if your side's winning, that's great, but it may also bring clarity to the other side. If you have an intransigent opponent or you have, you know, your adversary's opponent has their head in the sand and wants to pretend like nothing's happening.
[00:22:45] Jonathan Brollier: You know, everybody being called in front of the court is going to concentrate minds. And so it may be that you get a result quickly. It may be not the one you're looking for, but it may be that in about two weeks you get the same degree of clarity about the outcome as you would have in two years if you hadn't pursued an injunctive remedy.
[00:23:07] Scher Wasty: Well, thank you both so much for your time today, and thank you to our listeners for tuning in.
[00:23:12] David Jacobs: Thank you, Scher.
[00:23:13] Jonathan Brollier: Bye now.
[00:23:14] Scher Wasty: If you liked what you heard today, please consider subscribing. Speaking of Litigation is available on YouTube and wherever you get your podcasts.
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