Preliminary Injunctive Relief in the State and Federal Courts of New Jersey
An injunction is an Order issued by a Court compelling a party to a litigation to perform a certain act or not to perform a certain act. The usual form of injunction is known as a preventive injunction, and prohibits a party from doing a particular act, or commands him to refrain from doing it. If justice requires, and based upon especially strong proofs, the Courts may grant a mandatory injunction, which is one that (1) commands the defendant to do some positive act or particular thing; (2) prohibits him from refusing (or persisting in a refusal) to do or permit some act to which the plaintiff has a legal right; or (3) restrains the defendant from permitting his previous wrongful act to continue operative, thus virtually compelling him to undo his past act. Black's Law Dictionary; Bailey v. Schnitzus, 45 N.J. Eq. (1888).
Frequently, injunctive relief is needed by a party before a trial on the merits. A party may seek a Temporary Restraining Order at the time that a Verified Complaint is filed with the Court. A Temporary Restraining Order restrains the defendant from certain actions until the return date of the Court's Order To Show Cause. If the injunction is continued on the return date of the Order To Show Cause, it is known as an interlocutory injunction, which continues in effect until further Order of the Court or until trial and final judgment. An injunction which is entered after trial is known as a final or permanent injunction.
Under New Jersey law the factors to be considered on an application for temporary restrains are settled in the seminal case of Crowe v. DeGioia, 90 N.J. 126, 132-135 (1982). There, the Supreme Court of New Jersey identified four (4) requirements, as follows:
- A preliminary injunction should not issue except when necessary to prevent irreparable harm. Irreparable harm is generally considered to be harm which is not capable of being fully remedied by an award of money damages. If money damages can make the plaintiff whole, then the Courts will force the plaintiff to await final relief at a trial, and will rely upon the trial judge and/or jury to grant a full measure of relief in the form of money damages.
- A preliminary injunction is generally withheld when the legal right underlying the plaintiff's claim is unsettled. Thus, plaintiff must have a settled legal basis for the ultimate relief which the plaintiff claims in order to be entitled to a preliminary injunction. One exception to this rule applies when the injunction which the plaintiff seeks goes no further than to preserve the status quo ante, or in layman's terms, preserves the status of the parties which existed immediately prior to the allegedly wrongful conduct of the defendant.
- Preliminary injunctive relief will not issue when the material facts essential to the plaintiff's claim are denied by the defendant under oath. Thus, if the defendant files affidavits in opposition to an application for preliminary injunction which disputes all of the material facts essential to the plaintiff's case, the Court must either deny the preliminary injunction, or proceed to an immediate hearing with respect to the disputed issues before entering an injunction. Again, however, there is an exception to this rule that, ". . . mere doubt as to the validity of the claim is not an adequate basis for refusing to maintain the status quo." Crowe v. DiGioia, supra at 133.
- The final principle applied by the Court is that the Court must consider the relative hardship to the parties and to the public at large in granting or denying injunctive relief. The Court must determine first whether granting the injunction would be inimical to the public at large, or to third parties who are not involved in the litigation. The Court must weigh the hardship to the plaintiff if an injunction is denied against the hardship to the defendant if an injunction is granted. In this context the Court also may consider establishing a monetary bond or deposit requirement which the plaintiff must meet in order to obtain an injunction, in order to assure the defendant that if the defendant prevails in the litigation, defendant will be compensated for the harm caused by the injunction.
Typical cases in which injunctive relief is essential include:
- Actions to enforce a restrictive covenant or a trade secret agreement;
- Minority shareholder litigations, in which the control of the corporate entity during the course of the litigation is in issue, and the existence of the corporation may be threatened;
- Trademark, trade name, and other intellectual property litigation, in which the use of the protected trademark or trade name, copyright or patent pending the trial can destroy the value or the good will of a business;
- Nuisance and trespass litigations; and
- Environmental litigations in which significant environmental damage may occur before a trial on the merits.
These litigations are often won or lost within the first weeks of the case because it can take one and a half to two years until a trial on the merits. It is essential, therefore, to seek legal advice early on and to martial all of the available evidence and law in your favor before applying to the Court for injunctive relief.
Temporary restraining orders and preliminary injunctions are frequently denied on the grounds that a party has not acted soon enough. Time is of the essence and the quality of the initial presentation is also essential to winning a preliminary injunction.
In the Federal Courts the rules are essentially the same. The Federal Courts weigh four (4) factors in determining whether to grant a preliminary injunction: "(A) The likelihood that the applicant will prevail on the merits at the final hearing; (B) The extent to which the plaintiffs are being irreparably harmed by the conduct complained of; (C) The extent to which the defendants will suffer irreparable harm if the preliminary injunction is issued; and (D) The public interest." Opticians Ass'n. of America v. Independent Opticians of America, 920 F.2nd 187, 191-192 (3rd Cir. 1990); Pappan Enterprises, Inc. v. Hardees Food Systems, Inc., 143 F.3d 800, 803 (3rd Cir. 1998); One World Botanicals Ltd. v. Gulf Coast Nutritionals, Inc., 987 F. Supp. 317, 330 (D.N.J. 1997).