Injunctions Defined
As a preliminary matter, what is "injunctive relief"? The term "injunction" refers to "a court order prohibiting a party from doing a particular act." See generally In re Memphis Land Dev. LLC (9th Cir. 2011) 658 F.3d 662, 667 It thus serves to "maintain the status quo pending final adjudication of the case." Dolch v. United Mexican States (9th Cir. 2012) 648 F.3d 729, 733. In that regard, it can be used to "preserve the status quo pending a determination of the action on the merits. . . . The purpose of an injunction is to prevent irreparable injury." O’Cake v. United States as Parental Guardian of Amber P., a Minor, (10th Cir. 1998) 132 F.3d 778, 785.
In the civil context, injunctive relief can be used in most circumstances. See, e.g., 28 U.S.C. § 1651(a); 20 Am.Jur.2d, Courts, § 34 (when authorized by law, injunctive relief may apply to "general actions, equity actions, administrative procedures, statutory proceedings, special proceedings, and civil law causes of action").
The relief may be utilized, for instance, in disputes concerning:
Contract interpretation/non-compete covenants – specifically, in disputes over how non-compete agreements should be read or interpreted – have been subject to injunctive relief:
"[T]he proper scope of an injunction when the employer seeks to prevent the former employee from working with a competitor in an area in which she was employed depends upon the meaning of the restrictive covenant. Where the parties’ agreement is clear on its face, the court should enforce it as written. To the extent covenants are ambiguous or their scope is in question, however, the court may look outside the four corners of the agreement and receive extrinsic evidence of the intent of the contract’s parties." RDM Erhard (USA) Inc. v. RCM Industries, Inc. (6th Cir. 2017) 855 F.3d 396, 404. See also Applied Orthopedics v. Perdue, No. 18-56982 (9th Cir . 2019) (affirming application of injunctive relief to enforce a restrictive covenant), see also Forray v. Nevit, (9th Cir. 2012) 748 F.3d 1020, 1023 (rejecting application of injunctive relief to breach of contract claim).
"[A]n injunction is an integral part of California’s statutory scheme for enforcement of Surface Mining Act, at least with respect to penalizing continuing violations and compelling compliance; moreover, there is no requirement that a civil action for enforcement of statute and violation be brought by the Attorney General or district attorney." Jacobs, v. Dep’t. of Conservation (2001 C.D. Cal.) 93 P.3d 995. "A plaintiff may seek permanent injunctive relief [in California] only if it satisfies one of the following conditions: (1) an order to prevent a multiplicity of similar future lawsuits; (2) irreparable injury; (3) a statutory scheme that provides for its issuance." Access Fund v. U.S. Dep’t of Agric. (9th Cir. 2013) 563 Fed.Appx. 601, 603. "[I]njunctive relief is a limited remedy. Permanent injunctive relief cannot be based on past harm, but on future injury that is likely to occur." Id.
To that end, California courts have "not explicitly recognized any form of mandatory injunctive relief." Grace v. Mansour (S.D. Cal. 2014) 769 F. Supp. 2d 1178, 1188. However, "California courts have awarded mandatory injunctive relief in limited circumstances only." Id. at 1189 citing Rohan v. Huntington Beach (2002) 29 Cal.4th 1427, 1440, 131 Cal.Rptr.2d 1, 54 P.3d 1252; see also Children’s Hosp. & Med. Ctr. v. Belshe, (1997) 91 Cal.App.4th 188, 203, 110 Cal.Rptr.2d 456; Stoneman v. Sacramento East V, Ltd. P’ship (1996) 46 Cal.App.4th 1032, 1040, 54 Cal.Rptr.2d 756. Yet a "preliminary injunction [may be] sought to enjoin threatened conduct." Id. citing Rock Cafe HD, LLC v. United Nat’l Ins. Co. (C.D. Cal. 2012) 880 F. Supp.2d 1073, 1078-80.
Categories of Injunctions in Contract Breaches
There are various types of injunctive relief that may be used when seeking to a stop a breach of contract. These include temporary restraining orders, preliminary injunctions, and permanent injunctions. In some situations, temporary relief may be granted in the form of a temporary restraining order. A TRO is appropriate only if the moving party can show that immediate and irreparable injury will result before the adversary can be heard in opposition.
A TRO will not be granted unless: the applicant gives written certification of efforts to give notice to the opposing party, stating the reasons why notice should not be required; or the applicant’s attorney files a certificate stating the efforts made to give the notice, and the reasons why notice should not be required; and, if the adverse party was given notice, a specific and clear showing is made why a TRO should enter without notice.
Under the Federal Rules of Civil Procedure, a TRO may not be granted if the applicant would be "effectively be disposed of his or her remedy if required to await the trial." A TRO can be issued without notice, but only in what are called "narrowly tailored" circumstances, where the opposing party is not likely to suffer any harm, and the adverse party will be restrained only until the hearing on the motion for a preliminary injunction.
TROs are meant to preserve the status quo of the parties until a "full hearing" can be held. A preliminary injunction prohibits the parties from taking certain action or compels certain action, and is issued by the court at any time in the pendency of the case. A preliminary injunction requires that the adverse party receives notice and has an opportunity to be heard.
A permanent injunction is awarded only after a trial on the merits, and is there to inhibit subsequent conduct by the opposing party. Once granted, this relief is permanent and will last until the court orders otherwise.
Below is a chart that helps to break down these three types of injunctive relief:
A TRO or preliminary injunction may only be granted if the moving party shows that "the balance of hardships favors issuance of injunctive relief, the public interest favors granting it, the moving party has demonstrated a substantial likelihood of success on the merits, and there is no adequate remedy at law and irreparable harm will occur if the injunction is not granted."
Most courts will only award a TRO or preliminary injunction where the movant shows a reasonable probability of success and there is irreparable harm. However, some courts, such as California state and federal courts, grant injunctive relief when there has been irreparable harm, but there is no likelihood of success if the defendant has acted in bad faith.
Requirements for Issuing an Injunction
The criteria for granting injunctive orders include a showing that absent the preliminary injunction, the party seeking the relief would incur irreparable harm, and that, at least in a preliminary injunction setting, monetary damages would be inadequate to remediate any harms caused by the other party’s actions.
As a preliminary matter, courts do not presume that although a protected property right is being infringed, irreparable injury will follow. Instead, it may be shown that a part of the threatened injury is the loss of a valuable publicity right or the destruction of a unique work of art or other really unique item. As a general rule, infringement of property rights are adequately remediable by money damages, and do not meet the irreparable harm prong. However, as has been noted in many other instances, money damages may be much less than the actual harm suffered.
And the losses must be ones that would not be easily cured by money damages. Courts have been asked to consider the difficulty of restoration in determining whether or not a person could be made whole by money damages. Even if a relatively simple computation is possible, can the interested party afford the effort and cost involved?
Courts have found that the mere speculative possibility of harm which might occur in the future is not sufficient evidence to establish a likelihood of irreparable harm. Orders of preliminary injunction or special injunctions may be vacated or set aside where there remains no substantial likelihood that the violation has occurred or will be repeated.
Obtaining an Injunction
The legal process for seeking injunctive relief in a breach of contract case begins with the drafting of a motion. The motion is filed in the same district where the underlying dispute is pending and is served upon the opposing party. Once served, the opposing party then has 10 days to help you and the judge by consenting to the motion, or not. Most defendants will not consent. Shortly thereafter, the motion and supporting affidavits are heard by the superior court judge that is hearing the underlying breach of contract case. The judge will initially determine whether the plaintiff has established a likelihood of success on the merits, which is decided at a hearing. In Georgia this element requires the judge to find that plaintiff has a "substantial likelihood" of succeeding on the underlying merits of its case. The next question of interest to the judge is whether there will be an irreparable injury suffered by the movant (plaintiff in the breach of contract case). An injury may be considered irreparable if there is a threat of continued violation of an enforceable contract requiring a remedy that is not available at law. In Georgia, we consider three factors when determining whether there will be an irreparable injury: (1) whether the threatened injury is serious; (2) whether the threatened injury is immediate; and (3) whether the threatened injury will become irreparable when coupled with the injury to the movant when considering the status quo and whether any harm caused by the defendant can be compensated by money damages. Next, the judge looks at the harm to the nonmovant (defendant in the breach of contract case) versus the harm to the movant if the injunction is granted. The Georgia Court of Appeals has described the "balance of the harm" test as follows: ‘The harm to the plaintiff if the injunction is denied and to the defendant if the injunction is granted.’ (Internal quotation marks omitted.) McDuck v. State, 235 Ga.App. 871, 872, 511 S.E.2d 254 (1999) (affirming a trial court’s grant of a temporary restraining order after determining that ‘[t]he danger of [plaintiff] losing its ongoing business without the issuance of the TRO outweighs [defendant’s] injury stemming from the limited activity [defendant] would be prevented from engaging in by the terms of the TRO.’). 458/Decatur, Inc. v. Bowers, 260 Ga.App. 36, 39, 578 S.E.2d 900 (2003) (quoting McDuck). Lastly, the trial court will determine whether the threatened injury to the movant outweighs the harm to the nonmovant if the injunction is granted and whether granting the injunction serves the public interest. There is no bright line rule for how the Georgia courts make this determination. But the court "may consider the totality of the circumstances to determine whether the public interest favors the granting of the injunction." McDuck v. State, 235 Ga. App. 871, 873(1)(b), 511 S.E.2d 254 (1999). The judge may decide to grant a temporary restraining order for a limited period of time until the case can be heard. Additionally, if the plaintiff has won the TRO hearing, the court can then set a hearing for a preliminary injunction. This hearing can be set a few months later . . . or maybe a few years later, if the case is delayed.
Tactical Considerations
Any evaluation of whether a party should seek injunctive relief will be guided by strategic considerations, weighing the benefits and burdens imposed by injunctive relief. The specter of potential liability for failure to post a bond or the possibility of injunctive relief being offered at trial may prevent or constrain some litigants from seeking injunctive relief altogether. Those litigants who elect to move for injunctive relief must then evaluate whether they intend to press for a preliminary injunction (restraining extrajudicial conduct pending the outcome of the suit) or a final injunction (issued at a later point in the case, usually after a full trial). Fully litigating a motion can be quite costly—in both time and money—and whether to offer the court a full record will depend on the facts and circumstances of the particular dispute, the type of injunctive relief sought, and the resources the parties are willing to expend. Some litigants may opt to seek only temporary restraint of extrajudicial conduct with little or no evidentiary record (through an ex parte TRO or subsequent preliminary injunction) in the hope that the threat of ensuing sanction will compel the defendant to modify its conduct . Other litigants, however, may believe that a credible threat of a TRO will not be enough, and instead they may decide that full-blown briefing will be necessary to ensure that their arguments are fully developed and preserved. In addition to resource considerations, litigants will also have to weigh the possibility that injunctive relief will not be prejudged by the court in connection with the TRO or preliminary injunction motion and may not even be tried until the end of the case. Some courts will require parties who seek a TRO or preliminary injunction to waive their right to a jury trial on the merits before the issuance of injunctive relief. See, e.g., Capri v. Baltimore & Ohio R.R. Co., 299 U.S. 248, 254 (1936); Peters v. Ritchie, No. 035477, 2003 WL 23009618, at *2 (Iowa Ct. App. Dec. 24, 2003). Otherwise, the parties will have to litigate for months or longer over liability (including a fully briefed summary judgment motion) before returning to the court for a and complete resolution of the merits. See, e.g., O2C, Inc. v. Raychem Corp., No. C-00-1925 BAB, 2000 WL 1560155, at *6 (N.D. Cal. Oct. 9, 2000) (denying a request for TRO and request for injunctive relief because the plaintiff "failed, at this point, to articulate an intent on the part of [defendant] to misappropriate its trade secrets," and, therefore, "plaintiff’s losses, if any, are purely monetary").
Notable Case Studies
In the case of City of New York v. Golden Feather Smoke Shop, Inc., 511 F.3d 389 (2d. Cir 2008), the two owners of a tobacco shop in New York were put on notice for a move to shut them down, even though the shop was legal at the time. They brought the claim against New York City, alleging that a statute that was passed was unconstitutional, as it was overbroad. The owners sought and were granted a temporary injunction against New York City to stall them from enforcing the law. The trial court found in favor of the owners, but the City appealed the granting of the injunction. The court took a close look at the statute – which prohibited the sale of tobacco that contained flavoring – and found that it was too broad, as it covered more than what it needed to. The appellate court upheld the lower court’s ruling. In Morton v. Patrick, 689 F.3d 372 (6th Cir 2012), the parties were in the middle of a domestic dispute, and a man was forced to leave a property shared with his former lover. A temporary restraining order was put in place to prevent him from going to the house or contacting her. She had to appear to the court to extend the order, and at that hearing, the order was extended until he was moved out from the home. When he refused to leave, an emergency injunction was placed against him ordering him to leave the premises. He challenged the order on the grounds that he was banned from entering a rental home which he owned and that a provision of the order is unconstitutional. The court found in her favor, noting that greater entitlement is allowed to residential property even during a public emergency. New Jersey – Turnpike Authority v. AT&T, 764 F.3d 364 (3rd Cir 2014) examined the granting of an injunction where injury has been suffered as a result of a defendant’s breach of contract and in the absence of money to cover the damages. The plaintiff, a government agency, had made damage with AT&T due to the breach that was far greater than the contract itself. Because such damages could not be repaired by money, the court provided an injunction instead to put things back the way they were prior to the wrongdoing.
Consequences of Injunction Violations
Once injunctive relief is awarded, the party subject to the injunction ("injured party") faces civil and even, criminal penalties for violating the injunction. The injunction will expressly describe what is required of the parties and typically dictates a timeframe of compliance. The injured party must comply with the terms of the injunction "upon pain of contempt." Generally, contempt of court is a willful disobedience of a lawless act by the court. In order to impose civil contempt, a two prong test must be satisfied. First, the terms of the injunction must be clear and specific. Second, the injured party must have violated the injunction. Once found to be in contempt, the judge has wide latitude to craft the appropriate remedy or penalty to address both the motives and conduct of the injured party. Judges have ordered the entire assets and contents of a party’s business turned over to the other party to pay for its litigation costs as well as civil contempt. A judge may impose sanctions against an attorney or a party for violating the injunction and require the opposing attorneys’ fees be paid as a penalty. A judge may issue a monetary fine against an injured party for violating the injunction. A judge may also order that the parties jointly share the costs of an injunction bond to address injunctive relief. Since characterizing violations as civil or criminal contempt are matters for the court’s discretion, court orders, such as stipulations, may contain additional clauses and notifications that imposed penalties on the parties if they violate the order. Sometimes this will require the injured party to notify the other party of a violation within a limited time period or submit a further stipulation, which is then used to support a later damage award.
Injunction Alternatives
In some cases, a suggested alternative to injunctive relief is monetary damages pursuant to the contract or incurred as a result of the breach of contract. Not all breaches of contract involve a malicious intent to deprive the other party of their rights, and not all breaches of contract involve past conduct that requires injunctive relief to prevent future violations. Some breaches of contract can be remedied with a sum of money. For example, contractor fails to pay subcontractor on a project, misappropriates funds, breaches contract when it refuses to pay for the materials furnished by the supplier. In that situation, there are two remedies, 1) file an action against the contractor for damages due to his failure to pay for construction work completed or materials furnished and 2) file an action by the unpaid contractor against the subcontractor for the unpaid amounts. A contractor may also attempt to cancel a contract when a material breach occurs. In this situation, the party who was materially breached may also elect to continue with the original contract and breach against the party who is seeking to cancel the contract.
Other alternative remedies include specific performance , which is a type of equitable relief and the equitable remedy utilized when money damages are inadequate to remedy the harm. Specific performance can be an alternative to injunctive relief when the plaintiff seeks performance in place of damages and the defendant refuses to perform. Specific performance is awarded after irreparable injury is established, when the injury is reflected in money can be obtained, and when the future harm to be suffered can be adequately addressed through equitable means.
Finally, declaratory judgment may be an alternative to injunctive relief. Declaratory judgment is often most useful for adjudicating rights and duties under contracts that are silent with respect to a disputed provision, and sometimes the request for injunctive relief and a request for declaratory relief are merged. For example, in some cases, an action may be filed for a declaratory judgment outlining the rights, duties and obligations under a contract, and then injunctive relief may also be sought depending on the outcome of the declaratory judgment.