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TROs and Preliminary InjunctionsNEWBIE LITIGATOR SCHOOL II - 2017
Premiere Date: February 7, 2017This webinar is sponsored by: EisnerAmper 1
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MODERATOR
Kathryn Nadro Sugar Felsenthal Grais & Hammer, Chicago
PANELISTS
Adam Hirsch Robinson Curley & Clayton, Chicago
Michelle Gershfeld Law Offices of Michelle Gershfeld, NY
Thomas Lancia Thomas M. Lancia PLLC, NY
MEET THE FACULTY
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ABOUT THIS WEBINAR
Sometimes you need the court to take immediate action to protect your client’s interests. This webinar discusses procedures and strategy for temporary restraining orders and preliminary injunctions. Topics include best practices for how to succeed on these motions and how to effectively defeat them.
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ABOUT THIS SERIESThis webinar series is one of several series (together with the other “Newbie Litigator School” series) that Financial Poise designed specifically for attorneys who are just starting to get involved in civil litigation or who could use a refresher on some litigation fundamentals. The purpose is to introduce you to different components and phases of litigation, from the basic rules of civil procedure and evidence, to dispositive motions, through trial, and on to appeal and post-judgment collection work. Each episode is delivered in Plain English understandable to business owners and executives without much background in these areas. Yet, each episode is proven to be valuable to seasoned professionals.
As with all Financial Poise Webinars, each episode in the series brings you into engaging, sometimes humorous, conversations designed to entertain as it teaches. And, as with all Financial Poise Webinars, each episode in the series is designed to be viewed independently of the other episodes, so that participants will enhance their knowledge of this area whether they attend one, some, or all of the episodes.
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EPISODES IN THIS SERIES
EPISODE #1 TROs and Preliminary Injunctions 2/7/2017EPISODE #2 Evidence Rule Refresher 3/21/2017EPISODE #3 Settlement & Mediation 4/18/2017EPISODE #4 Anatomy of a Trial 5/2/2017
Dates shown are premiere dates; all webinars will be available on demand after premiere date
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TROs VS. PRELIMINARY INJUNCTIONS
• Temporary restraining order (TRO): Limited in duration - often only ten or fourteen days Can be granted either with notice or ex parte Open to extension
• Preliminary injunction: Must be given notice Duration set by the judge after hearing Issued after presentation of evidence
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PURPOSE OF TROS AND PRELIMINARYINJUNCTIONS
• Preserve the “status quo” between the parties.
• “The status quo is the last uncontested status which preceded the pending controversy.” Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 809 (9th Cir. 1963).
• Need everything to stop immediately!
• Mandatory injunctions disfavored – higher likelihood of obtaining a prohibitory injunction.
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MANDATORY VS. PROHIBITORY INJUNCTIONS
• Mandatory injunctions Typically require a party to take a specific action
• Prohibitory injunctions Requires a party to refrain from performing a specific act
• Courts typically disfavor mandatory injunctions
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COMMON CASES WHERE TROS AND PRELIMINARY INJUNCTIONS ARE USED
• Threat of releasing confidential or trade secret information
• Trademark or copyright infringement
• Restrictive covenants: non-competes and non-solicitation agreements
• Freezing or seizing accounts
• Sale of particular property, i.e. real estate
• Constitutional rights cases
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OBTAINING INJUNCTIVE RELIEF
Easier when:
• Contract provides for injunctive relief if a breach occurs due to irreparable harm that cannot be remedied by monetary damages Common in non-competes, confidentiality agreements
• An applicable statute provides for injunctive relief
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PROCEDURE FOR OBTAINING A TRO
• State requirements vary; federal requirements in Fed. R. Civ. P. 65(b)
• Verified pleadings and/or affidavits
• Proposed order identifying requested relief
• Notice (if any – can be limited) to the other side
• Bond preparations if successful
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EX PARTE VS. NOTICE GIVEN
• Courts are generally averse to entering injunctions with no notice Some notice, even if very limited, is usually preferable to an ex parte
proceeding Can be half an hour’s notice before the return hearing
• When to proceed ex parte: Real danger of opposing side taking final action prior to hearing Time sensitivity of TRO proceeding
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ELEMENTS OF INJUNCTIVE RELIEF
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1. Likelihood of success on the merits
2. Likelihood of irreparable harm in the absence of preliminary relief
3. The balance of equities tips in plaintiff’s favor
4. An injunction is in the public interest
Some courts use a sliding scale where a higher likelihood of success on the merits requires a smaller showing of irreparable harm.
WHAT IS IRREPARABLE HARM?
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• Party cannot be adequately compensated in damages or when damages cannot be measured with any certainty
• Violations of constitutional rights usually qualify as irreparable harm
BOND REQUIREMENT
• Federal Rule of Civil Procedure 65(c) requires a plaintiff to post a bond for TROs issued to protect against the wrongful enjoining of a party
• Many state courts have bond requirements as well
• Be prepared to argue the need for, and amount of, any bond at the TRO hearing
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DEFENDING AGAINST A TRO
• Difficulty of defending against a TRO when given little or no notice
Might be reading papers while running to court
• Need extreme cooperation of the client quickly
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DEFENDING AGAINST A TRO
• What to bring to court, if possible: Answers to factual allegations Affidavits Witnesses (if court will allow any evidence)
Arguments on other available remedies Unclean hands Monetary damages
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DEFENDING AGAINST A TRO CONT’D
• Argue no irreparable harm to plaintiff absent entry of a TRO
• Argue status quo is more inequitable to your client than to plaintiff (where affidavits/witnesses are helpful if available)
• Hallway negotiations with opposing counsel may result in a negotiated agreement rather than TRO
• Argue need for a substantial bond from plaintiff
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NEGOTIATING A STANDSTILL AGREEMENT
• Judges will often order attorneys to go discuss in the hallway before arguing the merits of a TRO motion see if the parties can adequately preserve status quo without entry of a true TRO
• As plaintiff, understand what your client wants stopped immediately and what could continue without causing your client harm If you can agree with opposing side, no need to post a bond for a TRO
• As defendant, be prepared with facts from your client to discuss any possible concessions you can grant to other side to avoid entry of a TRO
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YOU WIN A TRO – WHAT’S NEXT?
• Make sure your temporary restraining order language is clear and capable of enforcement
• Lay out the factual and legal findings in your proposed order
• Plan to provide copies of the TRO to relevant third parties
• Post any required bond
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ENFORCING YOUR TRO
A TRO is a court order and can be enforced as such:
• Contempt of court
• Contempt sanctions
• Criminal contempt possible
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YOU’RE A PLAINTIFF THAT LOST A TRO –WHAT’S NEXT?
• Did you lose on a procedural basis? Might have ability to file a new motion
• Case may continue absent injunctive relief with other claims
• Attempt at negotiated resolution, but with a weakened position if lost on irreparable harm
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YOU LOST A TRO – CAN YOU APPEAL?
• In some state courts, yes Illinois allows appeals of TROs in expedited proceedings (Illinois
Supreme Court Rule 307(d))
• In federal court, almost never Federal rules require truly exceptional circumstances for an appeal of a
grant or denial of a TRO
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PREPARING FOR THE PRELIMINARY INJUNCTION HEARING
• After the TRO hearing, parties usually schedule a preliminary injunction hearing
• If TRO was ex parte, preliminary injunction hearing usually follows very quickly, often within weeks
• Court may order expedited discovery based on timing of the preliminary injunction hearing
• Can be written discovery, depositions, etc.
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PREPARING FOR THE PRELIMINARY INJUNCTION HEARING CONT’D
• Preliminary injunctions require the plaintiff to show the same elements as a TRO
• Parties will present both evidence and legal arguments
• Witness testimony is common, as are demonstrative exhibits
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DEFENDING AGAINST A PRELIMINARY INJUNCTION
• By now, will have had time to put in a responsive brief opposing the motion for TRO/preliminary injunction
• Can also pair with a motion to dismiss, if applicable OR a verified answer
• Marshal evidence showing lack of need for any/continuing injunctive relief
• If possible, present evidence and legal arguments illustrating why plaintiff has no likelihood of success on the merits (i.e. the non-compete is unenforceable or the information is not a trade secret)
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AFTER THE PRELIMINARY INJUNCTION HEARING
• Most cases will settle following the preliminary injunction hearing
• Effectively, the court has ruled that one side will most likely win
• Cases may proceed to trial, but a mini-trial has already occurred on the merits of the case
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ABOUT THE FACULTY:
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KATHRYN [email protected]
Kathryn Nadro is an associate at Sugar Felsenthal Grais & Hammer in Chicago. She practices in the Labor & Employment and Commercial Litigation groups. Kathryn's practice focuses on representing companies and individuals in business disputes and employment matters.
Kathryn has broad experience defending companies in contract, fiduciary duty and trademark litigation in state and federal court. Her successful representations include favorable resolutions for her clients in both pre-trial proceedings and at trial. Additionally, Kathryn counsels clients on employment and labor issues, including discrimination claims, executive compensation disputes and worker's compensation claims.
ABOUT THE FACULTY:
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ADAM [email protected]
Adam Hirsch is a partner at Robinson, Curley & Clayton, PC in Chicago. He has practiced law in Chicago for more than 15 years, with a regular focus on commercial litigation. After graduating from Harvard Law Sachool in 2001, he began his legal career at Jenner & Block, LLP. For the last 11 years, he has practiced at Robinson, Curley & Clayton, PC, a Chicago litigation boutique that has practices in commercial, receivership, and employment litigation disputes, in particular claims brought by investors relating to unregulated securities, limited partnerships, and private equity investments.
ABOUT THE FACULTY:
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MICHELLE [email protected]
Michelle Gershefld is the Principal at the Law Offices of Michelle Gershfeld in New York. As a bankruptcy attorney, debt negotiator and personal financial life coach she advises people who are in debt, or building wealth, by identifying and overcoming obstacles that lie in their path to securing worry-free, financial wellness. She works with clients individually to create a strategic, customized plan for each unique financial situation; tackling challenges while defining actionable steps that will increase awareness, change behaviors and lead to the fulfillment of long-term financial goals.
ABOUT THE FACULTY:
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THOMAS [email protected]
Thomas is a Principal at Thomas M. Lancia PLLC in New York City. A 1988 graduate of the Fordham University School of Law, Thomas Lancia received a Bachelor's Degree from the State University of New York at Stony Brook and a Masters Degree in International Affairs from the School of International and Public Affairs at Columbia University. He is admitted to practice in both New York and New Jersey.
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