In litigation, unless a plaintiff meets its initial burden of proof a preliminary injunction must be denied.
Let’s first discuss the legal definition of a preliminary injunction and what it means and what its purpose is.
A preliminary injunction is a temporary court order issued before a case reaches trial to preserve the status quo and prevent irreparable harm while the legal proceeding is ongoing. It is typically sought by a plaintiff to prevent the defendant from taking certain actions that could cause harm or further damage to the plaintiff’s rights before a final judgement is made. A preliminary injunction will generally be granted based on a showing that the plaintiff is likely to succeed on the merits of the case, that irreparable harm will occur without the injunction, and that the balance of harms favors the plaintiff.
N.J. case law sets forth a four prong test a party must satisfy in order for a preliminary injunction to issue. The moving party must demonstrate (i) the existence of substantial risk of irreparable harm which cannot be compensated by money damages, (ii) the legal authority underlying the party’s claim is settled and strongly favors their position, (iii) the material facts of the dispute are uncontroverted and the moving party has demonstrated a substantial probability of success on the merits of the case, and (iv) the balancing of the relative hardships to the parties favors the party seeking the injunction.
So, what does irreparable harm mean?
“Harm is generally considered irreparable if it cannot be redressed adequately by monetary damages.” It is well settled that if a Plaintiff can calculate and prove its loss of income or economic damage at trial, then a plaintiff’s harm can be redressed with money damages and its request for a preliminary injunction should be denied.
A preliminary injunction should also be denied when the legal rights supporting the claim are not well settled. A plaintiff bears the burden of proving that the legal authority that supports its case is well settled as a matter of law.
A preliminary injunction should also not issue when material facts are disputed and clear and convincing evidence to support the case is not in the record.
This third prong of analysis depends upon whether all of the material facts of the case are controverted, meaning disputed by both sides or are not in dispute. Finally, a moving party must make a preliminary showing of a reasonable probability of success on the merits of their case.
A preliminary injunction should not issue when the balancing of the hardships is not in favor of the moving party. This fourth prong of the test requires a balancing of the hardships. The primary purpose of a preliminary injunction is the maintenance of the status quo until a decision on the merits of a case can be reached. (“The purpose of a preliminary injunction is to maintain the parties in substantially the same condition when the final decree is entered as they were when the litigation began.”) This concept of maintaining the status quo has become an intimate part of N.J. injunction law.
Mandatory injunctions to change the status quo are rarely issued. When mandatory judgements changing the status quo are warranted, one court has explained. “[t]he court is always very reluctant to grant a mandatory injunction, but where extreme or very serious damage will result from withholding it, as in cases demanding immediate relief, it will be granted.
To discuss whether you can reasonably expect to receive or oppose the issuance of an injunction in a matter involving NJ shareholder rights litigation, a LLC case or a probate litigation case, contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Shareholder Rights Litigation Attorney, NJ LLC Litigation Attorney and Probate Litigation Attorney