Delaware Trial Handbook § 2:7. MOTION FOR A PRELIMINARY INJUNCTION OR A TEMPORARY RESTRAINING ORDER
An injunction is a command of a court of equity forbidding a party from engaging in certain action or, in the case of a mandatory injunction, commanding positive action. The injunction issues “to restrain or compel conduct in those extraordinary situations where irreparable injury might result from delay or inaction.”116 A preliminary injunction is an order designed to preserve or restore the status quo, to prevent a danger or injury of a character which cannot be easily be remedied if relief must wait until the court can make a determination after a final hearing on the merits.117 A temporary restraining order, an order of more limited duration, is designed to maintain the status quo for a period of time sufficient to enable the parties to develop an evidentiary record to present to the court and to permit the court to decide a motion for a preliminary injunction.118
Preliminary injunctions and temporary restraining orders, as in the case of final injunctions, are issued only by the Court of Chancery. Where no Chancellor or Vice Chancellor is available to hear or decide such a motion, however, one of the Judges of the Superior Court may hear the motion and, if warranted, grant the requested relief.119 The decision whether to grant or deny a motion for a preliminary injunction or a temporary restraining order is within the discretion of the trial court.120 An injunction, considered the “strong arm of equity,” will not issue absent a showing of urgent necessity.121 Preliminary injunctive relief must be earned and will never issue merely because to do so will do no harm.122
In deciding how to exercise its discretion in deciding a motion for a preliminary injunction, the court focuses on three elements. The first element is whether or not the movant has demonstrated a reasonable probability that he or she will ultimately be successful after a final hearing on the merits.123 This relates to issues of law as well as issues of fact.124 A movant seeking a mandatory preliminary injunction faces a higher standard and must show that the legal right to be protected is clearly established.125 In determining the probability of success, disputed issues of fact will be found in favor of the moving party if it appears after evaluating all of the evidence in the record that there is a reasonable likelihood that on final hearing that fact will be so established by the proper standard of review. In other words, disputed facts will be resolved on the basis of how the dispute would probably be resolved at trial.125.1 Where the plaintiff ultimately seeks relief in the form of a decree of specific performance, the court must keep in mind, in assessing the reasonable likelihood of success, that the plaintiff will bear the burden of establishing its case by “clear and convincing” evidence.125.2 The mere existence of a dispute will not satisfy this element.125.3
The second element is the presence of imminent, irreparable injury.126 Irreparable injury does not require a catastrophe or violence or an epidemic. It does not even require significant pecuniary loss. An injury will be considered irreparable if there is interference with a legal right which cannot be adequately compensated for by an award of damages. It is not necessary that the injury be beyond the possibility of repair by money compensation, but it must be of such a nature that no fair and reasonable redress may be had in a court of law and that to deny the requested relief would be a denial of justice.127 Once it is established that an injury is “irreparable,” it must also be shown to be “imminent.” A mere apprehension of injury at some indefinite point in the future is inadequate.128 On the other hand, the wrongful act need not have already been committed before an injunction may issue, since such a requirement, in most cases, would defeat the very purpose for which relief is being sought.129 In one case, the Court of Chancery held that where there was a risk that serious harm could result by action taken before the party had notice of it there was no requirement that the threat be “imminent.”130
The third element is referred to as the “balancing of the equities.” The court must balance the injury to be prevented by granting the interim relief against the potential hardship to the party sought to be enjoined and, where relevant, to the public interest.131 A court will not issue a preliminary injunction or a temporary restraining order when to do so would threaten the party sought to be enjoined with irreparable injury that, in the circumstances, seems greater than the injury that the movant seeks to prevent.132 The movant has the burden of establishing that the balance of equities tips in his or her favor.133
The three elements discussed above are not to be considered independently of each other, with each element always deemed to be of equal weight. Rather, the elements are all related, and a court must engage in a delicate weighing and balancing of the various factors as is required to reach a decision under the circumstances of the individual case.134 For example, in certain cases a strong showing of success on the merits may compensate for a weak showing of irreparable injury.135 In the context of temporary restraining orders, which are usually heard on a very limited record in response to emergency situations in which irreparable injury is threatened to occur before the parties can establish a sufficient record for a hearing on a preliminary injunction, courts will place the greatest emphasis on the risk of danger of imminent irreparable injury.136 In all cases the probability of success on the merits must be weighed against the risk of harm to one party or another, and no one factor should be favored to the total exclusion of another.137
A court may not issue a preliminary injunction without prior notice to the adverse party, or without a prayer therefor appearing in a verified complaint, or a motion therefor filed and supported by affidavits.138 A court may order that a final hearing on the merits be expedited and beard in conjunction with a motion for a preliminary injunction.139
The essential predicate for issuance of a temporary restraining order is a threat of imminent, irreparable injury. Once that is shown, the remedy ought ordinarily to issue unless the Court is persuaded (1) that the claim asserted on the merits is frivolous or not truly litigable, (2) that the risk of harm in granting the remedy is greater than the risk to plaintiff of denying it, or (3) that plaintiff has not proceeded as promptly as it might, and has therefore contributed to the emergency nature of the application and is guilty of laches.139.1
Because of the limited opportunity to develop a record before seeking relief, the analysis of whether the claims asserted are meritorious generally requires nothing more than a showing that a colorable claim has been made out if the facts alleged are true. However, where the applicant for a temporary restraining order has had the opportunity to develop evidence and present a record from which the court may responsibly make a more informed judgment concerning the merits, the elements of the equitable test is something akin to the traditional preliminary injunction formulation.139.2
A temporary restraining order may be granted without written or oral notice to the adverse party or that party’s attorney only if (i) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate irreparable injury, loss or damage will result to the applicant before the adverse, party or that party’s attorney can be heard in opposition, and (ii) the applicant’s attorney certifies to the court in writing the efforts, if any, which have been made to give notice to the adverse party and the reasons supporting the claim that notice should not be required. Every temporary restraining order granted without notice must be indorsed with the date and hour of its issuance, must be filed immediately in the office of the Register in Chancery and entered of record, must define the injury and state why it is irreparable and why the order was granted without notice, and will expire by its terms within such time after entry, not to exceed ten days, as the court fixes. However, within the time so fixed, the court, for good cause shown, may extend the order up to an additional ten days. If the party against whom the order is directed consents, then it may be extended for a longer period. If a temporary restraining order is issued without notice, the court must schedule a motion for a preliminary injunction at the earliest possible time and such hearing takes precedence over all other matters before the court except older matters of the same character. At the time scheduled the party who obtained the temporary restraining order must proceed with the application for a preliminary injunction. If that party does not do so, the court must dissolve the temporary restraining order.140
In the event that the court grants either a, temporary restraining order or a preliminary injunction, the movant must provide security in such sum as the court deems proper for the payment of such costs and damages as may incurred by any party who is subsequently found to have been wrongfully enjoined or restrained. Any security required to be given as a condition to the grant of a temporary restraining order will also constitute security for, a preliminary injunction subsequently issued and requiring security.141 The amount of security required is within the discretion of the court.141.1 In some cases, the amount of the required security may be so high that the plaintiff cannot provide it, thereby effectively denying the plaintiff the relief requested.142 Thus, counsel should make arguments in his or her supporting briefs as to the proper amount of security. In the appropriate case, counsel may wish to include affidavits from experts to demonstrate that the risk of harm to the defendant is low and so the amount of the security should also be low. A contractual provision waiving the requirement of a bond may be enforced.142.1
Usually, the court will include language in the order providing that the order will not be effective until the bond is filed with the Register in Chancery. Thus, counsel for the plaintiff should be ready to file a bond with the court immediately after the order is entered. Counsel will usually contact an insurance company prior to filing the complaint or, at least, prior to the hearing on the motion for preliminary injunctive relief to act as surety for the bond. A representative of the insurance company should be available on a standby basis while the motion is being presented. In the case of an ex parte temporary restraining order, counsel may wish to consider bringing the representative to court, or having the representative wait in counsel’s office or at the office of the Register in Chancery. After the order is signed, counsel can take it directly to the Register in Chancery, file it and have the insurance company representative execute the bond.
116. United Bonding Ins. Co. v. Stein, 410 F.2d 483, 486 (3d Cir. 1969).
117. Consolidated Film Industries, Inc. v. Johnson, 192 A. 603, 608 (Del. 1937); State v. Delaware State Educational Asso., 326 A.2d 868, 872 (Del. Ch. 1974); American Vulcanized Fibre Co. v. Taylor, 87 A. 1025, 1026 (Del. Ch. 1913); Gray v. Council of Newark, 79 A. 735, 737 (Del. Ch. 1911).
118. Wilmington Federation of Teachers v. Howell, 374 A.2d 832, 836 (Del. 1977); McCann Surveyors, Inc. v. Evans, 611 A.2d 1, 1-2 (Del. Ch. 1987); Two South Corp. v. Wilmington, C.A. No. 9907, slip op. at 13, Jacobs, V.C. (Del. Ch. July 10, 1989, revised July 18, 1989).
119. Del. Const. art. IV, § 14.
120. Data General Corp. v. Digital Computer Controls, Inc., 297 A.2d 437, 439 (Del. 1972); Richard Paul, Inc. v. Union Improv. Co., 91 A.2d 49, 54 (Del. 1952); Consolidated Film Industries, Inc. v. Johnson, 192 A. 603, 608 (Del. 1937).
121. Bayard v. Martin, 101 A.2d 329, 334 (Del. 1953), cert. denied, 347 U.S. 944 (1954); State v. Delaware State Educational Asso., 326 A.2d 868, 872 (Del. Ch. 1974).
122. Danby v. Osteopathic Hospital Ass’n, 101 A.2d 308, 316 (Del. Ch. 1953), aff’d, 104 A.2d 903 (Del. 1954).
123. Emerald Partners v. Berlin, 726 A.2d 1215, 1227 n.18 (Del. 1999); SI Management L.P. v. Wininger, 707 A.2d 37, 40 (Del. 1998); Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261, 1278 (Del. 1989); Allen v. Prime Computer, Inc., 540 A.2d 417, 419 (Del. 1988); Ivanhoe Partners v. Newmont Mining Corp., 535 A.2d 1334 (Del. 1987); Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 179 (Del. 1986); Shields v. Shields, 498 A.2d 161, 166 (Del. Ch. 1985), app. denied, 497 A.2d 791 (Del. 1985); McCann Surveyors, Inc. v. Evans, 611 A.2d 1, 2 (Del. Ch. 1987).
124. Wylain, Inc. v. Tre Corp., 412 A.2d 338, 342 (Del. Ch. 1979); Allied Chemical & Dye Corp. v. Steel & Tube Co., 122 A. 142, 148 (Del. Ch. 1923).
125. Steiner v. Simmons, 111 A.2d 574, 575 (Del. 1955); Stahl v. Apple Bancorp, Inc., 579 A.2d 1115 (Del. Ch. 1990); American Federation of State, County & Municipal Employees v. State Dept. of Finance, 288 A.2d 453, 455 (Del. Ch. 1972).
125.1. E.I. du Pont de Nemours & Co. v. Bayer CropScience L.P., 958 A.2d 245, 251-52 (Del. Ch. ), app. refused mem., 956 A.2d 31 (Del. 2008).
125.2. Cirrus Holding Co. Ltd. v. Cirrus Industries, Inc., 794 A.2d 1191, 1201-02 (Del. Ch. 2001).
125.3. Louisiana Municipal Police Employees’ Retirement System v. Crawford, 918 A.2d 1172, 1185 (Del. Ch. 2007).
126. Emerald Partners v. Berlin, 726 A.2d 1215, 1227 n.18 (Del. 1999); SI Management L.P. v. Wininger, 707 A.2d 37, 40 (Del. 1998); Allen v. Prime Computer, Inc., 540 A.2d 417, 421 (Del. 1988); Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261, 1278 (Del. 1989); Ivanhoe Partners v. Newmont Mining Corp., 535 A.2d 1334 (Del. 1987); Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 179 (Del. 1986); McCann Surveyors, Inc. v. Evans, 611 A.2d 1, 2 (Del. Ch. 1987); Shields v. Shields, 498 A.2d 161, 166 (Del. Ch. 1985), app. denied, 497 A.2d 791 (Del. 1985).
127. State v. Delaware State Educational Asso., 326 A.2d 868, 875 (Del. Ch. 1974). See also Hollinger Intern. Inc. v. Black, 844 A.2d 1022, 1090 (Del. Ch.), app. denied mem., 856 A.2d 1066 (Del. 2004) (injury is irreparable where money damage would involve speculation); Bayard v. Martin, 101 A.2d 329, 334 (Del. 1953), cert. denied, 347 U.S. 944 (1954).
128. Pierce Family, Inc. v. Magness Constr. Co., 235 A.2d 268, 270 (Del. 1967) (overruled on other grounds by Weldin Farms, Inc. v. Glassman, 414 A.2d 500 (Del. 1980)); Cook v. Oberly, 459 A.2d 535, 540 (Del. Ch. 1983).
129. New Castle County Vocational Technical Education Asso. v. Board of Education, 451 A.2d 1156, 1160 (Del. Ch. 1982); Wilmington Federation of Teachers v. Howell, 374 A.2d 832, 836 (Del. 1977).
130. Panamanian Secur., Inc. v. Punta Alegre Sugar Corp., 146 A.2d 808, 810 (Del. Ch. 1958).
131. Emerald Partners v. Berlin, 726 A.2d 1215, 1227 n.18 (Del. 1999); SI Management L.P. v. Wininger, 707 A.2d 37, 40 (Del. 1998); Mills Acquisition Co. v. MacMillan, Inc., 559 A.2d 1261, 1279 (Del. 1989); Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 179 (Del. 1986); McCann Surveyors, Inc. v. Evans, 611 A.2d 1, 2 (Del. Ch. 1987); Shields v. Shields, 498 A.2d 161, 166 (Del. Ch. 1985), app. denied, 497 A.2d 791 (Del. 1985); Levin v. Metro-Goldwyn-Mayer, Inc., 221 A.2d 499, 505 (Del. Ch. 1966).
132. Katz v. Oak Industries, Inc., 508 A.2d 873, 882 (Del. Ch. 1986).
133. State v. Delaware State Educational Asso., 326 A.2d 868 (Del. Ch. 1974); Gimbel v. Signal Cos., 316 A.2d 599, 602-03 (Del. Ch. 1974), aff’d, 316 A.2d 619 (Del. 1974); Allied Chemical & Dye Corp. v. Steel & Tube Co., 122 A. 156, 158 (Del. Ch. 1923).
134. Bayard v. Martin, 101 A.2d 329, 334 (Del. 1953), cert. denied, 347 U.S. 944 (1954); Gimbel v. Signal Cos., 316 A.2d 599, 603 (Del. Ch. 1974), aff’d, 316 A.2d 619 (Del. 1974).
135. Allen v. Prime Computer, Inc., 540 A.2d 417, 421 (Del. 1988); Cantor Fitzgerald, L.P. v. Cantor, 724 A.2d 571, 579 (Del. Ch. 1998).
136. McCann Surveyors, Inc. v. Evans, 611 A.2d 1, 2 (Del. Ch. 1987); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Price, C.A. No. 11098, slip op. at 4-5, Allen, C. (Del. Ch. Sept. 13, 1989); Doskocil Cos., Inc. v. Griggy, C.A. Nos. 10,095, 10,106, 10,107 & 10,108, slip op. at 5, Berger, V.C (Del. Ch. Aug. 4, 1988).
137. Bayard v. Martin, 101 A.2d 329, 333-34 (Del. 1953), cert. denied, 347 U.S. 944 (1954); Gimbel v. Signal Cos., 316 A.2d 599, 603 (Del. Ch. 1974), aff’d, 316 A.2d 619 (Del. 1974).
138. Ch. Ct. R. 65(a)(l).
139. Ch. Ct. R. 65(a)(2).
139.1. Dweck v. Albert Nasser and Kids Intern. Corp., C.A. No. 1353-N, slip op. at 3, Lamb, V.C. (Del. Ch. Sept. 28, 2005); Cottle v. Carr, C.A. No. 9612, slip op. at 6, Allen, C. (Del. Ch. Feb. 9, 1988).
139.2. Newman v. Warren, 684 A.2d 1239, 1244-45 (Del. Ch. 1996); ACE Ltd. v. Capital Re Corp., 747 A.2d 95, 102 (Del. Ch. 1999)
140. Ch. Ct. R. 65(b).
141. Ch. Ct. R. 65(c).
141.1. Petty v. Penntech Papers, Inc., C.A. No. 4830, Brown, C. (Del. Ch. Sept. 24, 1975).
142. See, e.g., Gimbel v. Signal Cos., 316 A.2d 599, 618 (Del. Ch. 1974), aff’d, 316 A.2d 619 (Del. 1974) (a required bond of $25 million proved fatal to the plaintiff’s preliminary injunction because he was unwilling to post security in that amount).
142.1. Concord Steel, Inc. v. Wilmington Steel Processing Co., Inc., C.A. No. 3369-VCP, slip op. at 33 n.92, Parsons, V.C. (Del. Ch. Apr. 3, 2008), app. refused mem., 947 A.2d 1123 (Del. 2008).
© 2010 David L. Finger