Request for a Preemptive
Injunction
employ to maximize your likelihood of
success. The first and most important
thing you can do is reevaluate all of your
contracts now. Each contract should
specify what constitutes an irreparable
harm. For example, contract language that
"the parties agree that any default in their
obligations as set forth in this contract will
irreparably harm their business reputation
and goodwill and cannot be compensated
by money damages."
If litigation is likely, also do the
following:
remotely likely, issue a litigation hold
letter to your team immediately. This way,
the evidence your company needs to prove
its case is accessible.
Litigation hold letters require
employees to suspend all protocols that
relate to destruction of data that may be
relevant to the potential litigation (for
example, automatic email purging.)
Accessibility is crucial for two
reasons. First, the sooner and easier you
can produce key evidence, the sooner and
easier it is to file for an injunction with
your court. Second, and perhaps more
importantly, opponents often claim they
"need discovery" for the sole purpose of
slowing down the injunction process and to
gain leverage in negotiations.
By comparison, great companies
identity their key players likely to be in
possession of relevant material, inventory
it and have it ready to provide to the
opponent immediately.
the irreparable harm your company will
suffer without an injunction.
Courts equate "irreparable harm"
with "emergency," and the longer your
the less likely you are to convince a judge
there is an emergency. Judges, like all
people, also respond better to concrete
examples like the Tier III supplier that
will go out of business or the contract that
will go unfilled, causing job loss so be
sure to provide as much detail as possible.
Vague statements of "business loss" are
unpersuasive and, moreover, are what
money damages compensate. The goal
for an injunction petition is to show why
money damages are insufficient.
Provide the court with affidavits
from your suppliers, plant managers,
accountants, etc., and copies of contracts
that will go unfulfilled. For supply chain
cases, provide photographs and replicas
showing why your company's part is
essential to the whole, photographs of
shops that will close, etc. The point is to
provide the court with a vivid picture and
persuasive case that irreparable harm that
will result.
show the extent of damage that will be
done without an injunction. In all states,
business records are admissible into
evidence so long as they are maintained
in the regular course of business and
contain information that the business
typically records (for example, profit and
loss statements). Market reports are also
generally admissible as public records,
provided they are from a reliable source,
such as a public or academic reporting
body. Both will show your company's
reach over the market and the number of
interests at stake in the case.
and damage to business reputation are
irreparable harms. So, emphasize them!
For an injunction to issue, the court must
find the harm is not fully compensable
by money damages (such as, for example,
ordering your company's opponent to pay
you the difference for having to secure
your part from another supplier). See
511 (6th Cir.1992). The likely interference
with customer relationships resulting
from the breach of a contract is the kind
of injury for which monetary damages are
difficult to calculate. "The loss of customer
goodwill often amounts to irreparable injury
because the damages flowing from such
losses are difficult to compute. Similarly,
the loss of fair competition that results from
the breach of a non-competition covenant
is likely to irreparably harm an employer."
Id. at 512 (internal citations omitted).
Vague statements about "harm to
goodwill" are unpersuasive discuss
it with specific examples, by reference
to connections in the community. For
example, if your company's loss will cause
a local plant to shut down, or render your
company in breach of another contract or
render inept to negotiate, say so. Now is
the time when (appropriately placed) self-
promotion is necessary. Have an executive
available to sign an affidavit and testify.
is a two-step process: a temporary, or
preliminary, injunction issues while the
case is scheduled for trial to determine
whether a permanent injunction should
issue. In the meantime, your opponent
will request discovery (see point A) and
leverage you to settle out of fear that the
case will not resolve before time is up for
your company. This is a particular risk for
courts that do not have mandatory decision
deadlines. In those courts, your case could
proceed to trial and yet not decision issue
before your contract expires. To avoid
these risks, in your petition ask that the
court consolidate the process. Rather than
decide first whether a temporary injunction
should issue, set an immediate trial on the
merits.
Your ability to offer discovery on a short
turnaround time, thanks to that litigation
hold letter, will go far here.
Strike promptly, and strike thoroughly,
and you will likely stop your rogue supplier
in the name of the law from dismantling
your business once and for all.