When should a party seek a preliminary injunction?
Sometimes a party may feel that a breach of contract or impending breach of contract requires immediate action to protect its interests and prevent further harm. The opposing party may simply disregard a cease and desist letter. And filing a complaint to initiate litigation garners no immediate remedy. For example, a publicly traded software company may feel that the opposing party has violated a nondisclosure agreement by publishing proprietary coding in various posts online and continues to post the coding online. Subsequently, stock prices plummet and competitors begin utilizing the code. That software company would file for preliminary injunctive relief and a temporary restraining order. A preliminary injunction and temporary restraining orders are court mandates that compel a party to do or refrain from specific acts. It is known as an equitable remedy.
What is the procedure for seeking a preliminary injunction?
Initially, the plaintiff and their attorney will need to review the New Jersey Rules of Court and carefully follow proper procedure (see N.J. R. 4:52-1 et seq.) Regarding applying for preliminary injunctive relief, the procedural component is even more important than the substantive component of the application because a dismissal will have a more severe impact than in litigation where the timing is not as sensitive.
There is ample information on the clerk of courts website. It is prudent practice for the attorney to alert the judge’s clerk of the intent to apply for preliminary injunctive relief. Most applications for preliminary injunctive relief are filed in the general equity part of the chancery division in the superior court. If money damages are involved, the law division is the appropriate venue. See N.J. R. 4:3-1(a)(1) and N.J. R. 4:3-1(a)(4). It can be the case, however, that the plaintiff’s lawsuit is already pending when the plaintiff files for injunctive relief. The plaintiff should review the Fee Schedule on the New Jersey Courts’ website for updated fees, but it is generally a $250 filing fee to commence a lawsuit and an additional $50 to file a motion or order to show cause to secure a preliminary injunction.
Documents to file
Because immediate relief is a priority for a plaintiff in this context, the plaintiff should be prepared to file several documents if the plaintiff wants to obtain preliminary injunctive relief and commence a lawsuit:
- The complaint
- An order to show cause
- A legal brief
- Affidavits and certifications to bolster the request for relief
Timing is critical
The timing of the application is critical, not only to obtain relief, but also because a court may not grant the application if a plaintiff does not act as soon as reasonably practicable. Any good faith delays in applying should be articulated to the court (e.g. settlement negotiations or informal dispute resolution was taking place between the parties).
New Jersey courts allow emergency filings outside of regular business hours, and a superior court judge is on emergency duty. If irreparable harm is at stake for a plaintiff, a plaintiff requires a temporary restraining order (TRO), which is an order that grants immediate relief. These are extraordinary circumstances though for a plaintiff and entails an ex parte hearing (only the moving party and the judge are present, not both parties). Naturally, there will be a higher level of scrutiny because the other party is not available to defend themselves.
An order to show cause, which can substitute for a summons, must be served on a defendant by the plaintiff with the complaint and any supporting affidavits at least ten days before the return date, unless the court orders another service deadline. See N.J. R. 4:52-1(b).
The hearing
The preliminary injunction hearing is held shortly after the party seeking preliminary injunctive relief commences the action (usually the same day). In order to obtain as much as evidence as possible to support the claim for preliminary injunctive, the plaintiff can seek an order granting limited discovery rights to expedite the process. The opposing party though will take advantage of the opportunity to exchange discovery, which can level the playing field. A preliminary injunction hearing is typically required under N.J. R. 4:52-1(c) but if a defendant is nonresponsive a judge may rule a hearing is unnecessary and approve the application on the documents alone.
The hearing itself is more informal than most preliminary hearings in litigation. The plaintiff will furnish evidence and the judge can grant the application, deny it, or modify it. If granted, it takes effect immediately and a date is set for the preliminary injunction hearing. The defendant will not be bound by a TRO until proper service is made in accordance with N.J. R. 4:4-3. If the plaintiff succeeds in getting the application granted, under N.J. R. 4:52-3, a plaintiff should have insurance in case the judge requires security in case the defendant is eventually found not liable for damages.
If the application is denied
If the application is denied, a hearing is still set. But the plaintiff will not get the benefit of immediate relief that a TRO offers. An unsuccessful plaintiff may eventually be required to pay the costs and damages incurred by the defendant during the pendency of the TRO.
The key is to be prepared. The amount of notice and consideration given to the judge’s schedule can sometimes be equally as important as the evidence a plaintiff presents. If a plaintiff contacts the judge’s clerk to notify the court of the TRO request, asks about the judge’s preferences regarding hearing evidence and procedures, and generally acts polite without putting pressure on the court, it can increase the likelihood of getting the application granted.
Contact an attorney
Consult with an attorney as soon as possible if a contract explicitly grants the right to seek preliminary injunction or if you are suffering imminent damages.
The post Preliminary Injunction Relief in New Jersey appeared first on New Jersey Collection Attorneys | Commercial & Real Estate Litigation.