Virginia Circuit Court Applies New, Tougher Preliminary Injunction Standard

Posted on January 21, 2010 by Angela France

The Richmond City Circuit Court appears to be one of the first Virginia state courts to adopt the tougher preliminary injunction standard set forth by the U.S. Supreme Court in Winter v. Natural Resources Defense Council, Inc. In the case of Strong Foundation Youth Initiative, LLC v. Robert Ashford, Jr., the Virginia Circuit Court considered its preliminary injunction ruling under the new Winters test concluding that the plaintiff in this matter satisfied all four prongs for an injunction –

  • likelihood of success on the merits;
  • likelihood that plaintiff will suffer irreparable harm in the absence of preliminary relief;
  • the balance of equities tips in plaintiffs’ favor; and
  • the injunction is in the public interest.

As we noted in a post last month on Virginia Business Law Update, the Fourth Circuit previously adopted the Winters test emphasizing that a preliminary injunction was an “extraordinary” remedy. In doing so, the Fourth Circuit overturned the Blackwelder standard which had been relied upon for over 30 years. Under Blackwelder, a preliminary injunction could be entered if the plaintiff made a strong showing of irreparable harm but had merely shown “serious questions” in the case, as opposed to likelihood of success. Thus, it provided some flexible interplay between the various factors considered at an injunction hearing. Flexibility which Winters has eliminated.

In light of this recent Virginia decision, businesses and their attorneys seeking preliminary injunctions in Virginia state courts should be now prepared to show the Judge that they satisfy every factor of the preliminary injunction test at the injunction hearing - rather than accentuating the facts supporting certain prongs.

Tags: , ,

New TRO Standard for Business Non-Competes

Posted on November 18, 2009 by Malik Cutlar

Most attorneys representing a corporate client have gotten the late afternoon call that a former employee is now working for a competitor in violation of the employee’s non-compete, and likely using confidential corporate information. A double-whammy which your client wants stopped immediately!

Well, for years us lawyers practicing in the Eastern District of Virginia would get out our tried and true Complaint asking for a PI, along with the papers requesting a Temporary Restraining Order (TRO) to immediately stop the wayward former employee from wrecking our client’s business one second longer (assuming diversity of citizenship for access to federal court).

We used what had become well-known as the Blackwelder standard, named after the case of Blackwelder Furniture Co. of Statesville v. Selig Manufacturing Co., 550 F.2d 189 (4th Cir. 1977), which was later reaffirmed in Rum Creek Coal Sales, Inc. v. Caperton. The injunction standard adopted by these cases used “the balance-of-hardship test”.

However, a few months ago, the Fourth Circuit changed the tried and true tune of the Blackwelder standard. Citing a Supreme Court case from 2008, the Fourth Circuit ruled in The Real Truth About Obama, Inc. v. FEC (PDF), that it had been misapplying the preliminary injunction standard. Last year, in Winter v. Natural Resources Defense Council, Inc. (PDF), the Supreme Court held that in order to obtain a preliminary injunction, a plaintiff has to establish that:

  1. he is likely to succeed on the merits
  2. he is likely to suffer irreparable harm in the absence of preliminary relief
  3. the balance of equities tips in his favor
  4. an injunction is in the public interest

For some reason, the prior cases form the Fourth Circuit heavily emphasized prongs two and three. The practical effect of the Real Truth decision (apart from a new catchy sounding injunction standard) is yet to be determined, because despite its proclamations in Real Truth, the Fourth Circuit and the district courts in this Circuit will likely find it difficult to move from a legal standard that had been adopted by jurists and practitioners alike for more than thirty years. However, it may be the case that employers and their counsel will have to really go the extra mile to get a TRO, and actually meet all four prongs of the injunction standard. We will have to wait and see.

Tags: , , , , , ,