Injunctions In Delaware
Injunctions in Delaware can fall into 1 of 3 categories:
(1) temporary restraining order, (2) preliminary injunction, and (3) permanent injunction. The Court that issues injunctive relief is the Delaware Court of Chancery. A permanent injunction is a final determination by the Court after a trial. A preliminary injunction is what’s granted on a temporary basis to maintain the staus quo until the Court decides whether to grant a permanent injunction. Where the plaintiff fears that the defendant will take action while the plaintiff is in the process of seeking a preliminary injunction, the plaintiff can request that the Court issue a temporary restraining order, even if there’s no notice to the defendant or an opportunity for the defendant to be heard. Before the Court will issue a temporary restraining order, it must be shown that there’s a treat of imminent and irreparable injury. Once this is shown, the temporary restraining order will be issued unless the Court believes that the plaintiff’s claim is frivolous,, or that the risk of harm to the defendant if the injunction is granted is greater than the risk of harm to the plaintiff if the injunction is denied, that the plaintiff has delayed in seeking the injunction which and is partly responsible for the emergency it claims exists.
The party seeking a preliminary injunction (the plaintiff) is required to show that there’s a reasonable probability that the plaintiff will prevail when there’s a final hearing on the merits of the case. In order to meet the standard for showing that the claim is meritorious as opposed to frivolous, the plaintiff only needs to show that if the facts alleged by the plaintiff are true, it will be entitled to relief.
Before the Court will issue a preliminary injunction, the plaintiff also has to show that it’s facing an imminent threat of irreparable injury if the preliminary injunction is not issued. In order to show irreparable harm, the plaintiff must demonstrate that money damages alone does not provide an adequate remedy. The Court of Chancery will not issue a preliminary injunction if the injury to the plaintiff is only speculative, or if the act the plaintiff is concerned about has already happened.
And, the final thing the plaintiff must show is that when the Court balances the interests of the plaintiff and the defendant, the scale tips in favor of the plaintiff. The balancing test involves the Court comparing the probability of harm to the plaintiff if the injunction is not granted, versus the probable harm to the defendant if the injunction is granted.
Let’s assume that a motion for a preliminary injunction is granted. What remedy does the defendant have if, after the final hearing on the merits, it’s ultimately determined that the plaintiff is not entitled to injunctive relief? To protect the defendant, the Court requires the plaintiff to post a bond in an amount that will compensate the defendant for its losses if it is wrongfully enjoined. The Court usually errs on the high side in determining the amount of the bond because the defendant’s damages are usually unknown until after the injunction is vacated.
