Well, it's Monday again. Hopefully, everyone has recovered from the pain and shock of learning just how much of the economic stimulus package they had to pay for last week.
Today, I have another chapter in the story of equity to relay to you. You may remember that, last week, I explained that we have a divide in the legal system between law and equity with equity based on the concept of fairness more than anything else.
Last time, I discussed some substantive equitable rights you had to payment if you were a lawn service provider. Today, I have procedural device used in equity - the injunction. Typically, people think of the injunction as the criminal restraining order used to keep that guy in your apartment complex at least 500 away at all times because he used to send you love letters enclosing voodoo dolls made from dust bunnies and which were tokens of his undying love.
The injunction, however, is more than that. Specifically, I am talking about the injunction used in the civil context - the only one I hope you will ever need. The injunction is a tool designed to prevent or compel someone from undertaking a certain act. Unlike a legal claim for which you can only receive money, the equitable devices allow for other forms of relief. The catch (because you knew there was one, right?)? To receive the benefit of something like an injunction, you have to be able to prove that there is no legal claim that affords you relief. In other words, you have a situation that money will not or cannot fix.
Example time, courtesy of an old client. Phone, Inc., a very small phone company, leases a telecommunications switch (a device that helps connect phone calls between two or more places) for inbound and outbound calls from South America from Switch, Inc. Switch sends a monthly invoice for the lease to Phone, but Phone thinks it has been overbilled by $300,000. Switch tells Phone, pay by Monday or be disconnected. Phone is now in a predicament. If it does not pay, it will lose the ability to send and receive calls, all of its customers will be unable to use the company's services, and in addition to losing the $300,000 in overbilled switch time, there will be lost revenue from customers (that cannot be measured) who cannot place calls and who quit the service altogether and the company will be out of business by the end of the week.
The only hope - an injunction to prevent Switch from terminating switch service until the billing dispute can be worked out. Fortunately, the Court granted Phone's injunction and the parties were ultimately able to work out the billing problem. To get the injunction, Phone had to be able to show the Court: 1) there was no remedy in the law to fix the problem (money was not going to help all the people who could not make calls); 2) Phone was likely to win its billing dispute with Switch; 3) Phone would suffer irreparable harm if the injunction was not granted (it would be out of business); and 4) obtaining the injunctive relief was not something contrary to public policy (which is a touchy-feely element designed to make sure we are not protecting interests that are out of line with what the greater society thinks is appropriate).
You should know that obtaining an injunction to prevent an action is easier than obtaining one to compel an action. It's just a common sense idea, really. Telling someone to take no action is easier than forcing them to do something.
The injunction is one of those equitable devices used to save the day when the ordinary lawsuit just won't cut it. It is a tool sparingly used by the Courts, but one that literally makes the difference between life and death for some of my corporate clients.
Have a great week, everyone.
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