An Injunction Can Issue to Preserve the Status Quo Even Without a Likelihood of Success on the Merits

Waste Management of New Jersey, Inc. v. Morris County Municipal Utilities Authority, 433 N.J. Super. 445 (App. Div. 2013).  Under Crowe v. DeGioia, 90 N.J. 126 (1982), some familiar factors normally govern whether interlocutory injunctive relief can be issued.  Those factors, summarized in Judge Fisher’s opinion in today’s case, are “whether the movant has demonstrated a reasonable probability of success on the merits; that a balancing of the equities and hardships favors injunctive relief; that the movant has no adequate remedy at law and that the irreparable injury to be suffered in the absence of injunctive relief is substantial and imminent; and that the public interest will not be harmed.”

In this bidding case, a Law Division judge denied an interlocutory injunction on the sole grounds that the movant had not shown a likelihood of success on the merits, without reaching the other criteria.  The movants sought leave to appeal, and the Appellate Division, applying the abuse of discretion standard that governs decisions regarding injunctions, reversed.

The reason for the reversal, as Judge Fisher explained, was that the Law Division “overlook[ed] a court’s authority to impose interlocutory restraints regardless of doubts about the movants’ likelihood of success.”  A court “may take a less rigid view of the Crowe factors and the general rule that all factors favor injunctive relief when the interlocutory injunction is merely designed to preserve the status quo” (emphasis in original).

Though the Law Division’s conclusion that the movants did not demonstrate a likelihood of success was entitled to deference, the judge “did not balance the relative hardships; he did not consider the irreparable injury that would follow the injunction’s denial; he did not examine whether the denial of interlocutory relief would impair or destroy the subject matter of the suit; and he did not weigh the detrimental impact on the public if a lucrative contract were to be given to a potentially unqualified party before a challenge to the bidding process could be fully and finally adjudicated.  These circumstances weighed heavily in favor of interlocutory injunctive relief here.”  Accordingly, the panel ordered, in essence, that the order of the Appellate Division that, in granting leave to appeal, had imposed certain restraints, in order to preserve the status quo, be continued until final judgment at the trial level.

The idea that an injunction can issue without a likelihood of success on the merits may seem revolutionary, given the familiarity of the Crowe factors.  But Judge Fisher cited a number of prior decisions to support this result.  Thus, injunctions that are designed solely to preserve the status quo apparently face less difficult sledding than other injunctions do.