The Fifth Court affirmed a temporary injunction about unwanted surveillance in Daugherty v. Ellington, stating: “Under this record, we conclude Daugherty engaged in conduct that violated the ‘right to be left alone from unwanted attention’  and is properly protected by injunctive relief. The trial court could reasonably conclude Ellington proved a probable right of recovery on his invasion of privacy claim even though Daugherty engaged in conduct while on public property.” No. 05-22-00991-CV (Jan. 17, 2024) (mem. op.). (LPHS represented the appellee in this case.)

The supreme court granted mandamus relief in the high-profile abortion case of In re State of Texas, reminding that “we may grant mandamus relief when the trial court effectively resolves the merits of a case in a temporary restraining order,” and applying that principle to hold:

A pregnant woman does not need a court order to have a lifesaving abortion in Texas. Our ruling today does not block a life-saving abortion in this very case if a physician determines that one is needed under the appropriate legal standard, using reasonable medical judgment. If Ms. Cox’s circumstances are, or have become, those that satisfy the statutory exception, no court order is needed.

No. 23-0994 (Tex. Dec. 11, 2023). Not addressed (because not presented) is whether the courts will be so deferential to medical judgment if it is challenged in the context of a later criminal prosecution, as opposed to the unusual “pre-clearance” type of injunction at issue in this case.

683 is a prime number, as well as a prime reason for reversal of temporary injunctions. Most recently, in a contentious case about the governance of an Eritrean church that presented significant issues about the ecclesiastical abstention doctrine, the Fifth Court resolved the matter on technical grounds by holding that the temporary injunction failed to satisfy the requirements of Tex. R. Civ. P. 683. Teklehaimanot v. Medhanealem Eritrean Orthodox Tewahedo Church, No. 05-23-00579-CV (Nov. 17, 2023) (mem. op.).

The Disaster Act “grants the Governor the authority to prohibit local governments from requiring the wearing of masks in response to a contagious disease.” The supreme court left for another day the outer limits of the Governor’s power under that Act. The Dallas mask case was decided in a separate cause number that referred back to the analysis in Abbott v. Harris County, No. 22-0124 (Tex. June 30, 2023).

An unusual TRO challenge, involving a high-school transcript, and in which no response was filed to the challenger’s mandamus petition, produced several reminders about the requirements of Tex. R. Civ. P. 683 – including the required statement of irreparable injury:

The TRO simply states that the Chens have shown an irreparable injury because Jeffrey may be denied college admission, while also alleging that he had been denied admission to a number of schools. An irreparable injury, however, must be immediate “and not merely an injury that may arise at some point in the future.”  That Jeffrey may be denied admission to unnamed colleges and universities to which he has applied or may apply in the future does not evince immediacy, particularly when the Chens alleged the same imminent harm when they initiated the action in 2022. … There is no identification of pending admission decisions, planned or outstanding applications to any particular institutions, or the deadlines that may apply.

In re St. Mark’s School of Texas, No. 05-23-00369-CV (May 3, 2023) (mem.op.) (citation omitted and emphasis added).

The Fifth Court granted mandamus relief as to a TRO requiring a law firm to make certain files available to a former firm attorney. It focused on this language in the TRO:

The Court further finds that Plaintiff has demonstrated she and the clients at issue will suffer imminent, irreparable, and extreme injury if the requested relief is not awarded by the Court. Specifically, Plaintiff has demonstrated that she – and the clients – will suffer imminent, irreparable harm for which there is no adequate remedy at law.

And the Court held:

The temporary restraining order … does not provide a nexus between the actions compelled (requiring PJD to give Cheek access to, and allow her to copy, all client files for clients she represented) and an irreparable injury to Cheek. The order merely recites the conclusory statement that Cheek would suffer immediate, irreparable harm for which there is no adequate remedy at law.

In re PJD Law Firm, PLLC, No. 05-23-00012-CV (April 11, 2023) (mem. op.) (applying, inter alia, El Tacaso, Inc. v. Jireh Star, Inc., 356 S.W.3d 740 (Tex. App.–Dallas 2011, no pet)).

Desperate to hear the fabled song of the Sirens, but knowing full well that they steered sailors toward the rocks, Odysseus told his crew:

“[T]ake me and bind me to the crosspiece half way up the mast; bind me as I stand upright, with a bond so fast that I cannot possibly break away, and lash the rope’s ends to the mast itself. If I beg and pray you to set me free, then bind me more tightly still.”

He survived. Not so, the appellants in Bienati v. Cloister Holdings, LLC, who disclosed during argument that:

“… because the probable right to recovery issue could impact the merits of the entire case, the trial court ‘abated it until this Court weighed in on the merits of the temporary injunction and whether there’s a probable right to recovery.”

The court of appeals held: “We have repeatedly disapproved the practice of postponing the trial on the merits of a case to obtain a ruling on the appeal of a temporary injunction. This practice not only delays the ultimate resolution of the merits of the parties’ dispute but wastes judicial resources.” It thus dismissed the appeal. No. 05-22-00324-CV (Feb. 10, 2023) (mem. op.).

The “Hitchhiker’s Guide to the Galaxy” teaches that “42” is the Ultimate Answer.  That may be true for intergalactic hitchhikers, but “683” is the Ultimate Answer for Texas temporary-injunction practice:

Here, the January Injunction states the applicants “are entitled to the relief sought” and an injunction is “necessary to restrain [Bailey and Edamame] from taking actions prejudicial to Applicants’ rights.” It does not, however, specify the facts the trial court relied on to reach those conclusions or provide any reason why the applicants are entitled to the relief sought in their application. The January Injunction does not explain why the four actions being enjoined need to be enjoined or how those actions could prejudice Applicant’s rights. The January Injunction is, therefore, conclusory. Further, the January Injunction does not specifically explain how appellees will suffer irreparable harm without the injunction and why they have no adequate remedy at law. These conclusory statements are insufficient to comply with the requirements of rule 683. 

Bailey v. Ramirez, No. 05-22-00072-CV (Dec. 30, 2022) (mem. op.) (applying, inter alia, Indep. Capital Mgmt., LLC v. Collins, 261 S.W.3d 792, 794–95 (Tex. App.—Dallas 2008, no pet.)).

A contentious easement dispute led to, among other matters, a damages judgment for the defendant’s alleged barricading of an access road. The damages included delay costs incurred when a contractor charged an extra fee after a TRO stopped the process of paving the road. Applying DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990), the Fifth Court found that those damages were not recoverable on this claim:

“The trial court’s temporary restraining order cannot be [defendant’s] breach. And to the extent [Plaintiff] argues the order was wrongful, she did not allege either of two possible actions for wrongful injunction, nor prove the elements of malicious prosecution.”

MQ Prosper North LLC v. Coulter, No. 05-20-00880-CV (Dec. 12, 2022) (mem. op.).

Justice Oliver Wendell Holmes, dissenting from an early Sherman Act case, famously observed: “Great cases like hard cases make bad law. For great cases are called great, not by reason of their importance… but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment.” Northern Securities Co. v. United States, 193 U.S. 197 (1904).

Yet in the context of temporary injunctions and TROs, there are only “hard cases,” because of the demanding requirements about proof of irreparable injury, etc. For example, the most recent statement from the Texas Supreme Court about the specificity required by Tex. R. Civ. P. 683 is In re: Luther, 620 S.W.3d 715, 722-23 (Tex. 2021) (orig. proceeding)–an extremely charged case politically, arising in one of the most challenging periods of the COVID-19 pandemic.

In that vein is the panel majority in In re Childrens Medical Center of Dallas, a dispute about care for transgender youth, which found this order sufficiently specific as to Rule 683’s requirements about harm. A dissent saw otherwise. No. 05-22-00459-CV (May 18, 2022) (mem. op.).

The Fifth Court deftly aligned the parties’ arguments about mask requirements with the Texas Disaster Act’s statement of purpose in Abbott v. Jenkins: “Based on the evidence in the record, the trial court acted within its discretion to conclude that Jenkins demonstrated a probable right to relief on the ground that Abbott lacked authority to suspend [Tex. Gov’t Code] section 418.108 because imposing a face-covering mandate does not prevent, hinder, or delay necessary action in coping with a disaster. Arguably, the evidence shows the opposite—that by imposing a face-covering mandate, Jenkins furthered Abbott’s stated goals to preserve livelihoods and protect lives through the least restrictive means available. No. 05-21-00733-CV (Nov. 22, 2021) (emphasis added).

In a temporary-injunction appeal, the Fifth Court reasoned: “During the time of COVID, remote proceedings and electronic submissions are the rule rather than the exception. Sohail’s submission of his affidavit and other evidence electronically prior to the Zoom videoconference was in compliance with the trial court’s standing order. Sohail’s evidence was put into the record, referenced and discussed without objection from appellants. Although the trial court did not use ‘magic words’ admitting into evidence Sohail’s affidavit and electronic submissions, the trial court’s order granting a temporary injunction repeatedly states that it was based on Sohail’s evidence.” Kazi v. Sohail, No. 05-20-00789-CV (Oct. 28, 2021) (mem. op.).

Continuing a series of Retail Services WIS Corp. v. Crossmark, Inc., a preliminary-injunction case, the Fifth Court examined how the injunction addressed electronic information:

Weekley involved rule 196.4 discovery rather than a temporary injunction and was not a trade secrets case. Appellants cite no authority mandating Weekley’s application here and we have found none. Further, the law governing mandatory injunctive relief is consistent with Weekley’s requirement that ‘trial courts should be
mindful of protecting sensitive information and utilize the least intrusive means necessary to facilitate discovery of electronic information.’  As described above, rule 683 requires an injunction order to be specific and detailed and to ‘set forth the reasons for its issuance.’ And a preliminary mandatory injunction is proper only if a mandatory order is ‘necessary’ to prevent irreparable injury or extreme hardship. Though the DTO in this case is deficient for the reasons described in our analysis above, we cannot conclude Texas law entirely precludes mandatory injunctions requiring production of digital storage devices when the applicable standards—including rule 683’s specificity and irreparable injury requirements—are met.

No. 05-20-00937-CV (May 4, 2021) (citations omitted).

This post follows up on a recent post about Retail Services WIS Corp. v. Crossmark, Inc., a preliminary-injunction case involving the alleged misuse of trade secrets. The Fifth Court identified problems with the emphasized terms in various parts of a temporary-injunction order (some of which were repeated throughout the order):

  • “The Court further finds that the CROSSMARK Confidential Information and Trade Secrets and other confidential and proprietary business information of CROSSMARK and business relationships of CROSSMARK are assets belonging solely to CROSSMARK.”
  • “For purposes of this Temporary Injunction, ‘Covered Clients and Customers’  means those persons or entities that CROSSMARK provided services to and that the Former Employees either had contact with, supervised employees who had contact with, or received proprietary information about within the last twenty-four (24) months period that they were employed by CROSSMARK.”
  • A ban on recruiting “any persons formerly or currently employed by or associated with Crossmark.”
  • “directly or indirectly . . . taking any steps to cause any current client or
    customer of CROSSMARK, including [Client X and Client Y], to divert, withdraw,
    curtail or cancel any of their business with CROSSMARK.”
  • Deletion of data about “existing or prospective customers or clients of CROSSMARK, as well as ”CROSSMARKinformation” and “other digital storage devices.”

No. 05-20-00937-CV (May 4, 2021) (mem. op.).

Retail Services WIS Corp. v. Crossmark, Inc., a preliminary-injunction case involving the alleged misuse of trade secrets, made these observations (among others):

  • Trade secret existence. The plaintiff adequately established the existence of a trade secret with testimony that “(1) Crossmark possesses information it considers confidential, including playbooks and digital transformation strategies, that would give a competitor ‘insight into what we’re working on’ and an opportunity ‘to cut corners and create a shortcut to allow them to be able to compete effectively and potentially even, you know, take it further faster than we are’; 2) Crossmark takes multiple steps to protect that information, including limiting access and requiring employees to sign confidentiality agreements; and (3) the digital demo display customers see in stores is ‘just the tip of the iceberg’ and does not constitute the entirety of Crossmark’s strategy.
  • Order specificity. While the Court said that “much of th[e] provision is conclusory” that described the harm justifying the injunction, it concluded: “[T]wo portions address ‘reasons why’ Crossmark will suffer irreparable injury: ‘because once CROSSMARK trade secrets are improperly used and disclosed, they are forever lost and such loss is cannot be calculated in money damages’ and ‘CROSSMARK’s customer and client goodwill, which has been developed over many years, will be harmed and such harm cannot be quantified in money damages.'”

The Court went on to identify a number of problems with the specificity of the enjoined acts, as well as the requirement that certain electronic storage devices be turned over, and the details of those holdings will be reviewed in a future post. No. 05-20-00937-CV (May 4, 2021) (mem. op.).

A temporary-injunction order about confidentiality obligations failed for lack of specificity in Wimbrey v. WorldVentures: “Paragraph 3 merely includes a list of items that the court found the covenants were intended to protect. By failing to define, explain, or otherwise describe what constitutes WorldVentures’s ‘confidential information,’ the order leaves appellants to speculate about what particular information or item would constitute ‘confidential information’ and thus fails to provide necessary notice as to how to conform their conduct.” The Court contrasted the order in McCaskill v. National Circuit Assembly, No. 05-17-01289-CV, 2018 WL 3154616, at *3 (Tex. App.—Dallas June 28, 2018, no pet.) (mem. op.).

The plaintiff sought a temporary injunction against a claimed trespass; the Fifth Court reversed on proof grounds: “[T]here is no evidence in the record that appellees have suffered or will suffer any injury or that any injury they would suffer is irreparable. Certainly the cost to repair or replace the fence can be adequately compensated in damages. And, while appellees argue trespass alone is an irreparable injury, this Court’s case law does not support that proposition. Appellees did not provide the trial court with any evidence that appellant trespassing on their property would cause probable, imminent, and irreparable injury. They did not show that appellant trespassing on their property would invade the possession of their land, destroy the use and enjoyment of their land, or cause potential loss of rights in real property.” WBW Holdings v. Clamon, No. 05-20-00397-CV (Nov. 12, 2020) (mem. op.) (emphasis added, citations omitted).

McGuire-Sobrino v. TX Cannalliance LLC presents a mini-course on effective protection of business information. Cannalliance sued McGuire-Sobrino, a former contractor, for restricting its access to its website and other digital assets. The Fifth Court addressed

  • Rule 683. The temporary injunction made adequately-detailed findings, which the Court quoted largely verbatim;
  • Irreparable injury. Rejecting the argument that Cannalliance’s proof of irreparable injury showed only “a fear of possible contingencies,” the Court credited testimony of its managing member that “his inability to control Cannalliance’s digital assets and website is ‘crippling our ability to market and promote our events, to sell tickets to support the business’ and … ‘can smear the public perception and paint a bad picture of the ability to have control over our business.'”
  • Likelihood of success. Cannaliance showed a likelihood of success on claims for conversion and trademark infringement; and
  • Status quo. The injunction preserved the status quo by “returning the parties to their pre-September 26, 2019 status” (the date when Cannalliance showed it no longer had full access to its digital assets).

No. 05-19-01261-CV (Aug. 10, 2020) (mem. op.).

 “…the power granted by section 22.221(a) of the government code is not a power that is granted to prevent damage to the appellant pending appeal.’ ‘That purpose is served by the statutes allowing appellants to supersede judgments by posting an appropriate bond.’ Rather, the power to issue a writ of injunction is limited to the purpose of protecting appellate jurisdiction. 

   Here, relators assert that the pending foreclosure threatens this Court’s jurisdiction over their existing appeal. But unlike the cases cited by relators involving appeals of interlocutory orders, the foreclosure of the property at issue does not moot their claims in the appeal and, thus, does not implicate the Court’s jurisdiction over the appeal.” In re Day Investment Group, No. 05-20-00643-CV (July 2, 2020) (mem. op.) (citation omitted, emphasis added).

Appellant challenged a temporary injunction arising from a noncompetition agreement about supplying beauty products to salons. The Fifth Court affirmed in Kim v. Oh, holding, inter alia:

  • Capacity. “Appellants argue the evidence in the record establishes they signed the contracts with Oh in their corporate, not individual, capacities, and consequently there are no enforceable contracts on which Oh can recover against appellants. Appellants further assert that Oh lacks capacity to recover in this suit, noting he signed the contracts as ‘Grace Beauty Supply’ and that Grace Beauty Supply is not a party to this suit. However, these arguments raise affirmative defenses and dilatory pleas, which may be addressed at a later proceedings on the merits and are not issues to be resolved at this stage . . . ” (footnote omitted).
  • Irreparable Injury. This testimony worked: “Oh stated there had been many violations of the noncompetition provisions, but he could not estimate how many because there were ‘too many’ to count. He saw appellants at his customers’ salons ‘many times’ after they terminated their contracts with him in December 2018. He believed appellants were competing with him for the same business and would continue to violate the noncompetition provisions. Oh testified it had been ‘very, very difficult’ for him to rebuild his customer base and that he was expecting a ‘difficult time’ when asked if he would be able to survive financially in the months between the hearing and the trial.” No. 05-19-00947-CV (May 11, 2020) (mem. op.)

Underscoring its 2019 opinion in RWI Construction v. Comerica Bank, the Fifth Court reminded that “the ancient and controlling rule forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment.” Acknowledging that the “general rule would not control where there is a logical and justifiable connection between the claims alleged and the acts sought to be enjoined, or where the plaintiff claims a specific contractual or equitable interest in the assets it seeks to freeze,” it found no such connection here: “Lake Point has not established any right to the funds in Renovation Guru’s Bank of America account.Instead, this injunction mirrors the RWI injunction on general capital call funds, which served only the improper purpose of assuring future satisfaction of a subsequent judgment.” Renovation Gurus, LLC v. Lake Point Assisted Living, LLC, No. 05-19-00499-CV (Jan. 29, 2020) (mem. op.).

The Fifth Court gives some highly practical guidance about the enforcement of noncompetition agreements in Gehrke v. Merritt Hawkins & Assocs.

As to the scope of activity, the Court reminded: “Covenants not to compete prohibiting solicitation of clients with whom a former salesman had no dealings are unreasonable and unenforceable. . . . . However, when an employer seeks to protect its confidential business information in addition to its customer relations, broad non-solicitation restrictions are reasonable.” Here, “the record demonstrates [Defendant] was much more than a mere salesman–he was an executive and vice president with intimate knowledge of MHA’s confidential business information and trade secrets who also supervised other salesmen.”

As to geographic scope, the Court concluded that “the trial court abused its discretion by misapplying the law to the facts in failing to enforce a geographic restriction for all states where Gehrke had worked during his final year at MHA, including the entirety of the Contested States. Additionally, we conclude the trial court abused its discretion by imposing the arbitrary ten-mile radius restriction because neither party presented evidence supporting that restriction.”  No. 05-18-01160-CV (Jan. 23, 2020) (mem. op.) (citations omitted from all quotes, all emphasis added).

The last stand of Dallas’s Confederate War Memorial (right) has been extended until mid-July; the Fifth Court stayed matters until it can receive and consider full briefing on the request for a writ of injunction during an appeal about the Memorial and the related statue of Robert E. Lee. In re: Return to Lee Park, No. 05-19-00774-CV (July 1, 2019) (order). Robert Wilonsky has a good summary of the current status of the litigation in the Dallas Morning News.

“[I]n concluding the agreed temporary injunction is void and must be dissolved, we necessarily reject Hanson’s contentions that because appellants agreed to the temporary injunction and failed to raise these technical defects in their motion to dissolve, they should be precluded from complaining about the order’s deficiencies under rule 683. We can declare a temporary judgment void even if the parties have not raised the issue. Moreover, because a temporary injunction order that fails to comply with rule 683 is void, a party cannot waive the error by agreeing to the form or substance of the order.” Reiss v. Hanson, No. 05-18-00923-CV (April 22, 2019) (mem op.)

Reiss distinguishes the Fifth Court’s December 2018 opinion about an injunction’s lack of specificity (as opposed to voidness) in In re: Rajpal, which noted: “Relators also claim that the agreed injunction likewise fails for lack of specificity. This argument, however, overlooks that both parties agreed to the entry of this temporary injunction. As a result, Relators are estopped to complain.”

The flip side to the “controlling rule [that] forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment” is that an “asset freeze” temporary injunction can issue on a proper showing. Here: “Comerica Bank presented evidence that in October 2017, after RWI Construction and RWI
Acquisition defaulted on their loan, RWI Construction collected $800,000 in settlement of a receivable owed by Oxy. Those funds were collateral for the loan at issue in this case. Rather than pay those funds over to Comerica Bank as required upon their receipt, RWI Construction transferred them to Lone Star. Accordingly, the evidence presented by Comerica Bank traced collateral for the loan to Lone Star, and those funds are both logically and justifiably connected to Comerica Bank’s breach of contract claim and the relief it seeks in this case.”

In the same vein, the Court noted that while a showing of insolvency can establish irreparable injury in such a context, it is not always necessary: “To a district court exercising discretion over an injunction decision, unwillingness to pay is just as significant, and perhaps more so, as an inability to pay.” RWI Construction Co v. Comerica Bank, No. 05-18-00265-CV (April 12, 2019).

“[T]he ancient and controlling rule forecloses resort to injunctive relief simply to sequester a source of funds to satisfy a future judgment. That general rule would not control where there is a logical and justifiable connection between the claims alleged and the acts sought to be enjoined, or where the plaintiff claims a specific contractual or equitable interest in the assets it seeks to freeze.” Accordingly, it was an abuse of discretion to enter a temporary injunction (beyond $800,000 as to which such a connection was shown), when “the injunction freezes Lone Star’s funds pretrial simply to assure their future availability to satisfy a judgment based solely on concerns about Lone Star’s general future liquidity.”  RWI Construction Co v. Comerica Bank, No. 05-18-00265-CV (April 12, 2019).

In civil practice, petitions for habeas corpus are uncommon but important when they arise – usually because of a contempt finding about compliance with an injunction or other court order. In re Huddleston reminds of an important procedural requirement: “To obtain habeas relief, the relator must provide proof that he is currently being restrained.” In that case, because “[t]e record includes no proof that relator was arrested or that relator remains confined or restrained,” the petition “does not provide the Court with the proof of current restraint required by [Tex. R. App. P.] 52 and should, therefore, be denied.” No. 05-18-01110-CV (Sept. 25, 2018) (mem. op). See generally In re: Daugherty, No. 05-17-001129-CV (June 19, 2018) (mem. op.) (reviewing sufficiency of evidence to support findings of injunction violations).

The Stantons obtained a temporary injunction against the removal of a “large elm tree” from along their property line. The Fifth Court reversed, finding that Tex. R. Civ. P. 683 was not satisfied as the order “does not state or explain the probable, imminent, and irreparable harm the Stantons will suffer absent an injunction. The trial court’s temporary injunction order simply recites the conclusory statement that the Stantons have shown that they will suffer an irreparable injury for which they have no other adequate legal remedy.” (citation omitted) The Court also questioned the Stantons’ right to sue about the tree at all, citing century-old Texas law establishing that “ownership is not shared with an adjacent property owner just because a tree grows across a boundary line. Instead, . . . this becomes an ‘invasion’ of the adjacent property owner’s right of possession.” Collins v. Mnuchin, No. 05-17-01363-CV (July 12, 2018) (mem. op.)

 

In a family-law holding of broader applicability to injunctions generally, Barnes v. Barnes affirmed a contempt holding related to a failure to pay a substantial amount of child support. The petitioner contended, inter alia, that the divorce decree’s requirement “that he pay . . . ‘50% of the after tax (regular payroll taxes for single deduction) proceeds’ of various compensation, performance awards, and stock sales makes the decree fatally ambiguous,” due to dispute about the appropriate tax treatment for those matters. The Fifth Court disagreed, noting that he “offer[ed] no justification for his failure to pay at least the amount he conceded he owes . . . or his failure to deliver the deferred compensation related documents. We conclude the divorce decree is sufficiently clear to inform David of his obligation to provide documentation and payment to Jennifer. The fact that the experts disagreed on which tax rate to apply, does not excuse David’s complete lack of compliance with the decree’s mandate regarding deferred compensation.” No. 05-16-00241-CV (Feb. 23, 2018) (mem. op.)

The opinion in 7-Eleven, Inc. v. Cardtronics, Inc. reminds both of the importance of proving irreparable injury to obtain a temporary injunction, and the deferential standard of review if the trial court denies relief. Specially, 7-Eleven alleged that cancellation of a contract involving ATMs would cause business disruption, but the Fifth Court saw the evidence differently:

“Seltzer’s testimony is nothing more than fear and speculation as to what may occur unsupported by any relevant data. Although the Agreement had been in place for almost ten years, 7-Eleven offered no evidence to show how over-the-counter sales have been impacted by the addition of the ATMs, or as specific to this case, the impact of the Allpoint network. This does not mean 7-Eleven had to prove any specific amount of damage, only that it needed to offer some concrete evidence that damages will in fact occur by something more than Seltzer’s unsupported conclusory opinion. As for Updyke, he testified only that the retailer loses between 65 and 80 percent of those ‘ATM customers, ATM transactions’ over time. He specifically stated he was not referring to over-the-counter sales customers. To the extent 7-Eleven relies on Cardtronics’s promotional material used to retain 7-Eleven’s business, the trial court could have reasonably seen that as nothing more than a sales pitch, not concrete evidence of specific irreparable harm. Under the particular facts before us, we conclude the trial court could have reasonably determined that 7-Eleven’s claim of harm is speculative and that 7-Eleven failed to demonstrate irreparable injury.

No. 05-17-00623-CV (Nov. 10, 2017) (mem. op.)

arrowsDahlheimer sought a writ of injunction in the court of appeals to stay proceedings involving a receivership about the sale of a home. The Fifth Court found that it lacked jurisdiction, noting that its injunctive power is limited to “jurisdiction over the subject matter of a pending appeal,” and that “[t]he power to grant a temporary writ of injunction to prevent damages which would otherwise flow to  alitigant who has an apppeal pending rests exclusively with the trial court.” In re Dahlheimer, No. 05-17-00556-CV (June 8, 2017) (mem. op.)

D&D

In Baxter & Associates, LLC v. D&D Elevators, Inc., No. 05-16-003300-CV (Feb. 15, 2017), the plaintiff appealed from the denial of a temporary injunction against former employees and the company they formed. The plaintiff alleged that the former employees took trade secrets, namely a list of builders with projects potentially including elevators, in violation of their fiduciary duties and the Texas Uniform Trade Secrets Act (“TUTSA”).

After a two-day hearing, the parties received a signed order denying the request for temporary injunction, which was attached to an email from the court administrator stating, “The Court makes the following rulings: … I do find that trade secret as to existing jobs or bids was obtained… [but] there is an adequate remedy at law….” The plaintiff requested findings of fact and conclusions of law, and filed a motion for reconsideration based on its argument that it did not need to show no adequate remedy at law under TUTSA to obtain injunctive relief. The trial court did not sign any findings of fact or conclusions of law, and the plaintiff appealed without filing a notice of past due findings and conclusions of law.

The first issue addressed by the court was procedural—whether the statement contained in the court administrator’s email stating the existence of trade secrets was a finding of fact. The Court of Appeals held it was not, in part because at a subsequent hearing the trial court stated that it had not made such a finding. Although the plaintiff formally requested findings of fact and conclusions of law, it failed to file a notice of past due findings and conclusions of law pursuant to Rule 297. Thus, the Court of Appeals held there were no findings of fact or conclusions of law, that any error for the failure to make such findings was not preserved, and implied a finding that the plaintiff had not shown the existence of a trade secret.

The Court went on to hold that there was evidence that would have allowed the trial court to conclude that the list of projects was not a trade secret because the information could be publicly identified, and therefore would not “derive[] independent economic value, actual or potential, from not being generally known….”

Baxter & Associates, LLC v. D&D Elevators, Inc., No. 05-16-003300-CV (Feb. 15, 2017)

Alphabet Soup

In In re FPWP GP LLC, et al. (January 25, 2017), the Dallas Court of Appeals conditionally granted a writ of mandamus for the district court’s failure to transfer venue under the mandatory venue provision of Section 65.023 of the Civil Practice & Remedies Code, which provides that “a writ of injunction against a party who is a resident of this state shall be tried in … the county in which the party is domiciled.” Courts have struggled at times to apply Section 65.023 because it does not apply to all suits seeking an injunction, but instead only to suits in which the relief requested is “purely or primarily injunctive.” So, if the primary form of relief is something else, e.g. damages, then the mandatory venue provision does not apply. The opinion gave examples of the exception, such as when injunctive relief is simply to maintain the status quo pending litigation or when there is no request for a permanent injunction. But in the case at hand, the plaintiff sought only a declaratory judgment that was effectively a mirror image of the permanent injunctive relief requested. Holding the injunction “was a means to the same end” as the declaratory judgment, the Court held that the primary purpose of the lawsuit was injunctive and that transfer to the county of domicile of the defendants was mandatory under Section 65.023.

In re FPWP GP LLC, et al. (January 25, 2017)

In the common fact situation of an employee leaving for a new, competing employer, the Fifth Court found no abuse of discretion in denying a temporary injunction when:

  • After his termination, Turner did not have access to any confidential information except for the contents of a laptop
  • Turner testified that he did not access the laptop following his termination except to examine his girlfriend’s resume and his employment agreement and when he took it to the Apple Store to have his personal photographs removed from the computer.
  • Plaintiff had a forensic examination of the computer performed, and it presented no evidence that Turner’s testimony was false.
  • When Turner also testified that when he went to work for Gulfstream, he did not contact any of BM Medical’s clients with whom he had worked while employed by BM Medical (although some contacted him to find out what had happened to him); and
  • Only one client of BM Medical became a client of Gulfstream, who was a good friend of Turner’s whom Turner had known before he went to work for BM Medical, and who still did business with BM Medical.

BM Medical Management Service LLC v. Turner, No. 05-16-00670-CV (Jan. 10, 2017) (mem. op.)

Show your work

In Freedom LHV, LLC v. IFC White Rock, Inc., the Dallas Court of Appeals reversed a temporary restraining order, reminding us yet again that under Rule 683, a trial court must state the specific reasons for issuing a temporary restraining order or temporary injunction, or the order is void. As the Dallas Court of Appeals wrote: “Even if a sound reason for granting relief appears elsewhere in the record, the Texas Supreme Court has stated in the strongest terms that rule of civil procedure 683 is mandatory.”

Practice pointers for those drafting a temporary restraining order or temporary injunction:

DO INCLUDE

  • specific and legally sufficient reasons for granting the TRO or temporary injunction finding all three necessary elements:  (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim; and
  • if it is a temporary injunction, a trial setting.

DO NOT INCLUDE

  • conclusory statements, e.g. “plaintiff will be irreparably injured” without a description of that specific injury and why it is probable, imminent, and irreparable; or
  • statements that merely reference the complaint or other document.

Freedom LHV, LLC v IFC White Rock, Inc.

“The parties are owners of adjoining property whose homes overlook a golf course. The Roses built a fence that blocked the view from the Bonvinos’ home. The ensuing legal dispute has lasted almost a decade.” That description begins a memorandum opinion affirming a Collin County trial court’s order enforcing a permanent injunction requiring the Roses to reduce the maximum height of their fence to 6 feet. The case hinged on the trial court’s finding that the “2012 Fence” exceeded 6 feet when measured from the “unaltered and unimproved grade.”

And thus, peace and tranquility were restored to Far North Dallas.

Rose v. Bonvino, No. 05-14-007020-CV

The Court of Appeals has dissolved a temporary injunction that would have prevented a court in Bastrop County from continuing to oversee a homeowner’s insurance appraisal process. James and Patricia Barrentines’ home in Bastrop was damaged by one the wildfires that plagued that area in 2011. Their insurer, Safeco, demanded an appraisal of the loss, and both parties appointed their own appraisers pursuant to the policy. When the two party-appointed appraisers were unable to agree on an umpire, Safeco went to court in Bastrop County to have one appointed. The court-appointed umpire issued an appraisal favorable to the homeowners, but the Bastrop County court then appointed a different umpire. The Barrentines then refiled in Dallas and obtained a temporary injunction forbidding any reappraisal. The Dallas Court of Appeals reversed that ruling, holding that it disturbed — rather than preserved — the status quo by interfering with the Bastrop County court’s authority to conduct the appraisal under the insurance contract.

Safeco Lloyds Ins. Co. v. Barrentine, No. 05-13-01011

A former Halliburton employee who had worked at the company designing and manufacturing wellbore plugs left and formed his own company that designed and manufactured wellbore plugs.  Halliburton sued the former employee and his company.  Ultimately, a jury found in Halliburton’s favor, awarding it damages, and the trial court entered an injunction barring the former employee from using Halliburton’s trade secrets for eighteen months.

Not satisfied, Halliburton appealed, seeking a permanent injunction.  The Court of Appeals sided with Halliburton, holding that the trial court erred by refusing to enter a permanent injunction because the former employee failed to show that anything less than a perpetual injunction would protect Halliburton’s rights and “remove the competitive advantage obtained through the misappropriation.”  Halliburton Energy Servs., Inc. v. Axis Tech. LLC, 444 S.W.3d 251 (Tex. App.-Dallas 2014, no pet.)

A Collin County divorce case turned into a temporary injunction proceeding involving claims of assault and terroristic threats by an attorney in the middle of a deposition. The plaintiff, Barry Wells, alleged that his wife’s attorney became angry when Wells told him to calm down and commented that May’s daughter had probably committed suicide due to the attorney’s supposed anger issues. The lawyer allegedly made multiple death threats in the course of throwing Wells out of the building. Five days later, Wells filed a petition seeking injunctive relief to prevent the attorney from coming within 300 feet of him. The trial court granted an ex parte TRO, but the attorney quickly moved to dissolve the order and to impose sanctions for filing a groundless, bad faith pleading. After a hearing, the trial court dissolved the TRO and entered sanctions against Wells by striking his petition and dismissing the case with prejudice.

The Court of Appeals affirmed the dissolution of the TRO, but reversed the sanctions order. The ruling on the TRO was moot, and therefore non-appealable, because the order would have expired after 14 days in any event. As to the sanctions order, the deposition transcript revealed that Wells had been the instigator of the confrontation with the defendant, and that his comment about the attorney’s daughter was outrageous, the transcript also showed that the attorney had indeed threatened to kill Wells if he did not leave or if he ever returned. Thus, even though though Wells’ pleading presented an inaccurate account of what had transpired, the threat of imminent bodily injury meant that the claims of assault and terroristic threat were not groundless. The order striking the petition was therefore reversed, and the case was remanded for further proceedings.

Wells v. May, No. 05-12-01100-CV

After accepting a $1500 settlement for damage to his truck, David Lynd allegedly began to harass various executives and employees of Bass Pro Shop, threatening them and demanding additional money. Bass Pro responded by filing a motion to enforce the releases in the settlement agreement and seeking injunctive relief. The trial court granted temporary and permanent injunctions, ordering Lynd not to contact Bass Pro personnel and to stay at least 100 feet away from Bass Pro’s locations and the homes of its directors, officers, and employees. Lynd — appearing pro se — asserted an impressive 33 issues on appeal. The Court of Appeals affirmed. The Court was unwilling to consider the errors Lynd claimed from the original lawsuit, which had not been appealed and could only be attacked on bill of review. The Court rejected Lynd’s attempts to argue that the settlement had been procured by fraud, as well as his complaint that he had been “betrayed by own counsel” in that lawsuit. More notably, the Court affirmed the trial court’s injunction, holding that Lynd’s pattern of harassment demonstrated imminent harm that could not be remedied by an award of damages. An injunction was proper, the Court held, because Lynd’s demands for additional money were in violation of his settlement agreement with Bass Pro, in which he had released all his claims concerning his truck, including all claims against the company’s personnel.

Lynd v. Bass Pro Outdoor World, Inc., No. 05-12-00968-CV

In this derivative suit, the plaintiff sought a temporary injunction stopping officers of the defendant company who had each been granted a promissory note in lieu of salary (which note was then in default) giving them the right to foreclose.  Although the trial court granted the temporary injunction, the Court of Appeals held that the mere existence of unexercised contractual rights does not give rise to the “imminent harm” required to sustain a temporary injunction, reversing the trial court’s decision.

Schmidt v. Richardson

In this memorandum opinion, the Court found that the trial court’s temporary injunction preventing the defendants from disclosing, among other things, “techniques,”  “materials,” “confidential information” and “proprietary information,” was not specific enough to meet the  requirements of TRCP 683, which requires that an injunction shall “describe in reasonable detail . . . the acts sought to be restrained.”

Ramirez v. Ignite Holdings

Jay Nanda and his brother, Atul, ended up in a dispute over their jointly-owned company, Dibon Solutions. An arbitrator awarded ownership of the company to Atul and ordered him to pay Jay in excess of $500,000. After the arbitration award, Jay began to call Dibon’s customers and its bank, claiming that Dibon was engaged in all kinds of misconduct, including money laundering, human trafficking, and forging documents. Dibon sued Jay, asking the trial court for a temporary injunction to stop Jay from spreading his allegations any further. The trial court denied the temporary injunction, and Dibon filed an interlocutory appeal. The court of appeals affirmed, holding that the testimony supported Jay’s assertion that the statements were true. Without any false or misleading statements at issue, Dibon could not meet its burden of establishing an exception to the First Amendment’s prohibition of prior restraint. The court went on to hold that an injunction could not be sustained on Dibon’s alternative theory of tortious interference because, apart from the fact that Jay admitted sending the disparaging information in an email, there was no evidence that he had otherwise taken an active part in persuading Dibon’s customer to breach its contract. Accordingly, the trial court did not abuse its discretion in denying Dibon’s request for a temporary injunction.

Dibon Solutions, Inc. v. Nanda, No. 05-12-01112-CV

A temporary injunction order is void if it does not fix the amount of security for the applicant’s bond or fails to set a trial date. The injunction issued against appellant Michael Lodispoto did neither. As a result, the court of appeals set aside both the TI order and the trial court’s subsequent order to show cause for violations of the injunction.

Lodispoto v. Ruvolo, No. 05-12-01580-CV

A temporary injunction order is void if it doesn’t set a specific date for trial on the merits. In this case, the county court at law issued a temporary injunction that only said it “shall remain in effect until final disposition of this case or until further order of the Court.” Neither “final disposition” nor “further order” is a date certain, so the TI was reversed on appeal as void without further reference to the merits.

ACI Healthcare Staffing, LLC v. V-Platinum Consulting, LP, No. 05-12-01060-CV

In February, the court of appeals reversed a district court’s temporary injunction prohibiting a lender from foreclosing on the borrower’s properties, concluding that the testimony only established an agreement to negotiate, not an enforceable agreement to forebear from foreclosure. The court has now issued an updated opinion in that case that clarifies the standard of review. In the original opinion, the court wrote that “the trial court abuses its discretion when it misapplies the law to established facts or when the evidence does not reasonably support the trial court’s determination of the existence of a probable injury or a probable right of recovery.” In the revised opinion, the court states that an abuse of discretion occurs when the trial court “misapplies the law to established facts or when there is no evidence that supports the trial court’s determination of the existence of a probable injury or a probable right of recovery.” The difference between those two standards yielded no difference in the outcome of the case, but anyone appealing a temporary injunction should be sure to cite the correct standard of review.

Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-00653-CV

The court of appeals has reversed the grant of a temporary injunction that prohibited the lender from foreclosing on a pair of properties that secured a $10,000,000 promissory note. After multiple previous foreclosures, a bankruptcy filing, and the voluntary dismissal of the bankruptcy case, the borrower sued to enjoin further foreclosures, claiming that the parties had entered into a binding agreement that limited the lender’s ability to foreclose. The court of appeals rejected that argument, concluding that the testimony of the borrower’s witness at the injunction hearing only demonstrated an agreement to engage in further negotiations following dismissal of the bankruptcy, not any concrete and enforceable contractual terms. The court of appeals also rejected the borrower’s contention that the foreclosures would be wrongful because they would result in less than fair market value being received. That argument, the court held, was only applicable to a deficiency claim after foreclosure, not as grounds to prevent foreclosure itself.  The court of appeals therefore dissolved the temporary injunction and remanded the case to the trial court.

Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-000653-CV

UPDATE: The court has issued a revised opinion in the case, in which it clarifies the standard of review. The outcome remains the same.

Kaufman County obtained a temporary injunction against the operators of a local firing range, preventing them from continuing to operate the gun range because it was too close to nearby businesses and residences.  The range owners filed an interlocutory appeal, and the parties thereafter agreed to stay the trial court proceedings while the appeal was pending. But an interlocutory appeal of a temporary injunction is not supposed to delay the trial on the merits, as the issue on appeal is whether the court abused its discretion in ordering temporary relief before the case can proceed to full trial, not to obtain a ruling on the merits from the appellate courts. Invoking the rule that the fastest way to cure the hardship of a temporary injunction is to try the case on the merits, the court of appeals dismissed the appeal, admonishing the parties and the trial court to proceed “expeditiously” to trial.

Morgan Security Consultants, LLC v. Kaufman County, No. 05-12-00721-CV

In this Memorandum Opinion, the Court of Appeals addressed whether it may exercise jurisdiction over an order granting an interlocutory summary judgment order for permanent injunctive relief, but which did not dispose of the defendant’s counterclaims. The Court refused to exercise jurisdiction, holding that “[a] summary judgment that fails to dispose of all claims, even if it grants a permanent injunction, is interlocutory and unappealable.”  Notably, however, the court pointed out that the appellant could have tried to challenge the injunction as actually being an appealable temporary injunction, but the appellant had not attempted to use that procedure.

Young v. Golfing Green Homeowners Ass’n, Inc., No. 05-12-00651

Hood worked for ISC as both an employee and an independent contractor “registered representative” working to bring in new clients on commission. Hood regularly downloaded ISC client information onto personal storage. ISC fired Hood, who solicited 800 of ISC clients at his new place of business. Many of those clients Hood brought to ISC and was entitled to solicit; other he did not. ISC sued and sought a temporary injunction. Both side submitted a list of client files taken from Hood’s hard drive, but disagreed about which clients were not Hood’s and thus ISC proprietary information. The court accepted Hood’s list, ordering him to destroy or return all of the files he designated as belonging to ISC, or preserve them and refrain from accessing them. ISC appealed the denial of a temporary injunction based on ISC’s list.

On appeal, the court first held that Hood’s download of client lists, prohibited by ISC for registered representatives, could constitute a violation of the Penal Code’s offense for accessing a computer without the consent of the owner. The court next held that some of the data Hood retained contained sensitive information about the clients that exposed ISC to FINRA violations, and that this information was unnecessary to Hood’s solicitations. Thus, the injunction should have extended to both information about clients that Hood did not bring to ISC and the social security numbers and account information of all ISC clients.

ISC Group, Inc. v. Hood, No. 05-12-00568-CV

Dr. Wallace Sarver was hired by Primary Health Physicians, P.A. to serve as a doctor at its clinic in Frisco.  The parties’ written employment agreement included a covenant not to compete, which prohibited Dr. Sarver from practicing medicine within ten miles of the clinic for a period of two years after his termination of employment.  Sarver resigned from the clinic, and shortly thereafter assumed the practice of another physician in Allen — less than 10 miles away from PHP’s clinic.  Dr. Allen sued filed suit for a declaratory judgment on the non-compete.  PHP’s counterclaims included a request for a temporary injunction, which the district court denied.

On interlocutory appeal, the court of appeals affirmed the trial court’s ruling.  The court rejected PHP’s argument that the Covenants Not to Compete Act preempted any requirement to show irreparable harm in order to enjoin Dr. Sarver from violating his non-compete agreement.  In making that ruling, the court dismissed contrary statements in three previous opinions as dicta: McNeilus Cos. Inc. v. Sams, 971 S.W.2d 507 (Tex. App.-Dallas 1997, no pet.); Hilb, Rogal & Hamilton Co. of Tex. v. Wurzman, 861 S.W.2d 30 (Tex. App.-Dallas 1993, no writ); Recon Exploration, Inc. v. Hodges, 798 S.W.2d 848 (Tex. App.-Dallas 1990, no writ).

The court of appeals also rejected PHP’s claim that the trial court had abused its discretion by failing to find irreparable harm.  Although PHP had established that Dr. Sarver had been popular with patients and that patients had continued to ask for him, there was little evidence that any of those patients had left PHP’s clinic and gone to Dr. Sarver’s new practice.  The court of appeals also relied on evidence that the two clinics practiced different types of medicine, with PHP’s facility focused on “episodic” illnesses and injuries, while Dr. Sarver’s new practice was devoted to a more traditional family practice.  Two of PHP’s witnesses also confirmed that the patient volume and profitability of its clinic were about the same as they had been before Dr. Sarver left.  That evidence supported the trial court’s finding of no irreparable harm, and the temporary injunction was therefore affirmed.

Primary Health Physicians, P.A. v. Sarver, No. 05-12-00351-CV

Being an appellant is hard when you don’t have a reporter’s record.  In this instance, the defendant filed an interlocutory appeal of a temporary injunction order, claiming that the plaintiff and intervenors had no standing to assert their claims and that the trial court had made a host of other errors.  But the court of appeals could find no request for a reporter’s record.  Only a partial transcript of the temporary injunction was included in the record, and there was no notice of issues relied upon in the clerk’s record.  In the absence of a complete reporter’s record, the court of appeals had to presume that the missing portions of the transcript supported the trial court’s ruling.  Accordingly, the temporary injunction was affirmed.

Dao v. Silva, No. 5-12-00331-CV

Delcom Group, LP thought that it was the winning bidder for a project to install “Digital Classroom integration solutions with technology components including installation and service at multiple school facilities” in the Dallas Independent School District.  But when DISD dumped Delcom and went with the second-place bidder instead, Delcom sued both the school district and the competing bidder.  The trial court granted a temporary restraining order to prevent DISD and the competitor from using Delcom’s trade secrets, but ultimately denied a temporary injunction and granted the school district’s plea to the jurisdiction.  On interlocutory appeal from that ruling, the court of appeals affirmed.  Despite a chain of documents that Delcom pointed to as forming the contract, the court held that the contractor could not sue DISD for breach because the parties had never settled on the essential terms of a contract.  Among other problems, Delcom had actually submitted two different bids, one for $79 million and the other for $62 million — and DISD had never stated which bid it intended to accept.  Because the parties had not agreed on the essential terms of a contract, there could be no waiver of governmental immunity under section 271.152 of the Local Government Code.  The court likewise rejected Delcom’s takings claim, because there could be no taking when Delcom had given its alleged trade secrets to the school district voluntarily.  Finally, the panel affirmed the trial court’s denial of the temporary injunction, holding that Delcom had not established any imminent and irreparable injury through use of its trade secrets, nor had it shown it could not be compensated with money damages if any actual misappropriation were to occur.

Delcom Group, LP v. Dallas Independent School District, No. 05-11-01259-CV