In deciding whether to grant injunctive relief, the Supreme Court and every circuit other than the Second Circuit (OK, the Ninth Circuit part of the time) uses the traditional four factor analysis. See eBay Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837 (2006): (l) a likelihood of prevailing on the merits, (2) irreparable harm if interim relief is denied, (3) balancing of hardships (harm to defendant if the injunction is granted versus the harm to plaintiff if the injunction is denied); and (4) weighing the effect on the public interest, including on non-parties
In the Second Circuit, though a two-part test for private claims is used, requiring a showing of (1) irreparable harm and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor. Under this formulation, a showing of irreparable harm is required under either prong; indeed the circuit has stated “in most cases the moving party must first demonstrate that [irreparable] injury is likely before the other requirements for the other requirements for the issuance of an injunction will be considered.” Zervos v. Verizon of N.Y. Inc., 252 F.3d 163, 172 (2d Cir. 2003) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234-235 (2d Cir. 1999)).
The origins of the prong 2(b) - sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor – may be traced to Judge Jerome Frank’s 1953 opinion in Hamilton Watch Co. v. Benrus Watch Co., 206 F.3d 738 (2d Cir. 1953). Hamilton alleged violation of Section 7 of the Clayton Act, claiming Benrus had bought a large stock of common shares in Hamilton for the purchase of gaining control over it. The complaint requested that Benrus be ordered to sell the shares. Plaintiff also requested a preliminary injunction (principally against voting the shares), which was entered. Defendant asserted its actions were lawful, a position the court of appeals cast doubt on. The irreparable harm took a number of forms, one of which was the immediate ability to elect a director to the Board of Directors and access to confidential and highly competitive materials.
There seems little doubt the injunction could have been affirmed applying traditional equitable principles; but in a throw-away passage that has inexplicably become a bedrock of Second Circuit jurisprudence, it was stated:
"To justify a temporary injunction it is not necessary that the
plaintiff’s right to a final decision, after a trial be absolutely
certain, wholly without doubt; if the other elements are present
(i.e., the balance of hardships tips decidedly toward plaintiff), it
will ordinarily be enough that the plaintiff has raised questions
going to the merits so serious, substantial, difficult and doubtful,
as to make them a fair ground for litigation and thus for more
206 F.2d at 740.
These remarks are striking both for their lack of any support in centuries of equity jurisprudence and for making the case against issuance of an injunction. Likelihood of success on the merits, not compliance with Federal Rule of Civil Procedure 8’s liberal pleading requirements, is a touchstone of injunctive relief as is irreparable harm: if the most that can be said about your case is that you have raised doubts about the merits of your own case, but that it is a serious case, you are well below any acceptable likelihood of success on the merits; indeed, abolition of the likelihood of success requirement seems to be the sole pupose for the Hamilton test.
Although in the 50 years plus years since Hamilton the Second Circuit has curbed some of the wilder implications of the opinion, it is well past time for the court of appeals to abandon its test. In this regard, it should be noted that the Supreme Court has not only never approved of the Second Circuit’s approach, but instead itself, in 2006, strongly endorsed the traditional four-factor test in eBay Inc. v. MercExchange, L.L.C.,