On December 16, 2013, in a published decision, the New Jersey Appellate Division in Waste Management of New Jersey, Inc. v. Morris County Municipal Utilities Authority clarified the standard governing interlocutory injunctions in New Jersey state courts. The court held that a trial judge’s denial of an interlocutory injunction based solely on the determination that the plaintiffs were not likely to succeed on the merits constituted reversible error because “the judge mistakenly overlooked his authority to impose interlocutory relief to preserve the parties’ positions and subject matter of the suit[.]” Stated otherwise, Waste Management holds that one can obtain an injunction preserving the status quo even where he or she cannot show a likelihood of success on the merits.
Waste Management is perhaps the most significant enunciation of the law regarding injunctive relief since the New Jersey Supreme Court’s seminal 1982 case of Crowe v. De Gioia. Under Crowe and its progeny, to obtain an injunction a party must demonstrate that: (1) an injunction is needed to prevent irreparable harm; (2) the underlying cause of action “rests on settled law and has a reasonable probability of succeeding on the merits;” (3) more harm would occur if an injunction were denied than if it were granted and, when a case raises an important public issue, (4) the public interest would be served by an injunction. When a court is being asked to issue an injunction to preserve the status quo, “the court may place less emphasis on a particular Crowe factor if another greatly requires the issuance of the remedy,” but the movant still bears “the burden to prove each of the Crowe factors by clear and convincing evidence.” Garden State Equal. v. Dow. Waste Management thus breaks new legal ground by being the first reported New Jersey appellate decision finding that an injunction could be issued where the party seeking injunctive relief failed to demonstrate the likelihood-of-success prong.
Waste Management is a public bidding case, where two unsuccessful bidders objected to the awarding of a public contract to a competitor and sought to preliminary enjoin the consummation of the contract with the successful bidder. The trial court denied the injunction, concluding that the unsuccessful bidders had failed to show a likelihood of success on the merits and, as such, it was not required to address the remaining Crowe factors. Continue Reading