Beyond the Elements: Erie and the Standards for Preliminary and Permanent Injuctions

The University of Akron IdeaExchange@UAkron Akron Law Review Akron Law Journals May 2019 Beyond the Elements: Erie and the Standards for Preliminary and Permanent Injuctions Michael T. Morley Please take a moment to share how this work helps you through this survey. Your feedback will be important as we plan further development of our repository. Follow this and additional works at: https://ideaexchange.uakron.edu/akronlawreview Part of the Civil Procedure Commons Recommended Citation Morley, Michael T. (2019) "Beyond the Elements: Erie and the Standards for Preliminary and Permanent Injuctions," Akron Law Review: Vol. 52 : Iss. 2 , Article 10. Available at: https://ideaexchange.uakron.edu/akronlawreview/vol52/iss2/10 This Article is brought to you for free and open access by Akron Law Journals at IdeaExchange@UAkron, the institutional repository of The University of Akron in Akron, Ohio, USA. It has been accepted for inclusion in Akron Law Review by an authorized administrator of IdeaExchange@UAkron. For more information, please contact , . Morley: Beyond the Elements BEYOND THE ELEMENTS: ERIE AND THE STANDARDS FOR PRELIMINARY AND PERMANENT INJUNCTIONS Michael T. Morley* Introduction ......................................................................... 457 I. Injunctive Relief for State-Law Claims in Federal Court ............................................. 461 A. Guaranty Trust and Permanent Injunctions ........ 461 B. The Special Case of Preliminary Injunctions...... 474 II. Comparing Federal and State Standards for Injunctive Relief................................................... 480 A. Facial Disparities ................................................ 481 B. Precedential Disparities ...................................... 486 III. Conclusion: Different Bodies of Precedent ............... 490 INTRODUCTION Substantial confusion exists about the standards federal courts must apply to determine whether to grant injunctions for state-law claims. This issue may arise in several different contexts, 1 including diversity cases, 2 * Assistant Professor of Law, Florida State University College of Law. Climenko Fellow and Lecturer on Law, Harvard Law School, 2012–14; Yale Law School, J.D., 2003; Princeton University, Woodrow Wilson School of Public & International Affairs, A.B., magna cum laude, 2000. Special thanks to Caprice Roberts for her help in developing this topic. I am grateful to Michael Green, Camilla Alexandra Hrdy, Tracy Thomas, and the participants at the University of Akron School of Law symposium on “Erie at Eighty” for their valuable comments and feedback. I also appreciate the invaluable aid of Mary McCormick of the Florida State University College of Law Research Center, as well as research assistance from Lindsey Boudreau. I dedicate this piece to my wonderful sons, Zachary Blaise Morley and Nicholas William Morley. 1. Arthur D. Wolf, Preliminary Injunction Standards in Massachusetts State and Federal Courts, 35 W. NEW ENG. L. REV. 1, 41 (2013). 2. 28 U.S.C. § 1332(a), (d)(2) (2011). SYMPOSIUM, ERIE AT EIGHTY: CHOICE OF LAW ACROSS THE DISCIPLINES Published by IdeaExchange@UAkron, 2019 1 Akron Law Review, Vol. 52 [2019], Iss. 2, Art. 10 458 AKRON LAW REVIEW [52:457 supplemental jurisdiction cases, 3 and those in which a state-law claim raises a “disputed and substantial” federal issue.4 Much of this uncertainty arises from an anachronistic exception the Supreme Court created to the principles set forth in Erie Railroad v. Tompkins. 5 Erie famously abolished general law, requiring federal courts to apply state substantive law when adjudicating claims arising under state law. 6 Seven years later, in Guaranty Trust Co. v. York, the Supreme Court held that federal courts must nevertheless continue to apply traditional equitable remedial principles tracing back to the English Court of Chancery in all cases that come before them, including state-law cases. 7 Since injunctions are a form of equitable relief,8 Guaranty Trust requires federal courts to apply this body of traditional equitable principles—as interpreted by the federal courts themselves—when considering injunctive relief for state-law claims. 9 The Court has distilled these traditional principles into four-factor tests for preliminary 10 and permanent 11 injunctions. While some circuits expressly follow Guaranty Trust, others appear to be unaware of the ruling and apply their own varying approaches to determining the proper standards for injunctive relief for state-law claims. 12 Guaranty Trust is wrong, erroneously treating equitable remedial principles as a lingering remnant of general law. In previous work, I explained that there is not a single uniform body of transcendental equitable remedial principles that federal courts must apply in all cases that come before them. 13 Rather, the body of equitable principles that applies to a claim depends on the source of law from which the claim arises. 14 For claims arising under state law, a federal court must apply that state’s body of equitable principles. 15 3. Id. § 1367(a) (2011). 4. See Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005); 28 U.S.C. § 1331 (2011). 5. 304 U.S. 64 (1938). 6. Id. at 78–80. 7. 326 U.S. 99, 105–06 (1945). 8. Weinberger v. Romero-Barcelo, 456 U.S. 305, 311 (1982) (“It goes without saying that an injunction is an equitable remedy.”). 9. Guaranty Trust, 326 U.S. at 105–06. 10. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). 11. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006); see infra notes 142–43 and accompanying text. 12. See infra notes 52–55, 97 and accompanying text. 13. Michael T. Morley, The Federal Equity Power, 59 B.C. L. REV. 217, 257 (2018). 14. Id. at 275. 15. Id. https://ideaexchange.uakron.edu/akronlawreview/vol52/iss2/10 2 Morley: Beyond the Elements 2018] BEYOND THE ELEMENTS 459 Building on that previous work, this article focuses on a different aspect of the issue. Federal courts frequently attempt to avoid choosing between federal and state equitable remedial principles when deciding whether to grant injunctive relief for state-law claims. Such courts usually declare that, since the relevant state’s standards are materially identical to federal standards, or the litigants did not identify any differences between the two tests, they may simply apply federal equitable principles and, implicitly, federal precedents applying them. 16 This article argues that this dodge is invariably inaccurate; courts may not evade this important Erie issue so easily. State standards for injunctive relief often involve somewhat different elements or are expressed in subtly different terms than federal standards. Even when state and federal factors governing injunctive relief appear identical, the manner in which different court systems have applied or construed them may substantially differ. When state and federal courts both require plaint (...truncated)