One of the most frequent battlegrounds in business litigation involves requests for preliminary injunctions. The importance of the grant or denial of a request for a preliminary injunction cannot be underestimated. Often, a decision on whether such an injunction should be issued is the entire case, with the matter ending in a concession by the party that loses on the issue.
In 1977, in a case entitled Blackwelder Furniture Co. of Statesville, Inc. v. Seilig Mfg. Co., Inc., 550 F.2d 189, the Fourth Circuit prescribed the procedure to be followed in when deciding whether to grant a preliminary injunction: The court must first determine whether the plaintiff has made a strong showing of irreparable harm if the injunction is denied; if such a showing is made, the court must then balance the likelihood of harm to the plaintiff against the likelihood of harm to the defendant. If the balance of the hardships "tips decidedly in favor of the plaintiff," then typically it will "be enough that the plaintiff has raised questions going to the merits so serious, substantial,difficult and doubtful, as to make them fair ground for litigation and thus for more deliberate investigation.” But if the balance of hardships is substantially equal as between the plaintiff and defendant, then "the probability of success begins to assume real significance, and interim relief is more likely to require a clear showing of a likelihood of success."
The Blackwelder formulation was adopted by Maryland in Lerner v. Lerner, 306 Md. 771 (1986).
In a recent case, however, the Fourth Circuit recognized a challenge to Blackwelder. In a footnote, the Court acknowledged that “Blackwelder’s emphasis on the balancing of the harms rather than the likelihood of success has been criticized, even within this court, as inconsistent with Supreme Court precedent. See Safety-Kleen, Inc. v. Wyche, 274 F.3d 846, 868 (4th Cir. 2001) (Luttig, J.,concurring) (arguing that Blackwelder ‘contravene[s] Supreme Court precedents by overvaluing the inquiry into the relative equities of granting and denying a requested injunction to an extent that essentially denies any value whatsoever to the inquiry into the likelihood of success on the merits’ and ‘virtually eliminate[s] altogether the inquiry into the likelihood of success on the merits.’”
In this particular case, The Scotts Co. v. United Industries Corp. the Court sidestepped the issue of whether the Blackwelder procedure is correct. Presumably, however, it will address the issue at some point. If it overturns Blackwelder, the question of whether a preliminary injunction is granted in any particular case might turn on whether the case is in state court (presumably following the Blackwelder formulation via Lerner) or in federal court.