This document is a memorandum opinion and order from a United States District Court case between Ixmation, Inc. and Switch Bulb Company regarding a letter of credit. Ixmation and Switch had entered into an agreement for Ixmation to manufacture a custom automated system, with payments secured by a letter of credit from Wells Fargo. However, before the project was completed, Switch told Ixmation to stop work and later executed an assignment for the benefit of creditors. Ixmation filed for arbitration and a temporary restraining order to prevent the letter of credit from expiring, and the court placed an equitable lien on the funds from the letter of credit to maintain the status quo until arbitration was concluded. Ixmation now seeks
Jail
3. A central excise officer can arrest, under section 13 of the Central Excise Act, any person who he has reason to believe to be liable to punishment under the Act. Similarly, a customs officer can arrest, under section 104 of the Customs Act, any person who he has reason to believe is liable to punishment under specified sections of the Act. It is noteworthy here that the arrest is made on the basis of the officer’s perception, and the determination of whether the person really is liable to punishment will be made by a court of
law, much later. The department will urge the court that the person is liable to punishment, the person will contend that he is not liable to punishment, and the court will decide. However, the citizen is deprived of his liberty and subjected to ignominy much prior to determination of guilt or innocence. He thus stands “pre-punished”
When Do Liquidated Damages Become an Irrecoverable Penalty?Sarah Fox
An overview of the recent case Makdessi v Cavendish [2013].
In this case the court reviewed agreed damages ie sums set out in a construction contract payable on breach of that contract. Such damages, known as liquidated damages or LADs are often payable for delay on construction projects.
This note summarises the judgment of the Court of Appeal.
For help writing simpler contracts or understanding complex ones, including how the court might view your limitations and exclusions of liability, email: sarah@500words.co.uk or visit www.500words.co.uk
Judgments on section 9 of the Arbitration and Conciliation Act, 1996Legal
This is a compilation of Judgments delivered by Hon'ble Supreme Court and Hon'ble High Courts on section 9 of the Arbitration and Conciliation Act, 1996
Jail
3. A central excise officer can arrest, under section 13 of the Central Excise Act, any person who he has reason to believe to be liable to punishment under the Act. Similarly, a customs officer can arrest, under section 104 of the Customs Act, any person who he has reason to believe is liable to punishment under specified sections of the Act. It is noteworthy here that the arrest is made on the basis of the officer’s perception, and the determination of whether the person really is liable to punishment will be made by a court of
law, much later. The department will urge the court that the person is liable to punishment, the person will contend that he is not liable to punishment, and the court will decide. However, the citizen is deprived of his liberty and subjected to ignominy much prior to determination of guilt or innocence. He thus stands “pre-punished”
When Do Liquidated Damages Become an Irrecoverable Penalty?Sarah Fox
An overview of the recent case Makdessi v Cavendish [2013].
In this case the court reviewed agreed damages ie sums set out in a construction contract payable on breach of that contract. Such damages, known as liquidated damages or LADs are often payable for delay on construction projects.
This note summarises the judgment of the Court of Appeal.
For help writing simpler contracts or understanding complex ones, including how the court might view your limitations and exclusions of liability, email: sarah@500words.co.uk or visit www.500words.co.uk
Judgments on section 9 of the Arbitration and Conciliation Act, 1996Legal
This is a compilation of Judgments delivered by Hon'ble Supreme Court and Hon'ble High Courts on section 9 of the Arbitration and Conciliation Act, 1996
The Law of Penalties - ANZ v Andrews and beyond Laina Chan
In https://www.youtube.com/watch?v=TVVSSbLUm0g, Ian Bailey SC and Laina Chan barristers, discuss the developments in the law of penalties since ANZ v Andrews. They also consider the approach of the Supreme Court in the UK in the first of a series of Chatz with Bailey SC and Chan in Cavendish Square Holding BV v Talai El Makdessi [2015] UKSC 67. This is the powerpoint that accompanies the chatz
‘Remoteness’ refers to the test of causation that is used to determine the loss caused by a breach of contract. It limits the ability of the plaintiff to recover damages to not too remote losses
Time Bars and their enforceability in English law EPC contractsEversheds Sutherland
The use of time bar clauses in standard form EPC contracts is common. How effective a tool are such clauses for managing contractors’ claims for extensions of time and additional payment, and what challenges will there be in enforcing a time bar clause?
This brief presentation covers the concept of 'Fit for purpose' obligation in various jurisdictions and how an arbitrator can deal with this concept in an international arbitration
Conduct of arbitral proceeding vaibhav goyalVaibhav Goyal
Arbitration and conciliation have been the preferred system of resolution of disputes in India from times immemorial. Sir Henry Maine observes that, “In those parts of India, in which village community was most perfect, the authority, exercised elsewhere by the headman, was lodged with what was called the village council or the panchayat.” The prevalent system of arbitration in India made Chief Justice Marten compelled to state in the case of Chanbasappa Gurushantappa vs. Baslinagayya Gokurnaya Hiremath (1927) that “It is indeed a striking feature of ordinary Indian life. And I would go further and say that it prevails in all ranks of life to a much greater extent than is the case in England. To refer matters to a Panch is one of the natural ways of deciding many a dispute in India.” The Orissa High Court in the case of State of Orissa vs. Gangaram Chhapolia (1982), traced the sequence of the formal codification of law on arbitration starting from Bengal Regulations of 1772 and 1780 to Bengal Regulation IX of 1883 which authorised Settlement Officers to refer disputes to arbitration. The Britishers introduced various acts dealing with the law on Arbitration including the Act IX of 1840, the Specific Relief Act of 1878, the Code of Civil Procedure of 1908, the Indian Arbitration Act of 1940 and The Arbitration and Conciliation Act, 1996.
My presentation at Indian Institution of Technical Arbitrators on October 26,2012. Topic: Dispute resolution in UAE; An overview on the recent developments.
The Law of Penalties - ANZ v Andrews and beyond Laina Chan
In https://www.youtube.com/watch?v=TVVSSbLUm0g, Ian Bailey SC and Laina Chan barristers, discuss the developments in the law of penalties since ANZ v Andrews. They also consider the approach of the Supreme Court in the UK in the first of a series of Chatz with Bailey SC and Chan in Cavendish Square Holding BV v Talai El Makdessi [2015] UKSC 67. This is the powerpoint that accompanies the chatz
‘Remoteness’ refers to the test of causation that is used to determine the loss caused by a breach of contract. It limits the ability of the plaintiff to recover damages to not too remote losses
Time Bars and their enforceability in English law EPC contractsEversheds Sutherland
The use of time bar clauses in standard form EPC contracts is common. How effective a tool are such clauses for managing contractors’ claims for extensions of time and additional payment, and what challenges will there be in enforcing a time bar clause?
This brief presentation covers the concept of 'Fit for purpose' obligation in various jurisdictions and how an arbitrator can deal with this concept in an international arbitration
Conduct of arbitral proceeding vaibhav goyalVaibhav Goyal
Arbitration and conciliation have been the preferred system of resolution of disputes in India from times immemorial. Sir Henry Maine observes that, “In those parts of India, in which village community was most perfect, the authority, exercised elsewhere by the headman, was lodged with what was called the village council or the panchayat.” The prevalent system of arbitration in India made Chief Justice Marten compelled to state in the case of Chanbasappa Gurushantappa vs. Baslinagayya Gokurnaya Hiremath (1927) that “It is indeed a striking feature of ordinary Indian life. And I would go further and say that it prevails in all ranks of life to a much greater extent than is the case in England. To refer matters to a Panch is one of the natural ways of deciding many a dispute in India.” The Orissa High Court in the case of State of Orissa vs. Gangaram Chhapolia (1982), traced the sequence of the formal codification of law on arbitration starting from Bengal Regulations of 1772 and 1780 to Bengal Regulation IX of 1883 which authorised Settlement Officers to refer disputes to arbitration. The Britishers introduced various acts dealing with the law on Arbitration including the Act IX of 1840, the Specific Relief Act of 1878, the Code of Civil Procedure of 1908, the Indian Arbitration Act of 1940 and The Arbitration and Conciliation Act, 1996.
My presentation at Indian Institution of Technical Arbitrators on October 26,2012. Topic: Dispute resolution in UAE; An overview on the recent developments.
The class-action lawsuit filed against Heartland Payment Systems filed on behalf of credit card holders claiming their private, sensitive data was breached.
CLE Presentation: Daniel O'Toole, Litigation Partner at Armstrong Teasdale
Learn about recent key Missouri and federal court decisions and other developments in the law that can significantly affect your business.
The choice of a lawyer is an important decision and should not be based solely on this presentation. All rights are reserved and content may not be reproduced, disseminated or transferred, in any form or by means, except with the prior written consent of Armstrong Teasdale.
Findings and Conclusions awarding damages to Ash Grove against Travelers and Liberty Mutual for breach of duty to defend in connection with Portland Harbor Superfund Site.
Attachment Trustee Process & ExecutionMikeProsser
Slideshow from presentation to District Court Clerk-Magistrates and Asst. Clerk-Magistrates intended to promote understanding of the topics from both an "in court" and "out of court" perspective.
Public international law trendtex case_ State ImmunityManish Kumar
This case is related to the State immunity in Public International Law. This very case enumerates the stand of courts over State Immunity when commercial nature of State is involved.
Express working capital llc v Starving Students IncM P
Synopsis
Background: Buyer of corporation's future credit card receivables brought action against seller-corporation and its owner, alleging breach of contract, promissory estoppel, fraud, and fraudulent inducement. Defendants asserted usury defense and counterclaim. Parties cross-moved for summary judgment.
1. For the short essay questions write your answers in the space pro.docxSONU61709
1. For the short essay questions write your answers in the space provided below each question. 2. Answer all questions.4. This exam is administered on a strict honor code and you are precluded from discussing its contents or your answers with anyone else but the instructor.
PART I: True – False Questions. Circle the correct answer. (1point each, total 10 marks)
1. T/F Any common law doctrine can be modified by a legislative act.
2. T/F A Professional Code of Ethics embodies the views of the profession, regarding the implied
social contract between its members on the one hand, and the larger society on the other.
3. T/F A condition subsequent in a contract, is an event which must occur before there is a duty to
perform.
4. T/F To be in privity of contract means to be a witness at the signing of the contract.
5. T/F Novation means substitution, usually of the parties in a construction contract.
6. T/F Subjective impossibility is an acceptable excuse for failure to perform a contractual obligation.
7. T/F Liquidated damages is the money the owner pays to contractor for delaying the project
8. T/F In a unit price contract, the contractor is expected to produce the project as designed for a fixed
sum.
9. T/F A builder’s risk insurance is an all-risk policy covering the contractor for all potential losses on a
construction project.
10. T/F A performance specification stipulates the details of how the contractor is to perform the work.
PART II: Multiple Choice Questions. Mark the best answers. (2-points each, total 20 marks)
1. The supreme law of the land refers to which of the following?
A. All acts of the US Congress. C. The United States Constitution.
B. Laws passed by State Legislatures. D. Decrees of the Executive Branch.
2. A contract remains enforceable even if the party seeking to avoid performance alleges and proves which one of the following?A. Innocent Misrepresentation C. Mutual Mistake
B. Fraud. D. Extreme Hardship.
3. Arthur sold his house to Michael, who agreed to pay the existing mortgage on the house. The bank holding the mortgage consequently released Arthur from liability for the debt. This transaction is which one of the following?
A. A delegation . C. Invalid, as the bank received no additional consideration.
B. A novation. D. Does not release Arthur from liability, if Michael defaults.
4. The term Statute of Limitations refers to which one of the following?
A. The effect of passage of time on the maintainability of claims.
B. The requirement that agreements not coming into force within a year be put into writing.
C. Limitation of the value of the damage claims that a plaintiff can make in a liability suit.
D. None of the above.
5. A Deposition is a pre-trial procedure involving which one of the following?
A. Sworn testimony taken in writing. C. The process of posting a bail bond.
B. The process of jury selection. D. None of the above.
6. A builder’s risk policy prot ...
Bankruptcy Adversary Proceeding in Eleventh Circuit Court, Florida. Defendant's Closing Argument Brief for Dischargeability under Section 523(a)(4) and 523(a)(6) of the Bankruptcy Code. Defendant is a Pro Se Litigant. Defending against allegations made from an ex-boyfriend who was using his business to escape liability. Tax avoidance, collusion, conflict of interest, abuse of power.
Fleet v. Bank of America case from California Court of AppealLegalDocsPro
This Fleet v. Bank of America case was recently decided by a California Court of Appeal. This case was decided by Division Three of the Fourth District Court of Appeal on August 25, 2014, on September 23, 2014 the Court granted the request of several parties for publication. The case involved allegations by the Fleets of fraud on the part of Bank of America during the loan modification process.
The Court of Appeal reversed the Judgment entered in the case and reversed the order sustaining the demurrer to the cause of action for fraud as to Bank of America and several other individual defendants, as well as reversing the order sustaining demurrers to the breach of contract and promissory estoppel causes of action against Bank of America athough the Court did affirm the order sustaining the demurrers without leave to amend against several other defendants including Recon Trust. The Court also affirmed the order sustaining the demurrer to the cause of action for accounting without leave to amend. This case is very good news in my opinion as this case may represent a turning point as it is the only published case from California that I am aware of in which an appeals Court appears to be at least considering the possibility that the big banks may be engaging in a pattern of fraud and deceit.
Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom CoverageNationalUnderwriter
From FC&S Legal: Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage.
A federal district court has ruled that an insurer was not obligated to cover claims stemming from allegedly faulty
emergency mitigation measures and repairs made to a roof damaged by Hurricane Isaac.
The Case
Cedar Ridge, LLC, alleged that its Riverlands Shopping Center was damaged by Hurricane Isaac and that it contracted with Roof Technologies, Inc., to perform “emergency mitigation work,” which generally consisted of fastening tarps to Riverlands’ roof. Cedar Ridge then filed a claim with Landmark American Insurance Company and RSUI Indemnity Company (together, “Landmark”), which was denied on the ground that the emergency mitigation work had caused additional damage to Riverlands.
Cedar Ridge sued Landmark, which filed a complaint against Roof Tech, asserting that, “in the event [Landmark was] held liable to plaintiff for any of the claims asserted, third party defendant, Roof Technologies, Inc. [was] liable to [Landmark] for the damage it caused to the property at issue as a result of its defective workmanship and by the improper installation of tarps on the roof following Hurricane Isaac.”
Roof Tech moved for summary judgment.
FORMAT FOR CASE BRIEF Virtually all of the cases in thi.docxbudbarber38650
FORMAT FOR CASE BRIEF
Virtually all of the cases in this text (and all legal texts for that matter) are at
an Appellate/Supreme Court level (not a trial court), where Issues of Law
are resolved, as opposed to issues of fact which are resolved at the trial
court level.
This suggested format is a slight modification of an outline for Case Briefs
used in the legal profession. (Example - Text Pg 4 – Case 1.1)
Style of Case and Citation:
Example - United States of America v. Martha Stewart and Peter Bacanovic
U.S. District, LEXIS 12538 (2004)
Court Rendering Final Decision:
Example - U.S. 2nd Circuit Court Of Appeals
Identification of Parties and Procedural Details: Who is the Plaintiff/Appellant?
Who is the Defendant/Appealer? What is the cause of action? Who prevailed in lower
court? Who is appealing to what court?
Example - Original Defendants, Martha Stewart and Peter Bacanovic, are Appealing
their conviction for Insider Trading in the Federal District Court by the U.S.
Department of Justice, and asking for a New Trial based on a Claim of Perjury by the
Prosecution's Expert Star Witness - Lawrence F. Stewart of the U.S. Secret Service.
District Court found insufficient evidence for invalidating the Jury/Court Decisions,
and Stewart and Bacanovic are Appealing to the U.S. 2nd Court of Appeals.
Discussion of the Facts: Who did what to whom? What relief is being sought?
Example - Defendants were trading ImClone Stock based on insider information one
day prior to a Public Announcement of damaging financial information regarding
ImClone Corporation. Both Defendants were also accused of lying to FBI Agents
during an investigation of the Insider Trading Claim.
Statement and Discussion of the Legal Issues in Dispute: What decision of the
lower court is being challenged? What specific legal questions is the subject court
being asked to address? Is the question about Common-Law? A Statute?
Example – The Defendants are challenging the District Court's Denial of their right to
a re-trial based on the presumed Perjury of the Expert Witness. This is a question of
2
Federal Statutory Court Procedure, which did not require an investigation of the
truthfulness of witnesses Testimony.
Subject Court Final Decision: For Plaintiff? For Defendant? What happens next?
Example – Ruling is in favor of U.S. Prosecutors. The conviction of Martha Stewart
and Peter Bacanovic in District Court is Affirmed. Request for a New Trial is
Denied.
Summary of This Final Court’s Reasoning: What is the legal basis for the court’s
decision? Be sure to include relevant Dissenting Opinions.
Example – The Testimony of Lawrence F. Stewart was not reviewed for Perjury by
the Court of Appeals because his Testimony was not successfully challenged in
District Court, and was supported by three other witnesses. Even if Mr. Stewart had.
Fisker's lawsuit against insurance companykatiefehren
A lawsuit filed by Fisker against insurance company XL for denying its claim when 338 Karmas were lost in Sandy flooding, which had a value of $33 million.
The Art of the Pitch: WordPress Relationships and SalesLaura Byrne
Clients don’t know what they don’t know. What web solutions are right for them? How does WordPress come into the picture? How do you make sure you understand scope and timeline? What do you do if sometime changes?
All these questions and more will be explored as we talk about matching clients’ needs with what your agency offers without pulling teeth or pulling your hair out. Practical tips, and strategies for successful relationship building that leads to closing the deal.
State of ICS and IoT Cyber Threat Landscape Report 2024 previewPrayukth K V
The IoT and OT threat landscape report has been prepared by the Threat Research Team at Sectrio using data from Sectrio, cyber threat intelligence farming facilities spread across over 85 cities around the world. In addition, Sectrio also runs AI-based advanced threat and payload engagement facilities that serve as sinks to attract and engage sophisticated threat actors, and newer malware including new variants and latent threats that are at an earlier stage of development.
The latest edition of the OT/ICS and IoT security Threat Landscape Report 2024 also covers:
State of global ICS asset and network exposure
Sectoral targets and attacks as well as the cost of ransom
Global APT activity, AI usage, actor and tactic profiles, and implications
Rise in volumes of AI-powered cyberattacks
Major cyber events in 2024
Malware and malicious payload trends
Cyberattack types and targets
Vulnerability exploit attempts on CVEs
Attacks on counties – USA
Expansion of bot farms – how, where, and why
In-depth analysis of the cyber threat landscape across North America, South America, Europe, APAC, and the Middle East
Why are attacks on smart factories rising?
Cyber risk predictions
Axis of attacks – Europe
Systemic attacks in the Middle East
Download the full report from here:
https://sectrio.com/resources/ot-threat-landscape-reports/sectrio-releases-ot-ics-and-iot-security-threat-landscape-report-2024/
UiPath Test Automation using UiPath Test Suite series, part 3DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 3. In this session, we will cover desktop automation along with UI automation.
Topics covered:
UI automation Introduction,
UI automation Sample
Desktop automation flow
Pradeep Chinnala, Senior Consultant Automation Developer @WonderBotz and UiPath MVP
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
Generating a custom Ruby SDK for your web service or Rails API using Smithyg2nightmarescribd
Have you ever wanted a Ruby client API to communicate with your web service? Smithy is a protocol-agnostic language for defining services and SDKs. Smithy Ruby is an implementation of Smithy that generates a Ruby SDK using a Smithy model. In this talk, we will explore Smithy and Smithy Ruby to learn how to generate custom feature-rich SDKs that can communicate with any web service, such as a Rails JSON API.
Software Delivery At the Speed of AI: Inflectra Invests In AI-Powered QualityInflectra
In this insightful webinar, Inflectra explores how artificial intelligence (AI) is transforming software development and testing. Discover how AI-powered tools are revolutionizing every stage of the software development lifecycle (SDLC), from design and prototyping to testing, deployment, and monitoring.
Learn about:
• The Future of Testing: How AI is shifting testing towards verification, analysis, and higher-level skills, while reducing repetitive tasks.
• Test Automation: How AI-powered test case generation, optimization, and self-healing tests are making testing more efficient and effective.
• Visual Testing: Explore the emerging capabilities of AI in visual testing and how it's set to revolutionize UI verification.
• Inflectra's AI Solutions: See demonstrations of Inflectra's cutting-edge AI tools like the ChatGPT plugin and Azure Open AI platform, designed to streamline your testing process.
Whether you're a developer, tester, or QA professional, this webinar will give you valuable insights into how AI is shaping the future of software delivery.
DevOps and Testing slides at DASA ConnectKari Kakkonen
My and Rik Marselis slides at 30.5.2024 DASA Connect conference. We discuss about what is testing, then what is agile testing and finally what is Testing in DevOps. Finally we had lovely workshop with the participants trying to find out different ways to think about quality and testing in different parts of the DevOps infinity loop.
Essentials of Automations: Optimizing FME Workflows with ParametersSafe Software
Are you looking to streamline your workflows and boost your projects’ efficiency? Do you find yourself searching for ways to add flexibility and control over your FME workflows? If so, you’re in the right place.
Join us for an insightful dive into the world of FME parameters, a critical element in optimizing workflow efficiency. This webinar marks the beginning of our three-part “Essentials of Automation” series. This first webinar is designed to equip you with the knowledge and skills to utilize parameters effectively: enhancing the flexibility, maintainability, and user control of your FME projects.
Here’s what you’ll gain:
- Essentials of FME Parameters: Understand the pivotal role of parameters, including Reader/Writer, Transformer, User, and FME Flow categories. Discover how they are the key to unlocking automation and optimization within your workflows.
- Practical Applications in FME Form: Delve into key user parameter types including choice, connections, and file URLs. Allow users to control how a workflow runs, making your workflows more reusable. Learn to import values and deliver the best user experience for your workflows while enhancing accuracy.
- Optimization Strategies in FME Flow: Explore the creation and strategic deployment of parameters in FME Flow, including the use of deployment and geometry parameters, to maximize workflow efficiency.
- Pro Tips for Success: Gain insights on parameterizing connections and leveraging new features like Conditional Visibility for clarity and simplicity.
We’ll wrap up with a glimpse into future webinars, followed by a Q&A session to address your specific questions surrounding this topic.
Don’t miss this opportunity to elevate your FME expertise and drive your projects to new heights of efficiency.
GraphRAG is All You need? LLM & Knowledge GraphGuy Korland
Guy Korland, CEO and Co-founder of FalkorDB, will review two articles on the integration of language models with knowledge graphs.
1. Unifying Large Language Models and Knowledge Graphs: A Roadmap.
https://arxiv.org/abs/2306.08302
2. Microsoft Research's GraphRAG paper and a review paper on various uses of knowledge graphs:
https://www.microsoft.com/en-us/research/blog/graphrag-unlocking-llm-discovery-on-narrative-private-data/
Encryption in Microsoft 365 - ExpertsLive Netherlands 2024Albert Hoitingh
In this session I delve into the encryption technology used in Microsoft 365 and Microsoft Purview. Including the concepts of Customer Key and Double Key Encryption.
JMeter webinar - integration with InfluxDB and GrafanaRTTS
Watch this recorded webinar about real-time monitoring of application performance. See how to integrate Apache JMeter, the open-source leader in performance testing, with InfluxDB, the open-source time-series database, and Grafana, the open-source analytics and visualization application.
In this webinar, we will review the benefits of leveraging InfluxDB and Grafana when executing load tests and demonstrate how these tools are used to visualize performance metrics.
Length: 30 minutes
Session Overview
-------------------------------------------
During this webinar, we will cover the following topics while demonstrating the integrations of JMeter, InfluxDB and Grafana:
- What out-of-the-box solutions are available for real-time monitoring JMeter tests?
- What are the benefits of integrating InfluxDB and Grafana into the load testing stack?
- Which features are provided by Grafana?
- Demonstration of InfluxDB and Grafana using a practice web application
To view the webinar recording, go to:
https://www.rttsweb.com/jmeter-integration-webinar
JMeter webinar - integration with InfluxDB and Grafana
Suit from ixmation against Switch Lighting, October 23, 2014
1. IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IXMATION, INC., )
)
Plaintiff, )
v. ) Case No. 14-cv-6993
)
SWITCH BULB COMPANY, INC., a/k/a )
SWITCH LIGHTING CO. and WELLS )
FARGO BANK, N.A., ) Judge John Z. Lee
)
)
Defendants. )
MEMORANDUM OPINION AND ORDER
Plaintiff Ixmation, Inc., (“Ixmation”) and Defendant Switch Bulb Company, Inc. (“Switch”) entered into an agreement whereby Ixmation agreed to manufacture a custom automated system for Switch. To secure payment, Switch obtained a Letter of Credit, which had an expiration date of October 1, 2014, from Wells Fargo Bank, N.A., issued for Ixmation’s benefit. However, before Ixmation could complete its work and collect fully on the Letter of Credit, Switch told Ixmation to halt work on the project and later executed an assignment for the benefit of creditors under California law. In response, Ixmation commenced an arbitration proceeding against Switch in April of this year and, worried that the Letter of Credit would expire, filed this suit and a motion for temporary restraining order in September, requesting that the Court maintain the status quo until the arbitration is concluded.
Granting Ixmation’s motion, the Court previously issued a temporary restraining order placing an equitable lien on the Letter of Credit to maintain the status quo pending the arbitration. The Letter of Credit has since expired by its terms, but the equitable lien was extended over the funds that Switch previously had deposited with Wells Fargo to secure the 1
Case: 1:14-cv-06993 Document #: 60 Filed: 10/23/14 Page 1 of 17 PageID #:813
2. Letter of Credit. Ixmation now moves for issuance of a preliminary injunction to maintain the equitable lien over the funds. Switch opposes Ixmation’s motion, arguing that this Court lacks authority to enter the injunctive relief Ixmation requests, that Ixmation has not met the requirements for an equitable lien, and that Ixmation has not met its burden to obtain preliminary injunctive relief.
1 For the reasons discussed below, the Court concludes that Ixmation has failed to meet its burden to obtain a preliminary injunction, and its motion is denied.
I. Factual and Procedural Background
A. The Proposal, Production, and Breach
Ixmation builds and sells production machinery and automated systems. Switch designs, manufactures, and sells various LED lighting solutions. Switch and Ixmation entered into a contract (the “Proposal”) on July 12, 2013, for the manufacture of a custom automation system. See Am. Compl. ¶ 4; id. Ex. A. By the terms of the Proposal, Ixmation agreed to design and build the custom automation system for Switch in return for $3,908,000.00, and Switch issued a purchase order for the automation system. See id. ¶ 6; id. Ex. B. The Proposal required Switch to pay Ixmation in increments contingent on Ixmation’s successful completion of certain milestones. See id. ¶ 8; id. Ex. A. The Proposal’s Appendix, documenting Ixmation’s terms and conditions of sale, contained an arbitration provision requiring the parties to arbitrate, inter alia, breach of contract claims. Id. Ex. A, Appendix I, ¶ 19. The arbitration provision also required that any disputes regarding the Proposal would be governed by Illinois law. Id.
1 Switch concurrently moves to dismiss this lawsuit or in the alternative moves to stay the case and compel arbitration. See generally Def.’s Mot. Dismiss, or in Alt. Compel Arb. The Court has set a status hearing for November 3, 2014, at which time it will take up Switch’s motion. Additionally, two clean technology venture capital investment firms which are part of Switch’s assignment for benefit of creditors in California have moved to intervene in the proceedings here. See generally Intervenors’ Mot. Interv. Similarly, the Court will continue this motion and defer its consideration until the November 3, 2014 hearing.
2
Case: 1:14-cv-06993 Document #: 60 Filed: 10/23/14 Page 2 of 17 PageID #:814
3. Throughout the months following the Proposal and purchase order, the parties agreed to several change orders. Of particular relevance is a November 2013 change order that resulted in a credit of $573,670.00 to Switch and delayed the project delivery schedule by seven to nine weeks. See Pl’s Mot. Prel. Inj., Curtis Aff. ¶ 7. This delay was, at least partly, due to Switch unilaterally putting the project on hold for several weeks. Id. Switch later acknowledged in a February 28, 2014, email that the November 2013 change order’s revised delivery schedule meant Factory Assurance Testing (“FAT”), a production milestone stage, would not occur until the week of March 31, 2014. Id. ¶ 8; see also id. Ex. 2. In this email, Switch documented a detailed schedule for finishing production of the machine from the FAT stage of production through shipping and delivery in late April. See id. Ex. 2.
In August 2013, Ixmation requested a Letter of Credit from Switch to secure payment for the custom automation system. On August 5, 2013, Wells Fargo issued the Letter of Credit in the amount of $3,079,200.00. See Am. Compl. Ex. D. The Letter of Credit had an expiration date of September 1, 2014. See id. On November 25, 2013, at the request of Ixmation, the amount in the Letter of Credit was reduced to $2,858,194.50, and the expiration date was extended to October 1, 2014. See id. Ex. E. As Ixmation made progress on the manufacture of the custom automation system, it drew on the Letter of Credit. The first draw occurred in October 2013 and the second in January 2014, with the draws totaling $1,836,097.80. See id. ¶ 11. The first draw was authorized after Ixmation completed its mechanical design review stage of production. See Pl.’s Mot. Prelim. Inj., Ludwig Aff. ¶ 7. The second draw was authorized after Ixmation completed a sub-system debug of the custom automation system. See id. ¶ 8. Consequently, $1,022,096.70 remained in the Letter of Credit. See Am. Compl. ¶ 11.
3
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4. Ixmation would make no further draws. By early spring, a dispute between the parties arose. In March 2014, Ixmation was working on the FAT stage of production. During this time, Ixmation became concerned with Switch’s actions and communications. On March 18, 2014, Ixmation’s Senior Account Manager Randy Curtis met with Switch’s Project Manager Myron Moreno in San Jose, California, to continue discussions of FAT. See Pl.’s Mot. Prel. Inj., Randy Curtis Aff. ¶ 9. During this meeting, Moreno told Curtis that VantagePoint Capital, a venture capital firm that funded Switch, had laid off more than half of Switch’s employees, including employees who were working on the custom automation system and necessary to complete the FAT stage of production. See id. Despite this, Moreno indicated he would be coming to Ixmation’s place of business in Roselle, Illinois, at the end of March for FAT. See id. The following day, however, on March 19, 2014, Moreno told Curtis that Switch was “trending towards liquidation” and would not be able to provide parts and personnel necessary for Ixmation to complete FAT. See id. ¶ 10. These representations were confirmed on March 20, 2014, in an email from Moreno to Curtis. See id. ¶ 11; see also Am. Compl. Ex. G.
The parties continued communications through the end of March 2014. See Pl.’s Mot. Prel. Inj., Curtis Aff. ¶¶ 12–13. For its part, Switch asserts that it was Ixmation that unilaterally ceased work on the custom automation system before reaching additional production milestones that were necessary to draw additional funds from the Letter of Credit. See Def.’s Mem. Opp. 2. An exchange of letters in late March captured the state of the parties’ business relationship. By letter on March 27, 2014, Switch’s Executive Vice President Ronald Rudolph notified Ixmation that on March 24, 2014, Switch had requested that Ixmation stop work on the custom automation system and that further financial assurances from Switch were not forthcoming because “[I]xmation insisted from the beginning that the full cost of the [custom automation system] be 4
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5. deposited into a bank under letter of credit with funds to be released upon [I]xmation’s appropriate performance.” See Pl.’s Mot. Prelim. Inj., Ludwig Aff. ¶ 11; id. Ex. 1. Ixmation’s President Mick Macsek promptly responded to Switch on March 28, 2014, writing that it appeared the parties were in a contractual dispute and quoting a provision of the Proposal requiring the parties to put forth best efforts to resolve disputes. See id.; id. Ex. 2. Macsek’s letter served as Ixmation’s formal request for a meeting of the companies’ senior executives. See id. Ex. 2.
Ixmation, now cognizant of an impending breakdown in the parties’ relationship and Switch’s apparently precarious financial state, sent four senior executives to attend the meeting on April 3, 2014, in San Jose, California. Pl.’s Mot. Prelim. Inj., Ludwig Aff. ¶ 12. According to Ixmation, this meeting proved fruitless; Switch provided no answers to questions concerning the reason for Switch’s suspension of operations and apparent skeleton crew, and no satisfactory plan on how Switch intended to supply the parts and personnel necessary for Ixmation to perform FAT. See Pl.’s Mot. Prel. Inj., Curtis Aff. ¶¶ 12, 14.
B. Arbitration and Assignment for the Benefit of Creditors
Faced with its rapidly deteriorating business relationship with Switch, Ixmation filed for American Arbitration Association (“AAA”) arbitration on April 16, 2014. See Amend. Compl. ¶ 19. The timeline of arbitration thereafter becomes hazy. Each party insists that, after the April 16, 2014, filing by Ixmation, it was the other party that delayed further progress in the arbitration. Ixmation represented to the Court at the October 20, 2014 hearing that, after it had filed for AAA arbitration, it did not move to expedite the process or take any other actions to advance the arbitration in the hope that Switch would eventually agree to resolve their dispute.
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6. Switch insists that is was Ixmation who delayed the arbitration. See generally Def.’s Second Supp. Mem. Opp’n. Pl.’s Mot. TRO 10–11.
Regardless, the next significant action in the arbitration proceedings was an email sent to Ixmation by Kelly Turner of the AAA on May 6, 2014. In the email, Turner informed Ixmation that it had to pay an administration fee by July 17, 2014, before the AAA would appoint an arbitrator so that the arbitration could proceed. See Pl.’s Supp. Memo. Ex. 2. The AAA required this “proceed fee” because Ixmation had chosen to file its request for arbitration under a flexible fee schedule. See id. The email notice also imposed a deadline of May 20, 2014, for Switch to file an answer, counterclaim, or objection to Ixmation’s request to hold the arbitration in Chicago. See id.
A little less than one month after this email was sent, on May 30, 2014, Switch instituted an assignment for the benefit of creditors under California law.2 See id. Ex. 4. While Switch apparently informed the AAA of this assignment by email on June 30, 2014, see id., Ixmation did not receive notice of Switch’s assignment until the AAA sent an email to Ixmation on July 9, 2014. See id. Ex. 5. By this point, Ixmation still had not paid the required proceed fee to begin arbitration. The next week, on July 15, 2014, Ixmation finally paid the fee, requested that the arbitration proceed without Switch, and for the first time requested expedited briefing. See id. Ex. 6.
Thereafter a series of email communications occurred between Switch, Kelly Turner, and Ixmation. See generally id. Ex. 7. Turner contacted the parties, attempting to schedule an administrative conference call for the final weeks of July. See id. 7/16/14 Email from Kelly
2 An assignment for the benefit of creditors is a state-level equivalent to a bankruptcy proceeding. See Pl.’s Supp. Mem. Ex. 4 (6/30/14 email from Switch to the AAA) (“An [assignment for the benefit of creditors] is a state level insolvency proceeding undertaken under state law, in this case California[.]”).
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7. Turner to Switch and Ixmation. Ixmation replied on July 16, 2014, asking to schedule the administrative conference call for July 21 or July 22. See id. 7/16/14 Email from Ixmation to Kelly Turner. Turner then suggested a date of July 22, 2014. See id. 7/16/14 Email from Kelly Turner to Switch and Ixmation. Switch responded, indicating that week would not work for it. See id. 7/16/14 Email from Switch to Kelly Turner and Ixmation. The next day, Switch proposed a July 28 or July 29 date. See id. 7/17/14 Email from Switch to Kelly Turner and Ixmation. Thereafter Switch noted that it still was retaining counsel, that it needed to find counsel that could appear in Illinois, and that this process would take two to three weeks. See id. 7/29/14 Email from Switch to Kelly Turner and Ixmation. In an attempt to balance Switch’s need to find appropriate counsel with the need to avoid undue delay, Turner scheduled the conference call for August 15, 2014. See id. 7/29/14 email from Kelly Turner to Switch and Ixmation.
After Switch retained counsel, it determined it would contest the Chicago locale requested by Ixmation. See id. Ex. 9. The AAA set a deadline of August 29, 2014, for both sides to submit briefing supporting its requested choice of locale. See id. Ex. 9. August 29 also served as the deadline by which Switch was required to indicate whether it woiuld agree to a single arbitrator instead of the three-arbitrator panel. See id. On September 3, 2104, the AAA decided in favor of Ixmation and determined that the arbitration would take place in Chicago. See id. Ex. 11. The AAA set a deadline of September 17, 2014, for the parties to submit a list of potential arbitrators. See id. On October 3, 2014, the AAA appointed Randall Rapp as an arbitrator. See Def.’s Mot. Dismiss or Alt. Compel., Ex. A. On October 6, 2014, Switch indicated that it would prefer a panel of three arbitrators. See id. Ex. B. Switch’s request is the 7
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8. last activity reflected in the record. From the record, it appears that Ixmation never raised any concern about the expiration of the Letter of Credit with the AAA.
C. Procedural History of This Action
Ixmation filed a complaint and moved for a temporary restraining order (“TRO”) in the Circuit Court for Cook County, Illinois, on September 5, 2014. See Def.’s Notice Remov. ¶ 1; id. Ex. A. Switch removed the case to this Court based on diversity jurisdiction on September 9, 2014. See Def.’s Notice Remov. ¶ 2. Ixmation refiled its request for a TRO on September 10, 2014. See Pl.’s Mot. TRO. This Court held a hearing on Ixmation’s motion for a TRO on September 17, 2014. The Court set a briefing schedule, allowing Wells Fargo to file a response to Ixmation’s motion for a TRO and allowing Switch to file supplemental briefing opposing Ixmation’s motion on state law grounds.3 See 9/17/14 Min. Entry. The Court also encouraged the parties to explore settlement. See id.
The Court held another hearing on September 23, 2014. The Court noted that Switch’s supplemental briefing did not address the state law issues the Court requested, but rather reargued points Switch had already raised in its original response brief. See 9/23/14 Min. Entry. Rather than strike Switch’s brief, the Court granted Ixmation a one-day extension to file a brief replying to both Switch and Wells Fargo’s briefing. See id. The Court reset the hearing on Ixmation’s motion for TRO, originally set for September 24, 2014, to September 26, 2014. See id.
3 The Court also denied an earlier motion to dismiss filed by Switch arguing principally that the arbitration provision in the parties’ contracted precluded this Court from intervening in the parties’ dispute. The Court found Switch’s argument unpersuasive in light of Seventh Circuit precedent holding that a court can enter injunctive relief preserving the status quo and the meaningfulness of arbitration. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Salvano, 999 F.2d 211, 215 (7th Cir. 1993).
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9. On September 26, 2014, the Court held a hearing on Ixmation’s motion for TRO. The Court first granted Ixmation’s request to submit an amended complaint. See 9/26/14 Min. Entry. The Court then directed the parties to file supplemental briefing addressing the procedural history before the AAA. See id. The Court continued the hearing on Ixmation’s motion for TRO to September 30, 2014, at 12:30 pm. See id.
On September 30, 2014, the Court reconvened for a hearing on Ixmation’s motion for TRO. First, the Court addressed whether Wells Fargo should remain in the case. Ixmation asserted no claims against Wells Fargo and represented on the record at the September 26, 2014, hearing that it had no claims against Wells Fargo. See generally 9/30/14 Hr’g Tr. at 3, lns. 10– 13. Without a claim pending against Wells Fargo, the Court dismissed Wells Fargo from the lawsuit and denied Ixmation’s request to compel Wells Fargo to extend the Letter of Credit.4 See 9/30/14 Hr’g Tr. at 3–4, lns. 10–25, 1–18.
After dismissing Wells Fargo, the Court turned to Ixmation’s request for a TRO in the form an equitable lien.5 On the record before it, the Court found that Ixmation met the
4 Specifically, the Court found that Ixmation had not pleaded claims against Wells Fargo and admitted that it had no claims against Wells Fargo. The Court noted that under Federal Rule of Civil Procedure 65(d)(2), an injunctive order can only bind the parties, the parties’ officers, agents, servants, employees, and attorneys, and other persons in active concert or participation. See Fed. R. Civ. P. 65(d)(2). A person is in “active concert or participation” if they “aid and abet” the enjoined party or if they are in “privity” with the joined party. Blockowicz v. Williams, 630 F.3d 563, 567 (7th Cir. 2010). Ixmation bore the burden of proving that any third party it sought injunctive relief as to was within the scope of the injunction it sought to enter. Id. Ixmation had not met that burden because it failed to advance evidence that Wells Fargo acted in concert with Switch, was an agent of Switch, or was in privity with Switch. Furthermore, while the Court noted it could issue an injunction against a nonparty in order to preserve its ability to render judgment, see Herrlein v. Kanakis, 526 F.2d 252, 255 (7th Cir. 1975), the Court, mindful of its independent duty to ensure injunctions are appropriate in scope, see Chicago Board of Education v. Substance, Inc., 354 F.3d 624, 631–32 (7th Cir. 2003), declined to enter an injunction against Wells Fargo as a nonparty in this case.
5 Switch mischaracterizes the equitable lien imposed by the Court as a sua sponte form of relief not requested by Ixmation. Ixmation, however, proposed the equitable lien in its moving papers. See Pl.’s Supp. Mem. 9 (noting that preserving the status quo would be by equitable lien if a draw were ordered on the Letter of Credit and the proceeds held in escrow or trust).
9
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10. requirements for an emergency TRO and imposed an equitable lien on the Letter of Credit. The Court additionally held that, once the Letter of Credit expired by its own terms, the equitable lien would extend to that portion of the funds that Switch previously had deposited with Wells Fargo as collateral for the Letter of Credit sufficient to cover the balance that remained under the Letter of Credit. See 9/30/14 Hr’g Tr. at 9. Any additional amounts would be released to Switch. See id. The Court then scheduled a briefing schedule for Ixmation’s motion for preliminary injunction and set a hearing on the motion for October 14, 2014 at 4:30 p.m. See 9/30/14 Min. Entry. The Court also required Ixmation to post a bond in the amount of $10,000.00. See id.
Subsequently, on October 7, 2014, Switch requested an emergency extension of time to file its response to Ixmation’s motion for preliminary injunction. See Def.’s Mot. Ext. Time. The Court held a hearing on October 8, 2014, and granted the motion based upon Switch’s agreement to be bound by the TRO until October 20, 2014. See 10/8/14 Min. Entry.6
Switch subsequently filed a motion to dismiss or in the alternative compel arbitration and also requested leave to file an over-length response brief under Local Rule 7.1 to Ixmation’s motion for preliminary injunction. The Court granted Switch’s request and gave Ixmation two additional days to submit its reply brief. See 10/14/14 Min. Entry. The Court continued Switch’s motion and set it for hearing concurrent with Ixmation’s motion for preliminary injunction. See id.
On October 20, 2014, the Court heard argument on Ixmation’s request for preliminary relief. The Court also heard brief argument from two venture capital firms, VantagePoint
6 At the parties’ request, the Court also held a telephone conference on October 9, 2014. During the telephone conference, the parties represented that Wells Fargo did not wish to maintain the funds constituting the collateral for the Letter of Credit. See 10/9/14 Min. Entry. Switch proposed that the funds be placed in a separate account in another financial institution and agreed that the transfer would not alter the effect of the equitable lien over those funds. See id. The Court approved this request. See id.
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11. Cleantech Partners II, L.P., VantagePoint Venture Partners 2006 (Q), L.P. on their motion to intervene filed on October 18, 2014. After argument, the Court took the matter under advisement. That same day, the Court denied Ixmation’s motion. See 10/20/14 Min. Entry. This Memorandum Opinion and Order sets forth the reasoning for the Court’s denial.
II. The Court’s Authority to Issue Injunctive Relief
As an initial matter, Switch contests the Court’s authority to grant the equitable relief previously granted to Ixmation. Specifically, Switch cites to Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999) for the proposition that this Court cannot impose an injunction hindering Switch’s ability to transfer or otherwise use its assets as it sees fits. In Switch’s view, such an injunction would be nothing more than a prohibited prejudgment attachment. But Grupo Mexicano is distinguishable in two material respects. First, Grupo Mexicano involved a breach of contract action seeking only money damages. See Grupo Mexicano, 527 U.S. at 310 (focusing the question presented in the context of “an action for money damages”); see also Oak Leaf Outdoors, Inc. v. Double Dragon Int’l, Inc., 812 F. Supp. 2d 944, 946 (C.D. Ill. 2011) (noting that Grupo Mexicano determined that in a suit for money damages on a contractual breach theory such injunctive relief freezing assets pre-judgment was “historically unavailable from a court of equity”). Here, although Ixmation is seeking money damages in arbitration, it is seeking only equitable relief from this Court to preserve the status quo so that any judgment it may receive from the arbitration panel would be meaningful. See Salvano, 999 F.2d at 215 (district court has authority “to maintain the status quo without prejudice to the merits of any of the parties’ claims or defenses until an arbitration panel [can] consider the issues presented”).
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12. Furthermore, even after Grupo Mexicano, courts have recognized a district court’s authority to enter equitable relief preserving assets where there is a “nexus between the assets sought to be frozen through an interim order and the ultimate relief requested in the lawsuit.” U.S. ex rel. Rahman v. Oncology Associates, 198 F.3d 489, 496–97 (4th Cir. 1999). Here, a nexus plainly exists between the Letter of Credit, which Switch had arranged with Wells Fargo for Ixmation’s benefit to secure payment under the agreement and Ixmation’s claim. Indeed, Switch itself admitted in its email communications that the Letter of Credit served to cover exactly the production of the custom automation system by Ixmation that is the subject of Ixmation’s claim. Accordingly, the reasoning in Grupo Mexicano did not apply in this case while the Letter of Credit was in effect, and the Court had the authority to preserve the status quo by imposing an equitable lien over it and the funds that could be drawn from it.7
That said, whether the equitable lien would extend to the funds that Switch had deposited with Wells Fargo as collateral for the Letter of Credit upon the expiration of the Letter of Credit itself presents an interesting, and previously undecided, question of law.8 But the
7 Contrary to Switch’s contention, Grupo Mexicano also does not “overrule” American Hospital Supply Corp. v. Hospital Products Ltd., 780 F.2d 589 (7th Cir. 1986). As Oak Leaf observes, the Seventh Circuit’s holding in American Hospital Supply Corp. did not consider the key issue in Grupo Mexicano, that is, “whether a district court has the authority to enter a preliminary injunction when the requesting party seeks only money damages for breach of contract.” Oak Leaf Outdoors, 812 F. Supp. 2d at 948 (emphasis added). Moreover, this Court relied on American Hospital Supply Corp. for the proposition that a plaintiff faced with an imminently insolvent defendant suffers irreparable harm. The Court did not invoke American Hospital Supply Corp., as Switch appears to suggest, for the general proposition that an equitable lien is available to Ixmation. Furthermore, it is well-established that a letter of credit and its associated funds does not become part of the bankruptcy estate of the debtor. See In re Duplitronics, Inc., 183 B.R. 1010, 1015 (Bankr. N.D. Ill. 1995).
8 Under Illinois law an equitable lien requires “(1) a debt, duty or obligation owing by one person to another, and (2) a res to which that obligation fastens.” Jacobsen v. Conlon, 302 N.E.2d 471, 473 (Ill. App. Ct. 1973). In the proper circumstances, “[i]f the res to which the lien attaches is converted into money, the Court in a proper case will treat the money as substituted for the property.” In re Brass Kettle Rest., Inc., 790 F.2d 574, 575 (7th Cir. 1986) (quoting Marshall Savings & Loan Ass. v. Chi. Nat. Bank, 206 N.E.2d 117, 120 (Ill. App. Ct. 1965)).
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13. Court need not address this question here, because it finds, after consideration of the parties’ papers, that Ixmation has failed to demonstration that a preliminary injunction is appropriate.
III. Ixmation’s Request for Preliminary Injunction
A. Legal Standard
Ixmation moves for a preliminary injunction maintaining the TRO. “[A] preliminary injunction is an exercise of a very far-reaching power, never to be indulged in except in a case clearly demanding it.” Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the USA, Inc., 549 F.3d 1079, 1085 (7th Cir. 2008) (internal citations and quotations omitted). The moving party must make a clear showing that it is entitled to the relief it seeks. Goodman v. Ill. Dep’t of Fin. & Prof’l Regulation, 430 F.3d 432, 437 (7th Cir. 2005). A party seeking a preliminary injunction must show that (1) it is reasonably likely to succeed on the merits; (2) no adequate remedy at law exists; (3) it will suffer irreparable harm which, absent injunctive relief, outweighs the irreparable harm the respondent will suffer if the injunction is granted; and (4) the injunction will not harm the public interest. Joelner v. Vill. of Wash. Park, Ill., 378 F.3d 613, 619 (7th Cir. 2004). Analysis of these elements occurs in two phases: a threshold phase and a balancing phase. See Girl Scouts of Manitou Council, 549 F.3d at 1085–86.
“To survive the threshold phase, a party seeking a preliminary injunction must satisfy three requirements.” Id. at 1086. First, the party must show that it will suffer irreparable harm without the injunction. Second, the party must demonstrate that traditional legal remedies would be inadequate. Third, the party must establish that its claim has some likelihood of succeeding on the merits. If the party cannot make a showing as to each of these threshold requirements, the preliminary injunction must be denied. Id. If, however, the party meets this initial threshold, the Court will proceed to the balancing phase of the analysis. Id.
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14. In the balancing phase, the party seeking the injunction must demonstrate that its harm in the absence of such relief outweighs any harm that may be suffered by the non-moving party if the injunction is granted. Id. In making this determination, the Court employs a sliding scale approach: “[t]he more likely the plaintiff is to win, the less heavily need the balance of harms weigh in his favor, the less likely he is to win, the more need it weigh in his favor.” Id. (quoting Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 389 (7th Cir. 1984)). Additionally, where appropriate, this balancing process “should . . . encompass any effects that granting or denying the preliminary injunction would have on nonparties (something courts have termed the “public interest”).” Id. (quoting Ty, Inc. v. Jones Grp., Inc., 237 F.3d 891, 895 (7th Cir. 2001)). Taking into account all of these considerations, the Court must exercise its discretion “to arrive at a decision based on a subjective evaluation of the import of the various factors and a personal, intuitive sense about the nature of the case.” Id. (internal citations and quotations omitted).
B. Ixmation Has Failed to Show Irreparable Harm
On a fuller record and with more developed argument, the Court finds that Ixmation’s unwarranted delay in seeking this injunction belies its contention of irreparable harm and defeats its motion for preliminary injunction. Delay is a factor in assessing the existence of irreparable harm, Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025 (7th Cir. 1979), and unexcused delay on the part of parties seeking extraordinary injunctive relief is grounds for denial of a motion “because such delay implies a lack of urgency and irreparable harm.” Newdow v. Bush, 355 F. Supp. 2d 265, 292 (D.D.C. 2005). “[T]he likelihood of irreparable harm takes into account how urgent the need for equitable relief really is.” Michigan v. U.S. Army Corps of Engineers, 667 F.3d 765, 788 (7th Cir. 2011). This is particularly true where the party seeking injunctive relief has “knowledge of the pending nature of the alleged irreparable harm.”
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15. Open Top Sightseeing USA v. Mr. Sightseeing, LLC, Case No. CV 14-820 (BAH), --- F. Supp. 2d ----, 2014 WL 2758603, at *3 (D.D.C. June 18, 2014) (citing Fund for Animals v. Frizzell, 530 F.2d 982, 987 (D.C. Cir. 1975)). Numerous courts in this district have refused to issue preliminary injunctions on this ground. See, e.g., Johnson Publ’g, Co., Inc. v. Willitts Designs Int’l, Inc., No. 98 C 2653, 1998 WL 341618, at *8 (N.D.Ill. June 22, 1998) (presumption of irreparable harm weak where the plaintiff waited four months to request injunctive relief); Stokley–Van Camp, Inc. v. Coca–Cola Co., No. 86 C 6159, 1987 WL 6300, at *3 (N.D.Ill. Jan. 30, 1987) (denying “extraordinary remedy” of preliminary injunction despite presumption of irreparable harm because plaintiff waited three months before filing action and the defendant was spending substantial amounts to market its product).
Here, although Ixmation initiated the arbitration on April 16, 2014, it did not pay the proceed fee required by AAA until almost three months later, on July 15, 2014. At a minimum, Ixmation received notice of the required proceed fee on May 6, 2014. And although Ixmation did not know that Switch had executed an assignment for the benefit of creditors until early July, Ixmation became aware of Switch’s precarious financial state in March 2014. Perhaps more importantly, Ixmation knew in no uncertain terms that the Letter of Credit would expire on October 1, 2014. Yet, Ixmation did not seek to expedite the AAA proceedings until July 16, 2014. And, when it did, it only did so in a one-line request that the AAA “select an arbiter and hearing date on an expedited schedule.” See Pl.’s Supp. Mem., Ex. 6. After this request, Ixmation never made another request to expedite the appointment of the arbitrators or otherwise hasten the proceeding, and it never raised any concern about the expiration of the Letter of Credit with the AAA.
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16. Instead, Ixmation waited until September 5, 2014, to file a request in state court seeking a TRO to preserve that expiration of the Letter of Credit. This was less than one month before the expiration date and nearly four and a half months after Ixmation first filed for arbitration. When asked to explain the delay, Ixmation’s counsel stated during the preliminary injunction hearing that Ixmation had waited until September in the hope that the parties would be able to come to an amicable resolution rather than proceeding with litigation. But, this strategy was at its own risk and its peril. “Although delay may not preclude the grant of ultimate relief, it may preclude preliminary relief because it undermines the sense of urgency that typically accompanies a motion for preliminary injunction.” Silber v. Barbara’s Bakery, Inc., 950 F. Supp. 2d 432, 441 (E.D.N.Y. 2013) (finding five-month delay in moving for preliminary injunction defeated a finding of irreparable harm).
To be clear, the Court’s conclusion that Ixmation’s delay precludes preliminary relief does not absolve Switch of blame. On the record before the Court, it appears Switch may have been less than forthright with Ixmation regarding its financial condition in March 2014, failed to communicate its assignment for the benefit of creditors to Ixmation in a timely fashion, and used the procedural devices available to it to prolong the arbitration proceedings, such as challenging the location of the arbitration and insisting upon the appointment of three arbitrators. But, Ixmation should have done its part to expedite the arbitration in light of the Letter of Credit’s October 1 expiration date. It did not do so. “It is horn-book law . . . that a person who seeks the protection of equity must do equity.” In re Thomas, 204 F.2d 788, 794 (7th Cir. 1953). The Court finds that Ixmation’s failure to seek an expeditious resolution of the arbitration proceeding and delay in seeking relief from the Court, despites its full knowledge of the pending October 1 16
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17. deadline and reason to doubt Switch’s continuing financial health, fatally undermines its ability to demonstrate the existence of irreparable harm. For this reason, Ixmation’s motion is denied.
IV. Conclusion
For the reasons stated herein, Ixmation’s Motion for Preliminary Injunction [36] is denied.
ENTERED: 10/23/14 ________________________
Hon. John Z. Lee
United States District Judge
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