Opinion ID: 2636667
Heading Depth: 2
Heading Rank: 1

Heading: the district court properly granted a permanent injunction because legal and administrative remedies were inadequate

Text: ¶ 22 We next address whether the district court properly granted injunctive relief or if instead Mack was required to first exhaust his administrative remedies before seeking injunctive relief. We review a grant of equitable relief for an abuse of discretion. Harline v. Campbell, 728 P.2d 980, 984 (Utah 1986). We review the underlying legal questions, such as whether a party is required to exhaust administrative remedies, for correctness. State v. Wagenman, 2003 UT App 146, ¶ 6, 71 P.3d 184. As discussed below, neither the standard for injunctive relief nor the Securities Act require Mack to submit to the administrative action before seeking injunctive relief from the district court. ¶ 23 A court may only grant a permanent injunction when legal remedies are inadequate. Johnson v. Hermes Assocs., Ltd., 2005 UT 82, ¶ 13, 128 P.3d 1151. A legal remedy is inadequate when `[a party] is unlikely to be made whole by an award of monetary damages or some other legal ... remedy,' Id. ¶ 20 n. 8 (alteration in original)(quoting 42 Am.Jur.2d Injunctions § 33 (2004)), or the legal remedy is not as practicable and efficient toward the ends of justice as an injunction. Hunsaker v. Kersh, 1999 UT 106, ¶ 9 n. 1, 991 P.2d 67 (quoting 42 Am. Jur.2d Injunctions § 39). ¶ 24 In the present case, Mack alleges that defending his interests in an administrative process will result in irreparable harm to his reputation, as well as require him to incur extensive expenses and expend great amounts of time. The only available legal remedy for such damage would be a monetary award. However, as Mack alleges, a monetary award could not compensate for the damage to his reputation or the unnecessary stress and trouble he would encounter if the administrative hearing was later found to have been legally barred. Moreover, to obtain a monetary award, Mack would be required to see the administrative action to its conclusion, which could involve a trial de novo and a possible appeal. See Utah Code Ann. 63G-4-402 (Supp.2008). In this case, the process of pursuing his res judicata arguments in the administrative hearing itself constitutes the harm for which Mack seeks relief. If he is required to submit to that harm before being permitted to seek a remedy for it, the inadequacy of the remedy seems self-evident. See Cont'l Can Co. v. Marshall, 603 F.2d 590, 597 (7th Cir.1979). Therefore, the district court did not abuse its discretion in determining that legal remedies were inadequate. ¶ 25 The Division, however, argues that a legal remedy was not only an adequate remedy, but that Mack was required to exhaust the administrative process that would itself occasion the monetary damages. We disagree. While it is true that both statute and case law strongly favor exhaustion of remedies, exhaustion is not required in this case. In legal actions based on the Utah Uniform Securities Act, a party is required to exhaust all administrative remedies when challenging the final decision of an administrative agency. See Utah Code Ann. § 61-1-18.6 (Supp. 2008) (incorporating the Utah Administrative Procedures Act); Id. § 63G-4-401 (Supp. 2008) (allowing judicial review of a final agency action only after exhausting all administrative remedies available). But Mack is not seeking review of a final agency decision; he is instead attempting to prevent what he claims is a duplicative and unlawful proceeding. Thus, the exhaustion requirement does not apply to Mack's claim.