Opinion ID: 201049
Heading Depth: 2
Heading Rank: 2

Heading: Choosing the Standard.

Text: 29 It is familiar lore that the issuance of a preliminary injunction depends on the outcome of a four-part inquiry. See, e.g., Ross-Simons I, 102 F.3d at 15; Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 5 (1st Cir.1991). C-H asseverates that this inquiry is inapropos here because a federal court must apply state attachment standards to motions seeking prejudgment freeze orders. As best we can decipher its asseveration, C-H seems to be saying that, in cases where the relief sought is in the nature of an equitable attachment, Fed.R.Civ.P. 65 should be read in light of Fed.R.Civ.P. 64 and be construed as importing state-law standards for determining the availability of relief. 3 BTG disagrees. It maintains that this case is a prototypical Rule 65 case — no more and no less — and that, therefore, the usual four-part test pertains. 30 To begin, circuit precedent suggests the use of the traditional four-part standard. In Teradyne, 797 F.2d at 51-57, we applied this standard in very similar circumstances (albeit without focused discussion). So too Unisys Corp. v. Dataware Products, Inc., 848 F.2d 311 (1st Cir.1988), in which we found that the disputed order resembled an injunction and applied the same quadripartite test. Id. at 314. 31 C-H attempts to blunt the force of these precedents by arguing, first, that the decision to utilize the four-part standard in Unisys was not part of the court's holding (a point that, for argument's sake, we are willing to assume); and second, that Teradyne should be read narrowly. To that end, C-H declares that the Teradyne court recognized the availability of an alternative equitable attachment standard. But that ipse dixit misreads the opinion: the Teradyne court discussed the alternative of equitable attachment only in considering the appealability of the lower court's order. See Teradyne, 797 F.2d at 45-47. Having determined (as have we) that the requested relief was really in the nature of an injunction, the court went on to apply the traditional four-part test in a straightforward and unequivocal manner. See id. at 51-52. There are no two ways about it; Teradyne stands four-square for the proposition that a prejudgment freeze order is in the nature of an injunction and that, therefore, its propriety should be analyzed under the traditional four-part test. 32 C-H next seeks to minimize the impact of these precedents by citing to decisions of other courts. This is wasted motion. The rule is firmly settled that, in a multi-panel circuit, a newly constituted panel is bound by prior panel decisions directly on point. See Jusino v. Zayas, 875 F.2d 986, 993 (1st Cir.1989). Although there are two well-defined exceptions to this rule, see Williams v. Ashland Eng'g Co., 45 F.3d 588, 592 (1st Cir.1995), neither applies here. 4 33 In all events, the precedents that C-H marshals are not persuasive. A clear majority of courts confronting similar circumstances have approved the use of the traditional four-part preliminary injunction standard. See, e.g., United States ex rel. Taxpayers Against Fraud v. Singer Co., 889 F.2d 1327, 1331 (4th Cir.1989); EBSCO Indus., Inc. v. Lilly, 840 F.2d 333 (6th Cir.1988); Newby v. Enron Corp., 188 F.Supp.2d 684, 707 (S.D.Tex.2002); cf. Deckert v. Ind. Shares Corp., 311 U.S. 282, 290, 61 S.Ct. 229, 85 L.Ed. 189 (1940) (finding injunction reasonable because available remedies at law would be inadequate). Although most of these decisions have applied this standard without any developed analysis of the issue that C-H advances here, see, e.g., Singer Co., 889 F.2d at 1330-31, resort to that standard makes eminently good sense in this context. 34 With the exception of a pair of Eleventh Circuit cases — to which we shall return — the precedents to the contrary comprise isolated district court rulings. To the extent that these cases apply state standards rather than the traditional four-part test to determine the availability of preliminary injunctive relief under Rule 65, see, e.g., Hasbro, Inc. v. Serafino, 958 F.Supp. 19, 22-23 (D.Mass.1997); Anderson Foreign Motors, Inc. v. New England Toyota Distrib., Inc., 475 F.Supp. 973, 978 (D.Mass.1979), we regard them as wrongly decided. Moreover, they are not fairly representative of the genre. See, e.g., Hunter v. Youthstream Media Networks, Inc., 241 F.Supp.2d 52, 54 (D.Mass.2002) (applying the traditional four-part preliminary injunction standard in analogous circumstances). 35 We turn now to the Eleventh Circuit cases hawked by C-H. See Rosen v. Cascade Int'l, Inc., 21 F.3d 1520 (11th Cir.1994); Mitsubishi Int'l Corp. v. Cardinal Textile Sales, Inc., 14 F.3d 1507 (11th Cir. 1994). Those opinions contain language which, at first blush, might be read to suggest that the Eleventh Circuit follows a rule opposite to that formulated in Teradyne. See, e.g., Mitsubishi, 14 F.3d at 1521-22 (stating that Rule 64, and not Rule 65 ... provides the standard for evaluating a request for preliminary injunctive relief that is, in reality, no more than a request for a prejudgment attachment). Taken in context, however, this language does not betoken an irreconcilable conflict. 36 In Rosen, the Eleventh Circuit made clear that district courts had no power under Rule 65 to issue a preliminary injunction that amounts to a prejudgment attachment when the underlying action seeks only monetary damages and no statute specifically authorizes ancillary prejudgment relief. Rosen, 21 F.3d at 1529. The focus of the case at hand is different (although we are sympathetic to Rosen's core holding, we do not need to pass upon that question here). Furthermore, both Rosen and Mitsubishi dealt with assets that seem to have been located within the forum state (a circumstance that, as C-H has acknowledged, is absent here). For that reason, the district court in each case actually was applying Rule 64, not Rule 65. Nothing in either decision fairly can be read to support the notion that state standards govern the determination of when a federal court, acting under Rule 65, can issue an injunction in the nature of a freeze order designed to affect assets located outside the forum state. 37 C-H has a fallback position. It observes that Grupo Mexicano, 527 U.S. at 330-31, 119 S.Ct. 1961, explicitly preserves the availability of state-law remedies. This is true as far as it goes — but it does not take C-H very far. In those few sentences, the Grupo Mexicano Court explained that a freeze order related to property in which the putative creditor possessed no legal or equitable interest essentially amounted to a prejudgment attachment. The Court then stated that allowing such relief in an action seeking only remedies at law could render Federal Rule of Civil Procedure 64, which authorizes use of state prejudgment remedies, a virtual irrelevance. Id. at 330, 119 S.Ct. 1961. The Court's reasoning supports the continued vitality of Rule 64 — but the mere fact that state attachment standards remain applicable in federal courts under Rule 64 tells us nothing about the wonted operation of Rule 65. C-H is not seeking an attachment under Rule 64, and it has identified no property that is subject to the district court's in rem jurisdiction. 38 At the expense of carting coal to Newcastle, we add that the very nature of a freeze order counsels against commingling the jurisprudence of Rule 65 with that of Rule 64. Even though a freeze order may serve many of the same ends as an attachment, the former acts upon a party whereas the latter is directed at specific property. Restraining (or compelling) individual action is especially strong medicine, and courts should hesitate to issue such orders on an interlocutory basis without a showing of urgent need. The traditional four-part standard for preliminary injunctive relief provides a prophylaxis against the hasty or intemperate use of that power. Consequently, sound policy considerations support the imposition of that standard in connection with freeze orders. 39 To say more would be to paint the lily. We hold that the traditional four-part preliminary injunction standard applies in full flower to motions brought under Rule 65 in hopes of securing prejudgment freeze orders.