Opinion ID: 2639694
Heading Depth: 1
Heading Rank: 4

Heading: Did the district court apply the correct legal standard in considering the request for a preliminary injunction?

Text: [¶ 6] We review the question of whether the district court applied the proper legal standard de novo. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 (Wyo. 1993). Wyo. Stat. Ann. § 1-28-102 (LexisNexis 2009) states: When it appears by the petition that the plaintiff is entitled to relief consisting of restraining the commission or continuance of some act the commission or continuance of which during the litigation would produce great or irreparable injury to the plaintiff, or when during the litigation it appears that the defendant is doing, threatens to do, or is procuring to be done some act in violation of the plaintiff's rights respecting the subject of the action and tending to render the judgment ineffectual, a temporary order may be granted restraining the act. The order may also be granted in any case where it is specially authorized by statute and by municipal ordinance adopted pursuant to W.S. 15-1-103(a)(xlvi). [¶ 7] With respect to temporary injunctions granted during the pendency of a litigation, we have said: The purpose of a temporary injunction is to preserve the status quo until the merits of an action can be determined. And a temporary injunction rests upon an alleged existence of an emergency, or a special reason for such an order, before the case can be regularly heard. Also, the award of a temporary injunction is an extraordinary remedy which will not be granted except upon a clear showing of probable success and possible irreparable injury to the plaintiff, lest the proper freedom of action of the defendant be circumscribed when no wrong has been committed. Weiss v. State ex rel. Danigan, 434 P.2d 761, 762 (Wyo. 1967) (citations omitted). In granting temporary relief by interlocutory injunction courts of equity do not generally anticipate the ultimate determination of the questions of right involved. They merely recognize that a sufficient case has been made out to warrant the preservation of the property or rights in issue in statu quo until a hearing upon the merits, without expressing, and indeed without having the means of forming a final opinion as to such rights. Stowe v. Powers, 19 Wyo. 291, 116 P. 576, 581 (1911) (citation and quotation marks omitted). [¶ 8] Appellants argue that the district court applied a federal standard not used in Wyoming when it required some showing of likelihood of success on the merits before it granted the preliminary injunction. The Tenth Circuit in Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250, 1255 (10th Cir. 2003) stated that [a] party seeking a preliminary injunction bears the burden of showing: (1) a substantial likelihood of prevailing on the merits; (2) irreparable harm unless the injunction is issued; (3) [that] the threatened injury outweighs the harm that the preliminary injunction may cause the opposing party; and (4) [that] the injunction, if issued, will not adversely affect the public interest. (Citation and quotation marks omitted.) Appellants contend that the district court used this standard, instead of Wyoming law, in reaching its conclusion. This is simply incorrect. The district court found that there is a substantial likelihood that GST will prevail substantially on the merits[.] However, the district court did not mention the federal standard or quote any federal precedent in its Findings of Fact. In addition, a review of the standard set forth above as described in Weiss v. State ex rel. Danigan makes it clear that likelihood of success on the merits is a factor that a district court must consider before granting a preliminary injunction under Wyoming law. Weiss, 434 P.2d at 762. The district court properly applied Wyoming law. [¶ 9] Appellants also contend that the district court improperly based its decision on the fact that the contracts signed by Appellants provide for injunctive relief. Appellants claim that the court ordered the injunction as a matter of contract, and therefore did not exercise its equitable powers in issuing the injunction. The district court did make a finding of fact that the non-compete agreements specifically authorize injunctive relief, however, it did so in the context of analyzing the facts under the proper standard for injunctive relief. It is proper for a court acting in equity to consider the remedies contemplated by the parties in reaching its conclusion on the equities. See, e.g., Dewey v. Wentland, 2002 WY 2, ¶¶ 35-42, 38 P.3d 402, 416-17 (Wyo. 2002). The district court did not erroneously award an injunction pursuant to contract but properly applied the equitable standards for granting an injunction. [¶ 10] Appellants next claim that the district court's findings of fact are inadequate as a matter of law because the court did not make a finding that there was no adequate remedy available at law. Although actions for injunctive relief are authorized by statute, Wyo. Stat. §§ 1-28-101 to -111 (1988 & Supp. 1996), they are, by nature, requests for equitable relief which are not granted as a matter of right but are within the lower court's discretion. Rialto Theatre, Inc. v. Commonwealth Theatres, Inc., 714 P.2d 328, 332 (Wyo. 1986). Injunctions are issued when the harm is irreparable and no adequate remedy at law exists. Id. ; Gregory v. Sanders, 635 P.2d 795, 801 (Wyo. 1981). Injunctive relief is appropriate when an award of money damages cannot provide adequate compensation. Rialto Theatre, Inc., 714 P.2d at 332. An injury is irreparable where it is of a peculiar nature, so that compensation in money cannot atone for it. Gause v. Perkins, 56 N.C. 177 (1857). Weiss v. Pedersen, 933 P.2d 495, 498-99 (Wyo. 1997) (quotation marks omitted), overruled in part on other grounds by White v. Allen, 2003 WY 39, 65 P.3d 395, 399 (Wyo. 2003). The district court found, GST will suffer immediate, great, and irreparable harm and damage in the event that Defendants Noecker and LaReau and their company, CBM GeoSolutions, are allowed to compete with GST in violation of the covenants-not-to-compete between Noecker and LaReau and WellDog that were purchased by GST. Underlying that conclusion were findings that Appellants had been trained by WellDog in the innovative technology now used by GST to provide services to its customers. GST's representative testified that the innovative technology used by the company is essential to its competitive edge in the marketplace and that only a few companies provide similar services in the market. He further testified that some of the services offered by Appellants involved disclosing information on the process to customers, which would cause permanent loss of those customers because they would no longer require the services of a company like GST. The district court found that this would constitute irreparable harm. Irreparable harm is, by definition, harm for which there can be no adequate remedy at law. The district court's findings were not insufficient as a matter of law.