Reciprocal Litigation Undermines Claim for Injunctive Relief (Tradition Chile v. ICAP Securities USA)

Obtaining preliminary injunctive relief is never easy, even when a non-compete violation is established. It's even more difficult, however, for a plaintiff to convince the court to issue an injunction when it has been a defendant in the exact same type of litigation and argued against injunctive relief.

That scenario in fact led a New York court to deny preliminary injunctive relief for a financial institution, Tradition Chile Argentes, when it sought to prevent a competitor from hiring several of its inter-dealer brokers. The court held that the plaintiff could not demonstrate "irreparable injury", a showing courts require as a condition of preliminary injunctive relief. Normally, in non-compete disputes, the irreparable injury showing is met because harm from continued competition is ongoing and difficult to redress by way of damages.

However, Tradition Chile had argued in another case (when it was a defendant) that injunctive relief was inappropriate because damages were calculable. The court denied the preliminary injunction motion and used its prior litigation position against Tradition Chile, citing a state court appellate decision which stated:

"the parties in this industry have been asserting alternative and contrary positions depending on which side of a particular suit they are on. Their interpretation of the relevant case law seems to depend, not on the individual facts of the matters, but rather whether in each particular instance, they are the party seeking to prevent the alleged misconduct or whether they are defending against the conduct. This type of self-serving litigation unfortunately appears to have become routinely practiced."

Though no two non-compete cases are alike, it is always helpful to be able to use an adversary's prior history against it.

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Court: United States District Court for the Southern District of New York
Opinion Date: 1/12/10
Cite: Tradition Chio Agentes de Valores LTDA v. ICAP Securities USA LLC, 2010 U.S. Dist. LEXIS 3877 (S.D.N.Y. Jan. 12, 2010)
Favors: Employee
Law: New York