Braintree and calendar


Yesterday the First Circuit issued a decision on preliminary injunctions and arbitration that is just full of points of interest.  Braintree Laboratories, Inc. v. Citigroup Global Markets, Inc. []

But first, a short squib on upcoming events.  Tomorrow there's a free one-hour national webinar "event" discussing law, women and cancer ("The Intersection of the Big C and the Practice of Law") from the Women Lawyers Alliance.  On Friday, we have the Red Mass, followed by the portrait hanging ceremony for MJ David Cohen.  Next week is the District Court judicial conference at the Samoset.  As always, your itnrepid reporter will be on the beat, ready to impart any useful gleanings. 

Back to Braintree.     

The context is claims against a broker for misrepresentation regarding auction-rate securities.  The district court ordered arbitration pursuant to the brokerage agreement and denied a request for a preliminary injunction.  The First Circuit (Howard, J.) affirmed.  Here are some of the useful take-aways:

1.  the decision discusses the standard for obtaining a mandatory v. an ordinary injunction, and when to deem an injunction mandatory;

2. it affirms the denial of the injunction on the basis of inadequate showing of irreparable harm, rejecting the appellants' argument that its ongoing inability to liquidate its investments was generating incalculable losses from missed opportunities.  The Court noted that if this argument worked, then any investor could show irreparable harm by claiming that "she could put money to better use than simply letting it accrue interest at the prevailing rate.  An asserted injury so ubiquitous cannot serve as the basis for the issuance of a preliminary injunction."  If a claim of irreparability could ever be based on outperforming the market, "it could only be on the basis of a substantial evidentiary showing" lacking in this record.  Hence, the door remains open a sliver on this argument.

3.  it concludes that the district court stayed the action pending arbitration instead of dismissing it outright (if the latter, the decision would be final; the former makes it interlocutory) because, while the decision itself was silent on this point, the trial court granted the motion to compel which asked for such relief.  The Court goes on to ask district courts please to be clear on this point in the future.

4.  It rejects an argument as waived when the opening brief referenced it only in a "cursory footnote" and adds "[t]he slight development in the reply brief does nothing to help matters, as arguments raised there for the first time come too late…"  This confirms the point that it is always dangerous to put an argument only in a footnote with this Court — this decision confirms that point, when you develop the argument in the reply brief.  So don't try to slip in an argument in the backdoor in your opening brief in the hopes that the other side will pay no attention, so you can then bring it out in all its glory in the reply.  And on the appellee side, this bolsters the merits of a strategy of just not responding to such bitsy scattered arguments, which silence underscores that the appellee had no opportunity to respond to the arguments as developed in the reply (although there are always risks if you don't respond at all aside from saying an argument is waived). 

5.  It addresses an argument requesting exercise of pendent appellate jurisdiction, noting that such instances are "hen's teeth rare," and rejects the request on the grounds that the preliminary injunction and arbitrability issues were not inextricably intertwined.

6.  It states that the public interest referred to in the injunction test means the issuance of the injunction itself and not "other claims that happen to touch upon the factual circumstances giving rise to the request for the injunction.  Just because the public may have a stake in a non-appealable decision does not permit the appellant to handcuff that decision to a request for a preliminary injunction and thereby attain immediate review.  Here, even if there were some public interest in Braintree litigating its claims in a court rather than before an arbitrator, that would have no bearing on our consideration of whether the public has an additional but separate interest in the preliminary rescission of Braintree's contract pending the final outcome of the dispute."