Irreparable Harm to the Irreparable Harm Standard

Courts have fundamentally distorted and mutated the irreparable harm standard for preliminary injunctions, especially in Administrative Procedures Act cases.[1] Courts have turned the irreparable harm standard away from its roots, looking to whether the financial harm is severe enough. But what courts should be looking at is whether the harm is unrecoverable, regardless of the amount. With this proper understanding in place, it becomes clear that when the government enforces an illegal regulation, the harm is per se irreparable, because money damages cannot be recovered under the APA. Recently, we beat the government in an APA trial wherein the Court correctly laid out the irreparable harm standard – hopefully the start of return to the proper application of the irreparable harm test.[2]

The elements of a preliminary injunction (or administrative stay) are likely well-familiar to practitioners: the movant must establish “(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships, and (4) a fit (or lack of friction) between the injunction and the public interest.”[3] When the government is the non-movant, the balance of harms and public interest prongs merge. Turning to irreparable harm specifically, there must be “an actual, viable, presently existing threat of serious harm” that “must be of a kind that cannot be redressed through money damages alone.”[4] This should make the irreparable harm standard straightforward in an APA case. Because a plaintiff cannot recover money damages from the government, it by definition cannot recover for the monetary harm caused by an illegal regulation.[5] Thus, so long as a plaintiff can demonstrate the regulation is arbitrary and capricious, it should prevail on the irreparable harm standard. Said differently, a plaintiff is always irreparably harmed when the government violates the law through illegal regulation.

Unfortunately, courts, especially in the D.C. Circuit (which handles the majority of APA challenges), have twisted the irreparable harm standard into a direct analysis of the amount of harm suffered.[6] They look not at whether the harm can be recovered, but at how much financial harm the plaintiff will suffer, often requiring the regulation to effectively be a business killer.[7] This is wrong. It does not matter if the financial loss is one cent or one million dollars; it is unrecoverable under the APA and therefore irreparable.

Thankfully, there is hope that courts may be course-correcting. Earlier this year, we secured a victory in the District of Massachusetts where the court, in an excellent opinion, adopted the proper approach. In Massachusetts Lobstermen’s Association, Inc. v. National Marine Fisheries Service, our client sought a preliminary injunction to halt the National Marine Fisheries Service (NMFS) from enforcing a regulation that clearly and unquestionably violated the Consolidated Appropriations Act, 2023.[8]^,[9] Using Fed. R. Civ. P. 65 to consolidate MLA’s motion for a preliminary injunction into a trial on the merits – a procedural move more courts should deploy – the MLA Court explained that the irreparable harm standard is “satisfied on a showing of substantial injury that is not accurately measurable or adequately compensable by money damages.”[10] Because the government “holds sovereign immunity from compensable damages[,]”MLA could not recover money damages from the government for its illegal rule.[11] Therefore, the court found that MLA necessarily faced irreparable harm necessary for an injunction.[12] In effect, the court properly held that because MLA could not recover monetary damages from NMFS for their promulgation of an illegal rule, MLA met the irreparable harm standard—no matter the amount of financial harm MLA would suffer.[13]

Courts have strayed dangerously from what the irreparable harm standard should be. Because the harm in APA cases is always unrecoverable, the harm is always irreparable. Any analysis as to whether the harm is severe enough to be harmful financially to the plaintiff has no place in an APA challenge. As we continue to fight back against illegal government regulations, we remain hopeful that more courts will return to the proper understanding of irreparable harm.

If you are seeking to challenge a government regulation or obtain a preliminary injunction, please don’t hesitate to contact the experienced business and government litigators at Eckland & Blando LLP.