The normal rule is that a party cannot get an injunction without demonstrating "irreparable harm," and that monetary harm is not "irreparable." Plaintiffs always try to get around this limitation by coming up with novel ways that the particular harm is "irreparable." In Bennington Foods LLC v. St. Croix Renaissance Group, LLP, 528 F.3d 176 (3d Cir. 2008), plaintiff claimed the damage to business goodwill was "irreparable," won in the District Court, then lost at the Court of Appeals:

The District Court found that failing to issue a mandatory injunction would cause irreparable harm to Bennington. Specifically, it found that failure to issue the injunction would harm Bennington’s reputation for being able to deliver scrap metal on time. How ever, a plaintiff in a breach of contract case cannot convert monetary harm into irreparable harm simply by claiming that the breach of contract has prevented it from performing contracts with others and that this subsequent failure to perform will harm the plaintiff’s reputation. …

The inability to gain possession of the scrap metal at issue here creates at most a monetary loss. In the event that subsequent failure to deliver scrap metal to others might create a cognizable risk of irreparable harm to the plaintiff’s reputation, Bennington has not demonstrated, except by Bennington’s president’s personal assertions, that the scrap metal business is different from other types of commerce in such a way that normal breach of contract remedies could not provide a remedy. Nor has Bennington identified any contracts to resell the scrap metal which it has been unable to perform, any third parties with whom it has suffered a loss of reputation, or any attempts—futile or otherwise—it has made to fulfill contracts to deliver scrap metal by obtaining it from other sources.

The Third Circuit goes on to note that damage to ordinary business goodwill is different from continuing trademark infringement (Pappan Enterprises, Inc. v. Hardee’s Food Systems, Inc., 143 F.3d 800 (3d Cir. 1998)) and a suspension from horse racing for suspected cheating (Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589 (3d Cir. 1979)), both of which cause "irreparable" harm.

They then note an apparent split with the Fourth Circuit:

Bennington, however, cites to Blackwelder Furniture co. of Statesville, Inc. v. Seilig Manufacturing Co., Inc., 550 F.2d 189, 197 (4th Cir. 1977), a case in which the trial court denied a preliminary injunction. The Fourth Circuit Court of Appeals reversed, holding that the district court’s finding of no irreparable harm was clearly erroneous. Id. at 196. In so concluding, the court stated that

The harm posed to Blackwelder’s general goodwill by its inability to fill outstanding and accumulating orders in excess of $ 15,000 for furniture listed in its catalogues is incalculable not incalculably great or small, just incalculable.

Id. at 197.

We are not bound by the holding in Blackwelder and we question whether irreparable harm was sufficiently demonstrated there. In addition, we note that Blackwelder has been distinguished from other preliminary injunction cases on the basis that Blackwelder “involved a manufacturer’s refusal to supply its entire product line to a particular retailer, treatment which discriminated against that particular dealer.” … As we mention above, there is nothing in the record before us to demonstrate that Bennington was unable to fulfill any contracts, was unable to find other sources of scrap metal when the Virgin Islands scrap metal could not be shipped, or lost reputation with any specific customers.

I boldfaced those two parts to show that the apparent against showing irreparable harm through secondary harm to business goodwill isn’t really the problem, the problem is a failure to produce evidence.

But there’s a chicken and egg problem — in determining an injunction, factual questions are left to the discretion of the district court judge, who here had evidence of the damage to goodwill: the testimony by Bennington’s president. So, really, the problem wasn’t a failure to produce any evidence, but a failure to produce sufficient evidence.

I suppose, then, that the rule here recognizes business goodwill as capable of "irreparable harm," it just requires a showing of unfulfilled contracts, inability to find other providers, and/or harm to specific customers.

Good to know.