News & Noteworthy
If you are aware that a contract breach is about to occur, can you get an injunction to halt it? Practioners might instinctively say that if you meet the traditional Crowe v. DiGioia criteria1(never an easy task), you should have a reasonable chance, if the threat and the contract provision are both clear. New Meadowlands Stadium Co., et al. v. Triple Five Group et al., Docket Number BER-C-193-12 (N.J.Ch.Div. August 9, 2012)2, alters us that there may be yet another hurdle: whether the request is ripe.
Against a heavy regulatory backdrop, but with the added ingredient of a "Cooperation Agreement", the plaintiff in New Meadowlands sought relief due to provisional approval of a development claimed to violate that Agreement; potentially with final approval to follow. The Court held that because of the preliminary nature of the approval and even though the plaintiffs were predicting that final approval was a "foregone conclusion", the uncertainties of the regulatory process (in terms of whether the outcome would be as the plaintiffs feared) rendered the issue premature. To quote the Court:
- With no proposal having reached the approval stage, it appears the harm to plaintiffs is still one step removed from even being threatened. As such, the matter is not ripe. [emphasis added]
New Meadowlands is of interest on at least one other point. First, a clarification: when third parties are added, it may seem surprising to label a claim against that third party as a "contract-substitute" claim. However, where the claim (as in New Meadowlands is for tortious interference, the contract-substitute concept applies, because the plaintiff's effort is to enforce or obtain a remedy relating to the contract, albeit from a third party.
In that vein, it is interesting to note that the New Meadowlands Court, while deeming a contract remedy premature, nonetheless allowed the contract-substitute claim of tortious interference to continue against the defendant entity that was allegedly motivating the co-defendant regulatory body to proceed forward.
Another question was whether and at what stage the court would intervene again, possibly only upon the regulator granting final approval. A further unstated legal question was whether the resulting contract claim might proceed at the trial level, while the potential challenge to the regulator might proceed at the appellate level (each for technical and procedural reasons).
The last point to consider is that the plaintiffs in New Meadowlands may (though unknown to this author) have erred on the side of proceeding at an early stage, even at risk of being premature, to belie any potential argument of repose (in the lay sense of the word) had the plaintiffs waited until final approval to raise the issue.
Contact & Legal Disclaimer
Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.
1 90 N.J. 126 (1982).
2 Available at http://www.judiciary.state.nj.us/decisions.
Windels Marx helps you harness opportunity and mitigate risk with a team that provides your business with the service, quality and value essential to a trusted relationship.