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Strobos v. Rxbio, Inc.

United States District Court, District of Columbia

December 27, 2016

RXBIO, INC., Defendant.


          JAMES E. BOASBERG United States District Judge.

         Plaintiff Jurriaan Strobos claims that Defendant RxBio, Inc. owes him nearly $700, 000 in unpaid salary, expenses, and severance pay. See ECF No. 1 (Complaint), ¶¶ 36, 41. Defendant, in turn, counterclaims that it is Strobos - not the Company - who has violated their employment agreement by, inter alia, retaining certain documents that he should have returned after resigning from his post. See ECF No. 6 (Answer) at 24, 33-34. Rather than await a ruling on the merits of these claims, both sides now move for preliminary-injunctive relief. See ECF Nos. 25 (Motion), 32 (Cross-Motion). Having held a hearing on December 16, 2016, at which the Court announced that it would deny both Motions, it now explains in more detail why neither side has shown a likelihood of irreparable harm.

         I. Legal Standard

         “[I]njunctive relief” is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). “A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Id. at 20. Before the Supreme Court's decision in Winter, courts weighed the preliminary-injunction factors on a sliding scale, allowing a weak showing on one to be overcome by a strong showing on another. See, e.g., Davenport v. Int'l Bhd. of Teamsters, 166 F.3d 356, 360-61 (D.C. Cir. 1999). This Circuit, however, has suggested, without deciding, that Winter should be read to abandon the sliding-scale analysis in favor of a “more demanding burden” requiring plaintiffs to independently demonstrate both a likelihood of success on the merits and irreparable harm. See Sherley v. Sebelius, 644 F.3d 388, 392-93 (D.C. Cir. 2011) (quoting Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C. Cir. 2009)). Whether a sliding-scale analysis still exists or not, courts in our Circuit have held, both before and after Winter, that “if a party makes no showing of irreparable injury, the court may deny the motion for injunctive relief without considering the other factors.” Dodd v. Fleming, 223 F.Supp.2d 15, 20 (D.D.C. 2002) (citing CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995)); see Safari Club Int'l v. Jewell, 47 F.Supp. 29, 32 n.5 (D.D.C. 2014).

         II. Analysis

         As neither party here has shown that its asserted injuries form a basis for preliminary relief, the Court need only discuss this factor and will not engage in an analysis of the merits of the litigants' claims. It considers each side's Motion in turn.

         A. Plaintiff's Motion

         Strobos seeks an injunction directing Defendant to preserve certain funds that it was recently paid on a government contract so that the Company will be able to pay a future judgment for his deferred wages. See Mot. 2. In the absence of such relief, he maintains that he will lose out on the sums he is due because RxBio is on the verge of insolvency and may transfer the funds - owed to him under his employment contract - to other creditors. Id. The likelihood he may never obtain his money, he believes, constitutes irreparable injury.

         The law of this Circuit, however, is clear that “[a]n injunction freezing assets is only permissible when a party has demonstrated an equitable claim to the assets.” Ellipso, Inc. v. Mann, 480 F.3d 1153, 1160 (D.C. Cir. 2007) (emphasis added) (citing Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 310, 332-33 (1999)); see also United States ex rel. Rahman v. Oncology Assos., P.C., 198 F.3d 489, 497 (4th Cir. 1999) ("[W]e must begin with an analysis of the claims in [this] suit to determine whether they seek cognizable relief in equity involving assets of the defendant."). The Supreme Court in Grupo Mexicano previously indicated that federal “courts cannot issue preliminary injunctions based solely on the solvency of debtors where the plaintiffs' underlying claims primarily seek monetary damages, ” rather than equitable relief. Vis Vires Grp. v. Endonovo Therapeutics, Inc., 149 F.Supp.3d 376, 393 (E.D.N.Y. 2016) (citing Grupo Mexicano and collecting cases); Oak Leaf Outdoors, Inc. v. Double Dragon Int'l, Inc., 812 F.Supp.2d 944, 947 (C.D. Ill. 2011) (“As Grupo Mexicano makes clear, this Court does not have the authority to issue a preliminary injunction preventing Oak Leaf from disposing of its assets - in the form of a constructive trust, escrow, asset freeze, or some other similar relief - pending adjudication of DDI's contract claim for money damages.”).

         Plaintiff's Complaint here has asserted no equitable claim to the money he now seeks to encumber. It instead asserts a right only to damages under a breach-of-contract theory or, alternatively, under a District of Columbia law that prevents the dilatory payment of wages. See Compl., ¶¶ 37-41 (Breach of Contract), ¶¶ 42-47 (D.C. Wage Payment and Collection Law). Neither of these claims sounds in equity. As a result, Grupo Mexicano and the law of this Circuit foreclose issuance of the preliminary injunction he seeks. See 527 U.S. at 332 (holding federal courts lack authority to freeze assets in action for money damages where no lien or equitable interest in assets is claimed).

         Perhaps recognizing the writing on the wall, Plaintiff nevertheless seeks to advance two arguments in his Reply to distinguish his case from the holding in Grupo Mexicano. He first asserts, in conclusory fashion, that “[u]nder RxBio's theory of the [employment] agreement . . . [, ] the Court can find that [he] has asserted an equitable lien on the money at issue.” ECF No. 34 (Reply) at 9. In other words, by his Reply, he requests that the Court transform this preliminary-injunction Motion into one for an equitable lien on the Company's monetary assets. Id. This entreaty, though, comes too late. See Aleutian Pribilof Islands Ass'n, Inc. v. Kempthorne, 537 F.Supp.2d 1, 12 n.5 (D.D.C. 2008) (“[I]t is a well-settled prudential doctrine that courts generally will not entertain new arguments first raised in a reply brief.”) (citing Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 196 (D.C. Cir. 1992)). Strobos, moreover, nowhere describes what would be legally required for such a lien, nor does he make any effort to argue that he qualifies for one on the facts of this case. See Johnson v. Panetta, 953 F.Supp.2d 244, 250 (D.D.C. 2013) (explaining courts need not construct party's legal arguments, for “perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are deemed waived”). His first salvo thus fails to develop a viable argument to circumvent Grupo Mexicano.

         Strobos next asserts, again in rather conclusory fashion, that his second cause of action under the D.C. Wage Payment and Collection Law “specifically provides the Court with the ability to grant” the preliminary-injunctive relief that he seeks. See Reply at 9-10. In support, he cites to a portion of that Act that provides:

Any employee or person aggrieved by a violation of this chapter . . . may bring a civil action in a court of competent jurisdiction against the employer or other person violating this chapter . . . and, upon prevailing, shall be awarded reasonable attorneys' fees and costs and shall be entitled to such legal or equitable relief as may be appropriate to remedy the violation, including, without limitation, the payment of any back wages unlawfully withheld, reinstatement in employment, and injunctive relief.

D.C. Code § 32-1308(a)(1) (emphases added). This statutory authority, he claims, renders his case more similar to United States v. First National City Bank, 379 U.S. 378 (1965), than to Grupo Mexicano. See Reply at 10. In First National, the Supreme Court did in fact uphold a preliminary injunction freezing the transfer of assets of a debtor held at a third-party bank in a suit brought by the United States to enforce a tax assessment and tax lien. Id. Citing a statutory provision that gave district courts the power to grant injunctions “necessary or appropriate for the enforcement of the internal revenues laws, ” the Court reasoned that preliminary relief was “appropriate to prevent [both] further dissipation of assets” ...

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