A recent decision from the Western District of Oklahoma reminds all litigators that you may be able to get preliminary injunctive relief from the courts, despite having a valid arbitration agreement.  Although this seems to fly in the face of the courts’ general arbitration refrain (stolen from M.C. Hammer: “[We] Can’t Touch This”), courts rationalize their decision by noting that they must preserve the status quo so that the arbitration hearing may be meaningful.

 In Wells Fargo Bank v. Maynahonah, 2011 WL 3876519 (W.D.Okla. Sept. 2, 2011), the district court granted first a TRO and then a preliminary injunction, prohibiting decision-making bodies of the Apache Tribe of Oklahoma from “proceeding with any hearing, issuing any order, making any determination, or taking any official action” with respect to issues that Wells Fargo claimed were arbitrable.  While the Tribe did not challenge the validity of the arbitration agreements at issue, it had taken various actions that seriously undermined those arbitration agreements, and it planned to adjudicate issues in tribal administrative proceedings that fell within the scope of the arbitration agreement.  The Court analyzed the usual factors for injunctive relief and found: Wells Fargo had demonstrated the risk of irreparable harm (through the potential loss of its right to arbitrate and the resources it would have to spend in the tribal adjudication); the balance of interests favored Wells Fargo because of the strong federal policy favoring arbitration; the public interest favored “safeguarding an arbitration agreement made by the Tribe”; and Wells Fargo was likely to succeed in showing that the Tribe was proceeding improperly.

If you have a valid arbitration agreement in your case, but need emergency relief, a two-step analysis is required to determine whether that relief is available from the courts. 

1.         Step One: Analyze The Language of the Arbitration Provision.

            If the arbitration agreement carves out requests for injunctive relief from the scope of arbitrable controversies, you have a strong basis to seek court relief.  Even a carve-out, however, does not necessarily guarantee success with the courts if there are disputes about the scope or applicability of the carve out. 

            Note that your arbitration agreement may also provide for emergency relief from the arbitrator.  If your arbitration agreement calls for administration with the AAA, check to see if that agreement incorporates the AAA rules for emergency protection.  (Those rules are titled “O-1” through “O-8”.)  If those rules are incorporated, they provide for temporary restraining orders and preliminary injunctions using procedures very similar to those applicable in state and federal courts.  However, the AAA may not react as quickly to a claimant’s request for emergency relief as a court is able to react.  (The AAA first has to appoint a case administrator and an emergency arbitrator, for example, and will not act until all fees are paid.)

2.         Step Two: Analyze the Governing Case Law.

            If your arbitration agreement does not explicitly provide for any special emergency procedures, or you think those emergency procedures still may be too slow, the next step is to see whether the case law in your federal circuit still allows you to seek relief in court.  While the FAA does not specifically address whether courts have authority to issue injunctions, most federal circuits are willing to grant emergency relief for the limited purpose of maintaining the status quo for the arbitrator, as long as the usual tests for injunctive relief are met.  E.g., Performance Unlimited, Inc., v. Questar Publishers, inc., 52 F.3d 1373, 1380 (6th Cir. 1995); Merrill Lynch, Pierce, Fenner & Smith v. Salvano, 999 F.2d 211, 214 (7th Cir. 1993); Ortho Pharmaceutical Corp. v. Amgen, Inc., 882 F.2d 806, 812 (3d Cir. 1989); Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 47 (1st Cir. 1986); Jameson v. Pine Hill Development, LLC, No. 07-0111, 2007 WL 623807, at *2 (S.D. Ala. Feb. 23, 2007) (citing decisions on both sides of issue).

            However, other federal circuits require evidence that the parties intended to give the courts authority to grant temporary relief.  The governing rules the parties selected for their arbitration can be sufficient evidence of the parties’ intent.  For example, in Toyo Tire Holdings of Ams. Inc. v. Continental Tire N. Am., Inc., 609 F.3d 975, 980 (9th Cir. 2010), the Ninth Circuit clarified that a court may grant injunctive relief when the governing arbitration rules provide for such relief and it is necessary to preserve the status quo pending the arbitration hearing.