Judicial Notice of Internet Evidence — Party’s Financial Condition as Reflected in Its 10-K Retrieved from EDGAR Considered on Irreparable Harm Prong of Preliminary Injunction Application
Honeywell Int’l, Inc. v. N. Am Refractories Asbestos Personal Injury Settlement Trust (In re All Matters Related to N. Am. Refractories Co.), 2015 Bankr. LEXIS 4191 (Bankr. Dec. 16, 2015):
Presently before the Court for decision following an extensive hearing, briefing, and argument is the Motion for Preliminary Injunction ("Motion") filed by the Plaintiff, Honeywell International, Inc. ("Honeywell") on July 13, 2015 at Doc. No. 63. For the reasons that follow, the Court finds that the Motion will be denied. Additionally, although none of the Parties have raised it, as expressed at the argument, the Court itself has some concerns as to whether it has subject matter jurisdiction in this case and will require that issue to be addressed before the case proceeds further.
(A) Irreparable Harm
The irreparable harm requirement for a preliminary injunction is met if a plaintiff demonstrates a significant risk that it will experience harm that cannot adequately be compensated for after the fact by monetary damages. Adams v. Freedom Forge Corp., 204 F.3d 475, 484-85 (3d Cir. 2000). The Adams court went on to comment that this is not an easy burden to meet, id., and in finding that the plaintiffs involved in the case had not met their burden, it stated:
An important factor animating our holding [*17] is our respect for the extraordinary nature of the preliminary injunction power. We have repeatedly insisted that the use of judicial power to arrange relationships prior to a full determination on the merits is a weighty matter, and the preliminary injunction device should not be exercised unless the moving party shows that it specifically and personally risks irreparable harm. The Supreme Court, moreover, has instructed that the tool of the preliminary injunction should be reserved for "extraordinary" situations. And as we have previously stated, "[t]he dramatic and drastic power of injunctive force may be unleashed only against conditions generating a presently existing actual threat."
204 F.3d at 487 (citations omitted, emphasis added by Adams court).
An important corollary that follows from the general rule stated above is that ordinarily an injury that is measured solely in monetary terms cannot constitute the sort of "irreparable harm" that is required for the issuance of a preliminary injunction. See, e.g., Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 562 F.3d 553, 557 (3d Cir. 2009) ("We have long held that an injury measured in solely monetary terms cannot constitute irreparable harm.").
On its face, this presents a clear problem to Honeywell in the present case because [*18] the only harm it is claiming as a result of the complained of actions of the Trust is monetary. Specifically, Honeywell argues that without preliminary injunctive relief the Trust will improperly pay claims, resulting in Honeywell having to expend more money in its contributions to the Trust than it otherwise would have to expend if the TA [NARCO Asbestos Trust Agreement] and the TDP [NARCO Asbestos Trust Distribution Procedures] were being faithfully implemented. Honeywell alleges no other type of harm but a monetary one. How then does Honeywell propose that it has established the existence of irreparable harm? Honeywell asserts that the monetary loss it will experience cannot subsequently be recovered once the Trust pays the disputed claims and therefore argues that this feature distinguishes this case from the Liberty Lincoln-Mercury corollary noted above.
[T]he Court will assume that Honeywell has demonstrated that it will incur economic [*26] loss that cannot be recovered if a preliminary injunction is denied and the Court ultimately finds in its favor on the merits. The question though, is whether it has also demonstrated that such loss would have a special, peculiar or particularly damaging effect on its business operations beyond a simple diminution in profits. The Court finds that Honeywell has failed to make such a demonstration. There was absolutely no evidence presented at the hearing on the Motion that the amount of potentially unrecoverable loss that is at issue here would threaten Honeywell's solvency, seriously damage its business operations, or cause it any other sort of special, onerous or peculiar hardship, such as damage to its goodwill or reputation.
Furthermore, it is highly doubtful that Honeywell could have made such a showing even if it had tried to do so. When the Motion was filed, Honeywell alleged that there were several hundred disputed claims with a collective value of approximately $10.2 million that were subject to the voluntary "hold" it had negotiated with the Trust during the ADR proceedings that the parties had engaged in prior to the filing of this case. See, Motion at ¶24. That would have [*27] represented the ceiling of possible unrecoverable loss by Honeywell under an unlikely "worst case" scenario in which the Trust paid every disputed claim once the hold was lifted and it was later determined that none should have been paid. As was mentioned previously, however, since the filing of the Motion, through discovery and discussions between the Parties, many of these claims have been resolved to the satisfaction of Honeywell. The universe of pending claims in dispute for purposes of the Motion has been reduced to less than 30, with a collective value of approximately $750,000, making that the new ceiling for Honeywell's possible unrecoverable loss.10
10 The Parties focused on the value of the potential loss at issue based on the pool of claims that was subject to the hold. Perhaps additional claims that would fall into the same category as the hold claims have been filed with the Trust since then -- and more claims may yet come in until such time as the case is resolved -- which could increase the amount "at issue," thus benefitting Honeywell's position as to the irreparable harm factor. In fact, counsel for Honeywell mentioned that possibility at the closing argument on the Motion [*28] . No quantitative or other evidence, however, was ever presented in that regard, as was incumbent upon Honeywell to do if it wanted such possible claims to be considered. The Court will not base its decision on mere speculation. Since the Motion is being denied without prejudice, Honeywell is always free to seek preliminary injunctive relief in the future based on additional claims.
While $750,000 million might be viewed as a large amount from the perspective of an individual person or a small business, the Court must view it within the context of Honeywell's overall financial condition, including its financing commitment to the Trust. See, e.g., Mylan Labs., Inc. v. Leavitt, 484 F. Supp. 2d 109, 123 (D.D.C. 2007) (monetary figures are relative, and depend for their ultimate quantum, on a comparison with the overall financial wherewithal of the corporation involved). Honeywell did not provide any evidence going to its general financial condition.11
11 Although Honeywell did not present any evidence of its general financial condition, the Court is permitted to take judicial notice of properly authenticated public disclosure documents filed with the United States Securities and Exchange Commission ("SEC"). Oran v. Stafford, 226 F.3d 275, 289 (3d Cir. 2000). The SEC provides public access to such documents through [*29] its Electronic Data Gathering , Analysis, and Retrieval ("EDGAR") System. See, Love v. Alfacell Corp., 2011 WL 4915874 *1 at n.3 (D. N.J. Oct. 17, 2011). EDGAR can be accessed online at http://www.sec.gov/edgar/searchedgar/webusers.htm . The availability of the report on a government website is sufficient for purposes of authentication. See, e.g., U.S. v. Joyce, 2008 WL 2367307 (W.D. Pa. June 10, 2008) (court referred to census data from census.gov government website); Berry Plastics Corp. v. Intertape Polymer Corp., 2015 WL 8131080 (S.D. Ind. Dec. 4, 2015) (a document posted on a government website is presumptively authentic if government sponsorship can be verified by visiting the website itself). The most recent 10-K Annual Report Honeywell filed with the SEC, (found at http://www.sec.gov/Archives/edgar/data/773840/000093041315000621/0000930413-15-000621-index.htm), indicates that in approximate terms for the year 2014 Honeywell had net sales of $40.3 billion, net income of $4.2 billion, and shareholders' equity of $17.7 billion. Honeywell 2014 10-K Report at p. 14. The Court does not rely on that data in reaching its decision here as to irreparable harm, but notes it to show that a finding of lack of irreparable harm is also consistent with Honeywell's general financial condition.
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