Can Preliminary Injunction Be Issued If a Defendant's Right to Relief Is Not Clear ?

In Anglo-American Ins. Co. v. Molin, 547 Pa. 504, 691 A.2d 929 (1997) the Supreme Court reversed this Court's order granting a preliminary injunction after it reviewed the record, examined the five factors that this Court stated were present and then determined that the defendants' right to relief was not clear, although they might prevail in their claims for certain insurance coverage after their case had been fully litigated. In reversing the preliminary injunction issued in Novak v. Commonwealth, 514 Pa. 190, 523 A.2d 318 (1987), against the Department of Revenue and vacating the judgment against it, the Supreme Court rejected the speculative nature of irreparable harm allegedly suffered by the appellees, lottery employees who were furloughed during collective bargaining grievance proceedings. In reviewing the sole question of the propriety of the preliminary injunction issued in Sameric Corp. of Market Street v. Goss, 448 Pa. 497, 295 A.2d 277 (1972), to prohibit the appellant's use of a name alleged to be similar to the appellee's name, the Supreme Court held that the appellee failed to show irreparable injury, that it made no showing of economic loss and that its proof of injury in the nature of loss of goodwill was too speculative and conjectural to support the injunction. The court reaffirmed the principle that speculative considerations cannot form the basis for a preliminary injunction. In Herman v. Dixon, 393 Pa. 33, 36-37, 141 A.2d 576, 577 (1958), the Supreme Court noted: Since a preliminary injunction is somewhat like a judgment and execution before trial, it will only issue where there is an urgent necessity to avoid injury which cannot be compensated for by damages and should never be awarded except when the rights of the plaintiff are clear. Also, it should in no event ever be issued unless greater injury will be done by refusing it than in granting it. See also John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 471 Pa. 1, 369 A.2d 1164 (1977) (reaffirming principle stated in Herman and discussing essential prerequisites). As for the essential prerequisites, the Supreme Court noted in New Castle Orthopedic Assocs. v. Burns, 481 Pa. 460, 392 A.2d 1383 (1978), that Herman states the threshold evidentiary requirement to be met before a preliminary injunction may issue, i.e., actual proof of irreparable harm.