Harris Corp. v. Nat'l Iranian Radio & Television - 691 F.2d 1344 (11th Cir. 1982)

Rule:

The four prerequisites for a preliminary injunction are (1) a substantial likelihood that the plaintiff will prevail on the merits; (2) a substantial threat that the plaintiff will suffer irreparable injury if the injunction is not granted; (3) threatened injury to the plaintiff must outweigh the threatened harm that the injunction may cause to the defendant; and (4) granting the preliminary injunction must not disserve the public interest.

Facts:

Plaintiff Harris Corporation contracted with the National Iranian Radio and Television (“NIRT”) to manufacture and deliver radio broadcast transmitters. Pursuant to the contract, plaintiff obtained a performance guarantee in favor of NIRT from the Bank Melli Iran, an agency of the foreign government; and obtained the letter of credit in the bank's favor. The foreign government was later overthrown, and plaintiff ceased to perform under the contract. The bank then made repeated demands for authorization to extend its guarantee for nonperformance on the contract and to collect on the letter of credit. Plaintiff subsequently brought the action against defendants. Defendants were enjoined from payment on the guarantee and payment on the letter of credit. Defendants appealed, arguing that the court abused its discretion by ordering preliminary relief. 

Issue:

Under the circumstances, did the court properly grant preliminary relief in favor of the plaintiff? 

Answer:

Yes.

Conclusion:

The court affirmed the preliminary injunction. The letter of credit arrangement extended into the U.S., and defendants' demands had significant and foreseeable financial consequences in the U.S. Thus, a "direct effect" was established under 28 U.S.C.S. § 1605(a)(2) of the Foreign Sovereign Immunities Act, and the U.S. district court had proper jurisdiction. Plaintiff met the requirements for the preliminary injunction. The contract failed through no fault of plaintiff's, plaintiff was not likely to obtain relief in foreign courts due to the foreign government's hostility toward the U.S., and the U.S. had indicated that injunctions were in the public interest.