FEI Hong Kong Company Limited v. Globalfoundries, Inc.

Background

FEI Hong Kong Company Limited sued GlobalFoundries, Inc., GlobalFoundries U.S., Inc., GlobalFoundries (Chegdu) Integrated Circuit Manufacturing, Limited, and several Schenker entities. The complaint alleged breach of contract based on the defendants’ failure to pay amounts allegedly owed under invoices for microscopes delivered under purchase orders. The complaint was filed on March 16, 2020. The court stated that no proof of service had been filed, and FEI acknowledged that the defendants had not been served. No defendant had responded or appeared.

FEI filed an ex parte motion for a temporary restraining order. It sought an order preventing the defendants from moving or transferring the microscopes from their current location in the Netherlands and requiring the defendants to post a bond against future damage or loss. FEI alleged that the defendants had repudiated any obligation to pay the overdue invoices. The opinion stated that FEI had been communicating with the defendants and their agents but had not notified them about the motion before filing it.

Legal standard

The court explained that a temporary restraining order is an extraordinary remedy governed by the same standards as a preliminary injunction. A party seeking that relief generally must show irreparable harm—harm that cannot be fully remedied by money—and either a likelihood of success on the merits or sufficiently serious questions for litigation combined with a balance of hardships strongly favoring the moving party.

For an ex parte order, meaning an order requested without advance notice to the opposing parties, Federal Rule of Civil Procedure 65(b)(1) also requires a written certification describing efforts to give notice and explaining why notice should not be required. The motion must include specific facts showing that immediate and irreparable injury will occur before the opposing parties can be heard, or that such injury will occur if notice is given.

Court’s analysis

The court found that FEI had not explained why notice was unnecessary or impractical. It also found that FEI had not provided facts showing an immediate and irreparable injury. According to the court, FEI’s conduct undermined any claim of urgency: FEI waited almost two years after the alleged payment default to sue, waited another two months after the alleged January 2020 repudiation to file the case, and had not yet served the defendants.

The court separately concluded that the motion failed on the requirement to show irreparable harm. FEI’s supporting declaration stated that its loss was $2,495,000 and described additional potential losses in amounts measurable through money damages. The court also noted FEI’s demands for immediate payment, which it said contradicted FEI’s claim that its injury could not be remedied with money. FEI’s unsupported concern that a money judgment might not be collectible did not establish irreparable harm, and FEI had not provided evidence that the defendants were insolvent or would avoid collection efforts.

The court further stated that, as alleged in the complaint, the defendants had accepted delivery of the goods and repudiated the contract. If those facts were proven, the court said, they could support a breach-of-contract claim for money damages, so an emergency injunction was unnecessary. The court also criticized the timing of the application during the COVID-19 health crisis, stating that handling the deficient application strained the court’s limited resources.

Disposition

Judge Mary Kay Vyskocil denied FEI’s motion for a temporary restraining order. The opinion did not resolve the underlying breach-of-contract allegations or determine whether FEI was entitled to damages.