Jericho Baptist Church Ministries, Inc. v. Jericho Baptist Church Ministries, Inc.
Civil Action No. 2016-0647
| D.D.C. | Aug 25, 2016Background
- Plaintiff Jericho Baptist Church Ministries, Inc. (D.C.) ("Jericho DC") alleges that in 2009 the Church’s board was wrongfully reconstituted, the Church was reincorporated in Maryland as Jericho Baptist Church Ministries, Inc. (Maryland) ("Jericho Maryland"), and Jericho DC was merged into Jericho Maryland, transferring assets to Jericho Maryland.
- Jericho DC seeks a temporary restraining order and preliminary injunction requiring defendants to stop using Jericho DC’s tax identification number, cease expenditures inconsistent with nonprofit status, and provide annual accounting of funds since December 15, 2010.
- Plaintiff pleads multiple federal and common-law claims, including RICO counts, but the court evaluates only the motion for preliminary injunctive relief.
- The dispositive question for the injunction was whether Plaintiff demonstrated irreparable harm; Plaintiff asserted loss of directors’ ability to perform fiduciary duties, reputational harm/nonprofit jeopardy, and tax exposure from misuse of the tax ID.
- The court found Plaintiff’s evidence speculative or conclusory, noted a seven-year period during which Plaintiff lacked control of assets, and emphasized Plaintiff’s seven-month delay in filing after regaining corporate identity.
- The court denied the motion for a TRO and preliminary injunction; Defendants’ motion to dismiss remained pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Irreparable harm from directors/officers being unable to perform fiduciary duties | Directors/officers cannot carry out duties while Jericho Maryland controls assets, creating irreparable injury | Plaintiff points to no authority; defendants argue there is no actionable irreparable harm absent actual breach or control | Court: No irreparable harm; directors cannot breach duties they lack power to exercise and no evidence of actual breaches |
| Reputational injury and threat to nonprofit status | Loss of control over finances harms reputation and risks nonprofit status | Defendants argue reputational risk is speculative and unsupported | Court: Reputational harm speculative and uncorroborated; IRS deficiency notice insufficient to show imminent harm |
| Tax exposure and misuse of Plaintiff’s tax ID | Continued use of Plaintiff’s federal tax ID and expenditures risk tax liability and endanger tax-exempt status | Defendants deny imminent IRS action or concrete tax jeopardy | Court: Plaintiff failed to show a clear, imminent threat to tax-exempt status or ongoing IRS enforcement |
| Request for mandatory relief and plaintiff’s delay | Plaintiff seeks mandatory injunction to alter status quo; delay excused because corporate identity restored in Aug 2015 | Defendants emphasize higher standard for mandatory relief and plaintiff’s seven-month delay in filing | Court: Higher standard applies to mandatory injunction; plaintiff’s unexplained delay undermines claim of urgency and irreparable harm |
Key Cases Cited
- Munaf v. Geren, 553 U.S. 674 (2008) (injunctive relief is extraordinary and not granted as of right)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (plaintiff must show likelihood of success, irreparable harm, balance of equities, and public interest)
- Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288 (D.C. Cir. 2009) (discussing Court of Appeals’ treatment of the preliminary injunction factors and sliding-scale approach)
- Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) (failure to show irreparable harm mandates denial of preliminary injunction)
- Wis. Gas Co. v. FERC, 758 F.2d 669 (D.C. Cir. 1985) (irreparable injury must be substantiated and likely)
- Trudeau v. FTC, 384 F. Supp. 2d 281 (D.D.C. 2005) (reputational injury can constitute irreparable harm but must be concrete and corroborated)
- Open Top Sightseeing USA v. Mr. Sightseeing, LLC, 48 F. Supp. 3d 87 (D.D.C. 2014) (unexplained delay in seeking injunction undermines claimed urgency)
- Dorfmann v. Boozer, 414 F.2d 1168 (D.C. Cir. 1969) (courts should sparingly grant preliminary injunctions, especially mandatory relief)
- Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981) (preliminary injunctions should preserve the status quo pending trial)
- Sampson v. Murray, 415 U.S. 61 (1974) (irreparable harm is the historic basis for equitable relief)