G.R. No. 157498 . July 15, 2005.
FILIPINO METALS CORPORATION, ET AL., Petitioners, vs. SECRETARY OF THE DEPARTMENT OF TRADE AND INDUSTRY, ET AL., Respondents.

FACTS

Petitioners are domestic steel manufacturers who import a bulk of their raw material, steel billets, as domestic supply is insufficient and of inferior quality. Republic Act No. 8800 , the Safeguard Measures Act, was enacted in 2000, authorizing the imposition of safeguard measures against increased imports causing serious injury to domestic industry. Petitioners filed a petition with the Regional Trial Court (RTC) of Valenzuela, seeking to declare RA 8800 unconstitutional and to enjoin its implementation. The RTC, while withholding a final ruling on constitutionality, found a strong case against the law’s validity and issued a writ of preliminary injunction upon the posting of a bond.
Respondents elevated the case to the Court of Appeals via certiorari. The appellate court reversed the RTC, holding that the trial judge committed grave abuse of discretion. It ruled that a challenge to a law’s constitutionality does not automatically warrant an injunction, emphasizing the presumption of validity that laws enjoy, and that petitioners’ projected business losses did not constitute a clear legal right meriting injunctive relief.

ISSUE

Whether the Court of Appeals erred in reversing the RTC order and dissolving the writ of preliminary injunction enjoining the implementation of RA 8800.

RULING

Yes, the Supreme Court reversed the Court of Appeals and reinstated the RTC’s preliminary injunction. The legal logic centered on the requisites for issuing a preliminary injunction and the nature of the constitutional challenge. For such a writ, a petitioner must show a clear and unmistakable right to be protected and that the act sought to be enjoined is violative of that right. The Court found that petitioners, by raising substantial constitutional questions regarding RA 8800—specifically, an alleged invalid delegation of legislative power to the Tariff Commission and a potential violation of WTO agreements—had established a prima facie case for its unconstitutionality.
This prima facie case was sufficient to overcome the presumption of constitutionality for the limited purpose of the injunctive relief. The Court reasoned that if the law were eventually declared unconstitutional, its continued implementation during the litigation would cause irreparable injury to petitioners. The injunction merely preserved the status quo to prevent such injury pending the RTC’s final adjudication on the merits. The Court of Appeals erred in requiring a definitive ruling on constitutionality at the injunctive stage; a showing of a strong case challenging validity is adequate to justify the provisional remedy.