07 Apr Stop the Bad Guys Now With a Court Injunction

In our last post we discussed mediation, a cost-effective alternative to litigating a dispute with an opponent.  But what if your opponent has already crossed the line, and you need to stop your opponent’s actions immediately?  In order to stop their actions now, your business should consider seeking a temporary restraining order or “TRO” from the court.

What is a TRO?

A temporary restraining order or TRO is a form of temporary emergency relief that a court may grant quickly to protect a party against irreparable harm.  A TRO can be sought immediately, and must be filed along with your complaint to begin a lawsuit.  Also, this type of injunction can be issued “ex parte,” which means the court can, if necessary, issue an injunction without you having to inform your opponent about the request.  Your company might want to get a TRO ex parte if informing your opponent would result in further harm to your business.  This is the most efficient way to ask a court for an order that immediately stops or prohibits your opponent from doing something that is causing your company substantial and irreversible harm.

However a TRO is temporary—it only lasts ten days after issuance, unless your opponent consents to a longer time (highly unlikely) or you give the court “good cause” for the extension.  The time frame is short because a TRO can be issued without notice to the opposing side.

If your company needs a longer injunction, you will need to seek a “preliminary injunction,” which provides the same type of relief, but it is effective for the duration of your lawsuit, while your case is pending and before your case goes to trial.  It’s different from a TRO because with a preliminary injunction, your company will need to give your opponent notice of the relief you request, as well as an opportunity to be heard.  The function of a preliminary injunction is to maintain the status quo, while your company’s rights are finally determined by a court at trial.

How Do You Ask the Court for a TRO?

A TRO is sought by motion in a pending case.  In support of the TRO, your business must demonstrate “immediate and irreparable injury” (discussed below) by an affidavit (a sworn written statement signed and notarized by your business) or by a verified complaint (a complaint signed and notarized by your business).  Also the motion must explain what attempts have been made to give your opponent notice.  If your company cannot provide notice, it must provide the court with the reason why notice should not be required.   Once the TRO is granted, the court must set the matter for hearing “at the earliest possible time.”

What is the Test That Must Be Met Before a Court Will Grant a TRO?

The test for obtaining injunctive relief from a court will differ depending on the state in which your company is located.

Colorado State Court

In Colorado, the state court provides a very broad test to cover a broad variety of reasons why your company would need to seek a TRO.

First, the court must find that it “clearly appears … that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or his attorney can be heard.”  This means your company must show that the only remedy is an injunction (considered an “equitable” form of relief), and that a “legal” remedy such as money damages won’t fix the problem.  In addition, your company must prove that it suffered and continues to suffer from an injury that it has a legal right to avoid.  These legal rights should be laid out in your TRO request, as well as the complaint that is filed with your request for an injunction.  The complaint is used to show the court your “likelihood of success on the merits” of your lawsuit.

Second, the court must determine that there are sufficient reasons to proceed without notice (if notice has not or cannot been given).  For example, if giving notice to your opponent about stolen data would result in the data being lost, this would be good grounds for the court to forego the notice requirement.

Colorado Federal Court

At the federal level, Colorado courts traditionally consider four factors when deciding whether to grant a TRO:

• The likelihood that the moving party will suffer “irreparable harm” absent injunctive relief;
• The balance of harms between the moving party and the non-moving party;
• The effect of the injunction on the public interest.
• The moving party’s likelihood of success on the merits.

Also, in the Tenth Circuit (which is where Colorado is located), federal courts apply a modified or relaxed approach to the traditional test.  Thus in Colorado, if your business can prove that the first three above factors “strongly” tip in its favor, the Court will modify the test so that your business can prove a likelihood of success on the merits by showing that questions going to the merits are so “serious, substantial, difficult and doubtful as to make the issue ripe for litigation and deserving of more deliberate investigation.”

The Tenth Circuit however does not use this modified test for what it considers “disfavored injunctions” such as “mandatory” injunctions, or injunctions that change status quo or otherwise give the movant all of the injunctive relief it seeks.  In these circumstances the movant always has to demonstrate a substantial likelihood of success on the merits.

In either state or federal court, if the Court denies your business’s request for a TRO, that decision cannot be questioned, or “appealed,” to a higher court.  Thus it is very important that the request is made timely and correctly.  If your business needs an injunction to stop its opponent from illegally stealing its trade secrets or its clients, call Edwards Law today to discuss your options.  The first call is free.