Business Law Breakdown: When Is Business Litigation an Emergency

As people go about their daily lives, they are exposed to constant interactions with others, whether they be coworkers, employees, friends, neighbors, hired helpers–you name it. And within these interactions comes the possibility, however slight, of harm. Perhaps a company you hired to work on your home or property makes an egregious mistake. Maybe your business was the victim of unfair practices resulting in monetary loss. Or perhaps a third party is preventing you from efficiently conducting your business, and you believe you are entitled to compensation. 

Whatever the case, disputes are a fact of life. And it is understandable if your initial reaction to being wronged is to demand swift and just retribution through emergency litigation. But is that always the best course of action? Richards Rodriguez & Skeith partner Dan Richards discuss your options below. 

Making a Case for Emergency Litigation

Clients are often upset when they come to see me about a litigation matter. Someone has done them wrong, they’re angry, and want something done about it right now. Nobody comes knocking at my door about a lawsuit because they’re happy about something. However, a court will rarely take any action on an emergency basis. 
 
In most civil litigation, emergency relief from the court (if available) will come as a temporary restraining order or a TRO. Several requirements are needed under the law in which a TRO can be granted without the participation of the opposing party. This is referred to as ex parte. 
 
However, most judges are reluctant to issue an order ex parte, absent a compelling reason, and they will generally prefer to give notice to the other side and allow them to appear to defend themselves. A TRO requires that the plaintiff plead facts and a legal basis for a claim for permanent relief. 

Racing Against the Clock

For example, two parties might both assert claims to a building, and one of them is preparing to demolish it. The claimant seeking a TRO could file suit for trespass, which may satisfy the permanent relief requirement. The party or parties that are seeking the TRO must convince the court that they’re likely to be successful in an ensuing lawsuit. 
 
This likelihood of success is demonstrated by sworn pleadings or affidavits explaining the merits of their lawsuit. In our example, if the claimant has what appears to be a valid deed to the building, the court might conclude that there’s enough evidence to stop the demolition. Lesser evidence, such as an oral promise regarding the building, will likely not satisfy this requirement. Judges granting an ex parte TRO generally want hard proof of a party’s promise. 
 

Imminent Injury vs. Money Damages

 A TRO also requires evidence of an imminent injury that monetary damages cannot remedy. This is often the hardest element to satisfy. In our example, if the demolition crew is scheduled to be on-site in 60 days, that is not imminent. 
 
If the bulldozers are on the property and the crew is preparing to knock the building down as the party pleads his case to the judge, then the injury is imminent. Permanent damage to real property satisfies the irreparable element. However, loss of money generally does not. The purpose of a TRO is to preserve the last peaceable, non-contested status, which preceded the controversy. 
 
So, in our example, the last peaceable status may be that both parties have competing claims to the building. Those claims need to be resolved in trial before the building is allowed to be destroyed if that is indeed how the case proceeds. The court might conclude that preventing the demolition preserves the status quo. 

Extending a TRO with a ‘Mini Trial’

 In contrast, if the party seeking to proceed with demolition asks for a TRO to allow the demolition, it may be difficult to convince the court of this need. Demolition is not the last peaceable non-contested status. In state court, if the court grants a TRO, the order expires in 14 days. To preserve the restraint longer, the parties must participate in a temporary injunction hearing prior to the expiration of the 14 days.  
 
This is a contested ‘mini trial’ with live testimony. As a result, contested TROs and temporary injunctions can dramatically accelerate the cost and burden of a lawsuit. A TRO is known as “extraordinary relief” for a reason. The court must be satisfied that each of these elements has been met and that there is a compelling reason for the court to intervene on an emergency basis. In my experience, the majority of cases do not justify extraordinary or emergency relief. 

If you feel that a dispute or event involving your business requires emergency litigation, Richards Rodriguez & Skeith’s Business Litigation team may be able to analyze your situation and advise whether or not emergency litigation is actually needed. Contact us today to learn more!