Today’s Business: Prevent a business crisis – Consider seeking an injunction
11/01/2021Businesses and individuals sometimes are faced with an imminent crisis — how to stop a person or competitor from taking action that will cause immediate harm.
While in most civil matters money can compensate a victim for damages, in some cases no amount of money can adequately remedy the results of another’s bad conduct. Take for example the neighbor who is about to cut down a favorite, historic tree bordering your property. Or, consider the business that misappropriates a trade secret that, if used, will cause the owner of the trade secret to go out of business.
There is a way to stop a potentially harmful act before it happens.
The courts commonly provide an opportunity in such circumstances to seek emergency, temporary injunctions to prevent another from commencing the adverse action.
There are generally two types of injunctions. A prohibitory injunction is a court order restraining a party from doing something. A mandatory injunction is a court order requiring a party to perform an act. The first preserves the status quo, pending litigation, while the latter requires a party to cease or reverse certain conduct pending a final determination of the merits of the case. When the action is fully adjudicated on the merits, the court can issue another injunction as part of the final relief in the matter.
To get an injunction, four elements must be demonstrated:
The potentially harmed party has no other adequate legal remedy.
The party will suffer irreparable harm without an injunction.
The party likely will prevail in court on the merits of the case.
The balance of equities tips in favor of the party seeking the injunction.
Injunctions are issued by judges, not juries, as only judges can issue court orders. For an injunction, a judge must take into account principles of fairness — these court orders are not issued lightly. The plaintiff seeking injunctive relief bears the burden of proving facts that will establish irreparable harm as a result of the unlawful conduct. That is defined as certain and near immediate harm for which a monetary award would not adequately compensate.
There are practical challenges to obtaining emergency, temporary injunctions, some of which have been magnified by the coronavirus pandemic.
Under very limited circumstances, when a plaintiff seeks to prevent a person from taking assets out of the state or when there is a risk that a person will rush to take the harmful action if simply notified of the injunction application, courts can issue relief ex parte, upon the affidavit of the plaintiff and/or his or her lawyer.
In those cases, an attorney drafts the application and walks it to the courthouse to have it considered by a judge prior to a hearing. In the vast majority of cases, however, the application is filed with a document called an Order to Show Cause, which is used by the court clerk to set a date for a judge to hear testimony and receive evidence. Not surprisingly, the courts strongly encourage the parties to reach agreement absent a hearing. And because the court dockets generally are quite busy, with matters being handled remotely over the last year because of COVID, the time within which to obtain temporary injunctions can vary from a few to many months.
When faced with imminent harm, the most important thing is to act immediately. The quicker the injunction application is filed, the better chance a party will have to head off the offending conduct. Indeed, obtaining temporary injunctive relief may prove to be the means of saving a business, keeping assets in the state, and preserving property.
Attorney David A. Slossberg leads the business litigation practice at Hurwitz, Sagarin, Slossberg & Knuff. He is an editor of the definitive treatise on unfair trade practices in Connecticut. He can be reached at dslossberg@hssklaw.com. 203-877-8000.