Emergency Commercial Litigation: Temporary Restraining Orders

Business owners know that legal emergencies require decisive legal action. In such circumstances, a business may require injunctive action now before a resolution of the entire case on the merits. There are two types of injunctive relief that a business may seek prior to resolution of the controversy on its merits: temporary restraining orders (often referred to as a “TRO”) and preliminary injunctions. A TRO is an emergency remedy issued in exceptional circumstances to maintain the status quo for a limited period of time. The key defining characteristic of a TRO is that it is provisional in nature and does not decide the merits of the dispute. Due to their limits, TROs are typically followed by other forms of emergency litigation, such as a preliminary injunction.

Under Illinois law, a TRO is an equitable remedy that requires a party to do something or refrain from doing something until such time as the court can hear and review further argument and evidence from the parties. The requirements for TROs in Illinois state courts are found in Section 5/11-101 of Article XI of the Illinois Code of Civil Procedure (commonly known as The Injunction Act), 735 ILCS 5/11-101. The requirements for TROs in federal courts are found in Federal Rule of Civil Procedure 65. Illinois law provides that a TRO may last only 10 days, except in certain circumstances.

Illinois law recognizes two different types of TROs: TROs with and without notice (the latter being referred to by courts as ex parte TROs). Ex parte TROs are disfavored and may be granted only in extremely limited circumstances where the party seeking the TRO can demonstrate that it would suffer irreparable harm in the time it would take to provide notice to the defendant. A business seeking a TRO must meet a high burden of demonstrating, through well-pled facts, its entitlement to the relief sought. Because TROs only last for a very short time, the court, upon entry of a TRO, typically sets a date for an evidentiary hearing on a motion for preliminary injunction.

Illinois courts will only grant a TRO if there is a threat that the party seeking its entry will suffer imminent, irreparable harm. TROs may only provide injunctive relief, meaning a TRO cannot be used to obtain money damages. Emergency motions for entry of a TRO are sought in a number of business settings, most often in employment and intellectual property disputes. For instance, seeking a TRO may be appropriate to require former employees to comply with the requirements of their non-compete, non-disclosure, or non-solicitation agreements.

Our emergency commercial litigation attorneys frequently seek TROs on behalf of minority shareholders who are being frozen out or squeezed out of their companies by a controlling shareholder or business partners or members of a limited liability company who are facing a stalemate due to a dispute that threatens the ongoing viability of the business.

The first step in obtaining a TRO is to file a lawsuit. A plaintiff seeking a TRO must either set forth the facts explaining why a TRO is necessary in a verified complaint or file a motion or petition supported by the necessary affidavits attesting to the facts that would justify entry of a TRO. As the court in Houseknecht v. Zagel explained, parties seeking entry of a TRO must establish: (1) the existence of a clearly ascertained right in need of protection, (2) an imminent risk of irreparable injury in the absence of injunctive relief, (3) an inadequate remedy at law, and (4) a likelihood of success on the merits of the dispute. Of these factors, the most important is the imminent threat of irreparable injury. A hearing on a motion for a TRO is a summary proceeding.

With offices in Chicago and Elmhurst, The temporary restraining order attorneys of Lubin Austermuehle represent clients in the greater Chicago area, DuPage County, elsewhere in Illinois, and in Indiana and Wisconsin. We have more than three decades of experience defending and prosecuting TRO motions and other emergency commercial litigation claims in the federal and state courts in Illinois in a wide variety of business dispute lawsuits. Contact us at 630-333-0333, or online to schedule a consultation with one of our knowledgeable business litigation attorneys.