Emergency Commercial Litigation: An In-depth Look at Temporary Restraining Orders

Business owners understand that legal emergencies often call for prompt and resolute action. In such cases, businesses may require injunctive measures before a full resolution of the entire case on its merits. Two types of injunctive relief that businesses pursue, prior to the resolution of the controversy, are temporary restraining orders (TROs) and preliminary injunctions. TROs are emergency remedies issued in exceptional circumstances to maintain the status quo for a limited period. It’s important to note that TROs are provisional in nature and do not decide the merits of the dispute. Due to their limitations, TROs are typically followed by additional forms of emergency litigation, such as a preliminary injunction.

Understanding the Nature of Temporary Restraining Orders

In Illinois, a TRO is an equitable remedy that compels a party to take specific action or refrain from doing something until the court has the opportunity to hear and review further arguments and evidence from all parties involved. The procedural requirements for TROs in Illinois state courts can be 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 can be found in Federal Rule of Civil Procedure 65. Under Illinois law, a TRO may typically only last for 10 days, with certain exceptions.

Illinois law recognizes two types of TROs: TROs with notice and TROs without notice (commonly referred to as ex parte TROs). Ex parte TROs are not favored by the courts and are only granted in extremely limited circumstances where the party seeking the TRO can demonstrate that providing notice to the defendant would result in irreparable harm. Businesses seeking a TRO must meet a high burden of proof by presenting well-pled facts that support their entitlement to the relief sought. Since TROs have a short duration, the court often schedules an evidentiary hearing on a motion for a preliminary injunction after the entry of a TRO.

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Determining the Appropriate Use of Temporary Restraining Orders

Illinois courts will only grant a TRO if there is a credible threat that the party seeking its entry will suffer imminent and irreparable harm. TROs are limited to providing injunctive relief and cannot be used to obtain monetary damages. Emergency motions for the entry of a TRO are commonly sought in various business settings, particularly in employment and intellectual property disputes. For example, it may be appropriate to seek a TRO to ensure that former employees comply with the terms outlined in their non-compete, non-disclosure, or non-solicitation agreements.

At Garrity Traina, our team of emergency commercial litigation attorneys regularly assists minority shareholders who find themselves being frozen out or squeezed out of their companies by a controlling shareholder. We also provide support to business partners or members of a limited liability company who face a stalemate arising from a dispute that threatens the ongoing viability of their business.

Establishing the Prerequisites for Obtaining a Temporary Restraining Order

To initiate the process of obtaining a TRO, a plaintiff must file a lawsuit. The plaintiff seeking a TRO must either present a verified complaint containing the necessary facts justifying the need for a TRO or file a motion or petition supported by relevant affidavits. As the court recognized in the Houseknecht v. Zagel case, parties requesting a TRO must establish the following factors: (1) the presence of a clearly ascertained right in need of protection, (2) an imminent risk of irreparable injury if injunctive relief is not provided, (3) the absence of an adequate legal remedy, and (4) a likelihood of succeeding on the merits of the dispute. Among these factors, the most significant is the imminent threat of irreparable injury. A hearing on a motion for a TRO is considered a summary proceeding.

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With offices located in Chicago and Elmhurst, the temporary restraining order attorneys at Garrity Traina proudly represent clients not only in the greater Chicago area and DuPage County, but also in other parts of Illinois, Indiana, and Wisconsin. With over three decades of experience in defending and prosecuting TRO motions and other emergency commercial litigation claims in both federal and state courts, we offer a wealth of knowledge to assist you with your business dispute lawsuits. Reach out to us at 630-333-0333 or visit our website to schedule a consultation with one of our highly skilled business litigation attorneys.