What Is An Injunction
You worked hard to grow your business and keep it competitive. You developed efficient policies and procedures, performed market research to set your price points, and invested in new technologies. And now the viability of your business is being threatened by another business trying to shortcut success. Lawsuits take a long time and you can’t wait years to get a court order in your favor to prevent immediate harm to your business. You need a court order now. You need an injunction.
An injunction is a court order designed to prevent injury to a business until the court can make a final decision on the merits of a case. The court may grant an injunction to:
- Prevent another business from performing any act that would continue to harm your business
- Force another business to perform an act in order to prevent harm to your business
- Prevent another business from removing, disposing of, or destroying property with the intent to defraud creditors
Phases Of Injunctive Relief
What most people know as an “injunction” actually comes in three separate phases: a temporary restraining order, a preliminary injunction, and a permanent injunction.
A temporary restraining order (TRO) is short-lived injunctive relief. The party seeking the TRO must file a motion and proposed complaint with the court that specifically states the nature of the harm to the business and how that harm will immediately affect the business. A TRO may be granted by the court before the competing business has a chance to respond. A TRO is meant to last only 21 to 28 days until the court can hold a hearing on the evidence. A TRO is meant only to protect the current rights of the business and does not award the business any relief other than keeping the status quo.
A preliminary injunction may be granted after the court holds a hearing on the TRO. A preliminary injunction may also be granted without a hearing on the TRO if the two businesses are each given a chance to present evidence to the court before and during a court hearing. A preliminary injunction is in effect for 180 days.
A permanent injunction may be granted after another hearing within 180 days of the preliminary injunction. The court may enter a permanent injunction if it determines the harm will continue for longer than the life of the lawsuit.
The Four Factors
The court must consider four factors before issuing an injunction.
- Substantial probability of succeeding on the merits
- Irreparable injury
- Harm to other interested parties
- Effect on public interest
Dataphase Systems, Inc. v. CL Systems, Inc., 640 F.2d 109 (8th Cir. 1981). Courts have found that no single factor is more important than the other and each must be weighed together considering the circumstances of the case.
If you need to file an injunction to protect your business, or if your business has recently had an injunction filed against it, contact our Business Law Team.