By Shannon Armstrong

Law360 (May 19, 2020, 4:14 PM EDT )

Shannon Armstrong

COVID-19 continues to disrupt business relationships and court operations, even as both businesses and courts begin to gradually reopen. For businesses, parties are still walking away from nearly inked deals, companies are incapable of fulfilling contractual obligations, and intellectual property rights are being ignored.

Companies must act quickly and strategically to protect their trade secrets, customer relationships, and rights to contractual performance. Often times, this means seeking emergency relief through a preliminary injunction, temporary restraining order or other provisional relief. And while courts are beginning to reopen for essential functions, business disputes are not courts' first priority. As a result, while business risks are greater than ever, the ability for businesses to seek emergency relief from courts remains limited.

To be successful, businesses must tailor their legal strategies to the unique circumstances of this time, in addition to considering whether businesses meet the applicable standard for emergency injunctive relief — typically a showing of irreparable harm, likelihood of success on the merits, and no adequate remedy at law. In setting and executing winning strategies to obtain emergency relief from the courts, companies should consider the following five suggestions.

1. Consider jurisdictions carefully.

For business disputes in which emergency relief is needed but no lawsuit has yet been filed, the initial decision of where to file has even more strategic importance given courts' varied responses to COVID-19 and ability to handle for emergency motions. Typical considerations for where to file may need to be adjusted to prioritize which court is currently best suited to hear an emergency motion in a timely and efficient manner.

For example, courts that have issued clear and comprehensive orders for how to obtain emergency relief during the pandemic are better suited to hear an emergency motion than a court that hasn't issued guidance for litigants needing emergency relief in civil cases. Courts that have experience with video hearings and telephonic appearances may also be a better choice than courts that have traditionally disfavored, or are inexperienced with, remote appearances.

The where-to-file decision may even be clearer in some states. For example, New York state trial courts still prohibit filing of new "nonessential" cases, while federal courts in New York are accepting new case filings. Law360 provides up-to-date information on current court closures.

2. Check new local rules, standing orders and judge-specific requirements regularly.

Courts across the country are implementing — and revising — standing orders for litigation during court closures related to COVID-19. Certain types of civil motions are no longer being heard while criminal and emergency family matters are prioritized, and procedures in some courts are changing on a regular basis.

For example, a North Carolina trial court recently denied a motion seeking expedited discovery to support a forthcoming motion for preliminary injunction in a trade secret dispute because although the applicable chief justice emergency orders would allow motions for temporary restraining orders, they "do not by their express terms provide exceptions for consideration of motions for preliminary injunctions, motions for expedited briefing or hearings, or motions to require expedited discovery."[1]

The trial court accordingly concluded it "must exercise the authority it does possess sparingly and only when an entitlement to emergency relief has been established by the requesting party."[2]

Carefully review rules for how to deliver chambers' copies of filings, procedures for telephonic or video hearings, and preferred methods of communication for court staff. Similarly, procedures for obtaining and posting bonds, or other security required to implement a provisional court order, will be challenging in this environment. Plan ahead and do not expect the court system to be as responsive or user-friendly as normal.

3. Know the audience.

Judges, and their staffs, are facing the same challenges as lawyers and clients, including closed schools, caring for sick family members, and navigating economic uncertainty. While important issues facing businesses may warrant emergency relief from the courts, take care to avoid over-the-top rhetoric or tone-deaf demands on court staff.

Instead, businesses should strive to adopt a practical approach by showing — not telling — the court audience that emergency relief is necessary. Businesses that present a compelling story supported by detailed facts in declarations and exhibits, with appreciation for the court's limited time and attention, increase their chances of a favorable response.

4. Expect courts to apply a heightened standard.

While litigants shouldn't expect courts to apply a new standard because of the COVID-19 pandemic, businesses can expect courts to apply the established standard for emergency relief in the context of today's world. Practically, that means the alleged irreparable harm needs to be immediate, compelling and specific.

Businesses should not rely solely on conclusory allegations of injury to goodwill or customer relationships to establish irreparable harm. For example, if customer relationships are at risk of being harmed, specify which customers, the length and scope of the relationship, and how the relationship will be damaged immediately if the opposing party's conduct is not stopped by a court order.

Likewise, in addressing the balance of the equities and public interest factors, expect courts to consider whether the relief sought by the emergency motion will result in greater, or reduced, risk for exposure to the coronavirus or economic hardship and tailor arguments accordingly.

For example, the U.S. District Court for the Northern District of Illinois court recently granted a motion for preliminary injunction requiring a food service and housekeeping vendor for 11 senior living facilities to continue providing services even though it claimed it had validly terminated the underlying contract with the facilities' owner.[3]

In analyzing the public interest factor, the court explained that the 1,600 senior citizens living at the facilities "rely on Defendant for meals, for clean clothes and bedding, and for sanitized living spaces. In normal times, these are essential services. During a pandemic, their interest in receiving these services is absolutely critical."[4] Requesting relief that requires a business to stay open to the public over its objections or would result in a business having to lay off employees will also likely be unpersuasive to a court in this environment.

Similarly, requests for expedited discovery — especially depositions — in connection with an emergency motion while stay-at-home orders are still in place will likely face additional scrutiny from the courts.

For example, the U.S. District Court for the District of Kansas recently denied a motion for expedited discovery to support a preliminary injunction motion in a trade secret dispute, noting that the "Plaintiff's motion comes at a time when the country is in the midst of the COVID-19 national emergency and while much of the country was (and even now some areas still may be) under stay-at-home orders. Therefore, the burden on the responding party of producing Defendant for an expedited deposition could place a very heavy burden upon Defendant."[5]

5. Tell the whole story through the papers.

Now it not the time to ask the court to hear from live witnesses for emergency hearings or for submitting last-minute declarations at the time of hearing. Even if oral argument is allowed, courts are shortening hearings and will have less patience for lengthy discussions of the law or the facts.

If it is important, make sure it is in the papers. That also means that written submissions must be clear and well-organized. Advocates cannot assume that they will have an opportunity to explain "what is really going on" at the hearing. If the legal issues or submitted evidence are particularly complex, consider including a more comprehensive summary of the legal argument, exhibits and declarations at the beginning of the brief.

Finally, consider whether the requested relief — often submitted in the form of a proposed order — is as narrow, specific and clear as the circumstances warrant. Now more than ever, courts want to cut through complicated issues, and courts often first review a proposed order in analyzing how to triage an emergency motion. To be most effective, the proposed order should, standing alone, describe the relief sought without cross-reference or reliance on the underlying motion.

Conclusion

In short, by planning ahead, considering the current circumstances and adjusting strategy accordingly, businesses will be in a better position to obtain emergency relief from courts when facing high-stakes legal issues that cannot wait.

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Shannon Armstrong is a partner at Holland & Knight LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] PDF Elec. & Supply Co. LLC v Jacobsen , No. 20 CVS 4609, 2020 WL 1930369, at *2 (N.C. Super. Apr. 16, 2020).

[2] PDF Elec. & Supply Co. LLC v Jacobsen, No. 20 CVS 4609, 2020 WL 1930369, at *3 (N.C. Super. Apr. 16, 2020).

[3] Lexington Healthcare Ctr. of Bloomingdale Inc. v. Morrison Mgmt. Specialists Inc. , No. 20-CV-1792, 2020 WL 1820522, (N.D. Ill. Apr. 10, 2020).

[4] Lexington Healthcare Ctr. of Bloomingdale Inc. v. Morrison Mgmt. Specialists Inc., No. 20-CV-1792, 2020 WL 1820522, at *4 (N.D. Ill. Apr. 10, 2020).

[5] CGB Diversified Servs. Inc. v. Forsythe , No. 20-2120-JAR-TJJ, 2020 WL 2193114, at *3 (D. Kan. May 6, 2020).

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