Declaratory Judgments: A Preemptive Litigation Tool

By Edward Jules Goodman

A declaratory judgment is a litigation tool where the litigant seeks the court's direction early within a commercial or other business controversy. The goal is to determine what kinds of rights or legal obligations might follow a future action. Declaratory judgments are meant to clarify the legal ramifications that would correspond with a future course of action before the course of action is initiated, according to attorney Neil Weinrich. They give legal knowledge that can guide the litigants' future actions.

Some examples of when it would be appropriate include:

• Non-compete agreements. If a former employee of a company is bound by a non-compete agreement but is seeking employment with a competitor of their past employer, the employee can seek a declaratory judgment to determine if the non-compete agreement is actually legally binding or if the duties of the future position are in conflict with the non-compete. Or the future employer may request a judgment to determine if hiring a potential employee with a non-compete agreement would leave the future employer at risk for litigation.


• Insurance Matters: An insurer may request a declaratory judgment confirming that they are not, for whatever reason, responsible to cover a claim filed by one of their insured. This prevents the insured from being able to successfully appeal an insurance company's claim denial.


• Copyright and Trademark Infringment: If an entitiy is considering the use of a trademark that is similar to another's business or is concerned about overstepping the bounds of copyright, the entity can ask for a declaratory action to prevent them from committing infringement.

Declaratory judgments are a preemptive legal move meant to show the legal ramifications of future actions. They are not appropriate when actions are already in motion and damages have already been incurred or rights infringed upon.

Some entities try to use them as preemptive actions in cases of further litigation. Most notably, declaratory judgments are sometimes attempted in order for and entity to claim the plaintiff position when, in the matter of law, it actually belongs to the adversary. The courts generally strike down these types of judgments.

If you are concerned about the legal ramifications of a future course of action, a declaratory judgment may be suitable for your situation. You should contact an attorney who specializes in commercial litigation in your area and who is familiar with them specifically. A commercial litigation attorney will be able to properly asses your case and consult you as to if a declaratory judgment is a good litigation tool to use in your situation, or if another course of action would prove more fruitful.

Please visit www.icardmerrill.com.

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