A declaratory judgment, or declaration, is provided by the court and defines the nature of each party’s rights and the relationship among all parties to the action. A declaratory judgment does not order any actions nor award any damages. It simply sets the record straight.
What Happens When a Declaratory Judgment Is Issued?
According to Article III of the U.S. Constitution, federal courts can only issue declaratory judgments when an “actual controversy” is present. (An actual controversy means a valid dispute between two parties with the potential to be resolved in federal court.)
A declaratory judgment is meant to resolve legal uncertainty for both parties. It may help provide legal certainty when there is a disagreement. An involved party can request that the court issue a declaratory judgment, meaning they would rule on and declare the rights and duties of one or more parties.
When can a declaratory judgment be requested?
A declaratory judgment can be requested when:
- A lawsuit has been threatened but not yet filed. (This is the most common reason a declaratory judgment is requested or issued.)
- One or more parties believe there may be a disagreement of rights.
- There is a counterclaim to avoid further lawsuits from the same party.
- The statute of limitations passes before an injured party sustains damage.
Courts are sometimes dubious about making a declaration until after they have seen the case develop further. They may want to see more information presented before making an official judgment based on the facts.
Can You File a Declaratory Judgment After a Cease-and-Desist Letter Has Been Sent?
Declaratory judgments can be filed after a cease-and-desist letter is sent from one party to another. This is a risk to the party who sends the letter. The party receiving the letter may respond by requesting a declaratory judgment in their local jurisdiction, which can be more favorable to the receiving party. The sender will need to consider the possible outcomes of sending the letter versus trying to first address the conflicts without litigation.
Declaratory Judgments Are Not Enforceable
By itself, a declaratory judgment made by the court does not enforce anything as far as actions or damages. It is meant to state the court’s opinion on the legal situation without an order for the parties to do anything or implying any damages. However, the court may provide certain remedies along with the declaration.
Declaratory Judgments Versus Advisory Opinions
Declaratory judgments are sometimes confused with advisory opinions. An advisory opinion is similar to a declaratory judgment in that it is an opinion issued by a court. However, it does not actually resolve a case or controversy like a declaratory judgment is meant to do.
An advisory opinion only advises on the explanation or constitutionality of a law. On the other hand, a declaratory judgment may help bring any earlier resolution to the case. Advisory opinions have been questioned in many countries, and the U.S. Supreme Court has prohibited federal courts from providing advisory opinions.
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