Emergency response to an asset freeze: the response checklist

A federal court order has frozen the funds in an eBay seller's payment account – and in many cases the seller did not know a lawsuit existed until the money stopped moving. That is the defining feature of the so-called SAD scheme, or Schedule A Defendants litigation: a plaintiff files under seal, obtains a temporary restraining order (TRO) and an asset freeze ex parte, and the first notice a seller receives is a notification from their payment processor that the balance is locked. The window to act is short, and the decisions made in the first days shape everything that follows.

TL;DRAn asset freeze in a Schedule A case is a court-ordered hold on a marketplace seller's payment accounts, entered without prior notice to the seller, typically as part of a temporary restraining order obtained by a brand owner alleging trademark counterfeiting. On eBay, this means PayPal and managed-payments funds can be locked simultaneously. The freeze is not a judgment – it is a provisional measure – and sellers have procedural rights, including the right to move to dissolve or modify the TRO, challenge jurisdiction and joinder, and negotiate a settlement on their own terms.

This checklist walks through the response in the sequence that matters most: confirm and document, stabilize operations, engage counsel, assess the legal position, and make the disposition decision. Each phase has concrete checks. None is optional.

Phase 1: Confirm the freeze and gather every document you have

The first task is to establish exactly what has been frozen and where the order originated, because the relief you can seek depends entirely on which court issued the TRO and on what grounds.

• Log into your eBay payments dashboard and screenshot every account balance, every pending payout, and every message or notification from eBay or Managed Payments. Time-stamp the screenshots.
• Check your registered email – the one on file with eBay, not just your primary inbox – for any email from a federal court or from a plaintiff's law firm. Service by email on foreign sellers is common in Schedule A cases; it is how many sellers first learn they are defendants.
• Check your PayPal account separately. In many Schedule A cases, the freeze order covers third-party payment processors associated with the seller's identity, not only the platform balance. Both can be locked independently.
• If you received a court filing – even a partial one – note the case caption, the district, and the docket number. Do not discard any paper or email. Save everything to a folder off the platform.
• Note the date and time the freeze appears to have taken effect. This matters for the timeline of any motion to dissolve or modify.
• Do not move money, close accounts, or transfer inventory until you have spoken with counsel. Any action that looks like dissipation of assets can complicate the motion practice and, in the worst case, trigger contempt.

Why this matters: Courts issue these orders under seal. The public docket may not yet contain the full complaint. The documents you have – however incomplete – are the starting record. Every competent TRO-defense motion begins with a reconstruction of what the seller actually knew and when.

What is really happening when eBay funds are frozen in a Schedule A case?

A Schedule A TRO is an ex parte order: the court heard only one side before freezing the funds. That asymmetry is the core of the defense. The seller named as a defendant had no opportunity to contest the allegations before the order was entered, and the plaintiff's burden at the TRO stage is deliberately lower than at trial.

In matters we handle, sellers are often named alongside dozens or even hundreds of other defendants on a single Schedule A complaint – hence the term "SAD scheme." The pleadings are frequently drafted to cover a broad population of marketplace sellers based on keyword searches and listing screenshots, not on individualized investigation. Many sellers in the schedule sold goods that were not counterfeit, or sold in quantities that had no realistic connection to the damages claimed. The fact of a TRO does not mean the underlying allegation is well-founded.

What eBay can do once it receives the order is limited: it is obligated to comply with the court's directive. The platform is not the decision-maker. The court is. That means the only path to unfreezing the funds is a legal one – a motion to the court, not a dispute with eBay.

The asset freeze is also temporary by design. A TRO typically has a short lifespan before the court must either convert it to a preliminary injunction or dissolve it. That hearing is the first substantive opportunity to challenge the order. Missing it – or arriving unprepared – can extend the freeze significantly.

• Confirm whether you received a date for a preliminary injunction hearing. It may be embedded in the TRO itself or communicated by the plaintiff's counsel.
• Calculate the days remaining. This is a hard deadline, not a guideline.
• Note the district. Scheduling norms, local rules, and the judge's preferences all affect the realistic timeline for a motion to dissolve or modify.

Phase 2: Stabilize your business operations immediately

While the legal process is engaged, the business continues to face obligations. A frozen payment balance does not pause supplier invoices, FBA storage fees, or the operating costs behind your other sales channels.

• Identify every revenue stream that does not flow through the frozen account. If you sell on Amazon, Walmart, or Etsy alongside eBay, those disbursements are on separate payment rails. Confirm they are moving normally.
• Notify your accountant or bookkeeper within 24 hours. The freeze will affect cash-flow projections, and any misdirected payments need to be tracked carefully from this point forward.
• Check whether any automated supplier payments, advertising charges, or platform fees are drawn from the eBay account or the frozen PayPal balance. If so, arrange alternative funding before those charges are due, to avoid a cascade of failed payments that complicates the business record.
• Do not cancel eBay listings unless instructed by counsel. The listings themselves are evidence, and some sellers inadvertently destroy their own documentation by cleaning up the account under stress.
• If you hold physical inventory that was part of the accused listings, do not dispose of it. It may be relevant to a merits argument – for instance, demonstrating legitimate sourcing.
• Preserve supplier invoices, purchase orders, and shipping records related to the accused products. These documents often determine whether the underlying allegation survives scrutiny.

In matters we handle, the sellers who preserve the most complete business records at this stage are the ones who have the most options at the motion and settlement stages. The ones who delete or ignore documentation narrow their own case.

Phase 3: Retain counsel and get a legal read on the specific order

Being named as a Schedule A defendant is a federal lawsuit. It requires a licensed US attorney. This is not a situation where a general business lawyer or an Amazon reinstatement consultant is adequate – the procedural and jurisdictional questions in Schedule A cases require federal litigation experience specifically in this area.

• Contact a lawyer with Schedule A TRO defense experience as your first call, not after you have attempted to respond on your own.
• Provide the lawyer with every document you collected in Phase 1: the TRO, any court communications, the case caption, and the notification from eBay or PayPal.
• Ask specifically about personal jurisdiction. Many Schedule A defendants are named in districts where they have no meaningful connection. A motion to dismiss for lack of personal jurisdiction can be a dispositive early step, and it is worth evaluating before the preliminary injunction hearing.
• Ask about misjoinder. Courts in several districts have pushed back on plaintiffs who bundle large numbers of factually unrelated defendants into a single Schedule A complaint. If the complaint covers hundreds of sellers with no demonstrated connection to each other or to the plaintiff's claimed harm, a joinder challenge is worth raising.
• Ask for a plain-language explanation of the bond. When a court enters a TRO with an asset freeze, the plaintiff typically posts a bond. The amount of that bond is relevant to the realistic damages exposure and to any claim the defendant may later make if the TRO is found to have been wrongly entered.

For an overview of how Schedule A litigation has evolved and the current defense strategies that have the most traction, see our complete guide to Schedule A TRO defense for sellers. For the specific context of counterfeit allegations filed in federal court, our briefing on counterfeit allegations in federal court – the current state for sellers covers the evidentiary standards in detail.

Phase 4: Assess the merits and the realistic decision points

After the legal read on the order itself, the next task is a merits assessment. This is where the business records from Phase 2 become critical, and where the seller's actual decision points emerge.

The myth that being named in a Schedule A case means an automatic loss is widespread. It is not accurate. Many Schedule A defendants have legitimate sourcing, operate in categories where the trademark claim is weak, or are named in complaints that contain jurisdictional or joinder defects. The preliminary injunction standard – which the plaintiff must meet to extend the freeze beyond the TRO period – is higher than the ex parte TRO standard. We regularly see cases where the plaintiff either cannot meet that standard or prefers not to test it, which creates real settlement leverage.

• Pull every supplier invoice, authorization letter, and sourcing record for the accused products. If you purchased from a licensed distributor or the brand itself, the counterfeit allegation may not be sustainable.
• Review the trademark registration(s) cited in the complaint. Generic descriptions of trademark claims sometimes cover only narrow categories of goods, and a seller in a different subclass may not actually be within the scope of the alleged infringement.
• Assess your sales volume in the accused category honestly. Courts and plaintiffs both look at this. A seller with a small number of transactions in the accused category is in a structurally different position than a high-volume reseller.
• Understand the settlement range. In many Schedule A cases, early settlement – before the preliminary injunction hearing – produces a release of the frozen funds in return for a payment that is a fraction of the theoretical statutory damages. This is often the economically rational outcome for a small seller. But "often" is not "always." The merits assessment tells you whether you have a stronger position than the typical settlement math assumes.

If a first attempt to resolve the matter has already produced an unsatisfactory offer or a failed motion, a second read can identify what changed, what was missed, and what routes remain open. For sellers who have already been through a first round of Schedule A litigation, the briefing on trademark suits naming many sellers – the current state for sellers addresses the evolving landscape directly.

The steps above describe the standard path. Your position turns on the specific court, the specific trademark, the specific complaint, and the specific account history – and those are the four things we examine first.

For a read on your specific order, email info@tutamenlaw.com.

Phase 5: The decision matrix – motion, settlement, or default

Every Schedule A defendant ultimately faces three paths. Understanding each one clearly is the only way to choose well under time pressure.

If the complaint contains a personal jurisdiction defect or a serious joinder problem – for example, if you are a UK or EU seller named in a US district where you have no operations, no sales directed at that forum, and no other meaningful connection – then a motion to dismiss or a motion to dissolve the TRO on jurisdictional grounds is the priority route. This path is faster than a full merits defense and, if successful, ends the case at low cost relative to the alternatives.

If the merits are mixed – you sold the product, the sourcing is legitimate but documentation is imperfect, and the volume is modest – then the realistic route is usually a negotiated settlement at the preliminary injunction stage. The settlement conversation often begins with the plaintiff's counsel within days of the TRO being served. Your position in that negotiation is directly tied to the quality of your documentation and the credibility of your merits arguments. An early settlement with a fund release, a consent injunction for future conduct, and a reasonable payment is a common outcome in matters we handle.

If the complaint is facially weak and the plaintiff's bond is thin – meaning the plaintiff posted a low bond, the trademark claim covers a broad and potentially overreached category, and the schedule contains hundreds of defendants in a mass joinder – then a contested preliminary injunction defense, combined with a motion to dissolve, can produce either a dissolution of the TRO or a substantially better settlement than was offered initially. This path requires more legal work and more time, but it is not unusual for it to produce a significantly better commercial outcome.

Default is never a strategy. A default judgment in a federal trademark case can include statutory damages far exceeding the frozen balance, a permanent injunction, and ongoing liability. Sellers who ignore the lawsuit because the frozen balance seems small, and who then receive a default judgment months later, are in a materially worse position than any of the three active paths above.

• Ask your counsel to give you a plain-English explanation of the statutory damages range the plaintiff could claim at default, and compare it to the settlement offer. This is the single most clarifying data point in the decision.
• Confirm the answer-due date and any extension options before choosing a path. Deadlines in federal court are not flexible absent a specific agreement or court order.
• Make sure the disposition decision is documented. If you choose to settle, the release language matters – confirm it covers all claims arising from the accused listings, not just the specific trademark at issue.

Phase 6: After the freeze lifts – what to check before resuming normal operations

Whether the funds are released by court order, as part of a settlement, or after a motion to dissolve, the post-freeze period requires its own checks. Resuming marketplace activity without them risks a recurrence.

• Confirm the release in writing from both eBay and the payment processor. A court order directing release does not always translate automatically to an account action; follow up with each platform's compliance team if the funds are not released within the period the order specifies.
• If the resolution included a consent injunction or a permanent injunction for future conduct, review the scope carefully with counsel before relisting any products in the category. Violating an injunction is contempt of court, not a policy violation.
• Audit the other listings in your store for any products in the same trademark owner's category. A settlement in one case does not prevent a new complaint about a different product from the same rights owner, unless the release is broad enough to cover it.
• Review your sourcing documentation process. The single most effective way to reduce future exposure in Schedule A litigation is to maintain, from the moment of purchase, a clean chain of title: invoice, authorization letter or licensed distributor confirmation, and product-level documentation. This is not a guarantee against being named – Schedule A complaints are sometimes filed on thin investigation – but it transforms the defense if you are.
• Consider whether the eBay store configuration contributed to the targeting. Sellers who present as high-volume discount suppliers of branded goods, without visible authorized-reseller indicators, are targeted more frequently than sellers with clear provenance signals in their store descriptions.

A micro-case from our practice illustrates the post-freeze phase. An eBay accessories seller (winter 2025) had a TRO and asset freeze entered in a Midwestern federal district. We reviewed the complaint and identified that the seller had legitimate authorized-distributor invoices covering the majority of the accused units, and that the plaintiff's trademark registration did not cover one of the two product subcategories at issue. We moved to dissolve on the jurisdictional question and opened settlement simultaneously. The freeze was lifted and the matter resolved before the preliminary injunction hearing, without a default and without a judgment on the merits. The seller resumed operations with a reviewed sourcing process and clear documentation going forward.

Related areas

• Schedule A TRO Defense – federal lawsuit defense for marketplace sellers facing asset freezes and restraining orders
• Counterfeit allegations in federal court – evidentiary standards and defense options for sellers accused of trademark counterfeiting

If you have already received a first settlement offer and it does not reflect your actual position, a second read often finds the specific argument that was missing. Email info@tutamenlaw.com to get that review started.

Frequently asked questions

How long does resolving emergency response to an asset freeze usually take on eBay?

The timeline depends on the path taken. A TRO by design has a short life before it must be tested at a preliminary injunction hearing – that window is typically measured in days to a few weeks, depending on the district and the judge. Settlement negotiations at that stage can conclude quickly if the parties have realistic expectations and the seller's documentation is in order. A contested motion to dissolve on jurisdictional grounds can resolve the freeze within that same window if the argument is strong. A full merits defense takes longer. The variable that most often extends the timeline is delay in retaining counsel – every day without a lawyer narrows the options available before the first hearing date.

What are the main risks if I handle emergency response to an asset freeze alone?

The risks are procedural, substantive, and permanent. Missing the answer deadline produces a default judgment, which can carry statutory damages far exceeding the frozen balance. Filing a response without understanding the jurisdictional or joinder arguments wastes the most powerful early defenses. Communicating directly with plaintiff's counsel without understanding the release language can result in a settlement that does not actually cover all claims or that contains injunction terms broader than the seller realized. And any action that looks like asset movement in defiance of the freeze order – even inadvertent – can result in a contempt finding. In federal litigation, there is no equivalent of a marketplace appeals process: errors are on the record and difficult to reverse.

Do I need a lawyer for emergency response to an asset freeze?

Yes. An asset freeze entered by a US federal court is a federal lawsuit. In the US, only a licensed attorney can represent a party in federal court. This is not optional, and it is not a matter of complexity – it is a legal requirement. Beyond the requirement, the quality of the early legal read determines whether the best defenses are preserved or waived. The jurisdictional and joinder arguments that most often produce fast, low-cost outcomes in Schedule A cases require federal litigation experience to identify and to frame correctly. Retaining a specialist at the first sign of a freeze is the single most protective step a seller can take.

About Tutamen

Tutamen is an independent law firm for online marketplace sellers. We represent Amazon, Walmart, Etsy and eBay sellers in account deactivations, frozen-funds recovery, intellectual-property disputes, arbitration and Notices of Dispute, and US federal Schedule A defense, plus EU marketplace regulation. Our work is attorney-led and confidential, with fees quoted up front. We act for founders, brand owners and in-house teams who need a specialist for a marketplace dispute. Our Schedule A practice focuses on TRO defense, motions to dissolve, jurisdictional challenges, and settlement on terms that reflect the seller's actual position – not the plaintiff's opening demand. To discuss your situation, email info@tutamenlaw.com.

Page authored by Noah Brennan, Federal Litigation & Schedule A Analyst, Tutamen.

Disclaimer: This article is general information, not legal advice, and does not create an attorney-client relationship. Marketplace policies and the law change, and every account and case is different. For advice on your situation, contact Tutamen at info@tutamenlaw.com.