Sealed complaint against online stores: what to do, step by step

The first sign something is wrong is usually a frozen balance, not a lawsuit. An Etsy seller's payment account goes to zero, or a marketplace hold appears without explanation, and only later does the seller learn that a federal court has already issued a temporary restraining order based on a complaint the seller was never allowed to see. That is the architecture of a Schedule A case, and it is designed to move faster than the seller can react.

TL;DRA sealed complaint against online stores is a federal trademark or copyright infringement lawsuit filed under a procedure known as the "SAD scheme" – Schedule A Defendants – in which the plaintiff obtains a temporary restraining order (TRO) and an asset freeze before the named sellers receive any notice. Being named is not an automatic loss. The TRO can be challenged, the asset freeze can be narrowed or dissolved, and settlement is usually possible on terms that are better than a default judgment.

This guide walks through the step sequence: what happens in the days before you find out, what the realistic procedural window looks like, and where each decision point sits. If you are already past the first stage, the section on where this goes wrong is the one to read first.

What is a sealed complaint against online stores, and why is your account frozen?

A sealed complaint against online stores is a federal civil complaint that a plaintiff – almost always a brand owner or a plaintiff's firm working on contingency – files under seal, meaning the court record is not publicly accessible when the case is first filed.

The plaintiff typically attaches a spreadsheet ("Schedule A") listing dozens or hundreds of online store names and marketplace seller IDs as co-defendants. Etsy sellers are regularly named alongside Amazon and eBay sellers in the same proceeding. The plaintiff then moves immediately for a TRO and, critically, for an order requiring marketplaces and payment processors to freeze any funds associated with the named accounts. Courts in a small number of federal districts grant these orders routinely, sometimes within days of the initial filing, and often without requiring personal notice to the defendants beforehand.

The freeze is the mechanism that concentrates your attention. The asset-freeze order typically reaches Etsy payment accounts, PayPal balances, and any processor the plaintiff identified in the motion. Your listings may also be disabled. The sealed status of the complaint is then lifted – or partially lifted – once service is attempted on defendants, at which point you may finally receive a copy of what was filed against you.

In matters we handle, sellers often discover the case when a customer emails asking why the shop disappeared, or when Etsy sends a generic account-action notice with no case reference. Some sellers find out only after searching their own store name in the federal court's PACER system. The information gap between the court's TRO and the seller's first awareness is not an accident; it is a feature of the procedure.

How does the Schedule A / TRO procedure actually work in federal court?

The Schedule A procedure follows a predictable sequence, and understanding it tells you which windows are still open at each stage.

First, the plaintiff files the complaint under seal and simultaneously files an ex parte motion – meaning without notifying you – for a TRO and an asset freeze. The motion argues that advance notice would allow defendants to move funds or abandon accounts. The court, if it grants the motion, issues a TRO that typically runs for a defined period before a preliminary injunction hearing must be held.

Second, the marketplace or payment processor receives the freeze order and complies. This is mandatory from the platform's perspective. Etsy, like other platforms named in these orders, does not have discretion to ignore a federal court order. Your account is held pending further instruction from the court.

Third, the plaintiff attempts service of process on each named defendant. Because many defendants are international sellers operating through marketplace accounts, service is sometimes effected by email to the account address, or through the court's authorization of an alternative method. Once service is complete or deemed complete, the clock on your response deadline starts running – typically 21 days to answer a federal complaint, though the local rules of the specific court and any prior extensions matter.

Fourth, the case moves toward either a preliminary injunction hearing – at which the freeze can be continued or dissolved – or a default judgment if no defendant responds. Most Schedule A cases settle before reaching a contested preliminary injunction hearing, but the settlement terms are driven by whether the defendant has appeared and contested the freeze.

In our practice, we regularly see sellers who missed the response window entirely because they did not realize that service had been completed. A default judgment in a Schedule A case can include damages, attorney's fees, and a permanent injunction, and it attaches to the frozen funds and potentially to other assets. Acting before default is entered matters enormously.

Step 1 – Verify the case and locate the court documents

The first concrete step is confirming that a federal case actually exists and finding the docket. Search your Etsy store name, your seller ID, and any associated business name in the Public Access to Court Electronic Records (PACER) system. Most Schedule A cases are filed in a small number of federal districts, so if you know the marketplace already sent a notice, look for a case number in that notice – Etsy sometimes includes partial reference information in account-action emails.

Once you locate the docket, pull the complaint, the TRO order, and any order regarding service. Read the TRO carefully for two things: the specific relief granted (account freeze, listing removal, asset transfer prohibition) and the hearing date, if any is set for a preliminary injunction. The gap between those two dates is the primary window for a motion to dissolve or modify.

If the complaint is still fully sealed and PACER shows nothing, the freeze may relate to a case where service has not yet occurred. A lawyer familiar with this procedure can contact the plaintiff's counsel to identify the case, and in some courts can file an appearance before the seal is fully lifted.

Do not contact Etsy's Trust and Safety team with general account questions at this stage. Platform support cannot modify or explain a federal court order, and the communication creates no legal benefit. The relevant channel is the federal court itself, through counsel.

Step 2 – Assess your exposure: is the infringement claim viable?

Being named in a Schedule A case does not mean the claim against you is well-founded. In matters we handle, we regularly encounter sellers who were named based on a keyword match, a product category overlap, or a listing that was lawfully sourced and accurately described. The complaint is often drafted broadly, and the plaintiff's firm may not have conducted thorough due diligence on every individual store before filing.

The honest assessment at step 2 has several parts. What does the complaint actually allege against your listings specifically? Does your inventory include items that could plausibly infringe the claimed trademark or copyright? Do you have purchase records, supplier authorizations, or documentation showing legitimate sourcing? Is the frozen balance material to your business operations, or is it a minor hold?

A common myth among sellers named in these cases is that being on the Schedule A list means an automatic loss. That is not accurate. Courts have dissolved TROs and dismissed individual defendants for lack of personal jurisdiction, misjoinder, and failure to state a claim. The viability of those defenses depends on the facts of the specific case and the court in which it is pending – but they are real options, not theoretical ones.

The other part of the assessment is practical. Contesting a TRO in federal court requires motion practice, briefing, and sometimes an evidentiary hearing. That has a cost and a timeline. Settling early – before appearances are filed and contested – is often available at a lower cost than full litigation. Understanding which route makes sense requires knowing what the plaintiff is actually seeking and whether the infringement claim has merit. For sellers weighing those trade-offs, the decision framework in fighting versus settling a Schedule A case is a useful reference point.

Step 3 – Move to dissolve or modify the asset freeze

The asset freeze is almost always the most urgent commercial problem. A TRO in a Schedule A case typically lasts no more than 14 days without the court's extension, though extensions are frequently granted and preliminary injunctions can continue the freeze for the pendency of the case. Acting before the preliminary injunction stage preserves the widest set of options.

The motion to dissolve or modify the TRO argues one or more of several grounds: the plaintiff cannot show a likelihood of success on the merits against your specific store, the balance frozen is disproportionate to any damages the plaintiff could recover, the court lacks personal jurisdiction over you as an individual seller, or you were misjoined with dozens of unrelated defendants who share nothing with you other than selling in the same general product category.

Personal jurisdiction is a significant defense in Schedule A cases because many sellers are located outside the United States, and the plaintiff must establish a basis for the court to exercise jurisdiction over each individual defendant. Misjoinder – the argument that hundreds of independent sellers cannot be sued together in a single action simply because they are accused of similar conduct – has succeeded in some courts and continues to be litigated. Neither defense is guaranteed, but both are legitimate and regularly raised.

Filing the motion requires appearing in the case, which also starts the clock on answering the complaint. The sequence of filings matters. An attorney experienced in Schedule A defense will structure the appearance to preserve defenses and avoid inadvertent waiver of jurisdictional arguments.

A home-goods Etsy seller (spring 2026) came to us after discovering a TRO had been in place for several weeks; the seller had not recognized the account-action notice as a federal court matter. We moved to dissolve the freeze based on a misjoinder argument and the absence of any sales of the specific product cited in the complaint, and the court modified the order to release most of the held balance while the case continued on the remaining question.

Step 4 – Engage on settlement or prepare to answer the complaint

Most Schedule A cases resolve before trial, and a significant proportion settle within weeks of a defendant appearing. The settlement conversation is different at different stages. Before the TRO is contested, the plaintiff holds all the leverage – the funds are frozen, the clock is running, and the defendant is anonymous in a sea of co-defendants. After a motion to dissolve or a jurisdictional challenge is filed, the dynamic shifts.

What does settlement in a Schedule A case look like? Typically: a consent judgment or a settlement agreement that includes a release of the frozen funds minus a payment to the plaintiff, a permanent injunction against the specific listings alleged to infringe, and sometimes reporting obligations. The payment amount, the scope of the injunction, and whether the settlement is confidential are all negotiated points.

For sellers who believe the infringement allegation is wrong or who have a viable jurisdictional defense, settling means accepting a judgment even if the claim was never properly proven. For sellers who had infringing listings and whose priority is releasing funds and getting back to operations, settlement on commercially reasonable terms can be the fastest path forward.

The alternative is answering the complaint and contesting the case on the merits. That means written discovery, potential depositions, and a trial schedule that can run for a year or more. In most matters, that path is reserved for sellers with a clear defense, a large frozen balance, or a business interest in establishing a precedent.

Understanding what the plaintiff's settlement demand actually means – and whether the range they offer is standard for these cases or aggressive – is covered in more depth in why settlement demands in Schedule A cases happen and how sellers respond.

The steps above describe the standard path from discovery of the case through the first meaningful decision. Your situation turns on the exact wording of the TRO, the court, the balance frozen, and whether the complaint identifies your specific listings – which is what we review first.

To discuss the case, email info@tutamenlaw.com.

Where this goes wrong: the mistakes sellers make alone

The most common mistake is delay. A seller who waits to "see what happens" allows the default judgment clock to run, gives the plaintiff's counsel grounds to argue the defendant has abandoned the case, and loses the window for the most effective TRO challenges. Default judgment in a Schedule A case is not a small adverse ruling – it can include statutory damages, attorney's fee awards, and a permanent injunction, all enforceable against the frozen funds without further notice.

The second common mistake is contacting the plaintiff's counsel without counsel of your own. Plaintiff's firms in Schedule A cases are experienced at converting those calls into quick settlements on their terms, sometimes before the seller has understood the scope of the complaint or the actual strength of the claim. Anything said in that call can inform the plaintiff's strategy in the case.

The third mistake is treating this as a platform dispute. Etsy cannot unfreeze your funds pursuant to a federal court order. Appeals to Etsy's seller support, even persistent ones, will not change the outcome. The resolution path runs entirely through federal court.

The fourth mistake is assuming the case is too small to fight. Many sellers on a Schedule A list have frozen balances in the low four figures and assume it is not worth the cost of a lawyer. The relevant comparison is not the balance versus the legal fee in isolation – it is the balance versus the cost of a default judgment, which can be substantially larger. The practical economics differ by case, and a short initial review can clarify whether the numbers make sense for each option.

A kitchen-accessories seller on Etsy (winter 2025) came to us six weeks after the TRO was entered, having spent that time writing to Etsy support and to the plaintiff's counsel directly, without representation. The plaintiff had secured an extension of the TRO. We still filed a motion to modify the freeze and opened settlement negotiations, ultimately reaching an agreement that released a portion of the funds. Had the seller appeared earlier, the modification motion would have been stronger and the settlement leverage greater.

Decision points and trade-offs: choosing your route

Once you have located the case and had a short legal review, the realistic options fall into three routes.

If the complaint cites listings you recognize as potentially infringing, and the frozen balance is modest, the route is typically early settlement. The realistic timeline for that path is several weeks from first appearance to a signed agreement. The cost is a fixed-fee engagement plus the settlement payment.

If you have strong evidence of legitimate sourcing, no actual infringing sales, or a clear jurisdictional defense – such as no sales into the forum state and no other US nexus – the route is a motion to dissolve or modify, potentially followed by a motion to dismiss. The timeline is longer, several months at minimum, and the outcome is uncertain, but the potential is release of the full frozen balance and dismissal from the case.

If the case is at an early stage, the plaintiff has not yet perfected service, and the complaint is still substantially sealed, there may be a narrow window to appear proactively, contest service, and negotiate from a position of greater information. That is the least common scenario but worth identifying in the initial review.

For a comprehensive orientation to how these cases work from filing through resolution, the complete guide to Schedule A TRO defense for sellers covers the full lifecycle in detail.

If a first motion or a direct approach to the plaintiff's counsel already came back without resolution, a second read of the record can identify what specifically failed and whether a different argument or a different settlement posture is available. Email info@tutamenlaw.com with a brief description of where the case stands.

Related areas

• Schedule A / TRO Defense – full practice hub for federal IP cases targeting marketplace sellers
• Amazon Account Reinstatement – account deactivation and appeal strategy for Amazon sellers

Frequently asked questions

How long does resolving sealed complaint against online stores usually take on Etsy?

The timeline depends on when you appear and which route you take. Early settlement – from first appearance to signed agreement – typically takes several weeks. A contested motion to dissolve the TRO adds weeks of briefing and a hearing. If the case proceeds through answer, discovery, and trial, the timeline runs to a year or more. Acting before default is entered is the single most important timing decision, because default forecloses most of the shorter paths.

What are the main risks if I handle sealed complaint against online stores alone?

The primary risk is default judgment. A seller who does not appear in federal court within the required period can receive a default judgment that includes damages and attorney's fees well above the frozen balance. Additional risks include inadvertent waiver of jurisdictional defenses by appearing incorrectly, making statements to plaintiff's counsel that compromise the case, and missing narrow windows – such as the TRO modification hearing – that close without notice. Federal civil procedure is not designed for self-represented parties unfamiliar with motion practice.

Do I need a lawyer for sealed complaint against online stores?

In practice, yes. A Schedule A TRO proceeding is a federal civil case with procedural deadlines, motion practice, and substantive defenses that are difficult to identify and brief without experience in this specific type of case. The cost of representation should be weighed against the alternative: a default judgment that can permanently freeze or forfeit the held funds and attach to future assets. A short initial review will clarify whether the economics make representation the right call for your specific situation.

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 handles TRO defense and settlement strategy on fixed fees, with scope and cost confirmed after a short review of the case. To discuss your situation, email info@tutamenlaw.com.

Written by Sofia Marchetti – Partner, Schedule A / Federal Defense

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.