Colorado law firm Godfrey Johnson asked a federal judge to halt the Small Business Administration from enforcing a provision of the U.S. CARES Act that would "cause an economic disaster."

The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, passed by Congress on March 27, is a $2 trillion stimulus package that, among other things, provides loans and economic relief to families and businesses impacted by the COVID-19 outbreak. On Friday, Godfrey Johnson filed an emergency ex parte motion for a temporary restraining order to prevent the SBA from enforcing an administrative rule that would exclude independent contractors as "payroll costs" in applying for small business loans under the "paycheck protection program" of the CARES Act.

"Time is of the essence," wrote Godfrey Johnson attorney J. Kirk McGill. "Defendants last-minute changing of the rules of the game—in direct contravention of the plain language of the Act and Congress' express intent in passing it—will, without swift intervention by this court, likely cause an economic disaster for a large swatch of America's small businesses."

U.S. District Judge R. Brooke Jackson of the District of Colorado, denied the motion Friday.

McGill and Godfrey Johnson partners Brett Godfrey and James Johnson did not respond to requests for comment. An SBA representative also did not respond.

Godfrey Johnson's motion claims that the CARES Act, starting Friday, allowed small businesses to begin applying for the loans. In their applications, they could list independent contractors as "payroll costs," but SBA Administrator Jovita Carranza implemented a rule Thursday evening that contradicted what Congress had intended.

"The fate of the most powerful economy on this planet balances on the edge of a knife—and an unelected bureaucrat has decided to torpedo a central plank of Congress' plan to keep it from falling into the abyss for reasons that fail to survive even the most cursory scrutiny on the very night before it goes into effect," McGill wrote.

Godfrey Johnson uses independent contractors "to manage its file systems," according to the motion, which sought to bring a case "for all similarly situated businesses within the jurisdiction of this court," possibly as a class action.

In the motion, McGill said he filed the emergency request prior to filing a lawsuit due to the "sheer magnitude of the damage" the administrator's actions could cause. He drew a distinction between his motion and one in another case in which U.S. District Judge Steven Seeger of the Northern District of Illinois, chastised lawyers bringing a trademark infringement case over unicorn designs.

"The undersigned doubts that this court has any more patience for spurious claims of a need for emergency relief than Judge Seeger did with the claimed emergency over counterfeit unicorns," he wrote. "But it is impossible to deny that excluding a major (and for many the primary) payroll expense of a broad swath of small businesses and accordingly denying them some or all of the financial relief they have been expecting and relying upon will critically undermine the very foundation of the Act—providing swift and broad financial assistance to America's small businesses."

In Friday's minute order denying the motion, Jackson wrote, "These are indeed strange and difficult times, but in such times the rule of law is particularly important."