Preliminary injunctions and the status quo

Conventional Wisdom:◦ Preliminary injunctions are only granted to preserve the status quo (aka

last peaceable contested status quo).

Why?

What is the “status quo” – just how manipulable is this concept?In Winter?

In O Centro (DEA wanted to stop church from using hallucinogenic tea, which it had used for years in services but which was also on schedule of illicit drugs)?

What does the “status quo” concept add to courts’ use of the four factor balancing test – i.e., when is it most likely to make a difference?

Protecting the defendant – the risk of error with preliminary relief 2 kinds of risk of error re preliminary injunction:

◦ Risk that preliminary injunction will be erroneously denied – hurts P

◦ P can sue for damages for harm done while D was not enjoined (i.e., during the period w/out preliminary relief and until permanent injunction issues

◦ Risk that preliminary injunction will be erroneously granted – hurts D

◦ D has no damages remedy for the harm done while the preliminary injunction was wrongfully in place – P hasn’t done anything wrong so D has no cause of action

◦ How can we protect D from harm of being wrongfully enjoined?

The Bond Requirement & Preliminary Relief

Because of the possibility that preliminary injunction or TRO will be erroneously issued, jurisdictions have BOND requirements:

◦ FRCP 65(c) – “The court may issue a preliminary injunction or TRO only if the movant gives security in an amount the court considers proper to pay costs and damages sustained by any party found to have been wrongfully enjoined or restrained. The US, its officers, and its agencies are not required to give security.”

◦ MRCP 92.02(d) – “No injunction or restraining order shall issue, …until the plaintiff … shall have executed a bond with sufficient surety or sureties to the other party, in such sum as the court may deem sufficient to secure … all damages that may be occasioned by such injunction or restraining order …, conditioned that the plaintiff will abide by the decision that shall be made thereon and pay all sums of money, damages and costs that shall be adjudged if the injunction or temporary restraining order shall be dissolved.”

Is setting the bond discretionary or mandatory – what courts actually do:

Federal – discretionary (despite seemingly mandatory language)◦ In what circumstances might a court waive the bond requirement?

◦ There is such a thing as inadvertent waiver – D is supposed to raise the bond issue. If D doesn’t and the court fails to require a bond then provisional relief is binding even if there is no bond.

Missouri◦ Bond is a jurisdictional prerequisite – P’s burden to make sure is set◦ Preliminary injunction/TRO are void if bond is not posted◦ BUT courts can set bond at a nominal amount

◦ Same reasons as “waiver” above for setting bond at nominal amount

When is D “wrongfully enjoined” so as to trigger P’s liability under the bond? Conventional Wisdom:

◦ When D is subject to a preliminary injunction but then prevails on the merits at trial, she has been wrongfully enjoined.

◦ Note FRCP & MRCP essentially get you to the same result here.◦ FRCP requires P to post bond in payment for costs incurred if D “wrongfully

enjoined.” MRCP requires P to post bond for costs incurred if injunction dissolved (Missouri courts hold that dissolution of injunctions usually equals a determination that the injunction was wrongfully obtained).

◦ What if D (as in Coyne-Delany) prevails on the merits at trial due to a change in the substantive law while the preliminary injunction was in place – should courts allow D to recover on the bond?

“Wrongfully Enjoined” cont’d In a trademark infringement case the court issues a preliminary injunction enjoining D from selling his product in 30 states. At trial, the court determines that infringement occurred in only 3 states and narrows the injunction. Has defendant been wrongfully enjoined?

P instigates a lawsuit and obtains a preliminary injunction. The lawsuit is later dismissed with prejudice due to P’s total failure to prosecute and the injunction is dissolved. Has defendant been wrongfully enjoined?

P files lawsuit and obtains preliminary injunction. The lawsuit is later dismissed because P & D have settled and agree to ask the court to dissolve the injunction. Has D been wrongfully enjoined?

If a preliminary injunction is wrongfully issued, can a court nevertheless refuse to enforce a bond that has already been set? Rarely. There must be a very good reason for the court to refuse to enforce a bond once it has already been set.

◦ Why? If a court can refuse to set a bond (federal) or set it at a nominal amount (Missouri) – why can’t it refuse to enforce it?

For what reason can a court refuse to enforce a bond?

◦ Change in the substantive law (much like in Coyne-Delany)◦ D’s failure to mitigate damages

◦ A court should not refuse to enforce the bond simply because P acted in good faith when bringing the lawsuit – bond is designed to protect D against judicial error regardless of P’s lack of malice

Does the bond amount limit P’s liability for the wrongfully issued injunction? General Rule – the bond amount is the limit of P’s liability

◦ Why? Bond is a compromise between P&D’s interests -- alleviates D’s harm from risk of error but also allows P to know ahead of time what liability is.

BUT:

◦ Some other source of law may provide independent liability for P aside from the bond• E.g., malicious prosecution

◦ Some statutes specifically provide greater recovery than the bond amount

What damages can D recover on the bond?

D can recover only those actual losses stemming from the wrongful granting of the preliminary injunction/TRO.

◦ Can’t recover damages caused by the litigation generally

◦ What are the kinds of damages caused by the wrongful granting of provisional relief that D can recover?

◦ e.g., lost profits if operation of business wrongfully enjoined◦ e.g., storage costs of construction equipment during period construction

project enjoined◦ e.g., maybe atty’s fees related to defending against, dissolving the

temporary injunction, or setting the bond amount (depending upon the jurisdiction)◦ recover as damages (not as fees)◦ unlikely to recover any attorneys fees in federal court

Temporary Restraining Orders What? Temporary emergency injunctions (usually several days at most) designed to prevent injury until a preliminary injunction hearing can be held.

--I--------------------I---------------------------I---------------------------------------------------I------- Complaint TRO Prelim. Injnxn Trial

Hearing Hearing

Critical showing for plaintiff:◦ MRCP 92.02(a)(1) & (b)(1) – P must demonstrate that immediate &

irreparable injury, loss or damage will result in the absence of relief.◦ FRCP 65(b)(2) – For TROs issued without notice P must show specific facts in

affidavit/verified complaint that immediate and irrep. injury loss or damage will result before adverse party can be heard• Courts say same substantive standards apply to TROs with notice

Note – Courts generally also weigh the other factors relevant in preliminary injunction cases (check jurisdiction to see how treat them) – BUT P’s harm showing is most critical

TROs and the notice requirements

If Carroll was decided under FRCP 65 or its state counterpart (Missouri/Maryland), would the court have granted the TRO? Why or why not?

Why is notice regarding the hearing so important under the rules?

Does Carroll rely on the rules or is it worried about something else?

TROs & notice Because of the emergent nature of TROs, NOTICE is often the biggest issue.

◦ Federal and State rules clearly contemplate Ps will give notice but also contemplate that there may be times when notice is not possible.

When will P’s ever dispense with notice of a TRO hearing?

◦ An injunction is only binding on someone if they have notice that it exists (that’s another requirement of notice) – you have to be able to find D after the hearing. This means P’s can usually find D to give them notice of the hearing so that they can defend themselves too.

◦ When, if ever, will P’s be unable to find D before the hearing but be able to serve D after the hearing w/ the injunction?

How much notice is required for a TRO?

With preliminary injunctions:◦ Notice cannot be dispensed with – see FRCP & MRCP rules.◦ All preliminary injunction hearings are typically dealt with as written motions on at

least 10-14 days notice. These time lengths are generally governed by local rules.

What type of notice is typically required of TRO requests – assuming P is not trying to dispense with notice altogether?

◦ Under FRCP? ◦ Can P wait until the last minute to give notice even if P knows where D is? In what

circumstances is delayed notice okay?

How does MO law deal with the length of notice issue?