Agencies Told to Forcefully Seek Security for Preliminary Injunctions

A March 11 executive order directs agencies to be aggressive in asking judges to require bonds from those seeking preliminary injunctions against the government. It allows for exceptions in "extraordinary circumstances."

The order (bit.ly/4imNLJH) tells agencies to assert that 65(c) of the Federal Rules of Civil Procedure "mandates" that judges require securities from those seeking such preliminary injunctions or restraining orders.

Whether courts will agree involves a debate over judicial discretion. Rule 65(c) states:

"Security. The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. The United States, its officers, and its agencies are not required to give security."

The debate is over which phrase is more important: "only if the movant gives security" or "in an amount that the court considers proper." The argument for second is that it lets judges set the amount at zero, especially in disputes involving public interest or to protect against the government quashing motions brought by those with limited financial ability.

CSPC typically faces companies in court, but those can be small businesses like Leachco, which failed last year on other grounds in securing a preliminary injunction at multiple judicial levels involving the agency's forced-recall administrative proceeding (PSL, 6/10/24).

The executive order dictates that agencies tell judges:

"(a) Rule 65(c) mandates the court to require, in all applicable cases, that a movant for an injunction post security in an amount that the court considers proper to cover potential costs and damages to the enjoined or restrained party;"

"(b) the security amount the agency is requesting is based on a reasoned assessment of the potential harm to the enjoined or restrained party; and"

"(c) failure of the party that moved for preliminary relief to comply with Rule 65(c) results in denial or dissolution of the requested injunctive relief."