Government Movants

Government Movants

The last sentence of Rule 65(c) carves out the only exemption the rule's text recognizes: "The United States, its officers, and its agencies are not required to give security."¹ That sentence follows the general command that a court may issue a preliminary injunction or a temporary restraining order only if the movant gives security. It therefore lifts a condition and confers no power. A federal movant must still satisfy the court that interim relief is warranted, and the exemption excuses only the guarantee that other movants must supply.

The exemption matters because of what a bond does for the party who is enjoined. One court called the bond's protection important for two reasons. A defendant who is wrongfully enjoined generally has recourse, with rare exceptions, only against the bond. And because a preliminary injunction issues before trial on the merits, the chance that it was wrongly imposed is real.² Excusing security removes the fund the enjoined party would ordinarily draw on. An Indiana appellate court has suggested why a government movant might be excused: a governmental organization's presumed financial integrity may make security unnecessary.³ That presumption may explain the exemption, but the federal rule states the exemption in narrower terms than the presumption.

The text therefore controls. It names the United States, its officers, and its agencies, all of which are federal, and says nothing about a state. In In re National Credit Management Group, L.L.C., the court observed that Rule 65 specifically excepts the Federal Government and its agencies, so the FCC need not post bond. It then added that the State of New Jersey was "not automatically exempted from this requirement."⁴ One opinion thus gave two answers for two movants, and the fact that separated them was which government was asking. When an exam stem makes the plaintiff a public body, ask first which government it is.

Not being exempt did not mean that New Jersey had to post whatever bond the defendant might demand. The court noted that although the State was not exempt, a large bond was not required, and it held that a $10,000 bond would suffice "under the circumstances."⁵ A state or local movant outside the text thus falls back on the court's ordinary discretion over whether to require security and in what amount, the subject of the waiver and amount sections of this chapter. The FCC had to post nothing, while the State faced a bond of $10,000.

The FCC and the city are both public actors, and the text separates them by naming one kind of government and omitting the other. A public enforcer's role may weigh when the court sets security, but it does not bring a state or city within the exemption.

The exemption also has limits on what it accomplishes. The sentence provides only that these movants "are not required to give security"; it relieves them of the guarantee and says nothing about liability.⁶ One state court has drawn that line under its own procedural rule. In Howard D. Johnson Co. v. Parkside Dev. Corp., an Indiana appellate court observed that a governmental organization's presumed financial integrity may obviate security, but it concluded that a wrongfully enjoined defendant's full recovery of damages was not meant to depend on the plaintiff's being governmental.⁷ The court reasoned that such a defendant is susceptible to damages whoever brings suit, so the recovery available should be the same whoever the plaintiff is. A state court applying its own rule does not govern federal practice, but its decision shows that being excused from security and being free of liability to a wrongfully enjoined party are separate questions.