Coyne-Delany Co. v. Capital Development Board (П), 717 F.2d 385, 1983 Is a prevailing Δ entitled to collect on an injunction bond? If so, can it collect above the limit of the bond? Issue Reasoning Court must require a bond or equiv security in order to ensure that the П will be able to pay all or at least some of the damages that the Δ incurs from the prelim injunction if it turns to have been wrongfully issued. The award of damages on the bond is not punitive. A good reason for awarding damages in this case was that the bond covered only a small fraction of the Δ’s damages. o $5K is not excessive – the П is substantial corp. It would be incongruous if a prevailing defendant could obtain the full consequential damages caused by a preliminary injunction. o The prelim injunction halted work for a year. It could’ve been for 2-3 or more. Having to post a bond is a deterrent to Пs. o If the П’s damages are limited to the amount of the bond, at least he knows just what his exposure is. A Δ unhappy with the amount of the bond can appeal it and ask the court to increase the bond. o Δ did not do so in here. 450 Rule The terms of the bond are limited to the damages caused by the TRO. Rule 65(c): Damages on an injunction bond: o No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. A prevailing Δ is entitled to damages on the injunction bond o unless there is a good reason for not requiring П to pay in the particular. o Ex: Δ failed to mitigate. The award of damages on the bond is not punitive. Surety cannot be required to pay more than the face amount of the bond. o The bond is the limit of the damages Δ can obtain for a wrongful injunction even from П. o Exception: o П not acting in good faith o П was seeking restitution "a party injured by the issuance of an injunction later determined to be erroneous has no action for damages in the absence of a bond. Facts Δ was injured by a prelim injunction that was later reversed. Coyne’s toilet-flush valves malfunctioned and it was not invited to bid on phase 2 of a gov K. After all bids were submitted and before they were opened, Coyne obtained a TRO against the gov’s opening of the bids. The gov asked for a $50K bond – the TRO was causing delay to the project and the delay was costly; but was granted a $5K bond only (the judge thought the TRO would be for a week only). A change in law caused the TRO to be reversed and the Δ asked for damages under the bond. o New law: no property right in bidding on gov K. o The gov asked for the diff between the 2 lowest bids before the TRO and after a rebid of $56K. o Court refused to award. Held Proc П argues Δ argues Reversed. Court refused to award the $56K damage. o When the judge issued the TRO, he thought that the П was likely to prevail on the merits. o It would be unreasonable to require a party to expect a change in law. Deprived of property right without DP. Asking for $56K for wrongfully issued prelim injunction. Carroll v. President of Princess Anne, 393 U.S. 175, 1968 Issue Reasoning The case is not moot: the group has sought to continue its activities. o Capable of repetition yet evading review. The 10-day order must be set aside b/c of a basic infirmity in the procedure. o It was ex party w/o notice and w/o any effort to invite or permit participation by the group in the proceeding. o The 10-day order can not be sustained. No justification for ex parte proceedings in the sensitive area of 1st Amend rights. o There is insufficient assurance of balanced analysis and careful conclusions which are essential in the are of 1st adjudication. The issuance of an injunction which aborts a scheduled rally or public meeting is a matter of importance and consequence in view of the 1st imperative. o The denial of a basic procedural right is not excused by the availability of post-issuance procedure. 459 Rule Collateral Bar Rule: o Demonstrators who proceed in face of the prohibition of an injunctive order could not defend contempt charges by asserting the unconstitutionality of the injunction. o The proper procedure is to seek judicial review of the order. There is a place for ex parte issuance o But not w/in the area of basic freedoms guaranteed by 1st. Facts A white supremacist group held a rally during which derogatory, insulting, and threatening language was used. Listeners would construe the speeches as provocation to the Negros and incitement to the whites. The rally was to resume the following day. In an ex parte proceeding. City officials obtained a 10day restraining order. A trial was then held and a10month extension was issued. On appeal the 10-day order was affirmed but the 10month order reversed: the period of time was unreasonable. o It was arbitrary to assume that a clear and present danger of civil disturbance and riot would persist for 10 months. Ex parte abridgment of 1st rights w/o notice are improper. Held Proc П argues Δ argues 10-day order must be set aside. o Failure to give notice and to provide an opportunity for adversary proceeding before the holding of the rally was restrained is incompatible with the 1st. o Failure to give notice and an opportunity to be heard should not be considered to invalidate the order b/c the group might have obtained a hearing on not more than 2 day notice.
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