09-2785 Habitat Education Center v. U.S. Forest Service

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Civil Procedure
Injunction bonds

Nonprofit groups are not exempt from posting injunction bonds pursuant to Rule 65(c).

"Preliminary injunctions, because issued before a full adjudication, often turn out to have been issued in error, and when that happens the costs imposed on the party against whom the injunction ran are costs incurred by an innocent person (at least innocent in the preliminary-injunction phase of the litigation). The innocent may be a private firm or a government agency or a hapless individual (or even another nonprofit), but that doesn't make it or him or her unworthy of the law's protection. The costs of government are borne ultimately by taxpayers (or by victims of inflation when government finds it infeasible or politically undesirable to raise revenues by outright taxation and instead reduces its expenses by paying them in ever-cheaper money), and the greater the expenses of the forest service the higher the tax burden is likely to be. Obviously, dissolving this injunction bond would not materially affect the budget of the forest service. But the principle that nonprofit entities should pay their way, reimbursing the losses incurred by entities whose operations the nonprofits impede by obtaining preliminary injunctions later dissolved, is general. And remember that Habitat's appeal does not challenge the judge's dissolution of the preliminary injunction that he had issued."

"Nonprofit entities such as Habitat have the benefit of exemption from federal income tax, and often from local property taxes, as well as the indirect tax subsidy provided to nonprofits by the charitable deduction from personal income tax. Need the courts grant them an exemption from Rule 65(c) as well?"

Affirmed.

09-2785 Habitat Education Center v. U.S. Forest Service

Appeal from the United States District Court for the Eastern District of Wisconsin, Goodstein, Mag. J., Posner, J.

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