Habitat Education Center v. United States Forest Service
607 F.3d 453, 70 ERC (BNA) 1865, 40 Envtl. L. Rep. (Envtl. Law Inst.) 20145 (2010)
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Rule of Law:
Federal Rule of Civil Procedure 65(c) does not provide a blanket exemption for nonprofit organizations from the requirement to post a security bond for a preliminary injunction, even if the organization is acting in the public interest.
Facts:
- Habitat Education Center, a nonprofit organization, sought to stop the U.S. Forest Service from allowing logging in a national forest in Wisconsin.
- The Forest Service had awarded a contract to a logging company that bid $55,000 for the rights.
- Logging in this particular forest is only feasible during the winter months when the ground is frozen solid.
- Habitat Education Center believed the planned logging would cause environmental damage.
Procedural Posture:
- Habitat Education Center sued the U.S. Forest Service in the United States District Court to obtain judicial review of a logging decision.
- Habitat requested and was granted a preliminary injunction to prevent the issuance of the logging permit.
- The district court required Habitat to post a $10,000 injunction bond as a condition of the injunction.
- Habitat moved for the district court to reconsider and rescind the bond order, but the motion was denied.
- Subsequently, the district court dissolved the preliminary injunction, granted summary judgment for the Forest Service, and dismissed Habitat's suit.
- Habitat (appellant) appealed the dismissal to the U.S. Court of Appeals for the Seventh Circuit, challenging only the interlocutory order requiring it to post the bond against the Forest Service (appellee).
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Issue:
Does Federal Rule of Civil Procedure 65(c) exempt nonprofit organizations dedicated to public interest causes, such as environmental protection, from the requirement to post a security bond when obtaining a preliminary injunction?
Opinions:
Majority - Posner, Circuit Judge
No. Federal Rule of Civil Procedure 65(c) does not exempt nonprofit organizations from the injunction bond requirement. The plain language of the rule is mandatory and provides no exception for nonprofits or public interest groups. The rule's explicit exemption for the federal government itself suggests that the drafters knew how to create exceptions and chose not to do so for nonprofits. While courts may waive a bond if there is no risk of damages or reduce it if the applicant cannot afford it, neither situation applied here. A preliminary injunction imposes costs on a potentially innocent party if later found to have been granted in error, and the bond serves to protect that party, regardless of whether it is a private firm or a government agency whose costs are borne by taxpayers.
Analysis:
This decision solidifies the principle that the requirement for an injunction bond under Rule 65(c) applies universally, irrespective of the plaintiff's nonprofit status or public interest mission. It serves as a significant precedent for public interest litigation, cautioning such groups that they must be prepared to secure potential damages if they seek to halt projects via preliminary injunction. The ruling prevents the creation of a judicial exception that is not present in the text of the rule, thereby protecting defendants from unrecoverable financial losses caused by what may turn out to be wrongfully issued injunctions.
