Opinion ID: 736206
Heading Depth: 1
Heading Rank: 6

Heading: Imposing Preliminary Injunctions Without Requiring a Bond

Text: 44 The franchisees argue that the district court abused its discretion by issuing preliminary injunctions in January and March 1996, without requiring DAI to post bonds pursuant to Fed.R.Civ.P. 65(c). In January 1996, after our remand in Distajo I, the district court enjoined the franchisees from prosecuting their state cases, finding that this relief was necessary in aid of federal jurisdiction. 944 F.Supp. 1007, 100809 (citing 28 U.S.C. § 2283). In its March 14 order compelling arbitration, the district court continued the injunction to effectuate that order. 944 F.Supp. at 1023. The district court did not require DAI to post a bond for either injunction because it found that the franchisees would not suffer damage or loss from being forced to arbitrate in lieu of prosecuting their state-court cases. Rule 65(c) states, in relevant part, that 45 [n]o 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. 46 Id. In Stuart, we flatly rejected an identical argument that the district court should have required such a bond. Rule 65(c) gives the district court wide discretion to set the amount of a bond, and even to dispense with the bond requirement where there has been no proof of likelihood of harm, or where the injunctive order was issued 'to aid and preserve the court's jurisdiction over the subject matter involved.'  Stuart, 85 F.3d at 985 (citations omitted). As in Stuart, both circumstances apply in this case. We therefore hold that the district court did not abuse its discretion by entering the injunctions without requiring DAI to post bonds. 47