This act holds parties financially accountable for damages the government incurs due to wrongfully obtained injunctions when insufficient security is posted.
Derek Schmidt
Representative
KS-2
The Wrongful Injunction Accountability Act ensures that parties who obtain court orders stopping the government from acting are held financially responsible for resulting damages. If an injunction is later found to be wrongful, the party that sought the order must reimburse the United States for costs and losses. This liability applies especially when the required security bond was insufficient or waived entirely.
Wrongful Injunction Bill Shifts Full Financial Risk to Groups Challenging Federal Government
This legislation, dubbed the Wrongful Injunction Accountability Act, is a short but potent change to how parties are financially responsible when they successfully pause a federal government action, only to be proven wrong later. Essentially, if a court issues a temporary restraining order or preliminary injunction (a stop order) against the U.S. government under Rule 65 of the Federal Rules of Civil Procedure, and that order is later determined to have been issued wrongfully, the person or group that requested the stop order has to pay up.
The Cost of Being Wrong
Under current court rules, when you ask a judge to stop someone temporarily, you usually have to post a security bond—money held aside to cover the other side’s damages if the court later decides you were wrong to stop them. This bill targets situations where the court either didn't require a bond at all, or the bond required wasn't nearly enough to cover the actual costs the government incurred while it was wrongfully restrained. The new rule is clear: if the security posted was inadequate, the movant (the group that asked for the injunction) must personally reimburse the United States for all costs and damages suffered because of the wrongful stop order (SEC. 2).
Think of it like this: If a small environmental group successfully gets a court to temporarily halt a massive federal construction project because they argue the permits were illegal, but six months later the Supreme Court says the permits were fine, that group is now on the hook. If the government claims the delay cost taxpayers $50 million, and the group only posted a $100,000 bond, the group is now personally liable for the remaining $49.9 million. This is a huge shift, making the liability potentially unlimited and uninsured.
Who Benefits and Who Takes the Hit?
For the federal government and taxpayers, this bill looks like a win for fiscal responsibility. It ensures that if a federal agency’s operations are delayed or stopped—and that delay costs money, staff time, or lost revenue—the party that caused the delay pays the full price, not the taxpayer. This should make agencies feel more secure when their projects face legal challenges, knowing the financial risk isn't theirs.
However, this places a massive financial burden on the litigants who challenge the government. This is especially true for advocacy groups, non-profits, or even small businesses and individuals who rely on injunctions to quickly halt a government action they believe is illegal or harmful. The risk of potentially bankrupting liability could “chill” legitimate legal challenges. If you’re a local community group trying to stop a harmful agency ruling, you might think twice if the penalty for being wrong is millions of dollars in uninsured damages, regardless of whether you acted in good faith. This could essentially limit access to the courts for critical temporary relief to only the wealthiest organizations, making it much harder for the little guy to hit the brakes on a powerful federal agency.