Legal Memorandum: Bond Requirement for Injunctive Relief

Issue: Is an injunction bond required when a declaratory judgment action seeks injunctive relief?

“[I]t is clear that injunctive relief is available as an incident to an action for a declaratory judgment where such action will lie, in order to maintain the status quo, if the facts are such as to warrant it.”  Town of Burnsville v. City of Bloomington, 264 Minn. 133, 138, 117 N.W.2d 746, 750 (Minn. 1962).  Injunctive relief may be granted in the court’s discretion upon a determination that “more harm will result from its denial than from its issuance.”  Id. 

By pleading for declaratory relief rather than a temporary injunction, parties often attempt to avoid the procedural requirements that are designed to protect against a wrongful injunction.  Minn. R. Civ. P. 65.03 demands that every temporary restraining order or temporary injunction be granted only “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.”  Minn. R. Civ. P. 65.03(a).  This security bond must be given regardless of a party’s good faith in pursuing the relief pleaded.  Hubbard Broadcasting, Inc. v. Loescher, 291 N.W.2d 216, 221 (Minn. 1980).  In assessing the amount of security, the court must “attempt to determine the damages likely to accrue as a result of an erroneous injunction,” including a party’s right to execute on its judgment and sell the property.  Eide v. Bierbaum, […]