Under Rule 65(c) of the Federal Rules of Civil Procedure, an injunction bond is security the party seeking a preliminary injunction or temporary restraining order must post before the court will issue the order, in an amount the judge sets to cover the costs and damages the opposing party would suffer if the injunction turns out to be wrongful. The rule uses the word “only”: the court may issue the order “only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.”1Cornell Law School. Federal Rules of Civil Procedure Rule 65 – Injunctions and Restraining Orders Until the security is on file, the injunction has no force.
The same requirement applies to TROs, but a TRO is a short-leash order. It expires no later than 14 days after entry unless the court extends it for good cause by another 14 days or the opposing party agrees to a longer period.1Cornell Law School. Federal Rules of Civil Procedure Rule 65 – Injunctions and Restraining Orders The bond amount for a TRO reflects that compressed timeline and is usually lower than the bond for a preliminary injunction that could run for months.
How the Court Sets the Amount
Judges have wide discretion over the number. The guiding principle is that the bond should cover the costs and damages the defendant would suffer during a wrongful restraint, so the court looks at what the defendant stands to lose, not what the plaintiff stands to gain.
In practice, that means concrete projections. If a company is ordered to stop selling a product, the court examines projected lost revenue for the expected duration of the injunction. If a construction project is halted, the bond needs to cover idle equipment costs, contractor penalties, and financing expenses that keep accruing. The moving party typically submits affidavits and financial projections, and the defendant submits competing evidence arguing the losses will be higher. Fight this out at the initial hearing. The bond amount effectively caps the defendant’s later recovery, and the judge is unlikely to revisit the figure once set.
Attorney fees are the exception people miss. In federal court, fees a defendant spends fighting a wrongful injunction are generally not recoverable from the bond. A defendant who wants fees included should ask the court to write an express provision for them into the bond at the time the amount is set.
What Counts as Security
Rule 65(c) says “security” without limiting the form. A surety bond from a licensed company is the most common option, but courts also accept cash deposits, certified checks, and occasionally letters of credit. The choice depends on the amount and on the plaintiff’s financial situation.
For surety bonds, federal law requires the company to be a corporation authorized to guarantee bonds in judicial proceedings, incorporated under the laws of the United States or a state, and in compliance with federal surety regulations.2Office of the Law Revision Counsel. United States Code Title 31 Section 9304 – Surety Corporations As a practical matter, courts expect the surety to appear on the Department of the Treasury’s Circular 570, which lists companies holding certificates of authority for federal bonds. Using an unlisted company is a reliable way to have your security rejected.
Sureties charge an annual premium, typically 1% to 3% of the total bond amount, depending on the applicant’s creditworthiness. On a $500,000 bond, that is $5,000 to $15,000 per year. The company also evaluates the applicant’s financial statements and may require collateral such as cash or real property before issuing the bond. For large bonds, the underwriting can take several days. That matters when you’re running against a court deadline, and experienced practitioners line up surety arrangements before the hearing so the bond can be filed the moment the judge rules.
When Bonds Get Waived or Set Low
The rule explicitly exempts the United States, its officers, and its agencies from posting security.1Cornell Law School. Federal Rules of Civil Procedure Rule 65 – Injunctions and Restraining Orders Private litigants get no such exemption.
Federal courts have also developed what is often called a public interest exception. Judges applying it have waived or reduced bonds for plaintiffs bringing civil rights cases, environmental challenges, and other litigation where a large bond would effectively close the courthouse to meritorious claims. Courts weigh the strength of the plaintiff’s case, the potential harm to the defendant, the plaintiff’s ability to pay, and the broader public interest. Indigent plaintiffs and nonprofit organizations arguing for reduced security should come with detailed evidence of their financial limitations rather than a general appeal.
Beyond the public interest doctrine, the circuits are split on whether judges can set the bond at zero or a nominal figure like $100 in ordinary cases. Some circuits treat the amount as fully discretionary, which includes the discretion to set it very low. A nominal bond is not free money for the plaintiff, though: it strips the defendant of any meaningful financial cushion if the injunction turns out to be wrong. A defendant facing a nominal bond should object on the record and present specific evidence of projected losses. The objection preserves the issue for appeal and forces the court to justify the figure.
Filing the Bond and Making the Injunction Enforceable
Once a surety bond is approved, the plaintiff files it with the clerk, usually through the electronic case filing system. Some courts still require a physical original with the surety’s raised corporate seal delivered to the clerk’s office. The filing must match the judge’s order exactly: bond amount, case number, party names, and surety details. Errors in any of these get the filing rejected and delay the injunction from taking effect.
The submission includes a power of attorney showing that the person signing for the surety has authority to bind the firm. The clerk verifies that authority and confirms the surety is in good standing. Once the bond is entered on the docket, the plaintiff serves notice on the opposing party, who then has an opportunity to object to the surety’s qualifications or the bond’s terms. The injunction becomes enforceable when the clerk enters the bond into the official record.
Failing to post the required security is not a procedural hiccup. Courts have held that an injunction issued without the required bond is inoperative, and a defendant who violates such an order cannot be held in contempt because the order lacks legal force. The rule does not specify a deadline for posting after the judge sets the amount. The court’s order typically sets one, and judges expect compliance within hours or days depending on the urgency.
What the Bond Actually Pays
The bond exists so the defendant has a source of funds if the injunction turns out to be wrong. “Wrongfully enjoined” is not self-defining, and the circuits have split on the standard. Generally, a defendant qualifies when the injunction is dissolved or reversed and a final judgment enters in the defendant’s favor. Some circuits require only dissolution; others require a merits determination that the injunction should never have issued. There is no liability on the bond at all unless the case ends with a final judgment favoring the enjoined party.
Recoverable damages are limited to “resulting and consequential” losses caused by the injunction: lost revenue, increased operating costs, penalties from broken contracts, and similar provable out-of-pocket harm. Recovery is capped at the face amount of the bond unless the defendant can prove malicious prosecution, which requires showing the plaintiff brought the injunction without probable cause and with improper purpose.3United States Department of Justice. Civil Resource Manual 214 – Injunctions
That cap is why the amount fight at the outset matters so much. A defendant who suffers $2 million in losses from a wrongful injunction but was protected by only a $200,000 bond can recover at most $200,000 from the bond. The remaining $1.8 million is gone absent a malicious prosecution claim.
Releasing the Bond After the Case
The bond does not disappear when the case concludes. The plaintiff or the surety must move the court to exonerate and release it. If the injunction was upheld and no wrongful-injunction claim is pending, release is usually straightforward: the court discharges the surety’s obligation, and any cash collateral is returned.
If the defendant has filed a claim against the bond, the security stays in place until that claim is resolved by settlement or ruling. Under Rule 65.1, the defendant can proceed against the surety in the same action rather than filing a separate lawsuit. Plaintiffs should factor the full duration of the bond obligation into their costs from the start, because surety premiums keep accruing for as long as the bond remains active.