Mead Johnson & Co. v. Abbott Labs.
| Decision Date | 12 April 2000 |
| Docket Number | No. 99-2215,99-2215 |
| Citation | 209 F.3d 1032 |
| Parties | (7th Cir. 2000) Mead Johnson & Co., Plaintiff-Appellee, v. Abbott Laboratories, Defendant-Appellant |
| Court | U.S. Court of Appeals — Seventh Circuit |
Patrick A. Shoulders, Ziemer, Stayman, Weitzel & Shoulders, Evansville, IN, R. Bruce Dickson, Paul, Hastings, Janofsky & Walker, Washington, DC, for plaintiff-appellee.
Thomas C. Morrison, Steven A. Zalesin, Patterson, Belknap, Webb & Tyler, New York, NY, Laura Schumacher, Abbott Laboratories, Office of the General Counsel, Abbott Park, IL, for defendant-appellant.
Before Bauer, Easterbrook, and Kanne, Circuit Judges.
Prior Report: 201 F.3d 883
Abbott Laboratories has filed a petition for rehearing asking us to remand so that the district court may increase the amount of the injunction bond. A higher bond would produce a higher potential award of damages for wrongful injunction, because we have already held that the district court should not have awarded preliminary injunctive relief. According to Mead Johnson, Coyne-Delany Co. v. Capital Development Board, 717 F.2d 385, 394 (7th Cir. 1983), holds that it is possible to increase the injunction bond even after the injunction has been reversed.
Coyne-Delany does not hold any such thing. None of the parties to the case requested such a step. What the panel in Coyne-Delany remarked is that a litigant aggrieved by an insufficient injunction bond may ask the court of appeals to increase it. An increase could be beneficial to the enjoined party if (a) the court of appeals affirms the preliminary injunction, but a possibility remains that permanent relief will be denied; or (b) the preliminary injunction is vacated for legal error, but the district court remains free to afford new injunctive relief, the situation in International Game Technology v. WMS Gaming Inc., 1999 U.S. App. Lexis 22971 (Fed. Cir. Sept. 3, 1999); or (c) the increase precedes reversal of the preliminary injunction, and thus affords the enjoined party additional damages for harm suffered during the period between the increase of the bond and the end of injunctive relief. Nothing in Coyne-Delany suggests that an injunction bond may be increased after the preliminary injunction has already been reversed and will not be replaced by another.
A bond is a condition to preliminary injunctive relief. Coyne-Delany holds, among other things, that, if the injunction is reversed, compensation for harm caused by the injunction cannot exceed the amount of the bond. 717 F.2d at 393-94. That conclusion would be vitiated if the district judge could increase the bond after the injunction had been set aside, for then the bond would not cabin the damages. We explained in Coyne-Delany that the bond requirement is an exception to the norm in American litigation that the parties bear their own costs and expenses. A prevailing party may recover up to the amount of the bond; beyond that, there is no basis for cost-shifting. To permit changes in the bond after an injunction's reversal would be to overturn the rule in fact, if not in name.
What is more, posting a bond is voluntary. 717 F.2d at 394. If the bond can be increased after reversal, the plaintiff lacks the option to drop the suit in order to limit its exposure. Anyway, what would a post-reversal bond secure? If the plaintiff is entitled to balk and walk away, as Coyne-Delany says (and Fed. R. Civ. P. 65(c) contemplates), then an order to increase the bond would be ineffectual. An injunction bond is a condition of a preliminary injunction. Once the injunction has been reversed, the bond no longer serves a function other than securing payment of the prevailing party's damages. As we held in Coyne-Delany, these damages cannot exceed the amount of the bond that was in effect while the injunction lasted. Thus there is neither logical nor legal room for a post-reversal increase in an injunction bond. See Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 664 n.13 (7th Cir. 1995).
Mead Johnson also has filed a petition for rehearing. In response to that petition, the panel amends its opinion by replacing the paragraph at slip op. 7-8 (201 F.3d 883, 886-87) with this language:
Section 43(a)(1) forbids misleading as well as false claims, but interpreting "misleading" to include factual propositions that are...
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