Bright Head, LLC v. The Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associates Identified on Schedule A

Summary

The United States District Court for the Northern District of Illinois denied without prejudice a defendant’s motion for damages on a $10,000 security bond under Federal Rule of Civil Procedure 65(c). The court held that denial of the preliminary injunction and dissolution of the temporary restraining order established wrongful restraint for purposes of seeking bond damages, but concluded that the defendant’s evidence did not adequately support a reasonable calculation of lost profits and expenses. The court permitted a renewed motion supported by sufficient quantitative evidence by February 27, 2026.

Holdings

1. A defendant restrained by a temporary restraining order that is dissolved when the court denies a motion for preliminary injunction is wrongfully enjoined for purposes of Rule 65(c), regardless of whether the plaintiff ultimately prevails on the merits and without a final merits adjudication.
2. Plaintiff's good faith efforts to release the restraints and the absence of a merits adjudication do not eliminate the wrongful nature of the restraint or provide a sufficient reason to deny compensation for losses caused by the injunction.
3. A wrongfully restrained defendant need not prove damages with mathematical certainty, but must provide evidence sufficient to support a reasonable estimate; defendant's current evidence did not satisfy that burden.

Questions Presented

1. Whether denial of a preliminary injunction and dissolution of a temporary restraining order constitute a wrongful injunction under Federal Rule of Civil Procedure 65(c) even without a final adjudication on the merits.
2. Whether defendant submitted sufficient quantitative evidence to recover damages on the Rule 65(c) security bond.
3. Whether plaintiff's good faith, its efforts to release restraints, or the fact that some losses resulted from a separate joint request concerning inventory constituted a good reason to deny bond damages.

Disposition

other