How Is a TRO Bond Amount Set in Minnesota?

What does Minnesota require before a court grants a TRO?

Minnesota’s court rule calls for security from the party asking for a TRO or temporary injunction, in a sum the court deems proper. Minn. R. Civ. P. 65.03(a) provides: “No temporary restraining order or temporary injunction shall be granted except 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. Gen. R. Prac. 135 adds a minimum. Before a restraining order issues, except in listed case types and “any other case exempted by law,” the applicant “shall give a bond in the penal sum of at least $2,000,” approved by the court. The bond pays the restrained party’s damages “if the court finally decides that the applicant was not entitled thereto.”

For a business asking for a TRO, the bond belongs in the budget from the first day, alongside the cost of proving the elements the judge weighs, covered in the strategy of seeking a TRO and the likelihood-of-success standard.

How do Minnesota judges calculate the bond amount?

A Minnesota judge calculates the bond by estimating the damages the restrained party is likely to suffer if the order turns out to be wrong. Rule 65.03 sets no formula; it leaves the sum to what “the court deems proper.” The Court of Appeals put it this way in Eide v. Bierbaum, 472 N.W.2d 193 (Minn. App. 1991): “We reaffirm that the trial court should attempt to determine the damages likely to accrue as a result of an erroneous injunction.” The same opinion explains that “The bond amount represents a prospective view of damages and not a determination of actual damages,” so appellate courts review the number with less scrutiny than a damages award.

The amount usually tracks the money the order keeps the restrained party from receiving or earning. Minnesota decisions show the pattern:

• Unpaid contract payments. In Eide, a buyer stopped a seller from canceling a contract for deed, and the court set the bond at $14,000, the two unpaid annual installments plus interest.
• A debt the order freezes. In Bio-Line, Inc. v. Wilfley, 366 N.W.2d 662 (Minn. App. 1985), a company that sued its former officers, who held its promissory notes, obtained a temporary injunction and was ordered to deposit $44,674.89 in court, the accelerated amount the officers claimed was due on the notes. The court stated that “Security should be set in an amount which will insure compensation to the party harmed by the erroneous issuance of an injunction.”
• Collateral that still covers the debt. In Strangis v. Metropolitan Bank, 385 N.W.2d 47 (Minn. App. 1986), a $2,000 bond on an order stopping a bank from foreclosing on pledged share certificates was upheld, and the bank’s request for $20,000 denied, because the valuation evidence showed the bank was still adequately collateralized.
• Lost earnings. In Hubbard Broadcasting, Inc. v. Loescher, 291 N.W.2d 216 (Minn. 1980), a TRO kept a broadcaster from working for a competing station under a $5,000 bond, later raised to $7,500. His lost salary and benefits during the order turned out to be well above $7,500.

The Hubbard figures show the restrained side’s main task at the hearing: put a number in front of the judge. The same estimating approach applies to temporary injunctions in Minnesota commercial cases.

What losses can a restrained business recover from the bond?

A restrained business can recover from the bond the damages the order itself caused, if the order is later found to have been one the applicant was not entitled to. The Minnesota Supreme Court stated the test in Hubbard, and the Court of Appeals repeated it in Newmech: “To recover on an injunction bond, the one seeking damages must establish that he suffered damages proximately caused by a restraining order to which the opposing party was not entitled.”

In Newmech Cos. v. Independent School District No. 206, 558 N.W.2d 22 (Minn. App. 1997), a losing bidder posted a $50,000 bond to stop a school district’s mechanical contract, and the court lifted the injunction four weeks later. The Court of Appeals held that the bond “covers only expenses arising from the delay caused by the injunction if wrongfully issued,” and added, “The heart of the matter is delay.” Because construction went ahead during those weeks, the only cost of the injunction was the attorney fees spent opposing it. The categories that follow from these decisions:

• Losses from the delay or restraint itself, such as lost earnings while a person is barred from working (Hubbard) or payments a seller cannot collect (Eide).
• Attorney fees spent resisting the TRO or temporary injunction (Newmech).
• Not fees for defending the rest of the lawsuit. In Electro-Craft Corp. v. Controlled Motion, Inc., 370 N.W.2d 465 (Minn. App. 1985), a competitor restrained under $260,000 in bonds recovered nothing on its claim for merits-defense fees and employee time: “Attorney fees and employee time costs incurred in defending the main action are not incidental to the damages contemplated in the TI.”

The Hubbard order rested on a noncompetition clause. For agreements entered into on or after July 1, 2023, Minn. Stat. § 181.988, subd. 2 makes a covenant not to compete between an employer and employee “void and unenforceable,” except one agreed upon during the sale of a business or in anticipation of its dissolution. Under subd. 3, an employer may not require an employee who primarily resides and works in Minnesota to give up Minnesota law or a Minnesota forum for that claim.

Why does the bond amount matter so much to the restrained party?

The bond amount matters because the Minnesota Supreme Court has said damages from a wrongful injunction are recoverable, unless the writ was procured by malice, only by action on the bond, so an amount set too low can leave the restrained party short. The Minnesota Supreme Court stated in AMF Pinspotters, Inc. v. Harkins Bowling, Inc., 110 N.W.2d 348 (Minn. 1961): “While damages from a wrongful issuance of an injunction may be determined in an injunction suit, they are recoverable (unless the writ was procured by malice) only by action on the bond.”

In Hubbard, the court read that sentence as suggesting that damages over and above the amount of the bond can be obtained if the applicant’s malice is shown, which implies that good faith should not matter. It held: “We therefore hold that good faith in obtaining a temporary restraining order is no defense to recovery of damages on an injunction bond.” Discussing loans from his new employer, the same opinion noted: “Another possible reason for the discussed forgiveness was that defendant knew that he could obtain at most $7,500 in damages on the bond.” His lost salary was higher.

The Court of Appeals has allowed recovery above a bond posted to stay a judgment during an appeal. In O’Leary v. Carefree Living of America (Minnetonka), Inc., 655 N.W.2d 639 (Minn. App. 2003), a supersedeas bond case, the Court of Appeals allowed recovery above the bond on unjust-enrichment grounds. It relied on a federal injunction-bond decision for the principle “that the amount of the bond limits the liability of the surety but not the liability of the principal.” O’Leary does not discuss AMF Pinspotters. More on injunction bonds in contract disputes.

When can a Minnesota court waive or reduce the bond?

A Minnesota court may set a low bond, or none, when the circumstances justify it and the court explains its decision. In Bio-Line, Inc. v. Wilfley, the Court of Appeals stated that “the amount of security required on a temporary injunction is within the trial court’s discretion and may be waived entirely if appropriate.” Courts have upheld no bond for a parent in a child-custody injunction (Petition of Giblin, 232 N.W.2d 214 (Minn. 1975)) and for the FDIC acting as a bank’s receiver (Howe v. Howe, 384 N.W.2d 541 (Minn. App. 1986)).

The waiver has to be a decision, not an oversight. In Bio-Line, Inc. v. Burman, 404 N.W.2d 318 (Minn. App. 1987), the TRO did not mention security, and the court held: “We must conclude that the trial court abused its discretion either in failing to address the security issue or in waiving the requirement without any indication of the basis for its decision.”

Rule 135’s $2,000 minimum complicates any request to go below that figure. In Giblin, the Minnesota Supreme Court held that Rule 65.03 controlled over the district courts’ earlier minimum-bond rule, then $1,000, where the two conflicted, and wrote that “the trial judge properly exercised his discretion in deciding to require no bond at all.” Giblin was decided in 1975, before Rule 135 was adopted in 1991, and the waiver decisions above do not discuss Rule 135. An applicant asking for less than $2,000 should address both rules directly. Other procedural limits on a TRO are covered in overreaching TROs that fail on procedure.

Which Minnesota disputes follow special bond rules?

Minnesota statutes change the TRO bond rule for contract-for-deed cancellations and labor disputes, a separate statute lets a public body seek a bond from a plaintiff challenging public bonds or public-improvement contracts, and Rule 135 exempts several other case types from its minimum. Outside those categories, Rule 65.03 and the case law above govern.

• Contract-for-deed cancellation. In an action “arising under or in relation to a contract for the conveyance of real estate or any interest therein,” Minn. Stat. § 559.211, subd. 1 provides: “Upon a motion for a temporary restraining order the court has the discretion, notwithstanding any rule of court to the contrary, to grant the order without requiring the giving of any security or undertaking, and in exercising that discretion, the court shall consider, as one factor, the moving party’s ability to afford monetary security.” For a temporary injunction, the court “shall condition the granting of the order either upon the tender to the court or vendor of installments as they become due under the contract or upon the giving of other security in a sum as the court deems proper.” Eide applied this subdivision.
• Labor disputes. In a case “involving or growing out of a labor dispute,” Minn. Stat. § 185.13 requires an undertaking “sufficient to recompense those enjoined for any loss, expense, or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney’s fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the court.” The statute sets its own hearing and findings requirements as well.
• Challenges to public bonds or public-improvement contracts. When a lawsuit challenges a public body’s action in issuing bonds or “the making of a contract for public improvement,” Minn. Stat. § 562.02 lets the public body move for a surety bond from the plaintiff: “If the court determines that loss or damage to the public or taxpayers may result from the pendency of the action or proceeding, the court may require such party, or parties, to file a surety bond, which shall be approved by the court, in such amount as the court may determine.” That bond is “conditioned for payment to the public body of any loss or damage which may be caused to the public body or taxpayers by such delay, to the extent of the penal sum of such bond, if such party, or parties, shall not prevail therein.” In setting it, “The court must also consider whether the action presents substantial constitutional issues or substantial issues of statutory construction, and the likelihood of a party prevailing on these issues, when determining the amount of a bond and whether a bond should be required,” and “If such surety bond is not filed within a reasonable time allowed therefor by the court, the action shall be dismissed with prejudice.” A disappointed bidder like the one in Newmech may face this motion.
• Rule 135 exemptions. The $2,000 minimum does not apply to orders in aid of writs of execution or replevin, harassment proceedings, dissolution of marriage, domestic abuse orders for protection, or “any other case exempted by law.”

How is a TRO bond enforced after the order ends?

A restrained party that wins enforces the bond by motion in the same case. Minn. R. Civ. P. 65.03(b) provides that each surety “submits to the jurisdiction of the court and irrevocably appoints the court administrator as the surety’s agent,” and “The surety’s liability may be enforced on motion without the necessity of an independent action.” Under Minn. Stat. § 574.18, an undertaking signed by a surety in place of a bond “shall save and secure all rights and liabilities to the same extent as a bond.”

Three procedural points decide how much the restrained party collects:

1. Prove the injunction damages separately. In Riverbluff Development Co. v. Insurance Co. of North America, 412 N.W.2d 792 (Minn. App. 1987), the restrained party had put all its damages before the court in the main case without separating those caused by the $1,000,000 injunction. Its later action on the bond for more was barred by res judicata, the rule against relitigating claims already decided.
2. Build the record. In Hubbard, the trial court first denied the damages motion as unsupported; the restrained broadcaster then took depositions on his lost salary and benefits, and the Minnesota Supreme Court reversed a second denial and remanded for an assessment of damages and an award on the bond.
3. Mitigate. Hubbard holds that an erroneously restrained employee should look for similar local work, but need not violate the order. It also holds that he need not accept re-employment with his former employer when that employer obtained a TRO to which it was not entitled that barred him from all other similar local work.

For the rules on getting the order and bond papers to the restrained party in the first place, see the service rules for a TRO.

How do federal courts in Minnesota set a TRO bond?

A federal court in Minnesota sets the bond under Fed. R. Civ. P. 65(c), which tracks the Minnesota rule: “The court may issue a preliminary injunction or a temporary restraining 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.” The same rule adds that “The United States, its officers, and its agencies are not required to give security.” Under Fed. R. Civ. P. 65.1, “The security provider’s liability may be enforced on motion without an independent action.”

The U.S. Court of Appeals for the Eighth Circuit, which reviews federal cases from Minnesota, treats the amount as discretionary. In Richland/Wilkin Joint Powers Authority v. U.S. Army Corps of Engineers, 826 F.3d 1030 (8th Cir. 2016), the court stated that the “amount of the bond rests within the sound discretion of the trial court and will not be disturbed on appeal in the absence of an abuse of that discretion.” It noted that “Courts in this circuit have almost always required a bond before issuing a preliminary injunction,” with exceptions “where the defendant has not objected to the failure to require a bond or where the damages resulting from a wrongful issuance of an injunction have not been shown.” It upheld a waiver for a public-interest environmental suit. Those exceptions make the same two steps matter in federal court as in state court: objecting to the bond, and showing the damages.

Setting and Challenging a TRO Bond

A TRO bond in Minnesota is the judge’s estimate of what the restrained party stands to lose, set under Rule 65.03 with a $2,000 floor under Rule 135 outside exempt cases. For the applicant, the bond pays if the court finally decides the applicant was not entitled to the order and the restrained party proves damages the order proximately caused, and good faith in bringing the claim is no defense. The hearing is the time to prove a number, and the damages motion after a win is the time to separate injunction losses from the rest of the case.

If you are asking for a TRO or facing one and would like a second set of eyes on the bond amount, email aaron@aaronhall.com with a brief description of the dispute; I start an intake and conflict check before you send confidential documents. More on Minnesota business litigation.