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Preliminary Injunctions and Regulatory Tyranny

It looks to me as if something is very wrong with the law of preliminary injunctions when it comes to the executive branch misusing its power. Here is what is supposed to happen. Smith sues Jones, asking the court to do X. For example, Smith may ask the court to stop Jones from selling a dog Smith claims is Smith’s dog. If doing X right away instead of in a year or two after a trial would prevent irreparable harm to Smith but not to Jones, then Smith can ask the court to do X immediately, via a preliminary injunction. Then, after the trial, the court will undo X if Smith loses. The common law is very sensible on how the judge should “balance the equities” in deciding what to do. (Actually, injunctions are “equity”, not “law”, since this stuff is specifically for cases where money damages later won’t work.) Smith may have to put up a bond so if he does lose, Jones can collect damages from him for having had to endure X when it’s turned out Smith really isn’t entitled to X.

So far, so good. But I was just looking over the legal papers in Hobby Lobby v. Sebelius. The Green family, who own Hobby Lobby, have sued HHS Secretary Sebelius for forcing them to buy abortion insurance for their employees. Right now, they want a preliminary injunction telling Sebelius not to fine them millions of dollars for not buying the insurance until after the court decides the main issue, which is whether Sebelius has the right to fine them.

Suppose the Greens get their injunction and then lose the main case. I don’t know how the law really works here, but what it should do is award the government damages for the Greens not having provided abortion insurance while the injunction was in place. That is entirely practical— the Greens could pay HHS the entire cost of abortion insurance for that period, which would fully compensate the government because its worst damage is that it would have provided the insurance to the employees itself during that period. So there is no irreparable harm to HHS, even if the Greens’ suit loses. Maybe the Greens would have to put up a bond, but the damages would be smaller than the value of the company, so HHS would be safe in waiting for its money.

On the other hand, suppose the Greens lose on the injunction, but win on the main case. Again,I don’t know how the law works. I would hope that they can get back the millions in illegal fines they paid, but I’m not sure. In any case, they’re subject to a huge risk— essentially, they lose the company if they lose the lawsuit. Or, they have two other alternatives. One is that they can shut down the company until the lawsuit is decided. The other is that they can violate their consciences and buy the abortion insurance. Let’s suppose they shut down the company. It might well be that they’d have to shut down permanently, since shutting down for a year and reopening would be more costly than just selling the assets off at a loss now. If this were a private case, this might be OK. Having won the main case, they’d be able to sue the loser, HHS, for damages, which would mean for the entire value of the company, perhaps with punitive damages on top. The harm would not be irreparable if the loser could pay, and HHS can certainly afford to pay a few billion dollars in damages. The question is whether the damage would be too difficult to estimate, since the company would have nonmonetary value to the Greens, not just the value of the profits.

The problem is that the Greens wouldn’t be able to sue HHS, as best as I can see. A section 1983 civil rights lawsuit against the government loses if the government official has “qualified immunity”, meaning he had a reasonable belief that his action was legal. Sebelius does have that reasonable belief (it doesn’t have to be correct, just reasonable). Thus, the Greens would have been damages by billions of dollars but not be able to get compensation. This means the harm to them from not getting the preliminary injunction is irreparable.

To make it sting all the more, if the Greens win, the courts have recognized that their civil rights were violated, and that anybody else getting that treatment from HHS will have their civil rights violated. Nobody, however, can sue for past damages. The law says that the government doesn’t have to pay for past civil rights abuses, only future ones. (That runs contrary to the main premise of a lot of affirmative action, but the law isn’t consistent.)

The way the law *ought* to be set up is that if there is reasonable doubt about the legality of a government action, the citizen should be exempt from fines until the courts decide, and the government should be liable for damages, just the opposite of the present situation. There are all kinds of reasons for this, but I won’t go further into it now. I may come back to it with an amicus brief some day. This sort of thing comes up in environmental cases too.

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