Grupo Mexicano de Desarrollo, S. A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 8 (1999)

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Cite as: 527 U. S. 308 (1999)

Opinion of the Court

litigation the plaintiff's prospects of winning were not sufficiently clear, or the plaintiff was not suffering irreparable injury) its issuance would in any event be harmless error. The final injunction establishes that the defendant should not have been engaging in the conduct that was enjoined. Hence, it is reasonable to regard the preliminary injunction as merging into the final one: If the latter is valid, the former is, if not procedurally correct, at least harmless. A quite different situation obtains in the present case, where (according to petitioners' claim) the substantive validity of the final injunction does not establish the substantive validity of the preliminary one. For the latter was issued not to enjoin unlawful conduct, but rather to render unlawful conduct that would otherwise be permissible, in order to protect the anticipated judgment of the court; and it is the essence of petitioners' claim that such an injunction can be issued only after the judgment is rendered. If petitioners are correct, they have been harmed by issuance of the unauthorized preliminary injunction—and hence should be able to recover on the bond—even if the final injunction is proper. It would make no sense, when this is the claim, to say that the preliminary injunction merges into the final one.2

2 We recognize that respondents alleged in their complaint that the assignments of the rights to receive Toll Road Notes violated the negative pledge clause of the note instrument and the provision that the Notes ranked pari passu with other debt, and therefore that petitioners were not entitled to engage in the restrained conduct. We do not, however, understand the District Court to have made a finding—either in the preliminary injunction order or in the final order—that petitioners' enjoined conduct was unlawful. The mootness of petitioners' claim at the present stage of the proceedings must be assessed on the basis of what that claim is. As shown by the question on which we granted certiorari, it is that the District Court wrongfully entered an order to protect its judgment before the judgment was rendered. If, in fact, petitioners had no right under the note instrument to take the actions that were enjoined, that would presumably be a defense to the action on the injunction bond. See, e. g., Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 910 F. 2d 1049, 1054 (CA2 1990); Note, Recovery for Wrongful Interlocutory Injunc-

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