A wrongful injunction may occur in ways "unrelated to the ultimate merits." St. Mary of the Plains Coll. v. Higher Educ. Loan Program of Kan., Inc., No. 89-1460-C, 1989 WL 159368, at *3 (D. Kan. Dec. 15, 1989) (quoting Showtime Mktg., Inc. v. Doe, 95 F.R.D. 355, 357 (N.D. Ill. 1982)); seealso XO Energy LLC v. Zhao, No. 4:15-CV-599, 2016 WL 6902418, at *2 (S.D. Tex. Apr. 8, 2016) (concluding court "did not have subject matter jurisdiction when the case was filed; therefore, the preliminary injunction was wrongfully issued."); Minn. Power & Light Co. v. Hockett, 105 F. Supp. 2d 939, 942 n.1 (S.D. Ind. 1999) ("Under . . . federal law, a defendant may recover damages and costs for wrongful injunction even when the injunction is vacated for lack of subject matter jurisdiction and not on the merits of the underlying claims and defenses."); Showtime Mktg, Inc., 95 F.R.D. at 357 (accord); see also Atomic Oil Co., 419 F.2d at 1102 ("And generally, for the purpose of establishing liability on an injunction bond, a decree dismissing a bill in equity constitutes a judicial determination that a temporary injunction should not have been granted.") (citation omitted). And so, the court finds on the facts submitted here that defendants have shouldered their burden to show that the TRO wrongfully enjoined them.
And as the court stated its earlier Memorandum and Order (Doc. 56), dismissal for lack of subject matter jurisdiction does not bar potential recovery against the bond. See XO Energy LLC v. Zhao, No. 4:15-CV-599, 2016 WL 6902418, at *2 (S.D. Tex. Apr. 8, 2016) (concluding the court "did not have subject matter jurisdiction when the case was filed; therefore, the preliminary injunction was wrongfully issued."); Minn. Power & Light Co. v. Hockett, 105 F. Supp. 2d 939, 942 n.1 (S.D. Ind. 1999) ("Under . . . federal law, a defendant may recover damages and costs for wrongful injunction even when the injunction is vacated for lack of subject matter jurisdiction and not on the merits of the underlying claims and defenses."); Showtime Mktg, Inc., 95 F.R.D. at 357 (accord); see also Atomic Oil Co. of Okla. v. Bardahl Oil Co., 419 F.2d 1097, 1102 (10th Cir. 1969) ("And generally, for the purpose of establishing liability on an injunction bond, a decree dismissing a bill in equity constitutes a judicial determination that a temporary injunction should not have been granted.") (citation omitted). The court thus concludes that defendants were wrongfully enjoined.
And, this outcome does not bar potential recovery against the bond. XO Energy LLC v. Zhao, No. 4:15-CV-599, 2016 WL 6902418, at *2 (S.D. Tex. Apr. 8, 2016) (concluding the court "did not have subject matter jurisdiction when the case was filed; therefore, the preliminary injunction was wrongfully issued."); Minn. Power & Light Co. v. Hockett, 105 F. Supp. 2d 939, 942 n.1 (S.D. Ind. 1999) ("Under . . . federal law, a defendant may recover damages and costs for wrongful injunction even when the injunction is vacated for lack of subject matter jurisdiction and not on the merits of the underlying claims and defenses."); Showtime Mktg, Inc., 95 F.R.D. at 357 (N.D. Ill. 1982) (accord); see also Atomic Oil Co. of Okla. v. Bardahl Oil Co., 419 F.2d 1097, 1102 (10th Cir. 1969) ("And generally, for the purpose of establishing liability on an injunction bond, a decree dismissing a bill in equity constitutes a judicial determination that a temporary injunction should not have been granted." (citation omitted)).
U.S. D.I.D. Corp. v. Windstream Commc'ns, Inc., 775 F.3d 128, 137 (2d Cir. 2014) (citing Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 314, 317 (1999)). Under federal law, a party may recover damages for a wrongful injunction when the injunction was vacated for lack of subject matter jurisdiction. Minnesota Power & Light Co. v. Hockett, 105 F. Supp. 2d 939, 942 (S.D. Ind. 1999). III. ANALYSIS
Dr. Tavel's request for dismissal of Vision Value's counterclaim pursuant to Rule 12(b)(6) for failure to state a claim will be denied. Vision Value seeks recovery of its damages, interest, costs, and attorney's fees, but recovery of attorney's fees on an injunction bond issued in federal is unavailable and the amount of the bond is the ceiling on the damages that may be recovered. SeeMead Johnson Co. v. Abbott Labs., 209 F.3d 1032, 1033 (7th Cir. 2000) ("if the injunction is reversed, compensation for harm caused by the injunction cannot exceed the amount of the bond");Minnesota Power Light Co. v. Hockett, 105 F. Supp. 2d 939, 941 (S.D. Ind. 1999) ("[T]he right to recover in federal court for wrongful injunction by a federal court is governed by federal, not state, law."), aff'd byMinnesota Power Light Co. v. Hockett, 14 Fed. App'x 703, 707 (7th Cir. 2001) ("Determining the scope of the phrase `costs and damages' [in Rule 65(c)] is a federal question . . . [a]nd this court has interpreted this `costs and damages' to not include attorneys' fees. Since the Indiana courts have reached the contrary conclusion and determined that attorneys' fees are recoverable under an injunction bond, there is a direct collision between the Federal Rule and state law, and we must apply the federal rule.").