Opinion
97 Civ. 801 (WK)
March 6, 2002
Peter J. Zambito, Dougherty, Ryan, Giuffra, Zambito Hession, New York, NY, For Plaintiff.
For Defendant (pro se):, Gulf Orient Steamship Line, Inc., New York, NY, Gulf Orient Steamship Line, Inc., Houston, TX.
ORDER
On February 7, 1997, upon Plaintiff Unitrans International, Inc.'s ("Plaintiff") application, we issued a Temporary Restraining Order ("TRO") wherein we, inter alia, enjoined Defendant Gulf Orient Steamship Lines, Inc. ("Defendant"), as well as its officers, directors and employees, from exercising any further possessory interest in or control over particular cargo. The TRO was to take effect only if Plaintiff posted a security in the amount of $50,000 in the form of either cash or a certified check to the Registry of the Court. The security was meant to compensate Defendant for such costs and damages as might be incurred by Defendant if it were found to have been wrongfully restrained. Plaintiff originally posted the requisite security in the form of a $50,000 certified check but shortly thereafter we permitted Plaintiff to substitute a $50,000 surety bond in place of that check.
Pursuant to the time limitations set forth in Federal Rule of Civil Procedure 65, our TRO expired in February 1997. See FED.R.CIV.P. 65(b); Southard Co., Ltd. v. Salinger (7th Cir. 1941) 117 F.2d 194, 195. Since then, the parties have taken no further substantive actions in this case. However, on March 5, 2002, Plaintiff requested that we release the security which they posted in February 1997. Since Defendant has neither been served with nor otherwise notified of Plaintiff's request, we construe the request as an ex parte application for the release of Plaintiff's security.
"`The purpose of requiring security prior to the issuance of an injunction or a temporary restraining order is to guarantee payment of costs and damages incurred by a party who is wrongfully enjoined or restrained.'" Interlink International Financial Services, Inc. v. Block (S.D.N.Y. 2001) 145 F. Supp.2d 312, 314. See also Little Tor Auto Center v. Exxon Co. USA (S.D.N.Y. 1993) 822 F. Supp. 141, 144 ("The injunction bond insures that funds will be available to compensate a party improvidently enjoined at the behest of the party posting the bond"). We have the discretion to determine what amount of security, if any, is necessary to protect the enjoined party's interest. See Ferguson v. Tabah (2d Cir. 1961) 288 F.2d 665, 675; Interlink International Financial Services, Inc., 145 F. Supp.2d at 314-315. When the reasonable possibility of damage to the enjoined party has passed, we also have the corresponding discretion to release the security. Citizens for a Better Environment v. Village of Elm Grove (E.D.Wis. 1979) 472 F. 1183, 1184.
Under ordinary circumstances, we would require Plaintiff to request the release of a security posted pursuant to Rule 65 by way of a noticed motion rather than by way of an ex parte application. See Local Civil Rule 6.1(d) of the Local Civil Rules of the United States District Court for the Southern and Eastern Districts of New York (providing that "no ex parte order . . . . will be granted except upon a clear and specific showing . . . of good and sufficient reasons why a procedure other than by notice of motion is necessary"). However, the circumstances presented in this case are far from ordinary. Over five years have passed since the TRO expired pursuant to the time limitations set forth in Rule 65(b). In the interim, Defendant went out of business. Upon the inquiry of both Plaintiff and the Court itself, we find that there is no new address or phone number available by which to contact the defunct Defendant or any successor, assignee, or representative. As such, Plaintiff has no means by which it can effectively provide Defendant with notice of the relief it requests. Given the circumstances, we find that Plaintiff is justified in seeking the release of its security ex parte.
As five years have passed since the TRO expired and Defendant has neither actively defended against this action nor sought to enforce any alleged liability on the posted security pursuant to Federal Rule of Civil Procedure 65.1 in the lengthy interim, we find that any potential damage to Defendant which could result from the TRO is now too remote to justify the continued retention of Plaintiff's security. We therefore grant Plaintiff's ex parte application for the release of its surety bond. See Citizens for a Better Enivornment, 472 F. Supp. at 1184.
The Clerk of the Court is hereby directed to release Plaintiff's $50,000 bond.
SO ORDERED.