Academic journal article Texas Law Review

A Status Quo Bias: Behavioral Economics and the Federal Preliminary Injunction Standard*

Academic journal article Texas Law Review

A Status Quo Bias: Behavioral Economics and the Federal Preliminary Injunction Standard*

Article excerpt

I. Introduction

A federal court's decision about whether to issue a preliminary injunction is one that is fraught with uncertainty and marred by a patchwork of differing standards and policy justifications.1 The tests applied by the various federal circuit courts of appeals are diverse, with some requiring that all of the preliminary injunction factors meet a certain threshold2 and others using a sliding scale approach that allows lesser showings on some factors when others are met more strongly.3

Some courts also consider the effect of a preliminary injunction on the status quo existing between the parties to the case.4 Many courts note that the purpose of a preliminary injunction is to preserve the status quo existing between the parties.5 Such statements of purpose, while notable, need not go beyond functioning as mere platitudes, throwaway lines in a judicial opinion that do not figure in the substantive test applied by the court.6

More interestingly, some federal circuit courts incorporate the status quo issue into their substantive preliminary injunction doctrine and require a greater showing by movants seeking preliminary relief that alters the status quo.7 For example, one court requires that movants prove not only that the court's normal preliminary injunction factors are met but also that these factors "weigh heavily and compellingly" in the movant's favor.8 Another court requires that a movant "must show not only a likelihood, but a clear or substantial likelihood, of success on the merits[] where the injunction sought is mandatory-i.e., it will alter rather than maintain, the status quo."9

These heightened requirements for preliminary injunctions that alter the status quo have been much criticized.10 Judge Richard Posner gave a particularly incisive critique in a recent Seventh Circuit opinion: "Preliminary relief is properly sought only to avert irreparable harm to the moving party. Whether and in what sense the grant of relief would change or preserve some previous state of affairs is neither here nor there. To worry these questions is merely to fuzz up the legal standard."11 If consideration of the status quo merely fuzzes up the legal standard, why are some courts worrying themselves over it?

Former Judge Michael McConnell of the Tenth Circuit, concurring in O Centro Espirita Beneficiente Uniao do Vegetal v. Ashcroft,12 provided an interesting justification.13 He wrote:

Disrupting the status quo may provide a benefit to one party, but only by depriving the other party of some right he previously enjoyed. Although the harm and the benefit may be of equivalent magnitude on paper, in reality, deprivation of a thing already possessed is felt more acutely than lack of a benefit only hoped for.14

Judge McConnell went on to cite studies from the social sciences-in particular, the field of behavioral economics-to justify this assertion.15 He discussed two well-established phenomena observed by researchers: "loss aversion" and the "endowment effect."16 Each of these phenomena supports McConnell's basic point that losses loom larger than gains and that people value things to a greater degree when they already possess them.17

Setting aside Judge McConnell's focus on litigants, there are two other possible, more judge-centric explanations for the preoccupation with the status quo in some federal courts. Each explanation also invokes the research and findings of behavioral economics and psychology. Earlier in his concurring opinion, Judge McConnell unconsciously nodded towards these two explanations when he stated:

Fundamentally, the reluctance to disturb the status quo prior to trial on the merits is an expression of judicial humility. As Judge Murphy points out, a court bears more direct moral responsibility for harms that result from its intervention than from its nonintervention, and more direct responsibility when it intervenes to change the status quo than when it intervenes to preserve it. …

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