Thursday, November 14, 2013

Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. et al. case brief

Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc. et al. case brief summary
Supreme Court of the United States, 1999.
527 U.S. 308


CASE SYNOPSIS: Writ of certiorari was granted to petitioners' challenge to the judgment of the United States Court of Appeals for the Second Circuit, which upheld the grant of a preliminary injunction requiring petitioners to post a monetary bond prior to the resolution of respondents' breach of contract claim.

CASE FACTS: Petitioner holding company was the debtor of notes purchased by respondent. As part of their breach of contract suit against petitioner holding company, respondents obtained a preliminary injunction requiring petitioners to post a monetary bond. Subsequent to a final judgment in favor of respondents, petitioners argued that the preliminary injunction had been wrongfully granted.

DISCUSSION
  • The Court first held that the issue of the injunction was not moot, despite final judgment on the merits in respondents' favor, as the final judgment involved a separate issue from the grant of the injunction. 
  • The Court then held that the scope of federal equity jurisdiction extended only as far as traditional English courts of equity. 
  • As traditional English chancery courts did not have jurisdiction to restrain a party's assets in the absence of an established judgment, the Court held that the trial court lacked jurisdiction to grant the preliminary injunction.
CONCLUSION: The judgment upholding the grant of a preliminary injunction requiring petitioner to post a bond prior to the resolution of respondents' claim against petitioner was reversed, as the grant of such an injunction exceeded the trial court's jurisdiction.

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