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

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  • August 3, 2015

In the patchwork quilt of differing standards and policy justifications for granting a preliminary injunction, many federal courts have noted that a preliminary injunction should be granted to preserve the status quo existing between the parties. Certain courts have gone so far as to require higher burdens from plaintiffs requesting injunctions that would alter the status quo. Judge Michael McConnell of the Tenth Circuit tried to justify these much criticized legal standards through behavioral economics studies. Judge McConnell defended the higher burdens for preliminary injunctions interfering with the status quo by arguing that a party will be more affected by the loss of a benefit already possessed than one that the party only hopes to attain.

Using the rich experimental literature of behavioral law and economics (BLE), Mr. Powers demonstrates how BLE cannot justify Judge McConnell’s view for invoking the status quo in deciding whether to issue a preliminary injunction. In Part II, Mr. Powers presents a brief summary of the standards governing federal courts’ adjudication of motions for preliminary injunction; paying special attention to how the status quo affects these standards. Part III introduces the field of behavioral law and economics and summarizes the relevant phenomena: loss aversion, the endowment effect, status quo bias, and omission bias. In Part IV, Mr. Powers argues that while some of these BLE-based phenomena can explain courts’ invocation of the status quo in preliminary injunction decision making, none can justify it. Mr. Powers goes on to endorse the position held by many that the status quo has no place in this area of the law.