527 U.S. 308 (1999) (U.S. Supreme Court)
Grupo Mexicano is a foundational modern case on the scope of federal equitable power. In a 5–4 decision authored by Justice Scalia, the Supreme Court limited federal courts' authority to issue preliminary asset-freeze injunctions (so-called Mareva-type orders) when plaintiffs seek purely legal relief—money damages—and have no lien or equitable interest in the defendant's assets.
May a federal court, in a case seeking solely money damages where the plaintiff has no lien or equitable interest in the defendant's property, issue a preliminary injunction restraining the defendant from transferring assets in order to secure a potential judgment?
Absent statutory authorization or an asserted equitable interest in specific property, a federal court's equitable powers under Rule 65 do not include issuing a preliminary injunction to freeze a defendant's assets to secure satisfaction of a potential money judgment. The scope of federal equitable jurisdiction is defined by the traditional principles of equity exercised by the English Court of Chancery in 1789; because Mareva-type asset-freeze injunctions were not historically available in actions at law for money damages, such relief is beyond the court's equitable authority in those circumstances. Plaintiffs seeking prejudgment security for legal claims must proceed via state-law prejudgment remedies incorporated by Rule 64 or assert an equitable claim or interest that supports in rem or specific relief.
No. The Supreme Court reversed, holding that in an action for money damages, where the plaintiff has no lien or equitable interest in the defendant's assets, a federal court lacks authority to issue a preliminary injunction freezing those assets pending adjudication.
Grupo Mexicano is a touchstone for the modern law of equitable remedies and civil procedure. It sharpens the legal/equitable divide, confining Rule 65 injunctions to traditional equitable contexts and steering unsecured creditors toward Rule 64 state-law prejudgment remedies. After Grupo, courts routinely deny requests to freeze assets in pure damages suits unless the plaintiff shows a lien, security interest, or an equitable claim to specific property, or invokes a statute that expressly authorizes an asset freeze. The decision also has broader implications for separation of powers and federalism: it prevents federal courts from creating new prejudgment creditor remedies that could upend state law and bankruptcy priorities, leaving such policy choices to legislatures.