Section 70302 of the Big Beautiful Bill targets the federal courts, with huge implications for individuals, businesses and fiduciaries of all types.
(Images sourced at Shutterstock)
The One Big Beautiful Bill Act (H.R.1) from the 119th Congress (2025–2026) is a 1,116-page legislative document. Here’s the link to the entire bill: https://www.congress.gov/bill/119th-congress/house-bill/1/text.
Buried about halfway into the document is this item:
SEC. 70302. RESTRICTION ON ENFORCEMENT.
No court of the United States may enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued pursuant to Federal Rule of Civil Procedure 65(c), whether issued prior to, on, or subsequent to the date of enactment of this section.
Pro and con
Before I list pro and con arguments regarding Section 70302, I want to offer the conclusion of a 50-plus-year government official, an insider in government and in central banking. He will remain anonymous. His career and personal experience span the terms of six separate Fed chairs and eight presidents. He wrote this privately:
This provision effectively means that the courts cannot hold a government official for contempt since government officials are not required to post security when an injunction or order is issued. This rule essentially means that more power is now transferred to the executive branch since their actions would not be subject to court review.
If you ask the Bing AI search engine to create pro arguments, you will get something like this. Here, according to Bing AI, is what Section 70302 supporters argue on behalf of the provision:
Prevents abuse of contempt powers by requiring plaintiffs to post a bond before courts can enforce civil contempt orders. This is seen to discourage frivolous or politically motivated litigation.
Adds financial accountability to those seeking court enforcement, ensuring that only serious and well-supported claims proceed. Standardizes enforcement procedures, potentially reducing judicial discretion that could be inconsistently applied across different courts.
Kotok observation: These arguments are especially interesting because the sources Bing AI references are either arguing against Section 70302 (see the list below), or they are pulled from arguments concerning an unrelated court case, not Section 70302 of the “Big Beautiful Bill” at all. After hours of searching, my research team and I could not find any actual public supporters of Section 70302. It seems as if the pro arguments were made up by the AI search engine. We surmise that Bing AI (and others I tried) answered the question based on its own creative writing best guesses as to what the supporting arguments might be and then cited irrelevant sources just because that is all the AI searches could find.
WARNING: If you use an AI search engine and do not verify sources for every item, you are inviting an embarrassing moment on yourself.
Here’s what those against Section 70302 argue, according to Bing AI, whose sources are verified this time and are, therefore, included in the reading list):
Undermines judicial authority by limiting courts’ ability to enforce their own orders—especially in civil rights, environmental, and regulatory cases. Retroactively affects ongoing cases, potentially invalidating existing contempt rulings and allowing violators to escape consequences. Threatens the separation of powers, as it weakens a core function of the judiciary established in the Constitution. Jeopardizes public interest litigation, especially where courts traditionally waive bond requirements (e.g., school desegregation, civil rights enforcement). Could shield government officials from accountability, even when they are found to be in violation of the law.
Please note that, within the restrictions of time available, I have faithfully attempted to investigate both pro and con arguments.
Kotok’s conversations
I asked several lawyers and retired judges about this provision which, BTW, has little to do with the budget, taxes, or the deficit. They say they do not know when it was inserted in the drafting and that it could have been at the 11th hour and right before the actual voting. We subsequently found evidence that it was created in the drafting and escaped any observations during the committee hearings. They say that it was placed here (in reconciliation) so that it could be passed without a Senate filibuster rule applying to it. I have found not one single lawyer in favor of Section 70302. And that includes defense lawyers who have clients that may benefit by its provisions. I recommend every business enterprise ask their counsel, “What does this mean for us?” And I suggest that we think about the fact that every member of Congress that voted “AYE” is responsible for this clause whether they read the bill or not. Note that many said that the shortsightedness of some Republicans is that this clause could be used in the hand of Democrats, too.
I asked the nonpartisan Rule of Law Discussion Committee if they had considered the section. They have, and they kindly gave me permission to publicly offer a view written internally by one of their members. We thank Peter A. Gold, Esquire, member of the bar of the United States Supreme Court and founding member of the Rule of Law Discussion Community. His email is pagoldesq@gmail.com.
Here’s the comment:
A Limitation on the Judiciaries’ Contempt Powers
“No court of the United States may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued….”
As of today, this provision is included in what is being referred to as the Big Beautiful Bill or the Big Ugly Bill (depending on one’s view). It narrowly passed in the House of Representatives, and it’s on its way to the Senate.
It’s being actively discussed in the Rule of Law Discussion Community and elsewhere because it could mean that the chief and perhaps only enforcement mechanism a court has to enforce its orders — the power of contempt (both civil and criminal) — could be limited, or in the extreme, eliminated.
My interpretation
It is common that a party seeking a restraining order or injunction from a court must post what is referred to as a litigation or injunction bond in an amount determined by the court. The bond requirement can often be waived by the court.
In my experience the purpose of the requirement is that if the court incorrectly issued the order or preliminary injunction (which by its nature is preliminary, meaning prior to a full trial) and a party was harmed by that preliminary order, a third-party guarantor would pay an amount to offset the harm if other funds were not available.
Currently, if a party is not complying with a court order the court must meet all the traditional standards for finding contempt. This new language seeks to invalidate court contempt findings and orders where the judge did not require that security be posted. Thus, it is argued that court injunctions and orders could be converted to judicial advisory opinions without the force of law.
This provision in the bill has drawn national attention also because many of the orders or injunctions entered against the Trump Administration did not have a bond or other security posted at the time the preliminary order or injunction was entered. Thus, under this language contempt orders against the Administration for noncompliance would not be available.
One example is the Kilmar Garcia case. Garcia was deported by the Administration and sent to prison in El Salvador. The courts found that he should have been accorded due process of law (specifically, time to file an appeal through petition for habeas corpus). The U.S. Supreme Court held that the Administration must “facilitate” Garcia’s return. However, he remains in prison in El Salvadore.
As stated, typically, it is in a judge’s province to determine if security will be required for an injunction and the amount of the security. As in Garcia, in many cases security (because it doesn’t make sense, or the amount is impossible to calculate, or for other reasons) is not required. It may also be true that some, maybe many, of the parties who are subject to such actions by the Administration cannot afford to obtain security. Under the proposed language they would have no judicial redress to force compliance by the government and its leaders.
If the security requirement language becomes law, Garcia’s and other past, present, and future cases and their resulting orders maybe unenforceable by the judiciary because its contempt powers would be severely limited or eliminated.
Question: Under such a scenario would the judiciary, legislature and executive remain co-equal branches of government?
Kotok’s research and a conclusion
I searched the Judiciary Committee records that are publicly available. (See https://rules.house.gov/bill/119/hr-ORH-one-big-beautiful-bill-act.) I also searched for any amendment that may have been used to insert Section 70302. There is none in the public record. The bill’s sponsor is Rep. Jodey C. Arrington [R-TX-19] (https://budget.house.gov/press-release/chairman-arrington-celebrates-house-passage-of-one-big-beautiful-bill-act).
My conclusion, in the absence of any specific evidence, is that Section 70302 was probably drafted by committee staff or legal counsel as part of the committee’s submission to the Budget Committee. We don’t have any information on who in that staff or which person as counsel got that language into this bill. Throughout the entire sequence, from initial drafting to the final passage with only a one-vote margin in the House, Section 70302 was never examined for its impact on every business and financial entity, every fiduciary of any type, every board member of every corporation or philanthropic board.
This paragraph is not just about a wrongly and illegally deported man who is in an El Salvador prison and whether the courts can enforce a ruling. Please note that the Judiciary Committee was one of the 11 committees that contributed to the bill. Section 70302 falls under its jurisdiction, but every one of the folks who voted AYE is guilty of either ignoring the implications or depending on others to do their jobs. They have introduced a high-risk element to each and every business and investor in the United States, in my opinion.
Business and commercial implications of Section 70302
Let’s move today’s commentary beyond the narrow topics of deportations or tariffs. Section 70302 is unlimited as to issue. It applies to ALL courts in federal jurisdiction. That means all of finance, economics, and financial markets, and that means the defense (in a court) against the abuse of power by any federal agency or regulator. Here’s a partial list of business and commercial impacts should Section 70302 become law. This partial list is based on my personal career experiences plus my conversations with lawyers, retired judges, and financial market agents.
1. Trademark and Intellectual Property Disputes
In cases where a company is ordered to cease using a trademark or copyrighted material, courts often issue injunctions.
If the company ignores the order, courts may use civil contempt to enforce compliance.
Under Section 70302, if the plaintiff didn’t post a bond at the outset, the court may be barred from enforcing the contempt order, even if the violation is clear.
2. Corporate Compliance and Antitrust Cases
In antitrust litigation, courts may order companies to divest assets or cease anti-competitive practices.
If a company fails to comply, contempt powers are often the only way to compel action.
Section 70302 could neutralize these enforcement tools, especially in cases where the government is not the plaintiff.
3. Contract Enforcement and Business Injunctions
Businesses sometimes seek temporary restraining orders (TROs) or preliminary injunctions to stop a competitor from violating a non-compete clause or misusing trade secrets.
If the defendant ignores the court’s order, contempt is the usual remedy.
Without a bond (which courts often waive), Section 70302 could prevent enforcement, leaving plaintiffs without recourse.
4. Securities and Financial Fraud Cases
Courts may issue orders to freeze assets or compel disclosures in fraud investigations.
If defendants defy these orders, contempt proceedings are critical.
Section 70302 could shield violators from consequences if no bond was posted.
What to do?
Dear readers, please forward this discussion as you see fit. The first question is, what will the Senate do and when will they do it? If this clause (along with a few other hidden poisons) stays in the reconciliation bill, it will become the law of our land.
The second question is, what will we do, as Americans, as the Senate takes up consideration of the “Big Beautiful Bill”? I urge you to reach out to your senators and direct your questions to your representative in the House, especially if she or he voted AYE in the House. My congressman is Greg Steube, and I am publicly asking him for his view on this specific section. I’m asking him not to hide from the Sarasota business and investor community. If he didn’t know Section 70302 was in a 1000-page bill when he voted for it, let him say so. (How could anyone know if such a provision was inserted before the final draft was sent to the House floor for a vote?) If he did know, why did he vote AYE and threaten every business and financial enterprise in Sarasota County and across his district? Remember, there was a period when a Congressman could offer an amendment to remove Section 70302. Not one did it, not in any committee.
Sources and Additional Reading
“Outrage grows over a single paragraph buried deep in Republicans’ ‘Big Beautiful Bill,’”
https://l.smartnews.com/p-ltyC4v6/GidF1a
“These Hidden Provisions in the Budget Bill Undermine Our Democracy,”
https://campaignlegal.org/update/these-hidden-provisions-budget-bill-undermine-our-democracy
Letter to Speaker Johnson, signed by 21 members of Congress and shared by US Congresswoman Laura Friedman,
https://friedman.house.gov/sites/evo-subsites/friedman.house.gov/files/evo-media-document/friedman-letter-opposing-reconciliation-changes-to-court-contempt-powers-21-moc.pdf
“Big Beautiful Bill Contains Small Provision Seeking to Render Previous Judicial Contempt Orders Unenforceable,”
https://www.findlaw.com/legalblogs/federal-courts/big-beautiful-bill-contains-small-provision-seeking-to-render-previous-judicial-contempt-orders-unenforceable/
“What does SEC. 70302 of the “Big Beautiful Bill” actually do?”
https://law.stackexchange.com/questions/109768/what-does-sec-70302-of-the-big-beautiful-bill-actually-do
“Six-Chart Sunday – Overruled: POTUS v SCOTUS,”
https://open.substack.com/pub/brucemehlman/p/six-chart-sunday-overruled-potus?r=1hfyu&utm_campaign=post&utm_medium=email
Court of International Trade Opinion on Trump Tariffs,
https://www.courthousenews.com/wp-content/uploads/2025/05/court-of-international-trade-trump-tariffs-illegal.pdf
“Congressman Mike Flood tells crowd he didn’t read portions of the Big Beautiful bill before voting to pass it,”
https://www.3newsnow.com/northeast-nebraska/congressman-mike-flood-tells-constituents-he-didnt-read-portions-of-the-big-beautiful-bill-before-voting-to-pass-it
