Lorean Barrera v. Pharmavite LLC

Filing 445

MINUTES OF Motion Hearing held before Judge Christina A. Snyder: RE PLAINTIFFS MOTION FOR POSTING OF AN APPEAL BOND BY OBJECTOR JUSTIN FERENCE 440 . The Court GRANTS plaintiffs motion to impose an appeal bond. Ference is ordered to either (1) post a bond in the amount of $7,500.00 within ten days of the date of this order, or (2) file a notice of dismissal of appeal. Court Reporter: Laura Elias. (lc)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:11-cv-04153-CAS(AGRx)
Date
LOREAN BARRERA v. PHARMAVITE LLC

‘O’
February 26, 2018

Present: The Honorable

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Laura Elias
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Patricia Syverson

Juliet Markowitz

Stewart Weltman
Attorneys Present for Objector:
Caroline Tucker
Proceedings:

I.

PLAINTIFF’S MOTION FOR POSTING OF AN APPEAL BOND
BY OBJECTOR JUSTIN FERENCE (Dkt. 440, filed January 16,
2018)

INTRODUCTION

On May 13, 2011, plaintiff Lorean Barrera filed a putative class action suit in
connection with the marketing and sales of defendant Pharmavite’s “TripleFlex” dietary
supplements. Dkt. 1. On November 19, 2014, the Court certified two classes. Dkt. 192.
On June 5, 2017, the Court preliminarily approved a settlement agreement between the
parties. Dkt. 423.
On November 13, 2017, objector Justin Ference filed an objection to the class
action settlement. Dkt. 429. On December 4, 2017, the Court held a hearing, granted
final approval of the class action settlement, and entered judgment. Dkt. 436.
On December 28, 2017, Ference filed a notice of appeal of the settlement. Dkt.
438. On January 16, 2018, plaintiff filed a motion for posting of an appeal bond by
objector Justin Ference, pursuant to Federal Rule of Appellate Procedure 7. Dkt. 440

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:11-cv-04153-CAS(AGRx)
Date
LOREAN BARRERA v. PHARMAVITE LLC

‘O’
February 26, 2018

(“Motion”). On January 29, 2018, Ference filed an opposition, dkt. 441 (“Opp’n”), and
on February 12, 2018, plaintiff filed a reply, dkt. 442 (“Reply”).
Having carefully considered the parties’ arguments, the Court finds and concludes
as follows.
II.

LEGAL STANDARD

Federal Rule of Appellate Procedure 7 (“Rule 7”) provides that “[i]n a civil case,
the district court may require an appellant to file a bond or provide other security in any
form and amount necessary to ensure payment of costs on appeal.” Fed. R. App. P. 7.
The district court has discretion to determine the amount of a bond. See Azizian v.
Federated Dep’t Stores, Inc., 499 F.3d 950, 955 (9th Cir. 2007). “[T]he purpose of [an
appeal bond] is to protect an appellee against the risk of nonpayment by an unsuccessful
appellant.” Fleury v. Richemont N. Am., Inc., 2008 WL 4680033, at *6 (N.D. Cal. Oct.
21, 2008) (quotations and citations omitted). “[T]he question of the need for a bond, as
well as its amount, are left [to] the discretion of the trial court.” Id.
III.

DISCUSSION

Pursuant to Rule 7, plaintiff requests the Court to order Ference to post an appeal
bond in the amount of $80,842.00. Motion at 1.
A.

Whether a Bond is Required

In determining whether a bond should be required, courts have considered: (1) the
appellant’s financial ability to post a bond; (2) the risk that the appellant would not pay
the appellee’s costs if the appeal loses; and (3) the merits of the appeal. See Fleury, 2008
WL 4680033, at *6–7. While an appeal bond may cover costs on appeal, those costs may
only include attorneys’ fees if the claim is brought under a fee-shifting statute that would
allow recovery from an objecting class member, as opposed to a defendant. Azizian, 499
F.3d at 953–54. Even if a district court concludes that attorneys’ fees are likely to be
awarded on the ground that an appeal is frivolous, the district court may not include such
fees in an appeal bond. See id. at 954.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:11-cv-04153-CAS(AGRx)
Date
LOREAN BARRERA v. PHARMAVITE LLC

‘O’
February 26, 2018

With respect to the first factor—the ability to post a bond—the Court observes that
Ference presents no evidence of an inability to post bond. See Schulken v. Washington
Mut. Bank, 2013 WL 1345716, at *4 (N.D. Cal.) (“District courts have found that this
factor weighs in favor of a bond, absent indication that the [party] is unable to post a
bond.”). Thus, this factor weighs in favor of imposing an appeal bond.
When analyzing the second factor, district courts have recognized that it can be
difficult to collect costs from out-of-state appellants. See, e.g., Low v. Trump U., LLC,
10-CV-00940-GPC-WVG, 2017 WL 2655300, at *4 (S.D. Cal. June 19, 2017); Keller v.
Nat’l Collegiate Athletic Ass’n, No. 09-CV-1967-CW, 2015 WL 6178829, at *3 (N.D.
Cal. Oct. 21, 2015); Padgett v. Loventhal, 2015 WL 4240804, at *3 (N.D.
Cal.); Schulken, 2013 WL 1345716, at *5, Embry v ACER America Corp., 2012 WL
2055030, at *1 (N.D. Cal. June 5, 2012). Plaintiff argues that, should the appeal fail,
Ference’s residency in Boulder, Colorado will make it much more difficult for plaintiff to
collect costs and for the class to collect its losses. Motion at 7. In opposition, Ference
argues that “an analysis of these factors would weigh against imposition of a bond.”
Opp’n at 5. In this instance, because Ference lives outside of the Ninth Circuit’s
jurisdiction, the Court recognizes the potential difficulties and risks associated with
collecting costs from Ference. Accordingly, the Court concludes that this factor weighs
in favor of an appeal bond.
The third factor concerns the likelihood that Ference will lose the appeal and be
subject to costs. The Court notes that only one class member—Ference—objected to the
settlement, only one individual opted out, and as of November 13, 2017, there were
98,852 settlement class members who submitted claims. See Dkt. 431-3. Moreover, it
appears unlikely that Ference’s arguments will succeed on appeal given that the Court
considered Ference’s objections to the settlement, found them meritless—and one
moot—at the December 4, 2017 hearing, and approved the settlement.
Therefore, upon review of the record, the Court finds that posting of an appeal
bond is warranted.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:11-cv-04153-CAS(AGRx)
Date
LOREAN BARRERA v. PHARMAVITE LLC

‘O’
February 26, 2018

B.

The Amount of Bond Required

Plaintiff requests an appeal bond in the amount of $80,842.00—which includes
$2,500.00 in taxable costs and $78,342.00 in “administrative costs.” Motion at 14–17. In
particular, plaintiff requests anticipated “administrative costs” associated with appeal that
include updating the toll-free settlement phone line; maintaining and updating the
settlement website and the interactive voice response system; and case management and
correspondence. Opp’n at 15.
The Ninth Circuit has held that Rule 7 costs on appeal include those identified in
Federal Rule of Appellate Procedure 39(e), which include preparation of the record, the
reporter’s transcript, and filing fees. Azizian, 499 F.3d at 958. Here, the Court finds that
plaintiff’s projected expenditure of $2,500.00 in taxable costs is reasonable given
plaintiff’s expected motions and their anticipated filing fees, printing and copying
expenses, and costs of compilation of the lengthy record. See, e.g., Dennings v.
Clearwire Corp., 928 F. Supp. 2d 1270, 1272 (W.D. Wash. 2013) (authorizing $2,000.00
bond for the cost of acquiring transcripts and filing documents); Redwen v. Sino Clean
Energy, Inc., No. 11-CV-3936-PA (SSX), 2013 WL 12128684, at *2 (C.D. Cal. Dec. 20,
2013) (granting $900 in Rule 39 appellate costs); Miletak, 2012 WL 3686785, at *2
(granting $10,000.00 in Rule 39 appellate costs).
With respect to plaintiff’s request for $78,342.00 in administrative costs, the Court
observes that many district courts in this Circuit have interpreted Rule 7 to include
increased expenses in settlement administration and administrative costs pending appeal.
See, e.g., Dennings, 928 F. Supp. 2d at 1272 (authorizing $39,150.00 for expected
administrative costs pending appeal); Redwen, 2013 WL 12128684, at *2 (finding
$17,410.50 in administrative costs reasonable to include in Rule 7 bond); Miletak, 2012
WL 3686785, at *2 (finding “good cause” supported including $50,000 in
“administrative costs” incurred in order “to continue to service and respond to class
members’ needs pending the appeal”); Embry, 2012 WL 2055030, at *1 (concluding that
$70,650.00 in anticipated costs was appropriate for Rule 7 bond). Here, the claims
administrator has estimated that “numerous expenses and staff hours will be incurred as a
result of an appeal,” which include monthly costs to manage the toll-free settlement
phone line, settlement website, and the interactive voice response system, and costs to
support case management and correspondence with class members. See Supplemental

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:11-cv-04153-CAS(AGRx)
Date
LOREAN BARRERA v. PHARMAVITE LLC

‘O’
February 26, 2018

Declaration of Phil Cooper, Dkt. 440-3 ¶¶ 1–3. Without more specificity as to how staff
hours and monthly website and phone line maintenance amount to $78,342.00 over the
projected pendency of appeal, the Court declines to authorize such a sum. Although
these projective administrative costs do not seem necessarily accurate, it does appear that
the claims administrator will need to respond to inquiries regarding the status of the
settlement and will need to maintain the website, phone line, and voice response system
until the appeal is resolved. In light of these anticipated expenses, the Court finds that
$5,000.00 is reasonable and is a sufficient sum to cover these costs. Accordingly, the
Court finds good cause to impose an appeal bond in the amount of $7,500.00, which
represents $2,500.00 in appellate costs and $5,000.00 in administrative costs.
V.

CONCLUSION

In accordance with foregoing, the Court GRANTS plaintiff’s motion to impose an
appeal bond. Ference is ordered to either (1) post a bond in the amount of $7,500.00
within ten days of the date of this order, or (2) file a notice of dismissal of appeal.
IT IS SO ORDERED.
00
Initials of Preparer

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CMJ

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