Hohenberg v. Ferrero USA, Inc

Filing 147

Reply in Support re 140 MOTION for Order Imposing Appeal Bond filed by Athena Hohenberg, Laura Rude-Barbato. (Attachments: # 1 Declaration of Jack Fitzgerald in Further Support of Motion for Appeal Bond, # 2 Proof of Service)(Fitzgerald, John) (ag).

1 THE WESTON FIRM
GREGORY S. WESTON (239944)
2 [e-mail]
3 JACK FITZGERALD (257370)
[e-mail]
4 MELANIE PERSINGER (275423)
[e-mail]
5 COURTLAND CREEKMORE (182018)
[e-mail]
6 1405 Morena Blvd. Suite 201
7 San Diego, CA 92110
Telephone:
[phone]
Facsimile:
[phone]
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LAW OFFICES OF RONALD A.
MARRON, APLC
RONALD A. MARRON (175650)
[e-mail]
B. SKYE RESENDES (278511)
[e-mail]
3636 4th Avenue, Suite 202
San Diego, California 92103
Telephone:
[phone]
Facsimile:
[phone]

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Class Counsel

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

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Case No. 3:11-cv-00205-H-KSC
Pleading Type: Class Action

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IN RE FERRERO LITIGATION

DECLARATION OF JACK
FITZGERALD IN FURTHER
SUPPORT OF PLAINTIFFS’ MOTION
FOR APPEAL BOND
Judge: The Honorable Marilyn L. Huff
Hearing: November 13, 2012
Time: 10:30 a.m.
Location: Courtroom 13

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In re Ferrero Litigation, Case No. 3:11-cv-00205-H-KSC
DECLARATION OF JACK FITZGERALD

1 I, Jack Fitzgerald, declare:
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1.

I am a member in good standing of the State Bars of California and New York; and of

3 the United States District Courts for the Northern, Central, and Southern Districts of California and the
4 Southern and Eastern Districts of New York; and of the United States Court of Appeals for the Ninth
5 Circuit. I am Class Counsel in the above-captioned action. I make this declaration in further support of
6 Plaintiffs’ Motion for Appeal Bond.
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2.

Attached hereto as Exhibit 1 is a true and correct copy of a November 3, 2012 e-mail I

8 received from Drey and Pridham’s counsel titled “Fwd: Rule 11 Motion.”
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3.

Attached hereto as Exhibit 2 is a true and correct copy of the Emergency Motion Filed

10 Pursuant to Circuit Rule 27-3, in the case In re Wal-Mart Wage & Hour Empl. Practices Litig., No. 1011 15516 (9th Cir.), Dkt. No. 8-1.
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4.

Attached hereto as Exhibit 3 is a true and correct copy of the Order Granting the

13 Emergency Motion in the case In re Wal-Mart Wage & Hour Empl. Practices Litig., No. 10-15516 (9th
14 Cir.), Dkt. No. 11.
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5.

Attached hereto as Exhibit 4 is a true and correct copy of Order denying Appellant’s

16 Motion to Vacate the Appeal Bond in In re Magsafe Apple Power Adapter Litigation, No. 12-15782
17 (9th Cir.), Dkt. 41.
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I declare under penalty of perjury that the foregoing is true and correct to the best of my

20 knowledge. Executed on November 6, 2012 in San Diego, California.
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/s/ Jack Fitzgerald
Jack Fitzgerald

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In re Ferrero Litigation, Case No. 3:11-cv-00205-H-KSC
DECLARATION OF JACK FITZGERALD

EXHIBIT 1

From:
To:
Cc:
Subject:
Date:
Attachments:

Christopher Langone
[e-mail]
Grenville Pridham; Mark Lavery
Fwd: Rule 11 Motion
Saturday, November 03, 2012 5:01:44 PM
Exhibit A Group On opinion.pdf
Exhibit B Kane LCD OBJECTION#1.pdf
Exhibit C - Email to Alioto.pdf
Exhibit D Langone motion for sanctions.pdf
Exhibit E Response to sanctions class maters.pdf
Exhibit F Langone Reply.pdf
Exhibit G Langone motion.pdf
Exhibit H LANGONE CERTIFICATION - FINAL.pdf
Exhibit I 12-15-11.PDF
Exhibit J Cobell v. Salazar.pdf
Draft rule 11 motion - sent 11.3.12.pdf

Mr. Fitzgerald:
The motion you filed to require a bond from Ms. Pridham violates Rule
11.  In accordance with the so-called safe harbor provisions of FRCP
11(c)(2), a draft motion is attached.  Demand is hereby made that you
withdraw your false pleading on or before November 26, 2012.  Failure
to do so will result in the fling of the attached motion.
Very Truly Yours,
By:  Christopher V. Langone
       Mark Lavery
       Grenville Pridham

__________ Information from ESET NOD32 Antivirus, version of virus signature database 7656
(20121103) __________
The message was checked by ESET NOD32 Antivirus.
http://www.eset.com

EXHIBIT 2

Case: 10-15516

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No. 10-15516

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UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

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IN RE: STEPHANIE SWIFT, FATIMA ANDREWS,
JESSICA GAONA AND DEBORAH MADDOX
Appellants,
v.

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Nancy Hall, Plaintiff,
Wal-Mart, Inc., Defendant,

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Appellees.

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EMERGENCY MOTION FILED PURSUANT
TO CIRCUIT RULE 27-3

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Circuit Rule 27-3 Certificate

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Counsel for Appellants:
John J. Pentz, Esq.
2 Clock Tower Place, Suite 440
Maynard, MA 01754
Phone: [phone]
Fax: [phone]
[e-mail]
Edward W. Cochran, Esq.
2003 Marchmont Road
Shaker Heights, OH 44122
Phone: [phone]
Fax: [phone]
[e-mail]
Edward F. Siegel, Esq.
27600 Chagrin Blvd. #340
Cleveland Ohio 44122
Phone:[phone]
Fax: [phone]
[e-mail]
Christopher A. Bandas, Esq.
500 N. Shoreline Blvd., Ste. 1020
Corpus Christi, TX 78471
Phone: [phone]
Fax: [phone]
[e-mail]
Lisa A. Rasmussen, Esq.
616 South 8th Street
Las Vegas, NV 89101
Tel. [phone]
Fax. [phone]
[e-mail]

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Facts Supporting Emergency:
The district court case is an MDL litigation involving a class of hourly wage
employees working for Wal-Mart. The appellants herein objected to the amount of

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attorney’s fees as part of the final proposed settlement. They took appeal in

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November 2009 as to the attorney fees only and that case is pending before this
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Court, case number 09-17648, 09-17682 and 09-17683, consolidated for briefing.

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On March 8, 2010, the district court entered an order requiring each of the

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Appellants herein to post an appeal bond in the amount of $500,000—a total of

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$2,000,000. (See Exhibit A.) The bonds were to be posted by March 29, 2010.

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(Id.)
The appellants appealed the order to this Court on or about March 9, 2010.
They mistakenly believed that since the only issue on appeal was the bond, that the
district court no longer had jurisdiction to enforce the bond order once the appeal

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was taken to this Court. Additionally, even as of today’s date, the distribution of

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the settlement funds has not been delayed because approval of the home office part

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of the settlement is not final.

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On May 7, 2010 a hearing was held before the district court to address

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objections to the home office settlement. The appellants herein were not a party to

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those objections.

Thus, neither the appellants nor their counsel attended the

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hearing. At the hearing, class counsel advised the district court that the appellants

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herein had not posted their bond as required on or before March 29, 2010, and they

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orally requested an order to show cause. The district court entered a minute order

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requiring counsel for the appellants herein to show cause why the bond had not

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been posted and set a hearing on the Order to Show Cause for May 18, 2010. (See

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Exhibit B.)
The appellants herein sought emergency assistance from this Court, via
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motion, on May 11, 2010. They had not, however, filed a motion in the district
court asking the district court to stay its appeal bond order. On May 13, 2010, the

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appellants herein filed a Motion to Stay the Bond Order in the district court. (See

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Exhibit C.)

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The appellants herein also sought a continuance of the hearing

scheduled for May 18, 2010. (See Exhibit D.)

The hearing requesting a

continuance was denied. (See Exhibit E.)
On May 18, 2010, this Court entered its order denying the Motion to Vacate
the show cause hearing scheduled in the district court for May 18, 2010.
On May 18, 2010, counsel for the appellants herein appeared before the
district court on the Court’s minute order to show cause.

On that date, the district

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court heard argument from the parties and took the matter under submission. (See
The district court also allowed class counsel one week to respond to

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Exhibit F.)

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the Motion to Stay Bond on Appeal filed by the appellants, but stated that no reply

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would be permitted. During the oral argument, counsel for the appellants herein

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advised the district court that the appellant objectors were unable to post a $500,000

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bond or a collective bond of $2,000,000 as they had been, after all, hourly wage

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employees of Wal-Mart who had standing to file the objections.

The appellants

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also filed a Supplement to their Motion to Stay Bond on May 21, 2010, that

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included affidavits from each of the appellants affirming their inability to post a

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$500,000 bond. (See Exhibit G, G-1, G-2, G-3 and G-4.)
On May 24, 2010, class counsel filed their Responses to the Motion to Stay
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Bond. (See Exhibits H and I.)

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On May 25, 2010, the district court issued its

order denying the Motion to Stay Bond and sanctioning each appellant and their

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counsel herein $10,000, a total of $40,000. 1

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that the appeal bonds, in the amount of $500,000 per objector/appellant, are to be

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posted by June 3, 2010. (Id.)
This emergency Motion follows.

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Notification of Other Counsel and the Court:

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(See Exhibit J.) The Order specifies

Counsel for all other parties were served with a copy of this Emergency
Petition by email on the date it was filed.
FED R. APP. P. 26.1 CORPORATE DISCLOSURE STATEMENT

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Appellants Stephanie Swift, Fatima Andrews, Jessica Gaona and Deborah

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Maddox state that they are individuals, not publicly held corporations.
...
...

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...

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...

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...

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...

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...

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The parties do not seek relief from the sanction portion of the order herein.
They will address the propriety of the sanction order via a separate appeal.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
EMERGENCY MOTION TO STAY BOND ORDER
The issue presented is whether the district court violated clear Ninth Circuit
precedent by prejudging the merit of appellants' appeals, and imposing an appeal
bond in the absurd and arbitrary amount of $2,000,000 that is clearly intended to

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chill appellants' appeal rights, and to force them to drop their properly filed (and

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already briefed) appeals.

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Rule 8 of the Federal Rules of Appellate Procedure permits this Court to

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entertain a motion to stay a judgment or an order if the motion has been denied by

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the district court, or, if the parties can demonstrate why it is not practical to bring

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such a motion in its first instance to the district court. Here, the district court has
denied the appellants’ Motion to Stay the Bond order.

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Facts
Each of the appellants is an hourly Wal-Mart employee and a class member
in a settled class action against Wal-Mart for wage and hour violations of the Fair

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Labor Standards Act, as well as other statutes, pending in the United States District

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Court for the District of Nevada. Each of the appellants filed a timely objection to

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the attorney's fees requested by class counsel, which fees will be deducted from,

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and reduce, the fund available to satisfy class members' claims. After the district

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court approved an award of attorney's fees to class counsel on November 20, 2009,

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each of the appellants filed an appeal from that award. 2 The Appellants filed their
opening Brief in those appeals on April 26, 2010, and the Appellees have now filed

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a Motion to Dismiss that appeal.

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On March 8, 2010, the district court entered an Order imposing an appeal
bond on each of the Appellants in the amount of $500,000, for a total of

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$2,000,000, as a condition for maintaining their appeals of the district court's fee

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award to class counsel. 3 The appellants herein filed an appeal from the district

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court's March 8, 2010 bond Order on March 9, 2010 (No. 10-15516). Appellants'
opening brief in this appeal, No. 10-15516, is due on June 17, 2010.

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On May 7, 2010, at a hearing on the approval of a separate settlement

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unrelated to the issues on appeal, and without any prior motion or notice to the

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Appellants, counsel for Defendant Wal-Mart, Brian Duffy, moved orally ex parte

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for an Order to Show Cause Hearing for the objectors to show cause why they have

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not posted the $2,000,000 appeal bond that is currently on appeal to this Court.

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Those appeals are Nos. 09-17648, 09-17682, and 09-17683.

The Class Plaintiffs maintain that the astronomical amounts of the bonds are
necessary to protect class members who submitted claims for settlement funds, but
the Appellants’ appeals, however, do not prevent the distribution of those funds in
any way. The appeals seek to augment the amount that will be paid to class
members, and therefore there is no reason why the amounts that the district court
awarded to the claimants could not be distributed to them immediately. If class
counsel's fees are reduced on appeal, that would merely create an opportunity for a
second distribution or cy pres award.
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(See Exhibit B.) The district court then set the Show Cause Hearing on May 18,
2010, just eleven days from the date of the minute order. Id.

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The Bond Order entered by the district court requires each of the four
Appellants to pay the amount of $500,000 each as a prerequisite for maintaining
their appeals from an award of attorney's fees to class counsel in the underlying

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class action. The district court ordered the appeal bonds based on its opinion that

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the appeals were “frivolous,” in flagrant violation of this Court's decision in Azizian

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v. Federated Dept. Stores, Inc., 499 F.3d 950 (9th Cir. 2007). In Azizian, this Court

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held that a district court may not prejudge the frivolousness of an appeal when

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setting an appeal bond:

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Award of attorney's fees for frivolousness under Rule 38 is
highly exceptional, making it difficult to gauge prospectively, and
without the benefit of a fully developed appellate record, whether such
an award is likely... Moreover, a Rule 7 bond including the potentially
large and indeterminate amounts
awardable under Rule 38 is
more likely to chill an appeal than a bond covering the other smaller,
and more predictable, costs on appeal... [O]nly the court of appeals
may order the sanction of appellate attorney's fees under Rule 38.
Id. at 960.
The district court's Bond Order states that "this Court finds that the Appeals

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taken by Objectors Gaona, Swift, Andrews and Maddox, are frivolous" (See

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Exhibit A, at p. 3.) Clearly, the district court imposed the extraordinary and

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arbitrary bonds in the amount of $500,000 per objector, or $2,000,000 total, as a

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sanction for what the district court deemed in advance to be a frivolous appeal,

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usurping this Court's exclusive authority to determine an appeal's frivolousness
after full briefing and argument. 4

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Argument

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This Court must grant the appellants’ emergency motion to stay in order to

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preserve the Appellants' right to pursue their properly filed and perfected appeals
that are currently pending in this Court, unencumbered by unlawful, unauthorized
and arbitrary appeal-chilling appeal bonds imposed on the whim of the district

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court. The appeal bond imposed by the district court is a clear abuse of discretion
and authority on its face.

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If the appellants are required to post a $500,000 bond each, they will be

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forced to dismiss their appeal. (See Exhibits G-1, G-2, G-3 and G-4, Affidavits of

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Appellants Andrews, Swift, Maddox and Gaona.)

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The appellants are unable to

post a collective bond in the amount of $2,000,000.

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First, the appellants have appealed the appeal bond Order to this Court, and

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briefing is due in that appeal in less than four weeks. In Azizian v. Federated Dept.

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Stores, Inc., 499 F.3d 950 (9th Cir. 2007), this Court made clear what avenues are

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available to appellees who wish to cut short an appeal that they deem to be

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There is no underlying statute that would authorize the bonding of any costs not
explicitly included in FRAP 39, see Azizian, supra, at p. 959-960, and therefore
there is no alternative basis for the Court's imposition of the shocking and
disproportionate bonds.

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frivolous:
We agree with the D.C. Circuit that the question of
whether, or how, to deter frivolous appeals is best left to the
courts of appeals, which may dispose of the appeal at the outset
through a screening process, grant an appellee's motion to
dismiss, or impose sanctions including attorney's fees under
Rule 38.
Id. at 961. As the above quote makes clear, the appellees in the predicate appeals
are not without options to dispose of the appeals if they truly believe that they are

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frivolous.
Second, the appeal bond imposed by the district court is a clear violation of
Azizian, supra. The district court clearly prejudged the frivolousness of the fee

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appeals, thus usurping this Court's sole prerogative to make that determination, and
set the bond at an amount that was obviously designed to deprive the appellants of
their appellate rights if the bond is not stayed by this Court. One of the factors in

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setting an appeal bond is the appellant's ability to pay. The appellants are low-

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wage hourly workers, and this Court may take judicial notice that none of the

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appellants has the current financial ability to pay that amount, let alone to pay it for

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the right to pursue their legitimate appeals to this Court. (See Exhibits G-1, G-2, G-

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3 and G-4.)

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Finally, the district court imposed sanctions of $10,000 each upon the

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appellants, despite the fact that they had filed with the district court proof of the

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impossibility of performance. (Id. and Exhibit J.) Additionally, even though the

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district court was aware that the appellants were financially unable to post the

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appeal bonds, it ordered the appellants to post the $500,000 bonds by June 3, 2010,
or face further sanctions. Thus, the appellants are faced with the following choices:

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(1) dismiss their appeals pending before this Court by June 3, 2010, or (2) face the

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risk of further or repeated sanctions orders until this Court reverses the district

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court’s appeal bond. It is these options that necessitate this Emergency Motion.
The central holding of Azizian is that a district court should not force
appellants to dismiss their appeals before this Court has had an opportunity to
consider them. Without intervention by this Court staying the appeal bond order of

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the district court, the appellants will be forced to dismiss their appeals. The district

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court was fully aware of the impossibility of performance of its order. The

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appellants’ only recourse cannot be to weather a volley of periodic sanctions orders

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mitigated only by the right to appeal them. A sanctions order causes damage both

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to the appellants and to their counsel that cannot be fully remedied by reversal of

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the order imposing a $2,000,000 or the order demanding sanctions at a later point in

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time. There is a punitive aspect to a sanctions order that appellants should not be

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required to endure in order to vindicate their right to appeal, and to have the facially

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improper appeal bond reversed.
Furthermore, a court that issues orders that are impossible to comply with
does irreparable damage to the federal judiciary because the resulting apparent

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disobedience of that order ironically undermines the authority of the court. Judge
Pro may just as well have ordered the appellants to plug the BP oil leak in the Gulf
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of Mexico by June 3, 2010. This Court, in turn, should not require appellants to
pursue a remedy that will cause collateral damage to the federal courts by requiring

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continued disobedience of a court order.
CONCLUSION

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For the foregoing reasons, this Court should issue an order staying the bond
orders entered by the district court on March 8, 2010 and on May 25, 2010.

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/s/ Lisa A. Rasmussen
Lisa A. Rasmussen, Esq.
616 South 8th Street
Las Vegas, NV 89101
Tel. [phone]
Fax. [phone]
[e-mail]

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John J. Pentz, Esq.
2 Clock Tower Place, Suite 440
Maynard, MA 01754
Phone: [phone]
Fax: [phone]
[e-mail]

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Edward W. Cochran, Esq.
2003 Marchmont Road
Shaker Heights, OH 44122
Phone: [phone]
Fax: [phone]

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Edward F. Siegel
27600 Chagrin Blvd. #340
Cleveland Ohio 44122
Voice:[phone]
Fax: [phone]
e-mail: [e-mail]

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Christopher A. Bandas, Esq.
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500 N. Shoreline Blvd., Ste. 1020
Corpus Christi, TX 78471
Phone: [phone]
Fax: [phone]
[e-mail]

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STATEMENT OF RELATED CASES
Plaintiff-Appellee's appeal in 08-80101 has been stayed pending the outcome
the Appellants' appeals. Appellants' bond appeal is No. 10-15516. Appellants' fee
appeals are Nos. 09-17648, 09-17682, and 09-17683.

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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument has
been served upon all parties registered for electronic filing in this action, on this the

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27th day of May 2010.

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Co-Lead Class Counsel
Robert J. Bonsignore, Esq.
BONISGNORE & BREWER
23 Forest Street
Medford, MA 02155
Tel. [phone]
Fax. [phone]

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Co-Lead Class Counsel
Carolyn Beasley Burton, Esq.
Robert W. Mills, Esq.
THE MILLS LAW FIRM
880 Las Gallinas Avenue, Ste. Two
San Rafael, CA 94903
Tel. [phone]
Fax. [phone]
Wal-Mart Class Counsel
Naomi Beer, Esq.
GREENBERG TRAURIG
1200 17th Street, Ste. 2400
Denver, CO 80202
Tel. [phone]
Fax. [phone]
/s/ Lisa A. Rasmussen
Lisa A. Rasmussen, Esq.

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EXHIBIT 3

EXHIBIT 4