Thermolife International, LLC v. Myogenix Corp. et al

Filing 335

ORDER (1) Denying Thermolife's Request for a Stay of Judgment Without Bond; (2) Granting Plaintiffs a Temporary Stay. Signed by Judge Janis L. Sammartino on 2/21/2018. (All non-registered users served via U.S. Mail Service)(mpl)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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THERMOLIFE INTERNATIONAL,
LLC,
Plaintiff,

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Case No.: 13-cv-651 JLS (MDD)
(LEAD CASE)
ORDER: (1) DENYING
THERMOLIFE’S REQUEST FOR A
STAY OF JUDGMENT WITHOUT
BOND; (2) GRANTING PLAINTIFFS
A TEMPORARY STAY

v.
MYOGENIX CORP. et al.,
Defendants.

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(ECF Nos. 328, 330)

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AND ALL RELATED CASES.

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Plaintiff ThermoLife has filed an Ex Parte Motion for Shortened Briefing Schedule

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and Stay of Judgment Pending Decision of Bond, (“MTN,” ECF No. 328-2). ThermoLife

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makes various requests: (1) the Court issue a stay pending resolution of its Motion; (2) the

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Court set an immediate stay of the Judgment pending appeal, or, (3) “if the Court is not

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inclined to stay execution absent a bond,” the Court should set the amount of a supersedeas

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bond. (Id. at 2–3.)

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The Court granted ThermoLife’s request for expedited briefing and ordered

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responses from both Defendants and from Stanford. (ECF No. 329.) The Court also denied

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ThermoLife’s request for a stay of judgment pending resolution of its Motion. (Id.)
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ThermoLife then filed a “Supplemental Motion,” also titled a “Renewed Motion” or a

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“Motion for Reconsideration,” essentially asking the Court to reconsider its order and

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institute a stay of judgment. (ECF No. 330.) Defendants and Stanford have filed responses

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to ThermoLife’s Motion. (See ECF Nos. 331, 333, 334.)

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LEGAL STANDARD

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“Federal Rule of Civil Procedure 62(d) states that a judgment debtor is entitled as a

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matter of right to a stay of the execution of a money judgment pending appeal upon the

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posting of a supersedeas bond.” Brooktree Corp. v. Advanced Micro Devices, Inc., 757 F.

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Supp. 1101, 1104 (S.D. Cal. 1990). Rule 62(d) states that “[i]f an appeal is taken, the

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appellant may obtain a stay by supersedeas bond . . . . The bond may be given upon or after

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filing the notice of appeal or after obtaining the order allowing the appeal. The stay takes

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effect when the court approves the bond.” Fed. R. Civ. P. 62(d). Pursuant to this Rule,

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“[d]istrict courts have inherent discretionary authority in setting supersedeas bonds”

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Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir. 1987), and “broad

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discretionary power to waive the bond requirement if it sees fit.” Townsend v. Holman

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Consulting Corp., 881 F.2d 788, 796–97 (9th Cir. 1989), vacated on reh’g on other

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grounds, 929 F.2d 1358 (9th Cir. 1990) (en banc).

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“When a party wishes a court to depart from the usual requirement of a full security

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supersedeas bond, the burden is on the moving party to show reasons for the departure

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from the normal practice.” Salameh v. Tarsadia Hotel, No. 09cv2739-GPC (BLM), 2015

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WL 13158486, at *2 (S.D. Cal. May 19, 2015) (internal citations omitted). A district court

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may either waive the bond requirement or allow the judgment debtor to use some

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alternative type of security. Brooktree Corp., 757 F. Supp. at 1104. In determining

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whether to waive the posting of a bond, the Court considers what is known as the Dillon

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factors:

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(1) the complexity of the collection process; (2) the amount of time required
to obtain a judgment after it is affirmed on appeal; (3) the degree of confidence
that the district court has in the availability of funds to pay the judgment; (4)
whether the defendant’s ability to pay the judgment is so plain that the cost of
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a bond would be a waste of money; and (5) whether the defendant is in such
a precarious financial situation that the requirement to post a bond would place
other creditors of the defendant in an insecure position.
Dillon v. Chicago, 866 F.2d 902, 904–05 (7th Cir. 1988); see Salameh, 2015 WL

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13158486, at *2 (citing Dillon); see also Kranson v. Fed. Express Corp., No. 11-cv-5826-

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YGR, 2013 WL 6872495, at *1 (N.D. Cal. Dec. 31, 2013) (“Courts in the Ninth Circuit

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regularly use the Dillon factors in determining whether to waive the bond requirement.”).

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ANALYSIS

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Both Defendants request the Court order both ThermoLife and Stanford to post a

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bond, either separately or jointly and severally. (“Vital Resp.,” ECF No. 331; “Hi-Tech

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Resp.,” ECF No. 333.) Stanford does not opine on the issue of ThermoLife’s bond, but

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requests the Court not require Stanford to post a bond. (“Stanford Resp.,” ECF No. 334.)

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ThermoLife did not address the Dillon factors in its Motion. ThermoLife cites to

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cases where other courts have granted a stay without a bond “in light of defendant’s clear

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ability to pay.” (MTN 4 (citing cases).) ThermoLife dedicates most of its Motion to the

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argument that a stay is warranted. But, as mentioned above, ThermoLife has the ability to

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institute a stay on its own by posting a bond; the Court is not determining whether or not a

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stay should be instituted. The Court only determines whether a stay may be entered without

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a bond and/or the amount of a bond.

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The Court finds ThermoLife has not met its burden of proving a stay should be

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entered without a bond. ThermoLife argues Stanford has a clear ability to post a bond, but,

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this has no bearing on ThermoLife’s ability to post a bond. ThermoLife has not indicated

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it is unable to pay the bond; in contrast, it states “there is no danger that Stanford and

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ThermoLife are not collectable.” (MTN 9.)

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Accordingly, the Court DENIES ThermoLife’s Motion for an order staying

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enforcement without posting a supersedeas bond since it has failed to meet its burden in

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showing an inability to obtain a bond, or that it is entitled to a waiver of a bond.

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Stanford recognizes that it and ThermoLife are jointly and severally liable for the

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Judgment. (Stanford Resp. 2.) Stanford requests it not be required to post a bond because
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its assets are much greater than the judgment in this case and a bond is not necessary to

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protect Defendants. (Id. at 5.) However, because ThermoLife and Stanford are jointly and

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severally liable, the Court determines the two must post a bond jointly and severally. For

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the Court to excuse Stanford from posting a bond would unjustly impose the burden on

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ThermoLife to post the entire bond.

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“While Rule 62(d) is silent on the amount of such a bond, Ninth Circuit case law

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provides that a district court has discretion to determine the appropriate amount.” Inhale,

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Inc. v. Starbuzz Tobacco, Inc., No. 2:11-CV-3838-ODW, 2013 WL 361109, at *1 (C.D.

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Cal. Jan. 30, 2013) (citing Rachel, 831 F.2d at 1505 n.1). “The predecessor to present

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[Federal Rule of Civil Procedure] 62(d), originally Civil Rule 73(d), had directed that the

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amount of the bond be computed by the district court to include ‘the whole amount of the

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judgment remaining unsatisfied, costs on the appeal, interest, and damages for delay, unless

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the court after notice and hearing and for good cause shown fixes a different amount or

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orders security other than the bond.’’ Cotton ex rel. McClure v. City of Eureka, 860 F.

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Supp. 2d 999, 1029 (N.D. Cal. 2012) (citing Popular Grove Planting & Refining Co. v.

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Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979)). “Although practices vary

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among judges, a bond of 1.25 to 1.5 times the judgment is typically required.” Id. (internal

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citations omitted).

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Accordingly, to stay execution of the judgment pending appeal, Plaintiffs must file
a supersedeas bond equal to 125% of the judgment, i.e. $1,637,527.36.
CONCLUSION

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For the foregoing reasons, the Court DENIES ThermoLife’s Motion (and

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Supplemental Motion) requesting a stay of enforcement of judgment through appeal

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without a bond, (ECF Nos. 328, 330). However, the Court GRANTS a temporary stay of

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fourteen (14) days from the date this Order is electronically docketed to allow Plaintiffs an

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opportunity to post a supersedeas bond. All attempts by Defendants to execute on the

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judgment shall be stayed. Once Plaintiffs obtain a bond, they are directed to submit to the

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Court the bond and a proposed order to stay enforcement of judgment while the appeal is
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pending. The stay will take effect when the Court approves the posted bond. If a bond is

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not submitted within fourteen days, the temporary stay shall be automatically lifted.

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IT IS SO ORDERED.
Dated: February 21, 2018

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