Eastwood Enterprises, LLC v. Farha et al

Filing 285

ORDER granting in part 284 Lead Plaintiffs' Motion for an Appeal Bond. Mr. Brachman shall post an appeal bond in the amount of $25,000 (twenty-five thousand) with the Clerk of Court on or before July 28, 2011. Signed by Judge Virginia M. Hernandez Covington on 7/11/2011. (CR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
EASTWOOD ENTERPRISES, LLC
Individually and on Behalf of
All Others Similarly Situated,
Plaintiffs,
v.

CASE NO:

8:07-cv-1940-T-33EAJ

TODD S. FARHA, PAUL L. BEHRENS,
THADDEUS BEREDAY, and
WELLCARE HEALTH PLANS, INC.,
Defendants.
_______________________________/
ORDER
This cause comes before the Court pursuant to Lead
Plaintiffs' Motion for an Appeal Bond (Doc. # 284).

Lead

Plaintiffs move this Court for an order requiring objector
Todd

Brachman

to

post

an

appeal

bond

in

the

amount

of

$5,025,000 pursuant to Federal Rule of Appellate Procedure 7
in order to pursue his appeal.

Mr. Brachman has failed to

file a response thereto.
Lead Plaintiffs ask this Court to require a $25,000
appeal bond for the costs of the appeal and a $5,000,000
appeal bond to cover the damages that the class may suffer as
a result of the appeal.

The Court finds that the case law

supports the request for the appeal bond for the costs of the
appeal but not for an appeal bond to cover damages.

Federal

Rule

of

Appellate

Procedure

7

provides

in

pertinent part:
In 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; see also Pedraza v. United Guar. Corp., 313
F.3d 1323, 1328 (11th Cir. 2002). The purpose of this rule is
to protect the appellee from the risk of nonpayment by the
appellant, if appellee wins the appeal. See Adsani v. Miller,
139 F.3d 67, 75 (2d Cir. 1998).
The Court finds that an appeal bond for costs of the
appeal is warranted in this case.

Mr. Brachman filed a

deficient objection and did not appear at the final settlement
hearing, but has filed a pro se Notice of Appeal from this
Court's Order and Judgment (Doc. # 276), Order Approving Plan
of Allocation (Doc. # 277), Order Granting Lead Counsel's
Application for an Award of Attorneys' Fees and Reimbursement
of Expenses (Doc. # 278), and Judgment (Doc. # 281).

The

Court agrees with Lead Plaintiffs that Mr. Brachman has no
standing to appeal, as he has failed to establish that he is
a Class Member and did not file a Proof of Claim form, and his
appeal has no merit
An appeal here will entail significant costs, including

2

copying costs for briefs and compilation of the substantial
appellate record.

Lead Plaintiffs argue that the copy costs

alone, taxed at the Eleventh Circuit rate of $0.25 per page
for commercial reproduction, will likely amount to tens of
thousands of dollars.

This Court agrees that a $25,000 bond

for these taxable costs is appropriate.

See, e.g., In re

Currency Conversion Fee Antitrust Litig., No. M 21-95, 2010 WL
1253741, at *3 (S.D.N.Y. Mar. 5, 2010); Berry v. Deutsche Bank
Trust Co. Am., 632 F. Supp. 2d 300, 308 (S.D.N.Y. 2009); Baker
v. Urban Outfitters, Inc., No. 01 CV 5440 LAP, 2006 WL
3635392, at *2 (S.D.N.Y. Dec. 12, 2006); In re Initial Pub.
Offering Sec. Litig., 728 F. Supp. 2d 289, 294 (S.D.N.Y.
2010).
As for the $5,000,000 appeal bond to cover damages, the
two cases cited by Lead Plaintiffs in support of their
argument that district courts have required objectors to post
appeal bonds in the an amount to cover the damages that the
entire

class

unavailing.

will

lose

as

a

result

of

the

appeal

are

In Allapattah Servs., Inc. v. Exxon Corp., No.

91-0986-CIV, 2006 WL 1132371, at *18 (S.D. Fla. Apr. 7, 2006),
the district court prospectively ordered an objector, if it
filed an appeal, to post a $13 million bond to cover the
damages the class would suffer.
3

The district court cited to

Pedraza in support of its ability to order an appeal bond in
an amount sufficient to cover the damages that the class will
lose as a result of the appeal.
Pedraza,

however,

did

not

Id.

address

The Eleventh Circuit in
or

approve

potential damages to a class in an appeal bond.

including

Pedraza, 313

F.3d 1323.
Likewise, Lead Plaintiffs cite to In re Compact Disc
Minimum Advertised Price Antitrust Litig., No. MDL 1361, 2003
WL 22417252, at *1 (D. Me. Oct. 7, 2003), to support the
argument that damages resulting from delay or disruption of
settlement administration caused by a frivolous appeal may be
included in a Rule 7 bond.

The district court in Compact

Disc, however, cites to In re NASDAQ Market-Makers Antitrust
Litig., 187 F.R.D. 124, 128 (S.D.N.Y. 1999), as its authority
for including damages in an appeal bond.

In re Compact Disc,

2003 WL 22417252, at *1. In re NASDAQ, however, appears to be
the only case in the Second Circuit that supports this
argument.

The clear majority of cases in that circuit hold

that damages for delay cannot be included in Rule 7 bonds
where no underlying statute provides for the inclusion of such
costs.

See In re Initial Public Offering, 728 F. Supp. 2d at

296-97; In re Air Cargo Shipping Servs. Antitrust Litig., No.
06-MD-1775, 2010 WL 1049269, at *2 (E.D.N.Y. Mar. 22, 2010);
4

In re AOL Time Warner, Inc., Sec. & "ERISA" Litig., No. 02 Cv.
5575(SWK), 2007 WL 2741033, at *4 (S.D.N.Y.

Sept. 20, 2007);

In re Currency Conversion, 2010 WL 1253741, at *3.
As such, the Court finds that Lead Plaintiffs have not
met their burden of establishing a right to an appeal bond to
cover delay damages to the class.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

Lead Plaintiffs' Motion for an Appeal Bond (Doc. #
284) is GRANTED IN PART.

(2)

Mr. Brachman shall post an appeal bond in the
amount of $25,000 (twenty-five thousand) with the
Clerk of Court on or before July 28, 2011.

DONE and ORDERED in Chambers in Tampa, Florida, this 11th
day of July, 2011.

Copies:
All Counsel and Parties of Record

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