Kardonick v. JP Morgan Chase & Co. et al

Filing 429

RESPONSE in Opposition re 406 MOTION for Bond Plaintiffs' Motion to Direct Objectors to Post Appeal Bond filed by Laura Fortman, Douglas Paluczak, Chris Schulte. (Weinstein, Matt)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
C. A. No. 1-10-cv-23235-WMH
DAVID KARDONICK, JOHN DAVID,
and MICHAEL CLEMINS, individually
and on behalf of all others similarly
situated,
Plaintiffs,
v.

JPMORGAN CHASE & CO. and
CHASE BANK USA, N.A.
Defendants.

RESPONSE OF CLASS MEMBER/OBJECTORS
DOUGLAS PALUCZAK, CHRIS SCHULTE AND LAURA FORTMAN TO
PLAINTIFF’S MOTION TO REQUIRE APPEAL BOND
OBJECTOR/APPELLANTS, DOUGLAS PALUCZAK, CHRIS SCHULTE AND
LAURA FORTMAN , by undersigned counsel, responds to Plaintiffs’ Motion to Direct
Objectors to Post Appeal Bond as follows:
INTRODUCTION
Class Plaintiffs seek to require all objectors to collectively post an appeal bond for costs
in the amount of $35,000.00 under Rule 7 Fed.R.App.P., but argue as grounds that all the appeals
are “frivolous,” and that the bond should “cover” Plaintiff’s attorney fees that may be incurred on
the appeal.
Appellant Objectors PALUCZAK, SCHULTE AND FORTMAN oppose the Motion on
the grounds that their appeals are well founded; that the trial court does not have jurisdiction to
determine an appeal is frivolous, in that such determination is exclusively in the purview of the
appellate court; and that absent a fee shifting contract or statute as the underlying cause, attorney
fees are not a bondable appellate cost.

.
ARGUMENT
Neither the Objections Nor the Appeals of Objectors PALUCZAK, SCHULTE
and FORTMAN are frivolous. They raised various objections based upon the amount and
fairness of the settlement; the abandonment of the injunctive relief claim and especially the
relationship between the settlement and the attorney fees. All the objections were argued and the
court even partially agreed with the objectors by reducing the agreed attorney fee for Class
Counsel. The fact that a trial court rules against an argument does not render it frivolous. If it
did there would be no such thing as an appeal. That is why the trial court cannot rule on whether
an appeal is frivolous; only the appellate court may do so. Vaughn v. American Honda Motor
Co., Inc., 507 F.3d 295, 299 (5th Cir. 2007); Cooter & Gell v. Hartmax Corp., 496 U.S.
384, 407 (1990); In re American President Lines, Inc., 779 F.2d 714, 717 (D.C. Cir
1985). Only the appellate court has the authority to impose sanctions, such as attorney
fees, for a frivolous appeal. Azizian v. Federated Department Stores, Inc., 499 F.3d 950,
960 (9th Cir. 2007); In re Vasseli, 5 F.3d 351, 353 (9th Cir 1993) citing In re American
President Lines, Inc., 779 F.2d 714, 717 (D.C. Cir. 1985). Moreover, although the imposition
of attorney's fees on appeal as a sanction is allowed under Rule 38 Fed.R.App.P., it is only
available after an appellate court finds the appeal frivolous, and only upon further motion and
hearing. 10 Wright, Miller & Kane, Federal Practice & Procedure, § 2675; 2675.2 (2001); see
also Azizian v. Federated Department Stores, Inc., supra.
Bondable Costs Do Not Include Attorneys' Fees. Rule 39(e) Fed.R.App.P. sets the
appellate costs that may be assessed. It does not include Plaintiffs’ counsels claims for brief
printing, “web site maintenance,” and preparing “accounting and tax documents.” (See
Plaintiff’s Motion, page 11). Nor does it provide for attorney’s fees. The majority rule among
the Circuits, including the Eleventh, Circuit, is that a district court may include attorney's fees in
a Rule 7 appellate bond only if those attorney's fees would be considered recoverable costs under
an applicable “prevailing party” fee shifting statute. See Pedraza v. United Guaranty Corp., 313
F.3d 1323, 1329-30 (11th Cir. 2002); Azizian, supra, at 958; In re Cardizem CD Antitrust
Litigation, 391 F.3d 812, 817-818 (6th Cir. 2004); Adsani v. Miller, 139 F.3d 67, 71 (2d Cir.

1998). In order for attorney's fees to be included in a Rule 7 bond, the statute on which the action
is based must have a “prevailing party” fee shifting provision, or must expressly define attorney's
fees as a category of costs. See Arencibia v Miami Shores, Inc. , 113 F.3d 1212, 1214 (11th Cir.
1997) (statute in issue must define "costs" to include attorney's fees for the district court to have
jurisdiction to award fees under procedural rules relating to costs). The instant case has no such
fee shifting statute.
The Class Plaintiffs have stated no basis whatever for their calculation of $35,000.00
they want for a bond. They are not the appellants and so do not have an appellate filing fee or
supersedeas bond premium, (Rule 39(e) (3,4)); There was no hearing testimony to be transcribed;
(Rule 39(e) (2); and the record, if any, consists of a Complaint; an Amended Complaint, and a
negotiated settlement. At most their taxable costs will consist of a few dollars in printing
expense. Indeed if anything is “frivolous,” in this appeal it is Plaintiffs’ counsels’ apparently
arbitrary demand for a $35,000.00 appeal bond.

CONCLUSION
WHEREFORE, Objector/Appellants, PALUCZAK, SCHULTE and FORTMAN
respectfully submit that any bond imposed may not include attorney fees and may not
exceed the actual Rule 39 Costs to be reasonably demonstrated by Class Plaintiffs.

Respectfully submitted this November 14, 2011.

S/ Matt Weinstein
MATT WEINSTEIN, fbn 113320
Co-Counsel for Objectors
Douglas Paluczak, Chris Schulte, Laura Fortman
9200 South Dadeland Blvd., Suite 400
Miami, FL 33156
ph:305-670-5200

United States District ourt Southern District of Florida
C. A. No. 1-10-cv-23235-WMH
David Kardonick, et al., Plaintiffs v. J. P. Morgan Chase & Co. , Defendant
Certificate of service
I hereby certify that on November 14, 2011 , I electronically filed the foregoing document
with the Clerk of the Court and using CM/ECF. I also certify that the foregoing document is being
served this day on all counsel of record via transmission of Notices of Electronic Filing generated
by CM/ECF or in some other authorized manner shown below for those counselor parties who are
not authorized to receive electronically Notices of Electronic Filing.
S/ Matt Weinstein
MATT WEINSTEIN, fbn 113320
Co-Counsel for Objectors Paluczak, Schulte & Fortman
Service List
Carney Williams Bates Bozeman &
Pulliam, PLLC
11311 Arcade Drive, Suite 200
Little Rock, Arkansas 72212
Covington & Burling LLP
1201 Pennsylvania Avenue NW
Washington, DC 20004
Ku & Mussman, P.A.
12550 Biscayne Blvd. #406
Miami, FL 33181
Golomb & Honik, P.C.
1515 Market St., Suite 1100
Philadelphia, P.A.
Kanner & Whiteley, LLC
701 Camp St.
New Orleans, LA 70130