Global Traffic Technologies LLC v. KM Enterprises, Inc. et al
Filing
26
MEMORANDUM & ORDER. For the reasons explained herein, KME's Motion for Stay/to Quash/for Hearing (Doc. 17 ) is DENIED; KME's Motion for Extension of Time (Doc. 15 ) is MOOT; KME's "Emergency" motion (Doc. 22 ) for a hearing on the matters herein is also MOOT. The case remains set for a judgment debtor exam in Magistrate Judge Wilkerson's courtroom on January 26. Signed by Chief Judge Michael J. Reagan on 1/23/2015. (jls)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
GLOBAL TRAFFIC TECHS. LLC,
Plaintiff,
vs.
KM ENTERPRISES, INC. and
RODNEY K. MORGAN,
Defendants.
)
)
)
)
)
)
)
)
)
)
Case No. 14–mc–0065–MJR–DGW
MEMORANDUM & ORDER
REAGAN, Chief Judge:
BACKGROUND
This miscellaneous case began with the registration of a foreign judgment by
Global Traffic Technologies LLC ("GTT"), pursuant to 28 U.S.C. § 1963. GTT won a
jury trial in the District of Minnesota, and that Court entered a judgment over $8.5
million against KM Enterprises, Inc. and Rodney Morgan. 1 With interest, over $9
million is now due to GTT. GTT has filed a citation to discover assets so as to
enforce that judgment. A judgment debtor exam is set for Monday, January 26,
2015.
KME—without posting a supersedeas bond—has appealed the Minnesota
judgment to the U.S. Court of Appeals for the Federal Circuit. In both the District
The jury trial concerned the infringement of a GTT patent by KME. The case was, as the Court of
Appeals noted, "one of several ongoing legal disputes between KME and GTT." KM Enters., Inc. v.
Global Traffic Techs., Inc., 725 F.3d 718, 722 (7th Cir. 2013) (affirming the undersigned's dismissal
of KME's anti-trust case in this District for improper venue).
1
1
of Minnesota and the Federal Circuit, KME has previously moved for—and been
denied—a stay of enforcement of the judgment pending appeal. The district court
held KME has "not shown justification for a stay of judgment and [has] not met [its]
burden to waive any amount of the supersedeas bond required under" Federal Rule
62. That court found KME's representations regarding alternate securities to be
completely unreliable, and underscored its holding with a sister court's reasoning
the undersigned finds pertinent here: "[T]he purported inability to post a bond does
not in any conceivable way show that Plaintiff's interest in the full value of the
judgment is secure. In fact, it shows just the opposite." Global Traffic Techs. v.
Morgan, No. 10-4110, 2014 U.S. Dist. LEXIS 96517, at *8–*9 (D. Minn. July 16,
2014) (quoting Lewis v. Utd. Joint Venture, No. 1:07-cv-639, 2009 U.S. Dist. LEXIS
48616 (W.D. Mich. June 10, 2009)).
In a brief, non-precedential Order, the Federal Circuit held KME had not
demonstrated irreparable injury absent a stay, nor had it provided "reasonable
alternatives to the posting of a supersedeas bond." (Doc. 21-4, 3).
The case comes before the Court on KME's "Motion for Stay of Enforcement
Proceedings and, Alternatively, for Expedited Hearing." (Doc. 21). None of the
requested relief is warranted, so the Court DENIES the motion.
ANALYSIS
Federal statute provides that "a judgment in an action for the recovery of
money or property entered in any [federal court] may be registered by filing a
certified copy of the judgment in any other district … A judgment so registered shall
2
have the same effect as a judgment of the district court of the district where
registered and may be enforced in like manner." 28 U.S.C. § 1963. Federal Rule of
Civil Procedure 62(f) is applicable in a § 1963 registration proceeding, U.S. ex rel.
Hi-Way Elec. Co. v. Home Indem. Co., 549 F.2d 10, 14 (7th Cir. 1977), and provides
in pertinent part:
If a judgment is a lien on the judgment debtor's property under the law
of the state where the court is located, the judgment debtor is entitled
to the same stay of execution the state court would give.
Fed. R. Civ. P. 62(f).
The question2 is a narrow one: is KME entitled to a stay of execution under
Illinois law? KME—pointing to a one-line, handwritten grant of a stay of a citation
proceeding (against banks that held KME deposits) in the Circuit Court for the
Second Judicial Circuit, Jefferson County, Illinois—argues in the affirmative.
KME's invocation of that state court ruling is misplaced.
In Illinois,
judgment creditors (like GTT) prosecute their judgments via "supplementary
proceedings," and each "supplementary proceeding shall be commenced by the
service of a citation."
735 ILCS 5/2-1402(a).
In other words, each citation to
discover assets is its own proceeding, so KME's broad assertion that the stay of
citation proceedings in Jefferson County is somehow applicable here is a nonstarter.
Rather, the Court looks to Rule 62(f)'s adoption of Illinois law.
The
enforcement of a monetary judgment shall be stayed if a timely notice of appeal is
Because KME cannot show it is entitled to a stay under Illinois law, the Court need not reach
GTT's argument that KME has effectively admitted that the Minnesota judgment does not act as a
lien.
2
3
filed "and an appeal bond or other form of security" is approved by and filed with
the court. Ill. Sup. Ct. R. 305(a). The security "shall be in an amount sufficient to
cover the amount of judgment, interest and costs." Id. "If a form of security other
than an appeal bond is presented, the appellant shall have the burden of
demonstrating" that alternative. Id. Further, a party requesting to stay execution
of a judgment pending appeal must "present a substantial case on the merits" for a
stay to be considered. Stacke v. Bates, 562 N.E.2d 192, 198 (Ill. 1990).
Here, KME has failed—for a third time in federal court—to justify waiving
the bond requirement for staying enforcement proceedings.
KME offers no
alternative security to an appeal bond, much less made a sufficient argument that
GTT's interests will be protected.
KME's own inability to post the bond (and
frivolous implication that GTT's financial health somehow works in KME's favor,
see Doc. 23) falls far short of the showing required to excuse the bond requirement
See Endress + Hauser, Inc. v. Hawk
present in both federal and state law.
Measurement Sys. Pty. Ltd., 932 F.Supp. 1147, (S.D. Ind. 1996) ("What (the
judgment debtor) fails to understand is that a supersedeas bond is essentially a
judgment insurance policy, and that alternate security must serve that same basic
purpose. Even large, well-to-do companies have a legal right to collect judgments
they have won in litigation."). It has not even argued that its appeal presents a
substantial case on the merits. The undersigned will certainly not rule in a manner
contrary the Federal Circuit's holding that KME has shown neither the irreparable
injury nor alternative security needed to stay enforcement. (Doc. 21-4, 3). Ruling in
4
KME's favor would effectively reward a litigant who persistently made the same
(losing) argument over and over again until it found a soft spot to land.
The
undersigned declines to incentivize such practice. See U.S. Commodity Futures
Trading Comm'n v. Lake Shore Asset Mgmt. Ltd., 540 F.Supp.2d 994, 996 (N.D. Ill.
2008) ("Zealous advocacy is laudable, but at a certain point can turn into conduct
that strikes at the heart of the court's core function of resolving disputes.").
CONCLUSION
KME's Motion For Stay / to Quash3 / for Hearing (Doc. 17) is DENIED.
KME's Motion for Extension of Time re: briefing this issue (Doc. 15) is MOOT.
Likewise, its "Emergency" motion for a hearing on the matter (Doc. 22) is MOOT. 4
The case remains set for a judgment debtor exam in Magistrate Judge Wilkerson’s
courtroom on January 26.
IT IS SO ORDERED.
DATE: January 23, 2015
s/ Michael J. Reagan
MICHAEL J. REAGAN
Chief Judge
UNITED STATES DISTRICT COURT
Insofar as KME moved to "quash" the citation, the Court agrees with GTT's position that the
election of remedies doctrine, held out by KME as reason for quashing, has "nothing to do" with the
instant controversy. Nor is the Court willing to address KME's argument, made for the first time in
its reply brief, that somehow the Minnesota judgment should never have been registered in Illinois.
See Citizens Against Ruining the Environment v. E.P.A., 535 F.3d 670, 675 (7th Cir. 2008) ("It is
improper for a party to raise new arguments in a reply because it does not give an adversary
adequate opportunity to respond.").
4 The Court further notes KME is certainly not under a timeline that could be construed as an
"emergency." KME could easily have moved to continue the January 26 judgment debtor exam.
3
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?