Contract Design Group, Incorporated et al v. Wayne State University et al

Filing 247

ORDER GRANTING DEFENDANTS' 210 MOTION TO STAY EXECUTION OFJUDGMENT AND WAIVING REQUIREMENT DEFENDANTS POST SECURITY PENDING THE STAY. Signed by District Judge Gershwin A. Drain. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CONTRACT DESIGN GROUP, INC., et al.
Plaintiffs,

Case No. 10-14702
Hon. Gershwin A. Drain

v.

WAYNE STATE UNIVERSITY, et. al.,
Defendants.

ORDER GRANTING DEFENDANTS’ MOTION TO STAY EXECUTION OF
JUDGMENT AND WAIVING REQUIREMENT DEFENDANTS POST SECURITY
PENDING THE STAY
I.

Introduction

Plaintiffs Contract Design Group, Inc. (“CDG”) and Robert Murray (“Murray”) filed a
Complaint against Defendants Wayne State University and the Wayne State University Board of
Governors (“Wayne”). Plaintiffs also named three Wayne employees as Defendants: James R.
Sears (“Sears”), Joan M. Gossman (“Gossman”) and John L. Davis (“Davis”). This case went to
trial, and on April 24, 2014, a jury returned a verdict for Plaintiffs on their counts of violation of
procedural due process, account stated, and breach of contract. See Dkt. # 203. Presently before
the Court is Wayne, Sears, Gossman, and Davis’ Motion to Stay Execution of the Judgment and
waive the requirement that Defendants post a security should the Court grant a stay. The Motion

is fully briefed, but the Court believes oral argument will not assist in the resolution of the issue.
Therefore, the hearing is cancelled pursuant to Local Rule 7.1(f)
II.

Factual Background

At the end of Plaintiffs’ case in chief, Defendants moved for a Judgment as a Matter of
Law. At the end of Defendants’ case in chief, the Defendants renewed their Motion. The Court
denied the Motion in part and granted the Motion in part as it related to Plaintiffs’ request for
punitive damages. On the day the Court entered the Judgment, Plaintiffs filed a Motion for an
Entry of an Award for Nominal Damages for CDG [#207] that is currently pending before the
Court. Also pending are Defendants’ Motion for a New Trial or Remittitur [#217], Defendants’
Renewed Motion for a Judgment as a Matter of Law [#218], and Plaintiffs’ Motion for
Attorneys’ Fees and Expenses Under 42 U.S.C. § 1988 [#234].1
III.

Analysis

A. Standard of Review
Rule 62(b) of the Federal Rules of Civil Procedure gives the district court the authority to
stay the execution of a judgment while there is a pending motion for a judgment as a matter of
law; motion to amend the findings or for additional things; motion for a new trial or amend a
judgment; or motion for relief from judgment or order. See Fed. R. Civ. P. 62(b). Courts
consider a set of four factors when determining whether to grant a stay: (1) whether the stay
applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will
substantially injure the other parties interested in the proceeding; and (4) where the public

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There are also motions pending that relate to interest and taxation of the judgment.

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interest lies Nken v. Holder, 556 U.S. 418, 434 (2009). The stay must be “on appropriate terms
for the other party’s security,” and what is appropriate terms is within the trial court’s discretion.
See Fed. R. Civ. P. 62(b); see also Lewis v. United Joint Venture, No 07-369, 2009 WL 1654600,
at * 1. (W.D. Mich. June 10, 2009).
There is a presumption in favor of requiring a bond if the court grants the stay, but the
court can forgo the bond in a limited set of circumstances. Newburgh/Six Mile Lit. Partnership
II v. Adlab Films USA, Inc., No. 09-cv-11067, 2010 WL 3167393, at 1 (E.D. Mich. Aug. 9,
2010). The party seeking an unsecured stay bears the burden of demonstrating “affirmatively
that posting a bond or otherwise providing a security is impossible or impractical.” Slip N’ Slide
Records, Inc. v. TVT Records, LLC, No. 05-21113, 2007 WL 1098751, at *2 (citing Int’l Wood
Processors v. Power Dry, Inc., 102 F.R.D. 212, 214 (D.S.C. 1984)). If there is no security, the
defendant must show that the plaintiff has some protection against the risk that the defendant will
not be able satisfy the judgment after disposition of the post-trial motions. Id. Thus, it is
appropriate for the court to consider the defendant’s financial situation. Frankel v. I.C.D.
Holdings S.A., 168 F.R.D.19, 22 (S.D.N.Y. 1996). This is an important factor in the court’s
decision making process because the “purpose of Rule 62(b) is to preserve the status quo until
disposition of the post-judgment motions.” Poplar Grove Planting & Refining Co., Inc. v. Bache
Halsey Stuart, Inc., 600 F.2d 1189, 1190-91 (5th Cir. 1979). Many courts analyzing motions
under Rule 62(b) have looked to the factors for waiver of a bond under Rule 62(d) when
deciding whether to waive Rule 62(b)’s bond requirement. Id. at 1191.

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B. Defendants’ Motion
Defendants argue the stay is appropriate because there are motions pending under Rule
50 and Rule 59 of the Federal Rules of Civil Procedure. Defendants also argue the Court should
waive the requirement that they post bond.
Given the outstanding post-trial motions the stay is appropriate. Additionally, Wayne is a
public university supported by an appropriation from the Michigan legislature, and Wayne will
indemnify the individual defendants in this case as well. One factor relevant to waiving a bond
under Rule 62(d) is whether the defendant’s ability to pay the judgment is so plain that the cost
of the bond would be a waste of money. Arban v. West Publ’g Corp. , 345, F.3d 390, 409 (6th
Cir. 2003) (upholding district court ruling that a corporation with revenue in excess of $2.5
billion did not have to post a bond for a judgment in excess of $200,000); see also Dillon v. City
of Chicago, 866 F.2d, 902, 904-05 (7th Cir. 1988) (reversing a district court denial of waiver of
bond because the city of Chicago’s appropriation from the state of Illinois legislature provided it
with sufficient funds to satisfy a judgment against its police department).
Wayne is similar to the city of Chicago in Dillon because its funding comes from an
appropriation from the Michigan legislature. According to an affidavit from Wayne’s Treasurer,
the university has $183.5 million in unrestricted net assets from which it can satisfy a judgment
once the court disposes of the post-trial motions. See Defs.’ Ex. A. The judgment in this case is
$550,000. See Dkt. # 203. Wayne has sufficient funds to satisfy this judgment if it is not
successful on its post-judgment motions. Given the amount and source of Wayne’s funds the
third and fourth factors of the Nken test weigh in favor of the stay. Plaintiffs will not be injured
because the funds will be available to Wayne if it is not successful on its post judgment motions.
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The public has an interest in Wayne being able to use its funds to carry out its mission of
providing educational and research services to the public. Therefore, the Court will GRANT the
Motion to Stay under Rule 62(b), and waive the requirement that Defendants post a security.
IV.

Conclusion

For the reasons mentioned above, the Court will GRANT Defendants’ Motion [#210] and
waive the bond requirement.
SO ORDERED.

/s/Gershwin A Drain
Hon. Gershwin A. Drain
U.S. District Court Judge

Dated: June 25, 2014

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