Trout Point Lodge, Limited et al v. Handshoe

Filing 47

ORDER denying 38 Motion for Bond Signed by Chief District Judge Louis Guirola, Jr on 02/25/2013 (Guirola, Louis)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
TROUT POINT LODGE LIMITED,
A Nova Scotia Limited Company;
VAUGHN PERRET, and CHARLES
LEARY
V.

PLAINTIFFS
CAUSE NO. 1:12CV90-LG-JMR

DOUG K. HANDSHOE

DEFENDANT

ORDER DENYING DEFENDANT’S MOTION
TO REQUIRE COST BOND FOR APPEAL
BEFORE THE COURT is the Defendant Douglas K. Handshoe’s [38] Motion
to Require Cost Bond for Appeal Filed by Plaintiffs. Plaintiffs Trout Point Lodge
Limited, Vaughn Perret, and Charles Leary have filed a response, and Defendant
Handshoe has filed a reply. The Court finds that the Motion is not well-taken and
should be denied.
This Court entered summary judgment in favor of Defendant Handshoe on
December 19, 2012, pursuant to Federal Rule of Civil Procedure 56. (ECF Nos. 35,
36). In its Memorandum Opinion and Order, the Court found that the SPEECH
Act, 28 U.S.C. 4101 et seq., precluded its enforcement of a judgment Plaintiffs had
obtained against Handshoe in a Nova Scotia court. Plaintiffs have appealed that
decision to the United States Court of Appeals for the Fifth Circuit.
In his Motion, Defendant Handshoe seeks an order requiring Plaintiffs to
post a bond or other security pursuant to Federal Rule of Appellate Procedure 7. In
support of the Motion, Handshoe argues that, as the prevailing party in this action,

he is entitled to attorney’s fees under the SPEECH Act.1 Handshoe submits that
the fees he has incurred “are believed to equal or exceed the amount of $50,000.00.”
(Def.’s Mot. 1, ECF No. 38). He asks this Court to order Plaintiffs to post a bond in
the amount of $60,000.00 to protect his right to collect those attorney’s fees, and to
ensure that his appeal costs will be paid. Handshoe’s Motion assumes he will
prevail on appeal.
Federal Rule of Appellate Procedure 7 is discretionary, and provides that
“[i]n 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 (emphasis added). The Fifth Circuit has not determined
whether attorney’s fees are included in “costs” under Rule 7 in cases where “the
underlying statute provides attorneys’ fees may be included as costs.” Vaughn v.
Am. Honda Motor Co., Inc., 507 F.3d 295, 299 (5th Cir. 2007) (noting that there is a
split in the circuits on this issue, and recognizing the risk that meritorious appeals
may be discouraged if the right to appeal is too heavily burdened) (citing Cooter &

1

The SPEECH Act provides:
In any action brought in a domestic court to enforce a
foreign judgment for defamation, including any such
action removed from State court to Federal court, the
domestic court shall, absent exceptional circumstances,
allow the party opposing recognition or enforcement of the
judgment a reasonable attorney's fee if such party
prevails in the action on a ground specified in section
4102 (a), (b), or (c).
28 U.S.C. § 4105.
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Gell v. Hartmarx Corp., 496 U.S. 384, 408 (1990)).
Handshoe has not provided any documentation or other evidence of his costs
in support of his request for a bond in the amount of $60,000.00. He submits that
he “believes” he had incurred costs of $50,000.00 or more at the time the Plaintiffs’
appeal was filed. It appears from Handshoe’s Motion that this sum consists solely
of attorney’s fees.2 As set forth above, a district court has discretion under Rule 7 to
require a bond that will cover “costs on appeal.” Handshoe’s estimated attorney’s
fees of $50,000.00 were incurred at the district court level prior to the Plaintiffs’
appeal. While it may be that Handshoe is entitled to recover attorney’s fees under
the SPEECH Act, nothing in the language of Federal Rule of Appellate Procedure 7
suggests that Plaintiffs should be required to post a bond covering his attorney’s
fees at the trial level. Likewise, Handshoe has not provided a legal basis on which
this Court may require, pursuant to Rule 7, that Plaintiffs post a bond covering
those fees while the appeal is pending.
The remaining $10,000.00 of his request is presumably what Handshoe
estimates will be his “costs on appeal.” But he has not provided any basis for that
estimate, or delineated what portion of that amount consists of attorney’s fees or
other costs. Handshoe argues that attorney’s fees incurred on appeal are not

2

In his Memorandum in Support of his Motion for Summary Judgment,
Handshoe represented to the Court that “disposition of the case need not involve
discovery and turns on legal issues which [the] Court [could] resolve by the
litigants’ respective motions for summary judgment.” (Def.’s Mem. 35, ECF No. 10).
The record indicates that there has been no discovery in this action.
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prohibited from inclusion in a Rule 7 bond, but as noted above, the Fifth Circuit has
not determined that attorney’s fees should be included in such an order. In any
event, Handshoe has not convinced the Court that it should exercise its discretion to
order a bond in this case. The Court’s Order on summary judgment involved a
matter of first impression for this Court, and there is no suggestion that the appeal
was frivolous. And Handshoe does not question Plaintiffs’ ability to pay his appeal
costs, should he prevail and be entitled to them. Because Handshoe has neither
provided support for the amount of security he requests, nor convinced the Court
that attorney’s fees are included in Rule 7 “costs,” the Motion will be denied.
IT IS THEREFORE ORDERED AND ADJUDGED that Defendant
Douglas Handshoe’s [38] Motion to Require Cost Bond For Appeal Filed by
Plaintiffs is DENIED.
SO ORDERED AND ADJUDGED this the 25th day of February, 2013.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE

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