Cone et al v. Sanitarios Lamosa S.A. DE C.V. et al
Filing
318
MEMORANDUM OPINION AND ORDER. It is ORDERED that Plaintiffs' Motion to Require Security (Dkt. # 292 ) is hereby DENIED. Signed by District Judge Amos L. Mazzant, III on 6/29/2020. (rpc, )
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 1 of 8 PageID #: 14577
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
MARK AND AMBER FESSLER,
ANDREW HOCKER, KEVIN REUSS,
MATTHEW CARRERAS, CHARLES
AND MICHELLE HANDLY, AARON
AND STACEY STONE, and DANIEL
AND SHARON SOUSA, on Behalf of
Themselves and Those Similarly Situated
§
§
§
§
§
§
§
§
§
§
§
§
§
v.
PORCELANA CORONA DE MÉXICO,
S.A. DE C.V f/k/a SANITARIOS
LAMOSA S.A. DE C.V. a/k/a Vortens
Civil Action No. 4:19-cv-00248
Judge Mazzant
AND
STEVEN AND JOANNA CONE, MARK
AND AMBER FESSLER, ANDREW
HOCKER, MATTHEW CARRERAS,
CHARLES AND MICHELLE HANDLY,
AARON AND STACEY STONE, and
DANIEL AND SHARON SOUSA, on
Behalf of Themselves and Those Similarly
Situated
§
§
§
§
§ Civil Action No. 4:17-CV-00001
§ Judge Mazzant
§
§
§
§
§
§
§
§
v.
PORCELANA CORONA DE MÉXICO,
S.A. DE C.V f/k/a SANITARIOS LAMOSA
S.A. DE C.V. a/k/a Vortens
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs’ Motion to Require Security (Dkt. #64; Dkt. #292).1
Having considered the motion and the relevant pleadings, the Court finds that the motion should
be denied.
1
Two identical motions, responses, replies, and sur-replies were filed in the above-captioned cases. Throughout this
Order, the Court will usually only cite to one of these filings, and unless otherwise noted, citations to the Motion
1
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 2 of 8 PageID #: 14578
BACKGROUND
This motion is the latest dispute concerning two settlement agreements 2 between Plaintiffs
and Defendant. On March 23, 2020, the parties submitted a joint proposal for a Final Order and
Judgment in this case. The Court issued a Final Order and Judgment that dismissed all claims in
the Second Amended Complaint. See Case No. 4:17-CV-00001 (Dkt. #281); Case No. 4:19-CV00248 (Dkt. #52). After the Court entered final judgment as requested by the parties, Plaintiffs
filed their Unopposed Motion to Amend Final Order and Judgment on April 21, 2020. See Case
No. 4:17-CV-00001 (Dkt. #283); Case No. 4:19-CV-00248 (Dkt. #54). Plaintiffs requested in
their motion that the Court memorialize “its findings and ultimate ruling as to the pending
Consolidated Fee Application” in an amended final judgment. See Case No. 4:17-CV-00001 (Dkt.
#283); Case No. 4:19-CV-00248 (Dkt. #54).
The Court granted Plaintiffs’ motion on April 24, 2020, and it ordered the parties to submit
a proposed amended final order and judgment within ten days of the Court’s order on Class
Counsel’s Consolidated Application for Attorneys’ Fees and Reimbursement of Expenses. See
Case No. 4:17-CV-00001 (Dkt. #284); Case No. 4:19-CV-00248 (Dkt. #55). On the same day,
the Court issued a Memorandum Opinion and Order that awarded Class Counsel $4,333,949.50 in
attorneys’ fees and $371,354.98 in litigation expenses and costs. Fessler v. Porcelana Corona de
Mexico, S.A. de C.V., No. 4:17-CV-00001, 2020 WL 1974246, at *1 (E.D. Tex. Apr. 24, 2020).
(Dkt. #64); the response (Dkt. #70); the reply (Dkt. #73); or the sur-reply (Dkt. #76) can be found on the docket of
Case No. 4:19-CV-00248, while any citations to Dkt. #292; Dkt. #310; Dkt. #313; or Dkt. #315—which are the
identical filings, respectively—are located on the docket of Case No. 4:17-CV-00001.
2
While there are two settlement agreements, the relevant provisions are identical.
2
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 3 of 8 PageID #: 14579
But in attempting to comply with the Court’s order and submit a proposed amended final
judgment within ten days, the parties hit a snag: they could not agree on how to interpret a
provision in their settlement agreements. Specifically, the parties disagreed on:
(1) whether Section VIII, subsection C of the settlement agreements extends to an
appeal of this Court’s Memorandum Opinion and Order on the issue of Class
Counsel’s Fee Application; and (2) if the answer to the first question is “yes,”
whether postjudgment interest does not begin to accrue until the date the award is
due under the terms of the settlement.
Fessler v. Porcelana Corona De Mexico, S.A. De C.V., No. 4:17-CV-00001, 2020 WL 2319989,
at *2 (E.D. Tex. May 11, 2020). The Court issued a Memorandum Opinion and Order to address
the dispute on May 11, 2020. Id. The Court held that the plain language of the settlement
agreement supported the interpretation that: (1) Section VIII, subsection C extended to an appeal
of the Court’s Order on the issue of Class Counsel’s Fee Application; and (2) postjudgment interest
accrues from the date of the entry of the judgment. Id. Perhaps anticipating the current dispute,
Plaintiffs mentioned the issue of a supersedeas bond but did not fully brief the issue. So, the Court
declined to answer the question at that time. Id. at *2 n.1.
After the Court’s interpretation of the settlement agreements, the parties submitted the
Amended Final Judgment and Order on May 13, 2020. See Case No. 4:17-CV-00001 (Dkt. #289);
Case No. 4:19-CV-00248 (Dkt. #60). Defendant is currently appealing the Court’s Award for
Attorneys’ Fees and the Court’s Amended Final Order and Judgment to the United States Court of
Appeals for the Fifth Circuit. See Case No. 4:17-CV-00001 (Dkt. #290); Case No. 4:19-CV-00248
(Dkt. #62).
Plaintiffs filed their Motion to Require Security on May 18, 2020 (Dkt. #292). Defendant
responded on June 1, 2020 (Dkt. #310). Plaintiffs replied on June 5, 2020 (Dkt. #313); Defendant
filed its sur-reply on June 12, 2020 (Dkt. #315).
3
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 4 of 8 PageID #: 14580
LEGAL STANDARD
Under Rule 69 of the Federal Rules of Civil Procedure, a judgment’s execution “must
accord with the procedure of the state where the court is located, but a federal statute governs to
the extent it applies.” FED. R. CIV. P. 69(a)(1). Rule 62 of the Federal Rules governs the stay of
proceedings in enforcing a judgment. See FED. R. CIV. P. 62. Relevant here, Rule 62(a) provides:
“Except as provided in Rule 62(c) and (d), execution on a judgment and proceedings to enforce it
are stayed for 30 days after its entry, unless the court orders otherwise.” FED. R. CIV. P. 62(a).
But a party may choose to obtain a stay on the judgment’s execution at any time by providing a
bond or other security, triggering Rule 62(b). See FED. R. CIV. P. 62(b) (“At any time after
judgment is entered, a party may obtain a stay by providing a bond or other security. The stay
takes effect when the court approves the bond or other security and remains in effect for the time
specified in the bond or other security.”) The Eastern District of Texas’s Local Rules provide
guidance on the presumptive bond amount:
Unless otherwise ordered by the presiding judge, a bond or other security staying
execution of a money judgment shall be in the amount of the judgment, plus 20%
of that amount to cover interest and any award of damages for delay, plus $250.00
to cover costs. The parties may waive the requirement of a bond or other security
by stipulation.
LOCAL RULE CV-62(a).
ANALYSIS
Plaintiffs ask the Court to dissolve Rule 62(a)’s automatic stay or mandate that Defendant
post a supersedeas bond (Dkt. #292 at p. 2). “One reason for dissolving the automatic stay may
be a risk that the judgment debtor’s assets will be dissipated.” FED. R. CIV. P. 62(a) advisory
committee’s note to 2018 amendment. Plaintiffs argue that the Court should require Defendant to
post a supersedeas bond in order to protect the final judgment since Plaintiffs claim there is “a
4
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 5 of 8 PageID #: 14581
substantial risk of [Defendant] essentially rendering the Final Judgment a nullity . . .” (Dkt. #292
at p. 3).
Supersedeas bonds are governed by Rule 62(b). See FED. R. CIV. P. 62(b). 3 The bonds
generally allow a party to stay a judgment’s execution in exchange for providing security. See
Enserch Corp. v. Shand Morahan & Co., 918 F.2d 462, 463–64 (5th Cir. 1990); see also 11
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2905 (3d
ed. 2020). The Fifth Circuit has acknowledged the general rule that supersedeas bonds “preserve
the status quo while protecting the non-appealing party’s rights pending appeal.” Poplar Grove
Planting & Ref. Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1190–91 (5th Cir. 1979). Indeed,
“[t]he posting of a bond protects the prevailing plaintiff from the risk of a later uncollectible
judgment and compensates him for delay in the entry of final judgment.” Hebert v. Exxon Corp.,
953 F.2d 936, 938 (5th Cir. 1992) (quoting NLRB v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988)).
Plaintiffs contend that a supersedeas bond is appropriate in order to protect their rights
while Defendant’s appeal is pending (Dkt. #292 at p. 5). Defendant disagrees and believes
Plaintiffs’ request for a Rule 62(b) bond is premature (Dkt. #310 at p. 2). Specifically, Defendant
argues that a supersedeas bond is unnecessary because the parties’ settlement agreements—and
the Court’s Amended Final Order and Judgment—provided that “Defendant shall pay any Courtapproved amount of attorney fees and costs within five days of the final resolution of all appeals
and/or objections to this Amended Final Judgment.” Defendant notes it is currently appealing the
3
Supersedeas bonds were formerly enumerated in the Federal Rules under Rule 62(d). FED. R. CIV. P. 62(b) advisory
committee’s notes to 2018 amendment. The Federal Rules were amended in 2018, moving that provision to Rule
62(b) and clarifying that a court may grant a stay if a party posts another form of security besides a supersedeas bond.
See id. (“The new rule’s text makes explicit the opportunity to post security in a form other than a bond.”).
The 2018 amendment also changed the text to allow “a party” to obtain a stay—not just an appellant. Id. (“[A] party
may wish to secure a stay pending disposition of post-judgment proceedings after expiration of the automatic stay, not
yet knowing whether it will want to appeal.”).
5
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 6 of 8 PageID #: 14582
Court’s Amended Final Judgment to the Fifth Circuit. Thus, Defendant argues that it is not
required to post a supersedeas bond because Defendant: (1) never filed a motion to stay the
judgment; and (2) a stay is effectively already in place due to the Court’s interpretation of the
parties’ settlement agreements and Defendant’s pending appeal (Dkt. #310 at pp. 4–5). Given that
Plaintiffs identify no on-point authority supporting their argument, the Court has no choice but to
agree with Defendant.
Plaintiffs cite no federal cases holding that a court may require a party to post a supersedeas
bond where that party has never requested a stay on a judgment’s execution. In fact, federal courts
appear to hold the exact opposite. See In re Navistar Diesel Engine Prod. Liab. Litig., No. 11 C
2496, 2013 WL 4052673, at *3 (N.D. Ill. Aug. 12, 2013) (“By its terms, this rule applies only
when [a party] asks the court to impose a stay. . . . The objectors have not sought a stay. Rather,
the execution of the settlement is on hold pursuant to a term in the parties’ settlement agreement.”);
Af-Cap, Inc. v. Republic of Congo, No. A-01-CA-321-SS, 2005 WL 8155158, at *1 (W.D. Tex.
Oct. 17, 2005) (“Furthermore, [the plaintiff] fails to cite any case law for the proposition that a
district court may order the posting of a supersedeas bond where no motion for stay has been
filed.”); In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Prod. Liab. Litig., No.
CIV.A. 99-20593, 2000 WL 1665134, at *3 (E.D. Pa. Nov. 6, 2000) (“Class Counsel cites no case
actually holding that a supersedeas bond can be imposed in the absence of a motion for a stay.”);
U.S. for Use of Terry Inv. Co. v. United Funding & Inv’rs, Inc., 800 F. Supp. 879, 881 (E.D. Cal.
1992) (“Here, appellant has not moved for a stay under Rule 62([b]) . . . . Rule 62([b]) nowhere
expressly provides that the district court may, of its own accord or on motion from appellee, order
appellant to post a supersedeas bond.”); Sheet Metal Workers’ Nat. Pension Fund v. Metals &
Machining Fabricators, Inc., 637 F. Supp. 50, 51 (D.D.C. 1986) (“Plaintiffs have failed to cite a
6
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 7 of 8 PageID #: 14583
single federal case, and the Court has discovered none, where a losing defendant did not request a
stay pending appeal but was ordered nonetheless to post a supersedeas bond.”). The uniform
federal authority suggests the Court cannot grant a supersedeas bond without a party first filing a
motion to stay. Plaintiffs do not provide a way around this overwhelming authority.
Here, the judgment’s execution is on hold until five days after the resolution of all appeals
because the parties freely agreed to delay the judgment’s execution. See Fessler, 2020 WL
2319989, at *3 (“Section VIII, subsection C of the settlement agreements contemplates that
‘[w]ithin five days of 1) the Effective Date or 2) the final resolution of all appeals and/or objections
to Class Counsel’s Fee Application, whichever is later, Defendant shall pay any Court-approved
amount of attorney fees. . . .’”) (alteration in original). No motion to stay has been filed because
the parties themselves effectively put one in place. C.f. In re Navistar Diesel, 2013 WL 4052673,
at *3 (“The objectors have not sought a stay. Rather, the execution of the settlement is on hold
pursuant to a term in the parties’ settlement agreement.”). In short, Plaintiffs’ motion for a
supersedeas bond lacks the necessary predicate: a party obtaining a stay from the Court on a
judgment that could otherwise be executed. The Court cannot require Defendant to post a
supersedeas bond on the ground Plaintiffs urge here. 4
CONCLUSION
It is therefore ORDERED that Plaintiffs’ Motion to Require Security (Dkt. #64; Dkt. #292)
is hereby DENIED.
4
Plaintiffs could have avoided this consequence. Plaintiffs could have contracted for a requirement that Defendant
provide security prior to appealing. Or Plaintiffs could have contracted for the judgment to be immediately executable.
But that language is nowhere in the settlement agreements. C.f. In re Navistar Diesel, 2013 WL 4052673, at *3 n.1
(“There was nothing to prevent the parties from entering into a settlement that would have not required a stay in the
event of an appeal. This would have left it to any [party] to ask for a stay if it wanted one, which in turn would have
triggered the requirement for a supersedeas bond under Rule 62([b]).”).
7
Case 4:17-cv-00001-ALM-KPJ Document 318 Filed 06/29/20 Page 8 of 8 PageID #: 14584
SIGNED this 29th day of June, 2020.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
8
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?