Groshek v. Time Warner Cable Inc
ORDER signed by Judge Pamela Pepper on 10/12/2016 DENYING WITHOUT PREJUDICE 81 Motion to Stay Execution of Judgment for Costs Without Posting a Bond. (cc: all counsel) (kgw)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
Case No. 15-cv-157-pp
TIME WARNER CABLE, INC.,
ORDER DENYING PLAINTIFF’S MOTION TO STAY EXECUTION OF
JUDGMENT FOR COSTS WITHOUT POSTING A BOND (DKT. NO. 81)
On August 9, 2016, the court granted the defendant’s motion to dismiss.
Dkt. Nos. 71, 72. The defendant then filed its bill of costs. Dkt. No. 73. The
clerk taxed those costs--$3,621.06—on August 30, 2016. Dkt. No. 75.
The plaintiff has filed a notice of appeal to the Seventh Circuit. Dkt. No.
76. On September 20, 2016—about two weeks after filing his notice of appeal—
the plaintiff filed this motion, asking the court to stay execution of the
judgment for costs pending the appeal, and to waive the posting of a bond. Dkt.
The plaintiff begins by indicating that he asked counsel for the defendant
whether the defendant would agree to the stay; the defendant responded that it
would not agree to a stay absent posting of a bond. Id. at 1. The plaintiff argues
that the cost of a bond would be between $500 and $1,000, on top of the full
amount of the judgment. He also argues that posting a bond takes “voluminous
paperwork, including disclosure statements from all of the owners of each
firm.” Id. at 2.
The plaintiff then states that “[c]lass counsel, by fee agreement, is
responsible for payment of costs in this class action lawsuit, should Plaintiff
not ultimately prevail on his claim. Class counsel represent that the two firms
representing Plaintiff class in this matter, have sufficient assets to pay the
judgment for costs.” Id. For these reasons—because the cost of the bond would
be high, it would require paperwork, and “class counsel” are responsible for
paying costs and have the money to do so, the court should stay enforcement
of the judgment for costs, without requiring the plaintiff to post a bond. Id.
The defendant responds that Fed. R. Civ. P.62(d) allows a plaintiff to
obtain an automatic stay only by posting a bond. Dkt. No. 82 at 1. It points out
that the plaintiff cited no authority for the proposition that there is an
exception to the Rule 62(d) bond requirement if the party’s counsel can pay the
judgment. It also points out that the plaintiff has not identified any
“extraordinary circumstances” warranting waiver of the bond requirement.
Finally, the defendant notes that if “class counsel” has sufficient cash to pay
the judgment for costs, then counsel should just go ahead and post the bond
(despite the fact that it will require some work). Id. at 2.
Rule 62(d) allows an appealing party to obtain an automatic stay pending
appeal by posting a bond, and the stay goes into effect when the court approves
the bond. The rule lists two exceptions: a party doesn’t have to post a bond for
the automatic stay of an interlocutory or final judgment in an injunction or
receivership action, and a party doesn’t have to post a bond to obtain an
automatic stay of a judgment or order “that directs an accounting in an action
for patent infringement.” (Referencing Rules 62(a)(1) and (a)(2)) Neither of those
exceptions exist in this case.
The plaintiff argues that, pursuant to a fee agreement, “class counsel” is
responsible for paying costs, and that the two firms representing “Plaintiff
class” have enough money to pay the $3,600 judgment of costs. As the
defendant points out, the fact that one’s attorney is bound by contract to cover
costs is not an exception to Rule 62(d). In addition, the court is a bit
flummoxed by the references to “class counsel.” It is true that the complaint
filed on February 6, 2015 contained class allegations, Dkt. No. 1, and that the
plaintiff filed a motion to certify a class, Dkt. No. 2. But no law firm ever his
filed an application to be appointed as class counsel. The court has not
certified a class. There has been no formal class discovery schedule set,
because the court granted a motion to dismiss. The plaintiff’s motion provides
no information about counsel’s obligation to the individual plaintiff if no class
ever is certified, and the case proceeds as an individual action—which is the
state of affairs at present.
Nor does Rule 62(d) contain a “de minimis” exception; it does not state
that one obtains an automatic stay via a bond unless the bond would be too
costly, or the process of obtaining the bond would be too burdensome.
The only option available to the plaintiff is to ask the court to use its
discretion to waive the bond requirement. Dillon v. City of Chicago, 866 F.2d
902, 904 (7th Cir. 1988). An appealing party does not have to post a bond to
obtain a stay; the bond requirement is a condition of obtaining an automatic
stay. Northern Indiana Public Service Co. v. Carbon County Coal Co., 799 F.2d
265, 281 (7th Cir. 1986). The Seventh Circuit has indicated that when a trial
court is considering whether to waive the bond requirement, it may look to
(1) the complexity of the collection process; (2) the amount
of time required to obtain a judgment after it is affirmed on
appeal; (3) the degree of confidence that the district court
has in the availability of funds to pay the judgment . . . ; (4)
whether “the defendant’s ability to pay the judgment is so
plain that the cost of a bond would be a waste of money” . . .
; and (5) whether the defendant is in such a precarious
financial situation that the requirement to post a bond
would place other creditors of the defendant in an insecure
Dillon v. City of Chicago, 866 F.2d at 904-905 (citations omitted).
The Seventh Circuit has affirmed a district court’s waiver of bond in a
case where the appellant seeking the stay was a solvent public utility with
assets far in excess of the judgment. Northern Indiana Public Service Co. v.
Carbon County Coal Co., 799 F.2d at 281. It also has approved waiver of bond
where the collection process is cumbersome, time-consuming and uncertain.
Lightfoot v. Walker, 797 F.2d 505, 506-507 (7th Cir. 1986) (judgment against
the state could not be collected “unless and until the state legislature vote[d] to
appropriate the money necessary to pay it”).
The facts of the plaintiff’s case do not resemble those of Carbon Coal or
Lightfoot. The plaintiff is an individual—Cory Groshek—who lives in Brown
County, Wisconsin. Dkt. No. 1 at 2. He is not a solvent public (or private)
corporation with demonstrated assets well in excess of the judgment. While
collecting a judgment from the plaintiff will not require the defendant to wait
for the Wisconsin legislature to make an appropriation, the process may be
cumbersome if the defendant has to seek the judgment from the plaintiff
himself; the court has no information about the plaintiff’s financial condition.
The plaintiff has provided no information regarding his net worth, his liquidity,
or his ability to pay the taxed costs. As the court noted above, the court cannot
rely on the assertion that “class counsel” is responsible for costs by contract,
when there is no class. The court has no information, therefore, which would
indicate that collection would not be cumbersome, and no information that
gives it any degree of confidence that posting a bond would be a waste of
money. The court has no information regarding whether the posting of a bond
would put the plaintiff’s other creditors in a precarious situation—or even if the
plaintiff has other creditors.
Finally, the plaintiff indicated that research into the bond question had
revealed that the cost of a bond would be $500 to $1,000. The plaintiff provided
no information about the source of that information—given that the alleged
costs are between 13% and 28% of the total cost of the judgment, it would have
been helpful for the plaintiff to indicate where he obtained such quotes, and
the basis for the amounts he quotes. And as for cumbersome paperwork—as
the defendant points out, that is the nature of the bond process for any party
seeking a stay pending appeal.
“The philosophy underlying Rule 62(d) is that a plaintiff who has won in
the trial court should not be put to the expense of defending his judgment on
appeal unless the defendant takes reasonable steps to assure that the
judgment will be paid if it is affirmed.” Lightfoot v. Walker, 797 F.2d at 506507. The assertions the plaintiff made in his motion to stay without a bond are
not sufficient to support that philosophy.
The court DENIES WITHOUT PREJUDICE the plaintiff’s motion to stay
execution of judgment for costs. Dkt. No. 81. The plaintiff may renew his
motion for a stay if and when he posts a bond.
Dated in Milwaukee, Wisconsin this 12th day of October, 2016.
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