Commercial Litigation and Arbitration

Stay Pending Appeal — Issue of First Impression

The factors considered by the District Court in determining whether to issue a stay pending appeal are the same as those considered by the Court of Appeals, under the Supreme Court’s decision in Hilton v. Braunskill, 481 U.S. 770, 777 (1987) — namely: ‛(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 interest lies.“ Hilton also observes that ‛[s]ince the traditional stay factors contemplate individualized judgments in each case, the formula cannot be reduced to a set of rigid rules,“ and that ‛a substantial case on the merits“ may suffice with respect to factor (1) if other factors militate strongly in favor of a stay. Id. at 777, 778. How, then, should factor (1) be applied by the District Court when the issue presented is one of first impression which, by its nature, is one that the Court of Appeals may decide differently? District Judge Henry Hudson, in Miller v. Brown, 465 F.Supp.2d 584 (E.D. Va. 2007), ruled that the ‛substantial case on the merits“ approach is the proper one to follow: ‛While the Court cannot say that Defendants are likely to prevail in their appeal, the Court does recognize that this case raises an issue of first impression. Because the Fourth Circuit may resolve the issue differently, Defendants have at least demonstrated a ‘substantial case on the merits.’ Hilton, 481 U.S. at 778. A stay may therefore be appropriate if the other factors weigh in Defendants' favor.“ Stay granted.

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