Factors in Setting Supersedeas Bond under Fed.R.Civ.P. 62(d) — District Court Jurisdiction to Enforce Judgment After Notice of Appeal

From Dell, Inc. v. Advicon Computer Servs., Inc., 2008 U.S. Dist. LEXIS 40881 (E.D. Mich. May 22, 2008):

The Sixth Circuit has explained that this Rule "entitles a party who files a satisfactory supersedeas bond to a stay of money judgment as a matter of right." Arban v. West Pub. Corp., 345 F.3d 390, 409 (6th Cir. 2003). The amount of the bond, however, is entrusted to the discretion of the trial court. vAcevedo-Garcia v. Vera-Monroig, 296 F.3d 13, 17 (1st Cir. 2002). "A judgment creditor's primary concern when a judgment in his favor is stayed pending appeal is that he be 'secure . . . from loss resulting from the stay of execution."' Texaco Inc. v. Pennzoil Co., 784 F.2d 1133, 1154 (2d Cir. 1986) (quoting Federal Prescription Services v. American Pharmaceutical Association, 636 F.2d 755, 760 (D.C. Cir. 1980)), rev'd on other grounds, 481 U.S. 1 (1987). Therefore, "when setting supersedeas bonds courts seek to protect judgment creditors as fully as possible without irreparably injuring judgment debtors." Ibid (citations omitted). The amount of the bond should secure the judgment creditor for the amount of the judgment, accumulated interest, and costs of the action. A court has discretion to approve a bond in an amount less than the total necessary to secure those sums, but the court must consider such factors as the complexity of the collection process, the amount of time required to obtain a judgment after it is affirmed on appeal, the availability of funds to pay the judgment, whether the defendant's ability to pay the judgment is so obvious that the cost of the bond would be a waste of money, and the economic burden on the judgment debtor and the impact on its other creditors. See 12 James Wm. Moore et al., Moore's Federal Practice § 62.03[2] (3d ed. 1997); Dillon v. Chicago, 866 F.2d 902, 904-05 (7th Cir. 1988).

The case also makes a valuable point about continuing District Court power following the filing of a notice of appeal in the absence of a supersedeas bond staying enforcement of judgment (factually, the plaintiff had been awarded a default judgment):

Generally speaking, "'the district court loses jurisdiction over an action once a party files a notice of appeal, and jurisdiction transfers to the appellate court.'" Dixon v. Clem, 492 F.3d 665, 679 (6th Cir. 2007) (quoting Lewis v. Alexander, 987 F.2d 392, 394 (6th Cir. 1993)). However, "'[a]lthough a district court may not alter or enlarge the scope of its judgment pending appeal, it does retain jurisdiction to enforce the judgment.'" City of Cookeville, Tenn. v. Upper Cumberland Elec. Membership Corp., 484 F.3d 380, 394 (6th Cir. 2006) (quoting NLRB v. Cincinnati Bronze Inc., 829 F.2d 585, 588 (6th Cir. 1987)). ***[T]he Court plainly has jurisdiction to entertain the plaintiff's motion to seize and destroy certain assets because that relief amounts to nothing more than the collection of the money judgments and enforcement of the injunctive relief ordered in those judgments. The Sixth Circuit has drawn a "crucial distinction between expansion and enforcement of judgments." Am. Town Ctr. v. Hall 83 Assocs., 912 F.2d 104, 110 (6th Cir. 1990). Since the plaintiff's motion fits into the latter category, the Court may adjudicate the request.

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