Heekin v. Anthem, Inc., 2013 U.S. Dist. LEXIS 26700 (S.D. Ind. Feb. 27, 2013):

Federal Rule of Appellate Procedure 7 states: "In 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." Rule 7 exists to protect the rights of appellees by appellants who pose payment risks. See Adsani v. Miller, 139 F.3d 67, 75 (2d Cir. 1998). The award and amount of an appeal bond is within the discretion of the district court. Appeal bonds only apply to costs relating to the appeal. The Circuits are split as to whether costs under Rule 7 include all costs or only those available under Federal Rule of Appellate Procedure 39(e).

Footnote 1. See Walton v. City of Carmel, No. 05-902, 2008 WL 2397683, *3 (S.D. Ind. June 10, 2008) (noting split). The Seventh Circuit has not squarely addressed the issue of whether only Rule 39(e) costs can be secured by an appeal bond under Rule 7. Id.

Rule 39 enumerates the taxable costs on appeal. Such costs include the preparation and transmission of the record, the reporter's transcript, premiums paid for a supersedeas bond or other bond to preserve rights pending appeal, and the fee for filing the notice of appeal. The Circuit split deals more specifically with whether attorneys' fees can be secured by an appeal bond, which Plaintiffs do not request in this case. The majority view is espoused by the Ninth Circuit in Azizian v. Federated Dep't Stores, Inc., 499 F.3d 950, 953 (9th Cir. 2007).

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While the Seventh Circuit has not enumerated a test for when an appeal bond is appropriate, courts generally consider the following factors in determining whether an appeal bond is appropriate: (1) the appellant's financial ability to post a bond, (2) the risk of nonpayment of appellee's costs if the appeal is unsuccessful, (3) the merits of the appeal, and (4) bad faith or vexatious conduct on the part of the appellants. In re Uponor, 2012 WL 3984542, at *2. As an initial matter, the trial Court recognizes that it is [not?] its place to determine whether an appeal is frivolous. However, the merits of an appeal may be relevant to the risk of nonpayment, "in that if the appellant is pursuing a clearly frivolous appeal one might infer that the appellant is abusing the judicial process and thus has no intention of paying any costs taxed on appeal." In re Lawnmower Engine Horsepower Mktg. & Sales Practices Litig., MDL No. 08-1999, 2010 WL 4630846, at *1 (E.D. Wis. Nov. 2, 2010).