The opinion of the court was delivered by: Glasser, District Judge.
The plaintiff obtained an order of this court directing the
defendant HUD to show cause why it should not be directed to
(1) pay to the plaintiff the sum of $618,015.88 in full
satisfaction of a supplemental judgment against HUD entered on
June 6, 1990; (2) pay the costs and attorneys' fees incurred in
seeking the relief.
The background of this case leading up to this application is
fully set out in a Memorandum and Order issued by this Court on
January 12, 1990; the decision of the United States Court of
Appeals for the Second Circuit dated May 8, 1990; and that of
August 15, 1990, familiarity with which is assumed. HUD has, on
August 3, 1990, again filed a notice of appeal seeking a review
of the issue of the waiver of HUD's sovereign immunity claims
which the Court of Appeals has already ruled on adversely to
HUD. That appeal is pending.
Following the entry of the supplemental judgment on June 6,
1990, and the failure of HUD to pay it, the plaintiff, pursuant
to Rule 69(a), Fed.R.Civ.P., and Article 54 of the N Y
C.P.L.R. (a) served a restraining notice upon the judgment
debtor, HUD; (b) served restraining notices and information
subpoenas upon the Federal Reserve Bank of New York and seven
of the largest commercial banks in the City of New York; (c)
served a restraining notice upon the United States Department
of the Treasury; and (d) served a deposition subpoena duces
tecum upon the Judgment debtor which was returnable on
September 10, 1990. The information sought by the subpoena is
critical in the light of the per curiam decision of the Court
of Appeals of August 15, 1990, which provides in its entirety
The Government's petition for rehearing
misapprehends that our decision will oblige the
Secretary to satisfy any judgment that might be
rendered out of Treasury funds. It will not. The
Secretary will be obliged to satisfy the judgment
only out of non-Treasury funds that are available
to him, if any. If no such funds are available,
the Secretary will have no payment obligation.
C.H. Sanders Co. v. BHAP Housing Dev. Fund Co., 910 F.2d 33.
HUD's sole basis for resisting the relief sought is that the
Notice of Appeal it filed operates to divest this Court of
jurisdiction to issue any further orders in the proceeding and,
in effect, gives rise to an "automatic stay" of the enforcement
of the judgment. It is significant to note that in its order of
January 12, 1990, this Court denied the defendant's application
for a stay pending appeal. For the reasons that follow, the
plaintiff's motion for a Turnover Order will be and hereby is
The defendant must be presumed to have recognized the
necessity of obtaining a stay of proceedings to enforce the
judgment given the fact that it sought one. Indeed, Rule 62(a),
Fed.R.Civ.P., and Rule 8(a), Fed.R.App.P., make that necessity
manifest. It nevertheless persists in asserting such a stay
relying upon the plethora of cases invoking the general rule
that an effective notice of appeal divests the district court
of jurisdiction over the matter forming the basis for the
appeal. It would be an affectation of research to cite the
cases which announce that rule. The defendant blithely ignores,
however, the plethora of cases which plainly hold that to that
general rule there is an exception which is precisely
applicable to this motion.
The principle precisely applicable here is stated with
exquisite precision in 9 Moore's Federal Practice ¶ 208.03 (2d
ed. 1990) as follows:
A party who desires to appeal is not obliged to
seek a stay of the judgment pending appeal.
The only consequence of failing to obtain a stay is
that the prevailing party may treat the judgment of
the district court as final, notwithstanding that
an appeal is pending. If the judgment awards money
or property, it may be executed upon unless stayed;
That exception to the general rule was recognized in
N.L.R.B. v. Cincinnati Bronze, Inc., 829 F.2d 585 (6th Cir.
1987), which stated it as follows, at p. 588:
". . . the mere pendency of an appeal does not, in
itself, disturb the finality of a judgment. . . .
[T]he district Court has jurisdiction to act to
enforce its judgment so long as the judgment has
not been stayed or superseded. . . . Although a
district court may not alter or enlarge the scope
of its judgment pending appeal, it does retain
jurisdiction to enforce the judgment.
The court went on to emphasize the crucial difference between
expanding upon an order after a notice of appeal has been filed
and enforcing such an order, the district court being precluded
from expansion but not enforcement.
In Deering Milliken, Inc. v. F.T.C., 647 F.2d 1124 (D.C. Cir.
1978), the court stated it thus, at pp. 1128-29;
It is well established that the District Court is
without jurisdiction to alter a judgment of its
own while an appeal therefrom is ongoing. But it
is equally clear that the vitality of that
judgment is undiminished by pendency of the
appeal. Unless a stay is granted either by the
court rendering the judgment or by the court to
which the appeal is taken, the judgment remains
See also, International Paper Co. v. Whitson, 595 F.2d 559
(10th Cir. 1979); Lara v. Secretary of the Interior of the
United States, 820 F.2d 1535, 1542-43 (9th Cir. 1987); Island
Creek Coal Sales v. City of Gainesville, 764 F.2d 437 (6th Cir.
1985); National Service Industries, Inc. v. Vafla,
694 F.2d 246, 250 (11th Cir. 1982); BGW Associates, Inc. v. Valley
Broadcasting Co., 532 F. Supp. 1115 (S.D.N.Y. 1982).
The plaintiff seeks an award of the costs and attorneys fees
incident to the bringing of this motion. It bases its claim for
such relief upon Rule 11, Fed.R.Civ.P., and upon 28 U.S.C. § 2412.
A cursory examination of the relevant authorities would
have dispelled the possibility of a reasonable belief that the
opposition to the plaintiff's motion was warranted by existing
law or by a good faith argument that the existing law should be
extended, modified or reversed. The conclusion is inescapable
that the defendant's papers were interposed for no purpose
other than to harass, cause unnecessary delay or needlessly
increase the cost of litigation. Rule 11, Fed.R.Civ.P.
In N.L.R.B. v. Cincinnati Bronze, Inc., supra, the Court
considered the propriety of imposing sanctions pursuant to Rule
38, Fed.R.App.P., which provides that damages and single or
double costs may be awarded to an appellee if the court
determines that an appeal "is frivolous." In concluding that
sanctions should be imposed, it wrote:
Frivolity, like obscenity, is often difficult to
define. With courts struggling to remain afloat in
a constantly rising sea of litigation, a frivolous
appeal can itself be a form of obscenity.
We conclude that the present appeal represents the
latest in a seemingly endless series of attempts .
. . to frustrate the [plaintiff's] efforts to
obtain relief to which it is clearly entitled.
829 F.2d at 591. That observation is peculiarly apposite here.
For the very same reasons, the conclusion is inescapable that
the position of the defendant was not substantially justified.
28 U.S.C. § 2412(d)(1)(A).
The plaintiff's application for an award of costs, expenses
and attorneys' fees incurred in bringing this motion is hereby
granted. The plaintiff's attorney shall submit an affidavit
listing the time spent, hourly rate charged and expenses
incurred on or before October 15, 1990. The defendant may
submit papers in opposition on or ...