United States District Court, E.D. New York
MEMORANDUM AND ORDER
L. MANN, CHIEF UNITED STATES MAGISTRATE JUDGE.
pending before this Court, on a referral from the Honorable
Frederic Block, see Electronic Order (May 17, 2018),
is plaintiffs' application for an order requiring
defendants to obtain a supersedeas bond in the amount of $2,
608, 507.37, to secure “the Court's prospective
award” of attorneys' fees during the pendency of
defendants' appeal to the Second Circuit, see
Letter Motion for Bond (May 14, 2018) at 1 (“Pl.
Motion”), Electronic Case Filing Docket Entry
(“DE”) #200; Fed.R.Civ.P. 62(d) (if an appeal is
taken, the appellant may obtain a stay of execution on the
judgment by giving a supersedeas bond). Defendants oppose
the motion, arguing that plaintiffs “have no legal
basis for demanding security for their unadjudicated claim
for attorneys' fees.” Response in Opposition (May
16, 2018) (“Def. Opp.”) at 2, DE #201. While
defendants “do not agree to post additional security[,
]” Letter to Chief Magistrate Judge Mann Providing
Status Report (May 22, 2018) (“Def. 5/22/18
Letter”), DE #204, they have offered to
“demonstrat[e] that [d]efendants' assets are well
in excess of any potential judgment . . . ., ”
id. The question thus posed is whether plaintiffs
should be afforded any additional security to cover all or
part of the $2.6 million fee award sought in plaintiffs'
pending fee application, see Motion for Attorney
Fees (Mar. 15, 2018), DE #187 -- an application that
defendants have asked Judge Block to stay until the appeal is
decided, see Letter Motion to Stay (Mar. 23, 2018),
motion referred to this Court by Judge Block, plaintiffs seek
an order directing defendants “to immediately post a
supersedeas bond in the amount of $2, 608.507.37[.]”
See Pl. Motion at 3. Defendants counter that
plaintiffs, who cite no case law in support of their request,
“have no legal basis for demanding security for their
unadjudicated claim for attorney's fees.” Def. Opp.
suggestion that the Court is without authority to grant the
relief requested by plaintiffs does not accurately reflect
the more nuanced caselaw on which they rely. To be sure, in
Southern Track and Pump, Inc. v. Terex Corp., C.A.
No. 08-543-LPS, 2014 WL 4825249 (D.Del. Sept. 29, 2014), the
court declined to increase the supersedeas bond amount to
include an estimate of accrued attorneys' fees. See
id. at *2. Nevertheless, the court did so as an
“exercise of its discretion[, ]” taking into
account the specific circumstances of that case. See
id. Notably, as the court in that case expressly
There is precedent for requiring a supersedeas bond to
include an estimate of attorneys' fees. See VICI
Racing LLC [v. T-Mobile USA, Inc.], 921 F.Supp.2d [317,
335 (D.Del.2013), vacated in part on other grounds,
2014 WL 3930025 (3d Cir. Aug. 13, 2014)]; see also
Evergreen Cmty. Power LLC v. Riggs Distler & Co.,
Inc., 2012 WL 2974891, *1-2 (E.D.Pa. July 19, 2012).
There is also precedent for not including as-yet
non-calculated attorneys' fees in the bond amount.
See Berberena-Garcia v. Aviles, 258 F.R.D. 42, 43
Southern Track & Pump, 2014 WL 4825249, at *2;
see also Frankel v. ICD Holdings, 168 F.R.D. 19,
21-22 (S.D.N.Y. 1996) (conditioning stay of execution pending
appeal on the posting of a bond “for 110 percent of the
principal amount of the judgment” or alternative
security approved by the court).
to the implications of defendants' argument, the
principle that emerges from the relevant caselaw is that
district courts have considerable discretion in determining
whether to require security for accrued but
as-yet-unadjudicated attorneys' fees and, if so, in what
amount and what form. See, e.g., S. Track &
Pump, 2014 WL 4825240, at *2; VICI Racing, 921
F.Supp.2d at 335. Even in the context of a Rule 62 dispute
over bonding the underlying judgment, the Second Circuit has
made clear that a district court may, in appropriate
circumstances, waive the bond requirement where the
“appellant provides an acceptable alternative means of
securing the judgment.” In re Nassau County Strip
Search Cases, 783 F.3d 414, 417 (2d Cir. 2015) (citation
omitted); see, e.g., Gaus v. Conair Corp.,
No. 94 Civ. 5693(FM), 2003 WL 542652, at *2 (S.D.N.Y. Feb.
14, 2003) (in lieu of supersedeas bond, court allows
defendant-appellant to post an irrevocable letter of credit
and directs defendant to provide periodic financial
disclosures to plaintiff-appellee). Where, as here,
defendants have obtained a supersedeas bond in the amount of
the underlying judgment, it follows that the Court's
discretion is even less constrained in evaluating the
sufficiency of alternative means of securing plaintiffs'
potential fee award.
than attempt in good faith to arrive at a mutually acceptable
form of security in lieu of an additional supersedeas bond,
each side appears to have staked out its position, dug in its
heels, and turned to the Court to resolve their dispute as a
matter of law. On the one hand, defendants have offered to
make some financial disclosures but have refused to post
any additional security, in any form, see
Def. 5/22/18 Letter; on the other, plaintiffs have demanded
either an additional supersedeas bond or a recordable
interest in, and an appraisal of, debt-free real property,
see Pl. Motion at 2-3.
reasons expressed by the Court during the May 18th
conference, defendants' offer to satisfy the Court and
plaintiffs' counsel as to their net worth is an
unsatisfactory alternative to a bond. See generally
Leevson v. Aqualife USA Inc., 14 Civ. 6905 (JBW)(VMS),
2017 WL 6541766, at *4 (E.D.N.Y. Dec. 8, 2017) (observing
that “[f]oreclosure actions are not simple
procedures”). That said, the Court has been afforded
insufficient information with which to fashion an appropriate
form of relief and, for that reason, plaintiffs' motion
for a bond is denied without prejudice.
are directed to promptly disclose to plaintiffs' counsel
the financial information with which they offered to furnish
the Court. The parties shall further confer in good faith to
resolve this dispute. If they are unable to reach a
resolution, either side may seek the Court's approval of
a particularized proposed form of security; the parties'
submissions should be supported by evidentiary (financial)
material, which may be filed under seal, with access limited
to case participants.
foregoing reasons, plaintiffs' motion is denied without