1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 GULAMNABI VAHORA, Case No. 1:16-cv-01624-SKO 7 Plaintiff, ORDER DENYING WITHOUT 8 PREJUDICE DEFENDANT VALLEY v. DIAGNOSTICS LABORATORY, INC.’S 9 MOTION TO STAY PROCEEDINGS TO ENFORCE THE JUDGMENT AND 10 VALLEY DIAGNOSTICS LABORATORY, APPROVE BOND 11 INC., et al., (Doc. 175) 12 Defendants. _____________________________________/ 13 I. INTRODUCTION 14 On August 30, 2019, Defendant Valley Diagnostics Laboratory, Inc. (“VDL”) filed a 15 “Motion for a Stay of Proceedings to Enforce the Judgment/Approve Bond” pursuant to Rule 62 16 17 of the Federal Rules of Civil Procedure. (Doc. 175.) 18 In the motion, VDL represents that it has secured a supersedeas bond in the amount of 19 $197,720, equivalent to approximately 125% of the judgment entered against VDL, and that 20 VDL has deposited that amount in cash with a surety corporation. (Id. at 3.) The motion states 21 Qarni’s relatives provided the money to Qarni to deposit on behalf of VDL. (See id.) VDL 22 requests that the Court stay proceedings to enforce the judgment against it during the pendency 23 of any appeal of the judgment, and accept the supersedeas bond as security under Rule 62. (See 24 25 generally id.) 26 Plaintiff filed an opposition on September 18, 2019, and VDL filed a reply on September 27 25, 2019. (Docs. 177, 178.) 28 1 Upon review of the motion and supporting documents, the Court deemed the matter 2 suitable for decision without oral argument pursuant to Local Rule 230(g). Accordingly, the 3 hearing on the motion set for October 2, 2019, was vacated. (Doc. 179.) 4 II. LEGAL STANDARD 5 Rule 62 of the Federal Rules of Civil Procedure provides: 6 (b) Stay by Bond or Other Security. At any time after judgment is entered, a party 7 may obtain a stay by providing a bond or other security. The stay takes effect when the court approves the bond or other security and remains in effect for the time 8 specified in the bond or other security. 9 Fed. R. Civ. P. 62(b). Rule 62(b) allows a party to stay execution of a judgment pending appeal 10 by posting a supersedeas bond with the court. See Hardesty v. Sacramento Metropolitan Air 11 Quality Management District, No. 2:10-cv-02414-KJM-KJN, 2019 WL 2715616, at *3 (E.D. 12 Cal. June 28, 2019) (“Rule 62(d) [now Rule 62(b)] is a purely procedural mechanism to preserve 13 14 the status quo during a stay pending appeal of a district court decision . . .”) (citing Vacation 15 Vill., Inc. v. Clark Cty., Nev., 497 F.3d 902, 913–14 (9th Cir. 2007)). Under this rule, a party can 16 “receive the stay ‘as a matter of right by posting a supersedeas bond acceptable to the court.’” 17 Nat’l Grange of the Order of Patrons of Husbandry v. Cal. Guild, No. 2:14-cv-676 WBS DB, 18 2019 WL 2009533, at *2 (E.D. Cal. May 7, 2019) (quoting Matter of Combined Metals 19 Reduction Co., 557 F.2d 179, 193 (9th Cir. 1977)). 20 21 As to the amount of the bond, the district court has “inherent discretionary authority in 22 setting supersedeas bonds.” Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir. 23 1987). “The purpose of the supersedeas bond is to secure the appellees from any loss resulting 24 from the stay in execution of judgment.” Nat’l Grange, 2019 WL 2009533, at *2 (citing Pac. 25 Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019, 1027 (9th Cir. 1991)). 26 Local Rule 151 generally requires a bond in the amount of 125 percent of the judgment amount. 27 E.D. Cal. L.R. 151(d) (citing Fed. R. Civ. P. 62). 28 1 Local Rule 151 also provides that “[e]very security, bond, undertaking, or deposit 2 instrument shall state the conditions of the obligation and shall contain a provision expressly 3 subjecting it to all applicable federal law,” and “[n]o security, bond, or undertaking with 4 corporate surety shall be accepted unless the corporate surety is in compliance with the 5 provisions of 31 U.S.C. §§ 9304–06[.]” E.D. Cal. L.R. 151(e), (f). 6 III. DISCUSSION 7 VDL seeks to stay proceedings to enforce the judgment during the pendency of an appeal 8 of the judgment1 by posting a supersedeas bond with the Court in the amount of $197,720— 9 10 which represents approximately 125% of the $158,175 judgment against VDL. (Doc. 175.) 11 Plaintiff objects to the form of the bond, contending that the bond is not in compliance with 12 Local Rule 151, because it does not (1) contain a provision expressly subjecting the bond to “all 13 applicable federal law” or (2) establish that the corporate surety is in compliance with 31 U.S.C. 14 §§ 9304–06. (Doc. 177 at 16.) Plaintiff also contends the Court should apply a four-factor test 15 to determine whether entry of the stay is appropriate, and notes that Defendants have not yet 16 filed a notice of appeal of the judgment—since the judgment is not yet final. (See id.) 17 18 A “party taking an appeal from the District Court is entitled to a stay of a money judgment 19 as a matter of right if he posts a bond in accordance with Fed. R. Civ. P. 62(d).” American Mfrs. 20 Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 87 S. Ct. 1, 3 (1966). “Under 21 Fed. R. Civ. P. 62(d), an appellant may obtain a stay as a matter of right by posting a supersedeas 22 bond acceptable to the court.” Matter of Combined Metals Reduction Co., 557 F.2d 179, 193 23 (9th Cir. 1977). Rule 62(b) states that “[a]t any time after judgment is entered, a party may 24 25 obtain a stay by providing a bond or other security.” Fed. R. Civ. P. 62(b). 26 1 The specific relief requested by VDL is an order “[s]taying all proceedings to enforce the Judgment pending final 27 adjudication of VDL’s appeal.” (Doc. 175 at 2.) However, to the extent VDL requests a stay of proceedings to enforce the judgment during the pendency of the post-trial motions, that request is denied as moot since the Court 28 has addressed the post-trial motions in an Order, (see Doc. 180), filed contemporaneously herewith. See Guidance 1 In contending that the Court should apply a four-factor test to determine whether entry of 2 the stay is appropriate, Plaintiff cites AngioScore, Inc. v. TriReme Med., Inc., No. 12-cv-03393- 3 YGR, 2015 WL 13387576 (N.D. Cal. Oct. 23, 2015). (Doc. 177 at 14–15.) However, the court 4 in that case applied the test to determine whether the bond requirement should be waived, and a 5 stay should be entered under a different subsection of Rule 62. See Angioscore, 2015 WL 6 13387576, at *1–2. As stated by the court in Angioscore, that test does not apply where the 7 appellant posts a supersedeas bond. See id. at *1 (“[T]he prevailing party may execute upon the 8 judgment absent imposition of a formal stay pending appeal, which an appellant is entitled to 9 10 obtain from the trial court by posting an adequate supersedeas bond pursuant to Rule 62(d).”). 11 VDL is entitled to a stay of proceedings to enforce the judgment pending appeal upon the 12 posting of a supersedeas bond deemed acceptable by the Court. See Matter of Combined Metals 13 Reduction Co., 557 F.2d at 193. Rule 62 provides that a party may obtain a stay “[a]t any time 14 after judgment is entered.” See Fed. R. Civ. P. 62(b). The stay becomes effective upon the 15 Court’s approval of the supersedeas bond and will expire upon the termination of any appeal, or 16 if VDL fails to file a notice of appeal within the time prescribed in the Federal Rules of Civil 17 18 Procedure. See Fed. R. Civ. P. 62. 19 As to the amount of the bond, the Court finds that $197,720 is an acceptable amount as it 20 complies with Local Rule 151 and is equivalent to approximately 125% of the judgment amount. 21 Regarding the form of the bond, VDL has sufficiently established that the corporate surety, 22 United States Fire Insurance Company, complies with 31 U.S.C. §§ 9304–06. See Doc. 178. 23 The bond must, however, include an explicit statement that the corporate surety complies with 24 25 those sections. See Flagship West, LLC v. Excel Realty Partners, L.P., Case No. CV F 02-5200 26 LJO DLB, 2011 WL 13301319, at *2 (E.D. Cal. Oct. 28, 2011). The bond must also state 27 explicitly that it is “subject to all applicable federal law,” E.D. Cal. L.R. 151(e), and must also 28 1 proposed bond must state that the bond is posted to secure a stay of enforcement of the judgment 2 against VDL until determination of any appeal filed by VDL, or if VDL does not appeal the 3 judgment once it becomes final, until after the time for filing a notice of appeal expires. See id.; 4 Flagship West, 2011 WL 13301319, at *2. 5 Accordingly, the Court denies without prejudice VDL’s motion, and directs VDL to file on 6 the docket an amended proposed bond in accordance with this Order by November 25, 2019. 7 The Court ORDERS Plaintiff not to execute on the judgment until further order of the Court. 8 See Flagship West, 2011 WL 13301319, at *2. The Court will enter a separate order approving 9 10 or rejecting the bond, and setting forth the terms of the stay if the bond is approved, upon the 11 filing of the amended proposed bond. 12 IV. CONCLUSION AND ORDER 13 Based on the foregoing, IT IS HEREBY ORDERED that Defendant VDL’s Motion for a 14 Stay of Proceedings to Enforce the Judgment/Approve Bond, (Doc. 175), is DENIED 15 WITHOUT PREJUDICE. 16 The Court ORDERS Defendant VDL to file on the docket an amended proposed bond in 17 18 accordance with this Order by no later than November 25, 2019. The Court further ORDERS 19 Plaintiff not to execute on the judgment until further order of the Court. 20 21 IT IS SO ORDERED. 22 Sheila K. Oberto Dated: November 13, 2019 /s/ . 23 UNITED STATES MAGISTRATE JUDGE 24 25 26 27 28