Opinion
MDL No. 1403, This document is applicable to No. 01 C 1181
June 10, 2002
MEMORANDUM OPINION AND ORDER
On April 16, 2002, class representatives moved to require the posting of an appeal bond by the two objectors/proposed intervenors ("objectors") Melissa Nolet and Mercedes Valenjuela. Counsel for Valenjuela attended; counsel for Nolet did not. Counsel for Valenjuela made a one-sentence perfunctory objection, without giving any reason. We set a bond amount somewhat less than the amount sought. On April 24, 2002, plaintiffs were in court to get a date when the bond had to be posted. Counsel for Notel attended and counsel for Valenjuela did not. Our best recollection is that counsel wanted more time to file the bond than plaintiffs thought appropriate, and we granted more time. Then, apparently, the objectors questioned, on May 3, 2002, in the Court of Appeals, the need to file the bond because of a prior order suspending briefing. The Court on May 7, 2002, advised the objectors that its order did not relieve them of their obligation to file a bond. That led, then, to the filing by objectors of two motions here on May 10, 2002, one asking for rehearing pursuant to Rule 59 or, alternatively, for relief pursuant to Rule 60, and the other for relief pursuant to Rule 60.
Both counsel are from out of town, and they have on occasion complained that they do not get notice sufficiently in advance to get here and they have asked that additional notice be given. We have suggested that the parties do so, while we do note that the local rules require the designation of local counsel (which they have not done), one reason being to respond to court calls noticed in accordance with the local rules, and we entertain, as well, patching in out-of-town counsel by telephone.
Both motions say essentially the same thing. They contend that the bond amount is excessive because it asks for coverage of $2,500 for estimated costs of appeal (which objectors concede is appropriate), $25,000 for attorneys' fees and $484,000 for eight months lost interest on that $8,400,000 settlement fund (the bond amount ordered was $100,000, or $11,500 less, but that does not affect the argument). They contend that there is, in reality, not much possible interest loss, since benefited consumers get a discount coupon, not cash. They also contend that the only type of bond appropriate in these circumstances is an appeal bond, not a supersedeas bond, and that relates solely to the costs of appeal, here $2,500. Indeed, they argue, appellees cannot ask for a supersedeas bond — that is up to whoever wants to be excused from paying a judgment, and no one is asking to be so excused. See United States ex rel. Terry Investment Co. v. United Funding and Investors, Inc., 800 F. Supp. 879 (E.D. Calif. 1992).
Plaintiffs contend that the objectors are too late. The Rule 59 motion was filed more than ten days after the last order the objectors attack, and appeal, not Rule 60, is the appropriate way to seek relief from alleged errors of law. Plaintiffs are right about Rule 59, but Rule 60 gives considerable latitude to the district court. The objectors sat on their hands when the bond motions were before the court, and there is something unseemly about coming in considerably late and asking to start over. Still, it is clear that the $100,000 bond, which plaintiffs concede is not a supersedeas bond, is excessive. The amount of the bond should have been $2,500, and we see no reason to burden the Court of Appeals with an appellate issue that can be resolved here. The bond amount shall be $2,500, which is consistent with allowable costs on appeal.
That does not, however, end the matter. Plaintiffs contend there are virtually no delay damages because the consumers do not get cash. But these appeals have the effect of a stay, see, id., and that means consumers will be delayed in getting their discounts. They will be forced to pay a dollar more for product during the pendency of the appeal, a dollar they otherwise could have invested. Individually, of course, the amount of delay loss is de minimus, but that is not so when perceived in the context of a collective delay. Of course, what should be done with any delay damages poses a problem. There are no specifically identifiable victims, which was a principal reason for approving the settlement in the first place. Perhaps, if the objectors were required to pay delay damages, that amount could be added to the coupon amount, increasing the number of coupons.
But that we leave to another day and, we think, another forum. The Court of Appeals can, we believe, make any necessary order to preserve the effectiveness of the judgment, pursuant to Federal Rule of Civil Procedure 62(g) and it can award just damages for a frivolous appeal pursuant to Federal Rule of Appellate Procedure 38. But those are matters for determination by the Court of Appeals. For now, we believe our authority is limited to requiring a cost bond.