Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-04993/USCOURTS-cand-4_05-cv-04993-6/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

HUNT,

 Plaintiff,

 v.

 CHECK RECOVERY SYSTEMS, INC.,

Defendant. /

No. C05-04993 MJJ

ORDER GRANTING DEFENDANT’S

MOTION TO STAY 

INTRODUCTION

Before the Court is Defendant Imperial Merchant Service, d/b/a Check Recovery Systems’

(“Defendant”) Ex Parte Application For Leave to File Motion for Reconsideration of Motion to Stay

Payment of Notice Costs Pending Ruling From Appeal of Order Requiring Defendant to Advance

Notice Costs Prior to Entry of Judgment (“Motion”). (Docket No. 121.) Plaintiffs Brandy Hunt and

Brian Castillo (“Plaintiffs”) oppose the motion. 

For the following reasons, the Court GRANTS Defendant’s Motion and ORDERS

Defendant to post a supersedeas bond of $9,000. 

FACTUAL BACKGROUND

Plaintiffs filed a complaint against Defendant on December 5, 2005. (Docket No. 1.) 

Plaintiffs allege that Defendant violated the Fair Debt Collections Practices Act (“FDCPA”), 15

U.S.C. § 1692 et seq. Plaintiffs seek declaratory judgment, damages, and costs. 

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United States District Court

For the Northern District of California

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On March 21, 2007, the Court granted Plaintiffs’ motion for class certification. (Docket No.

93.) On the same day, the Court issued an order denying Defendant’s motion for summary judgment

and granting in part Plaintiffs’ motion for summary judgment (“Summary Judgment Order”). 

(Docket No. 92.) On June 19, 2007, Plaintiffs filed a Motion for Approval of Class Notice Plan

(“Motion for Approval”). (Docket No. 94.) In the Motion for Approval, Plaintiffs requested that

Defendant pay all reasonable costs incurred in the mailing of notice to class members. (Motion for

Approval at 2.)

On August 1, 2007, the Court issued an order which, inter alia, granted Plaintiffs’ Motion for

Approval (“Notice Order”). (Docket No. 112.) In the Notice Order, the Court ordered Plaintiffs to

send notice, by first-class mail, to all class members and account for the actual cost of producing and

sending the notices. (Notice Order at 11.) The Court further ordered Defendant to pay the cost of

producing and sending the notices. (Id.) Shortly thereafter, Defendant appealed the portion of the

Court’s Notice Order requiring that Defendant reimburse Plaintiffs for the notice costs. (Docket No.

113.) Defendant now seeks an order staying this portion of the Court’s Notice Order while the

appeal is pending. 

LEGAL STANDARD

Federal Rule of Civil Procedure 62(d) (“Rule 62(d)”) allows for a stay of the execution of a

final judgment pending appeal when the moving party posts a supersedeas bond. Rule 62(d) states,

in relevant part:

If an appeal is taken, the appellant may obtain a stay by supersedeas bond . . . . The

bond may be given upon or after filing the notice of appeal or after obtaining the order

allowing the appeal. The stay takes effect when the court approves the bond.

Fed. R. Civ. P. 62(d). Pursuant to this Rule, “[d]istrict courts have inherent discretionary authority

in setting supersedeas bonds[.]” Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir.

1987). “The purpose of a supersedeas bond is to secure the appellees from a loss resulting from the

stay of execution and a full supersedeas bond should therefore be required.” Id. 

ANALYSIS

Defendant’s Motion is styled as an ex parte application for leave to file a motion for

reconsideration. Defendant, however, essentially requests that the Court stay the Notice Order while

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 While Defendant refers to “previous stay motions” in its Motion, the only motion to stay considered by the Court

was one brought by Defendant in February 2006, in which Defendant requested the Court to stay proceedings pending

resolution of a related matter in Bankruptcy Court. The Court denied Defendant’s motion to stay. The current Motion is not,

however, related to Defendant’s prior motion to stay.

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the Notice Order is on appeal. Plaintiffs oppose the Motion both as to the form and the merits. 

Specifically, Plaintiffs contend that the Court should not grant Defendant the relief it seeks because

there is no statute, rule or order permitting Defendant to proceed on an ex parte basis, as required by

Civil Local Rule 7-10. Plaintiffs further argue that the motion is inappropriately framed as a motion

for reconsideration, given that Defendant has not previously requested the relief sought here. On the

merits of Defendant’s request, Plaintiffs argue that it is appropriately viewed as a request pursuant to

Rule 62(d) and, if granted, the Court should require Defendant to post a supersedeas bond. See Fed.

R. Civ. P. 62(d). 

The Court notes that while Defendant’s Motion is titled “ex parte,” it was filed on ECF,

Plaintiffs presumably had notice of the Motion and Plaintiffs timely opposed the motion. Thus,

Plaintiffs’ arguments regarding the ex parte nature of this Motion are unavailing. In addition,

Defendant has not previously presented this request to the Court, therefore the Court does not

consider the Motion as a motion for reconsideration.1

 Furthermore, the Court ordered supplemental

briefing on Rule 62(d) and the proper amount for a supersedeas bond in this matter. Defendant’s

supplemental brief notes that it has no objection to an order that requires it to post a supersedeas

bond under Rule 62(d), although the parties disagree about the appropriate bond amount. Therefore,

for the foregoing reasons, and pursuant to the Court’s discretion under Rule 62(d), the Court grants

the Motion to stay pending appeal and orders Defendant to post a supersedeas bond. 

I. Rule 62(d) Governs this Motion.

As a preliminary matter, in the initial briefing on this matter there was some disagreement as

to the standards governing Defendant’s request. Defendant, in its Motion, relies on Leyva v.

Certified Grocers of California, Ltd.,593 F.2d 857, 863 (9th Cir. 1979), to argue that “[a] trial court

may . . . enter a stay of an action before it, pending resolution of independent proceedings which

bear upon the case.” Plaintiffs assert that because Defendant requests a stay pending appeal of an

interlocutory order for payment of money in advance of judgment, and not resolution of an

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independent proceeding, Rule 62(d) governs the request. The Court agrees. As Plaintiffs correctly

point out, Defendant has not requested a stay of the Notice Order while an independent proceeding

that affects the instant case is pending. Rather, Defendant has requested a stay pending appeal of an

interlocutory order for payment of money - namely, the Court’s Notice Order requiring it to pay

notice costs in advance of judgment. Therefore, the Court will analyze Defendant’s request for stay

under Rule 62(d), not under the Leyva balancing test. 

II. Defendants Must Post a Supersedeas Bond to Obtain a Stay. 

Defendant asserts that unless the Court grants a stay, it will not obtain meaningful appellate

review of the Notice Order because it will be unable to retrieve notice costs from Plaintiff if it

prevails on appeal. Defendant further contends that “[s]ince the Plaintiffs have already paid for the

cost of notifying the members of the class, granting this stay pending appeal will not delay the

conclusion of this case.” (Motion at 10.) Plaintiffs do not substantively oppose a stay under Rule

62(d). Instead, in their Opposition, Plaintiffs contend that the Court should only grant a stay if

Defendant is required to post a supersedeas bond for $12,500, which includes $7,800 for notice costs

Plaintiffs already paid, plus future costs and interest that will accrue during Defendant’s appeal. In

their supplemental brief, Plaintiffs request a supersedeas bond of $23,794.40, which includes the

above costs plus Plaintiffs’ anticipated costs of appeal, including statutory attorney’s fees. (See

Plfs.’ Supp. Br. at 2.) Defendant, in its supplemental brief, argued that it should only have to post a

bond to cover the actual costs which the court ordered Defendant to pay for. (See Defs.’ Supp. Br. at

2.)

As noted above, Defendant, the appellant, may secure a stay by posting a bond. See Fed. R.

Civ. P. 62(d). In addition, the Court has discretionary authority to set a supersedeas bond. Rachel,

831 F.3d at 1505 n.1. The Court also, however, has discretion to stay execution of a judgment

without security or with an alternate form of security. See Federal Prescription Serv., Inc. v.

American Pharm. Ass’n, 636 F.2d 755, 761 (D.C. Cir. 1980) (holding that Rule 62(d) does not limit

the district court’s exercise of its sound discretion to issue unsecured stays); Telemeter v. Hamlin

Int’l Co., 754 F.2d 1492, 1495 (9th Cir. 1985) (explaining that the court has discretion to allow

forms of security other than a supersedeas bond). 

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Here, the Court views a stay as appropriate given that Defendant appealed the Notice Order

and Plaintiffs have not suggested that they will be harmed if a stay is granted. In addition, the Court

perceives no reason to stay execution without security or with an alternate form of security. As

Plaintiffs point out, Defendant has thus far failed to comply with the Court’s order requiring it to

reimburse Plaintiffs for notice costs. The Court therefore finds that Defendant must post a bond to

stay this matter. Furthermore, the Court finds that a supersedeas bond of $9,000 is appropriate. This

amount covers the reasonable costs of notifying the class members to date, as required by the Court

and as detailed in Plaintiff’s briefs. Plaintiffs’ request that the bond be set at an amount that also

includes the costs of appeal is not appropriate given the posture of this matter and the rationale

behind Rule 62(d). See Rachel, 831 F.2d at 1505 n.1 (“The purpose of a supersedeas bond is to

secure the appellees from a loss resulting from the stay of execution”).

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendant’s Motion for a stay of the Court’s

order requiring Defendant to pay class notice costs. The Court further ORDERS Defendant to post

a supersedeas bond for $9,000 within two weeks of entry of this Order. The stay will become

effective upon posting of the bond. 

Plaintiffs’ March 4, 2008 Application for an Order to Show Cause Re: Defendant in

Contempt (“Plaintiff’s Application”) is therefore DENIED as moot and the April 8, 2008 hearing

date in that matter is VACATED. (Docket No. 125.) If, however, Defendants do not post a bond in

the requisite time period, the Court ORDERS Plaintiffs to file, within three weeks of the entry of

this Order, a reply, if any, to Plaintiffs’ Application and Defendant’s opposition in the matter. The

Court will, at that point, schedule oral argument in the matter if necessary.

IT IS SO ORDERED.

Dated: March 21, 2008 

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

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