Opinion ID: 3000372
Heading Depth: 2
Heading Rank: 4

Heading: Premiums Paid for a Supersedeas Bond

Text: Republic next contends that the district court should not have awarded NATC the costs associated with obtaining the loan used to secure the district court’s judgment because Rule 39(e) only allows a party to recover “premiums paid for a supersedeas bond or other bond.” As Republic correctly points out, NATC did not purchase a bond to secure Republic’s judgment, but rather borrowed money located by an investor and deposited it with the clerk of the court. Several courts have discussed whether a party can recover costs, other than those associated with obtaining a bond, that serve to secure a judgment pending appeal. A number of those courts have held that costs paid in addition to costs paid for a supersedeas bond are not recoverable. See Johnson v. Pac. Lighting Land Co., 878 F.2d 297, 298 (9th Cir. 1989) (holding that a party may not recover the cost of a letter of credit used to obtain a supersedeas bond); Lerman v. Flynt Distrib. Co., 789 F.2d 164, 166 (2d Cir. 1986) (holding that a party may not recover the interest on a loan obtained to purchase a supersedeas bond). Other decisions have held that a party may recover the costs of securing a judgment if they are paid in lieu of obtaining a supersedeas bond. See, e.g., Trans World Airlines, Inc. v. Hughes, 515 F.2d 173, 177-78 (2d Cir. 1975) (holding that a party may recover costs of a No. 05-3634 13 letter of credit and auditing costs paid in lieu of a supersedeas bond premium, where the “obtaining of a supersedeas bond was impracticable”). Another court has held that a party may recover expenses, such as those incidental to obtaining a letter of credit, in addition to the premium paid for a bond, so long as the total cost of those expenses is less than the cost of obtaining a bond without supporting collateral. See Bose Corp. v. Consumers Union of U.S., Inc., 806 F.2d 304, 305 (1st Cir. 1986). In this case, unlike Johnson and Lerman, NATC did not pay borrowing costs in addition to a premium for a supersedeas bond. Rather, as in Trans World Airlines, NATC paid borrowing costs in lieu of a premium for a supersedeas bond. Additionally, as in Bose Corp., NATC has offered evidence, in the form of David Brunson’s affidavit, that NATC’s borrowing costs were no more expensive than the premium for a supersedeas bond, because no bond-seller was willing to secure Republic’s $18.6 million judgment.4 Republic has not offered evidence to the contrary. As a result, the district court did not abuse its discretion by taxing the costs that NATC paid to obtain its loan, but only to the extent those costs can be allocated to the period of time the case was on appeal.