American President Lines, Inc., In re
| Citation | 779 F.2d 714,250 U.S. App. D.C. 324 |
| Decision Date | 20 December 1985 |
| Docket Number | No. 84-5228,84-5228 |
| Parties | , 4 Fed.R.Serv.3d 902 In re AMERICAN PRESIDENT LINES, INC., Marshall P. Safir, Appellant. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (Civil Action No. 84-00302).
On Petition for Rehearing.
Marshall P. Safir, pro se, was on petition for rehearing.
Franklin D. Kramer, Washington, D.C., was on response of American President Lines, Inc., to petition for rehearing.
Before ROBINSON, Chief Judge, and WRIGHT and WALD, Circuit Judges.
Opinion Per Curiam.
The Bankruptcy Court dismissed Marshall P. Safir's petition in bankruptcy against American President Lines, Ltd. (APL), 1 whereupon Safir appealed to the District Court. Subsequently, the Bankruptcy Court ordered Safir to pay some $14,000 to APL as attorneys' fees. 2 Still later, APL moved in the District Court for dismissal of Safir's appeal on the ground that he had failed to prosecute it. The District Court granted the motion, and dismissed with prejudice. 3
Safir then sought to appeal to this court. On APL's motion, however, the District Court, purportedly exercising its authority under Federal Appellate Rule 7, 4 ordered Safir to post a $10,000 bond. 5 Shortly thereafter, APL moved us to dismiss Safir's appeal for noncompliance with that order. We initially granted the motion 6 but, on consideration of Safir's petition for rehearing, we remanded the record to the District Court for a statement of its reasons for setting the bond at $10,000. 7
On remand, the District Court endeavored to vindicate the size of the bond. 8 The court informed us that APL estimated its costs on appeal at $450, making it "clear that [APL was], at a minimum, entitled to a bond" in that amount under Rule 7. 9 Characterizing its remaining justifications as "less clear," 10 the court adverted to an "inherent or rule-based power to require a plaintiff with no assets in the court's jurisdiction to post a bond before proceeding with what appears to be a frivolous suit." 11 Bond was further warranted, the court said, because the appeal likely would be found to be frivolous and APL thus would qualify for costs and damages in this court 12 under Federal Appellate Rule 38. 13 Lastly, the court cited Safir's failure to satisfy the Bankruptcy Court's judgment for attorneys' fees as an additional indication of a need for security. 14 In our view, the reasons advanced by the District Court do not support a bond as large as $10,000.
Appellate Rule 7 specifies that a "district court may require an appellant to file a bond or provide other security in such form and amount as it finds necessary to ensure payment of costs on appeal in a civil case." 15 The costs referred to, however, are simply those that may be taxed against an unsuccessful litigant under Federal Appellate Rule 39, 16 and do not include attorneys' fees that may be assessed on appeal. 17 Rule 7 thus sustains the bond in suit to the extent of $450--APL's estimate of its costs on appeal--but not in any greater amount.
Aside from Rule 7, as the District Court observed, it had some authority to call for a cost bond in some situations. 18 But a review of the cases reveals that this power has been utilized only with reference to bonds for costs in district courts, not costs that may accrue on appeal. 19 Besides, such a bond may cover only taxable costs, not attorneys' fees or other expenses. 20 The "inherent or rule-based power" of which the District Court spoke 21 really adds nothing to the authority already conferred by Rule 7.
Moreover, the challenged bond fails as a legitimate means of protecting APL against the possibility that Safir's appeal might turn out to be frivolous. 22 The traditional countermeasure for an appeal thought to be frivolous is a motion in the appellate court to dismiss, 23 which is available at the outset of the appeal and before expenses thereon begin to mount. Additionally, a monetary remedy is afforded by Federal Appellate Rule 38, 24 which authorizes an assessment of damages and single or double costs, 25 including reasonable attorneys' fees, 26 "[i]f [the] court of appeals shall determine that [the] appeal is frivolous." 27 It is, however, for the court of appeals, not the district court, to decide whether Rule 38 costs and damages should be allowed in any given case. 28 The District Court's bond order effectively preempts this court's prerogative to determine, should Safir's appeal be found to be frivolous, whether APL is entitled to a Rule 38 recovery.
Nor can the size of the bond demanded of Safir be justified by his nonsatisfaction of the judgment he suffered in the Bankruptcy Court. 29 What the District Court exacted was not a supersedeas bond, which merely would have stayed execution on the judgment pending the present appeal; 30 rather, by the terms of the court's order, the bond became a precondition to an appeal. The judgment was not stayed--indeed, the record is devoid of any effort by Safir to obtain a stay, either with or without a supersedeas bond, 31 at the hand of the District Court--and for lack of a stay APL remains free to enforce its judgment at any time. 32 The District Court's order impinges on our prior holdings that an appellant who fails to furnish a supersedeas bond, though exposed to enforcement of the judgment, does not lose his right to appeal. 33
We sympathize fully with the District Court's desire to protect APL from further expense in this phase of the legal battle which Safir has waged unremittingly against shipping lines. 34 Excessive bond, however, is not an acceptable control. 35 While, in the federal scheme, appeals found to be frivolous cannot command judicial respect, 36 those possessing merit are normally a matter of right. 37 Courts accordingly must be wary of orders, even those well-meaning, that might impermissibly encumber that right. 38 Here the District Court's bonding authority was limited to security for payment of costs on appeal, 39 and APL's costs expectably will not exceed $450. 40 We hold that the bond demanded of Safir must be reduced to that amount. 41
Our earlier order dismissing this appeal is vacated and the record is remanded to the District Court for reduction of Safir's appeal bond to $450.
So ordered.
9 Id. at 1.
10 Id.
11 Id.
12 Id. at 2.
13 Fed.R.App.P. 38.
15 Fed.R.App.P. 7.
16 Fed.R.App.P. 39. See 9 J. Moore & B. Ward, Moore's Federal Practice p 207.02 (2d ed. 1985); 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure Sec. 3953, at 379 (1977).
17 Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 720, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475, 480 (1967); Baez v. United States Dep't of Justice, 221 U.S.App.D.C. 477, 480-483, 684 F.2d 999, 1002-1005 (en banc 1982); cf. Monolith Portland Midwest Co. v. Kaiser Aluminum & Chem. Corp., 407 F.2d 288, 293 (9th Cir.1969); 28 U.S.C. Sec. 1920.
18 This authority stems from Fed.R.Civ.P. 83, providing:
Each district court ... may from time to time make and amend rules governing its practice not inconsistent with these rules.... In all cases not provided for by rule, the district courts may regulate their practice in any manner not inconsistent with these rules.
Several district courts have adopted rules specifically authorizing bonds covering the costs expected to accrue in those courts. See, e.g., Leighton v. One William St. Fund, 343 F.2d 565, 567 (2d Cir.1965) (E.D.N.Y. rule); McClure v. Borne Chem. Co., 292 F.2d 824, 835 (3d Cir.) (E.D.Pa. rule), cert. denied, 368 U.S. 939, 82 S.Ct. 382, 7 L.Ed.2d 339 (1961); Leslie One-Stop in Pa. v. Audiofidelity, 33 F.R.D. 16, 17 (S.D.N.Y.1963); Marshall v. Spang, 321 F.Supp. 1310, 1311 (W.D.Pa.1971). Even absent a local rule, district courts have been held to have that power. See, e.g., Hawes v. Club Ecuestre El Comandante, 535 F.2d 140, 143 (1st Cir.1976); McClure v. Borne Chem. Co., supra, 292 F.2d at 835; Soo Hardwoods v. Universal Oil Prods., 493 F.Supp. 76, 77 (W.D.Mich.1980).
19 See cases cited supra note 18. Of course, a district court need never look beyond Fed.R.App.P. 7 for authority to set a bond merely for taxable costs on appeal.
20 Levine v. Bradlee, 378 F.2d 620, 621-622 (3d Cir.1967); Smoot v. Fox, 353 F.2d 830, 832 (6th Cir.1965), cert. denied sub nom. League of Women Voters v. Smoot, 384 U.S. 909, 86 S.Ct. 1342, 16 L.Ed.2d 361 (1966); McClure v. Borne Chem. Co., supra note 18, 292 F.2d at 835. But see A. & M. Gregos v. Robertory, 70 F.R.D. 321, 323 (E.D.Pa.1976) ().
21 See note 11 supra and accompanying text.
22 The District Court did not say that Safir's appeal is frivolous, but rather that it likely would be found to be. See text supra at notes 11-13.
23 Though the appellant is paying his own way, the appeal, once found to be frivolous, is dismissable forthwith. Bell v. Hood, 327 U.S. 678, 682-683, 66 S.Ct. 773, 776, 90 L.Ed. 939, 943 (1946); Reuber v. United States, 242 U.S.App.D.C. 370, 384, 750 F.2d 1039, 1053 (1984); Furbee v. Vantage Press, 150 U.S.App.D.C. 326, 328, 464 F.2d 835, 837 (1971). The same rule obtains statutorily with respect...
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