Azizian v. Federated Dept. Stores, Inc.
| Decision Date | 23 August 2007 |
| Docket Number | No. 05-15847.,No. 05-16600.,05-15847.,05-16600. |
| Parties | Fatemah AZIZIAN; Soraya Farrah; Eunice Fey; Rose Gonzales; Kazuko Y. Morgan; Nicola Nelson-Torres; Monique Patrick; Judith Pogran; Pamela Powell; Shirley Powell; Rose Skillman on Behalf of Themselves and All Others Similarly Situated; Hannah Feldman; Nikki Hurst Gibson, Plaintiffs-Appellees, Kamela Wilkinson, Appellant, Susan Casenza; Valerie Theng Matherne, Intervenors-Appellees, v. FEDERATED DEPARTMENT STORES, INC.; Boucheron (USA) Ltd.; Chanel, Inc.; Parfums Givenchy, Inc.; Guerlain, Inc.; Christian Dior Perfumes, Inc.; Conopco, Inc.; L'Oreal USA, Inc.; The Estee Lauder Companies, Inc.; Clarins U.S.A. Inc.; Dillard's Inc.; Target Corporation; Gottschalks, Inc.; Saks Incorporated; The May Department Stores Company; Nordstrom, Inc.; The Neiman-Marcus Group, Inc., Defendants-Appellees. Fatemah Azizian; Soraya Farrah; Eunice Fey; Rose Gonzales; Kazuko Y. Morgan; Nicola Nelson-Torres; Monique Patrick; Judith Pogran; Pamela Powell; Shirley Powell; Rose Skillman on Behalf of Themselves and All Others Similarly Situated; Hannah Feldman; Nikki Hurst Gibson, Plaintiffs-Appellees, Kamela Wilkinson, Appellant, Susan Casenza; Valerie Theng Matherne, Intervenors-Appellees, v. Federated Department Stores, Inc.; Boucheron (USA) Ltd.; Chanel, Inc.; Parfums Givenchy, Inc.; Guerlain, Inc.; Christian Dior Perfumes, Inc.; Conopco, Inc.; L'Oreal USA, Inc.; The Estee Lauder Companies, Inc.; Clarins U.S.A. Inc.; Dillard's Inc.; Target Corporation; Gottschalks, Inc.; Saks Incorporated; The May Department Stores Company; Nordstrom, Inc.; The Neiman-Marcus Group, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
San Francisco, CA; Guido Saveri, Saveri & Saveri, San Francisco, CA; Alan R. Plutzik, Bramson Plutzik Mahler & Birhaeuser, Walnut Creek, CA; Angelina Grace, Law Firm of Joseph M. Alioto, San Francisco, CA; Daniel J. Mogin, Mogin Law Firm, San Diego, CA; Michael J. Flannery, David Danis Law Firm, St. Louis, MO; Robert Diskint, Critchlow & Diskint, San Rafael, CA, Ben Furth, Furth Firm, San Francisco, CA; John J. Pentz, Class Action Fairness Group, Maynard, MA; Michael A. Caddell, Caddell & Chapman, Houston, TX; Mary L. Needham, San Francisco, CA, for the plaintiffs-appellees.
Phillip Aaron Proger, Amy Anne Stathos, Jones Day, Washington, DC, Bruce H. Jackson, Baker & McKenzie, San Francisco, CA; Peter J. Venaglia, Dornbush Mensch Mandelstam & Schaeffer, New York, NY; Terri Garland, Morrison & Foerster, San Francisco, CA; Marta Miyar, Bingham McCutchen, San Francisco, CA; Joel S. Sanders, Gibson Dunn & Crutcher, San Francisco, CA; Bruce A. Colbath, Weil Gotshal and Manges, New York, NY; Jeffrey Knowles, Coblentz Patch Duffy & Bass, San Francisco, CA; Frederic W. Yerman, Kaye Scholer, New York, NY; Michael W. Bien, Rosen Bien & Asaro, San Francisco, CA; Charles Berwanger, Gordon & Rees, San Diego, CA; James T. Fousekis, DLA Piper US, San Francisco, CA; Anita Fern Stork, Covington & Burling, San Francisco, CA; Samuel R. Miller, Folger Levin & Kahn, San Francisco, CA; Marlene J. Williams, Thelen Reid Brown Raysman & Steiner, San Francisco, CA; Gregory Philip Farnham, Townsend Townsend & Crew, San Francisco, CA; Matthew W. Hoffman, Elizabeth Runyan Geise, Goodwin Procter, Washington, D.C.; Ronald J. Dolan, St. Louis, MO; James L. McGinnis, Gary L. Halling, Shepherd Mullin Richter and Hampton, San Francisco, CA; Larry Steven Gangnes, Lane Powell, Seattle, WA; J. Thomas Rosch, Latham & Watkins, San Francisco, CA, for the defendants-appellees.
Andrew James Kopp, Oakland, CA; Steven B. Witman, Metairie, LA, for the intervenors-appellees.
Appeal from the United States District Court for the Northern District of California; Saundra B. Armstrong, District Judge, Presiding. D.C. No. CV-03-03359-SBA.
Before: PROCTER HUG, JR., MELVIN BRUNETTI, and W. FLETCHER, Circuit Judges.
This appeal arises from a class member/objector's challenge to the district court's final approval of a settlement of the antitrust claims of a certified nationwide class of consumers of department store cosmetics. We must decide two questions.
First, as a matter of first impression, we must decide whether, or under what circumstances, appellate attorney's fees are "costs on appeal" that a district court may require an appellant to secure in a bond ordered under Federal Rule of Appellate Procedure 7 ("Rule 7"). We conclude that a district court may require an appellant to secure appellate attorney's fees in a Rule 7 bond, but only if an applicable fee-shifting statute includes them in its definition of recoverable costs, and only if the appellee is eligible to recover such fees. The fee-shifting provision in Section 4 of the Clayton Act, 15 U.S.C. § 15, includes attorney's fees in its definition of costs recoverable by a prevailing plaintiff. However, this provision does not authorize taxing attorney's fees against a class member/objector challenging a settlement in an antitrust suit. Therefore, we hold that the district court erred by requiring security in the Rule 7 bond for attorney's fees as costs taxable under Clayton Act Section 4.
We further conclude that a district court may not include in a Rule 7 bond appellate attorney's fees that might be awarded by the court of appeals if that court holds that the appeal is frivolous under Federal Rule of Appellate Procedure 38 ("Rule 38").
Second, we must decide whether Appellant's appeal on the merits should be dismissed for failure to post the bond. In the circumstances of this case, we hold that it should not.
In a separate unpublished memorandum disposition, we reach the merits of the appeal and affirm the district court's approval of the settlement.
Appellant Kamela Wilkinson is one of a large number of consumers who bought cosmetics products manufactured and sold by Defendants-Appellees. In July 2003, Plaintiffs-Appellees commenced, on behalf of these consumers, a nationwide, settlement-only antitrust class action lawsuit in the federal district court for the Northern District of California. They alleged that Defendants-Appellees had violated the Sherman Act and California's Cartwright and Unfair Competition Acts by "enter[ing] into and engag[ing] in . . . a contract, combination or conspiracy . . . to fix, raise, and stabilize the prices of Department Store Cosmetics and to limit the supply of Department Store Cosmetics." On March 30, 2005, the district court approved a settlement of all class claims. Wilkinson appealed from the final approval order on April 29, 2005.
In July 2005, Plaintiffs-Appellees sought an appeal bond of $12,833,501.80 under Rule 7. This amount included two times their estimate of anticipated (1) appellate costs, not including attorney's fees, recoverable under Federal Rule of Appellate Procedure 39 ("Rule 39") ($6,540.00), (2) appellate attorney's fees ($300,000.00), (3) interest on the settlement's $24 million attorney's fees award ($178,457.68), and (4) damages resulting from delay ($5,931,753.22). The district court ordered Wilkinson to post a bond in the amount of $42,000.00, representing an anticipated $2,000.00 in appellate costs taxable under Rule 39 and $40,000.00 in appellate attorney's fees. The district court noted that a split in circuit authority exists regarding whether attorney's fees are "costs on appeal" securable under Rule 7, and that this circuit had not yet addressed this issue. It concluded that the bond could cover appellate attorney's fees because (1) the fee-shifting provision in Section 4 of the Clayton Act, 15 U.S.C. § 15, defines attorney's fees as among the costs recoverable, and (2) "the Court of Appeals [was] likely to find that the instant appeal[] [was] frivolous."
On August 19, 2005, Wilkinson tendered $2,000.00 to the district court clerk, which was rejected. Wilkinson then moved the district court to reduce the bond amount. After the district court denied her motion, she appealed from that order. On September 19, 2005, Plaintiffs-Appellees filed a motion asking us to dismiss Wilkinson's appeal of final approval of the settlement, based on her failure to pay the Rule 7 bond. A motions panel of this court denied the motion on December 12, 2005, with leave to Plaintiffs-Appellees to renew their request for dismissal in their answering brief, which they have done.
Federal Rule of Appellate Procedure 7, derived from former Federal Rule of Civil Procedure 73(c), provides that "the district court may require an appellant to file a bond or provide other security in any form and amount necessary to ensure payment of costs on appeal." Fed. R.App. P. 7. Wilkinson argues that the phrase "costs on appeal" does not include attorney's fees. Plaintiffs-Appellees contend that "costs on appeal" includes attorney's fees if they are described as "costs" by an applicable fee-shifting statute or if the appeal is likely to be found frivolous by the court of appeals.
Ordinarily, "[w]e review objections to the amount of a bond for abuse of discretion." A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1028 (9th Cir. 2001) (as amended). However, the meaning of the phrase "costs on appeal" is a question of law that we review...
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