Frommert v. Conkright

• Decision Date: 05 August 2009
• Docket Number: No. 00-CV-6311L.,00-CV-6311L.
• Citation: 639 F.Supp.2d 305
• Parties: Paul J. FROMMERT, et al., Plaintiffs, v. Sally L. CONKRIGHT, Patricia M. Nazemetz and Lawrence M. Becker, Xerox Corporation Retirement Income Guarantee Plan Administrators and Xerox Corporation Retirement Income Guarantee Plan, Defendants.
• Court: U.S. District Court — Western District of New York

639 F.Supp.2d 305

Paul J. FROMMERT, et al., Plaintiffs, v. Sally L. CONKRIGHT, Patricia M. Nazemetz and Lawrence M. Becker, Xerox Corporation Retirement Income Guarantee Plan Administrators and Xerox Corporation Retirement Income Guarantee Plan, Defendants.

No. 00-CV-6311L.

United States District Court, W.D. New York.

August 5, 2009.

George A. Schell, Jr., Schell & Schell, Fairport, NY, Robert H. Jaffe, Robert H. Jaffe & Associates, P.A., Springfield, NJ, Peter Stris, Stris & Maher, LLP, Dallas, TX, for Plaintiffs.

Margaret A. Clemens, Nixon Peabody LLP, Rochester, NY, for Defendants.

DECISION AND ORDER

DAVID G. LARIMER, District Judge.

On January 6, 2006, the United States Court of Appeals for the Second Circuit held that the defendants in this case, the Xerox Corporation Retirement Income Guarantee Plan and its administrators (hereinafter "defendants" or "the Plan"), violated plaintiffs' rights under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. The Court of Appeals held that the Plan impermissibly calculated plaintiffs' benefits by using a so-called "phantom account." 433 F.3d 254. Familiarity with the Second Circuit's decision on this point is assumed.

The Second Circuit remanded the case to this Court to fashion an appropriate remedy for the violation. Specifically, the Court of Appeals instructed this Court as follows:

On remand, the remedy crafted by the district court for those employees rehired prior to 1998 should utilize an appropriate pre-amendment calculation to determine their benefits. We recognize the difficulty that this task poses because of the ambiguous manner in which the pre-amendment terms of the Plan described how prior distributions were to be treated. As guidance for the district court, we suggest that it may wish to employ equitable principles when determining the appropriate calculation and fashioning the appropriate remedy.

Id. at 268.

This Court then received submissions from both sides, conducted an evidentiary hearing and, thereafter, issued a decision and remedy describing the manner by which payments were to be calculated for the affected employees. That decision ("remedy decision") was entered on January 24, 2007. 472 F.Supp.2d 452.

On March 6, 2007, this Court granted defendants' motion for a stay pending appeal to the Court of Appeals pursuant to Rule 62(d) of the Federal Rules of Civil Procedure, and waived the Rule 62(d) bond requirement. In doing so, I stated that defendants had shown that the Plan "has ample assets and is fully capable of paying any judgment entered in this case," and I therefore concluded that "the posting of a bond here serves no legitimate purpose and would be an unnecessary expense." 472 F.Supp.2d at 468-69.

By decision entered July 24, 2008, the United States Court of Appeals for the Second Circuit unanimously affirmed this Court's remedy decision concerning the identified ERISA violations. 535 F.3d 111.¹ The Plan's request for a rehearing or for en banc consideration was denied by the Second Circuit on September 25, 2008.

Thereafter, defendants petitioned the United States Supreme Court to grant certiorari. While that petition was pending, defendants applied to the Supreme Court for a stay of the Second Circuit's mandate. Acting in her capacity as Circuit Justice, Justice Ginsburg denied that application on April 30, 2009.² Conkright v. Frommert, ___ U.S. ___, 129 S.Ct. 1861, 173 L.Ed.2d 865 (2009). On June 29, 2009, the Supreme Court granted the Plan's petition for certiorari as to the two issues raised in the petition. Conkright v. Frommert, ___ U.S. ___, 129 S.Ct. 2860, 174 L.Ed.2d 575 (2009).

The Plan now moves in this Court either for a modification of the existing payment schedule that flowed from this Court's remedy decision or for a stay pending final disposition by the United States Supreme Court. Plaintiffs oppose the motion. Both sides have submitted papers and memoranda of law, and the Court heard oral argument on the motion on July 24, 2009.

Having reviewed both sides' submissions and considered their respective arguments, the Court grants defendants' motion for a stay. In short, I see no reason to reach a different decision on the present application for a stay than I did in my prior order granting a stay pending appeal to the Court of Appeals.

The Plan has moved for a stay pursuant to Fed.R.Civ.P. 62(d). That rule provides for an automatic stay pending appeal upon the posting of a supersedeas bond by the appellant. Although the rule provides that the stay takes effect upon the district court's approval of the bond, the party posting the bond is entitled to a stay as of right; the court has no discretion to deny the stay itself, but only to fix the amount of (or to waive) the bond. See American Mfrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres, Inc., 87 S.Ct. 1, 3, 17 L.Ed.2d 37 (1966) ("With respect to a case arising in the federal system it seems to be accepted that a party taking an appeal from the District Court is entitled to a stay of a money judgment as a matter of right if he posts a bond in accordance with Fed.R.Civ.P. 62(d)") (Harlan, J., in chambers); Cohen v. Metropolitan Life Ins. Co., No. 07-2071-cv, 2009 WL 1605139, at *3 (2d Cir. June 9, 2009) ("Rule 62(d) provides that an appellant may obtain a stay pending appeal, as of right, by posting a supersedeas bond") (unreported decision); Eurasia Intern., Ltd. v. Holman Shipping, Inc., 411 F.3d 578, 585 (5th Cir.2005) ("Fed.R.Civ.P. 62(d) provides that a party is entitled to an automatic stay of proceedings to enforce a judgment upon appeal when it posts a supersedeas bond").

Rule 62(d) does not apply in all cases, however. In general, Rule 62(d) is applied only to money judgments. See Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992) ("Courts have restricted the application of Rule 62(d)'s automatic stay to judgments for money because a bond may not adequately compensate a non-appealing party for loss incurred as a result of the stay of a non-money judgment"); N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988) (automatic stay of Rule 62(d) applies only to monetary awards); Donovan v. Fall River Foundry Co., Inc., 696 F.2d 524, 526 (7th Cir.1982) (stating that Rule 62(d) procedure "makes little sense as applied to an order to do, rather than an order to pay"); Centauri Shipping Ltd. v. Western Bulk Carriers KS, 528 F.Supp.2d 186, 188 (S.D.N.Y.2007) ("it is well-settled that subsection (d) applies exclusively to stays of money judgments"). The rationale behind that rule is that "where a party has been ordered to do or perform an act, the monetary value of a delay in performance is not so readily ascertained" as with an order to pay a sum of money. Miller v. LeSea Broadcasting, Inc., 927 F.Supp. 1148, 1151 (E.D.Wis.1996) (applying Rule 62(c) to motion for stay of order requiring specific performance of agreement to sell television station).

Non-money judgments, on the other hand, are governed by Rule 62(c), which provides for discretionary stays pending appeal. See Law v. National Collegiate Athletic Ass'n, 134 F.3d 1025, 1030 (10th Cir.1998); Centauri Shipping, 528 F.Supp.2d at 189. Courts deciding whether to grant a stay under Rule 62(c) generally apply a four-part test, taking into consideration (1) the strength of the applicant's showing that it is likely to succeed on the merits of the appeal, (2) the danger that the applicant will be irreparably injured absent a stay, (3) whether the issuance of a stay will substantially injure other interested parties, and (4) where the public interest, if any, lies. Hilton v. Braunskill, 481 U.S. 770, 776, 107 S.Ct. 2113, 95 L.Ed.2d 724 (1987).³ But see Venus Lines Agency v. CVG Industria Venezolana De Aluminio, C.A., 210 F.3d 1309, 1313 (11th Cir.2000) (affirming stay of execution of judgment vacating writ of attachment, which court referred to as a "non-money judgment," under Rule 62(d), but applying the four-part test of Rule 62(c)).

In determining whether Rule 62(d) applies, the court should focus on the nature of the relief ordered, not simply on the form of the judgment. See Hebert, 953 F.2d at 938 (stating that "[t]he applicability of Rule 62(d) turns not on that distinction [between declaratory and money judgments], but on whether the judgment involved is monetary or nonmonetary," and concluding that since the district court's declaratory judgment bound party to pay a "specific sum" of money, Rule 62(d) applied); Bolt v. Merrimack Pharmaceuticals, Inc., No. S-04-0893, 2005 WL 2298423, at *2 (E.D.Cal.2005) (applying Rule 62(d) where "the declaratory judgment in this case, which laid the foundation for plaintiff's right to redeem his stock, is more akin to a money judgement rather than injunctive relief").

In the case at bar, this Court's remedy decision directed defendants to "recalculate plaintiffs' retirement benefits, consistent with the terms of this Decision and Order and the January 6, 2006 decision of the Court of Appeals for the Second Circuit, and to pay each plaintiff a lump sum in the amount of the difference between the amount of benefits that each plaintiff has received, and the amount of the recalculated benefit, without any consideration of a `phantom account.'" 472 F.Supp.2d at 467 (emphasis added). That was clearly, then, an order "to pay" rather than an order "to do." Donovan, 696 F.2d at 526. That the order itself did not set forth a specified amount is of no moment; the relief ordered was indisputably monetary in nature: defendants were ordered to pay the plaintiffs money. See also Beatrice Foods Co. v. New England Printing and Lithographing Co., 930 F.2d 1572, 1574-76 (Fed.Cir.1991) (surety remained liable on Rule 62(d) supersedeas bond throughout prior proceedings on appeal and on remand to district court, since the question on remand [wa]s not whether damages were due, but merely how the damages should be calculated); cf...