Young v. New Process Steel, LP

• Decision Date: 09 August 2005
• Docket Number: No. 04-11554.,04-11554.
• Citation: 419 F.3d 1201
• Parties: Joseph YOUNG, Darrel Sims, Mark Steven Greer, Morris Pickett, Plaintiffs-Appellants, v. NEW PROCESS STEEL, LP, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

419 F.3d 1201

Joseph YOUNG, Darrel Sims, Mark Steven Greer, Morris Pickett, Plaintiffs-Appellants, v. NEW PROCESS STEEL, LP, Defendant-Appellee.

No. 04-11554.

United States Court of Appeals, Eleventh Circuit.

August 9, 2005.

Kevin Wade Jent, C. Michael Quinn, Wiggins, Childs, Quinn & Pantazis, Birmingham, AL, for Plaintiffs-Appellants.

David Wayne Long, Greenberg, Traurig, LLP, Atlanta, GA, Gaile Pugh Gratton, Sirote & Permutt, PC, Birmingham, AL, Sheldon E. Richie, Katherine J. Walters, Richie & Gueringer, P.C., Austin, TX, for Defendant-Appellee.

Before CARNES and PRYOR, Circuit Judges, and FORRESTER^*, District Judge.

CARNES, Circuit Judge:

This appeal brings us a question of first impression: May a district court require, as a condition for appealing a judgment, that a losing plaintiff in a civil rights case post a Fed. R.App. P. 7 bond that includes the defendant's anticipated appellate attorney's fees? The front line position of the appellants in this case, plaintiffs who lost their Title VII and 42 U.S.C. § 1981 lawsuit, is that the district court cannot order them to post such a bond, regardless. Their fall back position is that the court cannot do it without making a finding consistent with Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978), that the would-be appeal is frivolous, unreasonable, or groundless. Although we reject the plaintiffs' primary position, we do find merit in their secondary one.

I.

In May 2001 Joseph Young, Darrel Sims, Mark Greer, and Morris Pickett filed a lawsuit against their employer, New Process Steel, L.P., pursuant to 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. §§ 2000e et. seq. Their complaint alleged various forms of racial discrimination, including a racially hostile work environment and various adverse employment actions. Young sued under Title VII and § 1981, while the other plaintiffs sued only under § 1981. New Process Steel moved to dismiss Young's Title VII claims and, alternatively, moved for partial summary judgment on those claims. In response, Young moved to amend his complaint to bring all of his claims under § 1981. The court granted both Young's motion to amend and New Process Steel's motion to either dismiss or grant summary judgment against Young's Title VII claims.

In July 2002 Greer filed a new lawsuit alleging that he had been fired by New Process Steel after the original action was filed and that the firing was retaliatory. The new lawsuit was consolidated with the original one. Meanwhile the plaintiffs' attorney informed New Process Steel that the plaintiffs planned to pursue only their hostile work environment claims. In response, New Process Steel filed, pursuant to Fed.R.Civ.P. 41, an unopposed motion to dismiss all of the plaintiffs' other claims, the ones alleging racial discrimination regarding overtime and promotions. The court granted that motion and dismissed with prejudice all of those other claims, leaving for trial only the racially hostile work environment claims and Greer's retaliation claim.

The first trial of those remaining claims ended in a mistrial in June of 2003, which was granted on motion of the defendant, which was apparently made as a result of some comments by the plaintiffs or their attorneys to the jurors. Thereafter, on Greer's own motion his retaliation claim was dismissed, leaving for the second trial only the plaintiffs' hostile work environment claims. That trial ended in a jury verdict and final judgment for the defendant in October 2003. The four plaintiffs filed their notice of appeal from that judgment on November 21, 2003.

On February 5, 2004, the district court, without prodding from the defendant, entered an order stating:

Pursuant to Rule 7, Federal Rule of Appellate Procedure, this court would require appellant to file a bond or provide other security in an amount necessary to ensure payment of costs on appeal if the potential costs taxable on appeal can be fairly approximated. If appellee wishes to invoke Rule 7, it shall within fourteen (14) days submit evidentiary materials to support the fixing of a bond amount.

Being able to take a hint when hit over the head with one, the defendant responded by filing a motion that asked the court to require the plaintiffs to post a bond. The defendant sought to have the bond cover its anticipated appellate attorney's fees as well as the other costs it would incur as a result of the appeal. The motion was accompanied by affidavits estimating the amount of those attorney's fees. In granting the motion in its entirety, the district court relied on Pedraza v. United Guar. Corp., 313 F.3d 1323 (11th Cir.2002), which it called "potent medicine." The order the court entered required the plaintiffs to post a cost bond in the amount of $61,000 as a prerequisite to their appeal. All but $1,000 of that amount was to cover the attorney's fees the defendant estimated it would incur in the appeal.

The defendant's motion did not allege, and the court's order did not pretend to find, that the plaintiffs' appeal would be frivolous, unreasonable, or groundless. Instead, the court expressly disavowed the need for a finding of that nature. In a memorandum opinion accompanying its order, the court stated: "The fixing of a Rule 7 bond, pursuant to Pedraza v. United Guaranty Corp., 313 F.3d 1323 (11th Cir. 2002), does not require the court to predict whether or not a defendant will prevail on appeal, or to require that defendant demonstrate that the appeal is frivolous."

The plaintiffs appealed the district court's imposition of the Rule 7 bond. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949) (a district court's order requiring one party to post security prior to appealing is a final appealable order). Their putative appeal on the merits was stayed pending the appeal of the bond issue. Without hearing oral argument, a panel of this Court issued a decision vacating the district court's order requiring the bond and remanding with instructions that the court not include the defendant's anticipated appellate attorney's fees in the Rule 7 bond absent a finding that the plaintiff's appeal would be frivolous, unreasonable, or groundless. Young v. New Process Steel, L.P., 125 Fed.Appx. 977 (11th Cir. 2004) (per curiam). The defendant filed a petition for rehearing en banc. In response, the original panel vacated its earlier opinion and set the case for rehearing before an oral argument panel of the Court. We are the new panel and have heard oral argument on the issue.

II.

While this Court generally reviews a district court's imposition of a Rule 7 cost bond only for abuse of discretion, Pedraza, 313 F.3d at 1328, that limited standard does not mean much in this case, which turns on a pure law issue involving the interpretation of Rule 7. We decide pure law issues de novo, id., which is another way of saying that a ruling based on an error of law is an abuse of discretion. Koon v. United States, 518 U.S. 81, 100, 116 S.Ct. 2035, 2047, 135 L.Ed.2d 392 (1996) ("A district court by definition abuses its discretion when it makes an error of law."); United States v. Brown, 332 F.3d 1341, 1343 (11th Cir.2003) (same); United States v. Hall, 349 F.3d 1320, 1323 (11th Cir.2003) (an error of law "is by definition an abuse of discretion").

Rule 7 has two sentences, but only the first one has any relevance to the issue before us. That sentence provides: "In a civil case, 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. The rule does not define "costs" for its purposes, but this Court went a long way toward doing so, at least for cases where a fee-shifting statute is involved, in our Pedraza decision. There we explained that the word "costs" for Rule 7 purposes should draw its meaning from the fee-shifting statute applicable to the underlying case. Pedraza, 313 F.3d at 1333.

Pedraza was a case arising under 12 U.S.C. § 2607(a) of the Real Estate Settlement Procedures Act, and the applicable fee-shifting provision in that statute stated that "the court may award to the prevailing party the court costs of the action together with reasonable attorneys fees." 12 U.S.C. § 2607(d)(5) (emphasis added). We explained that the words "together with" meant that attorney's fees were recoverable in addition to costs, not as part of costs. Pedraza, 313 F.3d at 1333-34. For that reason, we concluded that in a RESPA case the district court could not order appellants to post a Rule 7 bond that included anticipated appellate attorney's fees. Id. at 1334-35. It could not, because the fee-shifting statute applicable to the underlying RESPA lawsuit, 12 U.S.C. § 2607(d)(5), did not include attorney's fees in its definition of "costs," 313 F.3d at 1334-35, and Rule 7 does not authorize courts to require a bond in an amount larger than "costs" as defined in the applicable fee-shifting statute.

We said more in Pedraza, and the more we said has direct relevance to this case. Explicating our holding in Pedraza by giving an example of its converse, we stated that a district court could order a losing plaintiff to post a Rule 7 bond that included anticipated appellate attorney's fees if 42 U.S.C. § 1988 were the underlying fee-shifting statute. See 313 F.3d at 1333-35. That's because § 1988 expressly allows the court to award the prevailing party "a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988(b) (emphasis added). Thus, where § 1988 is the applicable fee-shifting statute, "costs" includes anticipated appellate attorney's fees. In our present case, of course, § 1988 is the provision that governs fee-shifting, as it will in civil rights cases generally.

Of course, the statement in Pedraza about what should...