United States District Court, W.D. North Carolina, Charlotte Division
J. Conard, Jr. United States District Judge.
MATTER is before the Court on Defendants 3D Systems,
Inc. and 3D Systems Corporation's (collectively,
“3D Systems” or “3D”) Motion for Stay
of Execution of Judgment Pending Appeal Without Supersedeas
Bond or, in the Alternative, To Post Alternate or Lesser
Security and supporting memorandum, (Doc. Nos. 87, 87-1);
Plaintiff Ronald Barranco's (“Barranco” or
“Plaintiff”) Memorandum in Opposition to
Defendants' Motion, (Doc. No. 88); Defendants' Reply
in Support of their Motion, (Doc. No. 92); and the associated
declarations and exhibits.
August 31, 2016, this Court entered an Order and Judgment
(the “Judgment”) against 3D Systems and in favor
of Barranco in the amount of $11, 281, 681.46. (Doc. Nos. 77,
78). Plaintiff and Defendants filed cross motions to alter
judgment, (Doc. Nos. 79, 82), and on May 18, 2017 the Court
denied both motions. (Doc. No. 86). Shortly thereafter,
Defendants filed the instant motion asking the Court to stay
the execution of the Judgment without a supersedeas bond or
with a lesser bond or alternate security. (Doc. No. 87).
Defendants subsequently appealed to the United States Court
of Appeals for the Fourth Circuit the Court's Judgment
and Order denying the Cross Motions to Alter Judgment on June
15, 2017. (Doc. No. 89).
62(d) of the Federal Rules of Civil Procedure provides, in
pertinent part, that where an appeal is taken, the appealing
party “may obtain a stay by supersedeas bond.”
Fed.R.Civ.P. 62(d). It is well-settled that, when a
supersedeas bond is posted, the appellant is entitled to the
stay “as a matter of right.” Am. Mfrs. Mut.
Ins. Co. v. Am. Broad.-Paramount Theatres, Inc., 87
S.Ct. 1, 3 (1966). “The stay takes effect when the
court approves the bond.” Fed.R.Civ.P. 62(d). The Court
uses its discretion to set the amount of the bond. See
Van Pelt v. UBS Fin. Servs., No. 3:05-cv-477, 2007 WL
3224747, at *1 (W.D. N.C. Oct. 29, 2007). The amount of the
bond “is usually set in an amount that will permit full
satisfaction of the judgment together with costs and
alternative to a full supersedeas bond and associated stay as
a matter of right, courts have discretion to grant a stay of
execution absent a supersedeas bond or with a lesser or
alternate security. In such scenarios, courts must first
consider whether a stay is warranted by assessing four
1. whether the stay applicant has made a strong showing that
he is likely to succeed on the merits;
2. whether the applicant will be irreparably injured absent a
3. whether issuance of the stay will substantially injure the
other parties interested in the proceedings; and
4. where the public interest lies.
Hilton v. Braunskill, 481 U.S. 770, 776 (1987)
(citations omitted). See also Kirby v. Gen. Elec.
Co., 210 F.R.D. 180, 195 (W.D. N.C. 2000),
aff'd, 20 F.App'x 167 (4th Cir. 2001).
stay is warranted, a court also has discretionary authority
to decide whether a bond is necessary. Though the Fourth
Circuit has not specifically opined on the issue, several
circuit courts and many district courts within the Fourth
Circuit have held that there are two circumstances where a
bond may not be required: “(i) when the judgment debtor
can currently easily meet the judgment and demonstrates that
it will maintain the same level of solvency during appeal,
and (ii) when ‘the judgment debtor's present
financial condition is such that the posting of a full bond
would impose an undue financial hardship.'”
Alexander v. Chesapeake, Potomac, and Tidewater Books,
Inc., 190 F.R.D. 190, 193 (E.D.Va.1999) (quoting
Poplar Grove Planting & Refining Co. v. Bache Halsey
Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979)).
See also Kirby, 210 F.R.D. at 195. Although a
decision to stay a case upon appeal without a full
supersedeas bond is within the Court's discretion,
requiring anything less than the fully bond is the rare case.
Alexander, 190 F.R.D. at 193; Holland v.
Law, 35 F.Supp.2d 505, 506 (S.D. W.Va. 1999) (waiving
the full bond requirement should only be done in
“extraordinary circumstances”). This is not such
Systems' argument essentially is that it is so
financially well-off that it need not pay a bond, or need not
pay the full amount, because it will easily be able to
satisfy an $11.3 million judgment. Though this argument finds
some support in the law of other circuits, it raises the
question-why doesn't 3D Systems' simply post the bond
and secure its stay as a matter of right. Indeed, the
majority of the case law seems to involve the second
Poplar Grove exception- appellants that don't
have the requisite funds to post a full bond. Regardless, a
discretionary stay is not warranted in this case. Analyzing
the factors from Hilton makes the point clear.
First, 3D Systems has not made a strong showing that it is
likely to succeed on the merits.
the Court's Judgment and its Order denying the
Parties' Cross Motions to Alter Judgment, 3D Systems must
overcome a substantial barrier on its appeal-a standard of
review “among the narrowest known at law.”
Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc.,
142 F.3d 188, 193 (4th Cir. 1998); see also (Doc.
No. 77 at 4-6). Second, 3D Systems' own admission
demonstrates that it will not suffer irreparable harm absent
a stay. Indeed, 3D Systems' boasts of its financial
wealth and stability in requesting this stay. Neither the
third nor the fourth factors articulated in Hilton
strongly favor granting or denying a stay. It seems likely
that 3D Systems will be able to pay any judgment once the
pending appeal is resolved. Yet, nothing in life is certain
and there is no predicting 3D Systems' financial future
throughout the duration of an appeal. Regarding the fourth
factor, the public is not immediately affected by a stay in
this matter, but arguments can be made on either side for
indirect effects. On the one hand, granting a stay may
benefit the public, particularly those invested in 3D
Systems, by allowing 3D Systems the continued use of the
judgment amount. On the other hand, a stay may encourage
wealthy appellants to extend litigation with little risk.
Ultimately, the strength of the first two Hilton
factors as applied to this case favor declining to grant a
the Court declines to exercise its discretion and allow a
stay absent the posting of a full supersedeas bond to secure
the judgment. “The philosophy underlying Rule 62(d) is
that a plaintiff who has won in the trial court should not be
put to the expense of defending his judgment on appeal unless
the defendant takes reasonable steps to assure that the
judgment will be paid if it is affirmed.” Lightfoot
v. Walker, 797 F.2d 505, 506-07 (7th Cir. 1986).
Particularly given the size of the judgment against
Defendants and the litigious history between the parties, the
Court finds a full supersedeas bond to be appropriate to
secure the judgment. If 3D Systems wants a stay of execution
of the Judgment, it may obtain one as a matter of right by