Appellate stays in civil cases: Florida and federal courts offer more security flexibility than believed, but stay violations still have teeth.

• Author: Easley, Dorothy F.
• Position: Appellate Practice

What happens when a party is slapped with a seven-figure judgment that it intends to appeal, but for which it cannot afford to post a bond for an automatic stay? Given the current supersedeas bond market, both small and large companies are hard-pressed to post a bond that is the equivalent of the money judgment amount, plus two years of interest at the statutory rate. (1) But throughout the country, in both state and federal courts, appellate stays are available. An appellate stay allows the order or judgment to be held pending appeal, so that the aggrieved party does not have to start immediately paying the order or judgment until the appealable issues are resolved. If the judgment creditor will not agree to a stay pending appeal without the bond, the judgment debtor is largely subject to the judgment creditor's enforcement. (2) Fortunately, in Florida and in federal courts, there are various security alternatives to obtain stays and to ensure that they remain enforced.

In the January 2012 edition of The Florida Bar Journal, Anthony J. Russo published one of the most current, thorough discussions of stays in Florida state courts generally. (3) This article builds on that discussion and addresses Florida and federal law on stays and alternative security in the cases of money judgments. This article does not attempt to rewrite the general rules on appellate stays or discuss appellate stays and bonds in the narrow context of the Florida Tobacco Settlements, F.S. [section]569.23 (2012) and F.S. [section]768.733 (2012), which are left for another day.

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Historical Purpose Behind Appellate Stays xxxx The U.S. Supreme Court considers appellate stays to be a vital part of a court's "traditional equipment for the administration of justice." (4) A stay suspends enforcement of an order or judgment, (5) to hold an order or judgment while the appellate court assesses the legality of the order on appeal. (6) While a stay is an inherent power of an appellate court, a stay without the posting of a full bond (discussed below) "is not a matter of right." (7) Appellate courts may grant stays on a case-by-case basis, (8) and may consider 1) a strong showing of the likelihood of success on the merits; 2) whether the aggrieved party will be irreparably injured absent the stay; 3) whether issuance of the stay will irreparably injure other parties; and 4) where the public interest lies. (9) If a stay is not issued, then an order must be obeyed until it is reversed, and this is true even if the act under which the order is issued is unconstitutional. (10)

In particular cases, such as judgments solely for the payment of money, the appellate court may require a bond from the party requesting the stay. (11) This type of bond is called a supersedeas bond or an "appeal bond." The purpose of such a bond is to "protect the party in whose favor judgment was entered by assuring its payment" should the appeal prove unsuccessful. (12)

Rules on Appellate Stays in the Supersedeas Bond Context in Federal Court

Fed. R. of Civ. P. 62 governs federal stays granted in the district courts and sets forth when the actions are permitted. An interlocutory or final judgment in an action for an injunction or a receivership and a judgment or order that directs an accounting in an action for patent infringement may not be stayed. (13) A court may, however, stay an execution of judgment while awaiting the outcome of any of the following: judgment as a matter of law; amending the findings or for additional findings; a new trial or altering or amending a judgment; or relief from a judgment or order. (14) To that end, the aggrieved party may need to obtain a superseadas bond when seeking a stay for any action, except when waiting for the outcome of judgment as a matter of law or when a stay has been granted to amend findings or allow for additional findings. (15) However, the United States, its officers, and its agencies will not be required to post such a bond. (16)

Rule 62(c) authorizes the district court in injunction matters to "suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights." Rule 62(d) authorizes the appellant to "obtain a stay by supersedeas bond, except in an action described in Rule 62(a)(1) or (2). The bond may be given upon or after filing the notice of appeal or after obtaining the order allowing the appeal." Under Rule 62(d), the stay takes effect when the court approves the bond.

The Federal Rules of Appellate Procedure also address stays. As in Florida state courts, a party in federal court who wishes to receive a stay is instructed under Fed. R. App. P. 8 to first file a motion in the district court for the stay. (17) If making a motion in the district court would be impracticable, or if the district court denied the motion, then Rule 8(a)(2) permits the aggrieved party to file a motion in the circuit court of appeals. (18) Typically, a panel of judges will consider a motion for a stay filed in the circuit court of appeals. (19)

The good news for practitioners and their clients confronting large money judgments is that the federal rules provide for some flexibility in bonds and security: Fed. R. Civ. P. 62(d) has been construed to provide for the district court's discretion in granting stays without a full bond. In addition, Rule 62(g) recognizes the power of an appellate court to stay proceedings during the pendency of an appeal or to issue an order to preserve the status quo or the effectiveness of the judgment to be entered.

General Rules on Appellate Stays in the Supersedeas Bond Context in Florida Courts

Florida Rule of Appellate Procedure 9.310(a), known as the "supersedeas bond" section, sets forth the bond required of a party seeking to reverse or vacate a judgment on appeal, out of which a money judgment is to be satisfied if the appeal is not successful. That section provides that a "stay pending review may be conditioned on the posting of a good and sufficient bond, other conditions, or both." (20) Fla. R. App. P. 9.310(b) provides that, in the case of a money judgment, the stay is automatic, without the need to file a motion with the trial or appellate court, upon the "posting [of] a good and sufficient bond equal to the principal amount of the judgment plus twice the statutory rate of interest on judgments on the total amount on which the party has an obligation to pay interest." (21)

"A good and sufficient bond" is defined in Rule 9.310(c)(1) as "a bond with a principal and a surety company authorized to do business in the State of...