EBEL, Circuit Judge.
Appellants Sikora Nelson and Paul Dorsey ("Objectors") challenge the district court's order requiring them to post an appeal bond, see Fed. R.App. P. 7, in the amount of $1,007,294 in order to pursue their appeals objecting to a class action settlement. Concluding we have jurisdiction under 28 U.S.C. § 1291, we affirm the district court's decision to impose the appeal bond, but we reduce the amount of that bond.
Plaintiffs initiated the class action underlying these appeals against Defendants Western Union Company and Western Union Financial Services, Inc. (collectively "Western Union"), based on the fact that, at any given time, Western Union maintains between $130 and $180 million in wire transfers sent by Western Union customers that fail for some reason. These funds belong to Western Union's customers, but Western Union returns this money (minus Western Union's administrative fees) only when a customer requests a refund. Frequently, however, the customer is unaware that his wire transfer failed and thus does not know to ask Western Union to return his money. And Western Union, although possessing the customer's contact information, does not notify the customer that his wire transfer failed, but instead holds the unclaimed money and earns interest on it. Eventually, after several years, the law of the state where the customer initiated the wire transfer requires Western Union to notify the customer that his unclaimed funds will soon escheat to the state. At that time, Western Union uses the contact information it
In this case, four Western Union customers whose wire transfers failed ("Plaintiffs" or "named Plaintiffs") sued Western Union, seeking declaratory and injunctive relief, as well as damages, on behalf of all Western Union customers who have had a wire transfer fail. After several years of litigation, Plaintiffs and Western Union settled the case.
The parties' settlement agreement provided, in part, that in the future Western Union will notify its customers when their wire transfers fail; assist its customers in reclaiming funds that have escheated to a state; and pay these customers interest for the time Western Union held their funds. In addition, Western Union agreed to pay into a settlement fund all of the money it is holding for its customers, estimated at the time of the settlement to be approximately $180 million. From that fund, a neutral class administrator will pay, to class members who have already reclaimed their money, interest for the time Western Union held their funds; and, to class members who have not yet reclaimed their money, the funds Western Union is holding for them, minus Western Union's administrative fees, plus interest for the time Western Union held that money.
Once Plaintiffs and Western Union reached this settlement, the district court preliminarily certified a class of more than one million customers who experienced failed wire transfers between January 1, 2001 and January 3, 2013, and ordered the class administrator to notify those class members of the class action, the proposed settlement, and the opportunity for them to opt out of the class or to object to the settlement. Several class members objected, including Objectors Nelson and Dorsey. The district court overruled all objections, certified the class, approved the settlement and entered final judgment.
Although the district court approved the settlement, by its terms it cannot take effect until after all appeals challenging the settlement have been resolved. Objectors Nelson and Dorsey each filed such an appeal, challenging the district court's decision to deny their objections. Plaintiffs asked the district court to require Nelson and Dorsey, as a condition of pursuing their appeals, to post an appeal bond in the amount of $1,007,294. The district court granted that request, making Nelson and Dorsey jointly and severally liable for the bond.
As a threshold matter, Plaintiffs contend that we do not have jurisdiction to
Before imposing the Rule 7 appeal bond, the district court had already entered a final appealable order in this case when it approved the class settlement and entered final judgment. In light of that, there are at least two bases for our jurisdiction to review the appeal bond.
First, the district court made posting the appeal bond a condition of Objectors pursuing their merits appeals challenging the class settlement. Such an order is one entered "in aid of the appellate court's jurisdiction" to consider the merits appeals, 16A Charles Alan Wright et al., Federal Practice & Procedure § 3949.1 (4th ed. Sept.2014), and is thus reviewable as part of the underlying merits appeals. See Hamstein Cumberland Music Grp. v. Williams, 556 Fed.Appx. 698, 700 (10th Cir.2014) (unpublished) (invoking 28 U.S.C. § 1291 to affirm appeal bond and district court's merits decision); Jenson v. Fisher, Nos. 95-1252, 95-1512, 1996 WL 606505, at *1-*2 (10th Cir. Oct. 23, 1996) (unpublished) (reviewing appeal bond with merits appeal). Thus, because we have jurisdiction to review Objectors' merits appeals under 28 U.S.C. § 1291, we also have jurisdiction to review the district court's order making the posting of an appeal bond a condition of pursuing those merits appeals.
Second, even when considered apart from the merits appeals, the district court's order imposing the appeal bond is a final order ending the post-judgment bond proceeding and is thus appealable under 28 U.S.C. § 1291. See Hamstein Cumberland Music, 556 Fed.Appx. at 700 (invoking 28 U.S.C. § 1291 to review appeal bond). The fact that Plaintiffs may later have to execute on the bond, in the event they succeed in defending Objectors' merits appeals, leaves only a ministerial task that does not preclude the bond order from being final and appealable now. See Harbert v. Healthcare Servs. Grp., Inc., 391 F.3d 1140, 1145 (10th Cir.2004) (indicating that need for further ministerial action does not prevent decision from being final and appealable); cf. United States v. Nipper, 12 Fed.Appx. 634, 635-36 (10th Cir.2001) (unpublished) (stating, in dicta, that appellants failure to file notice of appeal at the time of the district court's order to post supersedeas bond deprived Tenth Circuit of jurisdiction later to consider issues pertaining to the bond).
Finally, even if the order imposing the appeal bond is not a final decision ending the post-judgment bond proceeding, that bond order would still be appealable as one of "a small class of collateral rulings" that the Supreme Court, in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), recognized "were sufficiently final to satisfy § 1291" because they "(1) finally decide (2) an important question collateral to (or separate from) the merits of the underlying [post-judgment] proceeding, and (3) [are] effectively unreviewable after final judgment." United States v. Copar Pumice Co., 714 F.3d 1197, 1204 (10th Cir.2013) (internal quotation marks omitted); see Young v. New Process Steel, LP, 419 F.3d 1201, 1203 (11th Cir.2005) (invoking Cohen to review an appeal bond imposed under Fed. R.App. P. 7).
For these reasons, then, we have jurisdiction to review these appeals from the district court's order imposing the Rule 7 appeal bond.
The district court imposed an appeal bond in the amount of $1,007,294, which covered three categories of costs: 1) the cost to send class members notice of Objectors' merits appeals challenging the class settlement ($647,674); 2) additional administrative costs to maintain the settlement pending Objectors' merits appeals ($334,620); and 3) costs for "printing and copying and preparation of a supplemental record" to defend against Objectors' merits appeals ($25,000). (Nel.App. at 724.)
The first issue presented is whether an appeal bond can, as a matter of law, cover the cost of notifying class members of Objectors' merits appeals and the cost of maintaining the settlement pending those appeals. We review this legal question de novo. See Noatex Corp. v. King Constr. of Houston, L.L.C., 732 F.3d 479, 488 (5th Cir.2013); In re Cardizem CD Antitrust Litig., 391 F.3d 812, 816 (6th Cir.2004).
Rule 7 provides in pertinent part that, "[i]n 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." (Emphasis added.) The purpose of a Rule 7 appeal bond is to ensure that the appellant, if he is unsuccessful on appeal, can pay the "costs on appeal" incurred by his opponent. See 16A Wright et al., Federal Practice & Procedure § 3953. Thus, "[c]osts for which a Rule 7 bond can be required include only costs relating to the appeal," id.; that is, costs which "the appellee stands to have reimbursed" should he prevail on appeal, Adsani v. Miller, 139 F.3d 67, 75 (2d Cir. 1998).
Although an issue of first impression in the Tenth Circuit, other circuit courts addressing the meaning of "costs on appeal" have consistently linked that phrase to costs that a successful appellate litigant can recover pursuant to a specific rule or statute. This is true even though the circuits
Circuit courts, in any event, consistently define "costs on appeal" for Rule 7 purposes as appellate costs expressly provided for by a rule or statute. But Plaintiffs have not identified, nor could we find, any rule or statute that permits them, should they succeed in defending Objectors' merits appeals, to recover the cost of notifying class members of those merits appeals or to recover the cost of maintaining the class settlement fund pending the merits appeals. Therefore, the district court erred in requiring Objectors to post an appeal bond covering these costs.
Plaintiffs argue for a broader definition of "costs on appeal," pointing to the fact that the imposition of an appeal bond is left to the district court's discretion. Although the district court is vested with discretion to determine whether to impose an appeal bond and, if so, in what amount, see Fed. R.App. P. 7 Advisory Committee Notes (leaving "the question of the need for a bond and its amount in the discretion of the district court"), Rule 7 expressly
Plaintiffs further contend that a broader interpretation of "costs on appeal" is particularly appropriate in a class action setting where, as here, one or two objectors can delay implementation of a large settlement. But the federal appellate rules do not provide distinct procedures for appeals from class actions. See John E. Lopatka & D. Brooks Smith, "Class Action Professional Objectors: What to Do About Them?" 39 Fla. St. U.L.Rev. 865, 928-29 (2012) (arguing for revisions to Fed. R.App. P. 7 and 39 to permit appeal bonds to cover increased administrative costs in order to deter professional objectors from taking baseless appeals in order to delay implementation of class settlements). What Plaintiffs really appear to be seeking is an appeal bond that includes damages due to the delay Objectors' merits appeals might cause. But that is not the purpose of a Rule 7 bond.
Although Plaintiffs can point to several unreported district court cases imposing appeal bonds that cover delay damages or increased administrative costs to maintain a class settlement pending appeal, we do not find the reasoning of those cases persuasive in light of the unanimous circuit authority restricting an appeal bond to costs expressly permitted by rule or statute.
Because Plaintiffs have not identified any rule or statute that allows them to recover, as costs on appeal, funds spent either notifying class members of Objectors' merits appeals or maintaining the settlement pending those appeals, the district court erred in imposing a Rule 7
Next, Objector Dorsey challenges the district court's decision to include in the appeal bond $25,000 for printing, copying, and preparing the appellate record. Although such costs are recoverable "costs on appeal," see 28 U.S.C. § 1920; Fed. R.App. P. 39(e), the district court abused its discretion in including $25,000 here to cover such costs. See Westinghouse Credit Corp. v. Bader & Dufty, 627 F.2d 221, 224 (10th Cir.1980).
Plaintiffs have failed to justify the need for the appeal bond to cover an estimated $25,000 for printing, copying, and record preparation, asserting only that "[a] bond for such expenses is routine and need not be requested with specificity given the number of unknowns that counsel face when asking for such a bond" (Nel.App. at 702). While an appeal bond request by necessity must be based on an estimate of the costs that a litigant may incur in defending against an appeal, Plaintiffs here made no effort to justify their $25,000 estimate. See Swenson v. Bushman Inv. Props. Ltd., No. 1:10-CV-00175-EJL, 2013 WL 6491105, at *4 (D.Idaho Dec. 9, 2013) (unreported) (reducing bond from $50,000 to $25,000 because appellees "have not offered any indication of how they arrived at the requested $50,000 bond amount, and have not detailed the precise costs they expect to incur on appeal"); In re Bayer Corp. Combination Aspirin Prods. Mktg. & Sales Practices Litig., No. 09-MD-2023 BMC, 2013 WL 4735641, at *3 (E.D.N.Y. Sept. 3, 2013) (reducing $25,000 bond amount, which appellees "failed to justify," to $5,000 for printing and copying appellate record). And, although Plaintiffs point to a number of cases in which a district court imposed an appeal bond for $25,000 in printing, copying, and record preparation costs, Plaintiffs have not explained how the costs at issue in those cases are similar to the costs Plaintiffs expect to incur here. See In re Bayer Corp., 2013 WL 4735641, at *3.
Before the district court, Objector Dorsey conceded that Plaintiffs were entitled to a $5,000 bond to cover printing, copying, and record preparation costs. We therefore reduce the appeal bond to $5,000. See In re Am. Investors, 695 F.Supp.2d at 167 & n. 10 (E.D.Pa.) (accepting appellant's cost estimate, where party seeking appeal bond failed to present district court with an amount for the requested bond); see also In re Bayer, 2013 WL 4735641, at *3 (E.D.N.Y.) (reducing $25,000 bond amount, which appellees "failed to justify," to $5,000 for printing and copying appellate record).
Lastly, Nelson argues that, because she cannot afford to post a bond in any amount, the district court's decision requiring her to post any bond deprives her of due process and equal protection of the law. To be sure, courts have acknowledged the possibility that an appeal bond might so burden a party's pursuit of an appeal that it violates due process and equal protection. See Adsani, 139 F.3d at 78 (2d Cir.) (noting cost requirement, valid on its face, still "may be unconstitutional as applied to a particular case"). In this case, however, we conclude that an appeal bond of $5,000 is not so burdensome as to deprive Nelson of due process or equal protection of the law. After all, that amount only involves the costs that Nelson will have to pay in the event her appeal is
For the foregoing reasons, we affirm the district court's decision to impose an appeal bond, but we decrease the amount of that bond to $5,000. Each Objector will have fourteen days from the date this opinion is entered to post a $5,000 bond. Failure to do so will result in the dismissal of that Objector's merits appeal. Plaintiffs' motion to dismiss Nelson's appeal is DENIED.