Keller v. Electronic Arts Inc. et al, No. 4:2009cv01967 - Document 1261 (N.D. Cal. 2015)
Court Description: ORDER GRANTING IN PART CLASS PLAINTIFFS MOTION FOR APPEAL BOND by Judge Claudia Wilken granting in part (1250) Motion for Bond in case 4:09-cv-01967-CW and in case 4:09-cv-03329-CW. (napS, COURT STAFF) (Filed on 10/21/2015)
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Keller v. Electronic Arts Inc. et al Doc. 1261 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 SAMUEL KELLER, et al., Plaintiffs, 9 United States District Court For the Northern District of California 10 11 12 13 14 15 18 19 20 21 22 23 ORDER GRANTING IN PART CLASS PLAINTIFFS’ MOTION FOR APPEAL BOND v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION; ELECTRONIC ARTS INC.; and COLLEGIATE LICENSING CONMPANY, Defendants. ________________________________/ EDWARD O’BANNON, et al. 16 17 No. C 09-1967 CW No. C 09-3329 CW Plaintiffs, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION; ELECTRONIC ARTS INC.; and COLLEGIATE LICENSING COMPANY, Defendants. ________________________________/ On August 19, 2015, this Court granted final approval of the class action settlements in the above-captioned cases and entered 24 judgment. On September 16, 2015, Objector Nathan Harris filed a 25 26 notice of appeal of the settlement in Keller and Objector Darrin 27 Duncan filed a notice of appeal of the settlement in O’Bannon 28 (collectively, Objectors). Class Plaintiffs in both cases have Dockets.Justia.com 1 now filed a motion pursuant to Federal Rule of Appellate Procedure 2 7 for an order requiring Objectors to post an appeal bond. 3 Defendants Electronic Arts Inc. (EA), National Collegiate Athletic 4 Association (NCAA) and Collegiate Licensing Company join in the 5 motion. 6 Objectors have filed a joint opposition to the motion and Plaintiffs have filed a reply. Having considered the papers filed 7 by the parties, the Court GRANTS Plaintiffs’ motion in part and 8 9 United States District Court For the Northern District of California 10 orders Objectors to file an appellate cost bond, as described below. 11 BACKGROUND 12 The settlements at issue resolved the claims of Plaintiff 13 14 classes in four different cases, the above-captioned cases, Hart v. Electronic Arts, Inc., D.N.J. Case No. 09-5990, and Alston v. 15 Electronic Arts, Inc., D.N.J. Case No. 13-5157. The claims arise 16 out of the depiction of Division One college athletes, 17 18 specifically football and male basketball players, in EA’s 19 videogames, and the NCAA’s restriction on compensation for those 20 players. 21 resolve the claims against it and CLC and the NCAA will pay 22 $20,000,000 to resolve the claims against them.1 The settlements provide that EA will pay $40,000,000 to 23 24 25 26 1 27 28 The O’Bannon Plaintiffs’ antitrust claims against the NCAA were not settled. Those claims were the subject of a bench trial before the Court in June 2014. 2 DISCUSSION 1 Rule 7 provides that, in a civil case, “the district court 2 3 may require an appellant to file a bond or provide other security 4 in any form and amount necessary to ensure payment of costs on 5 appeal.” 6 The purpose of the appeal bond is to “protect the amount the appellee stands to have reimbursed, not to impose an 7 independent penalty on the appellant.” Fleury v. Richemont N. 8 9 Am., Inc., 2008 WL 468003, *6 (N.D. Cal.) (internal quotation United States District Court For the Northern District of California 10 marks and citation omitted). 11 representing $5,000 in taxable costs and $83,839 in administrative 12 costs, calculated at $6,550 per month for 12.8 months, the median 13 time for disposition of an appeal in the Ninth Circuit. 14 Plaintiffs seek a bond of $88,839, These administrative costs include paying the claims administrator to 15 continue to maintain the settlement website and toll-free 16 telephone number and to respond to class member questions. 17 18 Objectors contend that an appeal bond is not appropriate in this 19 case and, if a bond is ordered, the amount requested by Plaintiffs 20 is not justified. 21 I. 22 23 Amount of Bond Although Rule 7 does not define the term “costs,” the Ninth Circuit has held that, as used in Rule 7, the term includes those 24 costs specified in Federal Rule of Appellate Procedure 39 and “all 25 26 expenses defined as ‘costs’ by an applicable fee-shifting statute, 27 including attorneys’ fees.” Azizian v. Federated Dep’t Stores, 28 Inc., 499 F.3d 950, 958 (9th Cir. 2007). 3 Rule 39 provides that 1 the following costs may be taxed: “(1) the preparation and 2 transmission of the record; (2) the reporter’s transcript, if 3 needed to determine the appeal; (3) premiums paid of a supersedeas 4 bond or other bond to preserve rights pending appeal; and (4) the 5 fee for filing the notice of appeal.” 6 Fed. R. App. P. 39(e). Objectors first argue that Plaintiffs have not provided 7 sufficient detail to support their request for a bond for $5,000 8 9 in taxable costs. However, the motion for bond states that $5,000 United States District Court For the Northern District of California 10 is a conservative estimate for the amount Plaintiffs will spend on 11 items such as printing, photocopying, and preparing and serving 12 the appeal record. 13 estimate. 14 The Court finds that $5,000 is a reasonable Objectors also argue that there is no basis on which the 15 Court may approve an appeal bond for administrative costs, noting 16 that there is no statute authorizing the shifting of such costs. 17 18 Plaintiffs do not argue that there is such a statute. Instead, 19 they cite various cases in which administrative costs were 20 included in appeal bonds. 21 basis on which this Court can impose an appeal bond for 22 administrative costs in this case. 23 However, those cases do not provide any In In re Cardizem CD Antitrust Litigation, 391 F.3d 812 (6th Cir. 2004), the Sixth Circuit 24 affirmed the imposition of an appeal bond that included 25 26 administrative costs. However, the Sixth Circuit panel relied on 27 a Tennessee statute that authorized an award of “any damages 28 incurred, including reasonable attorney’s fees and costs.” 4 Id. at 1 817 (quoting Tenn. Code Ann. § 47-18-109). The three district 2 court cases Plaintiffs cite include administrative costs in the 3 amount of the appeal bonds imposed but do not cite any statute 4 authorizing the recovery of such costs. 5 Litig., 2013 WL 6173772, at *4 (N.D. Cal.); Miletak v. Allstate 6 See In re Netflix Privacy Ins. Co., 2012 WL 3686785, at *2 (N.D. Cal.); Embry v. ACER 7 America Corp., 2012 WL 2055030, at *2 (N.D. Cal.). 8 9 Moreover, other courts have noted that there is no statute United States District Court For the Northern District of California 10 authorizing administrative expenses as “costs” for purposes of 11 Rule 7 and have accordingly declined to include such costs in 12 appeal bonds. 13 1249, 1255 (10th Cir. 2014) (“Circuit courts, in any event, 14 See, e.g., Tennille v. Western Union Co., 774 F.3d consistently define ‘costs on appeal’ for Rule 7 purposes as 15 appellate costs expressly provided for by a rule or statute. But 16 Plaintiffs have not identified, nor could we find, any rule or 17 18 statute that permits them, should they succeed in defending 19 Objectors’ merits appeals, to recover the cost of notifying class 20 members of those merits appeals or to recover the cost of 21 maintaining the class settlement fund pending the merits 22 appeals.”); Schulken v. Washington Mut. Bank, 2013 WL 1345716, at 23 *7-8 (N.D. Cal.) (declining to include administrative costs in 24 appeal bond where “Plaintiffs-Appellees were unable to identify 25 26 27 any additional precedent or statutes authorizing administrative expenses as ‘costs’”). 28 5 Azizian made clear that only those expenses expressly defined 1 2 as “costs” by a fee-shifting statute are “costs on appeal” for 3 purposes of Rule 7. 4 defining administrative expenses related to corresponding with 5 class members and maintaining the settlement website as “costs.” 6 499 F.3d at 958. There is no such statute Accordingly, the Court declines to require an appeal bond 7 including the $83,839 of administrative costs. 8 9 II. Whether to Require a Bond United States District Court For the Northern District of California 10 Neither Rule 7 nor the Ninth Circuit provides specific 11 factors a court should consider in determining whether to require 12 an appeal bond. 13 courts in this district have identified three relevant factors: 14 However, when applying the reasoning in Azizian, “(1) appellant’s financial ability to post bond; (2) the risk that 15 appellant would not pay the costs if the appeal loses; and (3) an 16 assessment of the likelihood that appellant will lose the appeal 17 18 and be subject to costs.” Schulken, 2013 WL 1345716, at *4 19 (citing Fleury, 2008 WL 468033, at *7; Miletak, 2012 WL 3686785, 20 at *1). 21 22 23 With respect to the ability to post bond, “[d]istrict courts have found that this factor weighs in favor of a bond, absent indication that the [party] is unable to post a bond.” Schulken, 24 2013 WL 1345716, at *4. Objectors have submitted declarations 25 26 indicating that they are unable to qualify for, pay for or post a 27 bond in the amount of $88,839, or to pay for and post a bond in 28 the amount of $5,000. Docket No. 1256-1 at ¶ 4; Docket No. 1256-2 6 1 at ¶ 5. As discussed above, the Court declines to include the 2 $83,839 in administrative costs in any appeal bond to be granted. 3 Notably, neither Objector states that he is unable to qualify for 4 a $5,000 bond. 5 seeking a bond and in their pending motion for an order to show 6 Moreover, as Plaintiffs note in their brief cause why counsel for Objector Harris should not be sanctioned, 7 counsel for Objectors have refused to answer questions regarding 8 9 whether they are representing Objectors on a contingent fee basis United States District Court For the Northern District of California 10 and, if they are, whether their retainer agreements make counsel 11 rather than Objectors liable for any costs. 12 the Ninth Circuit’s filing fee, together with their declarations 13 of extremely limited finances, supports a finding that their 14 Objectors’ payment of counsel are advancing costs for their appeals. Accordingly, the 15 Court finds that this factor weighs in favor of ordering an appeal 16 bond. 17 18 When analyzing the second factor, courts in this district 19 have recognized that it can be difficult to collect costs from 20 out-of-state appellants. 21 4240804, at *3 (N.D. Cal.); Schulken, 2013 WL 1345716, at *5, 22 Embry, 2012 WL 2055030, at *1. 23 See, e.g., Padgett v. Loventhal, 2015 WL Plaintiffs argue that where, as here, an appellant resides outside of the jurisdiction of the 24 court, but within the Ninth Circuit, this factor weighs in favor 25 26 of granting an appeal bond. However, the cases Plaintiffs rely 27 upon are distinguishable from this case. 28 appellants resided outside of California, but within the Ninth 7 In both cases, the 1 Circuit. See Padgett, 2015 WL 4240804, at *3 (appellant resided 2 in Washington state); Schulken, 2013 WL 1345716, at *5 (same). 3 Here, it appears that Objectors reside in California, but outside 4 of this District. 5 “substantial risk” that Objectors and their counsel “will resist 6 Plaintiffs also argue that there is a paying any costs imposed by an appellate court” because their 7 counsel are “professional objectors.” Docket No. 1250 at 6. 8 9 Although Plaintiffs have cited multiple cases in which counsel for United States District Court For the Northern District of California 10 Objector Harris has represented himself or his family members as 11 objectors to class action settlements, Plaintiffs have not 12 presented evidence that counsel for Objectors have failed to pay 13 costs ordered against them. 14 Accordingly, the Court finds that this factor weighs neither in favor nor against ordering an appeal 15 bond. 16 Finally, the Court finds that the merits of the Objectors’ 17 18 appeals weigh in favor of requiring a bond. The Court notes that 19 only three individuals objected to the settlement and five 20 individuals timely opted out, while close to 30,000 individuals 21 participated in the settlement by completing timely claim forms. 22 Moreover, Objectors’ arguments against approval of the settlements 23 are not likely to succeed. The Court considered and overruled the 24 objections as meritless when it approved the settlement and its 25 26 27 approval of the settlement can only be reversed if the Ninth Circuit finds that the Court abused its discretion. 28 8 1 2 Accordingly, the Court finds that a bond of $5,000 is appropriate. 3 4 5 6 CONCLUSION For the foregoing reasons, the Court GRANTS in part Plaintiffs' motion to require Objectors to post an appellate cost bond as a condition of prosecuting their appeals (Docket No. 7 1250). The Court hereby imposes, pursuant to Appellate Rule 7, a 8 9 bond requirement in the amount of $5,000 jointly and severally on United States District Court For the Northern District of California 10 Objectors Harris and Duncan. No later than ten days from the date 11 of this order, Objectors must file with the Court and serve on 12 Appellees either proof of satisfaction of the bond requirement or 13 proof of withdrawal of their appeals. 14 15 IT IS SO ORDERED. 16 17 Dated: October 21, 2015 CLAUDIA WILKEN United States District Judge 18 19 20 21 22 23 24 25 26 27 28 9
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