In re Morgan Stanley Data Security Litigation
- Paul Engelmayer
- 1:20-cv-05914
- U.S. District Court · Southern District of New York
- 3
In re Morgan Stanley Data Security Litigation: Judge Engelmayer ordered Helfand to respond and attend a hearing about possible contempt sanctions for not posting an appeal bond.
Steven Helfand, the settlement class, the plaintiffs and settlement class counsel, and Morgan Stanley.
What happened
In re Morgan Stanley Data Security Litigation concerns Steven Helfand, a class member who objected to an approved settlement and appealed. The court had ordered him to post a $25,000 bond before proceeding with that appeal, but he did not post it.
The plaintiffs asked the court to hold Helfand in contempt and impose a $50,000 fine, along with possible attorney fees. The court also considered ordering him to pay $250 each day until he posted the bond or dismissed his appeal.
Judge Paul A. Engelmayer ordered Helfand to respond by October 28, 2022, scheduled an emergency conference for November 2, 2022, and directed the plaintiffs to serve him with the contempt motion and related documents. This order did not impose a final contempt sanction.
The detailed version
- In re Morgan Stanley Data Security Litigation · No. 1:20-cv-05914
- Paul Engelmayer
- Oct. 24, 2022
Background
The court had previously approved a class-action settlement and awards of attorneys’ fees, costs, and service awards. Steven Helfand, described as an objector and non-party class member, appealed the settlement approval. The court later ordered him to post a $25,000 appeal bond as a condition of continuing the appeal. The court said the bond was warranted because the appeal could impose costs, inconvenience, and delay on the settlement class, including delaying class members’ access to the Aura Financial Shield product.
The court required Helfand to post the bond and provide proof by October 18, 2022. He appealed the bond order but did not post the bond or obtain relief from that requirement.
Motion and Possible Sanctions
The plaintiffs moved to hold Helfand in civil contempt, meaning to impose a sanction for failing to comply with a court order. They asked for a $50,000 fine payable to the court and, if appropriate, an award of attorneys’ fees to settlement class counsel. The plaintiffs represented that Morgan Stanley did not oppose the motion or requested relief.
The court also considered an alternative coercive sanction: requiring Helfand to pay $250 per day to the court clerk beginning November 4, 2022, until he either posted the bond or dismissed his appeal. The order cited the court’s authority to use civil contempt sanctions to encourage future compliance.
What the Court Ordered
The court directed Helfand to file a response by October 28, 2022 addressing both the plaintiffs’ proposed sanction and the alternative daily payment. It scheduled an emergency, in-person conference for November 2, 2022, to consider possible civil contempt sanctions and directed Helfand, plaintiffs’ counsel, and Morgan Stanley’s counsel to attend.
The court also directed the plaintiffs to promptly provide Helfand with the contempt motion, supporting documents, and this order, and to file proof of service. The order scheduled consideration of sanctions; it did not itself impose a final contempt sanction.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.