Trejos Hermanos Sucesores S.A. v. Verizon Communications Inc.

Background

On January 23, 2024, the court entered judgment against Verizon Communications Inc. for $106,354,185, plus post-judgment interest at the federal statutory rate from the judgment date until payment. Verizon asked the court to stay, or pause, enforcement of the judgment while it appealed. It asked the court to waive the usual supersedeas bond requirement under Federal Rule of Civil Procedure 62(b), or alternatively to require a reduced bond and extend the 30-day automatic stay under Rule 62(a) for another 30 days.

The court had previously stayed the judgment until April 8, 2024, to allow briefing. Trejos Hermanos opposed waiving the bond requirement and alternatively asked that Verizon place funds in escrow to secure the judgment.

Bond-waiver analysis

Rule 62(b) permits a stay of a judgment when the party seeking the stay provides a bond or other security. The court explained that the purpose is to ensure that the winning party can recover the judgment if the decision is affirmed while protecting the other side if the decision is reversed and payment must be recovered. The court may waive the bond if the appellant provides an acceptable alternative means of securing the judgment.

The court declined in its discretion to waive the bond requirement. It expected that collecting such a large judgment for a foreign plaintiff could be complex. It also noted that the litigation had continued since 2008 and that Trejos Hermanos had prevailed in every court that had examined the issues. The court concluded that Trejos Hermanos was entitled to receive the judgment without substantial delay or difficulty. The court further stated that Verizon’s assertions of wealth were not enough, particularly given the judgment’s size, and found no indication that posting the bond would place Verizon in a precarious financial situation that would harm other creditors.

Reduced bond and escrow

The court declined to impose a reduced bond requirement. It reasoned that a reduced bond would not ensure that the full judgment would be satisfied without substantial delay or difficulty. Although a reduced bond might have been considered if a full bond posed a significant threat to Verizon’s financial well-being, Verizon denied that such a threat existed.

The court did find that Verizon had an acceptable alternative means of securing the judgment. Verizon could place the full judgment amount plus expected interest in an interest-bearing escrow account. The court found that this option would secure the full judgment under the circumstances.

Disposition

The court further stayed the judgment until May 8, 2024, so Verizon could consider its options and arrange a bond if necessary. If Verizon chose the escrow option, it was directed to file a letter by May 8, 2024, providing evidence that the funds had been properly placed in an escrow account. Otherwise, Verizon was required to file a supersedeas bond. The Clerk of Court was directed to close the motion pending at ECF No. 78.

This order addressed security for and the timing of enforcement of the judgment; it did not decide the underlying merits of the dispute.