The Applicability of State Appeal Bond Caps in Suits Brought in Federal Courts Pursuant to Diversity Jurisdiction
Since 2000, forty-one states have passed appeal bond reform statutes, a tort reform measure that, in some shape or form, caps the amount of a supersedeas bond a defendant must secure in order to stay the execution of a judgment while pursuing an appeal. The state statutes vary widely in their operation, but their underlying goal is to protect a defendant’s right to appeal massive damages awards without putting himself in dire financial straits just to secure a sufficient supersedeas bond. Prior to the wave of reform beginning in 2000, state courts often required a bond in the amount of the full judgment plus costs and interest, which could be prohibitively expensive if the verdict was for hundreds of millions—or billions—of dollars. This Comment addresses whether state statutes capping supersedeas bond amounts are applicable in federal courts exercising diversity jurisdiction, or whether such statutes conflict with Federal Rule of Civil Procedure (FRCP) 62(d)—the rule governing postjudgment stays pursuant to supersedeas bonds.
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Derek E. Bambauer