Seneca Nation of Indians v. State of New York

DECISION AND ORDER   On November 8, 2019, this Court confirmed an arbitration panel’s award that requires the Seneca Nation of Indians to make revenue-sharing payments (“the State Contribution”) in the hundreds of millions of dollars to the State of New York under the terms of the parties’ 2002 gaming compact. See Seneca Nation of Indians v. State of N.Y., 19-CV-735S, 2019 WL 5865450 (W.D.N.Y. Nov. 8, 2019). The Clerk of Court entered judgment in the State’s favor on November 12, 2019. (Docket No. 15.) That judgment is presently stayed through today, December 12, 2019, by operation of Rule 62 (a) of the Federal Rules of Civil Procedure.¹ On December 3, 2019, the Nation filed a Notice of Appeal and moved to further stay the judgment under Rule 62 (b). (Docket Nos. 17, 18.) This Court granted expedited treatment of the motion, which is now fully briefed and pending decision. (Docket No. 21.) For the reasons that follow, the Nation’s motion is granted. Former Rule 62 (d) once governed stays with bonds pending appeal. It provided that “[i]f an appeal is taken, the appellant may obtain a stay by supersedeas bond,” with certain exceptions. Fed. R. Civ. P. 62 (d) (2018). On December 1, 2018, existing Rule 62 (b) replaced and expanded former Rule 62 (d), “carr[ying] forward in modified form the supersedeas bond provisions” of the former rule. See Fed. R. Civ. P. 62 (b) advisory committee’s note to 2018 amendment; see also Xerox Corp. v. JCTB Inc., No. 18-cv-06154-MAT, 2019 WL 6000997, at *3 (W.D.N.Y. Nov. 14, 2019) (explaining origins of Rule 62 (b)). Rule 62 (b) now “makes explicit the opportunity to post security in a form other than a bond,” id., by providing that “[a]t any time after judgment is entered, a party may obtain a stay by providing a bond or other security,” Fed. R. Civ. P. 62 (b). In addition, the availability of a stay is no longer contingent on the filing of an appeal. See Murillo v. A Better Way Wholesale Autos, Inc., No. 3:17-CV-1883 (VLB), 2019 WL 6700185, at *2 n.1 (D. Conn. Dec. 9, 2019). The full text of the rule is as follows: (b) Stay by Bond or Other Security. At any time after judgment is entered, a party may obtain a stay by providing a bond or other security. The stay takes effect when the court approves the bond or other security and remains in effect for the time specified in the bond or other security. Fed. R. Civ. P. 62 (b). This provision applies to stays of money judgments. See Gulino v. Bd. of Educ. of the City Sch. Dist. of N.Y., 96-CV-8414 (KMW), 2019 WL 2454094, at *1 (S.D.N.Y. June 12, 2019) (“Rule 62 (b) applies only to stays of money judgments.”) (citing Centauri Shipping Ltd. v. W. Bulk Carriers KS, 528 F. Supp. 2d 186, 188 (S.D.N.Y. 2007)). Its purpose “is to ensure that the prevailing party will recover in full, if the decision should be affirmed, while protecting the other side against the risk that payment cannot be recouped if the decision should be reversed.” In re Nassau Cty. Strip Search Cases, 783 F.3d 414, 417 (2d Cir. 2015) (per curiam) (discussing former Rule 62 (d)); Cayuga Indian Nation of N.Y. v. Pataki, 188 F. Supp. 2d 223, 254 (N.D.N.Y. 2002) (explaining that Rule 62 is designed “to protect[] an appellee’s rights and ability to collect the judgment and it guarantees an appellee the costs of delay incident to the appeal”). Thus, the bond or “other security” must be sufficient to insure the totality of the judgment. See Revlon, Inc. v. Carson Prods. Co., 647 F. Supp. 905, 905-06 (S.D.N.Y. 1986) (“If the district court’s judgment is affirmed, the bond insures the judgment creditor against the risk of lack of funds to satisfy the award.”). “Where a party posts a full bond or other security [under Rule 62 (b)], such party is entitled to a stay from a monetary judgment as a matter of right.” Grant v. Lockett, 5:15-CV-0445 (DNH/TWD), 2019 WL 1872967, at *4 (N.D.N.Y. Apr. 26, 2019) (citations omitted); Gill v. Bausch & Lomb Supplemental Ret. Income Plan I, No. 6:09-CV-6043(MAT), 2014 WL 1404902, at *2 (W.D.N.Y. Apr. 10, 2014) (“A party seeking a stay of enforcement of a judgment pending appeal can obtain a stay as a matter of right under Rule 62 (d)…by posting a supersedeas bond to secure the amount of the judgment.”). In such circumstances, “the court has no discretion to deny the stay itself, but only to fix the amount of (or to waive) the bond.”² Frommert v. Conkright, 639 F. Supp. 2d 305, 308 (W.D.N.Y. 2009) (citing Am. Mfrs. Mut. Ins. Co. v. Am. Broadcasting-Paramount Theatres, Inc., 87 S. Ct. 1, 3, 17 L. Ed. 2d 37 (1966) (“With respect to a case arising in the federal system it seems to be accepted that a party taking an appeal from the District Court is entitled to a stay of a money judgment as a matter of right if he posts a bond in accordance with Fed. R. Civ. P. 62 (d).”) (Harlan, J., in chambers). In support of its motion for a stay, the Nation proffers “other security” in the form of a restricted securities account held by KeyBank that contains deposits in excess of the judgment — the confirmed arbitration award of $255,877,747.44 for State Contribution through December 2018, plus an ongoing obligation to pay all future State Contribution under the terms of the compact.³ See Declaration of Carol E. Heckman, Esq. (“Heckman Decl.”), Docket No. 18-4,

6, 7. This account, which is fully described by Cheryl Watts, Comptroller of the Nation, is subject to multiple agreements with lending institutions that are specifically designed to ensure that the Nation will not default on any contingent liability to the State with respect to the disputed State Contribution. Id.; Affidavit of Cheryl A. Watts (“Watts Aff.”), Docket No. 18-2,