Satisfaction? Selling Off Appellate Rights

Bad cases make bad law, and it seems that any case involving  Crystal Cox is, almost by definition, bad.  Bad, bad, bad.  Which is why it’s painful to see the newest issue raised in one of the most bizarre cases around, Obsidian Finance Group, LLC v. Cox

Having obtained a judgment against Cox, and Cox having slightly less blood than a rock with which to satisfy the judgment or post a bond to stay execution pending appeal, the plaintiffs have moved forward to execution while Cox pursues, though her pro bono counsel, Eugene Volokh, an appeal. 

It’s worth noting that Eugene’s involvement reflects a true dedication to the underlying First Amendment cause, rather than any particular love of the individual.  That said, I can’t help but wonder whether there are any regrets, given that his client is the one no experienced lawyer would allow near his office, and the significance of the free speech issues at stake are not, upon reflection, nearly as important as they first appeared. Indeed, the issues are fact-bound, and the facts are awfully ugly.

Yet, this bad case begets another bad issue, as Eugene explains :

  1. Obsidian Finance and Kevin Padrick sue Crystal Cox. They win at trial, and get a large judgment.

  2. Cox appeals on First Amendment grounds (I’m representing her on appeal). Cox has very little money, so she can’t put up a so-called “supersedeas bond” (a bond for the full amount of the judgment) that is required to keep plaintiffs from seizing her assets to execute the judgment. But that doesn’t block her appeal, since under federal law one generally doesn’t need to put up a bond in the amount of the judgment to appeal — one only needs the bond to stop execution on the judgment pending appeal.

  3. But plaintiffs have a different view: They go to Oregon court, register the judgment, get a writ of execution, and ask the sheriff to seize and sell to the highest bidder Cox’s “intangible personal property,” in the form of … Cox’s right to appeal.
The reaction is a motion before the district court for a stay of execution.  The motion has been fully briefedopposed and replied, with Eugene taking the early lead on heft.  The core question is whether a party can execute a judgment against the intangible right to appeal, and thus prevent the appeal of the judgment.  On its surface, it just seems utterly wrong.

While the papers go on at length wrangling over procedural issues, where the plaintiff’s fairly straightforward contentions, particularly about Younger abstention over the state court execution of a judgment, appear far more persuasive than Eugene’s efforts to get the district court to stick its nose in.  But the core issue, whether the right to appeal can be sold out from under a litigant who can’t afford to post bond, is one with far larger implications.  And of course, it has to arise in this case, with this defendant.

Eugene finally gets around to mentioning this problem at page 10 of his memorandum in support of the motion:

Yet if plaintiffs’ end run around the Rules were accepted, then poor defendants in civil cases would routinely lose their rights to appeal. Defendants would not be able to afford to get a bond for the amount of the judgment. Plaintiffs would then be able to get sheriffs to levy on the defendants’ right to pursue the appeal. Plaintiffs would buy the right cheaply at the sheriff’s sale, since nobody would be competing with them at the auction. And they would then use the newly acquired right to drop the appeal against them.

The appeal bond requirement that the Federal Rules rejected would thus come in through the back door. Poor defendants would be unable to effectively challenge the judgments against them. And the development of the law would be distorted because appellate courts would be unable to hear the defendants’ appeals. This is not consistent with the system that the Rules strive to create.

Well, yeah. That’s a problem, and that’s exactly what would happen. It would happen to Crystal Cox. It would happen to any other poor litigant, unable to bond a stay of execution.

While some would argue that the losing defendant doesn’t deserve the right to appeal, as it will burden the prevailing plaintiff with the cost of appeal, and should the defendant lose on appeal, the plaintiff will have no chance of recovering a bill of costs since the defendant can’t cover the initial judgment, that’s not how the system is supposed to work. 

An appeal as of right is an integral part of the system. Courts aren’t perfect, and even the poor are entitled to review.  At least that’s the way I always thought it was supposed to work. 

David Aman, representing Obsidian in opposition to the motion, has come up with some caselaw supporting the proposition that the right to appeal is one of the intangible rights against which the plaintiff is entitled to execute judgment.  He contends that if Cox wants to appeal, all she need do is bond her judgment, thus assuring plaintiff of recovery if she loses on appeal.  If she can’t or won’t, then the plaintiff is entitled to do whatever he can to collect, and that includes “choses in action,” including her appeal.

The underlying issue is disturbing, in that depriving a poor person of their right to appeal by what Eugene properly characterizes as an “end run” has implications for all poor defendants.  It is not, as Eugene argues, harmless to the opposition to stay execution despite the absence of a bond, as there are real costs associated with defending against an appeal. On the other hand, that’s part of the scheme of civil litigation, and the burden isn’t so great as to justify depriving poor litigants of their right to appeal.

The one aspect that remains unclear is whether Eugene brought his motion in the right court for the right relief.  It seems that he might have been better off moving for relief before the state court, under whose jurisdiction execution would happen, and thus eliminate the Younger abstention issue. The other choice was the 9th Circuit, who could have ruled that they would consider the appeal regardless of the sale of Cox’s right to appeal as a matter of their own supervisory authority.

But why must it happen that this issue arises in a case with such an unsavory hero?  Why does it always seem to happen that way?  Nonetheless, even the most unsympathetic litigant is entitled to the same rights as the beloved one, and even the deservedly poor are entitled to the legal protections afforded the fabulously wealthy.  And so, we’re stuck with another Crystal Cox issue, and forced to root for the dark side.

11 comments on “Satisfaction? Selling Off Appellate Rights

  1. ShelbyC

    Reading Egnaro’s comment on EV’s post on the reply, seizing “all rights and interests” in connection with the case is less bad if it includes the judgement itself

  2. REvers

    Although the adherents of the “Screw the Poor” school will love this idea, it has the potential to screw more than just the poor. You wouldn’t necessarily need to be poor, per se, but you would only need to not have ENOUGH money to keep your appeal from being bought out from under you. Scary stuff.

  3. ShelbyC

    The theory would by that by seizing all rights and interests in the case, they seized the obligation to pay the judgment as well. Now I don’t know if that makes much sense, but it sure seems to make more sense than allowing someone to seize a procedural right divorced from the rest of the case.

  4. Pub Editor

    The one aspect that remains unclear is whether Eugene brought his motion in the right court for the right relief. It seems that he might have been better off moving for relief before the state court, under whose jurisdiction execution would happen, and thus eliminate the Younger abstention issue.

    I supose I should stress that this is just speculation, but it could be a simple as: Prof. Volokh is
    already admitted (pro hoc or otherwise) in the federal district court, but filing in Oregon state court would require a new motion for admission pro hoc vice. (I’m not terribly confident in this reasoning, and it would not reflect too highly on Eugene Volokh, whose writing and sharp legal mind I have admired for over a decade; so maybe classify this as a less likely reason.)

    Alternatively, perhaps Prof. Volokh feels more comfortable/familiar with the district court judge, whereas the state court judge would be an unknown quality. (This is a situation where local counsel can be very helpful. I do not know whether Cox’s defense team has local counsel associated in this case.)

    The other choice was the 9th Circuit, who could have ruled that they would consider the appeal regardless of the sale of Cox’s right to appeal as a matter of their own supervisory authority.

    Appellate courts generally like to have a lower court decision to chew over, yes? That consideration in itself could recommend filing the motion in district court before going to the 9th Circuit.

  5. SHG

    Meh. But since it’s just sheer speculation, it’s not worth discussing why it’s meh.  One important thing to remember however: Even though the client is Crystal Cox, once Eugene took on the representation, his obligation is to do it properly, not just for his own convenience. So if he’s not admitted, get admitted or find someone who is admitted. The responsibility doesn’t change becasue Eugene isn’t a practicing lawyer.

    And as for the 9th Circuit, meh again. Courts of appeals issue stays and other orders pending appeal all the time. No biggie.

    But since there is no basis for your rationalizations, there’s really nothing to discuss.

  6. G Thompson

    It seems that thankfully the appeal is now to go ahead on it’s merits, after the judge stayed any execution of the judgment. Bond of $100 only too. [via volokh]

    Like Jordan I am absolutely rooting for Padrick and Aman in this, though the idea of a supersedeas bond is highly egregious in any form to myself and what they tried to do was just wrong.

    Let the Appeal go through, maybe it will succeed maybe not (I’m on the NOT side). But now at least either outcome won’t have a smell other than what Crystal already brings to the case.

    [Ed, Note: Link added to Eugene’s post about the outcome of the motion.]

  7. SHG

    Like you and Jordan, I too am rooting for Padrick and Aman. But this was unseemly. They should win on the merits, not a trick play like this which has terrible implications otherwise.

    Edit: I’ve just had the chance to read the comments to Eugene’s post. How pathetic. VC used to be the envy of the blawgosphere for its thoughtful and incisive commentary. The comments here range from sycophantic drivel to pathological stupidity. What a shame that it has come to this.

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