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Howarth v. Patterson

United States District Court, D. Arizona

August 8, 2019

Morgan Howarth, Plaintiff,
v.
Ryan Patterson, et al., Defendants.

          ORDER

          EILEEN S. WILLETT, UNITED STATES MAGISTRATE JUDGE

         This Order sets forth the Court's rulings on a number of pending Motions (Docs. 40, 41, 43, 46, 47, 52, and 53).

         I. DISCUSSION

         A. Defendants' “Motion for a Bond Requirement for Plaintiff” (Doc. 40) and Plaintiff's “Motion to Strike Defendants' Untimely Reply, and to Strike or Disregard Arguments Raised for the First Time Therein” (Doc. 46)

         Pursuant to Local Rule of Civil Procedure (“LRCiv”) 54.1(c), Defendants filed a Motion (Doc. 40) requesting that the Court order Plaintiff to post a $25, 000 bond for Defendants' fees and taxable costs incurred in this action.[1] (Doc. 40). Plaintiff filed his Response (Doc. 42) on June 21, 2019. On July 1, 2019, Defendants filed their Reply (Doc. 45). Contrary to Plaintiff's assertion in his Motion to Strike (Doc. 46), Defendants' Reply is timely. Plaintiff correctly recounts that the rules provide a seven-day deadline for filing a reply in support of a motion. Plaintiff, however, neglects to consider that Federal Rule of Civil Procedure 6(d) states:

When a party may or must act within a specified time after service and service is made under Rule 5(b)(2)(C), (D), (E), or (F), 3 days are added after the period would otherwise expire under Rule 6(a).

         Rule 5(b)(2)(E) includes service by electronic means. Seven days from Plaintiff's June 21, 2019 Response (Doc. 42) is June 28, 2019. After adding another three days pursuant to Rule 6(d), Defendants' reply deadline was July 1, 2019. Although Plaintiff alternatively argues that the Court should strike or disregard arguments raised for the first time in Defendants' Reply (Doc. 45), the Court finds that the arguments contained therein are in response to issues raised in Plaintiff's Response (Doc. 42). The Court will deny Plaintiff's Motion to Strike (Doc. 46).[2] For the reasons discussed below, the Court will grant Defendants' Motion for a Bond (Doc. 40).

         “There is no specific provision in the Federal Rules of Civil Procedure relating to security for costs. However, the federal district courts have inherent power to require plaintiffs to post security for costs.” Simulnet E. Assoc. v. Ramada Hotel Operating Co., 37 F.3d 573, 574 (9th Cir. 1994). “Typically federal courts, either by rule or by case-to case determination, follow the forum state's practice with regard to security for costs, as they did prior to the federal rules; this is especially common when a non-resident party is involved.” Id. (internal quotation marks and citation omitted). The historical purpose of bond requirements is “to help resident defendants collect costs when victorious against non-resident plaintiff whose property was beyond the reach of the court.” Gay v. Chandra, 682 F.3d 590, 594 (7th Cir. 2012).

         In Simulnet, the Ninth Circuit reviewed whether the district court abused its discretion by dismissing a case after the plaintiffs failed to post a $500, 000 cost bond, which was imposed five days before trial was set to commence. 37 F.3d at 573. In holding that the district court abused its discretion, the Ninth Circuit stated that the district court:

knew that the plaintiffs could not post the bond, but imposed the bond because of its belief that the defendants would prevail in the jury trial, even though the court declined to hold the plaintiffs' claims were vexatious. In practical effect, this amounted to a judgment as a matter of law in a case where discovery proceedings revealed there was a genuine issue of material fact to be determined by the jury.

Id. at 576. The Ninth Circuit explained that “[i]n order to avoid depriving a plaintiff of access to the courts by a security bond requirement, the courts in some cases must strike a delicate balance.” Id. The Ninth Circuit did not hold that district courts must use a specific balancing test, but noted that the “First Circuit made an illuminating comment” regarding the issue. Id. In Aggerwal v. Ponce School of Medicine, 745 F.2d 723, 727-28 (1st Cir. 1984), the First Circuit weighed the following three factors in determining whether a district court abused its discretion in requiring a security for costs: (i) the degree of probability or improbability of success on the merits, and the background and purpose of the suit; (ii) the reasonable extent of the security to be posted, if any, viewed from the defendant's perspective; and (iii) the reasonable extent of the security to be posted, if any, viewed from the nondomiciliary plaintiff's perspective. Aggerwal, 745 F.2d at 727-28. The First Circuit further explained that:

just as factors such as the absence of attachable property within the district or the conduct of the parties may bear on a defendant's legitimate need for the prophylaxsis of a bond, so too, a plaintiff's ability to post surety for costs must weigh in the balance when the third figure of the equation is tabulated . . . . The district court, in the exercise of its sound discretion, must settle upon an assurance which is fair in the light not only of the case itself and of the exigencies faced by the defendant, but also fair when illuminated by the actual financial situation of the plaintiff.

Id. at 728.

         Here, given the early stage of litigation, the Court does not conclude that either party is more likely to succeed. Defendants reasonably assert that a bond is required because Plaintiff does not reside in the State of Arizona and does not own any property within Arizona out of which a judgment for costs can be satisfied. Plaintiff states that he has substantial equity in ...


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