UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE ANDREW CHERRY, CASE NO. 21-27 MJP Plaintiff, ORDER ON DEFENDANT’S MOTION TO STAY v. ENFORCEMENT OF JUDGMENT PENDING APPEAL COMPANY OF AMERICA, Defendant.
This matter comes before the Court on Defendant’s Motion to Stay Enforcement of Judgment Pending Appeal. (Dkt. No. 71.) Having considered Defendant’s Motion, Plaintiff’s Response (Dkt. No. 78), the Reply (Dkt. No. 79), and all relevant portions of the record, the Court GRANTS in part and DENIES in part. Andrew Cherry is a former Microsoft employee who filed this action against The Prudential Insurance Company of America under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (ERISA) after it terminated his disability benefits under Microsoft’s employee-benefit plan. Cherry asserted two claims: (1) Prudential’s termination of benefits was unlawful under 29 U.S.C. § 1132(a)(1)(B); and (2) Prudential breached its fiduciary duties by failing to act as an impartial administrator and instead actively looking for ways to terminate his claim, in violation of 29 U.S.C. § 1132(a)(3). (Compl. ¶¶ 7.1–7.14 (Dkt. No. 1).)
The Parties filed the cross-motions for judgment on Cherry’s first claim and reserved his second claim for trial. (Dkt. No. 24.) This Court found Cherry was entitled to judgment on his claim under § 1132(a)(1)(B) and ordered Prudential to reinstate Cherry’s benefits and pay him all unpaid benefits from the effective date of his termination to the date of the order. (Judgment (Dkt. No. 66).) Prudential now asks the Court to stay the enforcement of the Judgment pending an appeal. Federal Rule of Civil Procedure 62(b) allows a party to obtain a stay enforcing a judgment by providing a bond or other security. “The posting of a bond protects the prevailing plaintiff from the risk of a later uncollectible judgment and compensates him for delay in the
entry of the final judgment.” N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988). Rule 62(a) in conjunction with 62(c)(1) provides that an interlocutory or final judgment in an action for an injunction is not stayed after being entered, even if an appeal is taken. “In cases involving injunctive relief, it is discretionary with the court whether to allow a stay.” Hicklin v. Hartford Life & Acc. Ins. Co., No. CV06-4543 GAF (JTLX), 2008 WL 638238, at *1 (C.D. Cal. Feb. 28, 2008) (citation and internal quotation omitted). “The standard for evaluating stays pending appeal is similar to that employed by district courts in deciding whether to grant a preliminary injunction .... At one end of the continuum, the moving party is required to show both a probability of success on the merits
and the possibility of irreparable injury. At the other end of the continuum, the moving party must demonstrate that serious legal questions are raised and that the balance of hardships tips sharply in its favor. The relative hardship to the parties is the critical element in deciding at which point along the continuum a stay is justified.” Lopez v. Heckler, 713 F.2d 1432, 1435
(9th Cir.1983) (citations and internal quotations omitted) 1. Past Benefits It is undisputed by the Parties that the portion of the Judgment awarding payment of past benefits, plus interest, represents a money judgment that is subject to an automatic stay upon the posting of a sufficient bond. Rather, Prudential asks the Court to waive the bond requirement, which Cherry opposes. Rule 62 does not state that filing a bond is the only way obtain a stay, and the Court has broad discretion to waive the bond requirement if it sees fit. See Townsend v. Holman Consulting Corp., 881 F.2d 788, 796 (9th Cir. 1989), opinion vacated on reh'g, 914 F.2d 1136 (9th Cir. 1990), opinion amended and superseded, 929 F.2d 1358 (9th Cir. 1990), and opinion vacated on reh'g, 929 F.2d 1358 (9th Cir. 1990). The Court, in exercising its discretion, is not inclined to waive the requirement here. The Court GRANTS Prudential’s Motion to stay as to the portion of Judgment awarding past benefits upon the posting of a sufficient bond. 2. Ongoing Benefits The Parties’ main dispute is whether the Court should exercise its discretion to grant a stay as it applies to the portion of the Court’s Judgment reinstating Cherry’s long-term disability benefits. At issue is whether the obligation to provide benefits going forward qualifies as an injunction that is not automatically stayed. There is no binding guidance for which the Court may follow in answering this question and district courts have come out differently. For instance, Prudential asks the Court to follow a recent Ohio District Court opinion, Laake v. Benefits Comm., W. & S. Fin. Grp. Co. Flexible Benefits Plan, where the court found that claims brought under Section 502(a)(1)(B) are for
monetary as opposed to injunctive and therefore defendants were entitled to a stay of enforcement. No. 117CV611WOBKLL, 2022 WL 1233621, at *2 (S.D. Ohio Apr. 26, 2022). In contrast, Cherry asks the Court to follow two opinions from California District Courts, Hicklin v. Hartford Life & Acc. Ins. Co. No. CV06-4543 GAF (JTLX), 2008 WL 638238 (C.D. Cal. Feb. 28, 2008) and Gunn v. Reliance Standard Life Ins. Co. No. 204CV01852FMCMANX, 2009 WL 10671397 (C.D. Cal. May 20, 2009). The courts in these cases applied and interpreted relevant Ninth Circuit holdings to find that the payment of ongoing benefits is injunctive in nature. The Court finds the California decisions persuasive. The Ninth Circuit defined an injunction as “an order that is directed to a party, enforceable by contempt, and designed to accord or protect some or all of the substantive relief
sought by a complaint in more than temporary fashion.” Hicklin v. Hartford Life & Acc. Ins. Co., No. CV06-4543 GAF (JTLX), 2008 WL 638238, at *2 (C.D. Cal. Feb. 28, 2008) (quoting Gon v. First State Inc., Co., 871 F.2d 863, 865 (9th Cir. 1989)). The Hicklin court found that a judgment for the reinstatement of benefits meets the Ninth Circuit’s criteria – “it is enforceable by contempt; it is more than temporary; and it provides essentially all of the relief sought by plaintiff.” Id.; See also Id. at *2 n.2 (noting that even under the First Circuit's reasoning in J. Perez & CIA, Inc. v. United States, 747 F.2d 813, 814 (1st Cir.1984) (providing that “money judgments ... can be calculated and secured with relative ease .... a case involving an order to do, or not to do, something ... is, involving something like an injunction”), cited by defendant for the
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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE ANDREW CHERRY, CASE NO. 21-27 MJP Plaintiff, ORDER ON DEFENDANT’S MOTION TO STAY v. ENFORCEMENT OF JUDGMENT PENDING APPEAL COMPANY OF AMERICA, Defendant.
This matter comes before the Court on Defendant’s Motion to Stay Enforcement of Judgment Pending Appeal. (Dkt. No. 71.) Having considered Defendant’s Motion, Plaintiff’s Response (Dkt. No. 78), the Reply (Dkt. No. 79), and all relevant portions of the record, the Court GRANTS in part and DENIES in part. Andrew Cherry is a former Microsoft employee who filed this action against The Prudential Insurance Company of America under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (ERISA) after it terminated his disability benefits under Microsoft’s employee-benefit plan. Cherry asserted two claims: (1) Prudential’s termination of benefits was unlawful under 29 U.S.C. § 1132(a)(1)(B); and (2) Prudential breached its fiduciary duties by failing to act as an impartial administrator and instead actively looking for ways to terminate his claim, in violation of 29 U.S.C. § 1132(a)(3). (Compl. ¶¶ 7.1–7.14 (Dkt. No. 1).)
The Parties filed the cross-motions for judgment on Cherry’s first claim and reserved his second claim for trial. (Dkt. No. 24.) This Court found Cherry was entitled to judgment on his claim under § 1132(a)(1)(B) and ordered Prudential to reinstate Cherry’s benefits and pay him all unpaid benefits from the effective date of his termination to the date of the order. (Judgment (Dkt. No. 66).) Prudential now asks the Court to stay the enforcement of the Judgment pending an appeal. Federal Rule of Civil Procedure 62(b) allows a party to obtain a stay enforcing a judgment by providing a bond or other security. “The posting of a bond protects the prevailing plaintiff from the risk of a later uncollectible judgment and compensates him for delay in the
entry of the final judgment.” N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988). Rule 62(a) in conjunction with 62(c)(1) provides that an interlocutory or final judgment in an action for an injunction is not stayed after being entered, even if an appeal is taken. “In cases involving injunctive relief, it is discretionary with the court whether to allow a stay.” Hicklin v. Hartford Life & Acc. Ins. Co., No. CV06-4543 GAF (JTLX), 2008 WL 638238, at *1 (C.D. Cal. Feb. 28, 2008) (citation and internal quotation omitted). “The standard for evaluating stays pending appeal is similar to that employed by district courts in deciding whether to grant a preliminary injunction .... At one end of the continuum, the moving party is required to show both a probability of success on the merits
and the possibility of irreparable injury. At the other end of the continuum, the moving party must demonstrate that serious legal questions are raised and that the balance of hardships tips sharply in its favor. The relative hardship to the parties is the critical element in deciding at which point along the continuum a stay is justified.” Lopez v. Heckler, 713 F.2d 1432, 1435
(9th Cir.1983) (citations and internal quotations omitted) 1. Past Benefits It is undisputed by the Parties that the portion of the Judgment awarding payment of past benefits, plus interest, represents a money judgment that is subject to an automatic stay upon the posting of a sufficient bond. Rather, Prudential asks the Court to waive the bond requirement, which Cherry opposes. Rule 62 does not state that filing a bond is the only way obtain a stay, and the Court has broad discretion to waive the bond requirement if it sees fit. See Townsend v. Holman Consulting Corp., 881 F.2d 788, 796 (9th Cir. 1989), opinion vacated on reh'g, 914 F.2d 1136 (9th Cir. 1990), opinion amended and superseded, 929 F.2d 1358 (9th Cir. 1990), and opinion vacated on reh'g, 929 F.2d 1358 (9th Cir. 1990). The Court, in exercising its discretion, is not inclined to waive the requirement here. The Court GRANTS Prudential’s Motion to stay as to the portion of Judgment awarding past benefits upon the posting of a sufficient bond. 2. Ongoing Benefits The Parties’ main dispute is whether the Court should exercise its discretion to grant a stay as it applies to the portion of the Court’s Judgment reinstating Cherry’s long-term disability benefits. At issue is whether the obligation to provide benefits going forward qualifies as an injunction that is not automatically stayed. There is no binding guidance for which the Court may follow in answering this question and district courts have come out differently. For instance, Prudential asks the Court to follow a recent Ohio District Court opinion, Laake v. Benefits Comm., W. & S. Fin. Grp. Co. Flexible Benefits Plan, where the court found that claims brought under Section 502(a)(1)(B) are for
monetary as opposed to injunctive and therefore defendants were entitled to a stay of enforcement. No. 117CV611WOBKLL, 2022 WL 1233621, at *2 (S.D. Ohio Apr. 26, 2022). In contrast, Cherry asks the Court to follow two opinions from California District Courts, Hicklin v. Hartford Life & Acc. Ins. Co. No. CV06-4543 GAF (JTLX), 2008 WL 638238 (C.D. Cal. Feb. 28, 2008) and Gunn v. Reliance Standard Life Ins. Co. No. 204CV01852FMCMANX, 2009 WL 10671397 (C.D. Cal. May 20, 2009). The courts in these cases applied and interpreted relevant Ninth Circuit holdings to find that the payment of ongoing benefits is injunctive in nature. The Court finds the California decisions persuasive. The Ninth Circuit defined an injunction as “an order that is directed to a party, enforceable by contempt, and designed to accord or protect some or all of the substantive relief
sought by a complaint in more than temporary fashion.” Hicklin v. Hartford Life & Acc. Ins. Co., No. CV06-4543 GAF (JTLX), 2008 WL 638238, at *2 (C.D. Cal. Feb. 28, 2008) (quoting Gon v. First State Inc., Co., 871 F.2d 863, 865 (9th Cir. 1989)). The Hicklin court found that a judgment for the reinstatement of benefits meets the Ninth Circuit’s criteria – “it is enforceable by contempt; it is more than temporary; and it provides essentially all of the relief sought by plaintiff.” Id.; See also Id. at *2 n.2 (noting that even under the First Circuit's reasoning in J. Perez & CIA, Inc. v. United States, 747 F.2d 813, 814 (1st Cir.1984) (providing that “money judgments ... can be calculated and secured with relative ease .... a case involving an order to do, or not to do, something ... is, involving something like an injunction”), cited by defendant for the
proposition that the relief was not injunctive, “this Court's order to provide ongoing benefits (though ultimately transmitted in monetary form) is an order to continuously act— ‘an order to do, or not to do, something’—as compared to a lump sum money judgment”). This Court entered a Judgment for Cherry under 29 U.S.C. § 1132(a)(1)(B), which
allows, inter alia, a plaintiff to bring a claim to enforce his rights under the terms of the plan, or to clarify his rights to future benefits. Here, the Judgment provides for the reinstatement of Cherry’s benefits, and thus, enforces Cherry’s rights under the terms of the plan and clarifies his right to future benefits. This ongoing benefits portion of the Judgment is enforceable by contempt and is designed to provide some or all relief sought by Cherry. And it does more than simply require payment of a lump sum of money to him, it requires Prudential to continuously act to provide ongoing benefits. Accordingly, the Court finds that the ongoing benefits portion of the Judgment is properly regarded as injunctive. However, it is still within the Court’s discretion to grant Prudential’s request to stay. This “turns on the Court’s weighing the probability of success on appeal and the balance of hardships
to the parties.” Id. Prudential does not argue this, but rather hinges its entire argument on its assertion that Cherry’s ongoing benefits are monetary in nature and thus, subject to a stay. (See Def. Reply at 2.) Since the Court has determined otherwise, it need not rehash that argument here. As to the merits, the Court has already found in favor of Cherry and has no reason for altering this opinion absent any argument from Prudential. Likewise, the balance of hardships tips in favor of Cherry. Prudential has acknowledged that it has an excess of one trillion dollars as of December 31, 2021. (Def. Reply at 4-5.) On the other hand, Cherry would have to continue living without an income, something very few people can afford to do. In short, the amount of
money is trivial to Prudential, but critical to Cherry. The Court DENIES Prudential’s Motion as it applies to the ongoing benefits portion of the Judgment. Defendant’s Motion to Stay Pursuant Enforcement of Judgment Pending Appeal is
GRANTED IN PART and DENIED IN PART. Defendant’s Motion is GRANTED with respect to the monetary damages portion of the Judgement, subject to Defendant posting an adequate bond. However, Defendant’s Motion is DENIED as to a stay of injunctive relief, which the Court has determined are Plaintiff’s ongoing benefits. The clerk is ordered to provide copies of this order to all counsel. Dated July 25, 2022. A Marsha J. Pechman United States Senior District Judge