Judge Blocks Plaintiff’s Attempt to Sell Indigent Defendant’s Appeal Rights

As I blogged last week, a pro bono First Amendment appeal that I’m litigating (Obsidian Finance Group, LLC v. Cox) sprouted an interesting procedural twist; to oversimplify:

  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.

Plaintiff’s plan was thus to have the sheriff sell off Cox’s right to appeal, so that “Cox will be incapable of continuing the suit and the highest bidder at the foreclosure sale (whether that be plaintiffs or someone else) will take an assignment of Cox’s interest in the appeal, becoming the real party in interest.” Presumably the plan is that the highest bidder would be the plaintiffs, who will buy Cox’s rights for a modest amount, and then use those rights to drop the appeal. No more appeal; the judgment is final; end of story.

Of course, if plaintiffs can do this to Cox, any plaintiffs who win a judgment against a defendant who can’t afford a supersedeas bond can do the same. Poor civil defendants’ rights to appeal would thus be lost, and so would the rights to appeal of plaintiffs who weren’t poor at the outset but face a ruinous judgment that they can’t afford to stay.

In any event, I’m pleased to report that this morning we had oral argument on the motion, and the judge blocked the plaintiff’s plan: The judge stayed any execution of the judgment that would involve sale of defendant’s appeal rights. The appeal can now proceed on the merits, as the Federal Rules of Appellate Procedure provide. Many thanks again to my invaluable local counsel Benjamin Souede of the Angeli Law Group LLC, to Mayer Brown LLP for supporting this through their pro bono program, and to my colleagues Don Falk (Mayer) and Stuart Banner, Sam Bray, Joanna Schwartz, and Steve Yeazell (UCLA) for their help preparing me for oral argument.

By the way, if any of you face this sort of thing in your own cases, please feel free to borrow whatever you find helpful from our briefs, posted here.