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Doug Rendleman

Abstract

This article begins in Part II with background about appeal bonds and the way their amounts were set before tort reform. Since the defendant’s cost of an appeal bond is an expense and, perhaps, an impediment to its appeal, the defendant will seek ways to surmount, reduce, or avoid the impediment. Part II then uses Pennzoil v. Texaco to illustrate two of defendants’ strategies for staying collection on a judgment pending review in lieu of posting a huge appeal bond—obtain a federal injunction and file for bankruptcy. This article shows why neither strategy is sufficient: the federal court’s abstention doctrines militate against a federal injunction, and the damages defendant’s option to file bankruptcy to achieve the shelter of an automatic stay turns out to be an unattractive alternative. Part II turns, finally, to the reason that appeal bonds caused defendants to writhe in earnest—titanic punitive damages jury verdicts...The last several years have seen two waves of appeal-bond-capping statutes and rules. The article summarizes those developments in Parts III and IV. Part V includes the arguments the tort reformers made and discusses the legislative processes that facilitated the kind of tort reform involved in appeal-bond caps. In Part VI, the article moves from the legislative chamber back to the courtroom to examine whether federal and state constitutional challenges will undermine appeal-bond caps...Finally, the article’s last major subject touches on the nettlesome and speculative topic of litigants’ state constitutional challenges to appeal-bond caps. The article ends with an unpretentious conclusion in Part VII that some appeal-bond protection for large verdict judgment debtors is warranted in this age of mass litigation and titanic punitive damages awards, even though the protection will delay plaintiffs’ collection efforts.

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