The opinion of the court was delivered by: Pollak, J.
In this litigation, the Federal Trade Commission ("FTC") has alleged that the named defendants have conducted a huge telemarketing scheme. On September 24, 2009, this court ordered non-party Teledraft -- a payment-processing company which processed funds on behalf of some of the defendants but which has not itself been named as a defendant in this matter -- to turn over $264,224.03 to Wayne D. Geiser, the Receiver appointed on May 14, 2008 to oversee the corporate defendants. See Docket No. 109. In reaching the conclusion that Teledraft must turn over the funds at issue, the opinion accompanying the September 24 order rejected Teledraft's argument that it was entitled, prior to turning over any funds to the Receiver, to retain a portion of those funds under the doctrines of set-off and recoupment. See FTC v. NHS Sys., Inc. No. 08-2215, 2009 WL 3072475, at *9-*11 (E.D. Pa. Sept. 24, 2009). However, the September 24 opinion and order did allow Teledraft to pursue a contract claim against the Receiver. Specifically, the opinion and order lifted the stay of litigation previously in place in order to allow Teledraft to pursue a contract action against the Receiver in the District of Arizona, see Docket No. 109, for "the funds to which Teledraft alleges it is contractually entitled," NHS Sys., 2009 WL 3072475, at *11-*12.
On October 5, Teledraft filed a notice of appeal seeking relief "from the Order entered on September 24, 2009, directing it to pay $264,224.03 to the Receiver" (docket no. 110), and Teledraft now moves (docket no. 111) for a stay of the turnover order pending its appeal. The FTC opposes Teledraft's motion (docket no. 116).
Teledraft argues that it is entitled to a stay upon the posting of a supersedeas bond pursuant to Federal Rule of Civil Procedure ("Rule") 62(d). In the alternative, Teledraft contends that the provisions of Rule 62(c) allowing for a stay of injunctive relief pending appeal govern its motion, and that it is entitled to such a stay under the four-factor test applicable to stays of district court orders pending appeal that was enunciated by the Third Circuit in Republic of the Philippines v. Westinghouse Electric Corp., 949 F.2d 653, 658 (3d Cir. 1991). I will address these arguments in turn.
Rule 62(d) provides that "[i]f an appeal is taken, the appellant may obtain a stay by supersedeas bond, except in an action described in Rule 62(a)(1) or (2). The bond may be given upon or after filing the notice of appeal or after obtaining the order allowing the appeal. The stay takes effect when the court approves the bond." The rule "entitles a party appealing a money judgment to an automatic stay upon posting a supersedeas bond." Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992). Teledraft is correct that, as the Fifth Circuit noted in Hebert, "[t]he applicability of Rule 62(d) turns not on [the difference between declaratory and money judgments], but on whether the judgment involved is monetary or non-monetary." Id. Nevertheless, Rule 62(d) is not authority on the basis of which this court may grant Teledraft's motion, because the September 24 order is not a judgment within the meaning of the Federal Rules of Civil Procedure.
Rule 62 "does not govern stays in proceedings other than to enforce a judgment." Wright, Miller, & Kane, 11 Federal Practice & Procedure § 2902, at 491 (2d ed. 1995). "'Judgment' as used in [the Federal Rules of Civil Procedure] includes a decree and any order from which an appeal lies." Fed. R. Civ. P. 54(a). "[N]o right to a stay arises under Rule 62(d)... from an attempt to appeal... a non-appealable order." Morgan v. Kerrigan, 401 F. Supp. 270, 271 (D. Mass. 1975); accord Law v. NCAA, 134 F.3d 1025, 1030 (10th Cir. 1998) ("When there is no appeal of right there is no duty on the district court to grant a stay upon the filing of a supersedeas bond."); R.D. Goldberg Theatre Corp. v. Tri-States Theatre Corp., 119 F. Supp. 521, 522 (D. Neb. 1944) ("[T]he right to supersede presumes the right to appeal, as distinguished from the possession of a meritorious appeal. And where no right to appeal exists there is no right to supersede."); cf. Iowa Beef Processors, Inc. v. Bagley, 601 F.2d 949, 955 (8th Cir. 1979) (holding that Rule 62(a) does not apply where "no appeal lies from the district court's order").
The Third Circuit has ruled that an "order requiring the delivery of certain deposits to [a] receiver is neither final nor within any category of appealable orders." United States v. Chelsea Towers, 404 F.2d 329, 330 (3d Cir. 1968).*fn1 This determination is in accord with the holdings of three other circuits. See, e.g., FTC v. Overseas Unlimited Agency, Inc., 873 F.2d 1233, 1235 (9th Cir. 1989) (holding that a turnover order is not (1) a final order under 28 U.S.C. § 1291;*fn2 (2) an injunction under 28 U.S.C. § 1292(a)(1);*fn3 or (3) within the bounds of 28 U.S.C. § 1292(a)(2)*fn4 ); United States v. Beasley, 558 F.2d 1200, 1201 (5th Cir. 1977); Waylyn Corp. v. Casalduc, 219 F.2d 888 (1st Cir. 1955). Therefore, Teledraft's notice of appeal from "the Order entered on September 24, 2009, directing it to pay $264,224.03 to the Receiver," Docket No. 110, seeks to appeal a non-appealable order. As a direct consequence, Teledraft is not entitled to a stay pursuant to
In Section I of this opinion, Teledraft's contention that Rule 62(d) entitles it, upon the posting of a supersedeas bond, to a stay of this court's September 24 order has been found without merit. In the alternative, Teledraft grounds its motion for a stay on Rule 62(c). This section of the opinion addresses this alternative contention.
Rule 62(c) provides that "[w]hile an appeal is pending from an interlocutory order or final judgment that grants, dissolves, or denies an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights." Teledraft is not eligible to receive a stay pursuant to Rule 62(c), however, because the September 24 order is not injunctive in nature.
In the context of considering whether or not a turnover order is subject to appeal under the provisions of 28 U.S.C. § 1292(a)(1), which grants courts of appeals appellate jurisdiction over "[i]nterlocutory orders of the district courts... granting, continuing, modifying, refusing or dissolving injunctions," the Ninth Circuit has held that "[a]n order requiring a party to pay money to a receiver made pursuant to a previously unappealed order appointing the receiver 'does not constitute an injunction within the meaning of 28 U.S.C. § 1292(a)(1).'" Plata v. Schwarzenegger, 560 F.3d 976, 982 (9th Cir. 2009) (quoting Overseas Unlimited, 874 F.2d at 1235) (internal quotation marks omitted); accord, e.g., Trustees of Pension, Welfare, & Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Elec., 223 F.3d 459, 465 (7th Cir. 2000) (holding that a turnover order is not "injunctive in nature" unless the "order... effectively decides the merits, and has an irreparable effect on the merits"). Although the ruling of the Ninth Circuit in Plata was announced in a determination of the scope of that court's appellate jurisdiction, there appears to be no reason to reach a different result in construing the scope of Rule 62(c), which applies to "interlocutory order[s] or final judgment[s] that grant, dissolve, or den[y] an injunction." The only respect in which Rule 62(c) substantively departs from the language of Section 1292(a)(1) is that the former deals not only with ...