In Azizian v. Wilkinson, case no. 05-15847 (August 23, 2007), the Ninth Circuit faced, for the first time, an issue on which other circuits have split: “whether, or under what circumstances, appellate attorney’s fees are ‘costs on appeal’ that a district court may require an appellant to secure in a bond ordered under Federal Rule of Appellate Procedure 7.” It provides its conclusion at the outset of the opinion:
We conclude that a district court may require an appellant to secure appellate attorney’s fees in a Rule 7 bond, but only if an applicable fee-shifting statute includes them in its definition of recoverable costs, and only if the appellee is eligible to recover such fees.
Appellant Wilkinson is a class member who objected to the class action settlement approved by the district court between the certified class of consumers and a number of retail stores accused of antitrust violations with respect to cosmetics. She appealed from the order approving the settlement.
Plaintiffs sought a bond under FRAP 7 of nearly $13 million, which included a $600,000 component for twice the plaintiffs’ anticipated attorney fees on appeal. FRAP 7 provides that the district court “may require an appellant to file a bond or provide other security in any form and amount necessary to ensure payment of costs on appeal.”
The district court ordered a bond of only $42,000, but it included a $40,000 appellate attorney fee component. It reasoned that appellate attorney fees could be considered “costs” on appeal because: “(1) the fee-shifting provision in Section 4 of the Clayton Act, 15 U.S.C. § 15, defines attorney’s fees as among the costs recoverable, and (2) ‘the Court of Appeals [was] likely to find that the instant ppeal[ ] [was] frivolous.’”
Regarding the district court’s first justification, the court goes through a very detailed analysis of the cases from other circuits, then states that “[w]e agree with the Second, Sixth, and Eleventh Circuits and hold that the term ‘costs on appeal’ in Rule 7 includes all expenses defined as ‘costs’ by an applicable fee-shifting statute, including attorney’s fees.” The court gave four reasons for its holding: