United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE
CardiAQ Valve Technologies, Inc. (“CardiAQ”)
brought this suit against Defendant Neovasc Inc.
(“Neovasc”) in June 2014. On May 19, 2016,
following a two-week trial, a jury found for CardiAQ as to
some, though not all, of its claims, and awarded CardiAQ $70,
000, 000 in damages for Neovasc's theft of trade secrets.
On October 31, in an order resolving several post-trial
motions, the Court partially granted CardiAQ's motion for
enhanced damages and awarded an additional $21, 000, 000.
[ECF No. 583]. The court also granted in part CardiAQ's
motion for injunctive relief and denied Neovasc's motions
for a new trial. Judgment was entered on November 21, 2016.
[ECF No. 598].
before the Court are Neovasc's motion to stay judgment
pending appeal [ECF No. 600], Neovasc's motion to
stay/preserve the status quo pending resolution of its motion
to stay judgment [ECF No. 606], CardiAQ's motions for
reconsideration of the denial of the injunction [ECF Nos.
612, 613], and a brief from Neovasc opposing CardiAQ's
request for prejudgment interest [ECF No. 610].
reasons discussed below, the Court will allow Neovasc to file
a reply brief in support of its motion to stay judgment. To
provide for time to consider this additional briefing,
Neovasc's motion to stay pending the outcome of that
decision is granted (except on the correction of
inventorship). CardiAQ is granted leave to file a reply brief
in support of its request for prejudgment interest directed
to the issue of whether the Court continues to have
jurisdiction to award prejudgment interest. CardiAQ's
motions for reconsideration are denied.
Motion to Stay Judgment Pending Appeal
motion to stay judgment pending appeal argues that it should
not have to post a bond, and claims that the existing asset
transfer restrictions in place are sufficient to protect
CardiAQ. CardiAQ is correct, however, that the current
restrictions, with nothing more, are not sufficient to
establish that Neovasc is entitled to a stay pending appeal.
Rule of Civil Procedure 62(d) grants an automatic stay upon
the posting of a supersedeas bond. Local Rule 62.2 sets the
amount of the bond at the amount of the judgment plus 10% in
interest and $500 for costs, “unless the court directs
otherwise.” The “nature and the amount of the
bond is entrusted to the discretion of the trial
court.” Acevedo-Garcia v. Vera-Monroig, 296
F.3d 13, 17 (1st Cir. 2002). Courts have generally recognized
that an appellant is not automatically entitled to a stay
unless the appellant posts a bond for the full amount
specified by rule. The First Circuit has held that “no
bond is required if: (1) the defendant's ability to pay
is so plain that the posting of a bond would be a waste of
money; or (2) the bond would put the defendant's other
creditors in undue jeopardy.” Acevedo-Garcia,
296 F.3d at 17.
there appears to be a presumption that a stay will not be
granted, absent a demonstration of good cause to do so.
See Amica Mut. Ins. Co. v. Whois Privacy Prot. Serv.,
Inc., No. CA 11-0070L, 2013 WL 4008673, at *2 (D.R.I.
Aug. 5, 2013) (“‘the burden is on the party
seeking a waiver [of the bond requirement] to demonstrate
that the judgment is not at a risk, ” and the
“‘bond requirement will not be waived solely on
the basis that it will pose a severe financial hardship on
the appellant unless some other form of security is
offered'” (quoting 11 Charles Alan Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice and
Procedure § 2905, at 720-23 (3d ed. 2012));
Cipes v. Mikasa, Inc., 404 F.Supp.2d 367, 369 (D.
Mass. 2005) (“Given that the bond requirement is
explicitly described in both the federal and local rules, an
appellant should, as a general matter, be obliged to satisfy
it.”); see also Miami Int'l Realty Co. v.
Paynter, 807 F.2d 871, 873 (10th Cir. 1986) (“a
full supersedeas bond should be the requirement in normal
circumstances”); Fed. Prescription Serv., Inc. v.
Am. Pharm. Ass'n, 636 F.2d 755, 760 (D.C. Cir. 1980)
(same); Poplar Grove Planting & Ref. Co. v. Bache
Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979)
(“If a court chooses to depart from the usual
requirement of a full security supersedeas bond to suspend
the operation of an unconditional money judgment, it should
place the burden on the moving party to objectively
demonstrate the reasons for such a departure. It is not the
burden of the judgment creditor to initiate contrary proof.
Such a supersedeas bond is a privilege extended the judgment
debtor as a price of interdicting the validity of an order to
order to obtain a stay without posting a bond, some other
form of security is usually required. S.E.C. v.
O'Hagan, 901 F.Supp. 1476, 1480 (D. Minn. 1995)
(explaining that “[w]hen granting a stay without a
supersedeas bond courts generally require the appellant to
post partial bond or alternative security, ” and
refusing to grant a stay because defendant claimed he had no
assets, and he offered no bond or alternative security).
See Bowers v. Baystate Techs., Inc., No. CIV. A.
91-40079-NMG, 2001 WL 640876, at *1 (D. Mass. June 5, 2001)
(where defendant was unable to obtain bond for full amount of
judgment, Court ruled it had to pledge larger percentage of
stock to plaintiff as alternative security); see also
FINOVA Capital Corp. v. Richard A. Arledge, Inc., No.
02-1277-PHX-RCB, 2008 WL 828504, at *5 (D. Ariz. Mar. 26,
2008) (allowing defendants to post bond of $228, 138 on a
$1.66 million judgment); Athridge v. Iglesias, 464
F.Supp.2d 19, 24-25 (D.D.C. 2006) (allowing defendants to
post real estate holdings in lieu of bond); C. Albert
Sauter Co. v. Richard S. Sauter Co., 368 F.Supp. 501,
520- 21 (E.D. Pa. 1973) (where execution of judgment would
bankrupt defendant and it was unable to obtain bond, allowing
it to pledge as security all of its stock and stock in other
companies, with restrictions on asset transfers).
request for a stay provided financial reasons why it should
not be required to post a bond for the full amount of the
judgment, and it alleged that no security (beyond the current
restrictions on asset transfers) should be required because
CardiAQ did not suffer a “real-world” loss. In
light of the case law discussed above, these arguments are
insufficient to meet Neovasc's burden of proof to
demonstrate that no security should be required.
Therefore, in order to obtain a stay, Neovasc will be
required to post sufficient security to protect CardiAQ's
interest in the judgment during the pendency of the appeal.
The current restrictions on asset transfers, standing alone,
are not enough to secure the more than $90 million that
Neovasc owes to CardiAQ.
brief, CardiAQ proposed a variety of ways that Neovasc could
provide security, including pledging stock in its
subsidiaries, giving CardiAQ judicial liens against its real
property and intellectual property, allowing additional asset
restrictions, and instituting a Mareva-style
injunction. Since the burden is on Neovasc to offer adequate
security to entitle it to a stay, the Court will allow
Neovasc to submit a reply brief setting forth what it will
offer as security. The Court notes that CardiAQ's
suggestions generally appear reasonable. In addition, Neovasc
might consider offering a bond for less than the full amount
of the judgment. Neovasc must submit its reply brief
detailing the security it can offer (or declining to do so)
by December 12, 2016.
Correction of Inventorship
addition to the monetary judgment, the Court also ordered
that Dr. Quadri and Mr. Ratz be added as inventors of the
‘964 patent. CardiAQ correctly points out that none of
Neovasc's arguments in support of its motion to stay
relate to the correction of inventorship. The legal standard
to evaluate a motion for a stay of an injunction (which the
correction of inventorship is most similar to) is distinct
from the test for a stay of monetary relief.
Acevedo-Garcia, 296 F.3d at 16. The burden is on
Neovasc to demonstrate an entitlement to a stay, and Neovasc
has not done so. Furthermore, CardiAQ has ...