Articles

Stays Pending Appeal

August 01, 2005

by Thomas P. Murphy

Few areas of appellate procedure are as complex, or potentially significant, as the rules concerning stays pending appeal. The consequences of the failure to stay enforcement of a judgment or order pending appeal may be obvious. Absent a stay, for example, a successful appellant may be left with a mere right of action against an opponent that has already collected a money judgment. Less obvious may be an appeal’s impact on further trial court proceedings and the availability of trial court remedies. In Varian Medical Systems v. Delfino (2005) 35 Cal.App.4th 180, the California Supreme Court recently examined the rules governing what a trial court may do while an appeal is pending, and reached a surprising result.

Varian involved an appeal from a judgment for damages and injunctive relief based on derogatory Internet postings. Before trial, the defendants filed a motion to strike under California’s anti-SLAPP statute. The trial court denied the motion and the defendants appealed. On appeal from the judgment following trial, the appellate court affirmed, although it struck much of the injunction. The Supreme Court granted review to address whether the appeal from the denial of an anti-SLAPP motion resulted in an automatic stay of trial court proceedings

Code of Civil Procedure section 916 provides that “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” Certain exceptions to Code of Civil Procedure section 916 requiring the posting of an undertaking or other action to obtain a stay in most cases largely swallow this rule. However, once a stay is in place the trial court’s powers are restricted.

A stay prevents the trial court from rendering an appeal futile by altering the appealed judgment or order. Thus, an appeal from a preliminary injunction prevents the trial court from modifying or dissolving the injunction. Likewise, an appeal from the denial of a motion to compel arbitration stays further trial court proceedings on the merits.

However, a stay will not preclude trial court proceedings on “ancillary or collateral matters.” For example, a proceeding to expunge a lis pendens is collateral to an appeal from a judgment in the underlying action. Appeals from judgments do not stay proceedings on attorneys’ fee motions. An appeal from the denial of a preliminary injunction will not stay trial court proceedings on the merits.

In Varian, the Supreme Court held that the matters tried were embraced in and affected by the appeal from the denial of anti-SLAPP motion and that, once that appeal was filed, the trial court could not reach the merits. Accordingly, the Court reversed the judgment and remanded the case for a new trial. It thus undid a determination on the merits absent a showing of error at trial. Mindful that its decision might encourage misuse of anti-SLAPP motions to delay, the court deferred such considerations to the Legislature—although it suggested that prompt resolution of SLAPP issues “hopefully” would “somewhat reduce the risk of abuse.”

Given the consequences if enforcement of a judgment or order is not stayed, counsel must study the stay rules carefully. Counsel must also consider the effect that a stay may have on further trial court proceedings and whether an appeal will render a useful trial court remedy unavailable.

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Thomas Murphy, Berliner Cohen senior attorney, has over twenty-two years of experience in representing a variety of clients from individuals to large, publicly-traded corporations in appellate and extraordinary writ proceedings in state and federal courts, and in litigation involving commercial, intellectual property and real estate matters.  He also represents clients in intellectual property protection matters, including copyright and trademark counseling, registration, maintenance and enforcement, conveyance and licensing of intellectual property, and specialized agreements regarding intellectual property rights.  For more information, please contact Mr. Murphy at thomas.murphy@berliner.com

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