A class settlement was reached in a case against Honda alleging that odometers overstated actual mileage. Several class members objected on disparate grounds, including that the settlement provides no compensation to class members who sold or traded their vehicles. The district court overruled this objection, and required any objector who appealed to post a bond for costs on appeal of $150,000. The U.S. Fifth Circuit Court of Appeal reduced the bond to $1,000. “The settlement agreement makes no provision for the payment of pre-judgment interest on the benefits Honda has agreed to pay, and the settlement does not become effective, by its terms, until any appeals are concluded.” In addition, while the Federal Rules of Appellate Procedure permit a court of appeals to award damages and costs for a frivolous appeal, “there is no provision in the rules of procedure for a district court to predict that an appellate court will find an appeal frivolous and to set a bond for costs on appeal based on an estimate of what ‘just damages’ and costs the appellate court might award.” Finally, the court recognizes that “there are competing, significant interests when an objector appeals a proposed class settlement. In some circumstances objectors may use an appeal as a means of leveraging compensation for themselves or their counsel. The detriment to class members can be substantial. On the other hand, imposing too great a burden on an objector’s right to appeal may discourage meritorious appeals or tend to insulate a district court’s judgment in approving a class settlement from appellate review. However, the circumstances of the present case do not require us to consider the extent of a district court’s authority to address these considerations.” See Vaughn v. American Honda Motor Company, No.07-41056, 2007 WL 3182068 (5th Cir. Oct. 31, 2007).
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