Grande’s Proposed Bond ‘Insufficient as a Matter of Law,’ Say Record Labels

After the court ruled July 25 that Grande Communications Networks needed to post a bond for the court to stay execution of the record labels’ $46.8 million copyright infringement judgment pending appeal (see 2307260048), Grande moved for approval of a $46.9 million supersedeas bond. But Grande’s proposed bond is “insufficient as a matter of law,” said the labels’ memorandum of law Tuesday (docket 1:17-cv-00365) in U.S. District Court for Western Texas in Austin in opposition. Grande is seeking to vacate a Nov. 3 jury verdict awarding UMG and other plaintiffs $46.8 million in damages resulting from Grande’s willful contributory infringement of 1,403 copyrighted works. Grande’s proposed bond doesn’t make the surety “immediately and unconditionally liable for the judgment” if Grande doesn’t prevail on appeal, said the memorandum. It says instead the surety will become liable only if Grande first fails to pay the judgment, it said. Imposing such a condition precedent on the surety’s liability fails to protect the labels’ security interest in their judgment “and is impermissibly vague about when the surety will become liable,” it said. Grande’s bond should instead state clearly that the surety is immediately liable for the judgment if Grande doesn’t prevail on appeal, but such liability “is obviated if Grande satisfies the judgment itself,” it said. The amount of Grande’s bond also doesn’t account for post-judgment interest, as is required in the 5th Circuit, it said. As a result, the bond as proposed fails to “sufficiently protect” the labels’ interests pending Grande’s appeal, it said. The court should deny Grande’s motion for approval of its supersedeas bond and stay of judgment “until the deficiencies in Grande’s bond are corrected,” it said.