696 F.

2d 1046

Dr. Harry KAPLAN, Appellant,

v.
Samuel HIRSH, Appellee.
No. 81-1789.

United States Court of Appeals,

Fourth Circuit.
Argued Jan. 4, 1982.
Decided April 23, 1982.

Jonathan J. Schraub, Washington, D.C. (George J. Shapiro, John J.

Prendergast, Ltd., Alexandria, Va., on brief), for appellant.
Matthew A. Clary, III, Clary & Pijor, P.C., Springfield, Va., on brief, for
appellee.
Before HALL and MURNAGHAN, Circuit Judges, and WILKINS, *
District Judge.
K.K. HALL, Circuit Judge:

Kaplan obtained a judgment against Hirsh in the district court for the District of
Columbia. Hirsh filed a timely notice of appeal but did not file a supersedeas
bond to stay execution on the judgment. Thereafter, Kaplan attempted to
register the judgment in the district court in Maryland, pursuant to 28 U.S.C.
Sec. 1963 which permits a judgment creditor to register his judgment in foreign
districts once it has become "final by appeal or expiration of time for appeal."
The Maryland district court refused to register the judgment, construing the
statutory language to mean that the mere pendency of an appeal precludes
registration in a foreign district. We disagree. For the reasons outlined below,
we conclude that a judgment on appeal is nonetheless "final" for purposes of
the registration statute unless the judgment debtor has filed a supersedeas bond
to stay execution.1

When an appeal is taken, execution on a money judgment may be stayed by

filing a supersedeas bond pursuant to Fed.R.Civ.P. 62(d) or Fed.R.App.P. 8.

The appealing party is not required to obtain a stay, but if he does not do so, the
creditor may proceed to execution on the judgment. Sterling v. Blackwelder,
405 F.2d 884 (4th Cir.1969); Moore's Federal Practice p 62.06, p 208.03.
3

Problems arise, however, when the creditor tries to execute his judgment in
another state. The question then is, how does the registration statute fit with the
Rules which require a supersedeas bond in order to stay a judgment pending
appeal?

At least one court has recognized the anomaly created when the statute is not
viewed in pari materia with the Rules:

5 [Rules] would permit a judgment creditor to levy against assets of his judgment
The
debtor, unless supersedeas bond were posted, while [28 U.S.C. Sec. 1963] would
prevent the same, bond or no bond.... There is no sense to be found in such an
incongruity, and in light of the policy in the federal courts against unsecured stays of
execution ... no justice either. (citations omitted)
6

I.T.T. Credit Co. v. Lawco, 86 F.R.D. 708, 712 (S.D.W.Va.1980).

If Sec. 1963 is not interpreted to require a supersedeas bond to stay execution,

then it creates an unconstitutional disparity in rights between judgment debtors,
depending on the location of their assets. A debtor whose property is within the
jurisdiction of the court must file a bond to avoid execution of a judgment
against him while he awaits the outcome of his appeal. Yet, if read without a
bond requirement, the registration statute would grant an automatic stay to a
debtor whose property is outside of the district when he files his appeal. If this
were the case, then the statute would deny equal protection of the laws to
debtors whose assets are within the district. We cannot countenance such an
interpretation.

Also, if a supersedeas bond is not required under Sec. 1963, the statute could
encourage a debtor to escape his creditor by merely filing an appeal, even on
frivolous grounds, and then transferring his property to another state. We do not
believe that Congress intended to open the way for debtors to abuse the
appellate process in this way.2

Finally, we believe that our construction of the finality requirement best serves
the overall design of Sec. 1963, which was intended to be a summary
enforcement mechanism, an aid to creditors. Admittedly, a judgment creditor
may be able to file an independent action on his judgment to gain enforcement

in foreign districts, depending on jurisdictional requirements.3 Such a suit upon

a judgment would result in a judgment upon a judgment; the facts litigated in
the first court are res judicata in the second. Bros, Inc. v. W.E. Grace Mfg. Co.,
261 F.2d 428 (1958);4 I.T.T. Credit Co. v. Lawco, supra. However, even if it is
available, this is an unnecessarily circuitous route. The registration statute
relieves creditors and debtors of the burden of litigating successive suits to a
virtually foregone conclusion. We should not interpret one ambiguous clause as
a restriction on the use of this abbreviated procedure.
10

Accordingly, the decision of the district court is reversed, 91 F.R.D. 106.

11

REVERSED.
MURNAGHAN, Circuit Judge, dissenting:

12

The panel majority adopts a construction of the registration of judgments

statute1 which is altogether inconsistent with the statutory language and
foreclosed by the legislative history. Since I am unable to reconcile the
language "final by appeal or expiration of time for appeal" and the statute's
history with the result reached by the majority, I dissent.

I.
13

My position, simply put, is that a judgment is not "final by appeal" if an appeal

is pending. Looking for the moment solely at the language of the statute, it is
difficult to contend otherwise. A judgment which may be vacated or reversed
by an appellate court is not "final" in the ordinary sense of the word,
irrespective of whether the appellant has posted a supersedeas bond. Such a still
contested judgment does not necessarily terminate or conclude the controversy.

14

The majority contends, however, that, where no bond has been filed, a
judgment is "final by appeal" notwithstanding a pending appeal. Implicit in its
opinion is the notion that what is relevant is not finality, but rather,
collectibility. If no bond has been posted, then the judgment has, perhaps, some
aspects of finality in the sense that it may be collected, although it may
subsequently be disturbed on appeal.

15

Still restricting the analysis to the statutory language, it is clear that finality
does not here refer to collectibility. In the first place, Congress could hardly
mean by finality a collection that would have to be paid back if the appeal
should ultimately succeed. In the second place, Congress said just the contrary.

The majority's reading is flatly contradicted by the statute's reference to

"expiration of time for appeal." A prevailing party can collect a judgment ten
days after it is rendered, unless a stay is obtained. F.R.Civ.P. 62(a). The statute
clearly provides, however, that registration in another district of the judgment,
even though it has become fully collectible through the expiration of ten days
and the failure to post a supersedeas bond or otherwise obtain a stay, is not
permitted until the thirty day period2 in which an appeal may be taken has run.
The majority's view thus leads to the conclusion that "final" in the statute
means what ordinary usage of the word "final" indicates for the first thirty days
after a judgment is rendered, but on day thirty-one it mystically acquires a
whole new meaning; the possibility of an appeal is the crucial factor for the
first thirty days, yet on the majority's theory collectibility abruptly becomes
paramount thereafter, even though the possible appeal has ripened into an actual
one. It is a startling approach to ascribe to Congress two quite different, and
indeed conflicting, meanings for the same clear statutory language, depending
on which of two different times during the proceedings is involved.
II.
16

The legislative history fully confirms that Congress did not intend to permit
registration while an appeal was pending. Because of uncertainty as to whether
substantive rights were affected, what had been proposed as Rule 77 for
inclusion in the new Federal Rules of Civil Procedure was instead enacted by
Congress. 3 See Reviser's Note to 28 U.S.C. Sec. 1963 ("This section follows
the recommendation of the Supreme Court's Advisory Committee on Federal
Rules of Civil Procedure (1937)...."). Congress did not materially change the
proposed rule, 4 and the rule's evolution in the Advisory Committee is
instructive.

17

Early drafts of the rule differed substantially from the rule adopted by the
Committee in that they proposed making collectibility, not finality of judgment,
the test. A 1936 draft provided in part:

18

Whenever any interlocutory or final order or judgment in personam shall be

rendered by any federal court ... such order or judgment, if still valid and
enforceable, may be registered in any other federal court ... and for the purpose
of enforcement or utilization it shall then be deemed to be, as of that date, an
order or judgment rendered by the court wherein it is registered....

19

....

20

If a stay of execution or a supersedeas bond or an injunction pending appeal is

20

If a stay of execution or a supersedeas bond or an injunction pending appeal is

not in force in the court which originally rendered the order or judgment, or if
the original order or judgment has not been set aside, vacated, or reversed, an
order or judgment registered with a district court may be enforced where
registered in the manner and under the circumstances provided for the
enforcement of an original order or judgment of such court....

21

Tentative Draft II, Rule A31 (January 15, 1936), in 3 U.S. Supreme Court
Advisory Committee on Rules for Civil Procedure, Materials 1934-1939, supra.
In the 1936 draft, once the judgment was registered, it could be enforced by the
court of registry unless a stay was obtained.

22

That concept was retained in a number of subsequent drafts, continuing until

April 1937. However, in 1937, the Chairman of the Advisory Committee on
Civil Rules, William D. Mitchell, proposed that Rule 77 be amended by
inserting the words "and which has become final by expiration of the time for
appeal or by mandate on appeal" in the first sentence after "court." William D.
Mitchell Amendments, in 13 U.S. Supreme Court Advisory Committee on
Rules for Civil Procedure, Materials 1934-1939, supra.5 The proposed
amendment was adopted, and the first sentence of the rule submitted to the
Supreme Court provided:

23judgment entered in any district court and which has become final through
A
expiration of the time for appeal or by mandate on appeal may be registered in any
other district court by filing therein an authenticated copy of the judgment.
24

Final Report of the Advisory Committee on Rules (November, 1937), in 14

U.S. Supreme Court Advisory Committee on Rules for Civil Procedure,
Materials 1934-1939, supra. The purpose of the amendment was succinctly and
unambiguously explained in an accompanying note:

25 Committee believed that a judgment should not be registered in another district

The
while there is any chance of modification on appeal.
26

Id. (emphasis supplied).

27

Thus, by permitting registration in the present case despite the pending appeal
and possible modification of the judgment, the majority has run against the
clear legislative intent and has resuscitated a rule which the Advisory
Committee had knowingly put to death.

III.

28

The majority argues that the literal interpretation of the statute would deprive
some judgment debtors of equal protection.6 The premise of the constitutional
argument is the assertion that a judgment debtor whose property is within the
district must file a bond to avoid execution pending appeal, while a debtor
whose property is outside of the district is granted an automatic stay, since his
creditor must file an independent action on the judgment and suffer the
attendant delay in order to collect the debt. 7

29

Yet the argument proves too much. Prior to the passage of 28 U.S.C. Sec. 1963,
the only way to enforce a judgment--even an altogether final one--in another
district was to bring an independent action. In the case of a debtor whose
property was located within the district where the judgment was rendered,
immediate execution was possible unless the debtor filed a bond, but debtors
whose property was located elsewhere than in the district where judgment was
entered benefited from the same "automatic stay" which the majority finds
unconstitutional. Then the "stay" pending obtention of an independent
judgment remained in effect even after appellate finality had occurred through
affirmance or by expiration of time for appeal.

30

The statute ameliorated the situation at that "finality" level. Congress, however,
decided not to extend the relief even further to encompass non-final but
collectible judgments. The half a loaf was better than none, and affords no
viable constitutional argument because its relief did not go as far as all creditors
would like. There are, after all, possible problems of docket clogging through
registrations in multiple districts, as well as harassment of some defendants.
Congress was constitutionally permitted to take such considerations into
account.

31

Indeed, if, as the majority argues, the delay which accompanies an independent
action creates an unconstitutional disparity in treatment of debtors, then the
procedure which, from the very formation of the United States, had always
existed prior to the passage of 28 U.S.C. Sec. 1963 was unconstitutional as
well. The majority's constitutional analysis thus leaves two alternatives. Either
the statute is of no significance, because it simply calls for a result which has,
in any event, in the total absence of any statute, always been constitutionally
mandated, or it is unconstitutional, in which case it should be held ineffective
rather than extended beyond its scope as written.8

32

The first result ignores well-founded notions of dual sovereignty which provide
the underpinnings of our judicial system. We should be very slow to pronounce
unconstitutional a fundamental concept on which the entire system is based. If a

judgment entered in one judicial district is indistinguishable from one entered in

another district, then similarly a complaint filed in one district should
automatically be capable of service nationwide. The implications for our
judicial system are staggering, and I respectfully submit that there is no
occasion here for the taking of so gigantic a step.
33

The second alternative resulting from the majority's analysis, on the other hand,
would cause us to revert to the circumstances in force prior to enactment of 28
U.S.C. Sec. 1963, and so would lead to denial of registration in the present
case--the result which I contend should be reached, not the result to which the
majority has come.

34

A sounder conclusion is that neither the prior procedure nor the procedure
under 28 U.S.C. Sec. 1963 is unconstitutional. There is, it is true, a slight
difference between the judgment creditor's access to execution in the district
where the judgment was rendered and the situation of that creditor in another
district. In the former district, he may move immediately to seek execution. In
the latter he may also do so, but only after first filing a suit on the judgment and
obtaining judgment on it, as to which no supersedeas bond has been filed.9

35

However, that does not indicate a difference in treatment of two persons. All
judgment creditors are treated just the same. They all have access to an
identical system in which direct action to obtain execution is possible in the
district where judgment has been rendered, and a new suit to judgment is
required in any other district where judgment has not been obtained and where
the creditor wants to effect collection through execution.

36

It simply does not wash to say that the creditor without a judgment in the
district where he wishes to effect collection must be allowed direct execution,
without judgment, simply because other creditors who do have judgments in
that district may do so. Constitutionally at least, it is not asking too much to
require every creditor first to secure a judgment of the district if he wishes to
collect before the case has become final by appeal.

37

The majority's constitutional analysis is also flawed in its implicit assumption

that a debtor with assets in the judgment-rendering district is so like unto a
debtor whose assets are elsewhere that identity of treatment for creditors
seeking to collect from him is required to achieve equal protection of the laws.
To the contrary, they are not identical. In light of our system of dual
sovereignty, under which the procedural rights of parties are often dictated by
geographical factors, it can hardly be contended that two debtors with assets in

different states are similarly situated.

38

Moreover, assuming that the statute should be viewed as authorizing disparate

treatment of similarly situated individuals, it would by no means follow that it
is unconstitutional. Absent a suspect classification or fundamental right, the
statute survives if it rationally furthers a legitimate governmental interest. E.g.,
San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 55, 93 S.Ct.
1278, 1308, 36 L.Ed.2d 16 (1973); McGinnis v. Royster, 410 U.S. 263, 270, 93
S.Ct. 1055, 1059, 35 L.Ed.2d 282 (1973). The legislative history indicates that
Congress wished to limit the availability of the procedural shortcut afforded by
the registration statute to cases where there is no possibility of reversal after
registration of and execution on the judgment. Were we vested with the
legislative power to determine whether the risk of reversal should or should not
warrant restricting the availability of registration, I might reach the result
preferred by the majority. Since our task is instead the limited judicial one of
determining whether there is a rational basis for the statute, I have no doubt that
the statute passes constitutional muster.10

39

For all those reasons, I dissent.

Honorable William W. Wilkins, United States District Judge for the District of
South Carolina, sitting by designation

We write on a relatively clean slate. We can find no circuit court opinion

directly addressing this question. In Bros, Inc. v. W.E. Grace Mfg. Co., 261
F.2d 428 (5th Cir.1958), the court, in dictum, noted a position contra to the one
we take today without any discussion. In Goldman v. Meredith, 596 F.2d 1353
(8th Cir.1979), the court merely noted that the clerk had refused to register a
judgment which had been appealed but not stayed. The court did not address the
propriety of the clerk's actions. Thus, this is virtually a question of first
impression at the circuit court level
Several district courts have considered the question either summarily or in
dictum. E.g., Goldsmith v. Midwest Energy, 90 F.R.D. 249 (N.D.Ohio 1980);
Lipton v. Schmertz, 68 F.R.D. 249 (S.D.N.Y.1974); Slade v. Dickinson, 82
F.Supp. 416 (W.D.Mich.1949). However, only two district courts appear to
have given this question more than cursory attention, Dorey v. Dorey, 77
F.R.D. 721 (N.D.Ala.1978) and Abegglen v. Burnham, 94 F.Supp. 484 (D.Utah
1950). We find Dorey to be the more carefully reasoned and persuasive of the
two.

The dissent argues that the registration statute was intended to be only "half a
loaf." Yet it is inconceivable that Congress would have intended to enact a
collection procedure which is nonetheless absolutely ineffective in a case where
the debtor avoids execution by systematically transferring his assets from state
to state. If Sec. 1963 were read to permit this type of maneuvering, then it made
no improvement on the separate judgment procedure which preceded its
enactment. Under this construction, the statute would not amount to half a loaf;
it wouldn't even be a crumb

An independent action is often not available as an alternative collection

procedure. This case is a perfect example. Hirsh could not be found in
Maryland where his property was located. As a result, Kaplan could not get
service of process on Hirsh in Maryland, and therefore could not institute a suit
to execute his District of Columbia judgment against Hirsh's assets in Maryland

Bros, Inc. held that a judgment until reversed was enforceable and therefore res
judicata. The Bros court, however, refused to take the next step, as we do
today, to hold that if a judgment is automatically enforceable as res judicata in
another court, then a suit on a judgment is a waste of time when summary
enforcement is available through the 28 U.S.C. Sec. 1963

28 U.S.C. Sec. 1963 provides in pertinent part:

A judgment in an action for the recovery of money or property now or hereafter
entered in any district court which has become final by appeal or expiration of
time for appeal may be registered in any other district by filing therein a
certified copy of such judgment. A judgment so registered shall have the same
effect as a judgment of the district court of the district where registered and may
be enforced in like manner.

The general rule requires that a notice of appeal from a district court judgment
be filed "within thirty days after the entry of such judgment." 28 U.S.C. Sec.
2107. There are, of course, exceptions. For example, in an action in which the
United States or an officer or agency thereof is a party, the time limit as to all
parties is sixty days. Id

There was concern among members of the Advisory Committee and other
attorneys that the rule might affect substantive rights, and therefore should be
enacted legislatively. The Advisory Committee determined that the rule was
procedural, but the Supreme Court disagreed, and left the rule for congressional
consideration. See, e.g., Memorandum in Support of Rule 77, 14 U.S. Supreme
Court Advisory Committee on Rules for Civil Procedure, Materials 1934-1939
(Papers of Edgar B. Tolman, University of Chicago Law School Library)

Rule 77 as proposed provided in pertinent part:

A judgment entered in any district court and which has become final through
expiration of the time for appeal or by mandate on appeal may be registered in
any other district court by filing therein an authenticated copy of the judgment.
Congress' deletion of the words "mandate on" evidently indicates that the
meaning of "final by appeal" was thought to be so clear that the reference to
issuance of the mandate to signify finality was redundant. Rule 77's pertinent
language following the deletion of "mandate on" consequently read "final
through expiration of the time for appeal or by appeal." That language is
substantially identical to the final statutory language of 28 U.S.C. Sec. 1963
providing "final by appeal or expiration of time for appeal."

It appears that the idea for the amendment was first suggested by D. Hadsell, a
practicing attorney from San Francisco, who wrote the committee on September
8, 1937:
[R]egistration of a judgment should not be permitted in another District Court
until it has become final in the District Court where rendered and that would
mean that each such registration could not occur until after there has been an
appeal, and the case had finally been decided on appeal, etc.
Letter from D. Hadsell to Advisory Committee on Rules for Civil Procedure
(September 8, 1937), in 13 U.S. Supreme Court Advisory Committee on Rules
for Civil Procedure, Materials 1934-1939, supra.

Since a federal statute is at issue, the Fourteenth Amendment has no

application. The majority no doubt relies on equal protection principles implicit
in the Due Process Clause of the Fifth Amendment. Bolling v. Sharpe, 347 U.S.
497, 74 S.Ct. 693, 98 L.Ed. 884 (1954)

The majority concedes, as it must, that extraterritorial execution can be

accomplished by the filing of an independent suit upon the judgment. See, e.g.,
Bros., Inc. v. W.E. Grace Mfg. Co., 261 F.2d 428, 433 n. 4 (5th Cir.1958);
Slade v. Dickinson, 82 F.Supp. 416, 418 (W.D.Mich.1949). See also 7B
Moore's Federal Practice Sec. 1963 at 853-54 (2d ed. 1981)

The majority's analysis implies that the Constitution requires that a judgment be
capable of registration ten days after it is entered, since at that point it becomes
collectible. The statute, however, would not permit registration until expiration
of the thirty day appeal period. Thus the majority must conclude that the statute
is unconstitutionally restrictive, and must extend it beyond its clear terms

The availability of extraterritorial execution refutes the majority's reliance on

F.R.Civ.P. 62(d) and F.R.App.P. 8. Those rules permit an appellant to obtain a
stay pending appeal by filing a supersedeas bond. The majority argues that if
the statute and rules are viewed in pari materia, registration must be permitted
unless a bond has been filed. On the contrary, if no bond is filed but an appeal
is pending, extraterritorial execution can be effectuated by filing an
independent action rather than by registration. The registration statute does not
circumvent the rules and permit a litigant to obtain a stay without filing a bond.
Only by filing a bond can a party prevent extraterritorial execution in the form
of an independent action

10

The majority does not raise the other supposed constitutional problems
discussed in Dorey v. Dorey, 77 F.R.D. 721 (N.D.Ala.1978). The conclusion in
Dorey that the statute, if interpreted literally, would violate the Privileges and
Immunities Clause, the Due Process Clause, the doctrine of separation of
powers, and the Full Faith and Credit Clause, does not withstand analysis. The
premise is the court's assertion that the statute, if interpreted literally, would "
[deprive] a final and fully enforceable judgment of a United States District
Court of its power outside the limited geographical area of the district within
which the judgment was obtained...." Id. at 725. Since extraterritorial execution
can be effected by the filing of an independent action, no judgment is deprived
of extraterritorial power, and there are no constitutional problems