When a class action settlement is objected to and subsequently approved by the court, objectors sometimes appeal, which can substantially delay the settlement process including distribution of settlement funds to class members. To mitigate the risks and costs of such delays, parties to the settlement can ask the court to require objectors to post an appeal bond. This was successful in a recent case decided by the U.S. Court of Appeals for the Sixth Circuit.
In re East Palestine Train Derailment, – F.4th –, 2025 WL 3089606 (6th Cir. Nov. 5, 2025), involved a train derailment in Ohio resulting in the release of toxic chemicals. Property owners in the area brought a class action, and the railroad agreed to pay $600 million for a class settlement. Five class members objected, raising concerns about the notice and adequacy of evidence used to evaluate the settlement, and appealed the order approving the settlement. The settling parties requested, and the district court imposed, an appeal bond of $850,000 to cover anticipated administrative costs due to the delay caused by the appeal, along with taxable expenses.
The objectors failed to timely post any portion of the bond. Instead, they filed a motion in the Court of Appeals seeking to reduce or eliminate the bond, but without filing a motion for a stay or a timely notice of appeal from the order requiring the bond. The Sixth Circuit explained that the objectors would not have prevailed on a motion for stay because they were not likely to succeed on the merits and did not face irreparable harm where they could have appealed the bond order. The objectors also failed to file a timely motion in the district court to extend the time to appeal the bond order (they filed a motion that was late by one day). Neither the district court nor the Sixth Circuit could extend the time to appeal the bond order because the 30-day period had run.
The Sixth Circuit further concluded that it was appropriate to dismiss the objectors’ appeal from the settlement (which was timely) because the objectors failed to timely post the required bond. Dismissal of the appeal was appropriate because: (1) the delay in disbursement of the settlement funds substantially prejudiced the class; (2) the objectors had no valid justification for failing to pay at least a portion of the required amount even if they were unable to pay the entire bond; and (3) the objectors were unlikely to succeed on the merits of their appeal from the settlement because the settlement notice was adequate and the terms appeared to be reasonable.
Seeking an appeal bond may be a practical and effective strategy for parties to a class action settlement. It protects the interests of the class and settling defendant(s), deters meritless appeals, and ensures that objectors are serious and prepared to bear the costs of delay