Simulnet East Associates v. Ramada Hotel Operating Co.

HUG, Circuit Judge:

The sole issue in this diversity action is whether the district court abused its discretion in requiring, on the eve of trial, a $500,-000 cost bond as a condition to proceeding to trial. The litigation had proceeded for three years without a demand for a cost bond. The district court granted defendants’ motion for a bond five days before trial. When the plaintiffs were unable to post the bond, the district court dismissed the action. We hold that this was an abuse of discretion, and we reverse.

i:

Simulnet is the successor in interest to several agreements to provide…