You filed suit in a state where you do not live, or your company sued somewhere it is not registered, and the defendant has moved for security for costs. Now the court wants a bond before the case can go forward. The good news: a cost bond is usually the smallest court bond you will ever deal with. The bad news: ignoring it can end your case.
A cost bond — also called security for costs — guarantees that if the plaintiff loses, the defendant can actually collect the court costs it is awarded.
Note the narrow scope. It covers costs: the items a court taxes against a losing party, such as filing fees, service fees, and transcript or record preparation. It does not cover the defendant's damages. Some statutes extend it to attorney's fees, but that is jurisdiction-specific, not a default.
The concern is collectability. If the plaintiff has no presence in the state, a defendant who wins may have to chase a few hundred dollars across state lines — which usually means not chasing it at all.
Out-of-state plaintiffs are the classic case, and several states say so directly in statute.
- New York. Under CPLR 8501(a), a defendant is entitled as of right to security where no plaintiff is a domestic corporation, a foreign corporation licensed to do business in the state, or a state resident.
- Nevada. NRS 18.130 lets a defendant demand an undertaking for costs from a plaintiff residing out of state or from a foreign corporation, filed within the time to answer.
- California. Code of Civil Procedure section 1030 allows a defendant to move for an undertaking when the plaintiff resides out of state.
These provisions have been tested. In Clement v. Durban, the New York Court of Appeals held that CPLR 8501 and 8503 do not violate the Privileges and Immunities Clause, reasoning that security-for-costs requirements are common nationwide and condition court access on a reasonable safeguard rather than barring it.
Non-residency is not the only hook. Several statutes reach corporate plaintiffs specifically. California's section 1030 applies where the plaintiff "resides out of the state, or is a foreign corporation." Minnesota's reaches an action begun by a plaintiff who "is a nonresident or a foreign corporation." New York frames it in the negative: a domestic or licensed foreign corporation falls outside CPLR 8501(a)'s as-of-right reach.
Some jurisdictions also reach representative plaintiffs: CPLR 8501(b) lets the court require security from assignees, trustees, and receivers.
Two cautions. Statutes carve out exceptions — Minnesota's does not apply to actions for wages or personal services. And some jurisdictions require more than status: under California's section 1030, the defendant must also establish a reasonable possibility that it will obtain judgment.
These statutes also get repealed. Florida's non-resident cost bond requirement, former section 57.011, was repealed effective July 1, 2016 by Chapter 2016-43, Laws of Florida. Check current law, not an old memo.
Compared with attachment, injunction, replevin, or appeal bonds, cost bonds are modest — often a few hundred dollars. Verified statutory figures:
- New York: $500 in counties within New York City and $250 in all other counties, with the court free to require more but not less.
- Nevada: an undertaking not exceeding $500, or a $500 cash deposit.
- Minnesota: a bond in the sum of at least $75.
California is the outlier: section 1030 ties the amount to the costs and attorney's fees the defendant is likely to incur, so the figure comes from the court's order rather than the statute.
Small penal sums generally mean simpler underwriting, but premium is never a flat percentage. Our overview of what a surety bond costs explains the variables, and Jurisco writes plaintiff bonds in every state.
This is the part that surprises people. Failure to post security for costs can stop or end a case, and the mechanism differs by state.
- New York: under CPLR 8502, all proceedings other than to review or vacate the order are stayed until security is given. If the plaintiff does not give security within thirty days, the court may dismiss the complaint on the defendant's motion and award costs.
- California: if the plaintiff does not file the undertaking within the time allowed — 30 days from service of the order, unless extended — the action shall be dismissed as to the defendant in whose favor the order was made.
- Nevada: thirty days after notice that security is required, on proof that no undertaking was filed, the court may order the action dismissed.
The pattern in many jurisdictions is a clock followed by dismissal, sometimes with a stay in between. Whether dismissal is mandatory or discretionary, and with or without prejudice, is a state-law question to ask your attorney before the deadline rather than after.
A cost bond can also appear on appeal, and it is not a supersedeas bond.
Under Federal Rule of Appellate Procedure 7, a district court in a civil case may require an appellant to file a bond or other security in any form and amount necessary to ensure payment of costs on appeal. Many states have an analogue — Utah's appellate rule sets a bond of at least $300, subject to increase on the appellee's motion, with exceptions including criminal cases and government appellants.
A supersedeas bond, by contrast, secures the judgment itself so collection is stayed during the appeal. An appeal cost bond might be a few hundred dollars; a supersedeas bond is sized to the judgment. If your real problem is stopping enforcement, start with our guide to appeal and supersedeas bonds.
No. In most jurisdictions the trigger is status — where you live, or where your company is incorporated — not the strength of your claim. In states like California that require a further showing, the court is assessing a "reasonable possibility" of a defense verdict early on, not predicting the outcome.
Often yes. Nevada expressly allows a $500 deposit in place of an undertaking. Whether cash is preferable depends on how long your money would be tied up.
There is no federal statute imposing a general non-resident cost bond at the trial level the way the New York, Nevada, and California statutes do. On appeal, FRAP 7 allows the district court to require a bond for costs. At the trial level, have your attorney check the district's local rules, which sometimes address security for costs directly.
A cost bond is a small obstacle with a large downside if you miss the deadline. Jurisco has written court bonds nationwide since 1987 and our staff is lawyer-trained — send us the order and we will tell you what your court needs. Start at our bond application page or call 1-800-274-2663.
This article is general information about surety bonds and court procedure, not legal advice.