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ORSHAN v. MACCHIAROLA

February 28, 1986

DR. H. ALLEN ORSHAN, Plaintiff,
v.
FRANK J. MACCHIAROLA and THE BOARD OF EDUCATION OF THE CITY OF NEW YORK, Defendants



The opinion of the court was delivered by: NEAHER

MEMORANDUM AND ORDER

NEAHER, District Judge.

 This case is before the Court for determination of two issues: (1) the rate or rates of prejudgment interest to be applied to the award of $68,000 to plaintiff and (2) his application for attorneys' fees pursuant to 42 U.S.C. § 1988 and an award of costs.

 I.

 In its prior order of April 5, 1985 the Court requested the parties to brief the issue of the rate or rates of prejudgment interest applicable to the judgment entered September 28, 1983. After the denial of post trial motions, that judgment was entered upon a jury verdict which awarded $38,000 to plaintiff in economic losses and $30,000 in noneconomic losses. Orshan v. Macchiarola , 570 F. Supp. 620, 623 (E.D.N.Y. 1983).

 Before addressing the applicable rate, defendants ask the Court to strike the award of prejudgment interest. They rely on Newburgh Land & Dock Co. v. Texas Co., 227 F.2d 732, 735 (2d Cir. 1955), where Judge Learned Hand stated,

 "It is the federal law that in actions at law when the award of interest rests in discretion, it is the jury who must exercise it, (footnote omitted) and it follows that we may not remand the case to the judge, but that we must modify the judgment by striking out the award of interest, and direct judgment to be entered for the amount of the verdict only."

 This case was followed by Hertz v. Graham, 292 F.2d 443, 449 (2d Cir. 1961), where the Court remanded the case for the limited purpose of submitting the issue of prejudgment interest to a jury. Unlike Hertz, plaintiff's failure to ask the Court to submit the issue of prejudgment interest to the jury cannot be attributed to a change in the law effected by the Court of Appeals. Plaintiff's silence, however, which may well not be considered a waiver, see Mallis v. Bankers Trust Co., 717 F.2d 683, 693-94 (2d Cir. 1983), but see Robinson v. Watts Detective Agency, 685 F.2d 729, 742 (1st Cir. 1979), pales in the face of defendants' silence. Defendants raise this point, for the first time, despite having had an opportunity to submit appropriate jury instructions, object to the jury charge, move for a new trial and seek, pursuant to Fed. R. Civ. P. 60(b), to vacate a judgment which they cannot appeal. Orshan v. Macchiarola , 105 F.R.D. 534 (E.D.N.Y. 1985) (discussion therein). Whatever merit this argument may have had at some earlier point in the proceedings, see Segal v. Gilbert Color Systems, Inc., 746 F.2d 78, 84 (1st Cir. 1984), it is no longer viable. See Scola v. Boat Frances R., Inc., 618 F.2d 147 (1st Cir. 1980) (discussion therein); see also Cardillo by Cardillo v. United States, 767 F.2d 33, 35 (2d Cir. 1985); cf. In Re Frigitemp Corp., F.2d (2d Cir. January 15, 1986); Goodman v. Heublein, Inc., 682 F.2d 44, 47 n. 2 (2d Cir. 1982); Cibro Petroleum Products Inc. v. Sohio Alaska Petroleum Co., 602 F. Supp. 1520, 1565 n. 59 (S.D.N.Y. 1985).

 Defendants also contend that the $30,000 awarded by the jury for emotional/mental distress is an unliquidated sum not subject to prejudgment interest and, therefore, the Court should strike its award of prejudgment interest on that sum.

 "In a proceeding involving unliquidated damages, such as the resent case, the decision whether to award prejudgment interest is committed to the sound discretion of the district court."

 Feather v. U.M.W. of America, 711 F.2d 530, 540 (3d Cir. 1983) (citing Lodges 743 and 1746, etc. v. United Aircraft Corp., 534 F.2d 422, 445-47 (2d Cir. 1975), cert. denied, 429 U.S. 825 (1976)); accord Stern v. Shouldice, 706 F.2d 742, 747 (6th Cir.), cert. denied, 464 U.S. 993, 104 S. Ct. 487, 78 L. Ed. 2d 683 (1983); see also General Motors Corp. v. Devex Corp., 461 U.S. 648, 103 S. Ct. 2058, 2061-62, 76 L. Ed. 2d 211 (1983) (rejecting the common law distinction between liquidated and unliquidated claims in the award of prejudgment interest pursuant to 35 U.S.C. § 284 in patent infringement cases). Moreover, to grant defendants' request would require amendment of a judgment, see Stern v. Shouldice, supra, which is no longer procedurally available. See Scola, supra. As a result, and in accord with the prior order, 105 F.R.D. at 542, the Court will turn to the rate of prejudgment interest.

 In its charge the Court instructed the jury on multiple elements of damage applicable to a single federal cause of action. Orshan, supra, 105 F.R.D. at 535; Orshan, supra, 570 F. Supp. at 622; Transcript of jury charge, March 24, 1983. Here, unlike Wojtkowski v. Cade, 725 F.2d 127, 129 (1st Cir. 1984), there are no pendent state claims which might be subject to prejudgment interest under the law of New York.

 In federal question cases, absent statutory directive, the rate of prejudgment interest is left to the Court's discretion. Citizens Savings Bank v. Bell, 605 F. Supp. 1033, 1047 (D.R.I. 1985); Donovan v. Freeway Construction Co., 551 F. Supp. 869, 881 (D.R.I. 1982); see E.E.O.C. v. County of Erie, 751 F.2d 79, 82 (2d Cir. 1984); Norte & Co. v. Huffines, 416 F.2d 1189, 1192 (2d Cir. 1969), cert. denied sub nom. Muscat v. Norte & Co., 397 U.S. 989, 25 L. Ed. 2d 396, 90 S. Ct. 1121 (1970) (per curiam). Obviously, therefore, the Court of Appeals' approval of the adjusted prime rate of interest, 26 U.S.C. § 6621(c), as within the trial court's discretion in County of Erie, supra, does not preclude reference to the post judgment "Treasury bill" rate of interest specified in 28 U.S.C. § 1961(a). See E.E.O.C. v. Wooster Brush Co., etc., 727 F.2d 566, 579 (6th Cir. 1984).

 Initially, plaintiff requested the rate pursuant to § 1961(a), but in light of County of Erie, he asks for the adjusted prime rate. Relying on 42 U.S.C. § 1988, defendants contend that the rate should be as prescribed by N.Y.Gen.Mun. Law § 3-a. Their reliance is misplaced, however, because, as is apparent from 26 U.S.C. § 6621, 28 U.S.C. § 1961, and the above cited case law, there is no lack of suitable remedies under federal law requiring the Court to look to New York law to compensate plaintiff adequately and fairly. Not unsurprisingly, in light of the court's discretion, a search of relevant reported decisions reveals prejudgment interest rates of 10%, Whittlesey v. Union Carbide Corp., 35 F.E.P. Cases 1085, 1088 (S.D.N.Y. 1983), aff'd on other grounds, 742 F.2d 724 (2d Cir. 1984), 10.58%, Robertson v. Doctors Hospital, 570 F. Supp. 663, 33 F.E.P. Cases 785, 788 (E.D.Ark. 1983), the rate in accordance with 28 U.S.C. § 1961, Mother Goose Nursery Schools, Inc. v. Sendak, 591 F. Supp. 897, 915 (N.D.Ind. 1984), the applicable rate(s) in accordance with state law, Stertz v. Gulf Oil Corp., 616 F. Supp. 136, 138 (E.D.N.Y. 1985); Donovan, supra, and the adjusted prime rate, Marshall v. Burger King Corp., 509 F. Supp. 353, 356 (E.D.N.Y. 1981). Faced with myriad possibilities and alternatives, one court was moved to state,

 "This nearly indecipherable morass convinces the Court that the prudent and fair course is to follow Donovan [v. Carlough, 581 F. Supp. 271, 273 (D.D.C. 1984)], and award simple interest at the 6% rate [pursuant to D.C. Code Ann. § 28-3302]."

 Foltz v. U.S. News & World Report, Inc., 613 F. Supp. 634, 648-49 (D.D.C. 1985).

 Defendants attempt to avoid County of Erie by emphasizing that the Court limited its indorsement of the appropriateness of the adjusted prime rate to a back pay award, a liquidated sum. They argue that the $30,000 awarded for noneconomic losses was unliquidated, hence County of Erie supports their contention that this Court's award of prejudgment interest on that portion of the recovery is ...


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