Appellate Procedure,  Damages,  Decision on Appeal,  Federal Procedure,  Judgment,  Remittitur/Mandate

A “Cautionary Tale” on Post-Judgment Interest when Court of Appeals Directs Entry of Money Judgment

It’s always frustrating when you have to litigate over issues stemming from a court’s failure to do something that it should have done or even was required to do. Just ask the Oakland Raiders, who saw their new trial order reversed because the trial judge’s order did not satisfy the Code of Civil Procedure. The issue also arises in California courts where the trial court fails to rule on objections to evidence in the context of a summary judgment motion. The consequences of such failure have been discussed on a number of blogs recently, and The Appellate Practitioner has an excellent post regarding the Supreme Court’s recent grant of review in a case on that issue.

In Planned Parenthood v. American Coalition, case no. 06-35733 (Feb. 11, 2008), we see an example in the context of a federal requirement; specifically, where the Federal Rules of Appellate Procedure impose an obligation ot the Court of Appeals and the court fails to honor it.

The rule at issue is FRAP 37(b), which provides that “[i]f the court modifies or reverses a judgment with a direction that a money judgment be entered in the district court, the mandate must contain instructions about the allowance of interest.” In a previous appeal in the case, the Ninth reversed a punitive damages award as violative of due process and remanded for retrial unless the creditors accepted the judgment with a reduced punitive damages component, but the court failed to include in its mandate the date on which interest started to accrue on the judgment. The trial court entered a new judgment allowing for accrual of post-judgment interest as of the date of the original judgment.

The Ninth holds that failure to specify a judgment accrual date where required by FRAP 37(b) precludes a district court from entering the newly mandated judgment with interest accruing from the date of the original judgment. Interest accrues from the date where the amount of the judgment is “meaningfully ascertained.” and this ordinarily means the date of the mandate from the Court of Appeals if the mandate directs entry of a money judgment different from that in the original judgment.

Here, however, the judgment creditors get interest from the date of the original judgment in any event. The court recognizes that its omission was inadvertent and that despite the reduction in punitive damages on remand, the creditors’ right to interest on the reduced amount had been “meaningfully ascertained” in the original trial. Accordingly, it exercises its right to find out more and recall its prior mandate and amends it to include interest from the date of the original judgment.

That said, the court makes clear that it is affording this courtesy only because its prior jurisprudence was unclear, and that litigants should treat this case as a cautionary tale:

Henceforth, we expect that litigants in this circuit will clearly understand that if we modify or reverse a judgment with a direction that a money judgment be entered in the district court, our mandate must contain instructions about the allowance of post-judgment interest. Fed. R. App. 37(b). If our mandate omits such instructions, a party that believes it is entitled to interest from a date other than the date of entry of judgment on remand must expeditiously seek reform of the mandate.

Professor Martin calls this “an entirely just and equitable opinion.” I think that’s correct. But keep the court’s caution in mind.

I think a federal court litigant in this situation can have much more peace of mind than a party in a California case involving a new trial or summary judgment situation mentioned above. A party can expect a ruling one way of the other on a motion to recall and amend the mandate. Pleas to California trial courts to rule definitively on evidentiary objections often fall on deaf ears. And a party seeking a new trial is prohibited from doing too much to facilitate the trial court’s compliance with new trial procedures. Nonetheless, this greater peace of mind only applies if the party remembers to “expeditiously seek reform of the mandate.”