February 11, 2008

Ninth Circuit Clarifies Rules for Accrual of Post-Judgment Interest After Appellate Reduction of Punitive Damages

The Ninth Circuit today released an opinion in Planned Parenthood v. American Coalition. The opinion was written by Judge Fisher and joined by Judges Leavy and Berson. The opinion begins:

"At what all surely must hope is the conclusion of this long running litigation, we must address an issue of some importance under Federal Rule of Appellate Procedure 37(b) relating to the award of post-judgment interest to the plaintiffs-appellees on the punitive damages judgment they obtained against the defendants-appellants. This is a cautionary tale for all whose judgments on appeal are subject to the requirements of Rule 37(b). In an earlier appeal, we reduced the punitive damages because we concluded they were excessive under the Supreme Court’s Due Process Clause jurisprudence. We accordingly directed the district court on remand to enter a judgment for the damage amounts we specified, assuming the plaintiffs opted not to have a new trial. Because our mandate did not contain instructions about the allowance of post-judgment interest as required by Rule 37(b), we are now called upon to decide whether the district court had the authority to award post-judgment interest from the date of its original judgment, as modified in its final judgment, or only from the date of that final judgment. We hold that our failure to specify the accrual date for post-judgment interest in our mandate precluded the district court’s order that interest would run from the date of the original judgment."
The court then finds that its failure to include the post-judgment interest was inadvertent and it recalled its mandate to provide for post-judgment interest from the date of the original judgment. The court cautioned in the future that Rule 37(b)'s rules regarding mandates will be followed and adhered to. This opinion provides a caution for lawyers to make sure they clearly remind the court to include such direction for awarding of post-judgment interest in the mandate when a judgment is reversed or no interest can be awarded by the district court.