United States District Court, W.D. Wisconsin
OPINION AND ORDER
D. Peterson, District Judge.
near the end of a long case, we must tally some additional
amounts owed to the prevailing plaintiffs. The main question
before the court is the date on which pre-judgment interest
ends and post-judgment interest begins. Such apparently
simple questions have a way of getting complicated in patent
cases, and the parties were not satisfied with their opening
briefs. So plaintiffs ask the court to accept a reply, Dkt.
815, and defendants ask for a sur-reply, Dkt. 817. The court
will accept all the briefs, although they add little of
substance to the analysis.
prevailed at trial, and the jury awarded damages in the form
of a reasonable royalty of $5, 443, 484.61. The court entered
judgment on this verdict on October 15, 2015. Dkt. 580.
Defendants would like this to be the date on which
pre-judgment interest ends.
October 2015 judgment didn't stand for long, because the
court granted defendants' motion for judgment as a matter
of law that the patents-in-suit were invalid. Dkt. 706. Both
sides appealed: plaintiffs wanted to overturn the ruling that
the patents were invalid and defendants wanted a new trial on
damages. Plaintiffs won both points on appeal. Ultratec,
Inc. v. Sorenson Commc'ns, Inc., 733 Fed.Appx. 535
(Fed. Cir. 2018). So the Federal Circuit decision, issued May
18, 2018, effectively reinstated the jury's verdict.
Defendants contend that the Federal Circuit decision on the
damages issues confirms that the October 2015 judgment
correctly ascertained plaintiffs' damages, and thus
October 15, 2015, is the date on which pre-judgment interest
base their argument on Kaiser Aluminum & Chem. Corp.
v. Bonjorno, 494 U.S. 827, 835 (1990). The important
point in Kaiser Aluminum for our purposes is that a
judgment for damages that has been wholly reversed does not
correctly ascertain the amount of damages and it therefore
does not mark the end of pre-judgment interest. Defendants
argue, reasonably, that Kaiser Aluminum also implies
that a judgment for damages that correctly ascertains damages
does indeed mark the end of pre-judgment interest. On
defendants' calculation, pre-judgment interest would be
counterargument is that the October 2015 judgment does not
fully ascertain damages because plaintiffs are entitled to
more: specifically an award of supplemental damages and the
pre-judgment interest itself. So, plaintiffs' argument
goes, the October 2015 judgment does not fully ascertain
plaintiffs' damages, and plaintiffs are entitled to
pre-judgment interest until the court enters a truly final
judgment with all elements of plaintiffs' damages
included. On plaintiffs' calculation, pre-judgment
interest would be more than $1.8 million and counting.
invoke the principle that a judgment is not final for appeal
purposes unless it incorporates all components of damages to
be awarded by the court, including pre-judgment interest.
See, e.g., Pace Commc'ns, Inc. v. Moonlight Design,
Inc., 31 F.3d 587, 591 (7th Cir. 1994). Sometimes this
means that pre-judgment interest will continue to accrue
while the court considers the parties' submissions on
supplemental damages and pre-judgment interest. Because the
pre-judgment interest rate is typically higher than the
post-judgment rate, the extended accrual of pre-judgment
interest can result in a windfall for a prevailing plaintiff,
as this court observed in e2 Interactive, Inc. v.
Blackhawk Network, Inc., No. 09-CV-629-SLC, slip op. at
2-3 (W.D. Wis. Dec. 6, 2012). Defendants also invoke
decisions dealing with the finality of judgments. They argue
that when the calculation of pre-judgment interest is a
ministerial or mechanical task, a judgment is final even if
it does not include pre-judgment interest. See Prod.
& Maint. Employees' Local 504 v. Roadmaster
Corp., 954 F.2d 1397, 1401 (7th Cir. 1992). But whether
the October 2015 judgment is a final judgment for purposes of
appeal is not the issue, so these cases are not helpful.
question here is whether pre-judgment interest should accrue
during a lengthy appeal that ultimately upholds the
jury's verdict on damages. In arguing that it should,
plaintiffs rely on Cement Division, National Gypsum Co.
v. City of Milwaukee, 950 F.Supp. 904 (E.D. Wis. 1996),
aff'd 144 F.3d 1111 (7th Cir. 1998). That case
may be somewhat informative, but it is not squarely on point.
The case involved nearly two decades of litigation over a
shipwreck. At the point that matters to us, the district
court had denied the prevailing plaintiff's request for
pre-judgment interest. That decision was reversed in an
appeal to the Supreme Court, where the sole issue was
entitlement to pre-judgment interest. City of Milwaukee
v. Cement Div., Nat. Gypsum Co., 515 U.S. 189 (1995). On
remand, the district court awarded pre-judgment interest as
mandated, and, following Kaiser Aluminum, the
district court held that pre-judgment interest would accrue
until the district court entered an amended judgment that
included pre-judgment interest. Cement Division is
distinguishable because the original judgment was reversed on
appeal (unlike the judgment in this case), and the amount of
pre-judgment interest was the only component of damages
contested during that phase of the litigation. Cement
Division is an unusual case that would be a poor source
for a general rule about accruing pre-judgment interest after
also invoke AT&T v. United Computer Systems,
Inc., 98 F.3d 1206 (9th Cir. 1996), which was cited by
the district court in Cement Division. In
AT&T, the district court affirmed an arbitration
award for United Computer Systems and entered judgment on the
award in October 1991. The judgment was vacated pending
appeal, but the award was affirmed. On remand, the district
court entered a new judgment in March 1994, but allowed
pre-judgment interest only through the October 1991 judgment,
with post-judgment interest thereafter. The Ninth Circuit
reversed, relying on general equitable principles in the
absence of a clear rule. The Ninth Circuit acknowledged that
both the October 1991 and the March 1994 judgments adequately
ascertained United Computer Systems' damages, but allowed
pre-judgment interest through the second judgment for two
reasons. First, it was AT&T who requested that the
original judgment be vacated, so it was responsible for the
delay. Second, allowing pre-judgment interest at a higher
rate through the later judgment date “more fully
compensates” United Computer Systems for the time value
of the awarded amount during the appeal. The opinion in
AT&T suggests that a district court could
consider a broad range of equitable factors, but it reached a
result that would favor plaintiffs in this case.
cite several appellate decisions that point the other way.
For example, the First Circuit has stated the rule as
In general, where a first judgment lacks an evidentiary or
legal basis, post-judgment interest accrues from the date of
the second judgment; where the original judgment is basically
sound but is modified on remand, post-judgment interest
accrues from the date of the first judgment.
Cordero v. De Jesus-Mendez, 922 F.2d 11, 16 (1st
Cir. 1990). This approach has been endorsed by a district
court in the Seventh Circuit. See C.R. Bard, Inc. v. M3
Sys., Inc., 120 F.Supp.2d 1145, 1150 (N.D. Ill. 2000);
see also Transmatic, Inc. v. Gulton Indus. Inc., 180
F.3d 1343, 1349 (Fed. Cir. 1999) (applying Sixth Circuit law
and holding that post-judgment rather than pre-judgment
interest accrued during interim period from time of first
judgment, which was appealed and remanded by Federal Circuit
for clarification of the grounds for the award, and the time
of a second, identical judgment supported by additional
district court findings); Indu Craft, Inc. v. Bank of
Barcoda, 87 F.3d 614, 619-20 (2d Cir. 1996)
(post-judgment interest ran from date of original district
court judgment, not appellate court's reinstatement of
judgment after trial court's alteration; original
judgment was supported by evidence and was ascertained in a
rule as stated in Cordero appears to be the majority
rule regarding the accrual of pre-judgment interest after
remand, but the analytical framework that the Ninth Circuit
applied in AT&T is not in direct conflict with
it. So the question here is whether the October 2015 judgment
is “basically sound” even though it will be
modified on remand to add pre-judgment interest and
supplemental damages. In answering this question, the court
can consider pertinent equitable factors.
case, the court set the rate of pre-judgment interest at six
percent, as requested by plaintiffs. Dkt. 788. Plaintiffs
argued for the lowest rate actually paid by defendants for
unsecured debt, to reflect a market assessment of
defendants' relatively high risk of nonpayment.
Id. at 13. Promptly after judgment, defendants
posted a supersedeas bond to secure payment of the judgment,
Dkt. 587, which the court approved the next day, Dkt. 590.
After the bond was approved on October 22, 2015, plaintiffs
were no longer at any risk of nonpayment, so there is no
persuasive reason to calculate interest on the damage award
at an elevated rate for ...