The Post Judgment Request for Prejudgment Interest: When is a Final Decision Final?

Abstract

This article previews the issues and arguments in Osterneck v. Ernst and Whitney, on the Supreme Court’s 1988-89 appellate docket. The Supreme Court must decide whether a post-trial request for the award of prejudgment interest constitutes a motion to alter or amend the judgment, rendering an earlier notice of appeal untimely and ineffective.

In federal court, a series of interrelated rules and statutes strictly governs how much time a party has in which to bring an appeal after the jury has returned its verdict and the court has entered a judgment. The general rule is that an appeal must be "timely taken" from a final decision or else the party forfeits its right of appeal. Thus, knowing when a decision is final is crucial to giving proper notice of appeal and thereby preserving procedural rights.

The general problem of giving a timely notice of appeal is complicated by an array of possible post-trial motions, among them a motion to alter or amend the judgment. If a party files this request, then the judgment will not become final until the court rules on the motion. Once the court has ruled, then the party who wishes to appeal must file a new and timely notice of appeal. Conversely, if a notice of appeal was filed prior to a litigant's motion to amend a judgment, then the court's subsequent ruling on the motion renders the earlier notice ineffective as a basis for appeal.

In the last 15 years, the lower federal courts have been bedeviled by this highly technical problem concerning exactly when a judgment should be considered final for appeal purposes. In particular, the courts have struggled to determine whether certain post-trial requests are the equivalent of a motion to alter or amend a judgment that would render an earlier notice of appeal ineffective. Last term, in two separate cases, the Supreme Court decided that a post-trial request for attorney fees and costs did not constitute a motion to amend the judgment.

This term the Court will have to determine whether a post-judgment request for prejudgment interest is analogous to a motion for attorney fees and costs, or whether it is distinguishable from those post-trial motions.The Court in Osterneck will now have to determine whether the bright-line rule concerning attorney fees applies to a post-judgment request for prejudgment interest. If the Court indeed eschews an inquiry into the status of the request as merit or nonmerit-related, then it may simply rely on its "collateral to and separate from the judgment" test.

At any rate, the Court must resolve the conflict among the circuit courts of appeals with regard to the appropriate characterization of prejudgment interest. The 10th Circuit has held that prejudgment interest is part of a damages award and is therefore intrinsic to the merits of the underlying action, and not "collateral" in the same sense as attorney fees. The 9th Circuit, on the other hand, has held that prejudgment interest is a collateral issue that cannot be decided until there is a final judgment on the merits.