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Second Circuit Denies Motion for Prejudgment Interests, Costs Where Filed Untimely

John Austin – March 31, 2017

Late last month, the Second Circuit Court of Appeals denied a prevailing plaintiff’s request for prejudgment interest and costs as untimely where the plaintiff failed to request interest and costs after its first appeal.

Tru‐Art Sign Company prevailed at a jury trial on its claims against defendant‐appellee Local 137 Sheet Metal Workers International Association for violations of § 8(b)(4) of the National Labor Relations Act, and the jury awarded Tru‐Art $650,000 in damages. On August 27, 2013, the district court entered judgment in favor of Tru‐Art with “no costs or fees awarded to either party.” Tru‐Art did not request interest or costs and it did not move to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). Local 137 thereafter appealed, arguing, inter alia, that the district court should have ordered a new trial on damages due to an excessive damages award. The Second Circuit affirmed the district court’s judgment as to liability, but vacated the damages on the basis that the award was “clearly excessive” because the evidence at trial only supported damages amounting to $440,000. The Second Circuit remanded for a new trial on damages and noted that, in the alternative, the district court could offer Tru‐Art the option of accepting a remittitur as to the damages found to be excessive. On October 8, 2014, Tru‐Art accepted a remittitur and, for the first time in the proceedings, filed a motion for costs and prejudgment interest.

On October 29, 2014, the district court entered a second judgment against Local 137 11 for $440,000—the amount that we had identified on appeal as appropriate. On the same day, Tru‐Art filed its motion for costs, prejudgment interest, and post-judgment interest.

On September 29, 2015, the district court denied Tru‐Art’s requests for prejudgment interest and costs. The district court found that an award of prejudgment interest was not appropriate, reasoning that there were no special circumstances warranting additional compensation and that such an award likely would overcompensate Tru‐Art. The district court also noted that Tru‐Art’s requests as untimely.

The Second Circuit agreed that the motion for prejudgment interest under Rule 59(e) should have been filed within 28 days of the first judgment entered on August 27, 2013. By failing to file for prejudgment interest at that time, Tru-Art waived its ability to seek that interest. The Second Circuit did distinguish between mandatory.

As for costs, Local Rule 54(d)(1) requires parties to file a motion for costs within 30 days of judgment. Here, counsel did not file for costs until October 8, 2014—49 days after the court had issued its mandate. Again, the court denied it as being untimely.

Even in the glow of a six-figure award, practitioners should be careful to carefully consider the entire order so that prejudgment interests and costs, which can be sizeable amounts, are not waived for failure to file timely motions.

John Austin is the principal at John Austin Law Firm in Raleigh, North Carolina.

John Austin – March 31, 2017