Chattem, Inc. v. Bailey
Headline: Denial of review leaves appeals-court split over whether postjudgment interest runs from an original vacated judgment or a later reinstated judgment, affecting who gets interest on civil damage awards.
Holding: The Supreme Court denied review, leaving the Sixth Circuit’s ruling that interest can run from the original judgment date in this case intact, despite disagreement among other federal appeals courts about the federal law that sets postjudgment interest.
- Leaves an appeals-court split over postjudgment interest calculations unresolved.
- Some plaintiffs may get interest from the original vacated judgment date; others may not.
- Creates uncertainty for damages calculations and settlement negotiations.
Summary
Background
A person who sued another for fraud and breach of contract won a jury verdict and an award of money. That first judgment was later set aside by an appeals court because of problems with the jury instructions. After a second trial the plaintiff again won, with an even larger award, and that second judgment was affirmed on appeal. The plaintiff then asked the trial court to calculate postjudgment interest from the date of the original judgment instead of the later judgment.
Reasoning
The key question is simple: when a first judgment for a plaintiff is vacated but a later judgment again awards money, which date should be used to calculate postjudgment interest under the federal law that sets such interest? The trial court refused the plaintiff’s request, but the Sixth Circuit reversed and said interest should run from the original judgment date. Other federal appeals courts have disagreed, reading the law more narrowly and using only the later final judgment date.
Real world impact
Because the Supreme Court declined to review this case, the Sixth Circuit’s result stands in that circuit but the disagreement among circuits remains. Practically, plaintiffs in some parts of the country may receive interest from the earlier judgment date while plaintiffs elsewhere will receive interest only from the later judgment date, creating uncertainty for calculating damages and negotiating settlements.
Dissents or concurrances
Justice White dissented from the Court’s decision to deny review and argued that the Supreme Court should hear the case to resolve the conflict among the appeals courts over the correct reading of the federal interest statute.
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