Opinion ID: 698004
Heading Depth: 2
Heading Rank: 2

Heading: Choice of Rate for Post-Judgment Interest Accrual

Text: 7 Defendant contends that the district court erred in allowing post-judgment interest to accrue as provided by Kentucky law, at twelve percent, on the portion of the damages attributable to front pay and back pay. Defendant argues that interest should have accrued on the entire judgment at the federal rate. 8 Although we have not previously explicitly said so, we review the district court's decision on this issue de novo. 4 The choice between two potentially applicable interest rates is a purely legal question, and we review the determination of such questions de novo. E.g., Loudermill v. Cleveland Bd. of Educ., 844 F.2d 304, 308 (6th Cir.), cert. denied, 488 U.S. 946 (1988). Furthermore, we have, in addressing similar issues, sub silentio performed a de novo review. See, e.g., Bailey v. Chattem, Inc., 838 F.2d 149, 151-53 (6th Cir.), cert. denied, 486 U.S. 1059 (1988). Finally, other circuits have expressly held that district court decisions on analogous issues are reviewed de novo. E.g., Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1298 n. 24 (9th Cir.1984) (noting that de novo review is appropriate when the case requires interpretation of ... 28 U.S.C. Sec. 1961), cert. denied, 469 U.S. 1190 (1984). 9 We agree with defendant that federal courts exercising supplemental jurisdiction over state-law claims should apply the rate derived from Sec. 1961(a) to money judgments rendered for those state-law claims. The plain language of Sec. 1961(a) compels this result. The statute states, Interest shall be allowed on any money judgment in a civil case recovered in a district court.... Such interest shall be calculated [by a designated formula].... 28 U.S.C. Sec. 1961(a) (emphasis added). We decline to engage in the verbal gymnastics necessary to render Sec. 1961(a) inapplicable to judgments for state-law claims entertained by a federal court. 10 In further support of our holding, we note that we have reached the same conclusion in the closely analogous diversity context. Federal courts exercising diversity jurisdiction apply state substantive law but apply the post-judgment interest rate established in Sec. 1961(a). Chattem, 838 F.2d at 152. In fact, in Compressed Gas Corp., Inc., v. United States Steel Corp., 857 F.2d 346, 353 (6th Cir.1988), cert. denied, 490 U.S. 1006 (1989), a diversity case involving only state-law claims, we held that, although Kentucky law governed substantive issues, Sec. 1961(a) governed the accrual of post-judgment interest. With respect to Sec. 1961(a), there is no meaningful distinction between a judgment on a state law claim heard pursuant to supplemental jurisdiction and a judgment on a state-law claim heard pursuant to diversity jurisdiction. 11 Section 1961(a) governs the accrual of post-judgment interest for state-law claims heard under a federal district court's supplemental jurisdiction. The district court erred in ruling otherwise, and we therefore reverse and remand in order that the district court may revise the judgment to comply with our holding. 12