Opinion ID: 447998
Heading Depth: 2
Heading Rank: 1

Heading: Post-Judgment Interest on Past Due Royalties.

Text: 10 We review de novo the district court's award of post-judgment interest. See Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1298 (9th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 963, 83 L.Ed.2d 968 (1985). 1 11 State law governs the interest rate on a judgment in a diversity case entered before October 1, 1982. 28 U.S.C. Sec. 1961 (1976); Turner v. Japan Lines, Ltd., 702 F.2d 752, 757 (9th cir.1983); Michael-Regan Co. v. Lindell, 527 F.2d 653, 659 (9th Cir.1975). When judgment was entered for ITC, the New York post-judgment interest rate was 9% per year. N.Y.Civ.Prac.Law Secs. 5003, 5004 (McKinney 1963 & Supp.1984). 12 Under New York law, the district court had no discretion to deviate from the 9% rate in awarding post-judgment interest. N.Y.Civ.Prac.Laws Secs. 5003, 5004; see also Two Clinton Square Corp. v. Computerized Recovery Systems, Inc., 84 A.D.2d 911, 912, 446 N.Y.S.2d 663, 664 (1981) (court has no discretion unless authorized by statute). The court erred by awarding interest in excess of 9%. 13 ITC advances several reasons why it should have post-judgment interest in excess of the 9% rate. None of the arguments is persuasive. 14 First, it argues that the actual rate should apply because Hamlin put the money in escrow rather than securing the judgment by a supersedeas bond. ITC suggests that the use of an escrow account constituted actual payment of the judgment and it is entitled to all accrued interest. 15 ITC cites no New York or federal law to support its argument. Although Federal Rule of Civil Procedure 62 provides that a supersedeas bond may be used to stay execution of a judgment pending appeal, the court has discretion to allow other forms of judgment guarantee. See, e.g., Poplar Grove Planting and Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir.1979) (substitute security permissible where debtors present financially secure plan). Neither Rule 62 nor common sense would indicate that an alternative method of guarantee is the equivalent of payment of judgment. 16 The escrow account is more analogous to a supersedeas bond than to actual payment of the judgment. The parties' agreement provided that the deposits were intended merely to secure the judgment and did not constitute an admission of liability. Hamlin's control over the fund's investment is further evidence that the escrow account was not intended as actual payment. 17 ITC also argues that its motion for a court-ordered account forced Hamlin to agree to the escrow account, which rendered the stipulation involuntary. ITC had moved the court to establish an account for past-due royalties. The court reserved judgment and the escrow account was established before it could rule on the motion. 18 There is no evidence that the court ever ruled on the motion or that Hamlin paid into the account because the motion was filed. ITC acknowledges that the escrow was created only by agreement of the parties. The funds were not deposited into the registry of the court or put under court control. Although its discretion was rather limited, Hamlin retained some investment control of the blocked trust account. 2 19 ITC finally contends that this is indistinguishable from interpleader cases where the actual interest rate applies. The escrow account was only court ordered pursuant to stipulation of the parties, and the parties did not intend it to be a stake in an interpleader action. 20