Opinion ID: 2507746
Heading Depth: 4
Heading Rank: 5

Heading: Prejudgment and postjudgment interest awards

Text: The Municipality asserts that the trial court incorrectly calculated the interest on Gregg's damages. The FMLA specifically allows for an award of interest on lost wages. [45] Under Alaska law, prejudgment interest is a substantive right of an injured party. [46] The ordinary rule is that when suit is brought in state court under a federal statute, the substantive provisions of federal law govern the action. [47] For this reason, prejudgment and postjudgment interest calculations on FMLA claims should be decided under federal law. [48] Precedent interpreting the interest award provision of the FMLA is sparse. [49] Generally, the rate of federal prejudgment interest is at the discretion of the trial court, with the goal of fairly compensating the plaintiff. [50] The date when prejudgment interest accrues, unlike under our own statute, is also at the discretion of the court with the same aim in mind. [51] Postjudgment interest is specifically provided for by statute. Under 28 U.S.C. § 1961, postjudgment interest shall begin at the date of entry of judgment and be set at a floating market rate. [52] After considering the memoranda of the parties, the court found that federal law should determine the interest on Gregg's judgment, rather than Alaska statute. The court concluded that it should calculate prejudgment interest at a variable yearly rate from the date of Gregg's termination until the beginning of trial, and that postjudgment interest should commence at the date of trial. In setting the rate of postjudgment interest, however, the court found that the rate set by AS 09.30.070 should govern. The Municipality argues that the court incorrectly calculated prejudgment interest because under Alaska law prejudgment interest accrues from the day the defendant receives notice of the complaint. [53] But here federal law applies and the timing of prejudgment interest is at the court's discretion. Even under our own statute, we have held that when the plaintiff claims economic damages, prejudgment interest should commence upon the date of injury. [54] It was within the court's discretion to decide that Gregg's award of back pay and prejudgment interest should begin on April 11, 1997, the date she was constructively discharged. Next, the Municipality argues that postjudgment interest should have begun upon final judgment, rather than at the commencement of trial as the superior court decided. It suggests that a final, appealable judgment is a clear demarcation line, rather than the arbitrary date chosen by the trial judge. The court decided that because of the facts of the case and nature of the damages expert's testimony, that the date of final judgment was an arbitrary date, and chose the approximate date the trial began instead. Since federal law governs Gregg's award of damages, postjudgment interest should have been calculated from the date specified in 28 U.S.C. § 1961: [postjudgment] interest shall be calculated from the date of the entry of the judgment. Under the plain terms of the federal statute the Municipality is correct: the obligation to pay postjudgment interest only arises after the court renders final judgment. Similarly the rate of postjudgment interest should be the floating market rate prescribed by 28 U.S.C. § 1961. We therefore remand for the trial court to recalculate Gregg's postjudgment interest from the date of final judgment. [55]