Opinion ID: 170933
Heading Depth: 2
Heading Rank: 3

Heading: Federal or State Interest Rate

Text: In its cross-appeal, GIT argues the trial court erred by failing to apply the Colorado interest rate instead of the federal interest rate to its award of prejudgment interest. Prejudgment interest is an element of compensatory damages and is part of the actual damages sought. Johnson v. Cont'l Airlines Corp., 964 F.2d 1059, 1063-64 (10th Cir.1992); see also Monessen Sw. Ry. Co. v. Morgan, 486 U.S. 330, 335, 108 S.Ct. 1837, 100 L.Ed.2d 349 (1988). Prejudgment interest, as an integral element of compensatory damages is not subject to an independent choice of law analysis. Johnson, 964 F.2d at 1064. As a result, the law governing compensatory damages also governs prejudgment interest. Id. (rejecting smorgasbord approach created by allowing parties to pick and choose prejudgment interest law). By the terms of their contract, MK and GIT were bound by federal law. [12] The contract required the court to determine all substantive legal issues in accord with the FAR. The FAR, by reference to the CDA, applies the federal interest rate. See 48 C.F.R. §§ 49.112-2(d), 52.233-1(h). The district court properly concluded that federal law applied to both the calculation of damages and prejudgment interest.