Court Opinion

ID: 9478381
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:47:52.194777+00
Date Added: 2024-06-11T17:46:24.298151
License: Public Domain

MERRITT, Circuit Judge,
concurring in part and dissenting in part.
I concur in all of Chief Judge Engel’s opinion, with the lone exception of the final issue treated, that of prejudgment interest on the pay award for the period between date of complaint and date of judgment.
The award of prejudgment interest in a diversity case is a matter of state law because this type of interest is an element of the plaintiff’s damages. The Michigan statute is prescriptive, not discretionary; thus, the award of interest here is not a matter of discretion but rather a matter of law. As Chief Judge Engel notes, there is some disagreement among the intermediate appellate courts in Michigan about how accrual of “front pay” or other “future damage” awards should be treated for purposes of prejudgment interest. See, e.g., Om-El Export Co. v. Newcor, Inc., 154 Mich.App. 471, 398 N.W.2d 440 (1986); Central Michigan University Faculty Ass’n v. Stengren, 142 Mich.App. 455, 370 N.W.2d 383 (1985); Goins v. Ford Motor Co., 131 Mich.App. 185, 347 N.W.2d 184 (1983). One panel of the Michigan Court of Appeals appears to have gone so far as to openly disregard a contrary view earlier espoused by the Michigan Supreme Court. See Ombrello v. Montgomery Ward Long Term Disability Trust, 163 Mich.App. 816, 415 N.W.2d 658, 662 (1987) (rejecting without explanation Drake v. Norge Division, *929Borg-Warner Corp., 367 Mich. 464, 466, 116 N.W.2d 842 (1962)).
Drake was a workers compensation case in which the Michigan Supreme Court, relying on previous cases that had calculated interest on installment benefits from the time they became due, reaffirmed the principle that such a calculation “finally establishes a parity between the employee who ultimately collects accrued benefits and the employer who redeems a claim by paying benefits in advance, — at a commuted value, of course." 367 Mich. 464, 116 N.W.2d at 844 (emphasis added). This balancing principle of Drake is unaffected by subsequent changes in the Michigan interest statute; a mere change in the date from which interest is calculated would not disturb the deeper principle based on “the elementary nature of the equities” that the employee receives no “less than he is entitled to receive” and that the employer does not have “free use of money determined to have been due the employee.” Id.
While I agree that there are occasions in which our Court may accord some deference to the state-law expertise of a district judge, I do not concur that this is one of them. We might defer, for example, to the greater familiarity a district judge may have with the evolving direction of that state’s highest court in an area of considerable uncertainty. And certainly, to the extent that a district judge writes a detailed opinion explaining a problem of state law, that opinion is entitled to, and receives, deference from our Court. But that would be true of any learned and detailed opinion from a district court, not just those on a topic of state law. Well-founded legal analysis is always entitled to considerable persuasive value.
What we have in this case, however, is an issue on which the state intermediate appellate courts have floundered and the state’s highest court, while recently silent on this specific question, has articulated some general principles. I believe that, if we believe the district judge erred, it is an abdication of our responsibility as an appellate court to give the parties less than de novo review of this question. See In re McLinn, 739 F.2d 1395 (9th Cir.1984) (en banc); 19 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 4507 at 106-10.
Confusion in the state intermediate courts should not deter us from deciding in a diversity case what the state’s highest court would do. I believe that the only proper approach that would avoid “double counting” is to reduce the schedule of complaint-to-judgment payments to their present value at the time of the filing of the complaint. This approach produces the same result as triggering interest from the time that each installment payment is due; it takes account of the “straightforward interpretation of the prejudgment interest statute” favored by the Michigan Supreme Court, see Om-El, 154 Mich.App. 471, 398 N.W.2d at 445 (citing Rittenhouse v. Erhart, 424 Mich. 166, 380 N.W.2d 440 (1985)), without falling into the vice of double counting.
Unlike Chief Judge Engel, I find no contrary authority in American Anodco, Inc. v. Reynolds Metals Co., 572 F.Supp. 895 (W.D.Mich.1983), aff'd 743 F.2d 417 (6th Cir.1984). A careful review of the Anodco case, including its affirmance by this Court, reveals that the discussion of “apportionment” refers not to accrual of the schedule of payments or to reduction to present value at the time of the complaint but rather to “apportioning” the rate of interest before and after a statutory change in the rate of interest. Anodco, therefore, is of no help to Diggs. I would reverse the District Court on this issue as a matter of law.