Opinion
Civ. No. 3:87cv00052 (PCD), (All consolidated cases).
August 14, 2004
RULING
On June 30, 2003, this case was remanded for a determination of an award of pre-judgment and post-judgment interest.
Familiarity with all previous rulings during the seventeen year history of this case is presumed.
"The shades of Jarndyce Jarndyce stalk this litigation." Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 159 (2d Cir. 2002) ( citing CHARLES DICKENS, BLEAK HOUSE). In October, 2002, the Second Circuit issued a ruling affirming this Court's allocation of shares of the Coalitions' response costs to the Municipal Defendants, and vacating the award of pre-judgment and post-judgment interest regarding the LPC's claims. Id. at 179. The Second Circuit instructed that "the district court's judgment on the LPC's past response costs was ascertained in a meaningful way on August 2, 2000." Id. at 178. The parties attempted to resolve the remaining issues in a series of settlement conferences, and LPC and the Towns (Middlebury and Orange) could not reach a settlement. The parties agree that the total response cost allowed is $13,795,944.67. Although LPC contends that the parties agree that the mandatory compound pre-judgment interest is $2,979,082.87, LPC Resp. at 2 [Doc. No. 3256], the Municipalities contend that this figure should be either $1,072,470.00, $1,400,169.00, or $983,097.00, Town Mem. at 7 [Doc. No. 3255]. The parties sharply dispute the proper method to calculate post-judgment interest.
It is noted that neither party has complied with the Court's June 22, 2004 Order, which ordered the parties to "set forth concisely and clearly" their interest calculations [Doc. No. 3252]. Instead, the parties merely incorporate generally their myriad earlier filings, and their disregard of the Order certainly does not aid the Court in resolving the matter.
As a result of settlement proceedings with the Honorable Magistrate Judge Joan G. Margolis, LPC and the Town of Seymour recently reached a settlement [ see Doc. Nos. 3248 and 3249], which is not included in the offset calculations.
II. Discussion
A. Pre-Judgment Interest — CERCLA § 107(a)
"Under § 107(a) [of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C.S. § 9601 et seq.,] pre-judgment interest is mandatory." Goodrich Corp., 311 F.3d at 177 (citing 42 U.S.C. § 9607(a)(4) ("The amounts recoverable in an action under this section shall include interest on the amounts recoverable . . .") (emphasis added). The Second Circuit has directed this court
to recalculate pre-judgment interest on LPC's response costs, at the rates specified by the Secretary of the Treasury compounded annually, accruing from the latter of the date LPC made its demand on the Municipal Defendants or the date of the expenditure concerned. See 42 U.S.C. § 9607(a) ("Such interest shall accrue from the later of (i) the date payment of a specified amount is demanded in writing, or (ii) the date of the expenditure concerned.").Goodrich Corp., 311 F.3d at 177. The parties agree that the "demand date" for such pre-judgment interest is August 18, 1995. LPC Suppl. Mem. (June 17, 2004) [Doc. No. 3251]. Although they disagree about the ultimate pre-judgment interest figures, the parties agree that the starting number is $2,979,082.87, but they sharply dispute how any settlement proceeds should be deducted from the total response costs.
In the Order docketed on August 2, 2000, the Court stated that LPC's
costs were reduced by LPC's receipt of the amounts paid in settlement to it. To accommodate that factor, a discount of the interest included in the RC proportionate to the amount received in settlement is in order. That pro ration, .63, is calculated by dividing the settlement received, $8,768,387.90, by the allowed RC, $14,005,975.27.
Order at 1-2. The Second Circuit did not reverse this pro-rationing methodology, and therefore it will be followed here. Because now the parties agree that the total response cost allowed is $13,795,944.67, the pro ration factor is adjusted to 0.64, which is calculated by dividing the settlement received, $8,768,387.90 by $13,795,944.67. Accordingly, the figure of 0.36 represents the portion of LPC's expenditures not covered by settlements.
The Second Circuit found that "the district court erred in treating pre-judgment interest as a discretionary award under § 113(f)" and "was without discretion to grant anything other than compounded interest at the applicable rates set forth by the Secretary of the Treasury." Goodrich Corp., 311 F.3d at 177. The court did not address the method by which interest was computed.
As noted, the parties agree that $2,979,082.87 is at least the starting point to calculate compounded pre-judgment interest. Multiplying this number times the pro-ration factor yields a result of $1,072,469.83 of compounded pre-judgment interest to be allocated ($2,979,082.87 times .36 equals $1,072,469.83). The Towns' respective shares of this amount, representing compounded pre-judgment interest, are as follows:
Town of Orange (0.0363) $38,930.65
$1,072,469.83 times 0.0363 equals $38,930.65.
Town of Middlebury (0.048) $51,478.55 B. Post-Judgment Interest — 28 U.S.C. § 1961
$1,072,469.83 times 0.048 equals $51,478.55.
"Section 1961 of Title 28 provides a uniform rate at which post-judgment interest is to accrue on civil money judgments recovered in federal district court." Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir. 2004). Section 1961(a) provides that "Interest shall be allowed on any money judgment in a civil case recovered in a district court. . . . Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding . . . the date of the judgment." Such relief is "designed to compensate the plaintiff for the delay it suffers from the time damages are reduced to an enforceable judgment to the time the defendant pays the judgment." Andrulonis v. United States, 26 F.3d 1224, 1230 (2d Cir. 1994).
1. Time of Post-Judgment Interest
"[P]ost-judgment interest should be calculated from whenever judgment was first ascertained in a meaningful way." Goodrich Corp., 311 F.3d at 178. "Here, the district court's judgment on the LPC's past response costs was ascertained in a meaningful way on August 2, 2000." Id. Accordingly, post-judgment interest begins on August 2, 2000.
2. Rate of Post-Judgment Interest
The parties dispute the rate of post-judgment interest. LPC argues that the version of 28 U.S.C. § 1961 that was in effect on August 2, 2000, should govern. LPC Reply at 3 [Doc. No. 3258]. The Towns argue that the version of the statute in effect when final judgment, after the remand, is entered should govern.
Generally, "a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary." Bradley v. Richmond Sch. Bd., 416 U.S. 696, 711, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974). The parties dispute the impact of Kaiser Alum. Chem. Corp. v. Bonjorno, 494 U.S. 827, 840, 110 S. Ct. 1570, 108 L. Ed. 2d 842 (1990). Kaiser Aluminum involved the effects of an amendment to § 1961, whereby the pre-amendment version specified that post-judgment interest shall be calculated "`at the rate allowed by State law,'" and the post-amendment version instructed that post-judgment interest shall be calculated "`at a rate equal to the coupon yield equivalent . . . of the average accepted auction price for the last auction of fifty-two week United States Treasury Bills settled immediately prior to the date of the judgment.'" Kaiser Alum., 494 U.S. at 831-32 (quoting 28 U.S.C. § 1961 (1976 ed.) (1982 ed.)). In deciding that "amended § 1961 is not applicable to judgments entered before its applicable date," the Court considered the legislative history and noted that "on the date of judgment expectations with respect to interest liability were fixed, so . . . the parties could make informed decisions about the cost and potential benefits of paying the judgment or seeking appeal." Id. at 839-40. "Given Congress' understanding of the expectation of the parties on the date of judgment and the plain language of the statute, we conclude that both versions of § 1961 fix the rate of interest as of the date of the entry of judgment and, therefore, amended § 1961 may not be applied retrospectively." Id. at 840.
Here, on August 2, 2000, when judgment was meaningfully rendered, § 1961 provided that
[s]uch interest shall be calculated from the date of the entry of the judgment, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the judgment.
Effective December 21, 2000, the statute was amended and the language "the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to" was replaced by "the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding." 28 U.S.C. § 1961, Comments.
At the last auction of 52-week Treasury bills prior to August 2, 2000 (when judgment was first ascertained in a meaningful way), on May 31, 2000, the equivalent coupon issue yield rate was set at 6.375%. On July 28, 2000, the weekly average one-year constant maturity Treasury yield was 6.06%. Pursuant to Kaiser Aluminum, the rate shall be fixed as of the date of judgment of the statute in effect at that time. See Kaiser Alum., 494 U.S. at 839-40. In accordance with Kaiser Aluminum, the 6.375% rate shall apply in this case, as the Second Circuit has clearly instructed that judgment was meaningfully ascertained on August 2, 2000. Goodrich Corp., 311 F.3d at 178.
This result is not inconsistent with the Towns' argument that "`a court is to apply the law in effect at the time it renders its decision.'" Towns Opp. at 12 [Doc. No. 3223].
3. Effect of Funds Deposited Into the Court Registry by the Towns
Not surprisingly, the inquiry does not end here, as the parties sharply dispute the effect of the funds deposited by the Towns into the Court registry. While LPC argues that these funds should have no effect at all, the Towns argue that the deposits should freeze the accrual of post-judgment interest.
The Towns argue that their deposits into the Court registry pursuant to FED. R. CIV. P. 67 serve "to relieve the depositor of responsibility for a fund in dispute and may suffice to stop the running of interest." Middlebury Reply at 3 [Doc. No. 3240] (citing 12 CHARLES ALAN WRIGHT ARTHURR. MILLER, FEDERALPRACTICE AND PROCEDURE § 2991 at 50-51 (1973)). Courts have discretion on whether to grant a Rule 67 motion, and a Rule 67 deposit is proper where there is a dispute over funds. Gulf States Utilities Co. v. Alabama Power Co., 824 F.2d 1465, 1475 (5th Cir. 1987).
LPC argues that Rule 67 does not apply because the Towns have not submitted the exact amount of funds purportedly owed. However, it is the very amount of such funds that were in dispute, and there is no evidence that the Towns acted in bad faith when moving to make such deposits. By depositing the disputed funds into the Court the Towns have been deprived of using such funds. The Towns voluntarily relinquished the funds, and accordingly interest on the amount deposited stops at the time the motion for deposit was granted. See United States v. Midwest Constr. Co., 619 F.2d 349, 353 (5th Cir. 1980) (suggesting that the granting of a motion to deposit, and not "the mere filing of a motion to deposit," stops the accrual of interest). Should there be any amount outstanding, such amount shall be subject to the continued accrual of interest.
Orange's motion to deposit $330,000 was granted on July 29, 2003 [Doc. No. 3192]. Middlebury's motion to deposit $313,000 was granted on January 15, 2004 [Doc. No. 3220]. Middlebury's motion to deposit $137,000 was granted on August 2, 2004 [Doc. No. 3259].
The amount of post-judgment interest owed by Orange is $44,930.82. The amount of post-judgment interested owed by Middlebury is $71,596.57. The calculations are set forth in Exhibit A.
III. Conclusion
As discussed herein, the following amounts are found to be owed by Orange and Middlebury. As of the date of this Ruling, both Towns have deposited funds into the Court registry sufficient to cover these costs.
Orange:
Middlebury:
Share of net response costs: $182,500.67 Pre-judgment interest: $38,930.65 Post-judgment interest: $44,930.82 ________________________________________________ Total: $266,362.14
Share of net response costs: $241,322.72 Pre-judgment interest: $51,478.55 Post-judgment interest: $71,596.57 ________________________________________________ Total: $364,397.84
SO ORDERED.
Exhibit A — Calculations for Post-Judgment Interest
I. Net Response CostsThe amount received in settlement ($8,768,387.90) is subtracted from the total response cost ($13,795,944.67), for a total of $5,027,566.77 for the net response costs.
$13,795,944.67 minus $8,768,387.90 equals $5,027,566.77.
Orange's percentage share of the net response costs is $182,500.67, and Middlebury's percentage share is $241,322.72. II. Post-Judgment Interest Calculations — Orange Step 1: $6,100,036.60. Step 2: August 3, 2000 through August 2, 2001 — $388,877.33 August 3, 2001 through August 2, 2002 — $413,668.26 August 3, 2002 through July 29, 2003 $435,217.99 Step 3: Post-Judgment Total from August 2, 2000 through July 29, 2003 $1,237,763.58. Step 4: Calculating Orange's Post-Judgment Share $44,930.82.
Orange's share is determined by multiplying its percentage share (0.0363) times the net response cost ($5,027,566.77): 0.0363 times $5,027,566.77 equals $182,500.67.
Middlebury's share is determined by multiplying its percentage share (0.048) times the net response cost ($5,027,566.77): 0.048 times 5,027,566.77 equals $241,322.72.
As discussed in the accompanying Ruling, Orange's motion to deposit funds was granted on July 29, 2003.