Case 3:15-cv-02287-BAS-NLS Document 406 Filed 09/28/23 PageID.18470 Page 1 of 17
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`v.
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`BOFI HOLDING, INC.,
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`Defendant.
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`CHARLES MATTHEW ERHART,
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`Plaintiff,
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
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`
`Case No. 15-cv-02287-BAS-NLS
`consolidated with
`15-cv-02353-BAS-NLS
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`ORDER GRANTING IN PART
`AND DENYING IN PART
`PLAINTIFF’S MOTION FOR
`PREJUDGMENT INTEREST
`(ECF No. 384)
`
`
`
`And Consolidated Case
`
`In 2015, Defendant BofI Holding, Inc. terminated one of its internal bank
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`auditors—Plaintiff Charles Matthew Erhart—after learning he reported information
`to the Government. Seven years later, after a winding legal journey, a jury found
`BofI violated the law and awarded Erhart $1.5 million.
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`To make up for lost time, Erhart asks the Court to tack on $1.19 million in
`prejudgment interest. He applies an 8% interest rate with daily compounding to
`reach this number. BofI challenges Erhart’s request with a full suite of arguments,
`including that Erhart waived his right to prejudgment interest and proposes the
`wrong interest rate.
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`Case 3:15-cv-02287-BAS-NLS Document 406 Filed 09/28/23 PageID.18471 Page 2 of 17
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`Ultimately, prejudgment interest is appropriate, but several of BofI’s
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`arguments are compelling. The Court also finds it should not deviate from using
`the standard interest rate found in 28 U.S.C. § 1961. The Court thus awards Erhart
`$169,872.74 in prejudgment interest.
`I.
`Background
`Pretrial. In October 2015, Erhart filed this action claiming BofI retaliated
`against him for reporting information to the Government. (Compl., ECF No. 1.)
`The Complaint alleged BofI forced Erhart out of his job in March 2015 and later
`“officially fired” him in June 2015. (Id. ¶¶ 61, 72.) Erhart asked for compensatory
`damages and “an award of interest, including prejudgment interest, at the legal
`rate.” (Id. 36:11–13; accord Second Am. Compl. 38:6–7, ECF No. 124.) After
`protracted motion practice and discovery, the case neared trial in 2020. The
`COVID-19 pandemic and scheduling accommodations added two more years,
`leading to the Court setting a three-week jury trial for early 2022.
`Along the winding way, the Court made more pretrial rulings than can be
`fairly summarized here. One, though, limited Erhart’s recoverable damages. The
`Court found Erhart disregarded Federal Rule of Civil Procedure 26 by failing to
`provide any estimate of his calculable damages throughout discovery. (Order on
`Mot. in Limine No. 5, ECF No. 244.) Those damages included his “claims for
`future wages and earnings, lost employment benefits, bonuses, overtime, vacation
`benefits, medical expenses, and back pay.” (Id.) The Court also found he could not
`avoid the automatic sanction under Rule 37(c)(1). This ruling meant Erhart could
`seek only “emotional distress damages, reputational damages, and punitive
`damages” at trial. (Id.)
`Trial. Erhart prevailed at trial. The jury found BofI violated the Sarbanes-
`Oxley Act, California Labor Code section 1102.5, and California public policy
`when the Bank terminated him. (Jury Verdict 2–3, ECF No. 314.) In line with the
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`Case 3:15-cv-02287-BAS-NLS Document 406 Filed 09/28/23 PageID.18472 Page 3 of 17
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`Court’s damages ruling, the jury assessed Erhart’s “emotional distress or harm to
`his reputation” for these claims. (Id. 4.) The jury awarded him $1 million. (Id.)
`Erhart also prevailed on his California state law defamation claim, and the
`jury awarded him $500,000. (Jury Verdict 5–6.) The jury hung on punitive
`damages, leading to a retrial of that issue in August 2022. (ECF No. 359.) The
`second jury found punitive damages were not appropriate. (ECF No. 370.)
`Judgment. Following the punitive damages retrial, the Court circulated a
`Proposed Judgment, which was silent on prejudgment interest, and invited
`objections. (ECF No. 376.) See Fed. R. Civ. P. 58(b)(2). Erhart asked the Court to
`add seven years’ worth of interest to the judgment, but he did not propose a starting
`date for the calculation, an interest rate, or a total amount of interest. (ECF No.
`378.) The Court thus entered judgment without any prejudgment interest but
`allowed Erhart to file a motion to amend the judgment that addressed the variables
`for calculating interest. (ECF No. 379.)
`Erhart filed a combined Motion for Attorneys’ Fees and Prejudgment
`Interest. (Mot., ECF No. 384-1.) The Court addresses his $1.19m prejudgment
`interest request here.1 (Id. 15:4–18:3.) BofI opposes any prejudgment interest.
`(Opp’n 23:5–25:18, ECF No. 390.)
`II. Analysis
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`Erhart asks the Court to award prejudgment interest on his total damages—
`$1.5 million—from the date BofI terminated him to the date of judgment. (Mot.
`17:11–13.) BofI argues Erhart faces four obstacles in his track. (Opp’n 23:5–
`25:18.) First, Erhart waived his right to prejudgment interest. Second, California
`state law precludes interest on his state law claims. Third, awarding prejudgment
`interest on the Sarbanes–Oxley claim would be unfair. And fourth, even if
`awarded, prejudgment interest should be calculated using a lower interest rate.
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`1 Erhart’s request for prejudgment interest is timely and appropriately brought under Rule
`59(e). See Fed. R. Civ. P. 59(e); see also McCalla v. Royal MacCabees Life Ins. Co., 369 F.3d
`1128, 1130 (9th Cir. 2004) (applying prior version of Rule 59(e)).
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`Case 3:15-cv-02287-BAS-NLS Document 406 Filed 09/28/23 PageID.18473 Page 4 of 17
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`A. Waiver
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`BofI contends Erhart should not receive prejudgment interest because he did
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`not ask for it in the Pre-Trial Order. (Opp’n 24:1–8.) “Indeed, BofI was not aware
`that Erhart was seeking prejudgment interest until he submitted his objections to the
`Court’s Proposed Judgment.” (Id. 24:5–9.)
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`This waiver argument is unpersuasive for two reasons. First, BofI points to
`no controlling authority to support its position. The Court has found little from this
`century, but the caselaw favors Erhart. A Ninth Circuit decision issued around
`Apollo 11 reasoned a party’s “right to recover prejudgment interest was not
`affected by [its] failure to demand interest in its federal pleadings.” Soderhamn
`Mach. Mfg. Co. v. Martin Bros. Container & Timber Prod. Corp., 415 F.2d 1058,
`1064 (9th Cir. 1969). Similarly, in 1982, the Ninth Circuit rejected the claim that
`“silence of the pretrial order as to interest” was a “deliberative waiver of the right to
`interest.” Gelfgren v. Republic Nat. Life Ins. Co., 680 F.2d 79, 82 (9th Cir. 1982).
`More recent persuasive authority likewise supports Erhart. See Jerra v. United
`States, No. 2:12-cv-01907-ODW (AGRx), 2018 WL 1605563, at *12 (C.D. Cal.
`Mar. 29, 2018) (rejecting argument that the plaintiff waived his right to interest by
`not pleading it “in the operative complaint, pretrial conference order, or initial
`disclosures”); see also RK Co. v. See, 622 F.3d 846, 853–54 (7th Cir. 2010) (relying
`on Rule 59(c) to resolve this contention, which provides a prevailing party will be
`granted all the relief to which it is entitled, “even if the party has not demanded that
`relief in its pleadings”).
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`Second, unlike some plaintiffs, Erhart requested “an award of interest,
`including prejudgment interest, at the legal rate” in his October 2015 Complaint.
`(Compl. 36:11–13.) BofI has always been on notice that if it lost at trial, Erhart
`may seek prejudgment interest. The Court thus rejects BofI’s waiver argument.
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`Case 3:15-cv-02287-BAS-NLS Document 406 Filed 09/28/23 PageID.18474 Page 5 of 17
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`State Law Claims
`B.
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`BofI contends state law should control prejudgment interest for Erhart’s
`California claims, and this law precludes interest here. (Opp’n 23:11–26.) Erhart
`counters that BofI’s “discussion of state law obfuscates the issue.” (Reply 10:4–5,
`ECF No. 394.)
`A court is not “free to disregard the alleged” impacts of state law. Erie R.
`Co. v. Tompkins, 304 U.S. 64, 71 (1938). Under the Erie doctrine, “federal courts
`sitting in diversity jurisdiction apply state substantive law and federal procedural
`law.” In re Exxon Valdez, 484 F.3d 1098, 1100 (9th Cir. 2007). Erie principles
`apply equally when the court has supplemental jurisdiction over state law claims.
`Id. It is also “well settled that prejudgment interest is a substantive aspect of a
`plaintiff’s claim, rather than a merely procedural mechanism.” Id. at 1101; accord
`U.S. Fid. & Guar. Co. v. Lee Invs. LLC, 641 F.3d 1126, 1139 (9th Cir. 2011).
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`These rules apply here. The Court has jurisdiction over Erhart’s state law
`claims under the supplemental jurisdiction statute, 28 U.S.C. § 1367, and
`prejudgment interest is a substantive aspect of these claims. California law thus
`controls for those claims. See Exxon Valdez, 484 F.3d at 1101; accord Cannon v.
`Peck, 36 F.4th 547, 577 (4th Cir. 2022) (“When reviewing state-law claims based
`on supplemental jurisdiction, ‘the award of prejudgment interest rests on state
`law.’”); Chassin Holdings Corp. v. Formula VC Ltd., No. 15-CV-02294-EMC,
`2017 WL 66873, at *14 (N.D. Cal. Jan. 6, 2017) (same).
`Turning to California law, several statutes address prejudgment interest. The
`prevalent one is California Civil Code section 3287(a), which “authorizes an award
`of interest when a person is entitled to recover” liquidated damages. Union Pac.
`R.R. Co. v. Santa Fe Pac. Pipelines, Inc., 231 Cal. App. 4th 134, 199 (2014).
`Liquidated damages are those that are “certain, or capable of being made certain by
`calculation.” Cal. Civ. Code § 3287(a). Damages meet this test “where there is
`essentially no dispute between the parties concerning the basis of computation of
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`damages if any are recoverable but where their dispute centers on the issue of
`liability giving rise to damage.” Warren v. Kia Motors Am., Inc., 30 Cal. App. 5th
`24, 44 (2018). Conversely, where the damages are unliquidated and “cannot be
`resolved except by verdict or judgment, prejudgment interest is not appropriate”
`under section 3287. Wisper Corp. v. Cal. Com. Bank, 49 Cal. App. 4th 948, 960
`(1996).
`The damages awarded for Erhart’s state law claims—emotional distress and
`reputational damages—are unliquidated. They were not capable of determination
`until the jury rendered its verdict. Therefore, prejudgment interest is not available
`under Civil Code section 3287 for these claims from the date of Erhart’s
`termination until the verdict. See Wisper Corp., 49 Cal. App. 4th at 199.
` Erhart does not show that any of the other possibilities for recovering
`prejudgment interest under California law apply. See Greater Westchester
`Homeowners Ass’n v. City of Los Angeles, 26 Cal. 3d 86, 102–03 (1979) (applying
`California Civil Code section 3288, which requires a jury determination on this
`issue); O’Hara v. Storer Commc’ns, Inc., 231 Cal. App. 3d 1101, 1117–19 (1991)
`(applying California Civil Code section 3291, which requires a statutory offer to
`compromise). Hence, BofI is correct, and the Court finds Erhart cannot recover
`prejudgment interest for his state law claims.2
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`C.
`Federal Claim
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`Erhart’s federal claim is the last one standing for prejudgment interest. BofI
`argues it would be unfair to award prejudgment interest on this claim because
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`2 California law may authorize post-verdict interest under Civil Code section 3287(a)
`because Erhart’s noneconomic damages became certain on the date of the jury’s verdict. See
`Holdgrafer v. Unocal Corp., 160 Cal. App. 4th 907, 935 (2008). Erhart does not address this
`issue—or any of California law for that matter. (See Reply 10:3–10.) The Court will not sift
`through this maze unaccompanied. Erhart already had two opportunities to justify his
`prejudgment interest request. See Hamilton v. Wal-Mart Stores, Inc., No. 19-56161, 2022 WL
`2374445, at *3 (9th Cir. June 30, 2022).
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`Erhart recovered “purely non-economic damages.” (Opp’n 24:9–15.) In contrast to
`above, the Court now applies the law for victims of federal law violations.
`“Prejudgment interest is a measure that ‘serves to compensate for the loss of
`use of money due as damages from the time the claim accrues until judgment is
`entered, thereby achieving full compensation for the injury those damages are
`intended to redress.’” Schneider v. Cnty. of San Diego, 285 F.3d 784, 789 (9th Cir.
`2002) (quoting West Virginia v. United States, 479 U.S. 305, 311 n.2 (1987)).
`Awarding prejudgment interest “under federal law is a matter left to the sound
`discretion of the trial court.” Purcell v. United States, 1 F.3d 932, 942–43 (9th Cir.
`1993) (quoting United States v. California State Bd. of Equalization, 650 F.2d
`1127, 1132 (9th Cir. 1981)). Prejudgment interest awards “are governed by
`considerations of fairness and are awarded when it is necessary to make the
`wronged party whole.” Id. at 943.
`Moreover, “prejudgment interest is an element of compensation, not a
`penalty.” Barnard v. Theobald, 721 F.3d 1069, 1078 (9th Cir. 2013). And
`prejudgment interest is available for both economic and noneconomic damages;
`those “damages awarded for a plaintiff’s pain and suffering are ‘just as much an
`“actual loss” (for which prejudgment interest is in order)’ as purely economic
`damages.” Id. (quoting Murphy v. City of Elko, 976 F. Supp. 1359, 1364 (D. Nev.
`1997)).
`To illustrate, in Wooten, the defendant railroad terminated the plaintiff after
`he reported an on-the-job injury. Wooten v. BNSF Ry. Co., 387 F. Supp. 3d 1078,
`1090 (D. Mont. 2019). The jury found the defendant violated federal safety laws
`and awarded the plaintiff “$500,000 for his mental and emotional humiliation or
`pain and anguish.” Id. The court reasoned that prejudgment interest was
`appropriate to “fully compensate” the plaintiff for his injury. Id. at 1105. Hence,
`the court awarded prejudgment interest from the date the defendant terminated the
`plaintiff to the date of entry of judgment. Id. at 1106.
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`Interest under Sarbanes–Oxley
`1.
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`Erhart prevailed on his claim for retaliation in violation of the Sarbanes–
`Oxley Act, 18 U.S.C. § 1514A. Sarbanes–Oxley authorizes a broad swath of
`remedies:
`(c) Remedies.–
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`(1) In general.–An employee prevailing in any action under
`subsection (b)(1) shall be entitled to all relief necessary to make
`the employee whole.
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`(2) Compensatory damages.–Relief for any action under
`paragraph (1) shall include–
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`(A) reinstatement with the same seniority status that the
`employee would have had, but for the discrimination;
`(B) the amount of back pay, with interest; and
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`(C) compensation for any special damages sustained as a
`result of the discrimination, including litigation costs,
`expert witness fees, and reasonable attorney fees.
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`18 U.S.C.A. § 1514A(c). This statute “affords noneconomic compensatory
`damages, including emotional distress and reputational harm.” Halliburton, Inc. v.
`Admin. Rev. Bd., 771 F.3d 254, 266 (5th Cir. 2014) (per curiam). And that is what
`Erhart recovered here. Further, Sarbanes–Oxley makes prejudgment interest
`mandatory for “backpay,” but preserves the court’s discretion to award interest on
`other types of damages. See Purcell v. United States, 1 F.3d 932, 943 (9th Cir.
`1993) (explaining Congress can override the default rule by making interest
`mandatory).
`BofI recognizes as much. It acknowledges the Court can award prejudgment
`interest on federal noneconomic claims. (Opp’n 24:12–17.) BofI highlights,
`however, that Erhart “does not cite a single [Sarbanes–Oxley] case in which the
`Court awarded prejudgment interest for purely non-economic damages.” (Id.)
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`Even so, the Court remains persuaded that discretionary prejudgment interest is
`available here. Sarbanes–Oxley affords “all relief necessary to make the employee
`whole,” 18 U.S.C. § 1514A(c)(1) (emphasis added), and awarding prejudgment
`interest for noneconomic damages serves to achieve “full compensation” for an
`injury under the law, see Schneider, 285 F.3d at 789.
`In the same vein, the Court is unpersuaded that the jury’s verdict already
`incorporates any prejudgment interest awardable to Erhart. Courts have grappled
`with this issue before.3 Here, neither the jury instructions nor the verdict form
`addressed prejudgment interest and asked the jury to adjust Erhart’s damages to
`account for the delay in his recovery. (See Court’s Instruction No. 37 – Damages,
`ECF No. 319; Verdict Form; Jury Verdict 4.) Hence, the Court must determine
`whether Erhart should recover prejudgment interest on the damages he recovered
`under Sarbanes–Oxley.
`2.
`Allocation Between State and Federal Claims
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`There is a wrinkle. The jury verdict does not distinguish between Erhart’s
`damages for his Sarbanes–Oxley, California wrongful termination, and California
`Labor Code section 1102.5 claims. With the parties’ support, the Court combined
`the verdict form’s damages interrogatory for these causes of action out of concern
`“that having a damages section at the end of each cause of action could lead to
`double counting for what is essentially one harm.” (Tr. 23:1–2, ECF No. 261.)
`As anticipated, the evidence for damages overlapped at trial. There was no
`indication that Erhart suffered different emotional or reputational damages when
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`3 See Miller v. Schmitz, No. 1:12-CV-0137 LJO, 2014 WL 68883, at *2 (E.D. Cal. Jan. 8,
`2014) (rejecting the defendants’ argument “that there is no need to compensate Plaintiff for
`prejudgment interest because the jury likely already accounted for prejudgment interest when it
`rendered its verdict” and gave its award “in present value terms”); see also Copart, Inc. v. Sparta
`Consulting, Inc., 339 F. Supp. 3d 959, 1004 (E.D. Cal. 2018) (reasoning jury award did not
`already adequately compensate prevailing party because the court did not instruct on prejudgment
`interest); cf. Towey v. Catling, 743 F. Supp. 738, 742 (D. Haw. 1990) (reasoning prejudgment
`interest was available on part of damages award because it was possible the jury “simply added
`past and future damages together” and did not adjust damages to present value “from the time of
`the accident until the entry of judgment”).
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`BofI wrongfully retaliated against him under California law versus when BofI did
`so under the Sarbanes–Oxley Act. Moreover, although BofI generally argues
`Erhart cannot recover prejudgment interest for his state law claims, BofI does not
`address this allocation point. (See Opp’n 24:9–25:19; see also id. 23:11–25.) Nor
`does Erhart.
`A court struggled with this issue in Jadwin v. County of Kern, 767 F. Supp.
`2d 1069, 1092–97 (E.D. Cal. 2011). There, the plaintiff prevailed on state and
`federal employment causes of action, and the jury’s damages award similarly did
`not distinguish between the two. Id. at 1087. With no binding guidance, the court
`ultimately blended the interest rates from state and federal law. Id. at 1092–97.
`The court then applied the blended rate to the maximum amount of the damages
`award that could serve as the basis for awarding prejudgment interest. See id.
`By comparison, in Thomas v. iStar Financial, Inc., 629 F.3d 276, 280 (2d
`Cir. 2010), the plaintiff also “received an award of damages that compensated for
`both federal and state claims without distinguishing between the two.” The Second
`Circuit determined “judgments that are based on both state and federal law with
`respect to which no distinction is drawn shall have applicable interest calculated at
`the federal interest rate.” Id.; see also Vera v. Alstom Power, Inc., 189 F. Supp. 3d
`360, 390 (D. Conn. 2016) (applying federal law where judgment was “based on
`both state and federal claims, and is not apportioned between the two”); Arnold v.
`Pfizer Inc., No. 10-CV-01025-AC, 2015 WL 1262775, at *3 (D. Or. Mar. 18, 2015)
`(reasoning where “the jury did not allocate damages based on violations of state or
`federal law,” it was appropriate to award prejudgment interest using the federal
`rate). These comparisons are not airtight, though, because in these cases state law
`was typically more favorable than federal law for prejudgment interest.
`Given the overlap in the evidence at trial, and the lack of argument on this
`issue, the Court finds it is fair to attribute the $1 million damage verdict to the
`Sarbanes–Oxley claim for determining prejudgment interest under federal law.
`
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`This outcome is consistent with the Court’s rationale for combining the damages
`inquiries to begin with: BofI’s retaliation under state and federal law led to Erhart
`suffering the same harms in the form of emotional distress and reputational damage.
`To suggest otherwise and compare the nuances of the different causes of action
`would be splitting hairs. The Court thus considers whether the equities support
`awarding prejudgment interest on Erhart’s $1 million recovery under Sarbanes–
`Oxley.
`
`Equities
`1.
`A “district court should consider the balance of the equities” when
`determining an award of prejudgment interest. Barnard, 721 F.3d at 1078. For
`example, in Barnard, the plaintiff recovered $1.6 million for pain and suffering on
`his Fourth Amendment excessive force claim. Id. at 1074. The court, however,
`denied the plaintiff’s request for prejudgment interest. Id. at 1074. In a truncated
`analysis, the “court explained that prejudgment interest may not be appropriate
`when applied to an award of non-economic damages.” Id. The court also
`rationalized “that prejudgment interest was inappropriate because it was unclear
`which portion of [the plaintiff’s] award, if any, was intended to compensate him for
`future pain and suffering.” Id. at 1075.
`The Ninth Circuit later cast doubt on the district court’s prejudgment interest
`ruling. Barnard, 721 F.3d at 1075. Citing the rules mentioned above, the Ninth
`Circuit explained that “to the extent the district court denied prejudgment interest
`because it thought such interest is unavailable for non-economic damages, the
`district court abused its discretion.” Id. at 1078. Further, the Ninth Circuit
`explained the court could “consider whether it is appropriate to award prejudgment
`interest for at least that portion of the award that was likely given to [the plaintiff]
`in order to compensate him for his past pain and suffering and medical expenses.”
`Id.
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`BofI raises two points on balancing the equities. First, BofI argues
`prejudgment interest is inappropriate because “it is unclear when Erhart suffered
`emotional distress or reputational harm from a compensable event (if at all).”
`(Opp’n 24:16–21.) This argument is a nonstarter. The jury found Erhart suffered
`emotional distress and reputational harm, and the Court will not decline to award
`prejudgment interest on this ground. See Wooten, 387 F. Supp. 3d at 1105
`(rejecting defendant’s argument “that the balance of equities does not support the
`award of pre-judgment interest because the award itself is ‘excessive,’ unsupported
`by the evidence, and ‘undoubtedly” made [the plaintiff] ‘more than . . . whole.’”).
`BofI’s second point echoes the concern addressed in Barnard above. BofI
`argues the jury was entitled to award Erhart damages for future emotional distress,
`and “there is no way of knowing when his emotional distress ended (if at all).”
`(Opp’n 24:23–25:2.) Hence, BofI argues the Court is unable to parse Erhart’s past
`and future damages to ensure that prejudgment interest is being awarded for only
`Erhart’s past harms. (Id.)
`The Court agrees that awarding prejudgment interest on damages for future
`harms is nonsensical. Erhart, unhelpfully, does not propose a solution to this
`problem. (See Reply 10:14–23.) Some courts have examined the parties’ closing
`arguments to infer how much a jury awarded in damages for future harm. See, e.g.,
`Jerra v. United States, No. 2:12-cv-01907-ODW (AGRx), 2018 WL 1605563, at
`*13 (C.D. Cal. Mar. 29, 2018). For example, in Jerra, the district court reduced a
`$500,000 compensatory verdict by $179,000 when calculating prejudgment interest
`because $179,000 was the amount the plaintiff “requested, at most, as future
`damages.” Id.; see also Barnard v. Las Vegas Metro. Police Dep’t, No. 2:03-CV-
`01524-RCJ, 2013 WL 4039067, at *2 (D. Nev. Aug. 7, 2013) (prorating
`prejudgment interest on remand based on the plaintiff’s argument that he was
`thirty-nine years old and should receive pain and suffering damages to compensate
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`him for thirty-six years until reaching age seventy-five), reversed in part on other
`grounds, 649 F. App’x 414, 417 (9th Cir. 2016).
`There is no simple solution here. Although the brunt of Erhart’s damages
`likely occurred around the time of his termination, he has many years ahead of him.
`Erhart testified he is affected daily by what happened. (E.g., Trial Tr. Vol. 4 at
`260:20–261:2, ECF No. 290.) His counsel later reminded the jury that “he is
`entitled to be compensated both for his past emotional harm and future emotional
`harm. . . . There is no number of years that is a limit on how much time he can be
`compensated for.” (Trial Tr. Vol. 12 at 208:9–13, ECF No. 310.)
`Through his counsel, Erhart ultimately asked the jury for “$5 million for
`emotional distress, and $7 million for the destruction of his reputation,” but did not
`specify what portion of this amount should be for past or future harm. (See Trial
`Tr. Vol. 13 at 175:23–25, ECF No. 312.) The jury then awarded Erhart $1 million
`altogether for his federal claim. Considering Erhart’s arguments to the jury, and his
`lack of a suggested solution to the Court, the balance of the equities supports
`splitting his award down the middle for calculating prejudgment interest. The
`Court determines $500,000 of his damages were for past harm and the remaining
`$500,000 was for future harm.
`2.
`Interest Rate
`
`“Generally, the interest rate prescribed for post-judgment interest under 28
`U.S.C. § 1961 is appropriate for fixing the rate of pre-judgment interest.” Van
`Asdale v. Int’l Game Tech., 763 F.3d 1089, 1093 (9th Cir. 2014) (quoting
`Blankenship v. Liberty Life Assur. Co. of Bos., 486 F.3d 620, 628 (9th Cir. 2007)).
`Hence, “prejudgment interest is often calculated at the same rate as postjudgment
`interest.” Id.
`Under the postjudgment interest statute, the interest rate is “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
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`date of judgment. 28 U.S.C. § 1961(a). Further, the interest is computed daily to
`the date of payment and “compounded annually.” Id. § 1961(b); see also Price v.
`Stevedoring Servs. of Am., Inc., 697 F.3d 820, 839–843 (9th Cir. 2012)
`(summarizing the arguments for using compound interest in the prejudgment
`interest context when the court employs § 1961).
`The court retains discretion, however, to deviate from this rate where it
`“finds, on substantial evidence, that the equities of the particular case require a
`different rate.” W. Pac. Fisheries, Inc. v. SS President Grant, 730 F.2d 1280, 1289
`(9th Cir. 1984). For example, a plaintiff awarded disability benefits demonstrated
`he was forced to divert personal funds to cover the shortfall that would have
`otherwise returned 10.01% in a mutual fund. Blankenship, 486 F.3d at 628. The
`Ninth Circuit held the district court did not abuse its discretion in awarding
`prejudgment interest at this rate in lieu of the standard Treasury bill rate. Id.
`In contrast, in Barnard, discussed above, the plaintiff on remand argued the
`district court should deviate “from the general rule and apply a ‘fluctuating T-bill
`rate.’” 649 F. App’x at 417. The court denied the plaintiff’s request and calculated
`interest using 0.16%, which was the rate under § 1961 at the time of the original
`judgment. Id. at 416–17. The Ninth Circuit held the court did not abuse its
`discretion because it “correctly identified § 1961 as the source for pre-judgment
`interest rates, recognized that there were exceptions for departing from such
`statutory rate, and concluded there was not ‘sufficient cause’ to apply an
`exception.” Id. at 417.
`Here, the Clerk entered judgment on the morning of Friday, September 30,
`2022. (ECF No. 380.) “[T]he calendar week preceding” this date ended on Friday,
`September 23, 2022. See 28 U.S.C. § 1961(a); see also Goldstine v. FedEx Freight
`Inc., No. C18-1164 MJP, 2021 WL 952335, at *1 (W.D. Wash. Mar. 12, 2021)
`(noting the applicable rate is the one “issued for the full calendar week preceding
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`judgment”). For that week, the average 1-year constant maturity Treasury yield
`was 4.08% according to the Federal Reserve.4
`Erhart was terminated no later than June 9, 2015. Between June 9, 2015, and
`September 30, 2022, over seven years passed. For the initial seven years, with
`$500,000 earning interest at 4.08% compounded annually, Erhart receives
`$161,516.97 in interest.5 During the final partial year, 113 days passed between
`June 9, 2022, and September 30, 2022. Erhart receives $8,355.77 in interest for this
`period,6 bringing the total prejudgment interest to $169,872.74.
`Each party, however, asks the Court to deviate from the interest rate specified
`in 28 U.S.C. § 1961. Erhart asks the Court to use the interest rate for significant
`corporate underpayments of tax obligations, which is found in 26 U.S.C. § 6621(c).
`(Mot. 17:3–21.) He claims this rate is 8% and should be compounded daily under
`26 U.S.C. § 6622. (Id. 17:14–21.) Were the Court to use the same variables as
`
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`4 The Court