Petition — Ashland Oil, Inc. v. Phillips Petroleum Co.

In the Supreme Court of the United States

October Term, 1979 a

EGupreme Couet, Ui |

No. €.9.=.].9 4]) FILED

ASHLAND OIL, INC., ‘5 «BER 2D 1990

Petitioner, :

as | MICHAEL RODAK, JR., CLERR

PHILLIPS PETROLEUM COMPANY, and

UNITED STATES OF AMERICA,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

TENTH CIRCUIT

*GERALD SAWATZKY

FOULSTON, SIEFKIN, Powers & EBERHARDT

700 Fourth Financial Center

Wichita, Kansas 67202

(316) 267-6371

JAY W. ELSTON

FULBRIGHT & JAWORSKI

800 Bank of the Southwest Building

Houston, Texas 77002

JOHN M. IMEL

Moyers, MARTIN, CONWAY, SANTEE & IMEL

320 South Boston Building

Suite 920

Tulsa, Oklahoma 74103

ARLOE W. MAYNE

Ashland Oil, Inc.

1409 Winchester Avenue

P.O. Box 391

Ashland, Kentucky 41101

Attorneys for Petitioner Ashland Oil,

Inc.

February 8, 1980.

*Counsel upon whom service is to be made.

E. L. MenpEnnaut, Inc., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-3080

EE

a

TABLE OF CONTENTS

Nee ea cnsussapmanesneensé

GREENS ee aE

Sb ye ko) 6s 1 6

Ia a sans encesecitesutensteones

I,

II.

This Court Should Decide an Important, Re-

curring Question—Is a Party Entitled to Rely

on the Law of the Case Decided on Appeal, in

Subsequent District Court Proceedings? ........

The Conflict Among the Circuits As to

Whether Post-Judgment Interest Under 28

U.S.C. §1961 Should Accrue From the Time

of the Original Judgment, or From the Time

of a Later Revised Judgment Following Ap-

pellate Remand, Should Be Resolved by This

Court Because It Is an Important, Constantly

Recurring Problem, Which Has Not Yet Been

I TO ns secesnsonsnnseseecnsens

EE ESET

Index to Citations

CASES

Ashland Oil, Inc. v. Phillips Petroleum Company, 364

I alec ca csi cScennasectecgecarece

Ashland Oil, Inc. v. Phillips Petroleum Company, 554

SINS SSRI

Briggs v. Pennsylvania R. Co., 334 U.S. 304 (1948) ....21, 26

Chemical Bank & Trust Co. v. Prudence-Bonds Corp.,

213 F.2d 443 (2nd Cir. Frank, Circuit Judge, dis-

senting), cert denied, 348 U.S. 856 0...

12

21

27

il

Commissioner of Internal Revenue v. N etcher, 143

F.2d 484, 486 (7th Cir.), cert. denied, 323 U.S. 759 ... 13

De La Rama v. De La Rama, 241 U.S. 154, at 159 (1916) 24

Fassbinder v. Pennsylvania Railroad Company, 233

Bape. S78 CW). PO.) 21

Federal C.C. v. Pottsville Broadcasting Co., 309 U.S.

| RES RVC On Bete Oe AR PA eee 19

Givens v. Missouri-Kansas-Texas R. Co. of Texas, 196

a nae 23

Hanna v. Plumer, 380 U.S. 460 (1965) 20... 22

Harris v. Chicago Great Western R., 197 F.2d 829 (7th

| RMR ESS Re chs Tet eT Ou SR eT ae 23, 24

Hatch v. Morosco Holding Co., 5 F.2d 1015 (2nd Cir.) 15

Hysell v. Iowa Public Service Co., 559 F.2d 468 (8th

oo FR ENON R EEO eee ON RNC PERRET LS SITET TERR 11, 23, 24

Illinois ex rel. Hunt v. Illinois C.R. Co., 184 U.S. 77, 93

SSRIS TSE et alt eer oo a aR Ne ORR ORT aa 12, 13

Insurance Group Com. v. Denver & R.G.W.R. Co., 329

a oS | See ee Sea ei CA ee RE 12

Johnson v. Cadillac Motor Car Co., 261 Fed. 878 (2nd

AR LASER PS RPE ERAN DRT EOADD it hicks Make 13

Kneeland v. American Loan and Trust Co., 138 U.S.

ee i ks a 24

Louisiana and Arkansas Ry. Co. v. Pratt, 142 F.2d 847,

ce cen tle og FLORETS OT econ ERAT ORT AIRS 23, 24

Messinger v. Anderson, 225 U.S. 436, 443-444 (1912) 13

Northern Natural Gas Company v. Grounds, et al., 441

F.2d 704 (10th Cir. 1971), cert. denied, 404 U.S. 951,

OU bereits anced veka naigubiitis ac habaedaciocitonale: Son cece. 4,5,8

Ottey v. Stonewall Ins. Co., 538 F.2d 210, 212 (8th

sca UMTS ee OT ee Rao SO 13

Perkins v. Standard Oil of California, 399 U.S. 222

SIeTED. ictseinsleapicabueemimbainigsetiiuicabiitiec Sess ss i 2 26

III

Perkins v. Standard Oil Company of California, 487

CM OE RN iceland ached icin conus 22, 23, 25

Petition of United States Steel Corporation, 479 F.2d

489, 508 (6th Cir.), cert. denied, 414 U.S. 859 _........ 23

Phillips Petroleum v. Texaco, 415 U.S. 125 (1974) ........ 22

Powers v. New York Central Railroad Company, 251

F.2d 813, 818 (2nd Cir., Lumbard, Circuit Judge, dis-

asctessa, BE eT RS PRL RI AE ERE te 24

Premier Corp. v. Serrano, 471 F.Supp. 444 (S.D. Flor-

ida, 1979), affirmed per curiam, 578 F.2d 566 (Sth

Cir.), cert. denied, 439 U.S. 1003 ............. 23

Richle v. Margolies, 279 U.S. 218 ERS ava eae 14

Sibbald v. The United States, 37 U.S. (12 Pet.) 488,

Ge CW ee eee ee ee 12, 14

Swartzbaugh Manufacturing Co. v. United States, 289

ar Ons SP ES ee 23

Taylor v. Washington Terminal Company, 308 F.Supp.

ca ee GARIN oP Oe Oe HEE TE BESTE ey a a ee 21

Terrell v. Household Goods Carriers’ Bureau, 494 F.2d

16 (Sth Cir.), cert. dism. 419 U.S. 987... 12

Thompson v. Maxwell Land Grant & R. Co., 168 U.S.

ie i, arraigned A 19

United States v. Camou, 184 U.S. 572, 574 (1902) ........ 13

Vendo Co. v. Lekto-Vend Corp., 434 U.S. 424 (1978) 12

Walker v. Armco Steel Corp., 592 F.2d 1133 (10th Cw.),

cert. granted, ........ 8 Tae (1979), argued January

i: MU Seeetethtecpoiiucine ata tiean telecon niketca scree ete 22

Washington Sportservice, Inc. v.. M. J. Uline Company,

313 F.2d 889, 893 (D.C. Cir.), cert. denied, 375 U.S.

Fe Shaan catiticant anes dabaadehiiuc. (0 Bh lis 17

White v. Murtha, 377 F.2d 428, 432 (5th Cir.) ......... 13

Woods Explor. Pro. Co., Inc. v. Aluminum Co. of Am.,

909 F.2d 784 (5th Cir.), cert. denied, 423 U.S. 833 ... 23

IV

STATUTES AND REGULATIONS

2 USL. $1964(1) ROO EEA LON PITT 2

ees, NE ates ere i ne 3

ae Re Me MRE DN ASN Sat 26

oP DOR Be cee es 3, 4, 11, 21, 22, 25, 26

28 U.S.C. §1961, 62 Stat. 957 3

50 U.S.C. §§167a et seg. (74 Stat. | NA MS 9,10

41 CFR. §1-3.403-2 (1961) 7

41 CFR. §1-15.205-7 (1961) 0. 7

23 OBA. WF ceed ee ee 25

OTHER AUTHORITIES

64 Yale L.J. 1019, “Interest on Judgments in Federal

Ss MER eS aN Pt 22, 24, 26

Cardozo, “Nature of the Judicial Process”, from Se-

lected Writings of Cardozo, pp. 162-163 (Matthew

ee A a | MCs A Mo TL IY 13

38 Notre Dame Lawyer 58, at 70 (1962), “Interest on

Verdicts and J udgments in State and Federal Courts” 26

1 Chitty’s Blackstone, pp. 42, 46 | NE ies ee 13

40 West’s Federal Practice Digest 2nd, Federal Courts

TO isnvinnenicnivneivepseeiibiincilctnauibaginetia eae 13

1B Moore’s Federal Practice, §0.404(1), p. 403 2... 12

1B Moore’s Federal Practice, §0.404(3), pp. 432 et seq.

nseneevovrennenmtencasepstnansnsnnriniensi aun lionsiedaisisihaifiieiinnambiiasiadulebenss ates 14,15

1B Moore’s Federal Practice, §0.404(4) 15

1B Moore’s Federal Practice, §0.404 (5--1), pp. 471 et

SOQ. -------ne-n-n-nenrneneneneeesnenenneneoseenenenerncnsnsesececenscsnnsnenenecescseerenees 16

In the Supreme Court of the United States

October Term, 1979

ASHLAND OIL, INC.,

Petitioner,

VS.

PHILLIPS PETROLEUM COMPANY, and

UNITED STATES OF AMERICA,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

TENTH CIRCUIT

Ashland Oil, Inc. prays that a writ of certiorari issue

to review the judgment and opinion of the United States

Court of Appeals for the Tenth Circuit entered on October

15, 1979.

OPINIONS BELOW

The opinion of the court of appeals (A. 1a) is reported

in 607 F.2d 335, and that of the District Court for the North-

ern District of Oklahoma (A. 62a) is reported in 463 F.Supp.

619. These opinions followed proceedings on remand from

the rehearing en banc opinion of the court of appeals

2

(A. 8a) reported in 554 F.2d 381, cert. denied, 434 U.S.

921, 968, which had affirmed in part, and remanded limited

issues, on review of the district court’s first opinion (A.

99a) reported in 364 F.Supp. 6. These opinions, together

with an unreported court of appeals opinion (A. 43a) super-

seded by the en banc opinion on rehearing, are separately

appended hereto.

JURISDICTION

The judgment of the Court of Appeals for the Tenth

Circuit (A. 4a) was entered on October 15, 1979. Ashland’s

timely petition for rehearing was denied on November 14,

1979 (A. 6a). Jurisdiction of this Court is invoked under

28 U.S.C §1254(1).

QUESTIONS PRESENTED

1. The doctrine of law of the case embodies an im-

portant legal policy, akin to stare decisis, which prevents

unfairness to parties and assists in controlling the length

and expense of litigation by preventing the relitigation,

in the same case, of issues already decided on appeal.

Over a century ago, this Court held the law-of-the-case

doctrine controlling in federal court litigation, but am-

biguities have since developed.

This petition for certiorari presents the following ques-

tions:

(a) Does the federal doctrine of the law of the case

preclude relitigation of the principal valuation factor

for helium taken by the United States as part of a massive

federal helium conservation program during 1963-1972,

when that valuation factor had been rejected by the court

of appeals on a rehearing en banc in an earlier appeal, fol-

3

lowing which no intervening change in law or fact had

occurred?

(b) Is the party which prevailed on an issue on ap-

peal, as to which a petition for certiorari was denied, there-

after entitled to rely upon that decision in the future

conduct of the litigation?

2. Should post-judgment interest under 28 U.S.C.

$1961 commence to accrue from the time of entry of the

original judgment for plaintiff, notwithstanding the amount

to which plaintiff is entitled is ordered to be recalculated

according to objective data by an appellate court, resulting

in a revised amount for which judgment is later entered?

STATUTE INVOLVED

28 U.S.C. §1961, 62 Stat. 957, pertinent to Question

No. 2, provides:

“Interest shall be allowed on any money judgment

in a civil case recovered in a district court. Execution

therefor may be levied by the marshal, in any case,

where, by the law of the State in which such court

is held, execution may be levied for interest on judg-

ments recovered in the courts of the State. Such in-

terest shall be calculated from the date of the entry

of the judgment, at the rate allowed by State law.”

STATEMENT OF THE CASE

This action, invoking jurisdiction by reason of diversity

of citizenship under 28 U.S.C. §1332, was brought by Ash-

land against Phillips in 1967 to recover for the value of

Ashland’s helium contained in natural gas delivered to

Phillips, the helium having been extracted by Phillips and

delivered to the United States for conservation under a

4

long-term contract made in 1961. The action was an off-

shoot of massive class action cases, pending since 1963, in

federal court in Kansas involving large quantities of helium

similarly extracted and de’ivered to the United States by

three other companies having long-term conservation con-

tracts with the government. The helium was produced

from thousands of gas wells located in Kansas, Oklahoma,

and Texas.

In an earlier appeal (A. 8a), the court of appeals

had made a specific decision disapproving a valuation

theory asserted by respondents, had affirmed Ashland’s

right to recover, and had remanded the case on other is-

sues. On remand, however, the district court adopted the

valuation theory disapproved on appeal (A. 62a). Ash-

land appealed, relying on the federal doctrine of the law

of the case which precludes relitigation of issues decided

on a prior appeal. The court of appeals, affirming (A.

la), also declined to apply the law of the case, and gave

no consideration to the fact that Ashland, in relying on

the federal doctrine in district court, had not tried its

case on the theory that the valuation factor was any longer

open to relitigation.

The court of appeals also declined to award Ashland

interest on its judgment, under 28 U.S.C. §1961, from the

time of its earlier 1973 judgment, thereby following a line

of decisions which is in conflict with the contrary rule in

other circuits.

The decision below evolved from the following back-

ground.

In Northern Natural Gas Company v. Grounds, et al.,

441 F.2d 704 (10th Cir. 1971), cert. denied, 404 U.S. 951,

1063, the classes of gas producers and landowners owning

royalty interests in the Kansas litigation, were held en-

4)

titled to recover the value of their helium. Those cases

were remanded for a determination of that value.

Thereafter, the United States intervened in this action

as a party. Trial was conducted in 1973 in the District

Court for the Northern District of Oklahoma. The es-

sential controversy was how to value helium commingled

in natural gas prior to its extraction and delivery to the

government.

The United States intervened because contingency

price escalation provisions in the helium conservation con-

tracts with Phillips (RI, Pls. Ex. 5, Vol. I), and other

helium extractors, required the United States to pay an

additional amount, above an $11.00 per mc. average

base price fixed in the contract, to the extent that Phillips

was required to pay third parties (such as Ashland) above

approximately $3.00 per m.c.f. (thousand cubic feet) for ob-

taining the helium to be extracted and conserved. The

United States thus contended that Ashland’s recovery

should be a “nominal amount” not exceeding $3.00 per

m.c.f.

Ashland’s evidence in 1973 included all pertinent gov-

ernment and Phillips documents, demonstrating that no

“market value” as such existed for its helium prior to ex-

traction. Thus, Ashland contended that an alternative

valuation method commonly used in the gas industry

1. Helium is a rare, noncombustible gas with unique quali-

ties making it indispensable for numerous industrial, technological

and governmental purposes. Its only commercial source is from

minute quantities commingled in natural gas in limited areas,

over 95% being in the area involved in the Northern litigation.

Its depletion in this decade will require extraction from presently

non-commercial sources at costs up to $350 per m.c-f. (RI, Pls.

Ex. 57, Vol. VI), as contrasted with market prices during the

1960’s of only $20.00 per m.c.f. This situation dictated the massive

conservation program as described in the Northern case.

Citations “RI” and “RII” will be to the printed appendices

in the first and second appeals, respectively.

6

should be utilized to value its helium. This was the market

value of extracted product, less the expense of extraction

method, otherwise referred to as the “work-back” method.

When a commodity, such as butane, or helium, is extracted

from a gas stream in which it is commingled, the extracted

product which is then competitively marketable for the

first time as a commercial product, has a known market

value. To accurately arrive at the value prior to the ex-

traction, one need only deduct from the known value of

the marketable product, the expenses of extraction includ-

ing a fair return to the extractor.

Phillips and the United States, on the other hand, first

contended that several special transactions were sufficiently

comparable to prove commingled helium value in this case,

and that these supported a value ranging from $1.16 to

$3.00 per m.c.f. But they further contended that if the

work-back valuation method were to be utilized, the Court

should not use the value of helium being marketed as

helium in a free market (about $20.00 per m.c.f.), as the

starting point from which to subtract extraction expenses,

but should rather use as the starting point the base con-

tract price averaging $11.00 per m.c.f. as contained in the

government conservation contract. This, of course, would

have resulted, if accepted, in a much lower recovery than

by using the current market price of helium as the start-

ing point. )

In its 1973 decision, the district court held that the

transactions relied on by respondents were not comparable,

and adopted.the work-back method. The court then re-

jected the use of the base contract price as a starting

point in the method because that base price did not reflect

a market value but was a specially constructed contract,

containing the contingency price escalation clause for ad-

ditional third party payments, which enabled the United

7

States “to obtain a base price substantially lower than

would otherwise have been possible.” Ashland Oil, Inc.

v. Phillips Petroleum Company, 364 F.Supp. 6,9 (A. 105a).

It found that the prices for helium sold on the private

market ranged from $35.00 to $20.00 per m.c.f., and thus

found that the starting value in the method should be

$20.00 per m.c.f. (A. 104a), and awarded judgment accord-

ingly, deducting extraction and purification expenses

from that figure.”

On appeal, Phillips and the United States renewed

their contention that the starting point in the work-back

method should be the base contract price. They further

contended that Ashland had not presented sufficient evi-

dence of specific sales of marketable helium in the open

market to support the $20.00 price utilized by the district

court.

2. The finding that the base contract price was not represen-

tative of “market value” was supported by all the historical docu-

mentation of the contract negotiations, in which the parties

recognized that “no real market value for helium in natural gas

has ever been established”, and that the third party price escala-

tion provisions in the contracts were “absolutely necessary” be-

cause otherwise “if these provisions were deleted the price of

helium to the United States would be much higher or, it may

not be possible to enter into a contract... .” (RI, Pls. Ex. 39,

Vol. III).

This statement by the government negotiator was made

concerning the first conservation contract with Northern Helex

Company, which was the prototype for the later contracts, in-

cluding the Phillips contract. All helium extractors ultimately

insisted on that provision before execution of the contracts

(Grounds I, Vol. V, p. 1531, LPX 182). In obtaining a low base

price, the government also complied with 41 C.F.R. §§1-3.403-2

and 1-15.205-7 (1961), pertaining to contingent price escalation

provisions, which required that the base contract price not in-

clude any amount for the contingency which may later require

additional price payments.

Northern Helex consultants assisting in the contract pricing

recognized at the time that the base price was at least $4.00 to

$5.00 per m.c.f. below fair market value (RI, Ex. Vol. III, p. 688).

Northern’s base contract price was $11.24 as compared to Phillips’

$10.30 per m.c.f., these averaging about $12.00 and $11.00 re-

spectively, during 1963-1972, due to commodity index adjustment

provisions.

8

In the January, 1975, decision by the court of appeals,

respondents’ contentions were rejected, and the valuation

portion of the judgment was affirmed (A. 43a).

In the meantime, in late 1974 the Kansas district court

in the Grounds class action cases, on remand after re-

versal on the liability issue, had rejected valuation of

helium by the work-back method (393 F.Supp. 949), from

which judgment the representative producers and royalty

owners had appealed. To resolve the inconsistency, the

court of appeals ordered a hearing on those appeals before

the full court, en banc, to be consolidated with a rehearing

en banc which it granted to respondents in this Ashland

case.

After complete presentation to the appellate court in

November, 1976, on a consolidated evidentiary record (A.

60a), in which the question whether the base contract prices

should be utilized as the starting point in the valuation

method was extensively argued (Tr. of arguments, pp. 10,

33-34, 44-45, 65, 82), the en banc decision in this case was

entered in May, 1977, approving the work-back method.

Ashland Oil, Inc. v. Phillips Petroleum Company, 554 F.2d

381 (A. 8a). The five-judge majority flatly rejected use

of the base contract price as a valuation factor, but, in view

of respondents’ assertions that the $20.00 starting value

utilized by the district court was not supported by evi-

dence of specific sales of helium in the marketplace, re-

manded for further evidence on the selling price of such

helium (A. 21a) (554 F.2d at 388). After complete analysis

of respondents’ contentions, the court held:

“, . . The value here sought to be established is

independent of the contract base amount... .” (A. 23a)

(554 F.2d at 389).

Since an additional cost to be incurred by the govern-

ment to market the impure conservation helium, delivered

9

by Phillips for underground storage, was a $2.00 per m.c.f.

purification cost, the court ordered this cost to be applied

in deducting from the market value of pure, or marketable,

helium (A. 20a, 21a, 30a) (554 F.2d at 388 and 392). Thus,

the court noted the result of its holding was that “The

United States is liable for some of the additional amounts

which Phillips will have to pay”, and that “The Govern-

ment nevertheless obviously has the basic responsibility

and liability....” (A. 24a, 25a) (554 F.2d at 390).

The single dissent from the en banc decision disagreed

with the majority’s rejection of the base contract price as

a starting point, and its approval of the price of pure,

marketable helium as the starting point. The dissent

argued for use of the base contract price as the starting

point, which would result in “a price close to $3.00” (A.

36a) (554 F.2d at 395) 3

3. The dissent objected to a value above $3.00 per m.c.f., in

part because the government was liable to pay the price above

that amount, resulting in a cost to taxpayers (A. 4la) (554 F.2d

at 397-398). The dissent exaggerated the amounts involved, al-

though, with 20,000,000 m.c.f.’s involved in the total helium liti-

gation, about $140 million remains in controversy, since the dif-

ference between using the contract base price, and the market

price, of helium in the valuation method is about $7.00 per

m.c.f., taking account of the $2.00 purification cost.

The dissent failed to recognize that the government will

resell the conservation helium, and will recover all costs (50

U.S.C. §167d), achieving a multibillion dollar benefit because

prices will be several times as high as the previously depressed

$20 market price for helium upon depletion of the current cheap

sources in the 1980’s (RII, Pls. Ex. 2-19, Vol. I).

The dissent also failed to consider the legislative history of

the Helium Act Amendments, 74 Stat. 918, 50 U.S.C. §§167a,

et seq. The Interior Department sought to elininate the language

in §167(a)(2) requiring payment for helium “to be measured

by terms and prices determined to be commensurate with the

fair market value .. .” (RI, Pls. Ex. 53, Vol. IV, p. 829), because

the Department wanted to obtain commingled helium for its past

monopolistic price in noncomparable transactions, in the neigh-

borhood of $2.00 to $3.00 per m.c.f. (Private industries did not

(Continued on following page)

10

Phillips and the United States then filed petitions for

certiorari with this Court, recognizing the adverse decision

against them on this point, and relying, in part, upon the

dissent. The petitions were separately denied. 434 U.S.

921, 968 (1977) (Nos. 77-221; 77-530).

In the ensuing proceedings after remand, Ashland pre-

sented documented evidence of selling prices for helium

in the cpen market indisputably supporting the prior $20.00

value as being accurate and conservative. The district

court, however, over Ashland’s objection, then allowed re-

spondents to present several newly retained economists

who were permitted to testify to conclusions that the base

contract price shuld be utilized as the starting point in

the work-back method. Ashland’s case had been prepared

and presented in complete reliance on the prior rejection

of the base contract price as being relevant to valuation

(RII, Vol. I, pp. 208-333).

After the trial, the district court, adopting most of

respondents’ requested findings verbatim, found that its

first judgment was “erroneous” (A. 63a), that the base

contract price should be utilized as the starting point, and

that this resulted in a helium value of $3.00 per m.c.f.

(A. 97a), as had been advocated by the dissent from the

en banc opinion.

Footnote continued—

produce and sell helium until the 1960’s, the government having

a monopoly prior to that time).

Congress refused to delete the provision [50 U.S.C. §167a

(a)(2)], making clear that payment for helium value was to

inure to the benefit of those having interests in the helium, back

to the initial royalty owners from whose lands the helium was

produced (RI, Ex. Vol. IV, p. 827).

The only suggestion made to Congress for determining a

value “commensurate with a fair market value” was to consider

the value of helium after extraction and sale in a competitive

market, in connection with the extraction costs (Hearing Before

=_— on Mines and Mining, pp. 38-39, 103, 105, March,

1 ;

11

Ashland appealed that judgment, relying upon the

law of the case as established in the earlier en banc de-

cision.

A panel of the court of appeals handed down a

per curiam opinion on October 15, 1979, summarily af-

firming the $3.00 value, and the use of the base contract

price as the starting point in the valuation method, with-

out discussion of Ashland’s reliance on the law of the case

doctrine, and without attempting to explain the obvious

inconsistency with the 1977 en banc decision (A. la).

Ashland had also sought post-judgment interest under

28 U.S.C. §1961 on the revised amount of the judgment

after remand, such interest to accrue on the revised amount

from the date the original judgment had been awarded

in 1973.

The district court rejected the contention, and the

court of appeals affirmed (A. 3a) by citing Hysell v. Iowa

Public Service Co., 559 F.2d 468 (8th Cir.), thus following

a rule in conflict with that of several other circuits.

REASONS FOR GRANTING THE WRIT

The two questions presented involve basic, constantly

recurring problems of federal judicial management di-

rectly affecting the current propensity of litigants to take

appeals, contributing to delay and expense in federal

litigation. They are clearly defined issues which can be

decided by review of the appellate and district court opin-

ions issued between 1973 and 1979.

One question pertains to the court of appeals’ failure

to apply this Court’s federal doctrine of the law of the

case, and the failure to consider the juridical impact of a

party’s reliance on an appellate decision in connection

12

with further proceedings on remand. This element of

reliance is of crucial importance in federal jurisprudence

of the law of the case, which has not been, but should

be, settled by this Court.

The other question, of post-judgment interest under

28 U.S.C. §1961, presents an unresolved conflict among

the circuits which has increasingly led to inconsistent

results and great confusion, during a time when the view

adopted below motivates defendants to continue litigation

after adverse judgment in order to profit from the use

of money owed to a prevailing plaintiff.

This case also assumes additional importance because

it arose from massive class action cases which remain

pending without decision in the court of appeals since

arguments were presented in 1976, involving the rights

of tens of thousands of citizens, and many millions of

dollars.

I. This Court Should Decide an Important, Re-

curring Question—Is a Party Entitled to Rely on the

Law of the Case Decided on Appeal, in Subsequent

District Court Proceedings?

As generally stated, the law of the case precludes re-

litigation of an issue decided on appeal, either by the

district court, or by the appellate court in a later appeal

in the same case,® unless an intervening change in law or

4. Sibbald v. The United States, 37 U.S. (12 Pet.) 488, 492

(1838); Vendo Co. v. Lekto-Vend Corp., 434 U.S. 424 (1978);

Illinois ex rel. Hunt v. Illinois C.R. Co., 184 U.S. 77, 93 (1902).

5. Insurance Group Com. v. Denver & R.G.W.R. Co., 329 U.S.

607, 612 (1947). The doctrine is stronger that that of stare de-

cisis, 1B Moore’s Federal Practice, §0.404(1), p. 403, because a

party’s “burden should not be increased by a load he has al-

ready successfully shouldered.” Terrell v. Household Goods Car-

riers’ Bureau, 494 F.2d 16 (5th Cir.), cert. dism. 419 U.S. 987.

13

fact has occurred since the prior appeal. Recently, some

lower court decisions have broadly expanded those limited

exceptions if the prior decision is considered “clearly er-

roneous and would work a manifest injustice”,” without

providing any guideline limiting an otherwise unfettered

discretion.®

One such indispensable guideline, we submit, should

be the juridical element of reliance by a prevailing party

on a piror decision in the same case, an element ignored

by the court below.

Specifically, the issue arises because of this Court’s

rule that a district court has no authority to deviate from

6. Messinger v. Anderson, 225 US. 436, 443-444 (1912);

Commissioner of Internal Revenue v. Netcher, 143 F.2d 484, 486

(7th Cir.), cert. denied, 323 U.S. 759; Johnson v. Cadillac Motor

Car Co., 261 Fed. 878 (2nd Cir.). Commenting on the latter case

as being a tendency to subordinate precedent to “justice”,

Cardozo observed:

“How to reconcile that tendency . . . with the need of

uniformity and certainty, is one of the great problems con-

fronting the lawyers and judges of our day.” Cardozo, ‘“Na-

ture of the Judicial Process”, from Selected Writings of Car-

dozo, p. 175 (Matthew Bender, 1947).

7. E.g., White v. Murtha, 377 F.2d 428, 432 (5th Cir.); Ottey

v. Stonewall Ins. Co., 538 F.2d 210, 212 (8th Cir.); 40 West’s Fed-

eral Practice Digest 2nd, Federal Courts §950.

8. The difference between shaping the law to meet cur-

rent conditions is much different than “destruction of all rules

and the substitution in every instance of the individual sense of

justice, the arbitrium boni viri.” “That might result in a benevo-

lent despotism if the judges were benevolent men. It would put

an end to the reign of law.” Cardozo, “Nature of the Judicial

Process”, from Selected Writings of Cardozo, pp. 162-163

(Matthew Bender, 1947).

Even Blackstone observed that to allow a judge to vary

from the law of a case according to his “private sentiments”

would “make every judge a legislator, and introduce most in-

finite confusion. ...” 1 Chitty’s Blackstone, pp. 42, 46 (1832).

Allowing re-examination of questions decided on a first

appeal by the same court “would lead to endless litigation.”

United States v. Camou, 184 U.S. 572, 574 (1902); Illinois ex rel.

Hunt v, Illinois C.R. Co., 184 U.S. 77 (1902).

14

an appellate mandate, followed since Sibbald v. The United

States, 12 Pet. 488, 492 (1838). Ifa prevailing party then

relies upon the mandate, and declines to relitigate an issue

already determined, in remanded proceedings; but the dis-

trict court allows the other party to present more evidence

on the issue, and then decides that issue differently based

upon a “one-sided” record, what is the result? Not only

is this Court’s doctrine of the law of the case ignored by

permitting relitigation—but it is ignored based upon a rec-

ord in which the issue is not fully and fairly litigated in

the second trial. Unless an appellate court then corrects

this error by applying the law of the case decided in the

prior appeal, the doctrine itself becomes an instrument of

entrapment depriving the party relying on it of a fair trial.

And if a party cannot rely on the doctrine, it becomes

meaningless.

There are, of course, rare instances in which reliance

may not be a factor, where an intervening change in gov-

erning law has not caused a prevailing party to rely to his

prejudice in further proceedings. But where, as here,

reliance is a factor, any court must weigh the effect of this

reliance before it can possibly conclude that the law of the

case can be ignored.

In Richles v. Margolies, 279 U.S. 218 (1929), this ques-

tion of reliance as it relates to the law of the case was

implicit in the lower court proceedings, but was not ad-

dressed by the Court. As a consequence, an important

element of the doctrine has been left undecided, con-

tributing to confusion and a serious weakening of this

concept of finality in federal litigation.

This recurring problem is discussed by Professor Moore

in connection with Richle v. Margolies, 279 U.S. 218 (1929).

1B Moore’s Federal Practice, §0.404(3), pp. 432 et seq.

Richle, a federal receivership suit, was preceded by three

15

appeals to the Second Circuit. The first decision,® held that

any judgment obtained by a claimant in federal court, to be

obtained in an existing state court action, would not be

binding on the receiver. In reliance on that decision, the

receiver made no appearance at the state court wherein

the claimant obtained a default judgment.

In the second appeal,’ the circuit court held the de-

fault judgment conclusive, and remanded, without con-

sidering the effect of the receiver’s reliance on the first

decision. In the third appeal, the Second Circuit held that

the second decision was the law of the case, and declined

to re-examine it." This Court granted certiorari, but con-

sidered only the merits, and affirmed. As noted by Pro-

fessor Moore:

“The Supreme Court, like the Court of Appeals,

did not consider the factor of reliance upon the man-

date which went down on the first appeal. Thus the

policy behind the law of the case was completely per-

verted in this litigation.” 1B Moore’s Federal Prac-

tice, §0.404(3), p. 435.

In other words, if a party justifiably relies to his

prejudice upon an appellate decision in further district

court proceedings, he will be effectively deprived of a fair

trial if the courts decline to apply the law of the case on

which reliance was based. The inevitable result must be

a “perversion” of the doctrine.”

9. Hatch v. Morosco Holding Co., 5 F.2d 1015 (2nd Cir.).

10. 19 F.2d 766.

ll. 26 F.2d 247.

12. The factor of reliance also is more significant when

the decision relied on is made after trial and appeal. Pre-trial

rulings may more easily be altered than after full trial] and

appeal, because possible prejudice from reliance is minimal.

1B Moore’s Federal Practice, §0.404(4), and cases cited. In our

(Continued on following page )

16

In this case, the court of appeals en banc definitively

ruled in 1977, after two sets of briefings and oral arguments,

upon a complete record, that the valuation of Ashland’s

commingled helium must be determined “independent of

the contract base amount .. .” (A, 28a) (554 F.2d at 389).

Its analysis left no doubt of this conclusion, as further in-

dicated in the single dissent, which argued for use of the

base amount in the valuation process (A. 36a) (554 F.2d

at 395).

After this Court declined to review that holding, 434

U.S. 921, 968 (1977), Ashland justifiably considered the

issue settled (A. 119a). It limited its case in the remanded

proceedings to providing documentation concerning the

selling price of helium in the market in order to support

the district court’s use of the $20.00 per m.c.f. figure util-

ized in the first trial (RI, Vol. I, pp. 211, 216, 224-240),

as directed by the remand of the en banc appellate opin-

ion.**

The district court indicated apparent agreement with

Ashland’s position at the commencement of trial in 1978

(RII, Vol. I, p. 208), yet after Ashland’s evidence, the court

permitted respondents to present testimony (over the

specific objections of Ashland) from several economists,

who were allowed to give opinions that the base contract

price should be used in the valuation process (RII, Vol. II,

Footnote continued—

present case, there were two appellate proceedings following the

1973 district court judgment, culminating in an en banc decision

on rehearing in 1977. This Court’s denial of certiorari later that

year may have had no technical impact lending further finality,

but, again, it is an obvious factor increasing the right to reliance

on the en banc decision. See, 1B Moore’s Federal Practice,

§0.404(5--1), pp. 471 et seq. »

13. We exclude reference to evidence on minor cost issues,

pertinent to the work-back method, remanded by the court of

appeals, as irrelevant here.

17

pp. 405-447). Only after such testimony did the district

court indicate that it might reconsider use of the base con-

tract price (Trial Tr., Vol. VI, pp. 710-711). The docu-

mentary record in the 1973 trial apparently became sub-

merged as ancient history in the face of polished speeches

ignoring those facts, given by witnesses from the stand."4

The district court later found that its 1973 finding

was “erroneous” and adopted the base contract price as

the key valuation factor (A. 71a), which resulted in a

$3.00 per m.c.f. value as advocated in the dissent from the

en bane decision. On Ashland’s appeal, the court of appeals

did not attempt to analyze its 1977 decision that the valua-

tion must be “independent of the contract base amount.”

It made no reference to the unquestioned fact that Ashland

had placed total reliance on the 1977 decision in presenting

evidence on the limited issues remanded (A. 119a). The

court merely affirmed by stating:

“. . . We see no objection to the use of the con-

tract value for this purpose. It was a negotiated figure

14. Complete documentation of the negotiations for the 1961

contract was introduced in the 1973 trial. No new evidence thus,

was thereafter available in 1978.

Respondents, thus, rather than claiming they had newly

discovered evidence, contended (contrary to their admissions in

their prior petitions to this Court) that the court of appeals’ re-

mand to reconsider “the proper starting value” (A. 30a) was a

general remand enabling the court to consider again the base

contract price as a starting value. This ignored the specific

rejection of the base contract price in the opinion (A. 23a), ig-

nored the approved use of the $2.00 per m.c.f. purification cost

to be incurred by the U.S. prior to marketing the conservation

helium, in the work-back method (A. 20a, 21a, 30a), and ignored

that the reconsideration was because of respondents’ claims that

the selling price of pure helium was inadequately documented,

which was the only reason for the court’s allowing them to

reopen that limited issue (A. 21a).

A general statement of remand at the end of an opinion

must be read in context with the holdings, for otherwise “it

would contradict what had been already expressed in the body

of the opinion.” Washington Sportservice, Inc. v. M. J. Uline

Company, 313 F.2d 889, 893 (D.C. Cir.), cert. denied, 375 U.S. 814.

18

arrived at by parties dealing at arm’s ed

(A, 2a).25

In so holding, the court of appeals failed to apply

the federal doctrine of the law of the case, and failed to

consider what should be a most crucial element of that

doctrine, that of reliance and its impact in depriving Ash-

land of a fair trial, by allowing relitigation on favored

terms to one party.

The very silence of the court on the main issue pre-

sented is revealing. It did not discuss the issue or attempt

to square the two decisions, because it could not. In ne-

glecting to evaluate the effect of the district court’s refusal

to apply the law of the case," it failed to recognize the im-

pact of Ashland’s reliance on the fairness of the district

court evidentiary hearing on remand, i.e., that Ashland

presented a case to prove the selling price of marketable

helium in the competitive market, while respondents were

15. The complete formal and informal documentation of the

negotiations was presented by Ashland in evidence in the 1973

trial (RI, Ex. Vol. III). These, of course, showed the obvious fact

that the base price was negotiated at arm’s length, but also

showed that the base price was much lower than market value

because of the contingency price provisions, and other elements

of the contract. (Footnote 2, supra).

16. In 1977 it ruled that the valuation must be “independent”

of the base contract price. Now it approves a valuation totally

dependent on and utilizing that price. In 1977 it ruled that the

government’s $2.00 per m.c.f. cost of purifying the impure helium

delivered by Phillips for conservation should be deducted, in the

valuation formula, from the selling price of helium in the market

place. Now it approves a result which entirely ignores and does

not carry out that requirement. In 1977, thus, it ruled that the

United States was the principal party in interest because of its

obligation to reimburse Phillips for the amount of the judgment

for Ashland exceeding $3.00 per m.c.f., under its conservation

contract price provision. Now it approves a result which ex-

onerates the United States of any liability.

17. Although the district court had allowed respondents broad

pretrial discovery, it did not finally rule that it would reconsider

the relevancy of the base contract price until its opinion was

entered months after the trial.

19

permitted to present a case retrying the question of the

propriety of using the base contract price as a starting value

in the valuation process. The inherent unfairness of the

parties litigating two very different issues, because of Ash-

land’s reliance on the en banc decision, was not so much as

adverted tc by the court of appeals.1®

In its per curiam decision, the court below recognized

‘that the district court’s decision to utilize the base contract

price as the key valuation element was based on “the expert

testimony.” (A. 2a). Yet, it failed to recognize that re-

spondents were permitted to hire and present opinions

from four new economists in their attempt to negate the

prior rejection of the base price as being relevant; whereas,

Ashland, in reliance on the prior holding, declined to re-

open that subject and had not retained any new witnesses

in that connection.’®

18. The court’s refusal to discuss an important federal doc-

trine, Ashland’s principal point on appeal, appears to us to be a

departure from the accepted and usual course of judicial proceed-

ings (Rule 19 of this Court), which would warrant an exercise

of this Court’s power of supervision. Since, however, the per

curiam opinion, in context with the earlier en banc decision, nec-

essarily discloses the decision of the panel not to apply the law

of the case, nor to consider the crucial element of reliance implicit

in it, as urged by Ashland, the issue is now clearly defined, and

should be decided on its merits. Cf., Thompson v. Maxwell Land

Grant & R. Co., 168 U.S. 451, 456 (1897).

Co., 309 U.S. 134, 141 (1940).

19. Respondents hired four economists shortly before the

1978 trial who had no previous knowledge of the helium in-

dustry. Based on incomplete data, they opined that the base price

was a market value suitable for use in the work-back valuation

method.

Had Ashland not relied on the 1977 en banc decision, it would

have rebutted this misinformation by calling on genuine helium

experts, such as Dr. Charles Laverick, who have demonstrated

the erroneous nature of the type of conclusions which respon-

dents induced the district court to accept (A. 75a-95a) as the

(Continued on following page)

20

Since this case will be direct precedent in the related

massive class action cases which remain pending in the

court of appeals since argument in 1976, the court’s failure

to consider the factor of reliance will result in serious

prejudice to the rights of more than 30,000 citizens who are

members of the prevailing classes, and, in our view, will

deprive them of a fair price for their helium “commensu-

rate” with market value as intended by Congress, and of

many millions of dollars to which they are entitled, unless

the decision below is reviewed and reversed.

Even more significantly, the effect of the per curiam

opinion is to erode and negate an important foundation of

federal law at a time when finality, and an end to per-

petual litigation, are more needed than ever. This founda-

tion can now be strengthened by providing guidelines es-

sential to this concept of finality in federal jurisprudence.

This Court should, accordingly, require the weighing

by federal courts of the juridical factor of reliance in de-

termining whether the “law of the case” should be applied

to enforce a prior decision. It is an important element of

federal law which has not been, but should be, decided by

this Court.

Footnote continued—

basis for its holdings. (Hearings on Helium-Energy Act of 1979,

H.R. 2620, Committee on Interstate and Foreign Commerce,

Serial No. 96-60, pp. 105-164). Dr. Laverick assisted a National

Science Foundation study which described the 1973 termination

of the helium program, premised on this misleading data, as a

“disaster, to put it mildly”.

j

21

II. The Conflict Among the Circuits As to Whether

Post-Judgment Interest Under 28 U.S.C. §1961 Should

Accrue From the Time of the Original Judgment, or

From the Time of a Later Revised Judgment Follow-

ing Appellate Remand, Should Be Resolved by This

Court Because It Is an Important, Constantly Recur-

ring Problem, Which Has Not Yet Been Settled by

This Court.

Over 30 years ago, in Briggs v. Pennsylvania R. Co.,

334 U.S. 304 (1948), certiorari was granted to decide this

question, presented under the terms of what was then

28 U.S.C. §811, the predecessor statute to 28 U.S.C. $1961,

but the majority decided the case on other grounds.” Four

justices would have decided the question because of its

importance:

“Since the Court does not decide that question, I

reserve decision upon it. But I dissent from the re-

fusal to decide it now. The question is of considerable

importance for the proper and uniform administration

of the statute; it is not entirely without difficulty; and

the uncertainty as well as the conflict of decision

Should be ended. There is no good reason for per-

mitting their indefinite continuance, to the perplexity

of courts and counsel, and to an assured if unpredict-

20. The majority in Briggs decided that silence of the man-

date on the question of interest in the intervening appeal pre-

cluded any award of judgment interest calculated from the date

of the original verdict of the jury in favor of plaintiff, and thus

did not reach the instant question.

Briggs has been distinguished in those instances wherein a

judgment was entered on the original jury verdict (as contrasted

to Briggs, where it had not), and interest has been allowed, not-

withstanding silence of the first appellate mandate remanding

the case, on the amount of the new judgment calculated from the

date of the original judgment. Taylor v. Washington Terminal

Company, 308 F.Supp. 1152 (D. D.C.); Fassbinder v. Pennsylvania

Railroad Company, 233 F.Supp. 574 (W.D. Penn.).

22

able amount of injustice to litigants.” (Per Mr. Justice

Rutledge, with whom Mr. Justice Black, Mr. Justice

Douglas and Mr, Justice Murphy joined).

Since then, with the increase of litigation, the conflict

and confusion have proliferated. See generally, “Interest

on Judgments in Federal Courts”, 64 Yale L.J. 1019, 1040-

1047 (1955). Many of the conflicting district court deci-

sions are not reported.

Representing the view contrary to that below is

Perkins v. Standard Oil Company of California, 487 F.2d

672 (9th Cir.). Post-judgment interest under §1961 was

held to accrue on the judgment amount entered after an

appellate remand, from the time of the earlier, original

judgment, though the revised amount was lower than the

origins] judgment. In substance and effect, the original

judgment was viewed as having been partially affirmed,

so that interest should be computed from the date of its

original entry.”

21. Perkins was not a diversity case, and thus did not de-

cide whether state or federal law should determine the question

presented in such a case (487 F.2d at 675). Although ours is a

diversity jurisdiction case, the en banc decision properly held that

the question of interest and other issues were governed by fed-

eral law under the Clearfield Trust doctrine (A. 23a-27a) (554

F.2d at 389-391). See, Phillips Petroleum Co. v. Texaco, 415 U.S.

125 (1974). Thus, state law is clearly not applicable here.

A few courts, without analysis, have read §1961 to permit

application of state law in ordinary diversity cases, as noted in

Perkins, 487 F.2d at 675. These fail to distinguish the substantive

question of pre-judgment interest as a part of the damages

awarded, from the question of post-judgment interest which is

a procedural device to compensate for loss of use of money inci-

dent to delays inherent in the federal system due to appeals, or

otherwise.

Section 1961 adopts only the interest rate fixed by state law.

Therefore, it should remain within the exclusive province of fed-

eral law to determine the time of accrual of that rate, in order

to best serve the interests of federal courts in enforcing payment

of federal judgments in a uniform manner. Cf., Hanna v. Plumer,

380 U.S. 460 (1965); Walker v. Armco Steel Corp., 592 F.2d 1133

(10th Cir.), cert. granted, ........ 8 San (1979), argued January

8, 1980. (No. 78-1862).

23

Alternatively, Perkins, held “that interest should run

from the date of entry of the original judgment because

that is the date on which the correct judgment should

have been entered.” (487 F.2d at 676).

In so holding, the Ninth Circuit declined to follow a

contrary decision by the Seventh Circuit in Harris v.

Chicago Great Western R., 197 F.2d 829, recognizing that,

although an important question, “the Supreme Court has

so far declined to decide it.” (487 F.2d at 674).

The Tenth Circuit, in the instant case, however, chose

to follow Hysell v. Iowa Public Service Co., 559 F.2d 468

(8th Cir.), which is to the contrary (A. 3a). In Hysell,

the first appellate remand had “vacated” the original judg-

ment for additional findings below, after which the district

court ultimately entered judgment for the same amount.

It held that post-judgment interest should accrue only

from the time of the last judgment, not from the date of

the original judgment.

The district court in Premier Corp. v. Serrano, 471

F.Supp. 444 (S.D. Florida, 1979), affirmed per curiam,

578 F.2d 566 (5th Cir.), cert. denied, 439 U.S. 1003, noting

the absence of any decision by this Court on the issue,

was forced to choose between these two lines of authority,

that represented by Hysell, supra, and that represented by

Perkins, supra. It found the Perkins case “more persua-

sive under the circumstances” and declined to follow

Hysell.?2 ; -¢

22. The Fifth and Sixth Circuits apply the rule espoused

by the Ninth Circuit in Perkins, supra. Louisiana and Arkansas

Ry. Co. v. Pratt, 142 F.2d 847, 849 (5th Cir.) ; Givens v. Missouri-

Kansas-Texas R. Co. of Texas, 196 F.2d 905 (5th Cir.); Woods

Explor. Pro. Co., Inc. v. Aluminum Co. of Am., 509 F.2d 784 (5th

Cir.), cert. denied, 423 U.S. 833; Swartzbaugh Manufacturing Co.

v. United States, 289 F.2d 81, 85 (6th Cir.); Petition of United

rey: ee 479 F.2d 489, 508 (6th Cir.), cert. denied,

(Continued on following page )

EOE

24

The en banc remand in 1977 by the court below af-

firmed the issue of liability, and affirmed the basic premises

upon which the district court’s 1973 judgment had been

predicated. It remanded for reconsideration certain limited

elements of the valuation formula which were dependent

on objective factual data, and could result, at most, in a

modification of the amount owing to Ashland. Thus the

recitation that the original judgment was “set aside” for this

purpose is wholly irrelevant. As noted in Kneeland v.

American Loan and Trust Co., 138 U.S. 509, at 511-512

(1891), equity regards the substance and not the form.

“The rights of the parties ~re not to be sacrificed to the

mere letter, and whether the language used was ‘reversed’,

‘modified’, or ‘affirmed in part and reversed in part’, is im-

material.”

Indeed, the Kneeland case, and De La Rama v. De La

Rama, 241 U.S. 154, at 159 (1916), although not directly in

point, approved awards of interest from the time of the

original judgments which were reduced in later judgments

as a result of appeals.

Footnote continued—

The Second and Seventh Circuits apply the rule espoused by

the Eighth Circuit in Hysell, supra (followed by the Tenth Cir-

cuit in this case); Chemical Bank & Trust Co. v. Prudence-Bonds

Corp., 213 F.2d 443 (2nd Cir. Frank, Circuit Judge, dissenting),

cert. denied, 348 U.S. 856; Powers v. New York Central Railroad

Company, 251 F.2d 813, 818 (2nd Cir., Lumbard, Circuit Judge,

dissenting) ; Harris v. Chicago Great Western R., 197 F.2d 829 (7th

Cir.).

23. It has been suggested that the “equity of the statute”

doctrine formulated in Louisiana & A.R. Co. v. Pratt, 142 F.2d

847 (5th Cir.), which “would allow interest on the total amount

of plaintiff’s ultimate recovery for the interval from first to final

judgment” is “eminently sound” because this is the judgment

which should have been entered at the date the original judg-

ment was in fact entered. It assures full compensation without

confusing tests and thus “offers a uniform solution to problems

which are currently being solved by district court clerks in a

variety of conflicting ways.” Note, 64 Yale L.J. 1019, at 1040-

1048.

25

Two factors have gained importance in recent times,

which emphasize the greater need for a decision by this

Court on this point.

The first factor is that a party entitled to money and

deprived of it during appellate proceedings, is losing 10%

or more per year to inflation alone, as well as loss of in-

terest on the money at current high rates.

The second factor is that the party who owes the money

has the use of it during that same delay. If he can use

the money, interest free, it is to his interest to continue

litigation. It is a sad fact, of which lawyers are well

aware, that many cases are appealed, and appealed again,

because of this motivation. This results, not only in in-

justice to the party entitled to be paid, and in a windfall to

defendant, but unjustifiably increases the litigation load of

the courts.

Although Ashland will receive pre-judgment interest

at 6% per annum, Phillips has had the use of money owed

Ashland during a time of high inflation and high commer-

cial interest rates during more than five years between

the original 1973 judgment, and the revised 1978 judgment.

The economic loss (and corresponding gain to Phillips)

from those combined effects is nearly 50% of the total

judgment (including pre-judgment interest) as of 1978,

under the present holding. Almost half of this loss would

be recouped by approving the judgment interest rule fol-

lowed by the Perkins line of cases.*4

Moreover, it must be remembered that in many cases

pre-judgment interest is not awarded at all. In these, the

question now posed assumes even more vital importance.

24. The post-judgment interest rate in Oklahoma from

1973-1978 was 10% (12 O.S.A. §727), and is thus the rate adopted

by 28 U.S.C. §1961.

26

The time is ripe for this Court to decide this increas-

ingly widespread and recurring question in order to resolve

the existing conflict and confusion in the federal system.”5

25. Some of the rampant confusion has resulted from failure

to clarify the respective roles of 28 U.S.C., §1912, allowing dis-

cretionary award of “damages” for delay on appeals, and 28

U.S.C. §1961, which is a mandatory direction allowing interest on

judgments. See discussion, 64 Yale L.J. 1019, at 1023 et seq.

This problem has been exacerbated by the failure of the 5-4

majority in Briggs v. Pennsylvania R. Co., 334 U.S. 304 (1948),

to do so, as discussed in the dissent, 334 U.S. at 307-313.

(The predecessor to §1912 was then 28 U.S.C. §878). The ma-

jority opinion appears premised on this failure and is open to

serious question. Note, “Interest on Verdicts and Judgments in

State and Federal Courts’, 38 Notre Dame Lawyer 58, at 70

(1962). Cf., Perkins v. Standard Oil Co. of California, 399 U.S.

222 (1970).

27

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

GERALD SAWATZKY

FOULSTON, SIEFKIN, Powers & EBERHARDT

700 Fourth Financial Center

Wichita, Kansas 67202

Jay W. ELston

FULBRIGHT & JAWORSKI

800 Bank of the Southwest Building

Houston, Texas 77002

JOHN M. IME.

Moyers, Martin, Conway, SANTEE & IMEL

320 South Boston Building tg

Suite 920

Tulsa, Oklahoma 74103

ARLOE W. Mayne

Ashland Oil, Inc.

1409 Winchester Avenue

P.O. Box 391

Ashland, Kentucky 41101

Attorneys for Petitioner Ashland Oil,

Inc.

February 8, 1980.