Opposition Brief — Trailer Marine Transport Corp. v. Zapata Gulf Marine Corp.

Supreme Court, U.S. |

FILED

(F) JUN 5 199]

No. 90-1749 OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1990

7

TRAILER MARINE TRANSPORT CORPORATION,

Petitioner,

V.

ZAPATA GULF MARINE CORPORATION,

Respondent.

7

Petition For Writ Of Certiorari To The United States

Court Of Appeals For The Fifth Circuit

& _

BRIEF IN OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

S

JoserH N. More*

EDWARD F. Kouwnxe, IV

GEORGE FRAZIER

M. SHAWN McMurray

Lemie & KELLEHER

601 Poydras Street

21st Floor, Pan-American

Life Center

New Orleans, Louisiana 70130

Telephone: (504) 586-1241

Attorneys for Respondent

Zapata Gulf Marine Corporation

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (600) 225-4964

OR CALL COLLECT (402) 342-2831

AL/

COUNTERSTATEMENT OF QUESTIONS

PRESENTED FOR REVIEW

1. Is a motion for discretionary prejudgment inter-

est under Section 4 of the Clayton Act a motion for

prejudgment interest within the meaning given that term

by the Court in Osterneck v. Ernst & Whinney, 489 U.S. 109

(1989)?

2. Does a motion for discretionary prejudgment inter-

est filed within 10 days after the entry of judgment con-

stitute a Rule 59 motion to alter or amend the judgment

so as to render ineffective any notice of appeal filed

before a ruling on that motion?

il

LIST OF PARTIES, PARENTS

AND SUBSIDIARIES

The parties to the proceedings below were Petitioner

Trailer Marine Transport Corporation and Respondent

Zapata Gulf Marine Corporation.

The shares of Zapata Gulf Marine Corporation are

owned by the following entities: B C Partners L.P.; Zapata

Corporation; Corporate Partners, L.P.; Corporate Offshore

Partners, L.P.; and the State Board of Administrators of

Florida. Zapata Gulf Marine Corporation owns a 70%

interest in Marine Transportation Services Sea-Barge

Group, Inc.

ill

TABLE OF CONTENTS

Page

COUNTERSTATEMENT OF QUESTIONS

SCG dcp crcbebseccdscvoccccvedess i

rr ii

TE TED PS 6 oc ores ccc ccassrvccveseces iii

8g | | iv

I Es esc ees or ccc cctv sensoccccsesse 2

ie See eh ek phe reu crac ses vcccssves 2

STATUTES AND RULES INVOLVED............... 2

COUNTERSTATEMENT OF THE CASE............ 4

REASONS WHY THE PETITION SHOULD BE

eT 6 a ak ode bn sse6.cesescseccees 6

I. THERE IS NO CONFLICT AMONG THE CIRCUIT

COURTS OF APPEAL CONCERNING THE

ISSUES PRESENTED BY THE PETITION........ 6

Il. A MOTION FOR CLAYTON ACT PREJUDG-

MENT INTEREST IS A MOTION FOR PREJUDG-

MENT INTEREST AND NOT SANCTIONS FOR

ATTORNEY MISCONDUCT.................... 1]

Il. THIS IS NOT AN APPROPRIATE CASE FOR

I ask eco wb d6.es sb c eess 6 16

CONCLUSION ....

a

iv

TABLE OF AUTHORITIES

Page

Cases

Adams-Arapahoe School District No. 28-] v. Continen-

tal Insurance Co., 891 F.2d 772 (10th Cir. 1989)...... 9

Beeman v. Fiester, 852 F.2d 206 (7th Cir. 1988)........ 10

Budinich v. Becton Dickson & Co., 486 U.S. 196

|, SIE ONT Air eee In arse Sa ee Pan ev ye 45:95 tay VE

Dunn v. Truck World, Inc., 929 F.2d at 311.......... 8, 9

Fisher v. Klein, 873 F.2d 626 (2d Cir. 1989)........... 10

Gordon v. Heimann, 715 F.2d 531 (11th Cir. 1983)..... 10

Hicks v. Southern Maryland Health Systems Agency,

PD Ce BOP GUE GWE PEE de hc cee eddereesnesns 10

Jackson Marine Corp. v. Harvey Barge Repair, Inc.,

oe ee | ee rer ee 10

Jurgens v. McKasy, 905 F.2d 382 (Fed. Cir. 1990) ...... 9

Keith v. Truck Stops Corp. of America, 909 F2d 743

SRS WUUEED 656 5 5344c0 oe Feu suG sheen kabnh keew ensues 8

Kurkowski v. Volcker, 819 F.2d 201 (8th Cir. 1987) .... 10

Lawson v. Gelman Sciences, Inc., No. 90-3376 (6th

ee ee SER eh Se cha oes eens ereeauhe der sks 8

Lupo v. R. Rowland & Co., 857 F.2d 482 (8th Cir.

BLS cSU be vwecee ss Scie aT eeVE VON OEE A ORKE Seed 10

Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90 (3d

SS APU era rear senriage ise RRB ATLA PS AE ee 10

Osterneck v. Ernst & Whinney, 489 U.S. 169 (1989) passim

Rosen v. Rucker, 905 F.2d 702 (3d Cir. 1990) .......... 9

Wojan v. General Motors Corp., 851 F.2d 969 (7th

RUSUMEEE Te Saccictecss cone KT TNs ea Sioa et ieale 10

TABLE OF AUTHORITIES —- Continued

Page

STATUTES AND RULES

Clayton Act § 4(a), 15 U.S.C. SES Kian ee anes passim

rR E Eh | ee ee ee rrr rte rear ms es. 7 7

SP Wa Oe RE os os hore cees hic pe cores eee 2

a OP we OE coche sO aad eh kare be 10, 11, 12, 14, 15

ee eR Peeeeereierer ere rice 1

Paes as a RES eee a a cae innateee 6, 10, 11, 14

PI. Tae Ge WI re bce ek eee eli deenenaaee a oe

PE: A Se ES SN as See eae oe noe OR en passim

oe a Se ee er ere re er rr 6, 16

LEGISLATIVE History

H. R. Conf. Rep. No. 1234, 96th Cong., 2d Sess.

(1980) reprinted in 1980 U.S. CODE CONG. &

FE PR IOs pe ke ods he eee 12

H.R. Rep. No. 875, 96th Cong., 2d Sess. (1980)

reprinted in U.S. CODE CONG. & AD. NEWS

pig rrr err Tree erry ere errs hy seer 12

MISCELLANEOUS

Annot., Admiralty — Prejudgment Interest, 34 A.L.R.

eS Bi ff ee PT ferry err ee eee 8

Annot., Allowance of Prejudgment Interest on

Builder's Recovery in Action for Breach of Con-

struction Contract, 60 A.L.R. 3d 487 (1974).......... 8

Annot., Application of 28 U.S.C. § 2516(a) to Gov-

ernment Contractor’s Claim for Interest Expense for

Loss of Use of its Capital Caused by Delay Attribu-

table to Government, 59 A.L.R. Fed. 905 (1982)...... 8

vi

TABLE OF AUTHORITIES - Continued

Annot., Award of Prejudgment Interest Under Miller

Act (40 USCS § 270a et seq)., 66 A.L.R. Fed. 901

EEN rates Ci pee EA A re ar aan re vr

Annot., Automobile Insurer's Liability for Statutory

Excess Interest for Delayed Payment of No-Fault

Claim, 14 A.L.R. 4th 761 (1982) ................

Annot., Insured’s Right to Recover from Insurer Pre-

judgment Interest on Amount of Fire Loss, 5 A.L.R.

rs a Leek sae sae kA OO ede ee ee we es

Annot., Recovery of Prejudgment Interest on Wrong-

ful Death Damages, 96 A.L.R. 2d 1104 \1964)....

BLACK’S LAW DICTIONARY 729 (5th ed. 1979) ....

47 CJ.S. Interest and Usury § 49 (1982)...........

Comment, Prejudgment Interest: Survey and Sugges-

tion, 77 Northwestern L. Rev. 192 (1982).......

Page

No. 90-1749

¢

In The

Supreme Court of the United States

October Term, 1990

+

TRAILER MARINE TRANSPORT CORPORATION,

Petitioner,

ZAPATA GULF MARINE CORPORATION,

Respondent.

~

Petition For Writ Of Certiorari To The United States

Court Of Appeals For The Fifth Circuit

¢

BRIEF IN OPPOSITION TO PETITION FOR

WRIT OF CERTIORARI

— ¢

The Petition presents no ground specified in Rule 10

of this Court. The question of law involved in this case

has been definitively decided by the Court, the ruling

sought to be reviewed is consistent with that decision,

and the purported conflict among the Circuits is illusory.

Accordingly, Respondent Zapata Gulf Marine Corpora-

tion respectfully requests that the Court deny the Petition

for Writ of Certiorari to Review the Decision of the

United States Court of Appeals for the Fifth Circuit.

+

OPINIONS AND ORDERS BELOW

Jurisdictionally relevant Opinions and Orders are

found in the Appendices to the Petition for Writ of Cer-

tiorari. The Opinion of the United States Court of

Appeals for the Fifth Circuit dismissing Petitioner’s

appeal is reported at 925 F.2d 812 and reproduced in

Appendix A to the Petition. The unreported Order of the

court of appeals denying the Petition for Rehearing and

the Suggestion for Rehearing En Banc was entered April

2, 1991 and is reproduced in Appendix B to the Petition.

¢

JURISDICTION

1. The Fifth Circuit’s decision that it had no juris-

diction to review Petitioner’s appeal was issued on Feb-

ruary 25, 1991. A Petition for Rehearing was filed within

the allotted time and denied April 2, 1991. The Petition

for Writ of Certiorari was filed May 15, 1991.

2. The distriet court had jurisdiction under 28

U.S.C. § 1337 and 15 U.S.C. § 15{a).

7

STATUTES AND RULES INVOLVED

The statutes and rules relevant to this case are as

follows:

1. Federal Rule of Appellate Procedure 4(a)(4):

If a timely motion under the Federal Rules

of Civil Procedure is filed in the district court by

any party: (i) for judgment under Rule 50(b); (ii)

under Rule 52(b) to amend or make additional

findings of fact, whether or not an alteration of

the judgment would be required if the motion is

granted; (iii) under Rule 59 to alter or amend the

judgment; or (iv) under Rule 59 for a new trial,

the time for appeal for all parties shall run from

the entry of the order denying a new trial or

granting or denying any other such motion. A

notice of appeal filed before the disposition of

any of the above motions shall have no effect. A

new notice of appeal must be filed within the

prescribed time measured from the entry of the

order disposing of the motion as provided

above. No additional fees shall be required for

such filing.

2. Federal Rule of Civil Procedure 59(e):

A motion to alter or amend the judgment

shall be served not later than 10 days after entry

of the judgment.

3. Clayton Act § 4(a), 15 U.S.C. § 15(a):

Except as provided in subsection (b) of this

section, any person who shall be injured in his

business or property by reason of anything for-

bidden in the antitrust laws may sue therefor in

any district court of the United States in the

district in which the defendant resides or is

found or has an agent, without respect to the

amount in controversy, and shall recover three-

fold the damages by him sustained, and the cost

of suit, including a reasonable attorney’s ree.

The court may award under this section, pur-

suant to a motion by such person promptly

made, simple interest on actual damages for the

period beginning on the date of service of such

person’s pleading setting forth a claim under

the antitrust laws and ending on the date of

judgment, or for any shorter period therein, if

the court finds that the award of such interest

for such period is just in the circumstances. In

determining whether an award of interest under

this section for any period is just in the circum-

stances, the court shall consider only -

(1) whether such person or the oppos-

ing party, or either party’s representative,

made motions or asserted claims or

defenses so lacking in merit as to show that

such party or representative acted inten-

tionally for delay, or otherwise acted in bad

faith;

(2) whether, in the course of the action

involved, such person or the opposing

party, or either party’s representative, vio-

lated any applicable rule, statute, or court

order providing for sanctions for dilatory

“behavior or otherwise providing for expe-

ditious proceedings; and

(3) whether such person or the oppos-

ing party, or either party’s representative,

engaged in conduct primarily for the pur-

pose of delaying the litigation or increasing

the cost thereof.

COUNTERSTATEMENT OF THE CASE

By decision dated February 25, 1991, the Fifth Circuit

dismissed the appeal of Petitioner Trailer Marine Trans-

portation Corporation (“TMT”). The Fifth Circuit held

that it lacked jurisdiction because TMT failed to file any

notice of appeal following the district court’s order deny-

ing the motion of Respondent Zapata Gulf Marine Corpo-

ration (“Zapata”) for an award of prejudgment interest

under Section 4 of the Clayton Act. In so doing, the Fifth

Circuit followed the unambiguous holding of this Court

in Osterneck v. Ernst & Whinney, 489 U.S. 169 (1989).

TMT has sought to avoid the rule of Osterneck by

stating that what Zapata filed was a motion for sanctions.

That is not so.’ Zapata’s motion was a motion for pre-

judgment interest. Section 4 of the Clayton Act is entitled:

“Suits by persons injured: (a) Amount of recovery; pre-

judgment interest.” 15 U.S.C. § 15(a). Zapata’s motion did

not even arguably seek sanctions. TMT’s Petition is an

atternpt to create an artificial conflict between the Fifth

Circuit’s decision in this case and decisions of other cir-

cuit courts dealing with the effect of motions for sanc-

tions. The attempt cannot work because this is a case

about the effects of a post-judgment motion for prejudg-

ment interest, a subject which is foreclosed by the rule of

Osterneck. Thus, TMT’s statement of the case is a mate-

rially accurate recitation of the sequence of events which

occurred below, with the following exceptions: (1) Zapata

did not file a motion for sancticns; (2) the Fifth Circuit

did not address the effect of a motion for sanctions; and

(3) Section 4 of the Clayton Act does not provide for an

award of sanctions. Once that is seen, the rest of the

Petition is an interesting, but irrelevant, discussion of an

issue not before the Court.

' Respondent could have filed, but did not file, a separate

motion for sanctions. It filed three separate motions on March

27, 1990: a motion for prejudgment interest, a motion for costs,

and a motion for attorney’s fees.

REASONS WHY THE PETITION SHOULD BE DENIED

In its 1989 term, this Court framed the only question

relevant to this case as follows:

[W]hether a motion for discretionary prejudg-

ment interest filed after the entry of judgment

constitutes a Rule 59 motion to alter or amend

the judgment and renders ineffective any notice

of appeal filed before a ruling on that motion.

The unanimous answer of the Court was affirmative.

Osterneck v. Ernst & Whinney, 489 U.S. at 170. In the

interests of “ ‘operational consistency and predictability

in the overall application of the [finality requirement] of

§1291’”, the Court established a “bright-line rule” that

timely-filed motions for prejudgment interest are motions

to alter or amend the judgment under Rule 59 of the

Federal Rules of Civil Procedure, so that Rule 4 of the

Federal Rules of Appellate Procedure requires that a new

notice of appeal be filed after their disposition regardless

of the type of prejudgment interest in question. 489 US.

at 177 n.3. That is the rule that governs this case. TMT’s

repeated assertion that this is a case about sanctions does

not make it so.

I. THERE IS NO CONFLICT AMONG THE CIRCUIT

COURTS OF APPEAL CONCERNING THE ISSUE

PRESENTED BY THE PETITION.

TMT has urged this Court to grant the Petition based

on a purported conflict between the circuit courts over

the proper treatment of a motion for Rule 11 sanctions.

That issue is not before the Court. Petitioner’s contention

that clarification by the Court is necessary to dispel lower

courts’ confusion about “litigation sanctions” and Federal

Rule of Civil Procedure 59{e) is unsupported by the cases.

Whatever uncertainty there may have been was elimi-

nated by recent decisions of the Court, primarily Oster-

neck and Budinich v. Becton Dickson & Co., 486 U.S. 196

(1988).

In Osterneck, the Court cited its opinion in Budinich

for the principle that the Court was establishing a “practi-

cal approach” that did not depend on the characterization

of the particular motion in question as involving collat-

eral or non-collateral prejudgment interest. See 486 U.S. at

202. When Budinich and Osterneck are read together, the

Rule is clear: Motions for attorney’s fees are not motions

under Rule 59 and motions for prejudgment interest are

Rule 59 motions, regardless of their characterization as

“merits” or “nonmerits”. The reasoning is this:

[A]s we said last Term in Budinich, “what is of

importance here is not preservation of concep-

tual consistency in the status of a particular

[type of motion] as ‘merits’ or ‘non-merits,’ but

rather preservation of operaiional consistency

and predictability in the overall application of

the [finality requirement] of § 1291.” “Courts

and litigants are best served © the bright-line

rule, which accords with traditional understand-

ing,” that a motion for prejudgment interest

implicates the merits of the District Court’s

judgment.

489 US. at 177 n.3 (citation omitted).

To read Osterneck as Petitioner suggests would

destroy the certainty created by Osterneck and Budinich.

The standard proposed by Petitioner would require

courts to examine the legislative history, the purpose, and

the jurisprudential rationale behind the prejudgment

interest in question, each time the issue arose. Such a

result would mean that the Court wasted its time in

considering and writing Osterneck.2

Osterneck has achieved the Court's policy of certainty.

It has been cited often and followed consistently by the

courts of appeals confronted with the issue in this case.

E.g., Dunn v. Truck World, Inc., 929 F.2d at 311, 312-13 (7th

Cir. 1991); Lawson v. Gelman Sciences, Inc., No. 90-3376 (6th

Cir. Feb. 1, 1991); Keith v. Truck Stops Corp. of America, 909

F.2d 743, 746 (3d Cir. 1990) (dealing with prejudgment

2 There are dozens of state and federal statutes that pro-

vide for prejudgment interest for a variety of reasons, includ-

ing compensation, encouraging settlements, relieving court

congestion, and delay damages assessed against unsuccessful

defendants. There are also uncodified common law and equita-

ble bases for awards of prejudgment interest. There are at least

an equal number of cases interpreting these statutory and

uncodified common law and equitable bases for awards of

prejudgment interest. See Comment, Prejudgment Interest: Sur-

vey and Suggestion, 77 Northwestern L. Rev. 192 (1982). See also

the following annotations that discuss prejudgment interest:

Annot., Admiralty — Prejudgment Interest, 34 A.L.R. Fed. 126

(1977); Annot., Allowance of Prejudgment Interest on Builder's

Recovery in Action for Breach of Construction Contract, 60 A.L.R.

3d 487 (1974); Annot., Recovery of Prejudgment Interest on

Wrongful Death Damages, 96 A.L.R. 2d 1104 (1964); Annot.,

Application of 28 U.S.C. § 2516(a) to Government Contractor's

Claim for Interest Expense for Loss of Use of its Capital Caused by

Delay Attributable to Government, 59 A.L.R. Fed. 905 (1982);

Annot., Automobile Insurer's Liability for Statutory Excess Interest

for Delayed Payment of No-Fault Claim, 14 A.L.R. 4th 761 (1982);

Annot., Insured’s Right to Recover from Insurer Prejudgment Inter-

est on Amount of Fire Loss, 5 A.L.R. 4th 126 (1981); Annot.,

Award of Prejudgment Interest Under Miller Act (40 USCS §§ 270a

et seq.), 66 A.L.R. Fed. 901 (1984).

interest mandatory under state law as compensation for

delay, but suspendable if delay caused by plaintiff); Rosen

v. Rucker, 905 F.2d 702, 705 (3d Cir. 1990); Jurgens v.

McKasy, 905 F.2d 382, 385 (Fed. Cir. 1990) (prejudgment

interest awarded in case brought under Lanham Act);

Adams-Arapahoe School District No. 28-] v. Continental

Insurance Co., 891 F.2d 772, 780 (10th Cir. 1989). In Rosen,

the Third Circuit held that a motion for litigation delay

damages was analogous to prejudgment interest, and

therefore subject to the Osterneck rule, on the following

ground: “Treating a motion [for litigation delay damages]

as a Rule 59(e) motion maintains relatively simple and

comprehensible rules of procedure.” 905 F.2d at 706. As

explained by Judge Easterbrook, in discussing the

cumulative effect of Osterneck and Budinich:

The whole point of the [Budinich] case was to

end case-by-case inquiries into the relation

between the merits and the fee award. The

Supreme Court chose a rule to enable both the

parties and the court of appeals to know with

certainty when the time for appeal begins and

CD. 6-2

Budinich, in common with cases such as Oster-

neck v. Ernst & Whinney, emphasizes the need for

simplicity and clarity in jurisdictional matters.

Dunn v. Truck World, Inc., 929 F.2d at 312-13 (7th Cir. 1991)

(citation omitted).

The “state of confusion” expressed by TMT (Pet. at

10) is not shared by the courts. The only parties who are

confused are those who are unaware of the simple bright-

line rule of Osterneck. It is not the purpose of a writ of

certiorari to correct mistakes of law.

10

Finally, the authority upon which Petitioner relies is

inapposite. Petitioner cites a number a cases (Pet. at

10-11) illustrating that some courts of appeals consider

motions for prejudgment interest to be motions to aiter or

amend the judgment within the meaning of Federal Rule

of Civil Procedure 59(e), while others hold that motions

for sanctions under Federal Rule of Civil Procedure 11

and 28 U.S.C. § 1927 are not Rule 59(e) motions. This is

more than a mere non sequitur. Of the nine cases Peti-

tioner cites as “[e]vidence of confusion about the relation-

ship between sanctions motions and Rule 59(e)” (Pet. at

11), eight were decided before Osterneck, and thus show

very little about lower courts’ appreciation oi that case

and the need for a new pronouncement from this Court.?

None purport to involve motions for prejudgment inter-

est, and some seem irrelevant even to Petitioner’s

strained argument. Kurkowski and Wojan, for example, say

no more than that a district court has jurisdiction to

amend a judgment to impose sanctions sought by motion

filed within 10 days of judgment of dismissal. 815 F.2d at

972, 819 F.2d at 203. This is unobjectionable, and Peti-

tioner cannot seriously contend otherwise.

The ninth case, Fisher v. Klein, 873 F.2d 626 (2d Cir.

1989), is the only one referred to by Petitioner in which

3 Lupo v. R. Rowland & Co., 857 F.2d 482 (8th Cir. 1988);

Beeman v. Fiester, 852 F.2d 206 (7th Cir. 1988); Wojan v. General

Motors Corp., 851 F.2d 969 (7th Cir. 1988); Mary Ann Pensiero,

Inc. v. Lingle, 847 F.2d 90 (3d Cir. 1988); Kurkowski v. Volcker, 819

F.2d 201 (8th Cir. 1987); Hicks v. Southern Maryland Health

Systems Agency, 805 F.2d 1165 (4th Cir. 1986); Jackson Marine

Corp. v. Harvey Barge Repair, Inc., 794 F.2d 989 (5th Cir. 1986);

Gordon v. Heimann, 715 F.2d 531 (11th Cir. 1983).

11

Osterneck was actually relied upon by the court of

appeals. In Klein, the Second Circuit did indeed find that

a motion requesting that a judgment be amended under

Federal Rule of Civil Procedure 59(e) to include an

“award of sanctions” nullified a notice of appeal filed

before the motion was resolved. 873 F.2d at 627. Assum-

ing that the Court of Appeals used “sanctions” in its

usual sense, the case may well have been incorrectly

decided. But what has that to do with this case? A deci-

sion finding that a post-trial motion for sanctions of an

unspecified nature was a Rule 59(e) motion hardly con-

flicts with a case holding a motion for prejudgment inter-

est to be a Rule 59(e) motion. Indeed, there would be no

conflict even if this case concerned a motion for sanc-

tions, for then the only two post-Osterneck cases raised by

Petitioner would be in agreement. But this is not a case

about sanctions.

Il. A MOTION FOR CLAYTON ACT PREJUDGMENT

INTEREST IS A MOTION FOR PREJUDGMENT

INTEREST AND NOT SANCTIONS FOR ATTOR-

NEY MISCONDUCT.

Even assuming that an inquiry into the nature of

Clayton Act prejudgment interest were relevant, it is not

at all clear from the legislative history that such interest is

intended as a penalty and it is certainly not a sanction for

attorney misconduct in the same sense as sanctions under

Rule 1! or 28 U.S.C. § 1927. It was, like almost ali pre-

judgment interest, partly based on the rationale that an

antitrust plaintiff “cannot really be made whole unless

fully compensated by the payment of prejudgment

12

interest.”4 In response to questions concerning the pro-

posed addition of prejudgment interest to Section 4 of the

Clayton Act, John Shenefield, former Assistant Attorney

General for the Antitrust Division, stated that it had two

purposes:

[tlo remove the incentive for delay [and] to pro-

vide the appropriate compensation and interest

thereon to the plaintiff in pursuit of an award of

damages.°

The legislative history shows that at the time it-

authorized prejudgment interest under the Clayton Act,

Congress specifically considered — and rejected - a provi-

sion that would have imposed sanctions for attorney mis-

conduct. Congress instead amended 28 U.S.C. § 1927 to

impose such sanctions against attorneys guilty of dilatory

tactics.© Thus, those who drafted the statutes intended an

award of prejudgment interest under the Clayton Act to

be an entirely separate matter from sanctions that can be

imposed under, e.g., 28 U.S.C. § 1927. Petitioner’s

repeated attempts to equate litigation sanctions and pre-

judgment interest (Pet. at 10, 19) are contradicted by the

congressional history.

A further review of this legislative history reveals

various motives behind the 1980 amendment and the fact

4 H.R. Rep. No. 875, 96th Cong., 2d Sess. (1980), reprinted

in 1980 U.S. CODE CONG. & AD. NEWS 2766, 2767.

5 H.R. Rep. 875, 96th Cong., 2d Sess. (1980), reprinted in

198) U.S. CODE CONG. & AD. NEWS 2766, 2769.

® H.R. Conf. Rep. No. 1234, 96th {Oong., 2d Sess. (1980),

reprinted in 1980 U.S. CODE CONG. & AD. NEWS 2781, 2782.

13

that the final version of amended Section 4 was not the

same as that which was originally proposed. That confu-

sion supports the point made by this Court in Budinich

and Osterneck: Litigants and courts should be able to tell

from the plain words of statutes and jurisprudence when

their judgments are final, and they should not be required

to engage in an exegesis of the purpose and history of the

prejudgment interest in question. Section 4 of the Clayton

Act allows motions for “prejudgment interest” and not

sanctions; Osterneck said all motions for prejudgment

interest are motions under Rule 59(e); and Zapata filed a

motion for prejudgment interest. The result reached by

the Fifth Circuit in this case flows naturally from these

facts.

The general purpose of Clayton Act prejudgment

interest is the same as any discretionary prejudgment

interest. “The purpose of allowing such [prejudgment]

interest is to promote expeditious settlements of claims,

and to discourage defendants from deferring payments of

awards or settlements to injured plaintiffs.” 47 C.J.S.

Interest and Usury § 49 (1982). Interest for money in gen-

eral, and on judgments in specific, is always measured by

the amount owed. “Interest is the compensation allowed

by law... for the. . . detention of money.” BLACK’S

LAW DICTIONARY 729 (5th ed. 1979). In that sense,

prejudgment interest is always directly related to the

merits and not collateral. In the sense that it is always a

mere mechanical function of a rate and a principal

amount, it is seldom, if ever, directly related to the facts

of the case. It is just this sort of inquiry which Osterneck

and Budinich sought to avoid and rendered irrelevant.

14

In support of its contention that this case is primarily

about Rule 11 sanctions for attorney misconduct, Peti-

tioner makes several other arguments concerning the pur-

ported similarity between sanctions available for attorney

misconduct under Rule 11 and 28 U.S.C. § 1927 on the

one hand and prejudgment interest under 15 U.S.C. § 15

on the other. Again, the whole purpose of Osterneck was

to obviate the need to examine such merits or nonmerits

issues. Nevertheless, even these arguments are hollow.

Specifically:

- TMT points out that prejudgment interest is

one of the possible sanctions available under

Rule 11. Rule 11 and Rule 37 also allow a

court to default an intransigent defendant.

That is certainly not “collateral” to the

merits.

- TMT argues that Ҥ 4(a) of the Clayton Act

actually incorporates the standards of Rule

11” and “closely tracks the standards set

forth in Rule 11” (Pet. at 19). That is impossi-

ble. Rule 11 was amended to its present form

in 1983; Section 4 of the Clayton Act was

amended to its present form in 1980. All

Section 4(a)(2) of the amended Clayton Act

does is allow a trial court to consider sanc-

tionable attorney misconduct as one factor in

its decision whether to award prejudgment

interest as part of a plaintiff's compensation

for the delay in achieving its award.

—- TMT argues that Clayton Act prejudgment

interest is unrelated to the “merits” of the

underlying litigation. An examination of

Zapata’s motion for prejudgment interest

(Pet. App. F) and the district court’s opinion

(Pet. App. J) reveals that the almost exclusive

concern of both was the relationship of Peti-

tioner’s motion practice to the merits of the

15

case. Under 15 U.S.C. § 15(a), the district

court had to consider the extent to which

TMT’s motions were “lacking in merit” to

reach its conclusion that several of TMT’s

tactics were frivolous, but not in bad faith

(Pet. App. J, at 63a).

- TMT argues that Clayton Act prejudgment

interest is purely penal. An award of pre-

judgment interest would have added approx-

imately $4 million to Zapata’s award for

TMT’s destruction of a business in 1984. That

certainly would have helped to make Zapata

“whole” for the profits and investments it

had lost six years previously. To Respondent,

then, an award of prejudgment interest

would have been compensatory and not

penal.

TMT’s argument that prejudgment interest is “collat-

eral” to the main award and therefore a sanction is

sophistry. Section 4 of the Clayton Act creates the private

cause of action for antitrust victims, authorizes trebled

damages and allows for a discretionary award of prejudg-

ment interest. Prejudgment interest is only available after

judgment for a plaintiff is entered, and, unlike attorney’s

fees and costs, it is a direct function of the amount of the

untrebled judgment. It can only be assessed against the

defendant and not against an attorney. Rule 11, Rule 37,

and § 1927 sanctions are primarily, if not entirely, directed

at counsel misconduct; they can be assessed at any point

in the litigation process; they are customarily assessed in

amounts related only to the immediate harm done by

counsel misconduct; and they can be awarded regardless

of the outcome of the litigation. Again, however, in the

face of Osterneck’s clear rule, all of these arguments are

16

academic. A motion for prejudgment interest, discretion-

ary or mandatory, and regardless of its relationship to the

“merits”, is a motion to alter or amend a judgment under

Rule 59(e), which stays finality under Rule 4(a)(4) until

disposed of.

Iii, THIS IS NOT AN APPROPRIATE CASE FOR

REVIEW

Finally, Petitioner argues that this case would be

ideal for the court’s consideration of the proper treatment

of motions for sanctions under the Clayton Act and “all

other sources of sanctions for litigation misbehavior”

because subsection (2) of 15 U.S.C. § 15(a) allows the trial

court to consider whether a party or its representative

violated any “applicable rule, statute, or court order pro-

viding for sanctions. ... ” (Pet. at 9). This, Petitioner

argues, means that 15 U.S.C. § 15(a)(2) “subsumes all

sources of authority for litigation sanctions. ...” (Pet. at

12) [emphasis added]. That is not a logical deduction.

Furthermore, an examination of Respondent’s motion for

prejudgment interest (Pet. App. F, at 39a et seq.) reveals

that it sought relief only under subsections (1) and (3) of

15 U.S.C. § 15(a), and not under subsection (2). Specifi-

cally, Zapata did not argue that Petitioner or its counsel

had violated any statutes, rules or orders providing for

sanctions. That was not an issue below. Rather, Zapata

argued that prejudgment interest was due under subsec-

tion (1) for TMT’s frivolous motion practice and under

subsection (3) for its overt efforts to delay the litigation.

Thus, Petitioner asks the Court to resolve an issue which

was neither raised below nor factually developed. The

request should be denied. Such a finding is not likely to

aie rssh tt ne A AN IE ALE 2 TE a OT

ee ee

17

be of help to litigants and is very likely to return the

courts below to the uncertainty as to finality which exis-

ted prior to Budinich and Osterneck.

¢

CONCLUSION

If the Court is going to decide how litigants and

Courts should treat post-judgment motions for sanctions,

it should take a case presenting such an issue. This case

does not involve a motion for sanctions. It involves an

issue decided unanimously by the Court in 1989. To take

the case in order to affirm the decision of the Fifth Circuit

would be pointless. To take the case in order to reverse it

would return the circuit courts to the case-by-case exer-

cise and the inconsistency that existed prior to Osterneck.

The Petition should be denied.

Respectfully submitted,

JoserH N. More *

EDWARD F. Korinke, IV

GEORGE FRAZIER

M. SHAWN McMurray

Lemie & KeELLEHER

601 Poydras Street

21st Floor, Pan-American Life

Center

New Orleatis, Louisiana 70130

Telephone: (504) 586-1241

Attorneys for Respondent

Zapata Gulf Marine Corporation

* Counsel of Record

June 5, 1991