Petition for Writ of Certiorari — Alcan Aluminum Corp. v. Prudential Assurance Co.

Supreme Court brief2002

Ask Donna

What actually matters in this document.

Text

Court, US.

FILED

7 011594 APR 23 2002

NO. OPFIGE OF IT hoCusnhN

IN THE

SUPREME COURT OF THE UNITED STATES

ALCAN ALUMINUM CORPORATION

Petitioner,

Vv.

PRUDENTIAL ASSURANCE COMPANY LIMITED

et al.

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

Lawrence A. Salibra, II

Counsel of Record

Elisa P. Pizzino

Alcan Aluminum Corporation

6060 Parkland Boulevard

Mayfield Heights, Ohio 44124-4185

(440) 423-6918

Attorneys for Petitioner

Alcan Aluminum Corporation

Gter

QUESTIONS PRESENTED

Whether the use of non-published non-precedential opinions

violates the 14 Amendment when the purpose and effect of their

use is to disguise differential treatment of similarly situated

parties or the refusal of the inferior court to apply controlling

precedent of this court.

Whether the Ninth Circuit violated the Federal Rules of Civil

Procedure and Due Process when it devised a penalty for

appealing by depriving Alcan of post judgment interest when it

appealed only to increase the amount of a stipulated judgment.

Whether the Ninth Circuit violated this Court’s explicit

directive that non-appealing parties cannot enhance their legal

position, by creating a right in the District Court to enhance a non-

appealing parties post appeal position’ through the “exercise of

discretion.”

Whether the District Court violated Erie v. Thompkins when it

refused to apply state law with respect to: (a) the existence of a

state holiday; and (b) to the interpretation of its mght to recovery

under its comprehensive general liability policy.

Whether the Ninth Circuit’s view that a United States

Supreme Court decision of 1863 is stili valid or the more recent

view of the Fifth Circuit is correct in ruling that the Federal Rules

of Civil Procedure preempt decisions of this Court to the extent

there is, as in this case, a direct conflict.

RULE 14(b) - LIST OF PARTIES

Prudential Assurance Company Limited, absorbed into the

Prudential Assurance Company of England Property & Casualty

(Canada) acquired by General Accident tidemnity Company, part

of the General Accident Assurance Company of Canada; Certain

Underwriters at Lloyd’s Of London, Continental Insurance

Company; Orion Insurance Company Limited; The London &

Overseas Insurance Company Limited; The Home Insurance

Company; Commercial Union Assurance Company Of Canada

Limited.

RULE 29.6--STATEMENT

Petitioner, Alcan Aluminum Corporation is a wholly owned

subsidiary of Alcan Inc., a corporation organized and existing

-under the laws of Canada.

——- OrKreee

TABLE OF CONTENTS

Page

COUBS THON PRESENTED .0...0.0..ccccccdecseccsscccessecccsccecsseesese i

RT EN ea eee ee il

APES BPMN EAA PIEEIEIN E onccsccescnsscecdesesscsccecesnncceccosaccccecess ul

RD aT eee 111

I Is sesuusiediuomnemes v1

TST NS SN ee eS AEE ISD l

REA A Me Dae RIOD l

CONSTITUTIONAL PROVISIONS AND

Ae re I iso cccesicvaccnsccsnitiseslbcnniintaiannnes l

PUI REY BI PUI coc nah cccssccncarccinavssevcssacccsnanas 2

REASONS FOR GRANTING THE

i 8 | EER er eee 5

I. PERMITTING COURTS TO RULE BY UNPUBLISHED-

NON-PRECEDENTIAL OPINIONS CREATES THE

OPPORTUNITY AND THE CONSEQUENCE FOR

COURTS CAN EFFECTIVELY DENY EQUAL

PROTECTION TO PARTIES AND DO SO WITHOUT

PUBLIC ACCOUNTABILITY, WHICH IS A CRUCIAL

ELEMENT OF CONTROL ON THE JUDICIARY AND AN

IMPORTANT FACTOR MAINTAINING PUBLIC TRUST

fl. THE LOWER COURTS IN THIS CASE IMPLEMENT THE

UNJUST PRINCIPLE THAT EXERCISING A RIGHT TO

AN APPEAL WILL RESULT IN THE IMPOSITION OF A

PENALTY AND DENIAL OF FUNDAMENTAL DUE

IES TE Ia a ns Oe eee 9

Il. THE CIRCUIT TOTALLY DISREGARDS THE FEDERAL

RULES OF CIVIL PROCEDURE, IGNORES

CONTROLING PRECEDENT OF THIS COURT,

CREATES AN EXPLANATION FOR THE DISTRICT

COURT CONDUCT WHICH WAS CONTRARY TO THE

DISTRICT COURT EXPLANATION AS TO WHAT IT

DID, AND AGAIN USES UNPUBLISHED-

NONPRECEDENTIAL OPINIONS TO HIDE ITS

RN Min sieenddsbicaduitiinbeiccalslcddensnaalatiabidenbabentinbiiiesncnlecdicn 16

SUIT <cssicleslaiticishsichccinacensiadacseskeneasdaukeieteeiaaaiiniona 18

A LM Mist as aa ae

ARO MSIE SS SE EO A ATEEN REI LR, 1 Bl i SMS it ety

APPENDIX:

Alcan Aluminum Corporation v. Prudential Assurance

Company Limited, et al. Memorandum Filed Jan. 24, 2002

United States Court of Appeals Ninth Circuit

Alcan Aluminum Corporation v. Prudential Assurance

Company Limited, et al. Order, Dec. 8, 1999

United States District Court Central District of California

Alcan Aluminum Corporation v. Prudential Assurance

Company Limited, et al Order, Oct. 26, 1999

United States District Court Central District of California

Alcan Aluminum Corporation v. Prudential Assurance

Company Limited, et al Order, Aug. 24, 1999

United States District Court Central District of California

Alcan Aluminum Corporation v. Prudential Assurance

Company Limited, et al Hearing Transcript (selected pages)

United States District Court Central District of California

November 24, 1997

TABLE OF AUTHORITIES

Cases:

Aerojet-General Corp. v. Transport Indemnity Corp.,

94S P.2d SOD (19GF) ...arccceccereeserccccsrscsscsscesceseses socsscescsscsonscess 10

Alcan Aluminum Corporation v. Prudential Assurance

Co. Lid., et. al., 173 F.3d 859,

1999 US. App. LEXIS 12785 (9" Cir. 1999),

cert denied, $28 U.S. 1077 (2000). ..........cccccecceseeseeneeneneeennens 12

American National Fire Insurance Co., v. B&L Trucking Co.,

OS1 BP. Bb. ZOO CADBS) ncccrcocescccecccccccsesesscecnrssssessosssnsensosonsseseses 4

Anastasoff v. United States, 233 F.3d 898 (8" Cir. 2002),

vacated as moot on reh'g en banc, 233 F.3d 1054

CB Cie, FOI casscansssssintecnetaencninaaaaaae 2,3,7,9

Bronson & Soutter v. La Crosse & Milwaukee R.R..,

GB UD. GOS CRGTBD ccccccesiscerscssscesnssnctnstesssstecnntemnsnesnsiensene 6,10,13

California Sch. Employees Assoc. v. Governing Bd. of

the Marin Cnty. Coll. Dist., 8 Cal. Fk |, nS 15

Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). ........ccccccceeee 4

Enserch Corp. v. Shand Morahand & Co, 918 F.2d 462

CF” Cle, NOTE sisiimniunciearsienaee 11

Hart v. Massanart, 266 F.3d 1155 (9 Cir. 2001) .........000. 000: 7

International Ore & Fertilizer Corp. v.

SGS Control Services, Inc. 38 F.3d 1279 (2™ Cir. 1994),

cert. denied $15 U.S. 1122 (199S) ........cccccecessesseesensenenennnee 13,16

Kaiser Aluminum & Chem. Corp. v. Bonjorno, 49 U.S. 827

CID vxcecesscssscssnsccnsccnscncacescsssssuebediiassnassueanenstecsesnigpeneiesesennn 13

LSO, Ltd. v. Stroh, 205 F.3d 1146 (9th Cir. 2000) ....... 17

vil

Symbol Technologies Inc. v. Lemelson Medical,

Education & Research Foundation LP, 277 F.3d 1361

A I ERIE <i Ot AN acl A ea 3,6,8,9

U. S. v. American Ry. Express Co.,

ee ae ee 13,16,17

Constitutional Provisions

ees Seas INTE Ig, HPT: scniesicsatiiiceriscisanidlelinilenieitiiiin 7

Statutes

CAL. GOV'T CODE §19853 .....cccccccsecsccescsssssssssssssesseeeeeesese 1,15

CAL. GOV'T CODE $6700 .ccccccnnseacscccccccccccssccssecccscsssscsoseee 1,15

I its HSAs 17s GT sccocnnecsaccnnsstapetecsinnneentaitedaninepiainabiddiecnaetll 1,6,16,

PRIS Sets RPA: yo. iatnsenndccrctecicensnnnmnsétensucinnemnneninnnisaiitdmnpnabiniiel 15

SPU, Giibs AUPE A TIT curscisisidescinnsiniieniieishebseliianindaiaedannsadaainiien 16

Other Authority:

William G. Ross, A MUTED FURY: POPULISTS, PROGRESSIVES,

AND LABOR UNIONS CONFRONT THE COURT, 1980-1937,

(Princeton University Press) (1994) .2000..........ccccccccceceeseeeeees 8

Pamela Foa, A Snake in the Path of the Law: The Seventh

Circuit's Non-Publication Rule,

SOU. FUTTPL.. BBV. SOD (IGT TTS), .ncncsccccnescesscnsecsecsscesoenee 9

Brigid McMenamin, Justice In The Dark,

Pas ere UN, SETEM sedictdciilepsiocescithunnenpetciacinigalianatuaslabdenati 3,6

Jerome I Braun, Anastasoff v. U.S.: An Update,

JUDICATURE, Sept-Oct. 2001 ...............ccccccsccecccscssccseccncseeses 3,18

Salem M. Katsh and Alex V. Chachkes, Examining the

Constitutionality of No-Citation Rules, NEW YORK LAW

pe RNR re tenne oeeepaaooeaneee 3

Vill

Jason Hoppin, 9” Circuit Takes Soft Line on No-Cite Rule,

THE RECORDER, May 7, 2001 .0............cecccsscosesscecesscsesececees 3

Jose L. Fuentes and James F. Dial, Uncouple Precedential Value

of Opinions From Publication Status, 161 NEW JERSEY LAW

JOURNAL, AT 1123, September 11, 2000 .0........ceeeeeeeeeeeees 3

Bruce Rubenstein, 75 Percent of Federal Appeals Result in

Uncitable Decisions, CORPORATE LEGAL TIMES,

I SUE el caleeicaenianvesaanadsmuassapnaesbeamhels 3

William Glaberson, Legal Shortcuts Run Into Some

Dead Ends, N. Y. Times, Oct. 8, 2000. ...........ccccceseseeeeseeees 3

OPINIONS BELOW

The Opinion of the Ninth Circuit Court of Appeals concluded

that the law of the State Of California as promulgated by the

California Supreme Court precludes Alcan (1) from recovering

under its triggered comprehensive general liability (“CGL”)

policies for continuous harm that extends beyond the policy

period, and (2) an award of pre-judgment interest. This opinion of

the Ninth Circuit dated January 24, 2002 is reprinted and set forth

in the attached Appendix at A-1. The appellate opinion is based

upon two consolidated appeals. The order of the United States

District Court Central District of California dated December 8,

1999 is reprinted and set forth in the attached Appendix at A-6

was the first appeal regarding taxing the costs of the supersedeas

bond, the order of the United States District Court Central District

of California dated October 26, 1999 denying a Motion for

Reconsideration is reprinted and set forth in the attached

Appendix at A-17. The order of the United States District Court

Central District of California dated August 24, 1999 is reprinted

and set forth in the attached Appendix at A-28 which was the

order from which reconsideration was requested and the subject of

the second part of the appeal. Additionally, excerpts from a

hearing conducted in the United States District Court Central

District of California on November 24, 1997 are reprinted and set

forth in the attached Appendix at A-39.

JURISDICTION

The United States Court of Appeals For the Ninth Circuit

entered its judgment on January 24, 2002. The Jurisdiction of this

Court rests on 28 U.S.C. § 1257(a).

THE CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

U. S. CONST. amend. XIV, §1

CAL. CIV. CODE §19853 (West 2001)

CAL. CIV. CODE §6700 (West 2001)

STATEMENT OF THE CASE

Recently, in a conference in London entitled United States

and International Litigation and Dispute Resolution, Justice

Sandra Day O’Connor was a featured speaker. In her remarks

concerning the internationalization of United States Law, Justice

O’Connor noted that consistency of legal doctrines among nations

was important to, among other things, two critical objectives:

predictability of legal obligations and consistency of treatment

among comparable parties. This case is critically important

because it demonstrates how far from reasonably achieving these

goals we are in the federal court system. In fact, this case

illustrates in a rather dramatic manner the fact that in the federal

system we are increasingly frustrating achievement of these goals

by permitting the practice of unpublished, non-precedential

opinions (“NPOs”) to be used to obviate judicial accountability

and encourage judicial anarchy. In an age where the United States

legal system generally, and the federal judicial system in

particular, had been viewed as the example to be emulated by

other nations, this case illustrates that we have allowed our system

to silently erode the very principles which were the hallmarks of

its greatness by essentially eliminating predictable legal doctrine

and not insuring that comparably situated parties are similarly

treated.

This case illustrates how established principles of this Court

are routinely disregarded by the lower courts. It illustrates how

fundamental notions of due process are disregarded. For example,

in this case, the trial and appellate court actually construct an

economic penalty against Alcan for exercising its mght to appeal.

They do this because both courts share a mutual dislike for

California state law which they are obliged to follow in this

diversity action but refuse to do so. They do not disclose their

conduct, but attempt to bury it in the shadows of a NPO.

It is not a coincidence that this case raised the issue of the

Ninth Circuit’s attempt to disguise its refusal to apply California

law in the context of Alcan insurance coverage action in the first

appeal of this case, only to have the issue of NPOs explode as an

issue shortly thereafter. See Anastaoff v. United States, 223 F.3d

898 (8 Cir. 2000), vacated as moot on reh'g en banc, 233 F.3d

1054 (8" Cir. 2000).'

In Anastoff Judge Armold pointed out precisely what Alcan

had attempted to get this Court to recognize in the first appeal --

that legal doctrines were not being consistently applied. The

Ninth Circuit has staked out its position as defender of the

practice of differential treatment. However, this case and Symbol

Technologies Inc. v. Lemelson Medical, Education & Research

Foundation LP, 277 F.3d 1361 (Fed. Cir. 2002),? demonstrate that

if this Court does not intervene to forestall the attack on the

principles of predictability and consistency of treatment being

clandestinely effected by the lower courts, then its stands to lose

its moral authority and the public’s trust.

The first appeal in this case demonstrated how the inferior

courts can use the practice of NPOs to make this Court largely

irrelevant in developing and setting legal policy. It did this by

using a NPO to disguise the fact that the Ninth Circuit was flatly

'Jerome I. Braun, Anastoff v. United States: an update, JUDICATURE,

Sept-Oct 2001; Salem M. Katsh and Alex V. Chachkes, Examining the

Constitutionality of No-Citation Rules, NEW YORK LAW JOURNAL, April

2, 2001; Jason Hoppin, 9” Circuit Takes Soft Line on No-Cite Rule, THE

RECORDER, May 7, 2001; Brigid McMenamin, Justice in The Dark:

Federal appeals judges say they are so overworked that they have to

dispense quickie jurisprudence—meaning, no accountability, FORBES,

Oct. 30, 2000; Jose L. Fuentes and James F. Dial, Uncouple Precedential

Value of Opinions From Publication Status, 161 NEW JERSEY LAW

JOURNAL 1123 (September 11, 2000); Bruce Rubenstein, 75 Percent of

Federal Appeals Result in Uncitable Decisions, CORPORATE LEGAL

TIMES, November, 1999; William Glaberson, Legal Shortcuts Run Into

Some Dead Ends, N. Y. Times, Oct. 8, 2000.

"In Lemelson, the Federal Circuit established a new legal doctrine called

“prosecution laches” in contradiction to prior case authority which was

deemed non-precedential. Although the dissent tries to tip-toe over the

clear contradiction by claiming courts need to issue non-precedential

opinions, the dissent also points out that these opinions present a clear

contradiction since these cases “point up the diversity of continuation

practices.” Lemelson at 1522. Neither the majority nor the dissent

describe how a practitioner will know when his case will “follow the

precedent” or deviate from it as an unpublished opinion. /d.

4 ,

refusing to apply California state law in a diversity action. Where

the California courts had explicitly declared that the “all sums”

language of a Comprehensive General Liability Policy permitted

the insured to seek recovery to policy limits once a policy was

triggered regardless of the number of years over which the injury

occurred, the Ninth Circuit refused to apply the law and instead

tried to recharacterize it. The California Supreme Court’s

position was not only explicitly recognized and applied by a

number of California appellate courts, it was explicitly

acknowledged and adopted by the Supreme Court of Washington’.

The Ninth Circuit refused to acknowledge this doctrine as the law

of California.

After this Court refused to grant Certiorari on this clear

rejection by the Ninth Circuit of the practical relevance of Erie

R.R. Co. v. Tompkins, 304 U.S. 64 (1938) in the prior appeal in

this case, the district court and Ninth Circuit became encouraged

and emboldened by this Court’s apparent indifference. They

undertook a series of actions, the net effect of which was to °.

significantly reduce the value of the portion of Alcan’s judgment

against its insurer which should have been beyond assault because

it was stipulated to by the insurer. First, it undertook to impose a

penalty against Alcan for having the audacity to appeal and argue

that the federal courts were obligated to apply state law. It did

this by disallowing any post judgment interest during the

pendency of the appeal for undisputed amounts owed to Alcan in

direct contravention of holdings of this Court. It created a new

right in the district court to permit it to assign costs of the

insurer’s bond, posted to insure collection of undisputed amounts.

The Ninth Circuit did this notwithstanding the fact that the insurer

had never appealed its obligation to post a bond.

The Ninth Circuit also permitted the trial court to change the

date of judgment on a post-appeal motion thereby further reducing

the value of Alcan’s judgment by reducing the rate of interest

applicable after the appeal. Finally, the district court and the

Ninth Circuit disregarded the fact that the Friday after

* American National Fire Insurance Co., v. B&L Trucking Co., 951 P.

2d. 250 (1998)

Thanksgiving is a state holiday, and that the Federal courts were

closed for business and were inaccessible on that day. They did

so in order to refuse to hear a significant portion of this appeal.‘

Again they attempt to disguise the reality of what is actually going

on by the use of a NPO.

The reality is that the inferior courts have used NPOs to

disguise the fact that they have blatantly ignored explicit

precedent of this Court. They have used it to hide the fact that

their holdings created clear disputes between the Circuits on pre-

Victorian statements by this Court, and that they are again

disregarding clear state law. Each of these actions alone would be

a basis for review by this Court. Combined, they create a direct

attack on the Constitutional Requirement of Equal Protection and

threaten public trust in our judicial institutions.

REASONS FOR GRANTING THE

WRIT OF CERTIORARI

I. PERMITTING COURTS TO RULE BY UNPUBLISHED-

NON-PRECEDENTIAL OPINIONS CREATES THE

OPPORTUNITY AND THE CONSEQUENCE FOR

COURTS TO EFFECTIVELY DENY EQUAL

PROTECTION TO PARTIES AND DO SO WITHOUT

PUBLIC ACCOUNTABILITY WHICH IS A CRUCIAL

ELEMENT OF CONTROL ON THE JUDICIARY AND

AN IMPORTANT FACTOR IN MAINTAINING

PUBLIC TRUST.

Various justifications have been offered to support the rules

permitting courts to engage in NPOs. These have included the

argument that those cases selected for that treatment are applying

legal doctrine in routine, undisputed fashion, the cases are not

important to the development of the law or that judges are too

busy to thoughtfully consider and research every case which

* UPS attempted to deliver the appeal to the district court on that Friday,

the computed due date, but was unable to find anyone at the district court

to accept delivery. There was no dispute as to this fact.

would be required if the case were to be precedential. Each of

these justifications is meritless and this case illustrates that fact

quite well.

First, the argument that NPO’s are merely routine applications

of legal doctrine in an essentially undisputed manner is refuted by

the extraordinary number of these cases in which the tnal court is

reversed, the NPO results in splits between the Circuits and there

are dissenting opinions.® This case contains many of these

characteristics. In the first rendition of this case, which ultimately

gave rise to this appeal, the trial court was reversed far more than

it was affirmed. The case involves a clear split between the Ninth

Circuit and the Fifth Circuit with respect to the relevance and

application of an 1863 decision of this Court, to wit: whether a

non-appealing party against whom an undisputed judgment lies is

entitled to have its obligation to pay that amount stayed simply

because the appealing party seeks a larger judgment. Bronson &

Soutter v. La Crosse & Milwaukee R.R., 68 U.S. 405 (1863). The

notion that a party need not pay on a judgment while the opposing

party is seeking to increase the judgment on appeal, is also a

position that has no support in the present Federal Rules of Civil

Procedure (“FRCP”). See, FiD. R. Civ. P. §62. In appeal

proceedings, the District Court and the Ninth Circuit extended this

bizarre doctrine to not only permit the stay but to use it as a basis

for reducing the value of the stayed judgment by using it as a basis

for effectively amending the Federal Rules of Civil Procedure to

remove any obligation to pay post judgment interest. This is

hardly a routine application of the law, but a novel doctrine that

has no historical basis. In effect, these courts attempt to use this

1863 case, promulgated almost a century before the adoption of

the Federal Rules, to delete an explicit provision-of those rules

entitling parties to post judgment interest. This act can hardly be

described as routine and not subject to dispute.

Second, the recent decision of the Federal Circuit in

Lemelson, clearly demonstrates the falsity in the justification that

NPO’s are uncontroversial decisions. It also demonstrates the

> Brigid McMenamin, Justice In The Dark, FORBES, Oct. 30, 2000 at

72.

fundamental problem with the practice—similarly situated parties

are not being equally treated as required by the Equal Protection

Clause of the Constitution’.

Judge Kozinski has been a vocal advocate of the propriety of

the practice of NPOs both in his opinions and the media and has

attempted to justify the practice by strictly characterizing Judge’s

Arnold’s opinion in Anastasoff as improper because he ignores the

consequences of the practice. Instead, in Hart v. Massanari, 266

F.3d 1155 (9" Cir. 2001) Judge Kozinski uses a_hyper-

intellectualized technique to argue that since the Framers did not

explicitly prohibit NPO’s, we can only reach the conclusion that

they did not intend to prohibit them by accepting “a very ngid

conception of precedent, namely that all judicial decisions

necessarily served as binding authority on later courts”, /d. at

1163. We believe he misstates the essential argument of

Anastasoff that a decision states the law to the extent necessary to

resolve the dispute and “...must be applied in subsequent cases to

similarly situated parties.” Anastasoff, at 900. The facts of

Anastasoff, notably never mentioned by Judge Kozinski, which

formed the reason for the Anastasoff opinion is that a request was

being made to the court to treat two similarly situated parties

differently without any apparent justification for the disparate

treatment. Judge Kozinski’s attempt to ignore the reality of the

issue and transform it into intellectual discussion concerning the

rigidity in applying precedent is both dishonest and disingenuous.

The explicit Constitutional basis for prohibiting NPOs can be

found in the Equal Protection Clause and the practical application

of that doctrine—those are the practical mechanisms to insure that

the courts are applying the law to similar parties in the same way.

Precedent can change, but it must do so rationally, visibly and

PERMIT EVERYONE TO BENEFIT FROM THE CHANGE.

Court’s cannot violate the Equal Protection Clause. There

must be a practical mechanism to insure that the courts comply

with that requirement. Anastasoff properly points out that

requiring consistent application of the law is a control which

prevents preferential treatment of those we like and different

treatment of the disfavored. Transparency is another important

part of that control. William G. Ross in his history of the courts

entitled, A MUTED FURY: POPULISTS, PROGRESSIVES, AND LABOR

UNIONS CONFRONT THE COURT, 1890-1937, Princeton University

Press (1994), acknowledged the important role of public response

on curbing judicial behavior:

The breath of public dissatisfaction with judicial

decisions may have influenced the courts to render

decision that did not stray too far from prevailing

public sentiment regarding social and economic

questions. As C. Herman Pritchett once observed,

public support for judicial power has remained firm

because ‘the Court has generally told the country what

it wanted to hear, and provided a constitutional case

for what the dominant interests in the nation wanted to

do.

Id. at 314.

The unstated agenda in Judge Kozinski’s doctrine is that

courts. are above the law and beyond public scrutiny and

accountability. Stated in practical terms and illustrated by the

application of his doctrine in Lemelson (where contrary treatment

existed between the published opinion and the non-published

opinion): we can do what we want to whomever we want and we

are not accountable to the public for explaining or even disclosing

what we did. Is there serious doubt by Judge Kozinski that this is

Constitutionally improper!

Judge Kozinski’s attempt to justify this practice by reference

to historical circumstance ignores the minimal potential in the past

for courts to engage in unaccountable, preferential treatment.

Historically, the existence of far fewer cases and a smaller cadre

of practitioners, naturally led to a greater awareness of judicial

conduct and more potential for review by this Court, making

abhorrent conduct less likely. Times have changed dramatically.

Review by this Court is less likely making other methods of

insuring judicial accountability more necessary. Judge Kozinski

refuses to acknowledge the fact that the existence and potential

for abuse today is a far more serious issue than in the past.

nee

Another variation of this logic that preferential treatment is

acceptable is embodied in the argument that NPO’s are justified

because precedential opinions require the rigors of analysis,

thought and research that cannot be invested in all cases. Perhaps

Judge Kozinski could share with us the standards he and his

colleagues use to determine whose case deserves thoughtful

consideration and whose does not. Further, would Judge Kozinski

share with the public the consequences of those decisions so the

public may decide whether judicial conduct is appropriate.

Commentators who have conducted research in this area have

concluded that judges are wholly incapable of predicting which

cases will turnout in the future to have significant general

application. See, PAMELA FOA, A Snake in the Path of the Law:

The Seventh Circuit's Non-Publication Rule, 39 U. Pitt. L. REV.

309 (1977-78).

The principle of the Kozinski position is that judges are above

the law and accountable to no one but themselves, except in the

rare instances where the conduct is sufficiently massive and

egregious that enough political will can be mustered to result in

legislative action. For the bulk of the victims, such as Alcan in

this case and the victims in Lemelson and Anastasoff, there is no

practical remedy. It is the recognition of this fact by Judge Arnold

in Anastasoff that the courts are not treating everyone the same:

they are engaging in discriminatory conduct, that the other limited

means of remedy, including appeai to this Court, are ineffective to

properly and effectively deal with this real preblem -- that is the

essence of his opinion. Judge Kozinski chooses to ignore the

reality of the problem and intellectualize his response, because he

knows its true and has no credible direct response.

The conduct by the Ninth Circuit in this case evidences

patently unequal treatment and attempts to not only cloak its

unconstitutional conduct, but also to invite this Court to condone

its conduct by indifference.

Il. THE LOWER COURTS IN THIS CASE IMPLEMENT

THE UNJUST PRINCIPLE THAT EXERCISING A

RIGHT TO AN APPEAL WILL RESULT IN THE

IMPOSITION OF A PENALTY AND DENIAL OF

FUNDAMENTAL DUE PROCESS RIGHTS.

This case is a clear example of how the lower courts have

been able to surreptitiously construct a penalty for challenging

their refusal to apply state law. The Ninth Circuit achieves this

result by refusing to apply state law and ignoring that the Friday

after Thanksgiving is a state holiday and burying the decision in a

NPO. This was done in total disregard for the procedural due

process rights of Alcan, and effectively penalized Alcan for taking

its appeal by denying the appeal and not giving Alcan an

opportunity to vindicate its entitlement to post judgment interest.

One of the two present appeals in this case involved an

undoubtedly controversial principle—that a prevailing party at the

trial court who elected to appeal to enhance its award could be

penalized for electing to do so by forfeiting post judgment

interest. In economic terms the real value of its uncontested

award would be reduced in value. This was an expansion of this

Court’s decision in Bronson & Soutter v. La Crosse & Milwaukee

R.R., 68 U.S. 405 (1863), which is not even arguably supported by

any reasonable construction of the holding of that case.

In this case, Lloyd’s, one of Alcan’s excess carriers and a

party subject to the appeal, stipulated to a minimum level of

liability. Alcan appealed arguing that the district court had

incorrectly apphed California law and sought to increase the

judgment. A more definite statement of California law on the

precise issue in this case was at issue before the California

Supreme Court during Alcan’s appellate process in the federal

court. See Aerojet-General Corp. v. Transport Indemnity Corp.,

948 P.2d 909 (1997).

Each of the carriers other than Lloyd’s who had stipulated to

an undisputed amount of liability promptly paid Alcan what they

owed. Lloyds argued that it was entitled to an automatic stay. It

was undisputed that the Federal Rules of Civil Procedure did not

permit such a stay. Instead, Lloyds argued that Bronson, an equity

decision of this Court entitled it to a stay. Alcan replied citing a

more recent case from the Fifth Circuit, which rejected the

continued relevance of this case in light of the adoption of the

federal ruies which only permitted Stays In certain circumstances.’

The district court concurred with the Fifth Circuit, but created

an entirely new basis for a stay, the exercise of its discretion to

permit a stay contingent on Lloyds supplying of a bond. The

district court could not and did not cite to any rule that applied.

The Court explicitly stated that its discretion in allowing the bond

was based on his knowledge of the difficulty that his former

client, Lloyds, would have collecting twice from its syndicates if

Alcan’s appeal was successful.’

Alcan countered that the district court had no discretion to

effectively construct new federal rules to suit the personal needs

of his former client and effectively put Alcan into the bridge loan

business. Further, Alcan pointed out that post judgment interest

under the federal rules was far less than Alcan’s actual cost of

capital and that as a consequence the delay would reduce the

value of the judgment to Alcan (and since Lloyds cost of capital

was also likely far more than the post judgment interest it would

be a windfall to Lloyds). The district refused to increase the post

judgment rate and Alcan appealed.

Lloyds appealed NO issue, including the determination by the

district court that it must post a bond and pay post judgment

interest. However, in response to Alcan’s argument that the

district court had acted improperly in creating a special exception

to the federal rules for its former client, particularly in light of the

fact that it was based explicitly on the judge’s personal

experiences in representing that client, Lloyds again argued it was

” Enserch Corp. v. Shand Morahand & Co., Inc. 918 F.2d 462 (5"™ Cir.

1990).

“United States District Court, Central District of California Hearing

Dated Nov. 24, 1997: * THE COURT: Yes. Counsel for Alcan takes a

position that it’s a market rate advantage that Underwriters are trying to

use. Now, this is outside the record, but based upon my - - when I was

representing underwriters, it doesn’t work that way. There are all sorts of

syndicates that sign on for a piece of the action. And now, there’s one

allocation so they'd have to collect that. If Alcan then wins, then, there’s

another allocation, and they'd have to go back again. They can never .

close their books out....” A-39.

entitled to an automatic stay citing as authority Bronson. The

Ninth Circuit agreed stating that Alcan had no mght to challenge

the judge's stay since Lloyds was in fact entitled to an automatic

stay. The Ninth Circuit's opinion net only reversed the trial

court’s reasoning, but put itself in direct conflict with the Fifth

Circuit. Surprisingly, or perhaps in retrospect not so surprisingly,

the Ninth Circuit chose to make its opinion non-published and

non-precedential. The Circuit's concluding comments on the

issue made it clear that Alcan had received greater benefits than it

was entitled under its view of the law. Alcan Aluminum

Corporation v. Prudential Assurance Co. Lid., et. al., 173 F.3d

859, 1999 US. App. LEXIS 12785 (9" Cir. 1999), cert denied, 528

U.S. 1077 (2000). However, since Lloyd's had not appealed,

presumably Alcan could not lose the benefits the trial court had

granted.

The Ninth Circuit was confronted with a problem. If Lioyds

had appealed the Ninth Circuit would have had to directly

confront the legal issue posed by the conflicting appeals. The law

would have required Alcan lose completely or Lloyds lose

completely and the Circuit would have had io directly

acknowledge the conduct by the district court in explicitly using

his experience from his prior practice for this defendant to carve

out a remedy for them. The present format allowed a

Solomonesque approach (splitting the baby), and by rendering the

NPO they were not exposing themselves to treat someone, who

was in legal terms similarly situated, the same. Meanwhile, the

Ninth Circuit could avoid embarrassing the district court by hiding

the fact that it gave its former client (Lloyd's) preferential

treatment. What the Ninth Circuit had not counted on was that the

district court would interpret their action as an invitation to further

enhance its former client's position. After the conclusion of the

first appeal, the district court then proceeded to change the date of

the judgment significantly reducing the interest rate for post

judgment interest from the date the mandate issued until the

judgment was paid and entirely eliminating all of the post

judgment interest during the pendency of the appeal, thereby

dramatically reducing the real value of the stipulated liability.

The district court justified this action claiming that the Ninth

Circuit had ordered it to do it, notwithstanding the fact that it

could point to nothing in the Circuit’s former opinion that

supported that claim.

However, what was perhaps more outrageous is that Lloyd's

had not appealed and, therefore, the Ninth Circuit could not

enlarge Lloyd's nights, as the district court claimed it had done.

An unambiguous statement by this Court in U. S. v. American Ry.

Express Co., 265 U.S. 425, 435 (1924) (an appellee who had not

cross-appealed could not “attack the decree with a view...to

enlarging his own rights.”), and a recent application of the

doctrine by the Second Circuit in /nternational Ore & Fertilizer

Corp v. SGS, 38 F.3d 1279 (2™ Cir. 1994); cert. denied 115 S. Ct.

2276 (1995), made it clear that appellate courts were without

authority to do what the district court in this case claimed it was

compelled to do as a result of the Ninth’s Circuit's holdings. The

district court in this case ignored both Railway Express and

International Ore.

In addition, this Court’s explicit statement as to the purpose of

post-judgment interest in keeping a party whole (which was well

after Bronson), would have effectively overruled it assuming

arguendo that Bronson had held post judgment interest did not

accrue during an automatic stay.” This was also ignored by the

district court. When these actions were appealed, it created a

problem for the Ninth Circuit. Because of the extreme nature of

the facts, the potential of exposing their prior improper conduct

existed which they buried under the cloak of a NPO in the first

appeal. But fate gave them a way out. They could avoid the

appeal altogether by simply finding it was not filed on time.

The appeal with respect to post judgment interest was due on

Friday, November 26, 1999, the day after Thanksgiving. All

government offices, including the State and Federal Courts were

on holiday, except the Federal Courts had a “skeletal staff” for

* See Kaiser Aluminum & Chem. C orp. v. Bonjorno, 49 U.S. 827, 835-

836 (1990) where this Court stated: “The purpose of post judgment

interest is to Compensate the successful plaintiff for being deprived of

compensation for the loss from the time between the ascertainment of the

damage and the payment by the defendant.”

“emergency filing” only. (United States District Court Central

District of California, Court Observed Holidays at

http://www.cacd.uscourts.gov). When Alcan called the clerk's

office to determine the appropriate filing procedure, it was told

that the normal filings were shifted to Monday. Nonetheless,

since the appeal was completed it was sent overnight by United

Parcel Service (“UPS”) who attempted unsuccessfully to deliver

on Friday, November 26, 1999. The appeal was subsequently

filed on Monday.

Upon its receipt, the Ninth Circuit raised the issue as to

whether the Alcan filing was timely and remanded the case to

district court for a hearing on accessibility. Appendix at A-3. The

hearing process in the district court did not even make an effort to

make believe any provisions of due process were provided. Alcan

was given no right to discovery, no right to present witnesses and

no right of cross-examination. What occurred was the tral court

produced two court employees. This was in response to

information Alcan’s counsel could glean from conversation with

clerk’s staff suggesting that there were so few people around that

the likelihood of raising anyone’s attention at any particular time

could have been impossible. These two employees were never

officially identified. They were not subject to discovery or cross-

examination and essentially agreed with the district court’s view

that they were around if UPS looked hard enough.

Needless to say these employees never took the stand but

nodded obligingly from the back of the courtroom and of course

were not under oath. Based on this and the district court’s prior

view that UPS and FED EX were generally incompetent, it found

the court was accessible. The Circuit in its NPO noted that Alcan

had not shown the courthouse was “officially closed” or

accessible only by “heroic measures”. Nonetheless, there was no

dispute that the courthouse was not officially open as that term is

understood in common parlance and that Alcan had filed every

document in this case over the years it proceeded timely and

precisely in the same manner.

The next issue was whether Friday was an official state

holiday. The Federal Rules of Appellate Procedure (“FRAP”)

clearly provide that if the computed service date fell on a state

holiday, the due date was moved to the next official court business

date." There was no dispute that all non-essential state and

federal employees were on a holiday. All the state office web

sites described state offices as being closed for state holiday. The

California Supreme Court had declared the day an official judicial

holiday.'’ The U.S. District Court was itself, on holiday.

Notwithstanding all of the above, the Ninth Circuit

determined that the day after Thanksgiving is not an official state

holiday. There is no dispute that CAL. GOV’T CODE §19853

states that the Friday after Thanksgiving is a state holiday. The

Circuit concluded that this is merely “administrative” in nature

and sets out an employment policy. However, the Federal Rules

provide no limitation as to how a state may “declare” a holiday.

Moreover, CAL. GOV’T CODE §6700, which the Ninth Circuit

attempts to rely upon as a basis for denying it as a state holiday,

clearly provides the contrary:

(o) Every day appointed by the President or Governor for

a public fast, thanksgiving, or holiday....

The Circuit’s disingenuous attempt to ignore Cal. Gov’t Code

Section 19853 which appoints the day after Thanksgiving a

holiday, and artificially limit the reality of a declared state holiday

can only be accomplished by hiding the reality of its conduct in

the cloak of an NPO. The Friday after Thanksgiving is a state

holiday. It has all the attributes of one. It is described in the

Court’s and Government Code as a holiday. If the Ninth Circuit

were compelled to make its holding precedential it would be

untenable. It clearly wants to apply incredible “logic” to Alcan

alone—having no intention to apply it uniformly to similarly

situated parties because to do so would uncloak its own prior

improper conduct.

'° Fed. R. App. P. § 26 -

'' See California Sch. Employees Assoc. v. Governing Bd. Of the Marin

Cnty. Coll. Dist., 8 Cal. 4'" 333, (1994) which held that a “holiday” is “a

day on which government offices would be closed. /d. at 343. The CAL.

Gov't. CODE § 19853 provides that all employees shall be entitled to

holidays including the day after Thanksgiving.

ill. THE CIRCUIT TOTALLY DISREGARDS THE

FEDERAL RULES OF CIVIL PROCEDURE,

IGNORES CONTROLLING PRECEDENT OF THIS

COURT, CREATES AN EXPLANATION FOR

DISTRICT COURT CONDUCT WHICH WAS

CONTRARY TO THE DISTRICT COURT

EXPLANATION AS TO WHAT IT DID, AND AGAIN

USES UNPUBLUBLISHED-NONPRECENDENTIAL

OPINIONS TO HIDE ITS CONDUCT.

The district court required Lloyd’s to place a bond on the

undisputed amount that it owed Alcan as a basis for obtaining a

stay pending Alcan’s appeal. Lloyd’s did not appeal this

requirement. As noted earlier, as a result of Alcan’s appeal the

Circuit noted that Lloyd’s would have been entitled to an

automatic stay.

After the first appeal, Lloyd’s sought to recover the cost of

their bond pursuant to the “Rules”. The Clerk’s office refused to

assess the cost of the bond to Aican noting that it still owed the

money subject to the bond and had not appealed its obligation to

post a bond, thus FRAP 39(a) does not apply. This rule, the Clerk

noted, presumes a bond was posted pursuant to Rule 62. Lioyd’s

then appealed to the district court. The district court reasoned that

Lloyd’s had posted a bond pursuant to its “extended application”

of FRCP 62, thus FRAP 39(a) applied. Appendix at A-i5.

Moreover, Alcan pointed out that the Ninth Circuit could not

have given Lloyd’s its cost of the bond since it had not appealed.

Alcan cited the district court to the clear statement of the law by

this Court that a party who does not appeal is not entitled to

enhance its position if it appears during the appeal that had it

appealed it would have prevailed. See Railway Express, supra at

435. Alcan further referred the district court to a more recent

decision of the Second Circuit, which explicitly applied this

Court’s directive that non-appealing parties were not entitled to

enhance their positions as a result of the appeal. International

Ore & Fertilizer Corp. v. SGS Control Services, Inc., 38 F.3d

1279 (2™ Cir. 1994), cert. denied 515 U.S. 1122 (1995).

The district court chose to ignore this explicit doctrine and

ordered Alcan to pay the cost of Lloyd’s bond. A-6. Alcan

appealed that decision. (Alcan Aluminum Corporation vy.

Prudential Assurance, et al. Docket No. 00-55163) The Ninth

Circuit consolidated this appeal with the appeal regarding post

judgment interest. (Alcan Aluminum Corporation v. Prudential

Assurance, et al. Docket No. 99-56951). Since it was due to be

filed on a different date the Circuit was unable to avoid it by

holding that the Friday after Thanksgiving was not a legal holiday.

The Ninth Circuit sustained this ruling using a NPO in an

even more bizarre manner than was occasioned by its prior

holdings. Confronted with the fact that explicit precedent from

this Court precluded it from enhancing Lloyd’s position since it

did not appeal, and the rules did not provide that Alcan pay the

bond, it concluded that the district court enhanced Lloyd’s

position after appeal, it concluded that the district court, in fact,

enhanced Lloyds position by its exercise of discretion. A-4-5.

This novel doctrine permits a district court to enhance non-

appealing party’s positions after appeal even though the Ninth

Circuit cannot.

This is such a blatant charade around this Court’s clear

directives. Moreover, it is a direct challenge by the Circuit to this

Court’s right to establish legal doctrine and expect the Circuits to

apply it. The authority cited by the Circuit for this proposition—

the right of district court prior to appeal to assess legal fees is not

even arguably relevant to the proposition for which the Ninth

Circuit attempts to cite it. LSO, Lid. v. Stroh, 205 F.3d 1146 (9th

Cir. 2000).

Once again, to mask the refusal of the Circuit to follow this

Court’s directive the Circuit uses NPO. This Court should not

tolerate such subterfuge in challenges to its authority. If the

Circuit had explicitly rejected the rule of this Court in Railway

Express, this Court would clearly respond. The impact on Alcan

is no different than such a direct rejection; however, the use of

NPO is simply an attempt by the Ninth Circuit to escape

accountability to this Court for its conduct and should be treated

by this Court no differently than a direct challenge to its authority.

IV. Conclusion

This case involves every condition defined by Supreme Court

Rule 10 as a circumstance that is appropriate for this Court to

exercise it’s discretion of review. The only difference is that the

Circuit uses the technique of NPO to disguise the reality of

unacceptable judicial conduct. The problem is that this case may

well reflect the norm rather than the exception. Jerome I. Braun,

in a recent article in Judicature argued that a lawyer’s ethical

obligation to his clients requires intentional violations of the rules

prohibiting citation to NPO and reference NPO to the extent one

can even ascertain the existence."”

Judge Arnolds’ concerns about the extent to which this

practice is perverting the integrity of our legal system are real and

well illustrated by this case. They deserve the considered

attention by this Court.

Dated: April 19, 2002

Respectfully submi éd, i

ee Pr

aw 2

_* Lawrence A. Salibra, II

= Elisa P. Pizzino

Alcan Aluminum Corporation

6060 Parkland Blvd

Mayfield Heights OH 44124-4185

440-423-6918

Attorneys for Petitioner

Alcan Aluminum Corporation

'2 Jerome I. Braun, Anastasoff v. United States: An Update, Judicature

Sept.-Oct. 2001

A-1

FILED JAN 24, 2002

CATHY A. GATTERSON CLERK,

U.S. COURT OF APPEALS

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ALCAN ALUMINUM CORPORATION _ | No.99-56951

Plaintiff-counter-defendant-Appellant No. 00-55163

VS. D.C. No.

CV-94-02202 DT

PRUDENTIAL ASSURANCE

COMPANY LIMITED, absorbed into the

Prudential Assurance Company Of MEMORANDUM

England Property & Casualty (Canada)

acquired by General Accident Indemnity

Company, part of the General Accident

Assurance Company Of Canada:

CERTAIN UNDERWRITERS AT

LLOYD’S OF LONDON,

Defendants-counter-claimants-Appellees,

CONTINENTAL INSURANCE

COMPANY; ORION INSURANCE

COMPANY LIMITED; THE LONDON &

OVERSEAS INSURANCE COMPANY

LIMITED; THE HOME INSURANGE

COMPANY;

Defendants-Appellees

COMMERCIAL UNION ASSURANCE

COMPANY OF CANADA LIMITED,

Appeal from the United States District Court

For the Central District of California

*This disposition is not appropriate for publication and

may not be cited to or by the courts of this circuit except as may

be provided by Ninth Circuit Rule 36-3.

Dickran M. Tevrizian, District Judge, Presiding

Argued and Submitted, December 5, 2001

Pasadena, California

BEFORE: LEAVY, T.G. NELSON, and W. FLETCHER,

Circuit Judges.

Alcan Aluminum Corporation (“Alcan”) appeals the

district court’s post-judgment interest rulings and the court’s order

taxing costs against Alcan. We dismiss the post-judgment interest

appeal for lack of jurisdiction and affirm the district court’s cost-

taxing order.

The first time this case came before us, we rejected Alcan’s

arguments that the district court should have awarded Alcan a

larger judgment and that the court erred in granting a stay of the

judgment against certain underwriters at Lleyd’s of London

(“Lloyd’s”) on the groud that Lloyd’s had posted a supersedes

bond.’ On remand, Lloyd’s successfully moved the district court

for two rulings regarding the accrual of post-judgment interest and

for an order taxing the costs of Lloyd’s supersedeas bond against

Alcan. Alcan now appeals those rulings.

' See Alcan Aluminum Corp. v. Prudential Assurance Ltd., 173 F.3d 859,

1999 WL 201610 (9" Cir. 1999) (mem).

A-3

Alcan’s notice of appeal of the district court’s post-judgment

interest rulings was due on November 26, 1999, which was the

Friday after Thanksgiving day. Alcan filed its appeal on the

following Monday, November 29, 1999. Alcan’s filing was timely

only if the district court clerk’s office was “inaccessible” on the

Friday after Thanksgiving,’ or if that day was “declared a holiday”

in California.’

This court ordered a limited remand to the district court to

determine if the clerk’s office was “inaccessible” on the Friday in

question. The district court found that it was not. This factual

finding is supported by the record and is not clearly erroneous.‘

Thus, the district court clerk’s office was not “inaccessible”

within the meaning of Rule 26(a)(3)° on Friday, November 26,

1999.

We reject Alcan’s alternative argument that the Friday after

Thanksgiving is “declared a holiday” by California Government

Code Section 19853. Section 19853 is administrative in nature

and merely sets forth employment policy for state employees.° In

contrast, California Government Code Section 6700 explicitly

lists “[t]he holidays in this state[,]” and the list does not include

the Friday after Thanksgiving.’ Accordingly, the Friday after

Thanksgiving has not been “declared a holiday” in California

within the meaning of Rule 26(a)(4).°

> Fed. R. App. P. 26(a)(3).

* Id. at (4).

* See United States v. Hughes Aircraft Co., 162 F.3d 1027, 1030 (9th

Cir.1998) (“[A] district court’s factual findings on all jurisdictional issues

must be accepted unless clearly erroneous.”) We also note that Alcan has

not, shown that the clerk’s office was “officially closed” or accessible

only by “heroic measures” on the Friday in question. Keyser v.

Sacramento City Unjfied Sch. Dist., 265 F.3d 741, 747 (9th Cir. 2001).

* See Fed. R. App. P. 26(a)(3).

° See Ca. Govt. Code §19853 (West 2001).

” Id. §6700

8 See Fed. R. App. P. 26(a)}(4).

A-4

Thus, Alcan’s notice of appeal was due on Friday, November 26,

1999. Alcan’s Monday, November 29, 1999, filing was, therefore,

not timely. Accordingly, we have no jurisdiction to hear Alcan’s

appeal of the district court’s post-judgment interest rulings

because a timely filing of a notice of appeal is “mandatory and

jurisdictional.”

The district court granted Lloyd’s motion to tax the costs

(premiums) of Lloyd’s supersedeas bond against Alcan. We

review the district court’s award of costs for abuse of discretion.'®

We conclude that the district court was well within its discretion

and affirm.

After appealing the stipulated judgment, Alcan moved the district

court to order Lloyd’s to satisfy the judgment. Alcan’s appeal

automatically stayed the judgment, however, and Alcan had no

right to force Lloyd’s to pay.'’ Thus, but for Alcan’s insistence

that Lloyd’s satisfy the judgment when Lloyd’s had no legal

obligation to do so, Lloyd’s would never have had to post the

bond. The bond then served to protect Alcan’s interests.'*? Under

these circumstances, the district court was well within its

discretion in taxing the costs of the bond against Alcan. Alcan’ s

arguments are meritless because they ignore the foregoing facts

and invite us to conclude that Lloyd’s had no rights to protect

during the pendency of Alcan’s appeal. However, Lloyd’s had a

right to a stay during the pendency of Alcan’s appeal. That right

was created by Alcan’s decision to appeal, and Alcan’s actions

forced Lloyd’s to pay to protect that right.

* Browder v. Director, Illinois Dept. of Corrections, 434 U.S. 257, 264

(1978) (internal quotation marks and citation omitted); Pettibone v.

Cupp. 666 F.2d 333, 334 (9™ Cir. 1981).

° LSO, Ltd. v. Stroh, 205 F.3d 1146, 1160 (9" Cir. 2000).

'' See Alcan, 173 F.3d at 859, 1999 WL 201610 at **4 (“once Alcan

filed its appeal. . . the execution of the judgment against its insurers was

automatically stayed”) (citing Bronson v. La Crosse & Milwaukee R.R.

Co., 68 U.S. 405, 409-10 (1863)).

'? See id. (“The supersedeas bond actually provided Alcan protection om

it was not entitled to.”).

ee oe

Oe BE. hi 00 MN hem Ah

OLED ES DP AR He Ary F

») 8 OM Pw

A-5

Alcan’s appeal of the district court’s post-judgment interest

rulings was not timely, and it is DISMISSED for lack of

jurisdiction. The district court appropriately taxed Lloyd’s

supersedeas bond premiums as costs against Alcan, and that order

is AFFIRMED.

No. 99-5695 1 is DISMISSED; no. 00-55 163 is AFFIRMED.

Costs to Appellees.

A-6

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FILED

DEC. 6 1999

ENTERED

DEC 8 1999

ALCAN ALUMINUM CASE NO. CV 94-2202 DT

CORPORATION (CTx)

Plaintiff

V ORDER GRANTING

LLOYD’S

PRUDENTIAL UNDERWRITERS’

ASSURANCE COMPANY MOTION TO

LIMITED, ET AL. RETAX COSTS

Defendants

AND RELATED

COUNTERCLAIMS AND

CROSS-CLAIMS

Background

1. . Factuai Summary.

This insurance coverage action arises out of a dispute

between Plaintiff Alcan Aluminum Corporation (“Alcan”) and its

primary and excess insurance providers over the failure to defend

and indemnify Alcan in two underlying actions. —

On Aprii 21, 1983, the United States of America and the

State of California filed an action entitled United States et al v.

J.B. Stringfellow, Jr., et al., CV 83-2501 JMI (Mx) in the United

States District for Central District of California (the “Federal

Action”) against numerous defendants including Alcan. The

Federal Action sought damages for clean-up costs for the

Stringfellow Hazardous Waste Disposal Site (the “Site”), located

in Riverside County, California pursuant to the Comprehensive

Environmental Response, Compensation and Liability Act of 1980

Pbisadh\ WN NY Lhe hema oak AAD kb ae A Ss lls lic ld Ca laa | hl ae ‘bee bees Aes

NNR NATHAN Da Na aN

Sani RUAN li el HUAN VARA ARN TIF UF | ia A ANN

A-7

(CERCLA), 42 U.S.C. § 9601 et seq. See First Amended

Complaint, 4 25.

On September 28, 1984, a consolidated action entitled

Penny Newman, et al. v. J.B. Stringfellow, Jr. .et. al., Case Nos.

165994 MF, 167122, 167173, 167291, 167327, 167467, 16791,

168088, 168349, 168591, 168939, 169223, 16910, 169999 was

filed in the Superior Court of the State of California for the

County of Riverside (collectively, the “Newman Actions”). See id.

at | 26. In the Newman Actions, plaintiffs (the “Newman

Plaintiffs”) consisted of present and former residents of Glen

Avon, California, a community adjacent to the Site. The Newman

Plaintiffs sued the owners and operators of the Site, and numerous

chemical, industrial and manufacturing / companies, including

Alcan, for personal injury and property damages stemming from

the air and water contamination released from the Stringfellow

Acid Pits. See id.

From 1966 through 1973, primary, excess and/or umbrella

insurance policies (the “Insurance Policies”) were issued to Alcan

by Defendants Prudential Assurance Company Limited’

(“Prudential”), Continental Insurance Company (“Continental”),

Certain Underwriters of Lloyd’s of London (“Lloyd’s

Underwriters”), Orion Insurance Company Limited ~(“Orion”),

the London & Overseas Insurance Company Limited

(“Overseas”), The Home Insurance Company (“Home”)

(collectively, the “Insurance Companies”). See Id. at 19 3, 14.

Commercial Union Assurance Company of Canada (“Commercial

Union”) issued primary policies from August 1973 through

November 1981 (the “Commercial Union Policies”). See id. at |

Despite Alcan’s notice to the Insurance Companies of the

Federal Action and Newman Actions, the Insurance Companies

allegedly refused to investigate the claims raised in the Newman

Actions, and failed to provide a defense or to indemnify Alcan in

'? Prudential was absorbed into Prudential Assurance Company of

England Property and Casualty - Canada (“Prudential Canada”).See id. at

q 3. On September 1, 1993, General Accident Indemnity Company of

Canada (““GAIC”) acquired Prudential Canada. See id. at { 3.

A-8

either the Federal Action or the Newman Actions. See id. at 44

23, 27, 29. As a result, Alcan undertook its own investigation and

defense of the Newman Actions and allegedly settled those

actions for $4,281,591. See id. at 4 26.

B. Procedural History.

On April 6, 1994, Alcan filed the ornginal Complaint

against the Insurance Companies for breach of contract, breach of

the implied covenant of good faith and fair dealing and breach of

fiduciary duty.

On January 18, 1995, Alcan filed its First Amended

Complaint against the Insurance Companies for breach of

contract, breach of the covenant of good faith and fair dealing and

breach of fiduciary duty. Lloyd’s Underwnters was a named

Defendant, but the Answer and Counterclaim was filed by John

Richard Ludbrooke Youell, on his own behalf and as a

representative of Certain Underwmniters at Lloyd’s of London

(“Youell and Others”) on February 27, 1995.

On May 10, 1995, Alcan executed a Stipulation of

Dismissal of Home, and Youell and Others without prejudice,

based upon a tentative settlement reached with those defendants.

On February 20, 1996, Alcan filed a Motion For Leave To

File Second Amended Complaint.

On June 19, 1997, this Court entered Judgment in favor of

Alcan against Defendant Lloyd’s Underwriters requiring said

Defendant to pay Alcan the sum of one million five hundred forty

four thousand three hundred two dollars and fifty-three cents

($1,544,302.53), with post judgment interest at the rate of 6.06

percent.

On June 27, 1997, this Court entered judgment in favor of

Commercial Union on GAIC’s Cross-Claim against Commercial

Union.

On July 18, 1997, this Court entered an Amended

Judgment in favor of Alcan against Defendant Lloyd's

Underwniters in the same amount, with post judgment interest at

the rate of 6.06 percent.

Alcan filed an appeal on August |, 1997 on the issue of

damages with the Ninth Circuit Court of Appeals.

Sah es thda nate, oan eee

we yee

“Ube a es eT

aaa te |

Lye twee

A-9

On September 10, 1997, Alcan filed an Undifferentiated

Motion for Order Directing Defendant Lloyd’s Underwnters To

Pay on Judgment. That Motion was granted by this Court on

October 6, 1997 by Order entered on October 7, 1997.

On October 21, 1997, Lloyd’s Underwriters filed a

Supersedeas Bond in the amount of $1,132,341.06, reflecting the

gross judgment of $1,544,302.53, reduced by the proportionate

share of insolvent companies not represented by counsel for

Lloyd’ s Underwmiters.

On October 31, 1997, GAIC filed its Motion to Vacate

and Re-Enter Judgment pursuant to Fed. R. Civ. P. 60 (b). That

Motion was denied by this Court on November 24, 1997 by Order

entered on November 26, 1997.

On November 18, 1997, Defendant Lloyd’s Underwriters

filed an Ex Parte Application for Clarification of October 7, 1997

Order Regarding Execution of Judgment and/or Motion to Effect

Stay. That Ex Parte Application was granted by this Court on

November 24, 1997 by Order entered on November 26, 1997.

On December 8, 1997, Alcan filed a document styled as a

“Motion for Rehearing and/or Motion to Evaluate Adequacy of

Supersedeas Bond.” Because that purported Motion lacked a

proper form of notice pursuant to Central District Local Rule 7.4,

this Court deemed that purported Motion as an Ex Parte

Application, which was denied by this Court on January 14, 1998.

On January 21, 1998, Aican filed a Motion for Contempt

Against Prudential (acquired by GAIC) for Failure to Pay

Amended Judgment, which was taken off calendar as moot on

March 13, 1998 after Alcan and GAIC filed a Stipulation to File

Supersedeas Bond Staying Judgment Pending Cross-Appeal.

On February 17, 1998, Alcan filed an appeal of the

January 14, 1998 Order Denying Alcan’s Motion for Rehearing

and/or Motion to Evaluate Adequacy of Supersedeas Bond with

the Ninth Circuit Court of Appeals.

On March 31, 1999, the Ninth Circuit Court of Appeals

issued a decision affirming in part and reversing in part the

judgment of this Court. Specifically, the Ninth Circuit

A-10

(1) affirmed this Court’ s order granting summary judgment

in favor of Continental,

(2) affirmed this Court’s order allocating to Alcan a share of

the defense and indemnity costs arising out of the Federal Action

and the Newman Action,

(3) affirmed this Court’s decision denying Alcan prejudgment

interest in regard to costs in the Federal Action,

(4) reversed this Court’s decision granting Alcan prejudgment

interest in regard to costs in the Newman Action,

(5) reversed this Court’s decision allocating costs to GAIC

that were attributable to the Newman Plaintiffs who were exposed

to hazardous materials after the last GAIC policy expired,

(6) affirmed this Court’s decision denying GAIC a set-off

based on the pre-litigation settlement between Alcan and

Commercial, and

(7) affirmed this Court’s order staying the execution of the

judgment in favor of Alcan and allowing Lloyd’s Underwriters to

post a supersedeas bond.

The Ninth Circuit also awarded costs to GAIC, Lloyd’s

Underwriters, Home and Continental.

On July 28, 1999, Lloyd’s Underwniters filed a Motion for

Adjustment of Post Judgment Interest. Also on July 28, 1999, this

Court granted Lloyd’s Underwriters Ex Parte Application for

Order to Shorten Time to Notice Hearing and to Set Hearing for

August 2, 1999. On August 2, 1999, this Court ordered the

mandate from the Ninth Circuit filed and spread.

Pursuant to stipulation of the parties, the hearing on Lloyd

Underwriters’ Motion for Adjustment of Post-Judgment Interest

was continued until August 23, 1999. On August 23, 1999, this

Court granted Lloyds s Underwmiters’ Motion for Adjustment of

Post Judgment Interest by Order entered on August 24, 1999.

SC bcsiemob PRLS igh Man ADS a CIDADE Wess cioumep anes

A-11

On September 1, 1999, Alcan filed the Motion and Notice

for Reconsideration of Order Dated August 23, 1999.

On September 3, 1999,’ Alcan filed the Notice of

Continuance of Motion for Reconsideration to October 4, 1999.

On September 22, 1999, this matter was continued until October

25, 1999.

On September 20, 1999, this Court filed an Order

Amending Judgment pursuant to the Ninth Circuit ‘s mandate and

this Court’s rulings of August 23, 1999 in the following respects:

(1) Plaintiff recovers from Defendant GAIC as follows:

(a) Sum of $848,061.35 with respect to the Stringfellow

action, with post judgment interest thereon at the rate of 5.56%;

(b) Sum of $53,539.90 with respect to the Newman action,

plus post judgement interest at the rate of 5.56%.

(2) Plaintiff recovers from Defendant Home with respect to

the Stringfellow action for the sum of $6,461.51 with

post judgment interest at the rate-of 5.56%.

(3) Plaintiff recovers from Defendant Underwnters with

respect to the Stringfellow action the sum of $1,544,302.53

subject to reduction due to insolvencies which resulted in a final

judgment of $1,132,341.06 with post judgment interest at the rate

of 5.56%. The parties have agreed that Certain Underwriters at

Lloyd’s will have sixty (60) days from the date of this Order to

collect and distribute the amounts.

(4) Pursuant to this Court’s ruling of August 23, 1999, post

judgment interest at a rate of 5.56% shall accrue from July 18,

1997, until August 1, 1997; shall be stayed from August 2, 1997,

until August 2, 1999; and shall accrue again from August 2, 1999

until the Amended Judgment is paid.

On September 1, 1999, Alcan filed A Motion for

Reconsideration. On October 25, 1999, this Court denied Alcan’s

A-12

Motion for Reconsideration for Order dated August 23, 1999,

which was entered on October 26, 1999.

On November 1, 1999, Lloyd’s Underwriters filed a

Notice of Motion and Motion to Retax Costs. This matter is

presently before the Court.

Discussion

1. Standard

The Federal Rules of Appellate Procedure (“F.RA.P.”) provide for

the costs to be taxed, unless the law provides or the court orders

otherwise, in the following manner:

(1) If an appeal is dismissed, costs shail be taxed against the

appellant unless, unless the parties agree otherwise;

(2) If judgment is affirmed, costs shall be taxed against the

appellant;

(3) If judgment is reversed, costs shall be taxed against the

appellee;

(4) If a judgment is affirmed in part, reversed in part,

modified or vacated, costs are taxed only as ordered by the court.

See FED. R. ApP. PROC. 39(a). Additionally, the F.R.AP.

specifies that premiums paid for cost of supersedeas bonds or

other bonds to preserve rights pending appeal shall be taxed as

costs of the appeal in favor of the party entitled to costs. See FED.

R. APP. Proc. 39(e). The Local Rules of this district provide that

the costs on appeal taxable in the district court shall be governed

under F.R.A.P. 39(e). See Local Rule 16.4.15.

Further, Local Rule 16, “Taxation of Costs,” sets forth the

procedure for filing a Notice of Application to the Clerk to Tax

Costs as well as items taxable as costs. Local Rule 16.7 provides

for a review of the Clerk’s taxation of costs. The review may be

PRS

i NEAT RE ST cE LN Seer ASSL SE

A-13

obtained through a motion to retax which must be filed and served

within five days of the Clerk’s decision. This review is limited to

only those items specifically identified in the motion. See Local

Rule 16.7.

2. Analysis.

a. Introduction

On July 13, 1999, Lloyd’s Underwniters filed a Notice to

Clerk to Tax Costs against Alcan in the amount of $32,646.00.

(See Motion to Retax (“Motion”) p.3, lines 3-6). This amount is

representative of the 1997 and 1998 annual premiums for Lloyd’s

Underwriters’ supersedeas bond. (See Motion, p.3, line 6). On

July 21, 1999, Alcan filed an objection to the Notion to Tax Costs.

(See Motion, p.3, lines 7-8). On October 25, 1999, the Clerk of

Court denied Lloyd’s Underwriters’ Application. (See Motion,

p.3, lines 8-9). According to Alcan’s Opposition, the Clerk of

Court found that since Alcan was seeking only to increase the

amount of its judgement against Lloyd’s Underwriters, and

Lloyd’s Underwriters would have to pay at least the amount

covered by the bond, the circumstances were not those

contemplated by F.RA.P. 39(e). (See Opposition to Motion to

Retax, p.2, lines 4-8).

b. This Court Grants the Motion to Retax

Lloyd’s Underwriters seeks review of the Clerk of Court’s

denial of its Application to Tax Costs. Specifically, Lloyd’s

Underwriters argues that the Local Rules and F.R.AP. specifically

allow for the taxation of premiums paid for a supersedeas bond.

Additionally, Lloyd’s Underwnters contends that the taxation of

costs is governed by the plain language of the F.R.A.P. and is not

subject to the discretion of the Clerk of the court.

In contrast, Alcan argues that F.R.AP. 39(a) has no

application in the present case and may not be used by the Court

to tax the costs of Lloyd’s Underwriters’ supersedeas bond.

A-14

Specifically, Alcan argues that in this Court’s November 24, 1999

Order, this Court found that Federal Rule of Civil Procedure

(“F.R.C.P.”) 62(d) does not apply to the facts of this case. As

such, Alcan argues that since the application of F.R.A.P. 39(a)

presumes the application of F.R.C.P. 62(d), Rule 39(a) is not

applicable. This Court does not agree with Alcan’s arguments.

In the Order dated November 24, 1997, this Court stated

in pertinent part:

Fed. R. Civ. P. 62(d) provides that an appellant may stay

the execution of a judgment by posting a supersedeas bond.

. Although Fed. R. Civ. P. 62(d) specificall.y addresses the

use of a supersedeas bond by an appellant to stay execution

of a judgment, this Court finds no reason why an appellee

should not be able to stay execution of a judgment by

giving a supersedeas bond. The posting of a supersedeas

bond by Lloyd’s Underwriters means that Alcan will be

protected during the pendency of appeal in this action.

Hence, this Court finds in its discretion that a stay is

warranted.

As stated above, this Court found that while F.R.C.P. 62(d) does

not directly state that an appellee may use the supersedeas bond to

stay execution of a judgment, extension of the rule to appellees

was not without reason. Contrary to Alcan’s argument, this Court

did not make the broad finding that F.R.C.P. 62(d) was

inapplicable to this case. Rather, this Court extended the

application of a F.R.C.P. Moreover, not only are the F.R.C.P.

applicable, but the F.RA. P. are also applicable.

Lloyd’s Underwriters argue that the language of the Local and

Appellate Rules specifically allow for taxation of premiums paid

for a supersedeas bond. This Court agrees. F.R.A.P. 39(a)

provides four instances where costs are granted. Included is when

the “judgment is affirmed or reversed in part . . . costs shall be

allowed only as ordered by the court.” FED. R. PROC. 39(a). In

the Ninth Circuit decision, filed March 31, 1999, the Ninth Circuit

A-15

affirmed in part and denied in part Alcan’s appeal. The Ninth

Circuit awarded costs to the Defendant-Appellee Lloyd’s

Underwriters.

As previously noted, F.R.A.P. 39(e) provides for the costs on

appeal taxable in the district courts. The language of the rule

specifically states that the “premiums paid for cost of supersedeas

bonds or other bonds to preserve rights pending appeal . . . shall

be taxed in the district court as costs of the appeal in favor of the

party entitled to costs under this rule.” FED. R. APP. PROC. 39(e)

(emphasis added). Accordingly, this Court finds that the language

of the statute is not discretionary in nature, and it was error for the

Clerk of Court to deny the Application to Tax Costs.

Accordingly, this Court finds that pursuant to F.R.A.P. 39(e), the

premiums paid by Lloyd’s Underwriters for cost of its supersedeas

bond to preserve its rights pending appeal are taxable as costs.

Conclusion

Based on the foregoing, this Court GRANTS Lloyd’s

Underwriters’ Motion to Retax Costs and AWARDS Lloyd’s

Underwriters the amount of $32,646.00 which represents the 1997

and 1998 annual premiums for Lloyd’s Underwniters’ supersedeas

bonds.

IT IS SO ORDERED.

DATED: DEC-6 1999

DICKRAN TEVRIZIAN, Judge

Dickran Tevnzian, Judge

United States District Court

A-16

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FILED

OCT. 25 1999

ENTERED

OCT 26 1999

ALCAN ALUMINUM CASE NO. CV 94-2202

CORPORATION DT (CTx)

Plaintiff

V ORDER DENYING

ALCAN ALUMINUM

PRUDENTIAL ASSURANCE CORPORATION’S

COMPANY LIMITED, ET AL. MOTION FOR

Defendants RECONSIDERATION

AND RELATED FOR ORDER DATED

COUNTERCLAIMS AND AUGUST 23, 1999

CROSS-CLAIMS

Background

1. Factual Summary.

This insurance coverage action arises out of a dispute

between Plaintiff Alcan Aluminum Corporation (“Alcan”) and its

primary and excess insurance providers over the failure to defend

and indemnify Alcan in two underlying actions.

On April 21, 1983, the United States of America and the

State of California filed an action entitled United States et al v.

J.B. Stringfellow, Jr., et al., CV 83-2501 JMI (Mx) in the United

States District for Central District of California (the “Federal

Action”) against numerous defendants including Aican. The

Federal Action sought damages for clean-up costs for the

Stringfellow Hazardous Waste Disposal Site (the “Site”), located

in Riverside County, California pursuant to the Comprehensive

Environmental Response, Compensation and Liability Act of 1980

A-17

(CERCLA), 42 U.S.C. § 9601 et seq. See First Amended

Complaint, § 25.

On September 28, 1984. a consolidated action entitled

Penny Newman, et al. v. J.B. Stringfellow, Jr. .et. al., Case Nos.

165994 MF, 167122, 167173, 167291, 167327, 167467, i6791,

168088, 168349, 168591, 168939, 169223, 16910, 169999 was

filed in the Superior Court of the State of California for the

County of Riverside (collectively, the “Newman Actions”). See td.

at § 26. In the Newman Actions, plaintiffs (the “Newman

Plaintiffs”) consisted of present and former residents of Glen

Avon, California, a community adjacent to the Site. The Newman

Plaintiffs sued the owners and operators of the Site, and numerous

chemical, industrial and manufacturing companies, including

Alcan, for personal injury and property damages stemming from

the air and water contamination released from the Stringfellow

Acid Pits. See id.

From 1966 through 1973, primary, excess and/or umbrella

insurance policies (the “Insurance Policies”) were issued to Alcan

by Defendants Prudential Assurance Company Limited"*

(“Prudential”), Continental Insurance Company (“Continental”),

Certain Underwriters of Lloyd’s of London (“Lloyd’s

Underwriters”), Orion Insurance Company Limited ~(“Orion”),

the London & Overseas Insurance Company Limited

(“Overseas”), The Home Insurance Company (“Home”)

(collectively, the “Insurance Companies”). See Id. at q1 3, 14.

Commercial Union Assurance Company of Canada (“Commercial

Union”) issued primary policies from August 1973 through

November 1981 (the “Commercial Union Policies”). See id. at |

15.

Despite Alcan’s notice to the Insurance Companies of the

Federa! Action and Newman Actions, the Insurance Companies

allegedly refused to investigate the claims raised in the Newman

Actions, and failed to provide a defense or to indemnify Alcan in

'* Prudential was absorbed into Prudential Assurance Company of

England Property and Casualty - Canada (“Prudential Canada”).See id. at

€ 3. On September 1, 1993, General Accident Indemnity Company of

Canada (“GAIC”) acquired Prudential Canada. See id. at { 3.

A-i8

either the Federal Action or the Newman Actions. See id. at 4

23, 27, 29. As a result, Alcan undertook its own investigation and

defense of the Newman Actions and allegedly settled those

actions for $4,281,591. See id. at 4 26.

B. Procedural History.

On April 6, 1994, Alcan filed the original Complaint

against the Insurance Companies for breach of contract, breach of

the implied covenant of good faith and fair dealing and breach of

fiduciary duty.

On January 18, 1995, Alcan filed its First Amended

Complaint against the Insurance Companies for breach of

contract, breach of the covenant of good faith and fair dealing and

breach of fiduciary duty. Lloyd’s Underwriters was a named

Defendant, but the Answer and Counterclaim was filed by John

Richard Ludbrooke Youell, on his own behalf and as a

representative of Certain Underwriters at Lloyd’s of London

(““Youell and Others”) on February 27, 1995.

On May 10, 1995, Alcan executed a Stipulation of

Dismissal of Home, and Youell and Others without prejudice,

based upon a tentative settlement reached with those defendaris.

On February 20, 1996, Alcan filed a Motion For Leave To

File Second Amended Complaint.

On June 19, 1997, this Court entered Judgment in favor of

Alcan against Defendant Lloyd’s Underwriters requiring said

Defendant to pay Alcan the sum of one million five hundred forty

four thousand three hundred two dollars and fifty-three cents

($1,544,302.53), with post judgment interest at the rate of 6.06

percent.

On June 27, 1997, this Court entered judgment in favor of

Commercial Union on GAIC’s Cross-Claim against Commercial

Union.

On July 18, 1997, this Court entered an Amended

Judgment in favor of Alcan against Defendant Lloyd's

Underwriters in the same amount, with post judgment interest at

the rate of 6.06 percent.

Alcan filed an appeal on August |, 1997 on the issue of

damages with the Ninth Circuit Court of Appeals.

OO oo EEE O_O |

A-19

On September 10, 1997, Alcan filed an Undifferentiated

Motion for Order Directing Defendant Lloyd’s Underwniters To

Pay on Judgment. That Motion was granted by this Court on

October 6, 1997 by Order entered on October 7, 1997.

On October 21, 1997, Lloyd’s Underwniters filed a

Supersedeas Bond in the amount of $1,132,341.06, reflecting the

gross judgment of $1,544,302.53, reduced by the proportionate

share of insolvent companies not represented by counsel for

Lloyd’ s Underwriters.

On October 31, 1997, GAIC filed its Motion to Vacate

and Re-Enter Judgment pursuant to Fed. R. Civ. P. 60 (b). That

Motion was denied by this Court on November 24, 1997 by Order

entered on November 26, 1997.

On November 18, 1997, Defendant Lioyd’s Underwriters

filed an Ex Parte Application for Clarification of October 7, 1997

Order Regarding Execution of Judgment and/or Motion to Effect

Stay. That Ex Parte Application was granted by this Court on

November 24, 1997 by Order entered on November 26, 1997.

On December 8, 1997, Alcan filed a document styled as a

“Motion for Rehearing and/or Motion to Evaluate Adequacy of

Supersedeas Bond.” Because that purported Motion lacked a

proper form of notice pursuant to Central District Local Rule 7.4,

this Court deemed that purported Motion as an Ex Parte

Application, which was denied by this Court on January 14, 1998.

On January 21, 1998, Alcan filed a Motion for Contempt

Against Prudential (acquired by GAIC) for Failure to Pay

Amended Judgment, which was taken off calendar as moot on

March 13, 1998 after Alcan and GAIC filed a Stipulation to File

Supersedeas Bond Staying Judgment Pending Cross-Appeal.

On February 17, 1998, Alcan filed an appeal of the

January 14, 1998 Order Denying Alcan’s Motion for Rehearing

and/or Motion to Evaluate Adequacy of Supersedeas Bond with

the Ninth Circuit Court of Appeals.

On March 31, 1999, the Ninth Circuit Court of Appeals

issued a decision affirming in part and reversing in part the

judgment of this Court. Specifically, the Ninth Circuit

A-20

(1) affirmed this Court’ s order granting summary judgment

in favor of Continental,

(2) affirmed this Court’s order allocating to Alcan a share of

the defense and indemnity costs arising cut of the Federal Action

and the Newman Action,

(3) affirmed this Court’s decision denying Alcan prejudgment

interest in regard to costs in the Federal Action,

(4) reversed this Court’s decision granting Alcan prejudgment

interest !n regard to costs in the Newman Action,

(5) reversed this Court’s decision allocating costs to GAIC

that were attributable to the Newman Plaintiffs who were exposed

to hazardous materials after the last GAIC policy expired,

(6) affirmed this Court’s decision denying GAIC a set-off

based on the pre-litigation settlement between Alcan and

Commercial, and

(7) affirmed this Court’s order staying the execution of the

judgment in favor of Alcan and allowing Lloyd’s Underwriters to

post a supersedeas bond.

The Ninth Circuit also awarded costs to GAIC, Lloyd’s

Underwniters, Home and Continental.

On July 28, 1999, Lloyd’s Underwniters filed a Motion for

Adjustment of Post Judgment Interest. Also on July 28, 1999, this

Court granted Lloyd’s Underwriters Ex Parte Application for

Order to Shorten Time to Notice Hearing and to Set Hearing for

August 2, 1999. On August 2, 1999, this Court ordered the

mandate from the Ninth Circuit filed and spread.

Pursuant to stipulation of the parties, the hearing on Lloyd

Underwniters’ Motion for Adjustment of Post-Judgment Interest

was continued until August 23, 1999. On August 23, 1999, this

Court granted Lloyds s Underwnters’ Motion for Adjustment of

Post Judgment Interest by Order entered on August 24, 1999.

A-21

On September 1, 1999, Alcan filed the Motion and Notice

for Reconsideration of Order Dated August 23, 1999.

On September 3, 1999,’ Alcan filed the Notice of

Continuance of Motion for Reconsideration to October 4, 1999.

On September 22, 1999, this matter was continued until October

25, 1999.

On September 20, 1999, this Court filed an Order

Amending Judgment pursuant to the Ninth Circuit ‘s mandate and

this Court’s rulings of August 23, 1999 in the following respects:

(1) Plaintiff recovers from Defendant GAIC as follows:

(a) Sum of $848,061.35 with respect to the Stringfellow

action, with post judgment interest thereon at the rate of 5.56%;

(b) Sum of $53,539.90 with respect to the Newman action,

plus post judgement interest at the rate of 5.56%.

(3) Plaintiff recovers from Defendant Home with respect to

the Stringfellow action for the sum of $6,461.51 with

post judgment interest at the rate-of 5.56%.

(3) Plaintiff recovers from Defendant Underwmiters with

respect to the Stringfellow action the sum of $1,544,302.53

subject to reduction due to insolvencies which resulted in a final

judgment of $1,132,341.06 with post judgment interest at the rate

of 5.56%. The parties have agreed that Certain Underwriters at

Lloyd’s will have sixty (60) days from the date of this Order to

collect and distribute the amounts.

(4) Pursuant to this Court’s ruling of August 23, 1999, post

judgment interest at a rate of 5.56% shall accrue from July 18,

1997, until August 1, 1997; shall be stayed from August 2, 1997,

until August 2, 1999; and shall accrue again from August 2, 1999

until the Amended Judgment is paid.

On September 1, 1999, Alcan filed the instant Motion for

Reconsideration. This matter is presently before the Court with

A-22

reference to this Court’s August 23, 1999, Order as well as this

Court’s subsequent Order of September 20, 1999.

Discussion

l. Standard

This Court is empowered to reconsider its own decisions

prior motions pursuant to Local Rule 7.16. This rule provides on

that:

A motion for reconsideration of the decision on any motion

may be made only on the grounds of (a) a material

difference in fact or law from that presented to the Court

before such decision that in the exercise of reasonable

diligence could not have been known to the party moving

for reconsideration at the time of such decision, or (b) the

emergence of new material facts or a change of law

occurring after the time of such decision, or (c) a manifest

showing of a failure to consider material facts presented to

the Court before such decision. No motion -for

reconsideration shall in any manner repeat any oral or

written argument made in support of or in opposition to the

original motion.

2. Analysis.

a. Introduction

As a result of Alcan’s appeal regarding this Court’s

November 24, 1997 ruling asserting that the Court erred by

allowing Lloyd’s Underwriters to post a supersedeas bond, or in

the alternative, that the amount of the supersedeas bond was

insufficient, the Ninth Circuit found that because the prevailing

party appealed the Court's judgment, the execution of the

judgment should have been automatically stayed. Based on the

Ninth Circuit decision, Underwriters filed a Motion for

~ Adjustment of Post Judgment Interest on July27, 1999, asserting

that (1) due to the ruling requiring an automatic stay, post-

judgment interest should not have accrued during that time period;

(2) the proper rate of post-judgment interest is 5.56%, not 6.06%;

A-23 ;

and (3) the inception date of post-judgment interest should be th

date the Court entered its judgment.

Alcan opposed this motion by asserting that because

Lloyd’s Underwriters did not appeal from the Court's orders, they

should not benefit from the Ninth Circuit’s opinion. Additionally,

Alcan specifically stated that it did not oppose Lloyd's

Underwriters’ position regarding the rate or the inception date of

post-judgment interest. :

On August 23, 1999, this Court granted Lloyd's

Underwriters’ motion and held that (1) the proper interest rate of

post-judgment interest is 5.56%; (2) the inception date for post-

judgment interest is July 18, 1997; and (3) post-judgement interest

is owing from July 18, 1997 to August 1, 1997 and from August 2,

1999 until the date such judgment is paid. it is from this

modification that Alcan is requesting a reconsideration of this

Court's order.

b. Reconsideration of this Court’s Order dates

August 23, 1999, together with any subsequent

modification of that Order is not warranted.

In the present case, Alcan fails to meet any of the

requirements set forth in Local Rule 7.16. Instead, Aican attempts

to relitigate the issues which were previously before the Court.

Accordingly, Alcan’s arguments fail procedurally and

substantively.

In its Opposition to the Motion for Adjustment of Post

Judgment Interest filed July 27, 1999, Alcan argued that Lloyd's

Underwriters’ failure to appeal this Court’s judgments barred

Underwriters from bringing any further motion on this claim.

Similarly, in the present Motion for Reconsideration,

Alcan is arguing that the appealing party’ s judgment cannot be

modified to benefit the adversary that did not appeal. Accordingly,

Alcan states that the instant Motion for Reconsideration is based

on recent and clear authority that even if the Ninth Circuit's ruling

became the law of the case, the Court of Appeals could not change

a judgment when the party seeking to enhance the judgment did

not cross-appeal.

A-24

This Court does not agree. Primarily, the argument Alcan

presently relies upon repeats the arguments it made before this

Court in its Opposition to the previous Motion for Adjustment of

Post-Judgment Interest. Moreover Alcan has failed to assert any

new material difference in fact or law from that presented to the

Court which reasonable diligence could not known prior. The

“clear and convincing” authorities upon which Alcan bases this

Motion for Reconsideration are International Ore & Fertilizer

Corp. v_ SGS, 38 F.3d 1279 (2nd Cir. 1994) and Abatti_v.

Commissioner of the IRS, 859 F.2d 115 (9th Cir. 1988). Both

cases were discoverable through reasonable diligence prior to the

filing of Alcan’s Opposition to the Motion for Adjustment of

Post-Judgment Interest on August 10, 1999. Therefore, Alcan

does not meet the requirement of Local Rule 7.16(a) for a motion

for reconsideration.

Further, Alcan has failed to (1) state the emergence of

new material facts or change of law after this Court’s decision or

(2) manifest a showing of failure to consider material facts

presented to the Court before such decision. As such, Alcan’s

Motion for Reconsideration does not fit into the requirements of

Local Rule 7.16(b), (c). Accordingly, this Court finds that the

Motion for Reconsideration of the Judgment dated August 23,

1999, together with any subsequent modification of that Order, 1s

not warranted.

Cc. Even if the reconsideration were warranted, this Court

finds that the Order compiained of is proper

Alcan asserts that the appealing party's judgment cannot

be modified to benefit the adversary that did not appeal. Alcan

specifically argues that even if the Ninth Circuit explicitly stated

that Alcan is not entitled to post judgment interest, the judgment

could not have been modified due to Lloyd’s Underwriters’ failure

to appeal.

Alcan relies upon International Ore & Fertilizer Corp v.

SGS, 38 F.3d 1279 (2 Cir. 1994). Alcan asserts that International

Ore stands for the position that the judgment of a non-appealing

party can not be modified. Although this Court agrees that

A-25

International Ore does state that judgment may not be modified

due to a party’s failure to cross-appeal it, these remarks were

made in dicta and are not binding. See id. at 1283-84. As such,

this Court does not agree that this case is controlling.

As noted in this Court’s order of August 23, 1999,

Alcan’s argument is without merit. Primarily, the Supreme Court

held that an appeal by a prevailing party suspended the execution

of any decree. See Bronson & Soutter, 68 U.S. 405, 409-410

(1893). The Ninth Circuit relied on Bronson in the present action.

As such, this is the law of the case and a District Court - is bound

by this prior determination of the action by the appellate court.

See Thomas v. Bible, 983. F.2d 152, 155 (9" Cir. 1993). Further,

the policy behind post judgment interest clearly serves to protect

a. prevailing party upon appeal by a losing party. That is not the

case here.

Moreover, this Court has not amended the judgment to put

Alcan at a loss. The amended Judgment of July 18, 1997,

contained the same damages award in favor of Alcan. The Ninth

Circuit specifically stated upon Alcan’s appeal that execution of

the Amended Judgment was stayed upon the initiation of the

appeal. As such, this Court, pursuant to the Ninth Circuit ruling,

stayed the post judgment interest from August 2, 1997 (the date

following Alcan’s filing of its notice of appeal) until August 1,

1999 (the date prior to the filing and spreading of the Ninth

Circuit’s mandate). Post judgment interest began to accrue again

as of August 2, 1999, until such future date as the Amended

Judgment is paid. Therefore, this Court finds that the Order of

August 23, 1999, together with any subsequent modification of

that Order, is proper.

2. Conclusion

After reviewing Alcan’s Motion for Reconsideration for

Order dated August 23, 1999, Underwmiters’ Opposition to the

Motion, and this Court’s prior Order, this Court DENIES Alcan’s

Motion for Reconsideration.

IT IS SO ORDERED.

A-26

DATED: OCT 25 1999

DICKRAN TEVRIZIAN, Judge

Dickran Tevrizian, Judge

United States District Court

A-27

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FILED

AUG 23 1999

ENTERED

AUG 24 1999

ALCAN ALUMINUM | CASE NO. CV 94-2202

CORPORATION

Plaintiff

Vv ORDER GRANTING

PRUDENTIAL ASSURANCE UNDERWRITERS’

COMPANY LIMITED, ET AL. MOTION FOR

Defendants ADJUSTMENT OF

POST JUDGMENT

AND RELATED INTEREST

COUNTERCLAIMS AND

CROSS-CLAIMS

Background

e Factual Summary.

This insurance coverage action arises out of a dispute

between Plaintiff Alcan Aluminum Corporation (“Alcan”) and its

primary and excess insurance providers over the failure to defend

and indemnify Alcan in two underlying actions.

On April 21, 1983, the United States of America and the

State of California filed an action entitled United States et al v.

J.B. Stringfellow, Jr., et al., CV 83-2501 JMI (Mx) in the United

States District for Central District of California (the “Federal

Action”) against numerous defendants including Alcan. The

Federal Action sought damages for clean-up costs for the

Stringfellow Hazardous Waste Disposal Site (the “Site’), located

in Riverside County, California pursuant to the Comprehensive

Environmental Response, Compensation and Liability Act of 1980

A-28

(CERCLA), 42 U.S.C. 9601 et seq. See First Amended

Complaint, 4 25.

On September 28, 1984,\a consolidated action entitled Penny

Newman, et al. v. J.B. Stringfellow, Jr. .et. al., Case Nos.

165994 MF, 167122, 167173, 167291, 167327, 167467, 16791,

168088, 168349, 168591, 168939, 169223, 16910, 169999 was

filed in the Superior Court of the State of California for the

County of Riverside (collectively, the “Newman Actions”). See id.

at § 26. In the Newman Actions, plaintiffs (the “Newman

Plaintiffs”) consisted of present and former residents of Glen

Avon, California, a community adjacent to the Site. The Newman

Plaintiffs sued the owners and operators of the Site, and numerous

chemical, industrial and manufacturing companies, including

Alcan, for personal injury and property damages stemming from

the air and water contamination released from the Stringfellow

Acid Pits. See id.

From 1966 through 1973, primary, excess and/or umbrella

insurance policies (the “Insurance Policies”) were issued to Alcan

by Defendants Prudential Assurance Company Limited’

(“Prudential”), Continental Insurance Company (“Continental”),

Certain Underwriters of Lloyd’s of London (“‘Lloyd’s

Underwriters”), Orion Insurance Company Limited ~(“Orion”),

the London & _ Overseas Insurance Company Limited

(“Overseas”), The Home Insurance Company (“Home”)

(collectively, the “Insurance Companies”). See Id. at 11 3, 14.

Commercial Union Assurance Company of Canada (“Commercial

Union”) issued primary policies from August 1973 through

November 1981 (the “Commercial Union Policies”). See id. at

15.

Despite Alcan’s notice to the Insurance Companies of the

Federal Action and Newman Actions, the Insurance Companies

allegedly refused to investigate the claims raised in the Newman

Actions, and failed to provide a defense or to indemnify Alcan in

'S Prudential was absorbed into Prudential Assurance Company of

England Property and Casualty - Canada (“Prudential Canada’”’).See id. at

4 3. On September 1, 1993, General Accident Indemnity Company of

Canada (““GAIC”) acquired Prudential Canada. See id. at 3.

- A-29

either the Federal Action or the Newman Actions. See id. at 44

23, 27, 29. As a result, Alcan undertook its own investigat:cz and

defense of the Newman Actions and allegedly settled those

actions for $4,281,591. See id. at ¥ 26.

B. Procedural History.

On April 6, 1994, Alcan filed the original Complaint

against the Insurance Companies for breach of contract, breach of

the implied covenant of good faith and fair dealing and breach of

fiduciary duty.

On January 18, 1995, Alcan filed its First Amended

Complaint against the Insurance Companies for breach of

contract, breach of the covenant of good faith and fair dealing and

breach of fiduciary duty. Lloyd’s Underwriters was a named

Defendant, but the Answer and Counterclaim was filed by John

Richard Ludbrooke Youell, on his own behalf and as a

representative of Certain Underwriters at Lloyd’s of London

(“Youell and Others”) on February 27, 1995.

On May 10, 1995, Alcan executed a Stipulation of

Dismissal of Home, and Youell and Others without prejudice,

based upon a tentative settlement reached with those defendants.

On February 20, 1996, Alcan filed a Motion For Leave To

File Second Amended Complaint.

On June 19, 1997, this Court entered Judgment in favor of

Alcan against Defendant Lloyd’s Underwriters requiring said

Defendant to pay Alcan the sum of one million five hundred forty

four thousand three hundred two dollars and fifty-three cents

($1,544,302.53), with post judgment interest at the rate of 6.06

percent.

On June 27, 1997, this Court entered judgment in favor of

Commercial Union on GAIC’s Cross-Claim against Commercial

Union.

On July 18, 1997, this Court entered an Amended

Judgment in favor of Alcan against Defendant Lloyd’s

Underwriters in the same amount, with post judgment interest at

the rate of 6.06 percent.

A-38

Alcan filed an appeal on August 1, 1997 on the issue of

damages with the Ninth Circuit Court of Appeals.

On September !0, 1997, Alcan filed an Undifferentiated

Motion for Order Directing Defendant Lloyd’s Underwniters To

Pay on Judgment. That Motion was granted by this Court on

October 6, 1997 by Order entered on October 7, 1997.

On October 21, 1997, Lloyd’s Underwriters filed 2

Supersedeas Bond in ihe amount of $1,132,341.06, reflecting the -

gross judgment of $1,544,302.53, reduced by the proportionate

share of insolvent companies not represented by counsel for

Lloyd’ s Underwnters.

On October 31, 1997, GAIC filed its Motion to Vacate

and Re-Enter Judgment pursuunt ic Fed. R. Civ. P. 60 (b). That

Motion was denied by this Court on November 24, 1997 by Order

entered on November 26, 1997.

On November 18, 1997, Defendant Lioyd’s Underwriters

filed an Ex Parte Application for Clanfication of October 7, 1997

Order Regarding Execution of Judgment and/or Motion to Effect

Stay. That Ex Parte Application was granted by this Court on

November 24, 1997 by Order entered on November 26. 1997.

On December 8, 1997, Alcan filed 2 document styled as a

“Motion for Rehearing and/or Motion to Evaluate Adequacy of

Supersedeas Bond.” Because that purported Motion lacked a

proper form of notice pursuant to Centra! District Local Rule 7.4,

this Court deemed that purported Motion as an Ex Parte

Application, which was denied by this Court on January 14, 1998.

Qn January 21, 1998, Alcan filed a Motion for Contempt

Against Prudential (acquired by GAIC) for Failure to Pay

Amended Judgment, which was taken off calendar as moot on

March 13, 1998 after Alcan and GAIC filed a Stipulation to File

Supersedeas Bond Staying Judgment Pending Cross-Appeal.

On February 17, 1998, Alcan filed an appeal of the

January 14, 1998 Order Denying Alcan’s Motion for Rehearing

and/or Motion to Evaluate Adequacy of Supersedeas Bond with

the Ninth Circuit Court of Appeais.

On March 31, 1999, the Ninth Circuit Court of Appeals

issued a decision affirming in part ard reversing in part the

judgment of this Court. Spevificatly, the Ninth Circuit

A-31

(1) affirmed this Court’ s order granting summary judgment

in favor of Continental,

(2) affirmed this Court’s order allocating to Alcan a share of

the defense and indemnity costs arising out of the Federal Action

and the Newrnan Action,

(3) affirmed this Court’s decision denying Alcan prejudgment

interest in regard to costs in the Federal Action,

(4) reversed this Court’s decision granting Alcan prejudgment

interest in regard to costs in the Newman Action,

(5S) reversed this Court’s decision allocating costs to GAIC

that were attributable to the Newman Plaintiffs who were exposed

to hazardous materials after the last GAIC policy expired,

(6) affirmed this Court’s decision denying GAIC a set-off

based on the pre-litigation settlement between Alcan and

Commercial, and

(7) affirmed this Court’s order staying the execution of the

judgment in favor of Alcan and allowing Lloyd’s Underwriters to

post a supersedeas bond.

The Ninth Circuit also awarded costs to GAIC, Lloyd's

Underwriters, Home and Continental.

On July 28, 1999, Lloyd’s Underwriters filed a Motion for

Adjustment of Post Judgment Interest. which is before this Court

today.

Also on July 28, 1999, this Court granted Lloyd’s

Underwriters Ex Parte Application for Order to Shorten Time to

Notice Hearing and to Set Nearing for August 2, 1999. Pursuant to

stipulation of the parties, the hearing was continued until August

23, 1999.

On August 2, 1999, this Court ordered the mandate from

the Ninth Circuit filed and spread.

A-32

Discussion

a Standard.

A. Post Judgment Interest

28 U.S.C. § 1961(a) provides in relevant part:

Interest shall be allowed on any money judgment in a civil

case recovered in a district court. . . . Such interest shall be

calculated from the date of the entry of the judgment, at a

rate equal to the coupon issue yield equivalent (as

determined by the Secretary of the Treasury) of the average

accepted auction price for the last auction of fifty-two week

United States Treasury bills settled immediately prior to the

date of the judgment.

28 U.S.C. § 1961(a); see also American Tetephone and Telegraph

Company v. United Computer Systems, Inc., 98 F.3d 1206, 1210

(9" Cir. 1996).

Pursuant to Federal Rule of Appellate Procedure 37, when

an appellate court affirms a money judgment in a civil case,

“whatever interest is allowed by law is payable from the date

when the district court’s judgment was entered.” Fed. R. App. P.

37,

B. Motion to Correct Clerical Error

Rule 60(a) of the Federal Rules of Civil Procedure

permits a court to correct clerical mistakes and errors or omissions

in a court order “at any time of its own initiative or on the motion

of any party and after such notice, if any, as the court orders.”

Fed. R. Civ. P. 60(a).

y Analysis.

A-33

A. Post Judgment Interest For The Period Of Alcan’s

Appeal To The Ninth Circuit Is Unmerited.

On March 31, 1999, the Ninth Circuit affirmed this

Court's decision to stay the execution of judgment against Lloyd’s

Underwriters and to allow Lloyd’s Underwmiters to file a

supersedeas bond pending Alcan’s appeal. The Ninth Circuit

relied upon Bronson & Soutter v. La Crosse & Milwaukee R.R, 68

U.S. 405, 409-10 (1893), and concluded that “once Alcan filed its

appeal challenging the merits of the district court’s allocation

order, the execution of the judgment against its insurers was

automatically stayed.” Decision on Appeal, p. 13. The court also

stated that “[t]he supersedeas bond actually provided Alcan

protection that it was not entitled to because a bond was not

required to stay the execution of the judgment in this case.” Id.

Therefore, the Ninth Circuit concluded that any execution of the

judgment entered by this Court was automatically stayed by

Alcan’s appeal.

Lloyd’s Underwriters contends that post judgment interest

during the pendency of Alcan’s appeal, from August 1, 1997 until

August 2, 1999 when the filing and spreading of the mandate

occurred in this Court, is not recoverable by Alcan. Alcan

counters that because Lloyd’s Underwriters did not elect to appeal

its obligation under the supersedeas bond, it is obligated under

that bond to pay post judgment interest. Alcan’s argument is

without merit.

In Bronson & Soutter, the Supreme Court held that an

appeal by a prevailing party suspended the execution of any

decree.

The appeal! suspends the execution of the decree. This is

not the case where security is to be given in order to supersede the

execution. That rule applies in cases where the decree or judgment

is against the party eppealing, and who desires to suspend the

issuing of execution by the adverse party until the appeal is heard

and determined.

Id. at 409-10. The instant case mirrors Bronson & Soutter.

On June 19, 1997, this Court entered a Judgment in favor of

Aican. On July 18, 1997, this Court entered an Amended

Judgment which contained the same damages award in favor of

A-34

Alcan. Alcan, the prevailing party, appealed. As the Ninth Circuit

explicitly stated, execution of the Amended Judgment was stayed

upon Alcan’s initiation of its appeal. This is law of the case. See

Thomas v. Bible, 983 F.2d 152, 154 (9th Cir.:1993). Further, the

policy behind post judgment interest clearly serves to protect a

prevailing party upon appeal by a losing party. This is not the

present case.

As such, Lloyd’s Underwnters obligation to pay post

judgment interest was stayed from August 2, 1997 (the date

following Alcan’s filing of its notice of appeal) until August 1,

1999 (the date prior to the filing and spreading of the Ninth

Circuit’s mandate). Post judgment interest began to accrue again

as of August 2, 1999, until such future date as the Amended

Judgment is paid.

B. July 18, 1997 .is The Proper Inception Date At A

Post Judgment Interest Rate 5.56%.

Lloyd’s Underwnters confusingly argues for an inception

date to be determined by this Court. In its moving papers, Lloyd’s

Underwriters erroneously interchanges its relevant dates'®.

Nonetheless, this Court understands Lloyd’s Underwriters to seek

an inception date of July 18, 1997, the date which the Amended

Judgment was entered by this Court. Alcan insists that the proper

inception date is June 18, 1999, the date of the entry of the

original Judgment in this case (although Alcan also cites an

erroneous date as the original Judgment was entered on June 19,

1997). This Court agrees with Lloyd’s Underwniters proposed

inception date.

The general rule for post judgment interest after an

appellate court affirms the district court is that the earlier

judgment serves as the inception date. Fed. R. App. P. 37(a). On

the other hand, “when an appellate court reverses a judgment for

one party and directs entry of a money for judgment for the other,

Post Judgment interest runs from the date of the entry of the

'® See e.g, Motion, p. 9: 21-22 (“The amended judgment was entered by

this Court on June 18, 1997”).

A-35

second judgment on remand.” American Telephone and Telegraph

Co. v. United Computer Systems, Inc., 98 F.3d 1206 (9th Cir.

1996). However, even in these instances, an equitable exception

exists where damages are “sufficiently ascertained” in the

judgment. In such cases, no one judgment controls, and instead

the policy behind section 1961 of ensuring that a “plaintiff is

further compensated for being deprived of the monetary value of

the loss from the date of ascertainment of damages until payment

by defendant” must be preserved. Id. at 1209. In, Kaiser

Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827 (1990),

the court concluded that “{w]here a prior judgment awarding

damages has been vacated pursuant to the actions of an ultimately

losing party, equitable principles favor calculating the interest in a

manner that more fully compensates the prevailing party.” Id. at

835-36. However, this rules refer to the relationship between the

appellate court’s remand order and the district court’s initial

judgment.

Although the Ninth Circuit did affirm in part and reverse

in part the judgment by this Court, the decision as to the

underlying damages remained unchanged. Moreover, the two

judgments at issue both preceded the Ninth Circuit remand. This

Court is persuaded that, as between the Judgment and the

Amended Judgment, the entry date of the Amended Judgment is

the proper inception date to use. The date of entry of the Amended

Judgment in July 18, 1997.

Lloyd’s Underwriters suggests that this Court can elect to

apply the rule in Briggs v. Pennsylvania Railroad Co., 334 U.S.

304, 306 (1948), and begin post judgment interest at some future

date determined by this Court. However, this Court is not

persuaded that Briggs applies. In Briggs, the Court determined

that the district court lacked the power on remand to enlarge a

judgment by including a post judgment interest award that was not

contemplated in the appellate court’s mandate nor was included in

the original judgment. Such is not the case at bar. Post Judgment

interest was already provided in both the onginal Judgment and

the Amended Judgment entered by this Court.

Using July 18, 1997 as the proper inception date, the

proper post judgment interest rate 1s calculated by using “the last

A-36

auction of the fifty-two week United States Treasury bills

settlement immediately prior to the date of the judgment.” 28

U.S.C. § 1961(a). The Auction price as of July 17, 1997 was 5.56

percent. This Court notes that this rate is taken from the most

recent 1999 Cumulative Annual Pocket Part for 28 U.S.C. § 1961.

Lloyd’s Underwriters misquotes the appropriate rate as 5.65%

which is actually the rate as of June 19, 1997. Thus, the proper

post judgment interest rate in this case is 5.56 percent, not 6.06

percent as indicated in the Amended Judgment.

Pursuant to its powers under Federal Rule of Civil

Procedure 60(a), this Court corrects its clerical mistake in the

Amended Judgment as follows: (1) the proper inception date is

July 18, 1999, and (2) the proper post judgment interest rate is

5.56 percent.

Conclusion

Based on the foregoing analysis, this Court GR.M~TS

Lloyd’s Underwriters Motion for Adjustment of Post Judgment

Interest. The proper post judgment interest: inception date is July

18, 1997, and the proper post judgment interest rate is 5.56

percent. Post Judgment interest is owing from July 18, 1997 until

August 1, 1997, and again from August 2, 1999 until such future

date as the Amended Judgment is paid.

IT IS SO ORDERED.

DATED: AUG 23 1999 DICKRAN TEVRIZIAN

Dickran Tevrizian, Judge

United States District Court

A-37

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

ALCAN ALUMINUM CASE NO. CV 94-2202

CORPORATION DT (CTx)

Plaintiff

Vv Los Angeles, California

PRUDENTIAL ASSURANCE Monday, November 24,

COMPANY 1997

LIMITED, ET AL.

Defendants

AND RELATED

COUNTERCLAIMS AND

CROSS-CLAIMS

HEARING BEFORE

THE HONORABLE DICKRAN TEVRIZIAN

UNITED STATES DISTRICT COURT

APPEARANCES:

For the plaintiff: Lawrence A. Salibra

Counsel

Alcan Aluminum Corporation

6060 Parkland Boulevard

Mayfield Heights Ohio 44124

For the Defendants: Wilson, Elser, Moskowitz,

Edelman & Dicker

BY: Elizabeth M. Jacobi

Attorney at Law

650 Califorma Street

San Francisco, California 94108

Ropers, Majeski, Kohn & Bentley

BY: Paul D. Herbert

Attorney at Law

A-38

670 Howard Street

San Francisco, California 94105

Proceedings recorded by electronic sound recording; transcript

produced by transcription service.

Pages 7-9 reprinted below:

THE COURT: The Plaintiffs Alcan. You’re the appellant. And

you want the Court’s allocation to be adjusted upward so that

underwriters pays you more money.

MR. SALIBRA: Right. But they will never pay us - - in fact, I

should point out to the Court that, in fact, the bond they have does

not comply with the rules because it does not include interest. It is

the - - it does not cover the interest that would accrue just under

the post-judgment interest digit.

THE COURT: All nght. Let me find out from underwniters.

Why is it that you are posting a supersedeas bond and want to

delay payment in this matter when, on appeal, whatever happens,

you're not going - - should you prevail on appeal, you're still

going to end up paying the amount of money, which is now

$1,132,341, which is the amount - - the gross judgment was a

million 5 and some change.

MR. SEVER: Your honor, we argued this point at some length

with respect to our previous visit here, which was whether we

have to post a bond or whether there’s an automatic stay when we

are the appellee.

First of all, let me clarify. I'm not here to make money on behalf

of Underwriters or for my firm. The critical issue here for London

is one that has to do with collection. I think you're probably

familiar enough with London to know what a nightmare it is to

collect funds - -

THE COURT: [used to represent various underwriters.

A-39

MR. SEVER: Yes. The reason - -

THE COURT: They pass it - - everybody passes it around. It’s

the old-fashioned way. Signs off, and everybody has to put a

check in there.

MR. SEVER: That’s correct, your Honor. It is for that reason

that Underwriters are using their right to take a supersedeas bond

as opposed to actually paying the money. Because what we have

there is an argument that we are going to be having to re-collect

the money to reallocate that money to all the various companies

after the appeal. And rather that do that, rather than have to

reallocate, based on whatever the verdict is with the Ninth Circuit,

we want to use the right that we think we are given under the

federal rules to post a bond. What I’m hearing here from counsel

for Alcan is basically arguing against the entire supersedeas bond

process. It seems to me the point is if we've got a right under the

federal rules to post a bond, then, the reasons for the posting of

that bond should be irrelevant.

THE COURT: Yes. Counsel for Alcan takes a position that it’s a

market rate advantage that Underwriters are trying to use. Now,

this is outside the record, but based upon my - - when I was

representing underwriters, it doesn’t work that way. There are all

sorts of syndicates that sign on for a piece of the action. And,

now, there’s one allocation so they’d have to collect that. If Alcan

then wins, then there’s another allocation, and they’d have to go

back again. They can never close their books out. That’s one of

the problems that Underwriters has from their point of view. Your

argument is, you know, it’s a market rate. So we're really going

outside the record of this thing and trying to find out what the

reasons are. I don’t think there’s a problem here by having

Underwriters post the supersedeas bond because Alcan is

protected. You’re going to get your money. Whether you get the

amount that’s — the supersedeas bond which reflects the

proportionate share of the judgment, or you get more if the Ninth

circuit says my allocation was incorrect, that - - you , know, you'll

A-40

get your money.

MR. SALIBRA: Well, I - -

THE COURT: One way or the other.

MR. SALIBRA: yeah. The answer, I think, is that’s not correct.

We aren’t going to get our money. We’re going to get less money

than we would have gotten if the bond was executed then. That’s

why were are here.......

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.