Opposition Brief — Local Union No. 3, International Brotherhood of Electrical Workers v. Wickham Contracting Co.

7 . ~ i

No. 91-1740 SEP 2:

IN THE oan

Supreme Court of the United States

OcToBer Term. 1992

IETS <A RENE es

LOCAL UNION NUMBER 3. INTERNATIONAL

BROTHERHOOD OF ELECTRICAL WORKERS.

AFL-CIO.

Petitioner.

v.

WICKHAM CONTRACTING CO.. INC. and RALPH

PERONE. as a Joint Venture.

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF OF RESPONDENTS IN OPPOSITION TO

A PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

VINCENT F. Pitta

Counsel of Record

SHEA & GOULD

Attorneys for Respondents

1251 Avenue of the Americas

New York. New York 10020

(212) 827-3000

Of Counsel:

JosepH E. Guim

JosHua A. ADLER

QUESTIONS PRESENTED

Whether the Second Circuit correctly

applied the “equitable rule" in

determining if the district court abused

its discretion in granting prejudgment

interest.

Whether the granting of prejudgment

interest in this case was within the

sound discretion of the district court.

Whether review of this case would embroil

the Court in a factual inquiry more

. appropriately conducted by the district

and circuit courts.

ii

TABLE OF CONTENTS

DUGSBCIONS PreSONnted.....ccccccesserses

ies SO” ee a ee ee

Pee RTI DCACOMONE . 2c ccc eee eeece

i A Ch eh Gb We coho eee ene eek

rr tm peas aneecceasce

Reasons for Denying the Writ.........

I. THIS CASE WAS RIGHTLY DECIDED

BY THE SECOND CIRCUIT..........

THE DECISION OF THE SECOND

CIRCUIT IS WHOLLY CONSISTENT

WITH SUPREME COURT PRECEDENT...

A. Award of Prejudgment

Interest is Permissible

Even Where Congress Did

Not Authorize Such

a a

B. The Second Circuit’s

Opinion Does Not Conf-

lict With the Court’s

Holdings in Monessen,

Laborers Trust Fund and

Chauffeurs and Helpers

OS i er ae

bas

C. Noranda is Based on

Antiquated Reasoning

Which Has Previously

Been Rejected by the

COURTS sc cae cer seve nssacss

Il. THE GRANTING OF PREJUDGMENT

INTEREST IN THIS CASE WAS

WITHIN THE SOUND DISCRETION OF

THE DISTRICT COURT...........---

ee REVIEW OF THIS CASE WOULD

EMBROIL THE COURT IN A FACTUAL

INQUIRY MORE APPROPRIATELY

CONDUCTED BY THE DISTRICT AND

CEO ae CPO es 66 6 Hees ee eee ee

of ra are ee ee eee ae

ke a a ne ae ore eee ae

Decision of the United States

Court of Appeals for the Second

ag Bo kh a er ee ee eee ye ee

Opinion of the District Court...

Judgment of the District Court..

en vas 4 be a oS ee ee

13

18

iv

TABLE OF CASES

Page

Allied International, Inc. v.

International Longshoremen’s Assoc.,

814 F.24 32 (iet Cif. 1967) s0cicexeus fn2

Billings v. U.S., 232 U.S.

961 (19TE) coccuscesseunsvuus se enueames 6

Blau v. Lehman, 368 U.S. 403 (1962).. 22

C&K Coal Co. v. United Mine Workers

of America, 537 F.Supp. 480 (W.D.

Pa. 1982)... Terrrerr ct es eS oe fn2

Eazor Express, Inc. v. International

Brotherhood of Teamsters, 520 F.2d

951 (3 Clr. 1975) -cc cece cerccscccees an

EEOC v. Delight Wholesale Co., No.

91-3661, 1992 WL 202551 (8th Cir.,

August 25, 1992) ...ccececerececececes 16-18

Feather v. United Mine Workers of

America, 711 F.2d 530 (3d Cir.

LOSS) ccc chs ee veers sceseeeeseeeeeeeeees 14-15

Funkhouser v. J.B. Preston Co.,

Inc., 290 U.S. 163 (1933).......----- 14

Furtado v. Bishop, 604 F.2d 80

fiet Cie. TOTO) <a caves ee en 20

Greenberg v. Paramount Pictures,

Inc., 85 F.2d 42 (2d Cir. 1936)...... 17

Page

Gulf Coast Bldg. & Supply Co. v.

International Brotherhood of

Electrical Workers, 460 F.2d 105

(Sth Cir. 1972) <s-+sce ean eee AC earn fn2,

21

Havis v. Petroleum Helicopters,

Inc., 664 F.2d 54 (5th Cir. 1981)... 20

Hertz v. Graham, 292 F.2d 443 (2d

Cix. 1962) . «ss «0s dabeeleaee lee eee 20

International Assoc. of Machinists

v. United Aircraft Corp., 534 F.2d

422 (24 Cif. OTS} kine che bee 16

Jacobs v. U.S., 290 U.S. 13 (1933)... 6

Laborers Health and Welfare Trust

Fund v. Advance Lightweight Concrete

Co., Inc., 484 U.S. 539 (1988)....... a3

10-11

Local 20, Teamsters, Chauffeurs

and Helpers Union v. Morton, 377

US. 2352 (1964) cscsresessucencassesees Fa

Li-li2

Loeffler v. Frank, 486 U.S.

: 249 (L9SG) . vcccesnaee saeeees tee ee been 5-6

Miller v. Robertson, 266 U.S. 243 |

(¥9283 6a cence aba eee eee 6, 14

Monessen Southwestern Ry. Co.

v. Morgan, 486 U.S. 330 (1988)....... 7-10

vi

Page

eee Land & Dock Co. v. Texas

Co. 227 F.2d 732 (2d Cir. 1955) coeee 20

NLRB v. Pittsburgh Steamship Co.

Yi ee Pe Me Gh lS errr eee 2i-Z2

Noranda Aluminum, Inc. v. United

Brotherhood of Carpenters and >

Joiners, 528 F.2d 1304, (8th

SE cm SP eg ke ee Reha aa 4-5,

13-14,

18

Petersen v. Chesapeake & Ohio Ry.

Co., 784 F.2@ 732 (6th Cix. 1986) 2... 20

Redfield v. Bartels, 139 U.S. 694

PRR a SOs Ge We tae Conk eee cae ae eee 23

Seaboard Air Line Ry. Co. v.

U.S., 261 U.S. 299 (1923)... cecceeee 6; i9

U.S. v. Johnston, 268 U.S. 220

(1925) ~.. cece COR SK dee renereeceeneotee 21

Waite v. U.S., 282 U.S. 508 (1931)... 6

Wickham Contracting Co., Inc. v.

Local Union No. 3, 955 F. 2d 832

PaO CAL SORE) bss ace eee bad ae bee & ah ee :

vii

Page

STATUTES CITED

Labor-Management Relations Act,

6 303, 29 U.8.:C. © 267 6s cc sc ae passim

Labor Management Relations Act,

§ 301, 29 U.S.C. § 185........ is

OTHER AUTHORITY

13 Moore’s Federal Practice

S Gh. 40 ClSP a) cae ea es Chee eee ae eee 7-8

In The

Supreme Court of the United States

October Term, 1992

No. 91-1740

LOCAL UNION NUMBER 3, INTERNATIONAL

BROTHERHOOD OF ELECTRICAL WORKERS,

AFL-CIO,

Petitioner,

- against -

WICKHAM CONTRACTING CO., INC. and

RALPH PERONE, as a Joint Venture,

Respondents.

BRIEF OF RESPONDENTS IN OPPOSITION TO

A PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

PRELIMINARY STATEMENT

Respondents respectfully submit this

brief in opposition to a grant of certiorari

to review the Judgment and Opinion of the

United States Court of Appeals for the Second

Circuit in this-case.

OPINION BELOW

The Opinion of the Court of Appeals for

the Second Circuit is reported at 955 F.2d

831 and appears in the appendix. It affirmed

the Judgment of the U.S. District Court

for the Southern District of New York

(Mukasey, J.), which appears in the appendix.

This Judgment, inter alia, awarded

respondents prejudgment interest in the

amount of $50,905.

JURISDICTION

The Court’s jurisdiction is invoked

pursuant to 62 Stat. 928, 28 U.S.C.

§ 1254(1).

STATUTES INVOLVED

The relevant statute is § 303 of the

Labor Management Relations Act, 29 U.S.C.

§ 187, the pertinent text of which is set

forth in the appendix.

STATEMENT OF THE CASE

Respondents adopt Circuit Judge Miner’s

rendition of the facts of this case, as

reported in the Opinion below.

REASONS FOR DENYING THE WRIT

I. THIS CASE WAS RIGHTLY DECIDED

BY THE SECOND CIRCUIT

In determining whether the district

court abused its discretion in awarding

prejudgment interest, the Second Circuit

applied the well recognized "equitable rule",

which stresses the need for full compensation

and balancing of the equities in a particular

Situation. See Wickham Contracting Co. Inc.

v. Local Union No. 3, 955 F.2d 831, 837 (2d

Cir. 1992). (Hereinafter "Opinion"). This

approach is wholly consistent with Supreme

Court precedent and the decisions of other

circuit courts. To the extent that the

Opinion conflicts with the 1976 decision of

the Eighth Circuit in Noranda Aluminum, Inc.

v. United Brotherhood of Carpenters and

Joiners, 528 F.2d 1304, 1310 (8th Cir.), cert

denied, 429 U.S. 835 (1976), this latter

decision is an aberration, based on

antiquated common law reasoning which has

previously been rejected by the Supreme

Court.

THE DECISION OF THE SECOND CIRCUIT

IS WHOLLY CONSISTENT WITH SUPREME

COURT PRECEDENT

A. Award of Prejudgment Interest

Is Permissible Even Where

Congress Did Not Authorize

Such Awards

Petitioner argues that writ should be

granted because the Second Circuit’s decision

conflicts with the Supreme Court’s "recent

teaching limiting the jurisdiction of

district courts to award prejudgment interest

when Congress did not authorize such awards."

Contrary to petitioner’s assertion, the Court

has allowed recovery of prejudgment interest

awards “under a variety of federal laws,

despite the silence of the laws on the

Subject of interest." Opinion at 834. See

also, Loeffler v. Frank, 486 U.S. 549, 557-58

(1988) (prejudgment interest allowed in suit

for back pay under Title VII, despite

statute’s silence on the subject); Jacobs v.

U.S., 290 U.S. 13, 16-17 (1933) (prejudgment

interest permitted in Fifth Amendment takings

case as part of "just compensation"); Waite

v. U.S., 282 U.S. 508, 509 (1931)

(prejudgment interest permitted in patent law

infringement suit; interest viewed as part of

"entire compensation" to which statute

referred); Miller v. Robertson, 2466 U.S. 243,

250, 258 (1924) (prejudgment interest

permitted despite silence of "Trading With

the Enemy Act"); Seaboard Air Line Ry. Co. v.

U.S., 261 U.S. 299, 302, 304-06 (1923)

(despite silence of Lever Act, prejudgment

interest was allowed because it was viewed as

part of "just compensation" to which statute

referred); Billings v. U.S., 232 U.S. 261,

284-88 (1914) (prejudgment interest award

upheld in suit to recover federal excise

taxes paid, despite silence of statute). In

view of the cases cited above in which

interest was awarded despite statutory

silence on the matter, petitioner’s argument

is clearly lacking in merit.

B. The Second Circuit’s Opinion Does

Not Conflict with the Court’s

Holdings in Monessen, Laborers

Trust Fund and Teamsters, Chauffeurs

and Helpers Union

Petitioner further asserts that the

Opinion conflicts with this Court’s teaching

in Monessen Southwestern Ry. Co. v. Morgan,

486 U.S. 330 (1988), Laborers Health and

Welfare Trust Fund v. Advance Lightweight

Concrete Co., Inc., 484 U.S. 539 (1988) and

Local 20, Teamsters, Chauffeurs and Helpers

Union v. Morton, 377 U.S. 252 (1964).

However, "(t]he mere assertion of conflict

with Supreme Court precedent will not suffice

(as grounds for Supreme Court review). Rule

10 requires that the application of the

precedent to the case at bar be clear, and

that the state court or the_federal court of

appeals, did not follow that precedent." 13

Moore’s Federal Practice § 810.45 at SC10-51

(1991) (parentheses added). See also, 13

Moore’s Federal Practice § 810.45 at n. 5

(1991) (demonstrating how the history of Rule

10 indicates that a clear and unambiguous

conflict between a court decision and Supreme

Court cases must be shown before certiorari

should be granted). As is demonstrated

below, the Opinion does not conflict with the

Supreme Court cases cited by petitioner.

Monessen was a personal injury action

brought by a railroad employee in which the

Court held that awards of prejudgment

interest under the Federal Employer’s

Liability Act (FELA) were contrary to the

intent of Congress. See 486 U.S. at 336-339.

The intent of Congress in relation to FELA

was inferred by the Court from the fact that

(1) at the time FELA was passed in 1908, the_

common law did not allow recovery of

prejudgment interest in personal injury or

wrongful death actions and (2) since the

passage of FELA, Congress has not amended the

statute as to permit prejudgment interest

recovery, despite the plethora of cases

denying prejudgment interest recovery in FELA

cases. Id. at 337-339. Petitioner argues

that based on Monessen, it can be inferred

that the failure of Congress to amend § 303

as to authorize prejudgment interest awards

indicates congressional intent to deny such

relief.

Petitioner’s reading of Monessen is

overly broad and inaccurate. Monessen itself

states that its inferences regarding

congressional intent are based on the

"appropriate historical context" surrounding

FELA, i.e., the state of the common law at

10.

the time of its passage and failure to amend

the statute in the face of an abundance of

court decisions denying prejudgment interest

recovery in FELA cases. Id. at 337-338 and

n. 9. In contrast, § 303 was passed at a

time when the common law was receptive to

awards of prejudgment interest. See Opinion

at 837-38. Moreover, no inference can be

drawn from the fact that § 303 was never

amended to authorize prejudgment interest

awards because, unlike the FELA situation,

Congress was never faced with a plethora of

decisions rejecting prejudgment interest in

cases under § 303. Id. at 838. Therefore,

contrary to petitioner’s conjecture and

speculation regarding congressional intent,

Congress has never even suggested its

disapproval of prejudgment interest awards in

§ 303 cases.

Similarly, the Opinion does not conflict

with Laborers Health and Welfare Trust Fund.

Li.

That case involved an ERISA jurisdictional

question and had nothing to do with prejudg-

ment interest. See 484 U.S. at 541, 552.

Laborers’ comment in dicta that prejudgment

interest awards are "problematic in cases in

which there is a good-faith dispute over both

the existence and the extent of the employ-

er’s liability" are inapposite because in

this case there was never a good faith

dispute about the existence of liability.?

Finally, the Second Circuit’s decision

does not conflict, even Slightly, with this

Petitioner admits that a good faith

dispute existed only in regard to the

extent of the union’s liability. See

Petition at 12. It now asks this Court to

rule on whether it approves of prejudgment

interest awards "where there is not a good

faith dispute over the existence of some

liability but there is a good faith

dispute over the extent of that

liability." Id. However, petitioner

fails to cite to any cases below which

debate this narrow issue and,

consequently, it is unworthy of Supreme

Court review.

12.

Court’s 1964 decision in Chauffeurs and

Helpers Union. In that case, the Court held

that punitive damages were not available

under § 303. See 377 U.S. at 260-61.

Chauffeurs and Helpers Union had nothing to

do with prejudgment interest awards.

Furthermore, while the statutory

language of § 303 was a basis for the

conclusion that punitive damages should not

be allowed, see 377 U.S. at 260, that same

language does not in any way imply that

awards of prejudgment interest should not be

allowed. The statute speaks of recovery of

"the damages by him sustained." See 29

U.S.C. 187(b). Clearly, punitive damages are

not "damages sustained" in that their object

is not compensation but penalization. In

stark contrast, prejudgment interest is meant

to compensate a plaintiff for the loss of

funds which could have been invested and is

13.

clearly encompassed by the phrase "damages

sustained."

In sum, petitioner has attempted to

conjure up a conflict between the Second

Circuit decision and Supreme Court cases

where none exists. As such, there is no

reason for Supreme Court review of the

Opinion.

C. Noranda Is Based on Antiquated

Reasonine Which Has Previously

Been Rejected by the Courts

Petitioner asserts that the 1976 deci-

Sion of the Eighth Circuit in Noranda, which

disallowed prejudgment interest in a § 303

case based on the common law rule denying

prejudgment interest in unliquidated damage

cases, conflicts with the Opinion below.

Noranda is an aberration that is based on

obsolete reasoning which has previously been

rejected by the courts.

La.

This Court recognized long ago that the

common law rule denying prejudgment interest

in uniiguidated damage cases should be

rejected where the equities favored awarding

such interest. In 1924, the Court commented

in Miller v. Robertson, 266 U.S. 243, 258:

Generally, interest is not al-

lowed upon unliquidated damages

- . » But when necessary in

order to arrive at fair compen-

sation, the court in the exer-

cise of sound discretion may

include interest or its

equivalent as an element of

damages.

See also, Funkhouser v. J.B. Preston Co.,

Inc., 290 U.S. 163, 168-69 (1933) (noting

that law was evolving as to permit

prejudgment interest awards based on

considerations of justice and practicality;

determinations based on distinction between

liquidated and unliquidated damages viewed as

"not sound").

Moreover, other circuit courts have

applied the same "equitable rule" employed by

is.

the Second Circuit below. For example, in

Feather v. United Mine Workers of America,

711 F.2€@ 530 (34 Cir. 1983), the Court

disallowed a prejudgment interest award in a

§ 303 case where the particular facts of that

case suggested that no unjust enrichment of

defendant had occurred which merited interest

compensation. See 711 F.2d at 540-41.°

Similarly, awards of interest in cases

brought pursuant to § 301 of LMRA have been

upheld by the Courts of Appeal. See e.g.,

Eazor Express, Inc. v. International

Brotherhood of Teamsters, 520 F.2d 951 (3d

Note that prejudgment interest in § 303

cases has been awarded with neither

discussion of the merits nor reversal by

the Court of Appeals in the following

cases: Allied International, Inc. v.

International Longshoremen’s Assoc., 814

F.2d 32 (lst Cir.), cert. denied, 484 U.S.

820 (1987); Gulf Coast Bldg. & Supply Co.

v. International Brotherhood of Electrical

Workers, 460 F.2d 105 (5th Cir. 1972); C&K

Coal Co. v. United Mine Workers of

America, 537 F.Supp. 480 (W.D. Pa. 1982),

aff’d and rev’d in part on other grounds,

704 F.2d 690 (3d Cir. 1983).

Cir. 1975), cert. denied, 424 U.S. 935

(1976). Indeed the Second Circuit reversed

and remanded a district court § 301 case

which denied prejudgment interest, noting

that granting interest may have been

appropriate under the circumstances. See

International Association of Machinists v.

United Aircraft Corp., 534 F.2d 422, 446-47

(2d Cir. 1975), cert. denied, 429 U.S. 825

(1976).

Tellingly, a recent decision of the

Eighth Circuit indicates that that circuit

currently employs the same "equitable rule"

applied by the Opinion below. In EEOC v.

Delight Wholesale Co., No. 91-3661, 1992 WL

202551 (8th Cir., August 25, 1992), the

Eighth Circuit upheld denial of prejudgment

interest in a suit for back pay under Title

VII. See Delight Wholesale Co. at 5. Since

the exact amount of back pay required to make

a plaintiff whole is not ascertainable with

precision until a verdict is rendered, back

pay cannot be characterized as liquidated

damages in the common law sense. See

Greenberg v. Paramount Pictures, Inc., 85

F.2d 42, 45 (2d Cir. 1936) (L. Hand, J.).

Nevertheless, the Eighth Circuit denied

prejudgment interest in this case employing

an “equitable rule" analysis:

EEOC next asserts that the

district court erred by denying

an award of prejudgment

interest. The decision to

award or deny prejudgment

interest will be upheld unless

the district court has abused

its discretion. EEOC v. Rath

Packing Co., 787 F.2d 318, 333

(8th Cir.) (citation omitted) ,

cert. denied, 479 U.S. 910

(1986); Washington v. Kroger

Co., 671 F.2d 1072, 1078 (8th

Cir. 1982). After balancing

Title VII’s purpose of make

whole relief against

countervailing considerations,

including EEOC’s delay in

bringing suit, Childer’s

(plaintiff) unstable employment

history and Delight’s

(defendant) change in

ownership, the district court

concluded that back pay alone

was sufficient to compensate

Childers. Delight 765 F.Supp.

at 592. On these facts, we

find no abuse of discretion.

Delight Wholesale Co. at 6.

What emerges is that the common law rule

employed in Noranda has been rejected by the

Supreme Court and the Courts of Appeal. In

its place, determinations regarding

prejudgment interest are made by balancing

the equities, based on the particular facts

of a given situation. In view of the fact

that currently even the Eighth Circuit

ignores its own decision in Noranda, there is

no reason for this Court to pay it any heed.

II. THE GRANTING OF PREJUDGMENT INTEREST

IN THIS CASE WAS WITHIN THE SOUND

DISCRETION OF THE DISTRICT COURT

Petitioner argues that the issue of

prejudgment interest should have been

submitted to the jury. However, the law is

clear that the district court has broad

discretion to award prejudgment interest when

19.

it 1s necessary to fully compensate an

aggrieved party.

In Seaboard Air Line Railway Co. v.

U.S., 261 U.S. 299 (1923), this Court upheld

the district court’s discretionary award of

prejudgment interest in an action brought

pursuant to the Lever Act, despite the fact

that the case was tried by a jury. See 261

U.S. at 306. In that case, a jury verdict

determined that plaintiff was entitled to

$6,000 as "just compensation" for the

government taking of his property. Id. at

303. The district court added prejudgment

interest to the jury verdict. Id. In

affirming the district court award of

prejudgment interest, the Court commented:

The addition of interest

allowed by the District Court

is necessary in order that the

owner shall not suffer loss and

shall have "just compensation"

to which he is entitled.

20.

Id. at 306.

Furthermore, the cases cited by

petitioner for the proposition that a

prejudgment interest award should have been

decided by the jury are clearly

distinguishable. None of the cases cited

have anything to do with the labor laws, much

less § 303 of LMRA. See Petersen v.

Chesapeake & Ohio Railway Co., 784 F.2d 732,

734, 740 (6th Cir. 1986) (action based on

Jones Act, 46 U.S.C. § 688 and general

maritime law); Havis v. Petroleum

Helicopters, Inc., 664 F.2d 54, 55 (5th Cir.

1982) (action brought pursuant to maritime

law); Furtado v. Bishop, 604 F.2d 80, 84 (1st

Cir. 1979) (civil rights action brought

pursuant to 42 U.S.C. § 1983); Hertz v.

Graham, 292 F.2d 443, 444 (2d Cir. 1961)

(negligence action for the death of a race

horse); Newburgh Land & Dock Co. v. Texas

Co., 227 F.2d 732, 733 (2d Cir. 1955) (action

based on maritime law). In marked contrast,

district court additions of prejudgment

interest to jury verdicts in § 303 cases have

been affirmed on appeal. See e.g., Gulf

Coast Bldg. & Supply Co. v. International

Brotherhood of Electrical Workers, 460 F.2d

105, 107 (5th Cir. 1972).

Based on all of the above, it is clear

that at least ina § 303 case, decisions

regarding prejudgment interest awards are

within the sound discretion of the district

court. Petitioner’s assertion that the issue

Should have been submitted to the jury is

meritless.

III. REVIEW OF THIS CASE WOULD EMBROIL

THE COURT IN A FACTUAL INQUIRY

MORE APPROPRIATELY CONDUCTED BY

THE DISTRICT AND CIRCUIT COURTS

In U.S. v. Johnston, Justice Holmes

writing on behalf of a unanimous Court stated

"We do not grant a certiorari to review

22.

evidence and discuss specific facts." 268

U.S. 220, 227 (1925). See also, NLRB v.

Pittsburgh Steamship Co., 340 U.S. 498, 503

(1951) ("This is not the place to review a

conflict of evidence nor to reverse a Court

of Appeals because were we in its place we

would find the record tilting one way rather

than the other, though fair-minded judges

could find it tilting either way"). Justice

Holmes’ comment quoted above is relevant

because review of the instant case would

embroil this Court in reevaluation of facts

which were passed upon decisively by both the

district court and court of appeals.

In order for the Court to decide whether

a discretionary award of prejudgment interest

is permissible in a particular case, the

Court must consider fairness and the relative

equities involved. See Blau v. Lehman, 368

v.5S. 403, 444 (1962). As the Opinion of the

Second Circuit correctly pointed out at 834-

»

35, “(t]he relative equities may make pre-

judgment interest inappropriate when

the plaintiff himself is responsible for the

delay in recovery." See Redfield v. Bartels,

139 U.S. 694, 695, 702-03 (1891). Hence, for

the Supreme Court to decide the issue of pre-

judgment interest, it would have to involve

itself in a factual inquiry regarding which

party is at fault for the delay in prose-

cuting this case. In view of the need for

factual inquiry, this case is particularly

ill-suited for Supreme Court review.”

This issue was litigated extensively below

and both the district court and court of

appeals concluded that plaintiff does not

bear the blame for the long delay in

obtaining judgment on the amount of

damages. See Opinion at 839.

i

LJ

CONCLUSION

For all the foregoing reasons, the

petition for a writ of certiorari to the

United States Court of Appeals for the Second

Circuit should be denied.

Respectfully submitted,

Vincent F. Pitta, Esq.

Shea & Gould

Attorneys for Respondents

1251 Avenue of the Americas

New York, New York 10020

(212) 827-3000

Of Counsel:

Joseph E. Gulmi, Esq.

Joshua A. Adler, Esq.

APPENDIX

ye SR ee “ St ea papa: Sa

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

~— i

No. 482—August Term, 1991

(Argued November 6, 1991] Decided January 29, 1992)

Docket No. 91-7713

Sane

WICKHAM CONTRACTING CO., INC.; RALPH PERONE,

Plaintiffs-Appellees,

—against—

LOCAL UNION NO. 3, INTERNATIONAL BROTHERHOOD

OF ELECTRICAL WORKERS, AFL-CIO,

Defendant-Appellant.

Before:

CARDAMONE, PIERCE and MINER,

Circuit Judges.

a

Appeal from judgment of the United States District

Court for the Southern District of New York (Mukasey, J.)

awarding prejudgment interest on damages recovered by

9 a

~et

employer under Section 303(b) of the Labor Managemen:

Relations Act for union secondary strike.

Affirmed.

a

NORMAN ROTHFELD, New York, NY, for

Defendant-Appellant.

JOSEPH E. GULMI, New York, NY (Allan J

Parker, Shea & Gould, New York, NY, 0°

counsel), for Plaintiffs-Appellees.

>

MINER, Circuit Judge:

Defendant-appellant Local No. 3 of the Internationa

Brotherhood of Electrical Workers (“union”) appeals fror

a judgment of the United States District Court for th:

Southern District of New York (Mukasey, J.) awardin;

prejudgment interest on damages recovered by plaintiffs

appellees Wickham Contracting Co. and Ralph Peron:

(collectively, “Wickham’’), as employers and former join!

venture partners. The damages were awarded under Sec

tion 303(b) of the Labor Management Relations Ac

(“LMRA”), 29 U.S.C. §§ 141-97, which provides a civ:

remedy to employers sustaining damages from secondar

strike activity by a labor organization. See 29 U.S.C

§ 187.

The union contends that prejudgment interest is inap

propriate in Section 303 cases because the LMRA, bein;

Silent on the subject of prejudgment interest, provides n

“statutory authority” for such awards, and because th

CO OO

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images involved are unliquidated, or difficult to ascer-

un prior to judgment. The union further contends that,

ven if prejudgment interest may be awarded under Sec-

on 303, the district court erred in awarding interest in

us particular case. We have not previously addressed the

vestion of prejudgment interest under this provision of

¢ LMRA. For the reasons that follow, we hold that an

ward of prejudgment interest under Section 303 is within

sound discretion of a district court, and that Judge

lukasey did not abuse his discretion in awarding interest

i this case.

BACKGROUND

The union represents electricians who are employed by

mtractors to perform electrical construction work. Wick-

im was an electrical contractor. In early 1974, Wickham

itered into contracts with the Board of Education of the

ity of New York under which Wickham was to perform

| ectrical modernization and construction work at three

| ew York City public schools, P.S. 8, P.S. 41, and the

| remont Early Childhood Center. Wickham’s electricians

| tre represented by Teamsters Local 363.

During the week of July 8, 1974, while Wickham’s

ork on the schools was under way, the union caused its

embers to strike against all electrical contractors per-

ming work for the Board of Education. The immediate

dal of the strike was to force the Board of Education to

| ‘ase doing business with Wickham. The ultimate goal of

strike was to oust the Teamsters from their position as

‘presentative of Wickham’s electricians.

On July 22, 1974, the Board of Education issued stop

ork orders to every electrical contractor that did not

have a collective bargaining agreement with the union,

including Wickham. Wickham’s work on the schools came

to an immediate halt. Wickham commenced this civil suit

against the union under Section 303(b) of the LMRA on

July 29, 1974. At the same time, Wickham filed unfair

labor practice charges with the NLRB.

The Board of Education rescinded its stop orders on

August 6, 1974, although the union’s walkout apparently

continued until September 13, 1974, when a temporary

restraining order was issued against the strike by the

United States District Court for the Eastern District of

New York. On September 19, 1974, the union lost a rep-

resentation election to the Teamsters, and the NLRB cer-

tified the Teamsters as the bargaining representative of

Wickham’s electricians the following month.

On September 26, 1975, the NLRB found that the union

had engaged in an unfair labor practice under Section

8(b)(4) of the National Labor Relations Act (“NLRA”),

and issued a cease and desist order. The NLRB’s deter-

mination and order were upheld by this Court the fol-

lowing year. See NLRB v. Local 3, Int'l Bhd. of Elect.

Workers, 542 F.2d 860 (2d Cir. 1976) (“Wickham I’). In

the civil suit commenced by Wickham, a jury eventually

found the union liable in 1982, and awarded $959,000 in

damages under Section 303. We affirmed the jury’s find-

ing of liability, but remanded the case for a new trial on

the amount of damages. See Wickham Contracting Co. v.

Board of Educ., 715 F.2d 21 (2d Cir. 1983) (“Wickham

IT”).

The new damages trial was not held until April 1991.

The jury returned an award of $41,000. At Wickham’s

request, Judge Mukasey awarded prejudgment interest on

this amount accruing from September 1, 1975. The inter-

‘st Component amounted to $50,905, for a total award to

Vickham of $91,905.

DISCUSSION

Section 303(a) of the LMRA makes it unlawful for-a

abor organization to engage in conduct defined as an

unfair labor practice” in Section 8(b)(4) of the NLRA.

ee 29 U.S.C. § 187(a). Section 8(b)(4) of the NLRA

nakes it an “unfair labor practice” for a labor organiza-

ion to engage in, or to induce any individual to engage in,

: strike, where an object thereof is to force any person to

ase doing business with any other person or to force an

‘mployer to recognize or bargain with a labor organiza-

1on not certified as the representative of the employer’s

mployees. See 29 U.S.C. § 158(b)(4)(i)(B). Section

'03(b) of the LMRA provides that any person injured in

his business or property” by virtue of a Section 303(a)

lolation “shall recover the damages by him sustained and

ne cost of the suit.” See 29 U.S.C. § 187(b). The LMRA

s silent on the subject of prejudgment interest.

The Law of Prejudgment Interest

Since the early part of this century, the United States

upreme Court has stated repeatedly that discretionary

wards of prejudgment interest are permissible under fed-

tal law in certain circumstances. Under the Court’s anal-

sis, the award should be a function of (i) the need to

ully compensate the wronged party for actual damages

uffered, (ii) considerations of fairness and the relative

quities of the award, (iii) the remedial purpose of the

latute involved, and/or (iv) such other general principles

Sare deemed relevant by the court. See Loeffler v. Frank,

86 U.S. 549, 557-58 (1988); Blau v. Lehman, 368 U.S.

BEST AVAILABLE COPY

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403, 414 (1962); Rodgers v. United States, 332 U.S. 37!

373-74 (1947); Board of County Comm'rs of the Count

of Jackson v. United States, 308 U.S. 343, 352 (1939

Miller v. Robertson, 266 U.S. 243, 257-58 (1924).

On the basis of one or more of these enumerated con

siderations, the Court has allowed recovery of prejudg

ment interest under a variety of federal laws, despite th:

Silence of the laws on the subject of interest. See, e.g

Loeffler, 486 U.S. at 557-58 (suit for back pay under Tit!

VII); Jacobs v. United States, 290 U.S. 13, 16-17 (1933

(suit under takings clause of Fifth Amendment; intere:

viewed as part of “just compensation”); Waite v. Unite.

States, 282 U.S. 508, 509 (1931) (patent law infringemer

Suit; interest viewed as part of “entire compensation’'t

which statute referred); Miller, 266 U.S. at 250, 258 (cor

tract suit under Trading With the Enemy Act); Seaboar.

Air Line Ry. Co. v. United States, 261 U.S. 299, 302, 304

06 (1923) (suit for taking of property under the Lever Ac:

interest viewed as part of “just compensation” to whic:

Statute referred); Billings v. United States, 232 U.S

261, 284-88 (1914) (suit to recover federal excise taxe

paid).

The Court has, however, disallowed prejudgment inte:

est awards in certain instances. Prejudgment interest ma

not be awarded, of course, when Congressional intent!

to the contrary. Intent to deny recovery of preyudgmer

interest may be obvious from the language of the statut

itself. See United States v. Goltra, 312 U.S. 203, 207, 21

(1941) (statute governing plaintiff’s claim against th

United States provided no interest until “rendition ¢

judgment”). Even when the statute is silent, intent to den

recovery of interest may be inferable from (i) the state 0

the law on prejudgment interest, for the type of clair

involved, at the time the statute was passed, and (ii) con

sistent denial by the courts of prejudgment interest under

the statute and failure by Congress, despite amendments

(o the statute, to address prejudgment interest awards. See

Monessen Southwestern Ry. Co. v. Morgan, 486 U.S. 330.

336-39 (1988) (denying prejudgment interest under Fed-

eral Employers’ Liability Act).

Awards of prejudgment interest must not result in Over-

compensation of the plaintiff. Accordingly, the Court has

suggested disapproval of such awards where the statute

itself fixes damages deemed fully compensatory as a mat-

ter of law. See Brooklyn Sav. Bank vy. O'Neil, 324 U.S.

697, 699, 714-16 (1945) (interest not recoverable on liq-

uidated damages provided by Fair Labor Standards Act of

1938). Similarly, prejudgment interest should not be

awarded if the statutory obligation on which interest is

sought is punitive in nature. See Rodgers, 332 U.S. at

374-76 (interest not recoverable on penalty imposed on

farmer for exceeding quota under Agricultural Adjustment

Act); United States v. Childs, 266 U.S. 304, 308-10

(1924) (interest recoverable on back taxes due, but not on

penalty assessed for nonpayment).

The relative equities may make prejudgment interest

inappropriate when the defendant acted innocently and

had no reason to know of the wrongfulness of his actions,

see Jackson County, 308 U.S. at 352-53: when there is a

good faith dispute between the parties as to the existence

of any liability, see St. Louis & O'Fallon Ry. Co. v. United

States, 279 U.S. 461, 478, 483 (1929) (suit under Inter-

state Commerce Act to recover excess income allegedly

carned); or when the plaintiff himself is responsible for

the delay in recovery, see Redfield y. Bartels, 139 U.S.

694, 695, 702-03 (1891) (suit to recover duties wrongfully

imposed; interest denied since plaintiff neglected bring-

ing suit for years).

Our prejudgment interest decisions have been in accord

with the Supreme Court’s approach. We have allowed dis-

cretionary awards of prejudgment interest, notwith-

standing the statute’s silence on the subject of interest,

when the awards were fair, equitable and necessary to

compensate the wronged party fully. See, e.g., EEOC \

County of Erie, 751 F.2d 79, 81 (2d Cir. 1984) (award

under Fair Labor Standards Act and Equal Pay Act) (cit-

ing Rodgers v. United States, 332 U.S. 371, 373 (1947));

Katsaros v. Cody, 744 F.2d 270, 281 (2d Cir.) (award for

breach of fiduciary duties by pension fund trustees under

Employee Retirement and Income Security Act), cert

denied, 469 U.S. 1072 (1984); Waterside Ocean Naviga-

tion Co. v. International Navigation Ltd., 737 F.2d 150,

153-54 (2d Cir. 1984) (foreign arbitral award under 9

U.S.C. § 207); Mitsui & Co. v. American Export Lines,

Inc., 636 F.2d 807, 823, 824 (2d Cir. 1981) (award under

the Carriage of Goods by Sea Act) (citing Miller v

Robertson, 266 U.S. 243, 258 (1924)); Rolf v. Blyth, East-

man Dillon & Co., 637 F.2d 77, 86-87 (2d Cir. 1980)

(award under section 10(b) of the Securities Exchange Act

of 1934) (citing Blau v. Lehman, 368 U.S. 403, 414

(1962)); see also International Ass'n of Machinists v.

United Aircraft Corp., 534 F.2d 422, 446-47 (2d Cir.

1975) (award in contract action brought under Section

301 of the LMRA), cert. denied, 429 U.S. 825 (1976).

By contrast, we have suggested that prejudgment inter-

est is improper where the statute itself already provides

for full compensation or punitive damages, see Trans

World Airlines, Inc. v. Hughes, 449 F.2d 51, 80 (2d Cir.

1971) (treble and punitive damages available under

antitrust laws), rev'd on other grounds, 409 U.S. 363

(1973); United States v. Foster Wheeler Corp., 447 F.2d

100, 102 (2d Cir. 1971) (double damages available under

False Claims Act); or where tradition or the language of

the statute makes the award inappropriate, see Gretchen

v. United States, 618 F.2d 177, 178 & n.2 (2d Cir. 1980)

(Public Vessels Act failed to provide interest until “ren-

dition of judgment”); Gilroy v. Erie-Lackawanna RR.

Co., 44 F.R.D. 3, 4 (S.D.N.Y. 1968) (prejudgment inter-

est “traditionally” not awarded on claims under Federa]

Employers’ Liability Act).

The certainty of the damages due the plaintiff has been

another factor in resolving prejudgment interest issues.

The Supreme Court initially embraced the strict common

law view that interest may not be recovered where dam-

ages are unliquidated, or difficult to ascertain with pre-

cision at the time of the alleged wrongdoing. See, e.g.,

Mowry v. Whitney, 81 U.S. (14 Wall.) 620, 653 (1872)

(denying prejudgment interest in patent law infringement

| action). Accordingly, prejudgment interest Originally was

| available only in contract actions, if at all. The reasoning

of the common law was that interest would be unjust if

the party committing the wrongdoing could not know

exactly how much to tender to the wronged party to make

the latter whole.

Even in the modern cases awarding prejudgment inter-

est, damages have been ascertainable with precision, at

least by the time of trial or judgment. For instance, the

amount of back pay due an employee or the losses

incurred in a fraudulent securities transaction could be

calculated with certainty in many cases by the finder of

fact, after consideration of the available information.

However, the significant feature of these same cases was

that no party could foresee, at the time of the wrongdoing,

the full amount of damages that would result. The diffi-

culty of computing a “make whole” amount frequently

persisted until judgment itself. In an employment case,

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nobody knows on the date of the wrongful termination the

amount of back pay that will be necessary to make the

plaintiff whole. The quantity can only be determined at

trial, on the date verdict is rendered, and is therefore not

“liquidated” in the common law sense. See Greenberg v.

Paramount Pictures, Inc., 85 F.2d 42, 45 (2d Cir. 1936)

(L. Hand, J.). These problems of calculation also exist in

cases in which the injury is more similar to Wickham’s. In

a securities fraud case, for example, no one knows on the

date of the deception how much loss there will be in the

value of the stock, or what the stock’s price will be on the

date suit is brought. Similarly, in a patent infringement

case, it is impossible to determine at the time of infringe-

ment the profits that will be iost by one party or gained by

the other. Yet, prejudgment interest awards have been

upheld frequently in these and analogous cases, both by

the Supreme Court and by this Court.

Accordingly, the old common law rule of liquidated

damages no longer retains its full vitality. The Supreme

Court has practically said as much, see Miller, 266 U.S. at

258; see also Funkhouser v. J.B. Preston Co., 290 U.S.

163, 168-69 (1933), as have we, see United Aircraft, 534

F.2d at 447; see also Greenberg, 85 F.2d at 45, as has at

“least one other circuit, see Eazor Express, Inc. v. Inter-

national Bhd. of Teamsters, 520 F.2d 951, 973 (3d Cir.

1975) (citing Miller, 266 U.S. at 258), cert. denied, 424

U.S. 935 (1976). Moreover, the current “equitable” and

discretionary rule, based on the need for full compensa-

tion and fairness under the circumstances, necessarily

rejects much of the common law’s approach to prejudg-

ment interest.

The speculative nature of the damages in question will

always be relevant to a sound decision on a consideration

of whether prejudgment interest should be awarded. How-

lla

ever, the proper inquiry must include the other factors we

nave identified: analysis of the pertinent statute and its

purposes, the need to fully compensate the injured party;

fairness and the relative equities; and the specific cir-

cumstances of the parties and of the case. The degree of

speculation must then be considered in light of these other

factors to determine the propniety of prejudgment interest.

We recognize that in some Section 303 actions the fact

finder’s calculation of losses suffered by the employer

will be so conjectural that prejudgment interest should not

be awarded. Nonetheless, while the presence of “abstruse

inquiries” and “difficult questions of proof” in the cal-

culation of damages are factors to be considered carefully,

these problems must be considered together vith other

factors that may favor prejudgment interest. See Hughes,

449 F.2d at 80.

For the foregoing reasons, we cannot agree with the

union that the silence of the LMRA On the subject of

interest, or the unliquidated nature of damages in a Sec-

uon 303 case, are sufficient without more to bar the award

made to Wickham.

ll. The Award of Interest Against the Union

The factors generally justifying an award of interest are

present in this case. Wickham Clearly suffered actual dam-

age to its business because of the secondary strike. The

union insists that Wickham’s work on the schools was

interrupted for only the two week period during which the

Board of Education Stop orders were outstanding, not for

the two month period of the strike. There is some indi-

cation in the record, however, that the disruption in this

case lasted for two months, from early July 1974 until

carly September 1974, when the strike was enjoined by a

federal district court. See Wickham I, 542 F.2d at 862:

Wickham I], 715 F.2d at 23, 24. In any event, the disrup.

tions and delays, whether of two weeks or two months,

were of real impact. The stop orders issued by the Board

of Education directed Wickham to remove all of its men

and materials from the school construction sites. Initia!

compliance with the orders alone disrupted labor and sup-

ply schedules. Each of the three contracts had a duration

of less than a calendar year, and we cannot say that a two

week stoppage, in the context of the construction business

in which Wickham is engaged, failed to cause further

problems. The district court found that because of the

delays, Wickham had to perform certain of its work while

the schools were in session, and that the projects were

more costly to complete as a result. There is nothing in

the record to the contrary. See also Wickham I], 715 F.2¢

at 25. It is reasonable to believe (as the jury appears to

have believed on the basis of the evidence presented) that

the disruptions and delays caused by the strike eroded

Wickham’s expected profits from the contracts, by

increasing overhead and supply costs and making Wick-

ham’s use of labor and resources less efficient than woulc¢

have otherwise been the case.

Hence, Wickham was deprived of money that it other-

wise would have earned but for the secondary strike. A:

Judge Mukasey pointed out, the damage was incurred b

Wickham on September 1, 1975, the date on which Wick:

ham was to have received payment under the origina!

schedule contemplated by the contracts. Therefore, Wick:

ham has been deprived of a sum owed to it, under Section

303 of the LMRA, for over 16 years. It was not an abuse

of discretion for the district court to determine that pre-

judgment interest was necessary to compensate Wickham

fairly under the circumstances, especially in view of high

l3a

inflation during several of those years. See Rolf v. Blyth,

Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir. 1980).

Further, as indicated by the language of Section 303(b),

the purpose of the civil remedy provided by that provision

is compensatory and remedial. See Local 20, Teamsters.

Chauffeurs and Helpers Union v. Morton, 377 U.S. Kk

260-61 (1964). Under the circumstances of this Case, an

award of prejudgment interest comports with the remedial

scheme of the statute. By contrast, the factors that have

led federal courts to deny prejudgment interest awards are

markedly absent in this case.

There is no indication that Congress intended to deny

recovery of prejudgment interest in Section 303 cases. In

Monessen Southwestern Ry. Co. v. Morgan, 486 U.S. 330

(1988), a case involving a personal injury suit by a rail-

road employee, the Supreme Court concluded that pre-

judgment interest awards under FELA were contrary to

the intent of Congress. The Court reached this conclusion

because (i) in 1908, at the time FELA was passed, the

common law rule barring recovery of interest in tort

actions was still in force, and (ii) a great many State and

federal courts had concluded with “virtual unanimity”

Over the years since the passage of FELA that prejudg-

ment interest should not be available under the statute.

See id. at 337-39. The Court held that under these cir-

cumstances, intent to deny interest recovery could be

inferred from both the original silence of Congress on the

subject of prejudgment interest, and Congress’ failure,

despite many amendments to FELA, to make any addi-

tions on the subject to the statute in the face of unanimous

court holdings denying interest. See id.

There is no similar indication that Congress intended to

deny recovery of prejudgment interest in actions under

hain

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Section 303 of the LMRA. The legislative history of the

LMRA is as silent as that of FELA on the subject of pre-

judgment interest. However, the LMRA was passed in

1947, well after the passage of FELA. By the 1940s, the

common law rule against prejudgment interest in cases of

unliquidated damages and tort actions had eroded

severely, and was supplanted by an equitable and discre-

tionary approach emphasizing compensation. See Prager

v. New Jersey Fidelity and Plate Glass Ins. Co., 245 N-Y.

1, 5-6 (1927) (Cardozo, C.J.) (noting that in cases involv-

ing prejudgment interest considerations of “policy and

justice” frequently controlled, and that interest may be

necessary to make plaintiff whole); see also Greenberg v.

Paramount Pictures, 85 F.2d 42, 45 (2d Cir. 1936) (L.

Hand, J.).

Prejudgment interest in persona: injury cases similar to

those covered by FELA has not become accepted even to

this day. By contrast, awards of prejudgment interest,

w'thout inquiry into the certainty of the losses suffered at

the time of the wrongdoing, were acceptable well before

the passage of the LMRA in tort cases involving injury to

property or business. See Flamm v. Noble, 296 N.Y. 262,

267-68 (1947) (citing McCormick v. Pennsylvania Cent.

R.R. Co., 49 N.Y. 303 (1872); Parrot v. Knickerbocker Ice

Co., 46 N.Y. 361 (1871); Andrews v. Durant, 18 N.Y. 496

(1859)). Moreover, the Supreme Court itself decided

Miller in 1924, Waite in 1931, Funkhouser in 1933, and

Jackson County in 1939, all well before passage of the

LMRA. The Rodgers decision was handed down in 1947,

the very year the LMRA was passed. The Court’s lan-

guage in these cases strongly suggested an abandonment

of the common law approach to prejudgment interest

under federal statutes, and endorsement of a more dis-

cretionary approach. :

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Unlike the plethora of courts that have rejected recov-

ery of prejudgment interest under FELA, only a relatively

small number of courts have considered directly the issue

of prejudgment interest under Section 303 of the LMRA.

Of the courts that have considered the issue, few have

expressed the hostility to prejudgment interest we per-

ceive in the FELA cases. Moreover, the long history of

denial of prejudgment interest in the FELA cases, and

emphasized in Monessen, is wholly absent in the context

of the LMRA.

The Eighth Circuit has disallowed prejudgment interest

in a Section 303 case, apparently on common law rea-

soning that damages in a Section 303 action are by defi-

nition unliquidated. See Noranda Aluminum, Inc. vy.

United Bhd. of Carpenters and Joiners, 528 F.2d 1304,

1310 (8th Cir.), cert. denied, 429 U.S. 835 (1976). This

strict approach appears to have been followed once in the

District of Massachusetts, without discussion of the mat-

ter by the First Circuit on appeal. See John B. Cruz Const.

Co. v. United Bhd. of Carpenters and Joiners, No. 84-

2041MC, 1989 WL 63680 (D. Mass. 1989), aff’d 907

F.2d 1228 (1st Cir. 1990). On the other hand, prejudgment

interest in Section 303 suits has been awarded (with nei-

ther discussion on the merits nor reversal by the court of

appeals) in the District of Massachusetts, see Allied Int’ 1,

Inc. v. International Longshoremen’s Ass'n, 814 F.2d 32

(1st-Cir.), cert. denied, 484 U.S. 820 (1987); in the West-

ern District of Pennsylvania, see C&K Coal Co. v. United

Mine Workers of Am., 537 F. Supp. 480 (W.D. Pa. 1982),

aff'd and rev'd in part on other grounds, 704 F.2d 690 (3d

Cir. 1983); and in the Southern District of Mississippi, see

Gulf Coast Bldg. & Supply Co. v. International Bhd. of

Elec. Workers, 460 F.2d 105 (Sth Cir. 1972).

While the Third Circuit has set aside a prejudgment

interest award under Section 303, we find it significant

that the court did not apply a per se rule against the

award. Rather, the court applied an equitable rule similar

to the one we have discussed here, and decided that on the

particular facts of that case no unjust enrichment meniting

interest compensation existed. See Feather v. United Mine

Workers of Am., 711 F.2d 530, 54U-41 (3d Cir. 1983).

Similarly, in an opinion remanding a Section 303 case to

the Eastern District of Wisconsin with guidelines for

recomputation of damages, the Seventh Circuit passed

over without adverse comment the district court's award

of prejudgment interest on the original amount of dam-

ages calculated. See Boxhorn’s Big Muskego Gun Club v

Electrical Workers Local 494, 798 F.2d 1016, 1022-23

(7th Cir. 1986). We note also that the Third Circuit has

upheld an award of interest in a dispute under Section 30!

of the LMRA for breach of contract. See Eazor Express.

Inc. v. International Bhd. of Teamsters, 520 F.2d 951 (3¢

Cir. 1975), cert. denied, 424 U.S. 935 (1976). Likewise.

we reversed and remanded a district court decision not to

grant interest in a Section 301 action, noting that such a

grant might have been entirely appropriate under the cir-

cumstances. See United Aircraft, 534 F.2d at 446-47.

The LMRA does not fix liquidated damages, and does

not double or treble damages. Nor is a Section 303(b)

award punitive in nature. Therefore, the interest award to

Wickham is not overly compensatory or otherwise

improper. Moreover, there is no basis in the history of the

dispute between Wickham and the union for concluding

that the union acted innocently or that the union’s actions

against Wickham were taken in good faith. While there

are Cases in which it is difficult to determine whether an

unlawful secondary strike has occurred, this is not one of

ca aia ii

l7a

those cases There is every indication in this case that the

union knew it was clearly violating a specific statutory

duty erected by the LMRA. See Wickham I, 542 F.2d at

863, 865-67. Moreover, as we observed shortly after the

strike, the union’s coercive attempt to oust the Teamsters

as bargaining representative of Wickham’s employees

itself was of “dubious legality,” and a “fundamental

abuse” of the responsibilities of a labor organization. See

id. at 865, 867.

The availability of both injunctive and monetary relief

under the labor laws for secondary strikes reflects a strong

national policy against behavior Congress found quite

objectionable. See Robert A. Gorman, Basic Text on

Labor Law, Unionization and Collective Bargaining 291

(1976). The policy is rooted in the desire to protect inno-

cent third parties from labor disputes. In this case, the

union's unlawful activity led to the disruption of public

schools. These observations are offered not to Suggest in

any way that the union deserves to be penalized by an

award of prejudgment interest, but rather to emphasize

that the award does not strike us as inequitable under the

circumstances.

We do not agree with the union that the Supreme

Court’s decision in Laborers Health & Welfare Trust Fund

v. Advanced Lightweight Concrete Co., 484 U.S. 539

(1988), militates against an award of interest in this case.

Laborers Health did not even address the question of pre-

judgment interest, but rather involved a jurisdictional

question arising under ERISA. While the Court did state

in dicta that prejudgment interest awards become “prob-

lematic” in iabor cases where there is a “good-faith dis-

pute over both the existence and the extent of the

employer's liability,” the Court also noted that “it is

entirely appropriate to award prejudgment interest” when

Sa

a specific contractual provision is breached. See id. ;

551-52. As we have said, it is improbable that the union

actions toward Wickham were taken in good faith; and, ::

any event, whatever doubts there may have been as to th:

exact amount of the union’s liability, there has been litt):

doubt for years that the union breached a specific dur

imposed by the LMRA. In Laborers Health, by contras:

the employer simply ceased to make contributions to;

pension plan after the contract obligating him to do so ha

expired. See id. at 542. That is a far cry from what wer

on here.

The union further contends that, although a jury dete:

mined that the union was civilly liable to Wickham 1:

1982, the extent of that liability was not established unt

1991 and therefore it would be unfair for interest «:

accrue prior to that time. We disagree. It was entire!

appropriate for Judge Mukasey to choose the date o

injury as the date on which prejudgment interest shoul.

begin to accrue. See Taliercio v. Compania Empressa Lir

eas Argentina, 761 F.2d 126, 129 (2d Cir. 1985). It is als

worth recalling that in 1975, both the NLRB and thi

Court determined that a “secondary boycott’’—the bas!

of civil liability under Section 303—had occurred. Whil:

these determinations had no res judicata effect on the civ:

Suit as such, they did provide early notice of potenti

civil liability.

The district court also determined that the long delay 1

obtaining judgment on the amount of damages was du

essentially to procedural matters beyond Wickham’s con

trol. The record does not suggest that this determinatio:

is Clearly erroneous, and we are not in a position to reex

amine de novo the |7 year procedural history of this dis

pute. Moreover, it is undisputed that Wickham prompt!

commenced its Section 303(b) suit in 1974. According!)

——— Ll

19a

we see no basis for reversing the interest award on

grounds of delay by the plaintiff.

Lastly, the damages suffered by Wickham in this case

were not so conjectural that an award of prejudgment

interest was an abuse of discretion under the circum-

stances. The total revenue to be earned by Wickham under

the three contracts was known with certainty to be

$502,000. Further, as an experienced contractor, Wickham

probably had a good idea of the expected cost of labor and

materials. The trial testimony of Biele, Wickham’s Pres-

ident, was that Wickham expected a 10% profit. We real-

ize that Biele could not recall where this figure came

from, but note that the same profit margin is given in a

1974 letter from Wickham to the Board of Education. The

letter was an exhibit at trial. Further, as we noted in our

earlier decision remanding this case for a new trial on

damages, only the work stoppage could provide a legal

basis for recovery under Section 303(b), since no evi-

dence existed linking the union’s activities to the various

other misfortunes that Wickham suffered at the time. See

Wickham I], 715 F.2d at 25, 28-29.

Therefore, the upper limit on damages could be calcu-

lated with some certainty at about $50,200, the total prof-

its expected under the three contracts. The jury’s task was

relatively discrete: to determine how much of this

expected profit was eroded due to the work stoppage, or,

as Judge Mukasey put it in his instructions, to determine

what Wickham “would have earned less the amount

[Wickham] actually earned.”

According to the union, the jury declined to engage in

such calculations and instead speculated as to damages by

awarding Wickham “precisely” 10% of lost profits on

only two contracts, those governing the work at P.S. 8 and

20a

P.S. 41. The union also contends, coincidentally, that

Wickham’s work was disrupted only at these two schools

because workers were not present at the Tremont Early

Childhood Center on the day the Board of Education stop

orders were issued. The record leaves us unconvinced of

either contention. The total price of the P.S. 8 and PS. 41

contracts was $406,000. Lost profits on these contracts

would have been $40,600, not $41,000.

It is possible that the jury did that which the union con-

tends, but simply rounded upwards. Yet Wickham has

maintained all along that work was disrupted at Tremont

as well, and for 15 years the facts of this case have sug-

gested that all projects were affected. See Wickham /, 542

F.2d at 862; Wickham I], 715 F.2d at 23. Even if nobody

were present at the Tremont site the day the stop orders

were issued, it is hardly unreasonable to believe that the

terms of the stop orders prevented people from returning

to the Tremont site, or otherwise disrupted the Tremont

project.

Therefore, it is equally possible that the jury began with

$50,200 expected profit for all three contracts, and then

made a determination that about 80% of this sum was lost

by Wickham due to increased costs and lost efficiencies.

This determination does not strike us unreasonable or

unduly speculative on the basis of the evidence presented

at trial. In this connection, we note that the union has

appealed neither Judge Mukasey’s evidentiary rulings nor

the amount of the jury’s award.

We have carefully considered the union’s remaining

arguments, and find them to be without merit.

2la

CONCLUSION

The judgment of the district court aw arding prejudg-

ment interest under Section 303(b) of the LMRA jis

affirmed.

22a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

WICKHAM CONTRACTING CO.; INC.

and RALPH PERONE, as a Joint OPINION

Venture, AND

ORDER

Plaintiffs,

- against -

LOCAL UNION NO. 3, INTERNATIONAL

BROTHERHOOD OF ELECTRICAL

WORKERS, AFL-CIO,

Defendant.

MICHAEL B. MUKASEY, U.S.J.D.

This brief opinion 1s occas-

loned by the parties' dispute as

to whether plaintiffs, which were

awarded $41,000 by a jury as damages

resulting from defendant's unlawful

secondary boycott, should receive pre-

Judgment interest. This is no small

matter in this case because, as the

docket number of the case suggests,

the underlying facts occurred about

17 years ago.

23a

Defendant's counsel asserts in a

letter to the court dated April 29, 1991

that an award of prejudgment interest

was proposed by the court sua sponte,

and that it is "hornbook law that absent

legislative authorization ... a Court

may award prejudgment interest only when

the damages recovered were liquidated...."

Neither assertion is correct. Plaintiffs

raised the issue of prejudgment interest,

and the correct statement of the law is

that prejudgment interest is mandatory

when the amount is liquidated, but other-

wise 1S within the discretion of the

court guided by "fundamental considera-

tions of fairness." Rolf v. Blyth,

Eastman Dillon & Co., Inc., 637 F.2d

ie @? (26 Cir. 1980).

Those considerations warrant an

award of prejudgment interest here.

Defendant's violations of the labor

laws was clear and liability was deter-

+a

0,

Mined long ago. The jury's award was

small and recognized the added costs to

plaintiff and its losses that resulted

having to do added work on the pro-

ects affected by defendant's conduct, and

to do work while school was open instead

of while school was in recess, under

radically different conditions from those

anticipated when plaintiffs bid on the

renovation contracts in question. The

Gelay in adjudicating damages is not

attributable to plaintiffs but rather

1s dque to the tortured procedural history

of this case, which was assigned to my

docket in 1989. Plaintiffs have been

deprived cf the use of the funds since

the time of the events in question.

Plaintiffs have submitted a judgment

calling for interest from July 22, 1974,

the date plaintiffs were directed to

stop work on the projects affected by

defendant's wrongful acts. A more

25a

appropriate date would appear to be the

date by which plaintiffs could have expec-

ted to be paid for their work. Although

the record does not reflect a precise

date when such payment would have been

made, it does reflect that plaintiffs

continued work well into the 1974-75

school year. Accordingly, interest will

be awarded from September l, 1975.

settle judgment accordingly on five days'

notice following the date when plaintiffs'

counsel returns to his office.

SO ORDERED:

/s/ MICHAEL B. MUKASEY

Michael B. Mukasey

U. S.District Judge

DATED: New York, New York

May 14, 1991

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a JUDGMENT

- against - ‘

LOCAL UNION NO. 3, INTERNA- oe eas

TIONAL BROTHERHOOD OF ELECTRICAL” Ore

WORKERS, AFL-CIO,

Defendants.

The above-entitled action having

- - a £ - s > 7 ma & + } _ <A } 7}

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come on for trial before the Hon. Michael

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April 16, 1991 and concluding on April

appeared by their attorney, Joseph E.

Gulmil, and the defendant having appeared

by its attorney, Norman Rothfeld, and

ct

he allegations and proofs herein having

been heard by a jury of six and due deli-

to

~“~)

beration having been had and the jury

having duly rendered a unanimous verdict

in favor of the plaintiffs on April

23, 1991, in the sum of $41,000 against

the defendant, and this Court in its

Opinion and Order having awarded to the

plaintiff prejudgment interest from

September 1, 1974,

Now, On motion of Norman Rothfeld,

attorney for the defendant, it is

ORDERED, ADJUDGED AND DECREED, that

the plaintiffs, Wickham Contracting Co.,

Inc. and Ralph Person, as a Joint Venture,

located at 415 Fifth Avenue, Pelham, New

York, have a judgment against the defendant,

Local Union No. 3, International Brother-

hood of Electrical Workers, AFL-CIO,

located at 158-11 Harry Van Arsdale Jr.

Avenue, Flushing, New York, in the sum

of $91,905, together with the costs and

necessary disbursements of this action,

to be taxed by the Clerk of this Court,

28a

and that plaintiffs have execution there-

for, which execution is stayed for a

period of thirty (30) days from the

date of this judgment.

Dated: New York, New York

May 30, 1991

7s/ MICHAEL B. MUKASEY

UNITED STATES DISTRICT

JUDGE

THIS DOCUMENT WAS ENTERED ON June 3, 1991

29a

STATUTES

Pertinent text of 29 U.S.C. §187:

SEC. 303. (a) It shall be unlawful...for

any labor organization to engage in any

activity or conduct defined as an unfair

labor practice in section 8(b) (4) of the

National Labor Relations Act, as amended.

‘b) Whoever shall be injured in his

business or property by reason of any

violation of subsection (a) may sue

therefore in any district court of the

United States...and shall recover the

damages by him sustained and the cost of

the suit.