Associated General Contractors v. Drabik

Page 482

250 F.3d 482 (6th Cir. 2001)

Associated General Contractors of Ohio, Inc.; Associated General Contractors of Northwest Ohio, Inc., Plaintiffs-Appellees, Sherman R. Smoot Company, Inc., Intervenor-Appellee, v. Sandra A. Drabik, Director of Administrative Services; Reginald Wilkinson, Director of Rehabilitation and Correction, Defendants-Appellants.

Nos. 99-4401; 00-3104

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: November 2, 2000

Decided and Filed: May 23, 2001

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 98-00943, James L. Graham, District Judge.

Kevin R. McDermott, SCHOTTENSTEIN, ZOX & DUNN, Columbus, Ohio, for Appellees.

Donald B. Leach, Jr., Buckingham, Doolittle & Burroughs, Columbus, OH, for Intervenor-Appellee.

Sharon A. Jennings, Elizabeth Luper Schuster, Judith L. French, OFFICE OF THE ATTORNEY GENERAL OF OHIO, Columbus, Ohio, for Appellants.

On BRIEF: Before: KEITH, BOGGS, and COLE, Circuit Judges.

OPINION

DAMON J. KEITH, Circuit Judge.

Plaintiffs-appellees were the prevailing party in a suit against the State of Ohio. The district court included in its final judgment on the merits an award of reasonable attorney fees. Eleven months later, the district court entered judgment quantifying the fee award. In a subsequent order, the court held that plaintiffs-appellees were entitled to interest on attorney fees running from the date of the merits judgment. For the reasons that follow, weAFFIRM decision of the district court.

I. BACKGROUND

In September 1998, the State of Ohio, through the Ohio Department of Administrative Services ("DAS") and the Ohio Department of Rehabilitation and Correction ("DRC"), received bids for the construction of the Toledo Correctional Institution Administration Building. Pursuant to the Ohio Minority Business Enterprise Act ("MBEA"), Ohio Rev. Code Ann. § 123.151, the DAS and DRC set aside bidding for the construction work for minority-owned businesses ("MBEs") only. Therefore, otherwise qualified non-MBEs were excluded from bidding on the project on racial grounds.

On September 18, 1998, plaintiffs-appellees Associated General Contractors of Ohio and Associated General Contractors of Northwest Ohio (collectively "AGC") filed suit pursuant to 42 U.S.C. § 1983 against defendants-appellants Sandra Drabik, Director of the DAS, and Reginald Wilkenson, Director of the DRC (collectively the "state"). AGC alleged that its members, who are Ohio building contractors, were denied the opportunity to bid on the construction project. AGC challenged the constitutionality of the MBEA, and sought declaratory and injunctive relief.

The district court consolidated the preliminary injunction hearing with a trial on the merits. On November 3, 1998, the court entered judgment in favor of AGC, holding the MBEA unconstitutional and enjoining its enforcement. See Associated Gen. Contractors of Ohio, Inc. v. Drabik, No. C2-98-943, 1998 WL 812241, at *1 (S.D. Ohio Oct. 30, 1998). The judgment included a statement that AGC was a prevailing party under 42 U.S.C. § 1988, and that the court was exercising its discretion to award AGC reasonable attorney fees and costs. See id. The state appealed the district court's decision, and this Court affirmed. See Associated Gen. Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730, 740 (6th Cir. 2000), cert. denied, 121 S.Ct. 1089 (2001).

Pursuant to stipulation and order of the district court, AGC filed its application for attorney fees on January 11, 1999. During February and March, 1999, on three occasions, the district court granted the state's motions for extensions of time to respond to AGC's fee application. Then on April 8, 1999, the state moved for a stay of the district court's decision regarding attorney fees pending the merits appeal. The district court denied the state's motion on May 28, 1999. Thereafter, the state filed its fourth motion for an extension of time to respond to AGC's fee application, and the court granted the motion. Finally, on July 9, 1999, the state filed its response.

On October 13, 1999, the district court entered judgment granting AGC's motion for attorney fees in the amount of $113,915.48. On November 10, 1999, the state filed a notice of appeal from the district court's judgment quantifying AGC's fee award.

On October 13, 1999, the state moved for a stay of enforcement of the attorney fee award pending appeal, and for approval of a supersedeas bond equal to the full amount of the award. On December 7, 1999, the district court granted the state's motion, and ordered that the state post a bond or make a cash deposit with the clerk in the full amount of the judgment and "accrued interest." Subsequently, AGC moved to clarify or amend the district court's order of December 7, 1999 seeking interest on the attorney fee award from November 3, 1998, the date of the district court's judgment awarding AGC reasonable attorney fees. In its response to AGC's motion, the state argued that interest should accrue only from October 13, 1999, the date the attorney fee award was quantified.

On January 5, 2000, the district court granted AGC's motion to clarify its order of December 7, 1999. The district court held that interest on the attorney fees accrued from November 3, 1998, the date of the judgment on the merits. The state filed a timely notice of appeal¹.

II. STANDARD OF REVIEW

This appeal involves issues of statutory interpretation, which, as questions of law, we review de novo. Vergos v. Gregg's Enterprises, Inc., 159 F.3d 989, 990 (6th Cir. 1998).

III. DISCUSSION

A. Interest on Attorney Fees Pursuant to 28 U.S.C. §1961(a)

Initially, we note that this Court has never expressly decided the issue of whether an award of attorney fees awarded pursuant to 42 U.S.C. § 1988 accrues interest under 28 U.S.C. § 1961(a). Section 1961 provides, in pertinent 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 . . . ." 28 U.S.C. 1961(a). Most of our sister circuits have either expressly or impliedly concluded that the "any money judgment" provision of § 1961 includes a judgment awarding attorney fees. See, e.g., Eaves v. County of Cape May, 239 F.3d 527, 530 (3d Cir. 2001); Friend v. Kolodzieczak, 72 F.3d 1386, 1391 (9th Cir. 1995); Bank Atlantic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045, 1052-53 (11th Cir. 1994); MidAmerica Fed. Sav. & Loan Assoc. v. Shearson/American Express, Inc., 962 F.2d 1470, 1475-76 (10th Cir. 1992); Foley v. City of Lowell, Mass., 948 F.2d 10, 21 (1st Cir. 1991); Jenkins v. State of Missouri, 931 F.2d 1273, 1275 (8th Cir. 1991); Fleming v. County of Kane, 898 F.2d 553, 565 (7th Cir. 1990); Mathis v. Spears, 857 F.2d 749 (Fed. Cir. 1988); Copper Liquor, Inc. v. Adolph Coors Co., 701 F.2d 542, 543 (5th Cir. 1983) (en banc). We have found no cases rejecting this rule.

Because we see no reason to distinguish between judgments for attorney fees and judgments for other types of damages, we also construe the term "any money judgment" as including a judgment awarding attorney fees. We agree with the First Circuit that "short of straining, the plain language of section 1961(a) does not appear to permit a contrary result." Foley, 948 F.2d at 21.

We note that our resolution of this issue serves the underlying purpose of § 1961, which "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." Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835-36 (1990) (quoting Polento v. Consol. Rail Corp., 826 F.2d 1270 (3d Cir. 1985)). Because a dollar today is worth more than a dollar in the future, the only way a party can be made whole is to grant interest from the time of the award of fees. "Any other rule would effectively reduce the judgment for attorneys' fees . . . ." R.W.T. v. Dalton, 712 F.2d 1225, 1234-35 (8th Cir. 1983). Moreover, awarding interest on a § 1988 fee award "serves the purpose of awarding such fees to the prevailing party, since it would more nearly compensate the victor for the expenses of the litigation." Copper Liquor, Inc. v. Adolph Coors Co., 701 F.2d 542, 544 (5th Cir. 1983).

We also note that the award of interest on attorney fees is in no sense a windfall. Defendants will suffer no actual prejudice or unfair burden by the accrual of interest, since they will have use of the money until payment, and the rate of post-judgment interest, pursuant to § 1961(a), is set at the U.S. Treasury Bill rate. See 28 U.S.C. § 1961(a). Importantly, allowing an attorney fee award to bear interest will eliminate the losing party's incentive to delay payment. See Dalton, 712 F.2d at 1235. Accordingly, we join our sister circuits in concluding that the phrase "any money judgment" in §1961(a) includes a judgment awarding attorney fees.

B. Timing of Accrual of Interest on Attorney Fees Pursuant to 28 U.S.C. § 1961(a)

We now turn to the following issue: Whether an award of attorney fees accrues interest, pursuant to 28 U.S.C. § 1961, from the date of the judgment that unconditionally entitles the prevailing party to reasonable attorney fees, or the date of the judgment quantifying that fee award.

AGC contends, and the district court agreed, that attorney fees accrue interest from the date of the merits judgment that establishes the prevailing party's unconditional entitlement to such fees. AGC suggests that this is the "better approach," and notes that several circuit and district courts have adopted this approach. AGC argues that "delaying the accrual of interest until determination of the fee amount would frustrate the underlying purpose for interest on fee awards, which is to compensate counsel for a successful effort." Appellees' Br. at 9 (citing Jenkins, 931 F.2d at...