Van Vranken v. Atlantic Richfield Co.

PAULINE NEWMAN,

Circuit Judge, concurring in part, dissenting in part.

On rehearing, I join in affirming the decision of the district court in all respects, on the merits. However, I am persuaded that prejudgment interest is not warranted, applying the precedent of the Temporary Emergency Court of Appeals. On substantially identical facts the TECA has refused to award prejudgment interest. This case presents no basis for departing from that precedent.

A TECA Precedent Distinguishes Between ESA Sections 209 and 210

TECA has awarded prejudgment interest on recoveries for restitution under ESA § 209, and consistently denied it in actions for damages under ESA § 210. See United States v. Exxon Corp., 773 F.2d 1240, 1278 (Temp.Emer.Ct.App.1985) (awarding prejudgment interest under § 209, and distinguishing actions under § 210), cert. denied, 474 U.S. 1105, 106 S.Ct. 892, 88 L.Ed.2d 926 (1986). The present action was brought under § 210(b).

In Eastern Air Lines, Inc. v. Atlantic Richfield Co., 712 F.2d 1402, 1410 (Temp.Emer.Ct.App.), cert. denied, 464 U.S. 915, 104 S.Ct. 278, 78 L.Ed.2d 258 (1983), in denying prejudgment interest under § 210 the TECA explained that prejudgment interest is not available “where the amount of damages claimed to be due is uncertain.” Similarly in Zahir v. Shell Oil Co., 718 F.2d 1567, 1573 (Temp.Emer.Ct.App.1983), the court denied prejudgment interest on § 210(a) damages that were measured by Zahir’s lost profits, referring to the difficulty of determining lost profits. In the case at bar there was no determination of the lost profits of Van Vranken or any of the other 20,000+ plaintiffs; and indeed no evidence that any plaintiff suffered actual lost profits, instead of passing the overcharge on to the customer.

In Gulf Oil Corp. v. Dyke, 734 F.2d 797, 806 (Temp.Emer.Ct.App.), cert. denied, 469 U.S. 852, 105 S.Ct. 173, 83 L.Ed.2d 108 (1984), the TECA reversed the award of prejudgment interest by the district court, stating that although the overcharges under § 210(b) could be determined to a definite sum, the amount claimed was unliquidated and (as here) was made certain only by trial, making it unjust to award prejudgment interest. The dissenting judge in Gulf Oil was of the view that it was within the court’s discretion to award prejudgment interest on overcharges that the plaintiffs did not pass through to customers. Id. at 811. However, as in this case, such showings were not made.

I have not found, or been directed to, any case awarding prejudgment interest under § 210, whereas prejudgment interest is routinely awarded under § 209. In Kern Oil & Refining Co. v. Tenneco Oil Co., 868 F.2d 1279, 1281-82 (Temp.Emer.Ct.App.1989), an action under § 210(a), the court speculated that an award of prejudgment interest was “possible” in actions under § 210(b) — the section under which the Van Vranken action was brought — if the “inherently unliquidated nature and uncertainty” that characterize lost profits recovery under § 210(a) were absent from recovery of overcharges under § 210(b). However, such an award was not made in Kern Oil, the court stating:

Unlike cases brought under § 209, which emphasizes the restitutionary character of the remedy, and § 210(b), expressing equitable distinctions and typically involving overcharge claims for the difference between lawful prices and prices actually charged, § 210(a) claims typically involve the inherently unliquidated nature and uncertainty of lost profits. These damages claimed in the present case were clearly of that class and a proper reading of the decisions of this court establish that under such circumstances prejudgment interest will not be allowed.

868 F.2d at 1281-82. Thus although Kern Oil did not eliminate the possible award of prejudgment interest under § 210(b), in the case at bar the facts closely match those of Gulf Oil, in which prejudgment interest was refused under § 210(b). Indeed, the plaintiffs herein consistently maintained that the amount of the overcharges was unknown.

A distinction between recovery under ESA §§ 209 and 210 is that recovery by the government under § 209 is measured by the *1204amount of the overcharge. However, the award of damages in private actions under § 210 raises the question of whether actual damages were suffered by the plaintiffs, or whether the overcharges were simply passed through to others. This distinction is reflected in the denial by TECA of prejudgment interest under § 210. The TECA has consistently so held.

Thus, although I agree that § 210 does not prohibit the award of prejudgment interest, and on that basis I had joined in affirming the district court’s award, I now believe that TECA precedent requires its denial.

B. Willfulness

Nor does the jury’s finding of willfulness affect this result. I have found no case under the Economic Stabilization Act wherein prejudgment interest was awarded because of willfulness. In Kern Oil the TECA held that willfulness goes to treble damages and attorney fees, as authorized in ESA §§ 210(b) and (b)(1). The award of prejudgment interest is a matter of law and proof, not punishment. Thus precedent again weighs against the award of prejudgment interest.