O'TOOLE v. Northrop Grumman Corp.

F IL E D
United States Court of Appeals
Tenth Circuit
PUBLISH August 28, 2007

Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS
Clerk of Court

TENTH CIRCUIT

JOSEPH O ’TOO LE,

Plaintiff-Appellant,

v. No. 05-2174

NORTHROP GRUM M AN CORP.,

Defendant-Appellee.

A ppeal from the U nited States D istrict C ourt
for the D istrict of N ew M exico
(D .C . N o . Civ-99-1426 LH /RL P)

Alexander A. W old, Jr., of Alexander W old & Associates, P.C., Albuquerque,
New M exico, for Plaintiff-Appellant.

Edward Ricco (Scott D. Gordon with him on the brief), of Rodey, Dickason,
Sloan, Akin & Robb, P.A., Albuquerque, New M exico, for Defendant-Appellee.

Before M U R PH Y , SE Y M O U R , and T Y M K O V IC H , Circuit Judges.

SE Y M O U R , Circuit Judge.
 This is the third appeal in this case concerning M r. O’Toole’s claims for

consequential damages flowing from Northrop Grumman Corporation’s breach of

a contract to pay his relocation expenses to Los Alamos, New M exico. See

O’Toole v. Northrop Grumman Corp., 305 F.3d 1222, 1225 (10th Cir. 2002)

(O’Toole I); and O’Toole v. Northrop Grumman Corp., 113 F. App’x 314, 317-19

(10th Cir. 2004) (O’Toole II). Our jurisdiction arises under 28 U.S.C. § 1291,

and we affirm in part, reverse in part, and remand for further proceedings.

I

PR O C E D U R A L H IST O R Y

The dispute in this case arose after Northrop Corporation acquired

Grumman Aerospace, for whom M r. O’Toole worked. At the relevant time, M r.

O’Toole was on loan to the federal government to work on a project in San Diego

under a four-year “secondment agreement” and Grumman’s relocation policy. H e

subsequently relocated to Los A lamos. M r. O’Toole sued to recover unpaid

relocation expenses and consequential damages flowing from alleged breaches of

the Grumman contract. In the last appeal, we held that the district court erred in

denying consequential damages. O’Toole II, 113 F. App’x at 317-19. W e

reasoned it was undisputed that Northrop Grumman did not pay certain relocation

costs it agreed were due, and it was reasonably foreseeable that M r. O’Toole

would have to get money from some source to pay those expenses “resulting in

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extra costs to him.” Id. at 319. Noting that these holdings were law of the case,

we remanded with directions “for entry of an award of consequential damages that

includes at least an amount reimbursing the penalties paid and interest lost on the

funds M r. O’Toole was forced to withdraw from his retirement account to pay for

undisputed relocation costs.” Id. W e further directed the district court to

“consider all other claims for consequential damages and make specific findings

as to each claim.” Id.

On remand, the district court considered post-trial memoranda on damages

from both parties. On M ay 23, 2005, the court entered a decision granting M r.

O ’Toole three aw ards of consequential damages (and prejudgment interest on tw o

of those awards) and denying his other claims.

II

T H E D IST R IC T C O U R T’S A W A R D

The district court awarded or denied the follow ing claims:

(1) awarded $15,540, plus pre-judgment interest, for withdrawals from the
Grumman Savings and Investment Plan (SIP) to pay taxes and penalties on
$15,230 M r. O’Toole borrowed from the SIP to cover unreimbursed moving
expenses in 1996;

(2) awarded $13,400, plus pre-judgment interest, for withdrawals from the
SIP to pay taxes and penalties on the $13,000 M r. O’Toole borrow ed from the SIP
to cover unreimbursed expenses in 1998;

(3) denied damages for the lack of a mortgage interest deduction on his tax
return for the time between July 1, 1997, until September 1998;

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 (4) awarded $2000, without interest, for lost equity in a home purchase;

(5) denied damages for lost vacation pay and moving costs for the moves to
the second and third rental homes;

(6) denied damages in excess of $1000 for incidental moving expenses;

(7) denied damages for selling his current home and buying a home he
could have afforded if Northrop Grumman had followed its policies correctly;

(8) denied lost earnings, and lost earnings on earnings, on the money
M r. O’Toole withdrew from the SIP to cover unreimbursed relocation expenses;

(9) denied damages for Northrop Grumman’s failure to recall him to his
prior job in Bethpage, New York;

(10) denied damages for Northrop Grumman’s failure to follow its
grievance policy;

(11) denied gross-up on damages it awarded;

(12) awarded interest on the damages at the federal reserve rate instead of
awarding lost earnings and lost earnings on earnings for withdrawals from the
SIP; and

(13) awarded, in total, $31,970 plus costs.

See Aplt. Opening Br. at 9-10 (providing citations to district court’s memorandum

opinion).

M r. O’Toole contends the district court erred in items (3), (4), (5), (8),

(11), (12), and (13) of its award. He argues in addition that the court erred by

failing to address his claim for lost earnings on the uncontested damages paid in

the partial settlement in 2001, and his claim for penalties and taxes on SIP

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withdrawals made to cover increased taxes because he had no mortgage interest

deduction in 1997 and 1998. 1

III

A N A L Y SIS

W e determined in the first appeal that N ew York law applies to this case.

O’Toole I, 305 F.3d at 1225. W e stated that M r. O’Toole is entitled to damages

that will put him in the same economic position in which he would have been if

Northrop Grumman had not breached the contract with him, including any

foreseeable economic injury resulting from the breach and the costs of mitigation.

See id. at 1226. W e review the district court’s findings on damages for clear

error. See Easley v. Cromartie, 532 U.S. 234, 242 (2001); Furr v. AT&T Tech.,

Inc., 824 F.2d 1537, 1547 (10th Cir.1987). To reverse under this standard

requires that, based on the entire evidence, we have a “definite and firm

conviction that a mistake has been committed.” Easley, 532 U.S. at 242. W e

review the district court’s legal conclusions de novo. Dang v. UNUM Life Ins.

C o. of Am ., 175 F.3d 1186, 1189 (10th Cir. 1999).

1
Based on the arguments in his opening brief, M r. O’Toole has abandoned
four claims, items (6), (7), (9), and (10) from the numbered list of the district
court’s awards and denials set out above. See, e.g., Aplt. Opening Br. at 10. In
addition, M r. O’Toole no longer claims he is entitled to consequential damages
based on renting for the first year he was in Los A lamos, from approximately
mid-1996 to mid-1997. See Aplt. Reply Br. at 12.

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 M r. O’Toole does not dispute the amounts the district court awarded to

reimburse him for the taxes and penalties he paid on withdrawals from his

retirement account to pay undisputed relocation costs. In 1996, $15,540 was

withdraw n to pay taxes and penalties, as shown in item (1) of the district court’s

order, and in 1998, $13,400 w as withdrawn to pay taxes and penalties, as show n

in item (2). Rather, as explained below , M r. O’Toole disputes the district court’s

failure to award lost earnings on these amounts, plus earnings on earnings, along

with other items of consequential damages.

A. M oving Expenses and the Value of Vacation Time Used to M ove (Item 5)

W e affirm the denial of M r. O’Toole’s claim for moving expenses. The

district court denied this claim because M r. O’Toole did not hire movers or pay a

moving fee to anybody, and he has provided no legal authority to justify an aw ard

for the value of his ow n labor.

W e also affirm the denial of M r. O’Toole’s claim for the value of vacation

time he used to move twice between rental houses in Los Alamos. Although the

district court erroneously denied relief because M r. O’Toole no longer worked for

Northrop Grumman at the time he made these moves, M r. O’Toole did not

contend his vacation time had a cash value or cite any legal authority showing he

can claim his salary as the value of his vacation time.

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B. Lost M ortgage Interest Deduction (Item 3)

The district court denied M r. O’Toole’s claim for damages for the lack of a

mortgage interest deduction on his tax returns for the time between July 1, 1997,

until September 1998. W e remand this claim for reconsideration.

M r. O’Toole argued that he w as entitled to a lost mortgage interest

deduction because Northrop Grumman’s failure to pay his relocation costs

prevented him from buying a house in Los Alamos before September 1998. He

asserted that the lack of an interest deduction raised his taxes, which caused him

to withdraw funds from his SIP to pay his increased taxes in 1997 and 1998, and

incur taxes and penalties on the SIP w ithdrawal. He also claims we directed that

such an award be made, Aplt. Opening Br. at 12, but we actually held only that

such a claim was not foreclosed and that the district court should consider it.

O’Toole II, 113 F. App’x at 319 & n.1. M r. O’Toole presented tax returns for

1996, 1998, and 2000 in support of these claims.

The district court agreed that M r. O’Toole “sustained some damage by way

of having to pay more income tax than he otherwise would have paid commencing

in mid-1997.” A plt. App., vol. V at 992. The court concluded, however, that it

would be “virtually impossible” to calculate the loss due to not having a mortgage

interest deduction. Id. The court stated that because M r. O’Toole did not itemize

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in 1998 and did not provide a 1997 return, it was unclear what his other

deductions would have been. See id.

M r. O’Toole argues that he provided sufficient evidence to support an

award for his lost mortgage interest deduction. W e agree this claim is not

speculative, assuming M r. O’Toole seeks a minimum award. He correctly states

that the tax savings on a mortgage interest deduction are determined by his

federal and state tax rates and the amount of mortgage interest claimed, not by the

amount of his other deductions. See Aplt. Opening Br. at 17-18. The evidence

could support an award, for example, as long as the mortgage interest he would

have been able to claim on his federal taxes exceeded the standard deduction, and

as long as the calculation of damages included only the amount of an itemized

interest deduction that would have exceeded the standard deduction.

M r. O’Toole testified that $1500 a month was a reasonable figure to assume

would have gone to interest payments, based on the rent he had been paying in

Los Alamos. See Aplt. App., vol. 1A at 169-71. He show ed that this is less

mortgage interest than he actually paid in 1996 on his house in California or paid

in the year 2000 on his house in Los Alamos. Aplt. Opening Br. at 18 & n.77

(citing tax returns at Aplt. App., vol. II at 473, 498). M r. O’Toole’s present

calculation of the resulting loss does not match his testimony at trial. Com pare

Aplt. Opening Br. at 18 with Aplt. App., vol. 1A at 169-71. M ore importantly,

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however, M r. O’Toole did not subtract the amount of the standard deduction,

which he could have claimed on his taxes in any event. For this reason, his

claimed loss is inflated. Nevertheless, M r. O’Toole’s evidence brings into

question the district court’s finding that his claim was “speculative” because he

did not prove what his other deductions would have been. See Aplt. A pp., vol. V

at 992.

The district court determined M r. O’Toole w ould be entitled, at most, to

damages for a lost mortgage interest deduction for six months in 1997 and nine

months in 1998. See id. The court did not state, however, whether it accepted or

rejected M r. O’Toole’s testimony as to the amount of interest he would have paid

if he had purchased a house earlier. Accepting that M r. O’Toole w ould have paid

$1500 per month in interest on a mortgage instead of spending it on rent, see

Aplt. App., vol. 1A at 169-71, he would have spent $9000 in interest over six

months and $12,000 in interest over nine months. Comparing these amounts to

the federal standard tax deduction of $7100, see Aplt. App. vol. V at 992, M r.

O’Toole clearly would have benefitted financially by itemizing deductions based

on mortgage interest alone for six months in 1997 and nine months in 1998. This

is true without regard to other deductible expenses. M r. O’Toole’s minimum tax

cost can be calculated using his federal and state tax rates. However, M r.

O’Toole also testified that if Northrop Grumman had timely paid his relocation

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costs, he would have bought a more expensive house than he ultimately did, and

he would have put down 20% instead of the 5% he actually put down when he

bought his house in Los Alamos in late 1998. See Aplt. App., vol. 1A at 169-72;

Aplt. Opening Br. at 9. A higher loan-to-value ratio may have increased or

decreased the amount of interest he would have paid, depending on the cost of the

house.

Because a minimum aw ard is supportable by the evidence, we cannot affirm

the district court’s denial on the basis that any award would have been

speculative. W e conclude that M r. O’Toole’s claim for a lost mortgage interest

deduction should be reconsidered, and therefore that his claim for the taxes and

penalties on the SIP w ithdrawal made to cover these taxes should also be

reconsidered. The district court has already determined that taxes and penalties

constituted 51% of SIP withdrawals. See Aplt. App., vol. V at 990-91. W e

remand for further necessary fact finding on this claim.

C. Lost Earnings and Lost Earnings on Earnings (Item 8)

Because M r. O’Toole withdrew money from his retirement account, he lost

the earnings that his money would have accumulated if it had remained in his

stock funds. Consequently, he seeks lost earnings on his stock funds from the

date of the SIP withdrawals in 1996 and 1998 until Northrop Grumman paid

undisputed relocation expenses in June 2001, and lost earnings on unpaid earnings

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after that date until the date they are paid. The district court considered whether

to award lost earnings as an item of consequential damages and declined to do so.

See id. at 995-97. The court denied earnings based on partially faulty reasoning

and without addressing all of M r. O’Toole’s arguments. Because we conclude

M r. O ’Toole is entitled to an aw ard of lost earnings and earnings on earnings, we

remand this claim for reconsideration as w ell.

The district court denied lost earnings for three reasons, all of them

erroneous. See id. at 995-97. First, the court said M r. O’Toole withdrew much

more money than he needed for unpaid relocation costs. Id. at 996. M r. O’Toole

has shown, however, that the amounts he withdrew from the SIP in 1996 and in

1998 had to be much more than just the amount needed to pay his unpaid

relocation costs in order to pay the penalties and taxes on the withdrawn funds, as

this more than doubled the total amount he needed to withdraw. Indeed, the

awards the district court made reflected what M r. O’Toole was forced to withdraw

to pay taxes and penalties on withdrawals, as well as the withdrawals necessary to

pay undisputed relocation costs. See id. at 989-991. M r. O’Toole claimed he had

to w ithdraw funds to pay his increased taxes because he had no mortgage interest

deduction for nearly two years, to pay for three moves within Los Alamos (from

rental house to rental house to rental house to purchased house), and to cover the

taxes and penalties on the additional withdrawals from the SIPs.

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 Second, the district court said the fund results showed earnings in some

years but losses in others. Id. at 996. M r. O’Toole has clearly shown, however,

that the court was looking at the wrong fund results. Grumman and later

Northrop Grumman had several investment funds for employees. M r. O’Toole

testified that he kept his money in two funds, the U.S. Equity Fund and the Equity

Growth (M agellan) Fund. Aplt. App., vol. 1A at 179. He points to evidence

showing that these two funds had positive earnings each year between 1990 and

1999. See id., vol. II at 518. Based on the district court’s comments about losses

in the fund, the court must have looked at the results for an entirely different

fund, the Northrop Grumman Fund, because it is the only fund that had losses in

any years up to 1999. See id. at 519. The district court’s stated reason is

therefore clearly erroneous.

Third, the court said that M r. O’Toole had no evidence of fund results after

1999, and there was no support for his testimony that 12% was a fair

approximation of earnings. Aplt. App., vol. V at 996. But the district court

should have taken judicial notice under Federal Rule of Evidence 201(b)(2) of

historical retirement fund earnings on Northrop Grumman’s website, as M r.

O’Toole requested in his post-trial memorandum on damages. Aplt. Opening Br.

at 14-15; Aplt. App., vol. V at 941-58.

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 Federal Rule of Evidence 201(b) states: “A judicially noticed fact must be

one not subject to reasonable dispute in that it is either (1) generally known

within the territorial jurisdiction of the trial court or (2) capable of accurate and

ready determination by resort to sources whose accuracy cannot reasonably be

questioned.” M r. O’Toole’s request falls under (b)(2). As he correctly asserts,

Rule 201(d) makes the rule mandatory when it applies: “A court shall take

judicial notice if requested by a party and supplied with the necessary

information.” W e review the district court’s decision not to take judicial notice

for abuse of discretion. See Lozano v. Ashcroft, 258 F.3d 1160, 1164 (10th Cir.

2001).

Rule 201 “governs only judicial notice of adjudicative facts.” Fed. R. Evid.

201(a). “‘Adjudicative facts are simply the facts of the particular case.’” United

States v. Wolny, 133 F.3d 758, 764 (10th Cir. 1998) (quoting advisory committee

notes to Rule 201). M r. O’Toole asked the district court to take judicial notice of

the actual earnings history on Northrop Grumman’s website and gave the

complete address for the page to w hich N orthrop Grumman’s quarterly reports are

linked. Aplt. App., vol. V at 953 n.60. That page is still found at

http://benefits.northropgrumman.com/savings/sip_update/. M r. O’Toole

contended that the information should not be subject to dispute by Northrop

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Grumman because Northrop Grumman created it. Thus, M r. O’Toole addressed

all the factors relevant to the application of Rule 201(b)(2).

Northrop Grumman’s arguments for not taking judicial notice are

unpersuasive. It did not explain in the district court, see Aplt. App., vol. V at

968, and has not explained to us, why its own website’s posting of historical

retirement fund earnings is unreliable. M oreover, Northrop Grumman could have

asked the district court for a hearing under Rule 201(e), but did not do so. In

short, Northrop Grumman’s failure to dispute its own information, contributes to

its indisputability. See Hennessy v. Penril Datacomm Networks, Inc., 69 F.3d

1344, 1354 (7th Cir. 1995) (“In order for a fact to be judicially noticed,

indisputability is a prerequisite.”).

It is not uncommon for courts to take judicial notice of factual information

found on the world wide web. See City of M onroe Em ployees Ret. Sys. v.

Bridgestone Corp., 399 F.3d 651,655 n.1 (6th Cir. 2005) (taking judicial notice of

a term defined on the website of the National Association of Securities Dealers,

Inc.); Schaffer v. Clinton, 240 F.3d 878, 885 n.8 (10th Cir. 2001) (taking judicial

notice of information found in a political reference almanac and citing to the

almanac’s website). Cf. Grimes Navigant Consulting, Inc., 185 F. Supp. 2d 906,

913 (N.D. Ill. 2002) (taking judicial notice of published stock prices found on the

world wide web). Under the circumstances of this case, we conclude the district

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court abused its discretion by failing to take judicial notice of the actual earnings

history provided by Northrop Grumman on the internet as required by Rule

201(d).

M r. O’Toole testified that he invested in only two funds. He set out his

calculations to show that he would have made money, despite losses in some

years, if his money had remained in the U.S. Equity Fund, the one fund in which

he was invested that is still offered by Northrop Grumman. See Aplt. Opening Br.

at 29 (relying on Plaintiff Ex. 11, p.518 and Northrop Grumman website). It

seems reasonable to assume that M r. O’Toole would have left his money invested

in this fund after the other fund in which he was invested was discontinued.

These same calculations support M r. O’Toole’s assertion that 12% may be a

reasonable figure to use as average gain for all years. See id. at 29-30.

W e remand this claim so that the district court can determine an award of

earnings and earnings on the unpaid earnings. 2 The court should take judicial

notice of proof of earnings after 1999 from Northrop Grumman’s website, and

should consider whether 12% is a reasonable average for all years for lost

2
Because M r. O’Toole will be made whole by the award of earnings and
earnings on earnings, he is not entitled to prejudgment interest on these portions
of his judgment. Indeed, M r. O’Toole only asked for prejudgment interest in the
alternative to earnings and earnings on earnings. Aplt. Opening Br. at 39-43.

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earnings and earnings on earnings and whether M r. O’Toole w ould have left his

money invested in this fund as he asserted.

D. Claim for Prejudgment Interest on Award for Lost Equity (Item 4)

As w e have noted, the district court awarded M r. O’Toole $2000 to

represent the amount of equity he failed to accrue because he was unable to buy a

house for nearly two years after he moved to Los Alamos. The court stated that

the lost equity award would not carry prejudgment interest, but did not explain

why not. Aplt. App., vol. V at 993. M r. O’Toole listed the lack of interest on his

lost equity award as an issue on appeal, but he makes only a summary argument

for interest on this award of lost principal/equity. Aplt. O pening Brief at 43, 44.

Prejudgment interest is compensatory in nature, repaying the plaintiff for

the lost use of principal. Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87

(2d Cir. 1980). The district court appears to have determined it was Northrop

Grumman’s fault that M r. O ’Toole could not buy a house earlier than he did, see

Aplt. App., vol. V at 992, and it is lost principal that the award of lost equity

represents. Northrop G rumman contends the claim is unliquidated and interest

was therefore within the district court’s discretion under New York law, citing an

unpublished case in support of its argument. Wickham Contracting Co. v. Local

Union No. 3, Int’l Bhd. of Elec. Workers, No. 74 CIV. 3248 (M BM ), 1991 W L

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84595 (S.D.N.Y. M ay 15, 1991), aff’d, 955 F.2d 831 (2d Cir. 1992). Even were

we to consider the case, however, Northrop Grumman admits that the decision to

award or deny interest should be “guided by ‘fundamental considerations of

fairness.’” Id. at *1 (quoting Rolf, 637 F.2d at 87). Because the district court

gave no explanation for denying prejudgment interest, it is difficult to review its

exercise of discretion. See Foman v. Davis, 371 U.S. 178, 182 (1962); ARW

Exploration Corp. v. Aguirre, 45 F.3d 1455, 1459 (10th Cir. 1995).

M r. O’Toole argues in his reply brief that this claim was liquidated, citing

Exhibit 15, a mortgage payment summary for 2003 for M r. O’Toole’s house in

Los Alamos. Aplt. Reply Br. at 20 (citing Aplt. App., vol. II at 520-26). The

district court expressly relied on Exhibit 15, see Aplt. App., vol. V at 993, and it

therefore appears the court used M r. O’Toole’s actual mortgage payments to

approximate the amount of money he would have paid to principal if he had

bought a house earlier. The district court’s findings were not explicit, however.

See id. W e therefore remand this claim for further elaboration.

E. Gross-up (Item 11)

“Gross-up” is the name given to an increase in the damage award to offset

the taxes that will be payable on the award. The district court summarily denied

gross-up on M r. O’Toole’s remaining consequential damages claims because he

testified that he was not entitled to gross-up on consequential damages. The

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district court’s decision appears to stem from a misunderstanding or

mischaracterization of M r. O’Toole’s trial testimony regarding whether he

believed he was entitled to gross-up on consequential damages. Aplt. App., vol.

V at 997 (citing Aplt. App., vol. 1A at 319).

The questioning at trial appears to have been aimed at making a distinction

between relocation expenses (direct damages), which were entitled to gross-up

under the contract, and consequential damages, for which gross-up was not

specifically mentioned by either contract. The district court did not rely on such a

distinction, however. Its reason for denying gross-up resulted from a failure to

carefully review M r. O’Toole’s testimony and was therefore clearly erroneous.

M r. O’Toole stresses two points on appeal: (1) consequential damages are

taxable; and (2) this court has already held that New York law requires he be put

back in the same economic position as he would have been in if Northrop

Grumman had not breached the contract. Aplt. Opening Br. at 36-38 (citing

O’Toole I, 305 F.3d at 1226). For these reasons, M r. O’Toole contends his

consequential damages must be grossed-up so that his move to Los A lamos w ill

be made financially neutral to him, and his argument has some force.

Northrop Grumman contends the district court did not err in its refusal to

gross-up the consequential damages. Northrop Grumman initially conceded in its

brief that M r. O’Toole was covered by Grumman’s field assignment policy, not

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Northrop Grumman’s relocation policy. Aple. Br. at 1-2 (citing Aplt. App., vol.

III at 695). Theoretically, the Grumman policy provides for gross-up on

consequential damages in that it was Grumman’s policy to make relocations

financially neutral to employees. Aplt. App., vol. I at 35-36; vol. III at 698

(“[T]hese policies are intended to assure that all . . . personnel receive equitable

compensation for expenses incident to, or incurred on, a Field Assignment.”).

Northrop Grumman later argues that its own relocation policy provided for

gross-up on direct damages, but not for gross-up on consequential damages and

therefore, M r. O ’Toole is not entitled to gross-up on consequential damages.

A ple. B r. at 27-28. B ut N orthrop Grumman’s argument based on its own

relocation policy contradicts its earlier concession that M r. O’Toole was covered

by the Grumman policy, see id. at 1-2 (citing Aplt. App., vol. III at 695), as does

its concession at trial that such was the case. See Aplt. App., vol. IB at 377-78.

Northrop Grumman points out that courts generally do not increase damage

awards to offset the effect of taxes. See Medcom Holding Co. v. Baxter Travenol

Labs., Inc., 106 F.3d 1388, 1404 (7th Cir. 1997). But it admits that courts do

gross-up damage aw ards “when a taxable award compensates a plaintiff for lost

monies that would not have been taxable.” Home Sav. of Am. v. United States,

399 F.3d 1341, 1356 (Fed. Cir. 2005). Northrop Grumman fails to go through the

district court’s damage awards to show how these principles apply to the facts of

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this case, and we are unable to make this determination. This issue is therefore

remanded for reconsideration in order that the parties can explain to the district

court whether M r. O’Toole’s damage awards are taxable and whether they replace

monies that would not have been taxable. Given that M r. O’Toole was awarded

both earnings and earnings on earnings, as well as reimbursement for funds

withdrawn from his retirement account to pay taxes and penalties on funds

withdrawn to pay undisputed relocation costs, there may well be some significant

parsing out regarding what should and should not be grossed up. The principles

set forth in M ed-Com and Home Savings of America should guide the district

court’s determinations regarding same.

IV

C O N C L U SIO N

The judgment of the district court is A F FIR M E D in part, R E V E R S E D in

part, and R E M A N D E D for further proceedings consistent with this decision. 3 O n

remand, the district court should make specific and detailed findings regarding

the matters left open by our opinion.

3
To the extent that M r. O’Toole seeks costs in this matter, he should file an
appropriate motion under Fed. R. App. P. 39.

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