Devex Corp. v. General Motors Corp., Civ. A. No. 3058 CMW.

• Decision Date: 01 December 1983
• Docket Number: Civ. A. No. 3058 CMW.
• Citation: Devex Corp. v. General Motors Corp., 577 F.Supp. 429 (D. Del. 1983)
• Parties: DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

577 F. Supp. 429

DEVEX CORPORATION, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

Civ. A. No. 3058 CMW.

United States District Court, D. Delaware.

December 1, 1983.

Robert K. Payson of Potter, Anderson & Corroon, Wilmington, Del., for plaintiffs; Sidney Bender and Aaron Lewittes of Leventritt, Lewittes & Bender of Garden City, N.Y., of counsel.

Arthur G. Connolly and Arthur G. Connolly, Jr. of Connolly, Bove, Lodge & Hutz, Wilmington, Del., for defendant; George E. Frost of Barnes, Kisselle, Raisch, Choate, Whittemore & Hulbert, Birmingham, Mich., for defendant.

OPINION

CALEB M. WRIGHT, Senior District Judge.

On October 6, 1980, this Court entered its Final Judgment in this long and complex patent infringement action. That Final Judgment provided, inter alia, that defendant General Motors Corporation (hereinafter "General Motors") pay to plaintiffs the "costs" of the action. All aspects of the Court's October 6, 1980 Order were affirmed on appeal.¹See Devex Corp. v. General Motors Corp., 667 F.2d 347 (3d Cir.1981), aff'd., ___ U.S. ___, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983). Plaintiffs submitted their Bill of Costs on September 2, 1983 requesting $290,409.30. Subsequently, the parties agreed to a compromise payment of $161,960.07 by General Motors in satisfaction of the requested costs.² However, the parties could not agree upon whether plaintiffs are entitled to postjudgment interest on the agreed costs.

Plaintiffs have filed a Motion for an Award of Postjudgment Interest. Plaintiffs contend that they are entitled to postjudgment interest on the award of costs for the period from October 6, 1980, the date of the Judgment, to July 7, 1983, ten days after the return of the Final Mandate. Because the Court, in its Opinion of August 22, 1983, has fixed the applicable postjudgment interest rate at 16%,³ and because the agreed costs are $161,960.07, the amount of postjudgment interest on costs for the period mentioned above would be $71,262.43. For the reasons discussed below, the Court grants plaintiffs' Motion and awards $71,262.43 in postjudgment interest on costs.

A. 28 U.S.C. § 1961 Mandates The Award Of Interest On Costs Because Costs Are Part Of The Judgment Referred To In § 1961.

28 U.S.C. § 1961 (1982) provides in relevant part that, "interest shall be allowed on any money judgment in a civil case recovered in a district court." Under the provisions of § 1961, the allowance of interest on a district court judgment is mandatory. Perkins v. Standard Oil Co., 487 F.2d 672, 674 (9th Cir.1973). Plaintiffs contend that costs are part of the judgment referred to in § 1961 and, therefore, an award of interest on costs is mandatory. Defendant contends that no case has explicitly held that costs are part of the "money judgment" upon which interest is mandatory under § 1961 and, therefore, the traditional rule against awarding interest on costs should apply.

There appear to be no cases that directly address the question of whether costs are to be considered a part of the judgment for purposes of § 1961. Nevertheless, the Court believes that costs are part of the judgment upon which interest is mandatory. The language of the judgment, the action of the appellate courts in this case in affirming the award of costs as part of the judgment, and relevant case law all support the view that costs are part of the judgment.

The Final Judgment of October 6, 1980 ordered in relevant part:

5. Defendant G.M. Corporation shall pay to Plaintiffs:

(i) $8,913,945.50 plus prejudgment interest. ...;

(ii) plus postjudgment interest....;

(iii) with costs.

Under the above language, the award of costs is as much a part of the judgment as the award of a reasonable royalty, prejudgment interest, and postjudgment interest. "`Costs' refer to those charges that one party has incurred and is permitted to have reimbursed by his opponent as part of the judgment in the action." 10 Wright & Miller, Federal Practice and Procedure, § 2666 (1983) (emphasis added). The fact that the taxation of costs in this case took place well after the entry of judgment does not alter the fact that the award of costs was part of the judgment. The amount of postjudgment interest was not computed until after the Court's Opinion on Postjudgment Interest was entered on August 22, 1983,⁴ yet the award of postjudgment interest was a part of the October 6, 1980 Judgment. Moreover, the fact that § 1961 does not specifically mention costs does not mean that costs should not be part of the judgment; § 1961 does not specifically mention the award of a reasonable royalty and prejudgment interest, yet interest is mandated by § 1961 on these other components. In short, the inclusion of an award of costs in the judgment suggests that costs are a part of the judgment upon which interest is mandatory under § 1961.

This conclusion is supported by the treatment given the issue of costs by the Court of Appeals and the Supreme Court in this case. The Third Circuit, in affirming the judgment, explicitly affirmed the award of costs and thus implicitly treated the award of costs as part of the judgment. See Devex Corp. v. General Motors Corp., supra, 667 F.2d at 335, n. 20 ("we affirm the award of costs."). The Supreme Court, in affirming the judgment, noted that the Third Circuit had affirmed the award of costs and that the parties did not raise the issue of costs before the Supreme Court. See Devex, supra, 103 S.Ct. at 2063, n. 12. Thus, both courts treated the award of costs as part of the judgment from which General Motors appealed.

The conclusion that costs are part of the judgment is also supported by the cases interpreting 28 U.S.C. § 1961. In Perkins v. Standard Oil Co., supra, the Ninth Circuit held that an attorney's fee award was part of the judgment for purposes of § 1961 and, therefore, interest on the fee award was mandatory. In that case, the Court stated, "once a judgment is obtained, interest thereon is mandatory without regard to the elements of which that judgment is composed." Id. at 675. This rationale clearly applies to costs as well as attorneys' fees; both can be elements of a judgment and, thus, bear interest under § 1961.

Other cases have held that attorneys' fees are to be considered a part of the judgment upon which interest is mandatory under § 1961. See Preston v. Thompson, 565 F.Supp. 294, 298-300 (N.D.Ill.1983) (interest on attorney's fee award under 42 U.S.C. § 1988 is mandatory under 28 U.S.C. § 1961); Fleet Investment Co. v. Rogers, 505 F.Supp. 522, 524 (W.D.Okla.1980) (interest on attorney's fee award is mandatory under 28 U.S.C. § 1961). If attorneys' fees are part of the judgment upon which interest is mandatory under § 1961, costs should also be treated as part of the judgment. Attorneys' fees have traditionally been treated as a form of litigation costs, see Hutto v. Finney, 437 U.S. 678, 695-98, 98 S.Ct. 2565, 2576-77, 57 L.Ed.2d 522 (1978); Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247-257, 95 S.Ct. 1612, 1616-21, 44 L.Ed.2d 141 (1975), and there is no reason to award interest on the one but not the other. Indeed, one court has specifically held that, with respect to interest, attorneys' fees and costs should be treated alike. Gates v. Collier, 636 F.2d 942, 943 (5th Cir.1981), reh'g. en banc denied, 641 F.2d 403 (1981).

For the reasons discussed above, the Court holds that costs are a part of the judgment upon which interest is mandatory under 28 U.S.C. § 1961.

B. Even If An Award Of Interest On Costs Is Not Mandatory Under 28 U.S.C. § 1961, A District Court Still Has General Authority To Award Interest On Costs Under 35 U.S.C. § 284.

Even if an award of interest on costs is not mandatory under 28 U.S.C. § 1961, a district court still has general authority to award interest on costs under 35 U.S.C. § 284. 35 U.S.C. § 284 provides in relevant part:

Upon finding for the claimant, the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court....

In General Motors Corp. v. Devex, ___ U.S. ___, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983), the Supreme Court interpreted 35 U.S.C. § 284 to provide a district court with general authority to fix interest and held that the award of prejudgment interest in this case was not an abuse of discretion:

... § 284 gives a court general authority to fix interest and costs. On the face of § 284, a court's authority to award interest is not restricted to exceptional circumstances, and there is no warrant for imposing such a limitation. When Congress wished to limit an element of recovery in a patent infringement action, it said so explicitly. With respect to attorney's fees, Congress expressly provided that a court could award such fees to a prevailing party only "in exceptional cases." 35 U.S.C. § 285. The power to award interest was not similarly restricted.

103 S.Ct. at 2061. The Supreme Court also noted that the overriding purpose of 35 U.S.C. § 284 was to afford the patent owner whose patent had been infringed complete compensation. Id. at 2062. This statutory goal of affording the patent owner complete compensation, combined with the general authority given the court by § 284 to fix interest and costs, suggests that an award of interest on costs is an appropriate exercise of the court's discretion.

General Motors argues that § 284 makes no mention of an award of interest on costs and that the traditional rule that costs do not bear interest should be applied to patent infringement cases. While the Court recognizes that § 284 does not explicitly mention an award of interest on costs, the absence of explicit statutory authorization should not prevent an award of interest on costs. In cases brought under a variety of federal statutes which do not specifically mention an award of...