Golden State Transit v. City of Los Angeles

• Decision Date: 23 August 1991
• Docket Number: No. CV 81-1519 AAH (Tx).,CV 81-1519 AAH (Tx).
• Citation: 773 F. Supp. 204
• Court: U.S. District Court — Central District of California
• Parties: GOLDEN STATE TRANSIT CORPORATION, a California corporation, doing business as Yellow Cab of Los Angeles, Plaintiff, v. The CITY OF LOS ANGELES, a municipal corporation, Defendant.

773 F. Supp. 204

GOLDEN STATE TRANSIT CORPORATION, a California corporation, doing business as Yellow Cab of Los Angeles, Plaintiff, v. The CITY OF LOS ANGELES, a municipal corporation, Defendant.

No. CV 81-1519 AAH (Tx).

United States District Court, C.D. California.

August 23, 1991.

Zachary D. Fasman, Norman A. Dupont, John P. Carey, Keith F. Millhouse, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for Golden State Transit Corp.

Alan I. Rothenberg, Kenneth W. Oder, Brent E. Johnson, Patrick D. Quinlan, Latham & Watkins, Los Angeles, Cal., for City of Los Angeles.

DECISION AND ORDER RE MOTION FOR PRE-JUDGMENT INTEREST AND JUDGMENT

HAUK, Senior District Judge.

This matter came on for hearing before the Court on the issue of prejudgment interest on August 12, 1991, following a jury trial and verdict for Golden State for $4.5 million. The trial followed the issuance of an opinion by the United States Supreme Court, Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989), reversing the Ninth Circuit Court of Appeals in this matter, Golden State Transit Corp. v. City of Los Angeles, 857 F.2d 631 (9th Cir.1988), and remanding the case for further proceedings consistent with the Supreme Court opinion, and pursuant to the filing and spreading by this Court of the mandate of the Ninth Circuit Court of Appeals, 895 F.2d 1281, directing this Court to undertake further proceedings consistent with the Supreme Court opinion.

On the issue of prejudgment interest, this Court having fully considered the points and authorities, proposed findings of fact and conclusions of law, and proposed orders submitted by counsel for the parties; the arguments presented by counsel at the August 12, 1991 hearing; and the supplemental briefs filed during the week following the hearing; and good cause appearing, hereby issues its Decision and Order herein.

I. BACKGROUND AND PROCEDURAL HISTORY¹

This case arose in 1981 when the Defendant City of Los Angeles (hereinafter "City" or "Defendant") interjected itself into the labor dispute, between Plaintiff Golden State Transit Corporation (hereinafter "Golden State" or "Plaintiff") and its taxicab drivers,² by refusing to renew Golden State's taxicab franchise until Golden State settled its labor dispute with its drivers. The City also denied Golden State's application for a rate increase, previously recommended by various subordinate City agencies, and subsequently granted to all of the other taxicab companies. In addition, the City denied Golden State's request to lease taxicabs. Since that time, this case has had a complex, and sometimes tortured, procedural history culminating now in this decision and order by the Court.

Golden State filed this action seeking declaratory and injunctive relief, as well as damages, pursuant to 42 U.S.C. § 1983, on the grounds that the City's action was preempted by the National Labor Relations Act, 29 U.S.C. § 151 et seq. (hereinafter "NLRA"), and violated Golden State's rights to due process of law and equal protection. Golden State later amended the complaint to also allege that the City's action violated Section 1 of the Sherman Act, 15 U.S.C. § 1. On March 30, 1981, this Court, Judge A. Andrew Hauk presiding, granted Golden State's application for a temporary restraining order, and on April 13, 1981, this Court issued a preliminary injunction forbidding the City from terminating Golden State's franchise. See Golden State Transit Corp. v. City of Los Angeles, 520 F.Supp. 191 (C.D.Cal.1981) (Hauk, J.).

The Ninth Circuit Court of Appeals vacated the injunction, holding that neither the federal labor law nor the Equal Protection Clause precluded the City from refusing to renew Golden State's franchise while granting franchises to other taxicab companies. See Golden State Transit Corp. v. City of Los Angeles, 686 F.2d 758 (9th Cir.1982). The Supreme Court denied certiorari. Golden State Transit Corp. v. City of Los Angeles, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 954 (1983).

The case was returned to District Court Judge Cynthia Holcomb Hall.³ Golden State continued limited operations under the restraining order until April 28, 1983, when Judge Hall, in an unpublished decision, denied Golden State's application for a preliminary injunction. The City then ordered Golden State to cease and desist operation, and Golden State terminated operations.

On April, 28, 1983, Judge Hall also granted partial summary judgment for the City on the Sherman Act cause of action, holding that the City's regulation of the taxicab business was within the "state action" exemption from Sherman Act liability. See Golden State Transit Corp. v. City of Los Angeles, 563 F.Supp. 169 (C.D.Cal.1983) (Hall, J.). The Ninth Circuit affirmed. See Golden State Transit Corp. v. City of Los Angeles, 726 F.2d 1430 (9th Cir.1984).

While Golden State's appeal on the Sherman Act issue was pending, Judge Hall, in another unpublished decision, granted the City summary judgment on Golden State's remaining claims, holding that the City's conduct was not preempted by the NLRA and that Golden State did not allege a sufficient constitutionally protected property interest to give rise to a claim for violation of its due process rights.⁴ The Ninth Circuit affirmed on both points. See Golden State Transit Corp. v. City of Los Angeles, 754 F.2d 830 (9th Cir.1985).

The Supreme Court reversed, holding that the City's action was preempted, since the NLRA prevented state and local governments from interfering with the economic weapons of employers or employees. See Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 106 S.Ct. 1395, 89 L.Ed.2d 616 (1986) (Golden State I).

On remand, the case was returned to Judge Hauk, in view of Judge Hall's elevation to the Ninth Circuit Court of Appeals. On September 15, 1986, in an unpublished decision, this Court granted summary judgment for Golden State on the issue of the City's liability, holding that, pursuant to the Supreme Court's decision in Golden State I, the NLRA preempted the City from interfering in Golden State's labor dispute.

On April 23, 1987, this Court held that Golden State was entitled to a mandatory injunction, and the City was required to give Golden State a new four-year franchise. See Golden State Transit Corp. v. City of Los Angeles, 660 F.Supp. 571 (C.D.Cal.1981) (Hauk, J.). In addition, this Court held that Golden State was not entitled to any compensatory damages. The Court found that the City's violation of the Supremacy Clause did not create a right in Golden State that was protected by 42 U.S.C. § 1983 (hereinafter "§ 1983"). Golden State, 660 F.Supp. at 578. The Court also found that the City's violation of the NLRA did not create a cause of action under § 1983, because the NLRA only covered direct violations between management and the union, and even if the NLRA did create a right, Congress had foreclosed a remedy by creating a comprehensive enforcement mechanism. Id. at 579-80. Nevertheless, this Court awarded monetary relief in the form of ancillary damages to support the injunction, in the amount of the salvage value. Id. at 580-81.

However, at the same time that the Court made the above holdings, the Court stayed both the interim judgment and order, and certified both for immediate appeal. Id. at 582. The Ninth Circuit affirmed this decision. See Golden State Transit Corp. v. City of Los Angeles, 857 F.2d 631 (9th Cir.1988).

The Supreme Court reversed and remanded. See Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989) (Golden State II). The Supreme Court reaffirmed the rule that a violation of the Supremacy Clause did not create a cause of action under § 1983. Id. at ___, 110 S.Ct. at 449. However, the Court held that the NLRA did invest in the parties a right not to be interfered with by state or local government. Id. at ___, 110 S.Ct. at 450. Golden State was a beneficiary of the statutory scheme that prevented government interference in the use of economic weapons. Id. Furthermore, Congress did not preclude this action, but created a comprehensive enforcement scheme that protected this right. Id. at ___, 110 S.Ct. at 450-51. Thus, since the City interfered with Golden State's use of economic weapons, Golden State was entitled to maintain a § 1983 action for compensatory damages. Id. at ___, 110 S.Ct. at 452.

Liability already having been determined by this District Court's granting of summary judgment, the case was returned to this Court for a determination of the nature and extent of the compensatory damages to which Golden State was factually and legally entitled. The trial commenced on May 14, 1991. After approximately five weeks of testimony and five days of deliberation, on June 20, 1991, the jury returned a verdict awarding Golden State $4.5 million in compensatory damages, representing the value of Golden State's business in 1981.

The City moved for judgment notwithstanding the verdict and a new trial, or in the alternative, a remittitur. On August 12, 1991, this Court denied both of the City's motions.

Golden State moved for an award of pre-judgment interest.⁵ On August 12, 1991, this Court announced its tentative ruling, took the matter under advisement, and the parties filed post-hearing submissions. Thus, the sole issue remaining for resolution by this Court is whether Golden State is entitled to prejudgment interest, and if so, to what extent.⁶

II. MOTION FOR PREJUDGMENT INTEREST

A. Is Prejudgment Interest Available?

Since neither 42 U.S.C. § 1983 nor 42 U.S.C. § 1988 mention the award of prejudgment interest, and there is no general federal statute governing the award of prejudgment interest,⁷ this Court must first determine whether it has the power to award prejudgment interest under the appropriate rule of law, and if it does, whether it should award prejudgment interest. This...