Shawn Van Asdale, et al v. IGT

Filing

FILED OPINION (J. CLIFFORD WALLACE, SIDNEY R. THOMAS and JAY S. BYBEE) GRANTED. In sum, we hold that the Van Asdales are entitled to postjudgment interest at the rate established in 28 U.S.C. 1961. We grant the Van Asdales motion for attorneys fees on appeal and refer this matter to the Appellate Commissioner to determine the amount of such fees, as well as the amount of postjudgment interest. (The Appellate Commissioner shall consider the Van Asdales Motion for Fees and Postjudgment interest filed on October 9, 2013, and their Supplement to Motion for Fees and Postjudgment interest dated filed on June 5, 2014.) The Van Asdales motion for fees and postjudgment interest is GRANTED., Judge: JSB Authoring. FILED AND ENTERED JUDGMENT. [9206054]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SHAWN VAN ASDALE; LENA VAN
ASDALE,
Plaintiffs-Appellees,
v.
INTERNATIONAL GAME
TECHNOLOGY,
Defendant-Appellant.

No. 11-16538
D.C. No.
3:04-cv-00703RAM

OPINION

Appeal from the United States District Court
for the District of Nevada
Robert A. McQuaid, Magistrate Judge, Presiding
Argued and Submitted
September 10, 2013—San Francisco, California
Filed August 15, 2014
Before: J. Clifford Wallace, Sidney R. Thomas,
and Jay S. Bybee, Circuit Judges.
Opinion by Judge Bybee

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SUMMARY*

Sarbanes-Oxley Act / Postjudgment Interest
The panel granted plaintiffs’ motion for attorneys’ fees
and postjudgment interest following its affirmance of the
district court’s judgment, after a jury trial, in a SarbanesOxley whistleblower case.
Agreeing with the views of the Secretary of Labor, as
amicus curiae, the panel held that postjudgment interest on a
back pay award in a Sarbanes-Oxley whistleblower case tried
in district court is governed by 28 U.S.C. § 1961, the rate that
applies to all civil cases in federal district courts, rather than
26 U.S.C. § 6621, the interest rate for underpayment of
federal taxes.
The panel referred the matter to the Appellate
Commissioner to determine the amount of attorneys’ fees, as
well as the amount of postjudgment interest.

*

This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

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COUNSEL
Mark J. Lenz and Margo Piscevich, Piscevich & Fenner,
Reno, Nevada, for Plaintiffs-Appellees.
Deanne E. Maynard, Marc A. Hearron, Brian R. Matsui, and
Natalie R. Ram, Morrison & Foerster LLP, Washington,
D.C.; Daniel Paul Westman, Morrison & Foerster LLP,
McLean, Virginia; Richard G. Campbell, Jr. and Daniel K.
O’Toole, Armstrong Teasdale LLP, Reno Nevada, for
Defendant-Appellant.
M. Patricia Smith, Solicitor of Labor; Jennifer S. Brand,
Associate Solicitor; William C. Lesser, Deputy Associate
Solicitor, Megan E. Guenther, Counsel for Whistleblower
Programs; Eirik James Cheverud, Attorney, United States
Department of Labor, Washington D.C., for Amicus Curiae
Secretary of Labor.

OPINION
BYBEE, Circuit Judge:
This Sarbanes-Oxley whistleblower case is before us for
the third time. On the first appeal, we reversed the district
court’s order granting summary judgment in International
Game Technology’s (“IGT”) favor because material facts
were in dispute. Van Asdale v. Int’l Game Tech., 577 F.3d
989, 991 (9th Cir. 2009) (“Van Asdale I”). On remand, a jury
returned a verdict in favor of Shawn and Lena Van Asdale on
each of their Sarbanes-Oxley claims, and the district court
entered judgment consistent with the jury verdict. The
district court then denied IGT’s post-trial motion for

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judgment as a matter of law and granted the Van Asdales’
motion for fees, costs, and prejudgment interest “in
accordance with 29 C.F.R. § 20.58(a), at the rate specified in
the Internal Revenue Code, 26 U.S.C. § 6621.” Van Asdale
v. Int’l Game Tech., 2011 WL 2118637, at *18 (D. Nev. May
24, 2011).
On the second appeal, we affirmed the denial of IGT’s
motion for judgment as a matter of law. Van Asdale v. Int’l
Game Tech., 549 Fed. App’x 611, 613–14 (9th Cir. 2013)
(“Van Asdale II”). We also observed that the applicable
prejudgment interest rate was a novel issue but chose not to
address the issue because IGT had raised the issue for the first
time on appeal. Id. at 614.
After the second appeal, the Van Asdales filed a motion
for fees and postjudgment interest with this court, in which
they requested interest in accordance with 26 U.S.C. § 6621.1
IGT opposed the motion, arguing that the default interest rate
defined in 28 U.S.C. § 19612 should apply.
Because this is a question of first impression, we invited
the Secretary of Labor (“the Secretary”) to express his views

1

By regulation, the Department of Labor has provided that “[t]he rate
of interest provided in section 6621 of the Internal Revenue Code shall be
sought for backwages recovered in litigation by the Department.” 29
C.F.R. § 20.58(a). Section 6621 establishes the underpayment rate as “the
sum of – (A) the Federal short-term rate determined under subsection (b),
plus (B) 3 percentage points.”
2

Under 28 U.S.C. § 1961(a), “[i]nterest shall be allowed on any money
judgment in a civil case recovered in a district court.” The “interest shall
be calculated from the date of the entry of the judgment, at a rate equal to
the weekly average 1-year constant maturity Treasury yield.”

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as to the appropriate interest rate in this case.3 Specifically,
we asked:
(1) Is postjudgment interest in a SarbanesOxley whistleblower case governed by
28 U.S.C. § 1961, the rate that applies to all
civil cases in federal district courts, or [26
U.S.C. § 6621], the interest rate for
underpayment of federal taxes?
(2) What is the applicable prejudgment
interest rate in a Sarbanes-Oxley
whistleblower case that was litigated in
federal district court rather than the
Department of Labor?
(3) Must the applicable prejudgment interest
rate be the same as the postjudgment interest
rate?
The answers have important consequences for the parties
because the interest rate established by 28 U.S.C. § 1961 will
be less than the rate prescribed by the Internal Revenue Code
in 26 U.S.C. § 6621. Price v. Stevedoring Servs. of Am., Inc.,

3

While the Secretary’s response was pending, IGT filed a motion to
recall the mandate, arguing that the district court’s prejudgment interest
award would be erroneous if the Secretary opined that 26 U.S.C. § 6621
does not apply to prejudgment interest. Because of the unusual
circumstances in this case, we granted the motion and recalled the
mandate in Van Asdale II. See Zipfel v. Halliburton Co., 861 F.2d 565,
567 (9th Cir. 1988) (explaining that this court’s “discretion should be
employed to recall a mandate only when good cause or unusual
circumstances exist”).

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697 F.3d 820, 834 (9th Cir. 2012) (explaining that “[t]he
§ 6621 rate is always higher than the § 1961 rate.”).
The Secretary answered all three questions. In an amicus
curiae brief the Secretary informed us that, in the
Department’s view, 28 U.S.C. § 1961 governs postjudgment
interest calculations in cases involving district court
judgments. He further explained that the rate of interest
applied to prejudgment interest awards may differ from the
postjudgment interest rate because prejudgment interest is
within a district court’s discretion.
For the reasons set forth below, we agree with the
Secretary’s views. Accordingly, we hold that the Van
Asdales are entitled to postjudgment interest at the rate
established in 28 U.S.C. § 1961. We will not revisit the
district court’s prejudgment interest award.
I
The Sarbanes-Oxley Act provides that an employee who
prevails in a whistleblower suit “shall be entitled to all relief
necessary to make the employee whole,” 18 U.S.C.
§ 1514A(c)(1), including “the amount of back pay, with
interest.” Id. § 1514A(c)(2)(B). Notably absent from the
statute is any indication of what interest rate would “make the
employee whole.” The statute also does not differentiate
between prejudgment interest and postjudgment interest.
A. Postjudgment interest
“[I]f a money judgment in a civil case is affirmed,
whatever interest is allowed by law is payable from the date
when the district court’s judgment was entered.” Fed. R.

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App. P. 37(a). The Van Asdales argue that they are entitled
to postjudgment interest in accordance with 26 U.S.C.
§ 6621, which “defines the interest rate that the IRS uses with
respect to compensation for overpayment and underpayment
of taxes.” Price, 697 F.3d at 834. They maintain this is the
correct interest rate for two reasons. First, they point out that
we previously affirmed the district court’s decision to award
prejudgment interest pursuant to 26 U.S.C. § 6621. See Van
Asdale II, 549 Fed. App’x at 614. Second, they contend that
the underpayment rate prescribed by 29 C.F.R. § 20.58(a)
applies to cases that, like theirs, commence before the
Department of Labor.
The Van Asdales’ first argument is without merit. We
affirmed the prejudgment interest award because IGT waived
the issue; we did not address the merits of the interest rate.
With regard to their second argument, we agree that § 6621
may apply to cases that commence—and are resolved—
before the Department of Labor. See, e.g., Welch v. Cardinal
Bankshares Corp., Case No. 2003-SOX-15, 2005 WL
4889000, at *20 (Dep’t. of Labor SAROX Feb. 15, 2005);
Getman v. Sw. Sec., Inc., 2003-SOX-00008, 2004 WL
5032614, at *26 (Dep’t of Labor SAROX Feb. 2, 2004).
Although the Van Asdales’ case commenced before the
Department of Labor, it was subsequently “kicked out”
pursuant to 18 U.S.C. § 1514A(b)(1)(B). Under § 1514A, a
complainant who alleges unlawful retaliation must file a
complaint with the Secretary. Then, if the Secretary does not
issue a final decision within 180 days of the filing and “there
is no showing that such delay is due to the bad faith of the
claimant,” the claim is kicked out so that the complainant
may commence a civil action “in the appropriate district court
of the United States.” 18 U.S.C. § 1514A(b)(1)(B). Thus, the
Van Asdales filed their complaint initially in the Department

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of Labor, but their case was ultimately resolved before the
district court.
Ordinarily, “[i]nterest shall be allowed on any money
judgment in a civil case” at the rate established in 28 U.S.C.
§ 1961.4 We have “construe[d] the language of section 1961
to be mandatory in cases awarding post-judgment interest,”
including cases seeking back pay. Ford v. Alfaro, 785 F.2d
835, 842 (9th Cir. 1986). For example, in Ford we held that
a district court erred by failing to award postjudgment interest
at the rate set in § 1961 where the plaintiffs had been
unlawfully discharged in violation of 29 U.S.C. § 215(a)(3).
Id. at 836, 842. Similarly, in Hall v. Bolger, 768 F.2d 1148
(9th Cir. 1985), we upheld a district court’s determination
that an award of postjudgment interest under § 1961 was
appropriate where a claimant sought back pay for
discrimination based on her disability. Id. 1149, 1151.
Nevertheless, we have not previously considered whether
§ 1961 applies to back wages in Sarbanes-Oxley cases. And
so far as we can determine, no other circuit has done so
either. In fact, it appears that the Eastern District of Virginia
is the only federal district court to have considered this novel
issue. In Jones v. Southpeak Interactive Corp. of Delaware,
a plaintiff sought prejudgment and postjudgment interest on
a back pay award after a jury determined that Southpeak had
violated the anti-retaliation provision of the Sarbanes-Oxley
Act. 2013 WL 5874619, at *3 (E.D. Va. Oct. 30, 2013).

4
Section 1961 does not apply to “any judgment of any court with
respect to any internal revenue tax case.” 28 U.S.C. § 1961(c)(1). By its
terms, § 1961 also does not apply to review of administrative agency
determinations by a court of appeals. See Hobbs v. Dir., Office of
Workers Comp. Programs, 820 F.2d 1528, 1531 (9th Cir. 1987).

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There, the district court cited the Procedures for the Handling
of Retaliation Complaints Under Section 806 of the SarbanesOxley Act of 2002, 29 C.F.R. § 1980, and “approve[d] the
post-judgment interest calculation . . . compounded daily on
the underpayment rate authorized by [26] U.S.C. § 6621.” Id.
at *2–3. But unlike this case, the defendant there did not
argue that § 1961 applied or otherwise object to the plaintiff’s
request for postjudgment interest. Id. at *3.
Although the district court’s opinion is informative, it
does not provide much guidance. We think the Secretary’s
amicus curiae brief sheds more light on the matter. The
Secretary observes that we have held that § 1961 provides the
courts of appeals with the authority to order postjudgment
interest under Federal Rule of Appellate Procedure 37. The
Secretary suggests that we may award postjudgment interest
even if the district court did not address postjudgment
interest. See Travelers Prop. Cas. Ins. Co. of Am. v. Nat’l
Union Ins. Co. of Pittsburgh, Pa., 735 F.3d 993, 1007–08 (8th
Cir. 2013). The Secretary then suggests that postjudgment
interest in Sarbanes-Oxley cases should be governed by
§ 1961 when the case is tried in a federal district court under
18 U.S.C. § 1514A(b)(1)(B). Because postjudgment interest
in this case is “interest” on a “money judgment in a civil case
recovered in a district court,” 28 U.S.C. § 1961, the Secretary
concludes that § 1961 should apply.
The Van Asdales object to the Secretary’s analysis,
arguing that IGT essentially received a loan by failing to pay
the judgment and that if IGT pays interest at a below-market
rate—that is, under § 1961—IGT will benefit from its
unlawful conduct. We disagree. In Price, we examined back
pay awards made under a variety of laws such as maritime
law, ERISA, and Title VII, and we held that “our precedents

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support the reasonableness of [the § 1961] rate.” 697 F.3d at
836. We held that “the § 1961 rate does reflect market rates
and thereby ‘fully compensate[s]’ aggrieved parties.” Id.
(quoting W. Pac. Fisheries, Inc. v. SS President Grant,
730 F.2d 1280, 1288 (9th Cir. 1984)).
Thus, the
postjudgment interest rate established in § 1961 is sufficient
to make the Van Asdales “whole.”
Furthermore, the Secretary’s interpretation of 18 U.S.C.
§ 1514A(c)(1) merits some deference. The Secretary has
specialized experience because the Department of Labor is
responsible for enforcing Sarbanes-Oxley whistleblower
protection. Cf. Price, 697 F.3d at 832 (affording Skidmore
deference to a statutory interpretation made by the Director
of the Office of Workers’ Compensation Programs). The
Secretary’s views, as expressed in his brief, are persuasive
because his reasoning is consistent with the statutory
language and because the Secretary draws logical
comparisons between an award of back wages in SarbanesOxley cases and other employment actions. See Skidmore v.
Swift & Co., 323 U.S. 134, 140 (1944) (holding that the
weight of an agency’s interpretative decision depends upon
“the thoroughness evident in its consideration, the validity of
its reasoning, its consistency with earlier and later
pronouncements, and all [other] factors which give it power
to persuade”).
We agree with the Secretary’s observation that § 1961
applies to whistleblower cases that result in district court
judgments because there is nothing within the SarbanesOxley Act that says otherwise. Given that “Congress has not
expressed an intent on [this] matter” and that “[n]o clearer
alternatives are within our authority or expertise to adopt,” we
conclude that deference to the Secretary’s opinion is

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appropriate. Price, 697 F.3d at 839 (internal quotation marks
omitted). Accordingly, we hold that the Van Asdales are
entitled to postjudgment interest at the rate established in
28 U.S.C. § 1961.
B. Prejudgment interest
“Generally, the interest rate prescribed for post-judgment
interest under 28 U.S.C. § 1961 is appropriate for fixing the
rate of pre-judgment interest.” Blankenship v. Liberty Life
Assurance Co. of Boston, 486 F.3d 620, 628 (9th Cir. 2007)
(internal quotation marks omitted).
Consequently,
prejudgment interest is often calculated at the same rate as
postjudgment interest. MHC, Inc. v. Oregon Dep’t of
Revenue, 66 F.3d 1082, 1090 (9th Cir. 1995) (“We have also
determined that generally th[e] rate [of prejudgment interest]
will be equivalent to the rate imposed by statute on postjudgment interest.”).
Here, the prejudgment interest rate that the district court
awarded in accordance with 26 U.S.C. § 6621 differs from
the postjudgment rate that the Van Asdales are entitled to on
their back wages. The Secretary has advised us that “[t]here
is no compelling need to ensure that prejudgment and
postjudgment interest awards are always calculated in the
same manner,” and that “to hold otherwise would hinder
district courts’ exercise of discretion.” Thus, we need not
resolve in this case whether prejudgment interest and
postjudgment interest awards in Sarbanes-Oxley cases must
be based on the same interest rate. Because IGT failed to
raise this issue before the district court, we will not revisit the
prejudgment interest award that we affirmed in Van Asdale II.

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II

In sum, we hold that the Van Asdales are entitled to
postjudgment interest at the rate established in 28 U.S.C.
§ 1961. We grant the Van Asdales’ motion for attorneys fees
on appeal and refer this matter to the Appellate
Commissioner to determine the amount of such fees, as well
as the amount of postjudgment interest.5
The Van Asdales’ motion for fees and postjudgment
interest is
GRANTED.

5

The Appellate Commissioner shall consider the Van Asdales’ Motion
for Fees and Postjudgment interest filed on October 9, 2013, and their
Supplement to Motion for Fees and Postjudgment interest dated filed on
June 5, 2014.

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