Jenkins v. Missouri Motion for Award of Post-Judgement Interest

    IN THE UNITED STATES DISTRICT COURT FOR THE 
WESTERN DISTRICT OF MISSOURI 

WESTERN DIVISION

KALIMA JENKINS, et al.,

Plaintiffs,
vs.

STATE OF MISSOURI, et al.,

Defendants.

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) Case No. 77-0420-CV-W-4 
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MOTION FOR AWARD 
OF POST-JUDGMENT INTEREST

Plaintiffs and the State of Missouri defendants ("the 
State") disagree as to the proper measure of post-judgment 
interest to which plaintiffs are entitled arising from the 
first award of fees to plaintiffs. Pursuant to 28 U.S.C. Sec. 
1961, Plaintiffs move the Court for an order establishing 

their entitlement to post-judgment interest on attorneys fees 

as measured from February 24, 1986, the date the Court first 
determined Plaintiffs' entitlement to an award of attorney's 
fees. Plaintiffs request a post-judgment interest award of 
$299,017.88 for Arthur Benson and $494,487.32 for the LDF, 

plus interest accruing after October 31, 1989. Interest 

should be awarded at the rate of 7.71%, the United States 

Treasury Bill rate on February 24, 1986. The State's June 

23, 1989 payments included post-judgment interest of 

$113,379.44 to Benson and of $184,124.26 to LDF, which should

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be offset against the post-judgment interest awarded. 
Plaintiffs, therefore, request the Court to order the State 

to pay the balance of post-judgment interest owed, $185,638.44 
to Benson and $310,363.06 to LDF.

In the alternative, plaintiffs move the Court for an 
order awarding Arthur Benson prejudgment interest in the 
amount of $178,859.18. The requested prejudgment interest 
includes: (a) $121,131.62, the extraordinary interest 
payments he paid from September 17, 1984 to May 11, 1987 and 
(b) $57,727.56, the differential between the interest Benson 

paid and the 6.3% statutory interest earned (between May 11, 

1987 and June 30, 1989 when Benson's loans were finally paid) 

on that portion of the fees judgment that could have been used 
immediately to repay his $471,000 indebtedness had the State 
promptly paid the judgment, to compensate Benson for the 

extraordinary debt service burden he incurred as a result of 

the extraordinary and protracted nature of this litigation.

SUGGESTIONS IN SUPPORT OF MOTION 
Although the fee award ordered by this Court on May 11, 

1987 has been affirmed on appeal by the Eighth Circuit and 
the Supreme Court, there remains a dispute between the parties 

as to the proper amount of interest on that award that is due 

plaintiffs. By this motion plaintiffs request this Court to 

determine the appropriate amount of that interest.

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The calculations of the post—judgment interest award for 
Benson and the LDF, including appropriate credit for interim 
payments made by the State during the course of the fees 

litigation, are set forth in attachments to this motion. see 

affidavit of Randall Hickman. The calculation of the 

plaintiffs' alternative request of an award of prejudgment 
interest for Benson is set forth in the attached affidavit of 

Benson XX; the calculation of the interest 
differential paid by Benson from May 11, 1987 to June 30,
1989, is also set forth in Benson's affidavit.

Post-judgment interest per Sec. 1961 on attorney's fees 
awards commences to run no later than the date of the judgment 

awarding fees. This is the minimum post-judgment interest to 
which plaintiffs are entitled. The caselaw and the views of 
the leading commentators indicate that post-judgment interest 
should run from the date that plaintiffs' entitlement to fees 

is recognized by the district court (in some instances as 
early as the date of the judgment on the merits).

Plaintiffs have asked this Court to award them post­
judgment interest from February 24, 1986, the date this Court 

first declared plaintiffs' entitlement to fees. They submit 
that the caselaw and policy underlying Sec. 1961 and powerful 
equitable considerations mandate that post-judgment interest 

run from that date rather than the May 11, 1987 judgment which 
quantified the amount of plaintiffs' fee award.

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The Eighth Circuit Decision in Dalton Mandates Post-Judgment 
Interest on Attorney's Fees Awards; Although Dalton Fails to 
Instruct as to the Event Which Triggers the Running of Such 
Interest, Dalton's Approving Citation of the Fifth Circuit's 
Decision in Copper Licruor Suggests Incorporation of the Copper 
Liquor Standard

In R.W.T. v- Dalton. 712 F . 2d 1225 (8th Cir.)/ cert. 

denied. 464 U. S. 1009 (1983), the court of appeals reversed 
the district court which had declined to allow post-judgment 
interest on fees awarded pursuant to Sec. 1988. Quoting from 

Perkins v. Standard Oil Co. , 487 F.2d 672, 675 (9th Cir. 
1973), the court held that post-judgment interest was 

mandatory under Sec. 1961 for fees awards as well as damages, 
noting that a contrary rule would dilute fees awards and would 

work as an undesirable incentive for defendants to appeal. 

712 F .2d at 1234-1235.
Having reversed the district court's denial of post­

judgment interest on the fees award, the court of appeals in 
Dalton. in a single sentence and without explanation, 

instructed the district court to "allow interest from and 

after March 30, 1982, until payment." Id. at 1235. Although 

the district court had entered summary judgment for plaintiffs 

on October 14, 1980, its final judgment, including costs and 

attorney's fees, had been entered on March 30, 1982.
The failure of the court of appeals in Dalton to explain 

its rationale for measuring post-judgment interest on the fees 

award from March 30, 1982, leaves ambiguity. It is quite

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possible that March 30, 1982 was the date selected by

plaintiffs, and that plaintiffs did not request that interest 
run from an earlier date. This explanation is quite plausible 
due to the reality that 28 U.S.C. Sec. 1961 "became effective 
on October 1, 1982, after the award of fees in this case".
Id. at 1235. It is also possible the court of appeals 

intended post-judgment interest on fees to run from the date 

of the district court's judgment of liability, as both the 

final merits and fees decision were merged in the March 30, 

1982 judgment.
Dalton clearly does not hold that post-judgment interest 

on a fees award cannot run from the date of liability on the 
merits or from the date of an earlier order establishing 

plaintiffs' entitlement to fees. Indeed, the Eighth Circuit's 

approving citation in Dalton. at 1234, of the Fifth Circuit's 

opinion in Copper Liquor. Inc, v. Adolph Coors Co., 701 F.2d 
542 (5th Cir. 1983) (en banc) is a strong indication that 
post—judgment interest ordinarily should be measured from one 

of these two dates which precede the actual order awarding 

fees.
The Fifth Circuit in Copper Liquor recognized that, in

certain circumstances, post-judgment interest on a fees award

can run from the date of the judgment on the merits rather

than the date of a subsequent judgment on fees:
If a judgment is rendered that does not mention the 
right to attorneys' fees, and the prevailing party is 
unconditionally entitled to such fees by statutory 
right, interest will accrue from the date of the

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m e n S ^ f  a t i o r n e y ^ J s ^ f t h "  ered “^ o u tit? wi-t-v.!*-. 4-1̂  j - . rees/ ^nd the allowance of fep?s^ S n rS S ^ sss
Copper Liquor, 701 F.2 d at 5 4 5 .

In CgBper Liquor plaintiffs first obtained a judgment on 
liability at least as early as 1975. Following appeal to the 

Fifth Circuit the case was remanded for reconsideration of 
damages and fees. 506 F.2d 934 (5th Cir. 1975). The case was 

retried, and the district court entered a judgment for damages 
and fees on July 31, 1978. Following appeal the case was 

again remanded for reconsideration of fees. 6 2 4 F.2 d 5 7 5 (5th
Cir. 1980). The district court's amended judgment awarded 
fees on June 29, 1981.

m  Copper Liquor the "plaintiffs urge only that interest 
on attorneys' fees for work performed before July 31, 1978 be 

allowed from that date, because the original judgment awarding 

attorneys' fees was then rendered, and that interest on 

attorneys' fees for subsequent work be allowed from June 29, 

1981, the date of the district court's amended judgment." 7 0 1  

F*2d at 545‘ The Fifth Circuit approved this request. It 
should be noted that plaintiffs did not seek post-judgment 
interest from the date liability was first established on the 

merits, but conservatively sought post-judgment interest only

from the date their entitlement to fees was first established 
in the district court.

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Although Judge Collinson of this Court cited Dalton in
an order awarding post-judgment interest from the date of the 
fees judgment (in a case where the fees judgment was entered 

separately and subsequent to the judgment of liability), Judge 

Collinson did not discuss whether the interest could have been 
assessed from the date of liability or from the date of an 
earlier order establishing entitlement to fees. Griffin v. 
Ozark County, Mo.. 688 F. Supp. 1372, 1377 (W.D.Mo. 1988).

Dalton does not stand as a barrier to an award of post­

judgment interest measured from the date of the judgment on 
the merits or, as plaintiffs propose here, the date the 
district court first determined plaintiffs' entitlement to a 
fee award, as the issue was not addressed in Dalton.

II
Post-Judgment Interest Should Be Allowed At Least From 

the Date the Court Determines that the Fee 
Applicant Is Eligible for Fees

The better view, one in keeping with the compensatory 
purposes of Sec. 1961 and the Fees Act, is that post-judgment 
interest should run from the date that plaintiffs establish 

entitlement to fees, based on either the judgment of liability 
establishing plaintiffs as prevailing parties or a 

determination by the district court that plaintiffs are 

entitled to fees but prior to quantification of the amount of 

fees. Post-judgment interest is intended to "compensate the 

wronged person for being deprived of the monetary value of the 
loss from the time of the loss to the payment of the money

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judgment." Buck v. Burton. 768 F.2d 285, 286 (8th Cir. 1985), 

citing Turner v. Japan Airlines. Ltd.. 702 F.2d 752, 756 (9th 
Cir. 1985).

The leading case, Copper Liquor, has been discussed 
above. The Federal Circuit expressly followed Copper Liquor 
in Mathis v. Spears. 857 F.2d 749, 760 (Fed. Cir. 1988). 

Mathis held: "Interest on an attorney fee award thus runs 
from the date of the judgment establishing the right to the 
award, not the date of the judgment establishing its quantum."

In Mathis the district court awarded Sec. 1961 interest on 
its fees award measured from the date of the judgment on the 

merits, March 21, 1986, rather than the date of its subsequent 
judgment on fees, June 27, 1986. The Federal Circuit upheld 
the award of post-judgment interest from the date of the 

judgment on the merits because that judgment established 
plaintiffs' entitlement to fees.

The United States District Court for the Southern 
District of New York awards post-judgment interest as measured 
from the date it determines plaintiffs' entitlement to fees, 
rather than the date it enters the fees judgment. In 

Williamsburg Fair Housing Comm, v. Ross-Rodnev Housing. 599 

F. Supp. 509 (S.D.N.Y.1984), judgment on the merits was 

entered January 22, 1981; judgment granting plaintiffs' 

request for fees was entered on August 23, 1983; judgment 

quantifying plaintiffs' fees award was entered on October 26, 

1984. The court ruled that post-judgment interest per Sec.

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1961 ran from August 23, 1983.
The leading commentators agree:
The better view would allow interest at least from the 
date a court (trial or appellate) determines that the 
fee applicant is eligible for fees. * * *
And certainly the fee opponent should not be able to 
benefit by simply taking an appeal either on the merits 
or on the fee award. A fee opponent's appeal could 
effectively postpone for a substantial period of time 
the day when a fee judgment was finally entered or 
executed. Allowing interest dating back to the merits 
judgment (or at least to the date eligibility is 
presumptively determined, which may be the same date 
as the merits judgment) may be the only way to prevent 
fee opponents from undermining the remedial and 
deterrent purposes of fee awards.

Derfner & Wolf, Court Awarded Attorney Fees. para. 18.07,

at 18-90.
In the instant case, plaintiffs' entitlement to fees was 

clearly established on September 17, 1984, when this Court 

found liability on the part of the State and the KCMSD. 

Although this Court's opinion of that date was silent as to 

defendants' liability for fees, plaintiffs unquestionably 
attained "prevailing party" status entitling them to a fully 

compensatory fee on that date. The Supreme Court this past 

Term, in Texas State Teachers Association v. Garland 

Independent School District. 109 S.Ct. 1486 (1989), confirmed 

again Sec. 1988's very generous prevailing party test. 
Quoting from Nadeau v. Helqemoe. 581 F.2d 275, 278-279 (1st 

Cir. 1978), the Court held: "If the party has succeeded on

'any significant issue in litigation which achieve[d] some of 

the benefit the parties sought in bringing suit' the plaintiff

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has crossed the threshold to a fee award of some kind." 109 
S. Ct. at 1493.

Because of the extensive and immediate work necessitated 
by the remedy proceedings and the appeals by both parties, 

plaintiffs did not file their fee applications until February 
1986. On February 24, 1986 this Court entered its order

confirming plaintiffs' entitlement to fees: "Clearly under
the law, counsel for plaintiffs are entitled to an award for 
attorney's fees." (Page 1). Once this Court made this 

finding, post-judgment interest unquestionably began to accrue 
under the second part of the Copper Liquor test, Mathis, and 
Williamsburg Fair Housing.

Plaintiffs anticipate that the State will argue that this 
Court's award of current market rates and an additional 
enhancement of Benson's rate for delay in payment precludes 

award of post-judgment interest prior to May 11, 1987.

Although this Court's May 11, 1987 Opinion awarded fees based 

on "current market rates," it did not identify its time frame. 

Although the May 11, 1987 Opinion did not state that the

"current" rates were those of February 24, 1986, the date this 

Court first determined plaintiffs' entitlement to fees, such 
a reading would be consistent with plaintiffs' evidence. The 
extensive Altman & Weil Survey which established billing 

rates, P. Ex. 4, was based on "hourly rates as of December 31, 

1985." (Page 47). Weil's testimony and chart as to the 

effect of not receiving fees at the time the work was done

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went only through December 31, 1986. P. Ex. 5; T. at 114.

The affidavits and charts as to Kansas City market rates were 
primarily based on billing rates in early 1986.

Award of post-judgment interest from February 24, 1986
would be consistent with the delay in payment enhancement 
awarded plaintiffs on their lodestar fee and would fulfill 

the compensatory purpose of Sec. 1961. Such an award is also 

supported by powerful equitable considerations. Benson's 

interest payments on the $ 633,000 debt incurred during this 

litigation continued unabated, with Benson paying $121,131.62 
in interest from September 17, 1984, the date of the Court's 
decision on liability, through May 11, 1987.

Ill
The District Court Possesses 

Inherent Authority to Award Prejudgment interest 
from September 17, 1984 through May 11, 1987 

to Compensate Benson for $121,131 in Extraordinary 
Interest Paid and for the Interest Differential 

of $57,727 (Between Sec. 1961's 6.3% 
Post-Judgment Interest and the 11%+ Interest)
Imposed Upon Benson Because the State Delayed 

Final Payment Until June 23, 1989
Plaintiffs' alternative request for prejudgment interest

is a conservative one. Plaintiffs do not request that

prejudgment interest be awarded on their entire $4.1 million

fees judgment. Rather, they request only that Benson be

compensated in full, in the form of prejudgment interest, for
the entire interest he paid (on the extraordinary debts he
incurred to successfully litigate this case to conclusion).

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They request compensation, in the form of prejudgment 

interest, for Benson for all interest which he paid from the 

date this Court entered its judgment on liability, September 
17, 1984, until his debts were fully paid on June 30, 1989 
(less an offset described below for certain post-judgment 
interest earned).

Arthur Benson's extraordinary debt service burden did 
not conclude of course upon entry of this Court's fees 

judgment on May 11, 1987. Although not insignificant partial 

payments were made by the State, Benson was unable to repay 

his enormous loans in full and continued to pay the high 
interest rates for more than two years after the fees 
judgment— until the State's June 1989 payment enabled Benson 
to finally pay off his loans. Benson paid $121,107.31 in 
interest after this Court's May 11, 1987 fees judgment. 

Although Benson earned post-judgment interest at 6.3% 

following this Court's May 11, 1987 fees judgment (while that 
judgment was appealed), the interest rates paid by Benson 

throughout the fees appeals were nearly double the 6.3% 
Treasury Bill rate paid him in post-judgment interest. These 

continuing and substantial interest obligations were 
necessitated solely due to the extraordinary debts this 

litigation imposed on Benson and the State's decision to delay 

payment of the judgment. The interest penalty thus imposed 

was, most certainly, not compensated in the May 11, 1987 
j udgment.

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The award Plaintiffs request, thus, includes not only 
the $121,131.621 in interest payments Benson paid from 
September 17, 1984 to May 11, 1987, the date of the fees 
judgment, but also includes the additional interest costs that 

resulted from the failure of the State to pay Benson's $1.7 
million judgment on May 11, 1987. These additional interest 

costs, and they were substantial, were the direct result of 
the extraordinary debts Benson incurred earlier and his 
continuing obligation to pay interest on that indebtedness at 
rates substantially higher (generally 11% and higher) than the 

6.3% statutory post-judgment interest Benson's judgment would 
earn pursuant to Sec. 1961.2 The interest differential or

In order to avoid any possible confusion, plaintiffs observe 
that the amount of interest Benson paid prior to May 11, 1987
($121,107.31) is nearly identical to the amount of interest he paid 
subsequent to May 11, 1987 ($121,131.62). The similarity is, of 
course, coincidental.

2Benson was entitled to payment in full on May 11, 1987.
Benson had been paid approximately $347,000 prior to May 11, 1987, 
leaving a balance of $1,382,000. At that time Benson's litigation- 
related indebtedness was approximately $471,000. See affidavit of 
Benson and Benson Aff., Jan. 16, 1987, Tab III; T. at 131-132. The 
interest penalty incurred by Benson due to the State's delay in 
payment of the May 11, 1987 judgment can be appreciated by the
following comparison of Benson's position on June 30, 1989.

Had Benson been paid in full on May 11, 1987, he could have paid 
his $471,000 indebtedness and thereby eliminated his obligation to 
pay interest at times in excess of 15%. The balance, $910,702, 
Benson could have invested and earned at least the 6.3% interest 
then paid on T-bills. Through June 30, 1989 Benson would have
earned $50,000. See affidavit of Benson. This figure of $50,000 
would also represent Benson's net return from his fees judgment, 
since his immediate repayment of the $471,000 indebtedness would 
have eliminated any further interest payouts.

Since the State did not pay Benson's judgment on May 11, 1987, 
but made only partial payments until June 23, 1989, Benson was

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penalty is $57,727.56 and represents the difference between 

the interest Benson paid on the $471,000 indebtedness through 
June 23, 1989 - at rates of approximately 11% - and the 

statutory interest earned on that same amount - at rates of 

6.3% - which was ultimately paid Benson by the State on June 
23, 1989.

This Court should exercise its equitable discretion and 
order prejudgment interest paid Benson in the amount of 

$121,131.62, the interest actually paid by him on his 
litigation-related indebtedness between September 17, 1984 
and May 11, 1987. It should further order prejudgment 

interest paid Benson in the amount of $57,727.56, the interest 
differential or penalty which resulted from the State's delay 
in payment of the judgment. In total, plaintiffs request

forced to continue to pay higher interest on the $471,000 
indebtedness through June 23, 1989. The total interest paid by 
Benson from May 12, 1987 to June 30, 1989 totals $121,107.31. The 
portion of the outstanding $1.3 million fees judgment which Benson 
would have used to repay his indebtedness - $471,000 - of course 
did earn statutory post-judgment interest while the State delayed 
payment, but this interest was only at 6.3%. The statutory post- 
judment interest which could have been earned on the entire 
outstanding fees judgment through June 30, 1989 is $113,379.
See Benson affidavit. Subtraction of the $121,107.31 in interest 
Benson paid (after May 11, 1987) from the $113,379, the total post­
judgment interest earned, produces a net return of a negative 
$7,727.87 on Benson's fee judgment.

The State's decision to delay payment of Benson's fees judgment 
resulted in a net return of a negative $7,727.87; in contrast, 
immediate payment of Benson's fee judgment by the State would have 
resulted in a net return of $49,999.69. The difference of 
$57,727.56 can be fairly characterized as a continuing interest 
penalty for Benson - a penalty directly tied to his litigation- 
related indebtedness.

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prejudgment interest of $178,859.18 for Benson.

The Eighth Circuit has recognized that a district court 
has equitable discretion to award interest on fees awards per 
Sec. 1988, beyond the post-judgment interest statutorily 
mandated by Sec. 1961, in order to ensure that plaintiffs are 
fully compensated for any delay in payment of the fees 
judgment. Association for Retarded citizens nf worth n.voe.

i^Olnon, 713 F. 2d 1384 (8th Cir. 1983). See also Mathis y 
Spears f supra.3 * *

In ARC V .  Olson, 561 F.Supp. 495 (D.N.D. 1982) the
district court recognized that delay in payment of a fee award 

may impose substantial damages on plaintiffs. The degree of 

hardship that would result from delay in payment would be 
significantly less for plaintiffs' counsel in Olson where 

plaintiffs were represented by a legal services program, than 

m  the instant case where plaintiffs were represented by a 
private practitioner. still, the district court in Olson 
^warded__plaintiffs interest that explicitly compensate for 
both inflation and out-of-pocket interest paid hv 

counsel to maintain the litigation. Plaintiffs urge that this 
Court fashion similar relief for Benson.

In ARC v. Olson, the district court made an interim fee

c o u r t ^ H ^ ? ^  V; SpPars' -Simra, plaintiffs appealed the district
the"federal"circuit"affirmed" "I*6"63" the awardthe district court to awaST H' e r6c°gnlzed an inherent power in 
has acteS in bad faith or T * erest “hen the defendant
F.2d at 761. ° other exceptional circumstances." 8 5 7

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award on December 16, 1981, which the state apparently did 
not appeal. When the state did not pay, plaintiffs moved that 
defendants be found in contempt. The court instead exercised 
its equitable discretion to ensure that plaintiffs' counsel 

would "be made whole if payment is delayed" pending appeal on 

the final fees judgment. 561 F.Supp. 495, 511 (D.N.D. 1982). 

The district court found that the original fees judgment would 
have to be supplemented by 11% to compensate for loss due to 
inflation, by an additional 3% for reasonable interest income, 
and by an additional 17 1/2% to 18 1/2% for all lawful 
interest paid to loaning agencies on operational loans owed 
by plaintiffs' counsel during such time as this debt is not 

paid. 561 F.Supp. at 511. The Eighth Circuit upheld the 

above interest award, stating the district court may "take 

any reasonable action to secure compliance with its orders, 
and only when the district court's response is so 

inappropriate as to amount to an abuse of discretion will the 
Court of Appeals intervene." 713 F.2d at 1396.

The debt load imposed on Arthur Benson as a result of 

this litigation constitutes the extraordinary circumstances 

which permit exercise of this Court's inherent authority to 

award prejudgment interest. Benson paid interest at rates at 

times exceeding 15% on loans exceeding $633,000. From 

September 17, 1984, the date this Court entered judgment on 
liability, until Benson was finally able to repay his loans 
following the State's June 1989 payment, Benson paid a total

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of $242,238.93 in interest on loans incurred directly as a 

result of this litigation. Plaintiffs are unaware of any case 

in which the demands of the litigation forced individual 
counsel to incur such extraordinary personal financial 

obligations in order to maintain himself and his law firm 
through the conclusion of the litigation.

The Seventh Circuit has recognized an equitable
discretion in the district court to award prejudgment interest

on an attorney's fees award from the date of the judgment on

the merits to the date of the fees judgment. In re Burlington
Northern Employment Practices Litigation. 810 F.2d 601, 608-

609 (7th Cir. 1986), cert, denied. 108 S.Ct. 82. Although it
held the district court had not abused its discretion in
denying plaintiffs prejudgment interest on their fees award

in Burlington Northern, the court of appeals held:
While [28 U.S.C. Sec. 1961(a)] does not preclude 
prejudgment interest, the award of such interest is 
committed to the discretion of the district court and 
is to be based on equitable considerations. See, e .g.. 
Michaels v. Michaels. 767 F.2d 1185, 1204 (7th Cir.
1985).

Id. at 609.
In Burlington Northern (BN) a settlement was reached as 

to the merits which included a substantial agreement as to 

attorney's fees. The consent decree was approved on April 2, 
1984, plaintiffs' filed their fee application in June 1984, 

and the district court entered its judgment on fees on 

September 20, 1985. The BN defendants conceded the

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reasonableness of the 12,228 attorney hours and the 5,157 

paralegal hours claimed by plaintiffs. BN objected to the 

hourly rates sought, a requested multiplier, and prejudgment 

interest. The district court awarded fees of $ 2,184,165, 

the total lodestar sought. The court awarded the hourly rates 
sought by plaintiffs, but denied a multiplier and denied 

prejudgment interest.
On appeal the Seventh Circuit declined to overturn the

district court's denial of prejudgment interest. In
examining the Seventh Circuit's rationale it is important to

appreciate that the district court's denial of prejudgment
interest was reviewed under the very deferential abuse of
discretion standard. Under the abuse of discretion standard
a rationale that has any plausibility whatsoever is sufficient

to sustain the district court's decision.
The court of appeals noted two such plausible reasons

existed to sustain the district court. First, the delay in
the fees judgment was "occasioned by a legitimate dispute over
several issues, notably the question of fee multipliers" and,
therefore, the award of prejudgment interest would unfairly
penalize BN for asserting a successful defense. Second, the

court of appeals also observed:
In the absence of evidence, we have no basis on which to 
conclude that payment based on [top] 1984 rates 
compensated lead counsel only for the delay in payment 
up to that time; in fact, it may also have ameliorated 
the delay from June 1984 to September 1985."

Id. at 609.

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Although this Court's denial of a risk enhancement to 
the Jenkins plaintiffs provides a parallel to Burlington 

Northern, there are several key distinguishing equitable 

considerations that strongly commend exercise of this Court's 

discretion in favor of plaintiffs' lead counsel Benson.

First, unlike in Burlington Northern. plaintiffs' 
alternative prayer does not seek prejudgment interest on the 
ultimate fees judgment of nearly $ 4.1 million. Rather, 
plaintiffs' alternative prayer seeks compensation only for 
the extraordinary interest paid by their lead counsel Benson 
on the $ 633,000 debt he incurred as a result of this case. 

Plaintiffs are unaware of any civil rights case in which a 

solo practitioner had to incur such an enormous debt. The 

hardship was compounded because Benson paid interest at rates 
in excess of fifteen percent. Benson merely asks that the 

State be required to compensate him for the interest he paid 

following this Court's decision establishing liability. Had 
Benson been paid his fees award in September 1984, he could 

have paid his indebtedness and avoided over $242,238.93 in 
interest payments.

Second, plaintiffs acknowledge that denial of prejudgment 
interest may be appropriate when a plaintiff has engaged in 

dilatory tactics during the course of the litigation. See 

Michaels, supra. This rationale underlay Burlington Northern, 

where it is apparent the only major fees issue in dispute was 

plaintiffs' entitlement to a multiplier and the district court

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found that issue, which was resolved against plaintiffs, 
delayed the fees award. Recall that in Burlington Northern 
the defendants did not dispute any of the plaintiffs' 12,000- 
plus hours. In contrast the State disputed almost every 

aspect of the Jenkins plaintiffs' fees claims, from the number 

of hours that should be cut because of Hensley v. Eckerhart. 

461 U.S. 424 (1983), or alleged duplication, to hourly rates, 

to delay in payment, to a myriad of expenses and disbursements 
issues, to risk enhancement. All but the risk enhancement 
issue was resolved in plaintiffs' favor, and plaintiffs' 
unsuccessful request for a risk enhancement in no way delayed 
this Court's adjudication of plaintiffs' fees.

Third, the period of time from entry of the consent 
decree in Burlington Northern to entry of the fees award was 

slightly over seventeen months, from April 1984 to September 
1985. In the instant case the period of time from entry of 

the judgment on liability in September 1984 to entry of the 
fees award in May 1987 is thirty-two months. Although 

offered in a different context, Justice Cardozo's perceptive 
observation provides a helpful touchstone here: "The law is 
not indifferent to considerations of degree." Carter v. 
Carter Coal Co. . 298 U.S. 238 (Cardozo, J. , diss.). The 

delay in Jenkins extended nearly a year and a half longer than 

that in Burlington Northern. Burlington Northern is silent 

as to any special financial burdens imposed on plaintiffs' 
counsel as a result of the litigation.

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In Burlington Northern the consent decree not only 
resolved the liability issues, it resolved the remedies issues 
as well— and eliminated all appeals. The bifurcated nature 
of the liability and remedy issues in the instant case, and 
the appeals from both, did not permit immediate resolution of 

plaintiffs' fees immediately following the September 1984 

judgment. Following the remedies rulings in June 1985, and 
while both liability and remedy were pending on appeal, the 
Jenkins plaintiffs filed their fee applications in February 
1986. The plaintiffs can in no way be faulted for waiting 
to file their fee application. Because the resolution of the 
appeals and cross-appeals would impact dramatically the fees 

decision due to the Hensley principles, this Court delayed its 

fees decision until the Eighth Circuit en banc affirmed its 
rulings on December 5, 1986. Had plaintiffs filed their fee 

applications earlier it would not have resulted in an earlier 

disposition of their fees claim.
In Burlington Northern, although the district court had 

made no such finding, the Seventh Circuit speculated that the 

award of top 1984 market rates may have effectively 

compensated plaintiffs for the delay to the September 1985 

fees judgment. The leap of faith evident in the court of 

appeals' reasoning underscores the cursory nature of the abuse 

of discretion standard of appellate review.
This Court has the equitable power to award Arthur Benson 

the comparatively modest prejudgment interest and post­

21



judgment interest differential requested. The issue before 
this Court is whether the delay in payment enhancement awarded 
Arthur Benson compensated him for the extraordinary interest 
expenses he incurred to litigate this case. Unquestionably, 
the enhancement did not compensate Benson for the $121,107.31 

interest he was to pay during the two—plus years following the 

district court's fees judgment until June 23, 1989, when the 

State made its "final" payment following the Supreme Court's 

ruling. At a minimum, this Court should award Benson this 

amount in prejudgment interest (offset by the statutory 6.3% 

interest), or $57,727.56. Plaintiffs respectfully submit the 
enhancement likewise did not compensate Benson for the 
$121,131.62 interest he paid from September 17, 1984 to May 

11, 1987.
Plaintiffs anticipate the State will argue that the $200 

hourly rate awarded Benson necessarily included compensation 

for the extraordinary interest he paid. This Court, after 

finding that an appropriate hourly rate for Benson would 

normally be at the higher end of the $125 to $175 range, 
awarded Benson $200 per hour due to the additional factor of 
delay in payment. Plaintiffs' evidence showed that, during 

the period from 1979 to 1986, Kansas City "hourly rates have 

not gone nearly as high as the compounding effect of use on 

interest rates." T. at 116 (Testimony of Robert Weil).
Plaintiffs would first observe that this Court's Opinion 

never mentioned that it in any way took into account the

22



$113,706.56 in interest Benson paid through 1986. Plaintiffs 

would next observe that the $200 hourly rate awarded Benson 

parallels one of Robert Weil's illustrative, but exceedingly 
conservative calculations. Using only the midwest average of 

$72.50 per hour in 1979, Weil showed that counsel would have 
to be paid $203 per hour on December 31, 1986, based on the 
prime rate plus 1%, to be compensated for the delay in payment 

for work done in 1979. T. at 113-114; P.Ex. 5 at p. 10. 

Although a generally very instructive calculation, due to the 
conservative 1979 hourly rate and the conservative prime rate 

plus one assumptions, Weil's sample calculation understated 
a fully compensatory fee for Benson. This is evident in that 
a fair market rate for Benson in 1979 clearly exceeded $72 and 
Benson's financial situation was sufficiently precarious that 

he was unable to borrow money at rates as low as the prime 

rate plus one percent.
Whatever the facts may have shown in Burlington Northern, 

this Court's award of current market rates, whether those of 

February 1986 or May 1987, even when adjusted for the delay 
in payment enhancement awarded Arthur Benson, did not 
compensate Arthur Benson for the extraordinary interest 

expense he incurred and paid from September 17, 1984 to June 

23, 1989. This Court should exercise its equitable discretion 

and award Benson the requested prejudgment interest, and 

should make express findings that the delay in payment 

enhancement included in its May 11, 1987 fees award did not

23



ameliorate the unique injury suffered by Benson as a result 

of the extraordinary litigation-indebtedness he incurred. 
This Court should award Benson prejudgment interest of (a) 
$121,131.62, the extraordinary interest payments he paid from 
September 1984 to May 1987 and (b) $57,727.56, the 
differential between the interest Benson paid and the 6.3% 
statutory interest earned between May 11, 1987 and June 23, 

1989 when Benson was finally able to discharge all debts.

IV
Conclusion

In sum, plaintiffs submit that, pursuant to Sec. 1961, 

they are entitled to an award of post-judgment interest for 

Benson and the LDF from February 24, 1986 at 7.71%. In the 

alternative, pursuant to the Court's equitable discretion, 

plaintiffs submit that Benson is entitled to an award of 

prejudgment interest in the amount of (a) $121,131.62, the
extraordinary interest payments he paid from September 1984 

to May 1987 and (b) $57,727.56, the differential between the 

interest Benson paid and the 6.3% statutory interest earned 
(between May 11, 1987 and June 30, 1989 when Benson's loans
were finally paid) on that portion of the fees judgment that 

could have been used to immediately repay Benson's $471,000 

indebtedness had the State promptly paid the judgment.

24



Respectfully submitted,

i 1 > 'fejtl (t.LabJHRUSSELL E. 'LOVELL
3111 40th Place
Des Moines, IA 50310

1000 Walnut, Suite 1125 
Kansas City, MO 64106
Attorneys for Plaintiffs

I hereby certify that a copy of the 
above and foregoing was mailed, 
postage prepaid, this *5^day of 
December, 1989 to:

Michael Fields
221 W. High St., 8th FI.
Jefferson City, MO 65102
Allen Snyder 
Hogan & Hartson 
555 Thirteenth Street, N. W. 
Washington, D. C. 20004
Bartow Farr
Onek, Klein & Farr
2550 M Street, N. W. #350
Washington, D. C. 20037

Michael Gordon
204 W. Linwood Blvd.
Kansas City, MO 64111

25



AFFIDAVIT

STATE OF MISSOURI )
) ss

COUNTY OF JACKSON )

I, Randall D. Hickman, Tax Manager for the Accounting 
firm of Deloitte, Haskins & Sells, based interest calculations on 
schedules provided to us by the Law Offices of Benson & McKay 
reflecting fee awards to the Legal Defense Fund and Arthur A.
Benson II in the case of Jenkins v. State of_Missouri and on
payments made by the State of Missouri to Arthur Benson and the 
Legal Defense Fund. Interest was calculated at 7.71% beginning 
February 24, 1986 and compounded annually through October 31, 1989.

Randall D. Hickman 
DELOITTE, HASKINS & SELLS

Sworn and subscribed to before me this day o f v

1989.

My Commission Expires:

7 7  7 7
Notary Public

NANCY L. ELDER 
Notary Public • Stats of Missouri 
Commissioned In Clay County 

My Commission Expires Feb. 1 5 ,1S82



nuo jN I

1 N i L R L j  1 1 n v  c L n  1 1 D  N

ON J U D u i" .E i(T  T h R O U c .-. 
i v ; w 1 / B 7

DATE DESCRIPTION
OUTSTANDING 4 uF unij 

BALANCE OUTSTANDING
INTEStST ACCRUED

r a t e i n t e r e s t

02/ 24 ■' CO F JO C nhn: 1 , 0 4  ,457 .4 D 1. tl4,457 .43 9 T. 71% 7D >0c9. 20

C i'05;1 dO P n f M t N i i 200, OCO. 00 j 1,,4i4, 937. 43 90 7. I 1 -o 2b, 389..81

U D/ 03JI Sc r A iCIlNT (ICC, 000. 00 J 1,,314, 437 .46 - ■ 7- 7P© 7, 49d .61
7 Q ' 00 FEE HWn! i o*T A j090. 45 1,556, 527 .85 i j , . 1 0 2o,,o48,

i C!■ :*i.' jO PAYMENT i 1' 4 ; ,333. 00) 1 ,,309, 1V4 .86 14c 7, 71* 40,, j / d .
C "7. J ,

_ i •• d  / INTEREST i 04 ,4 79..72 i,913,,674. 60 ■‘■j 1 ,. . i o 2 L ., 0 7 4 , ' ' i

i i fEE r,h-
7 *, 70";, 49 1 ,966, „ 7 , ,08 2 7 ,, : i s .

C •. v t

C u,'Co / 87 PrtrhENT (300 ,000 .00) 1 , 136 ,577 .09 202 7 .71-o 50 >o2i .57

02;'24 / d d ANNUhL INTEREST 100 , o 3 1 ,.82 1 ,267 ,008 .91 o6 7 .7 Pi 18 ,456 . 3d

d 5,f 02 1 w c PAYMENT (500 ,000 .00) 787 ,008 .91 298 i .71$ 4 7,540 . 16

c J.0/ «. n/89 m HNUAl INTEREST 68 ,026 c c 853 ,035 .46 119 7 .714 21 ,492 .78
•n r/ C 7 ?nthENT ! 0 7 5 ,376 .511 159 lio, / J U .65 Iod ’ .71C 7 0 71 J 6 1 . 0 L

10. wf i/3S ACCRUE! i n t e r e s t _ D ,579 .60 185 f 7C, U  J U .44



Z 1 N - w li j il C K .1 ;
I H T E f t E w  i v , n L u U L n T  1 ON
ci j u d g m e n t  t h r o u g h 
i O / 51 / 3 "i

w/nTE D E S C R I P T O R  h i ^ O D f i l
•jU I j I HiiO I fib 

BnLhll v t
H OF DAYS 

uUT j i AUDIHo
INTEREST

RATE
ACCRUED
INTEREST

AO '04 / 
•J - i til So FEE AkARE1 0 70?fc , J* w ,,730,.6 0 2 ,323,,730 .6 0 3c 5 7,, 7 U 179,,159,.63
02/24/ 37 ANNUAL INTEREST 179,,139,.o3 0

L , 502 ,890 . 2 j It *7. 7 U 40 , lCu,. C j
u 5/ 1 1 /67 r t l A A nRD *t u .,145., 14 L ,,545,,035,,37 87 7,. 7ii 4fc,,770. •>:, / u
03/Oo/ 87 PAYMENT 1550,, OuO,,0 0 ) 1 ,695 ,035 .37 2 0 2 7,. 71% 72:,325., 3 j
02;'24/ 85 ANNUAL i n t e r e s t 159,,276.,96 * 1,654, 7 1 '), jl. ,.35 66 7 7ii 2 6 ,, c 3 5., v 4
• 5, 0 2 /55 rAlnlNl SOv.,,0 0 2 ,0 0 ) i , 444,,.i. . u u 295 ,:n u - ,i - .44
02/24/69 ANNUAL In t e r e s t ill.,885. 47 1 ,,466,,197., 80 119 7. 71* 36,,655. 39
06/23/ 39 PAYMENT 1 i ,^ 0 0 .,0 0 0 .,0 0 ) 2 6 o ,197 ,80 130 7,,7U 7,,309.,8c
10/31/69 ACCRUED INTEREST 44,,165. 2o 310,, u6 o ..06



AFFIDAVIT

STATE OF MISSOURI )
) ss

COUNTY OF JACKSON )

1. Arthur A. Benson II, of lawful age and being first duly 
sworn state that:

1* In the course of the Jenkins litigation I found it 
necessary to borrow substantial sums of money. After I had 

exhausted my limited personal resources I borrowed on my own 
signature until I could obtain no further credit. I then borrowed 

with the assistance of others who co-signed or guaranteed my loans.

2. The loans were necessary because, after devoting 
increasing amounts of time to the litigation from 1979 through 
1982, in January, 1983 with the commencement of depositions, I 
devoted full-time, often in excess of 75 to 80 hours a week to the 

Jenkins case. This committment continued through mid-June, 1984. 

Thereafter substantial, and often virtually full-time, work on the 
case was required in each of the succeeding years.

3. With little or no income from practicing law, the loans 

were necessary to pay salaries and other overhead for associates 
and nonlawyers working on the case and to meet my personal 

obligations for house payments, food, and normal living expenses. 
These loans were mostly written at rates that varied from day to 

day with interest generally costing me the prime rate plus one or 

two percent. it was not unusual for unforeseen needs to require 

loans more quickly than could be arranged with co-signors. On 

those occasions I used credit cards for cash advances and later



paid down the balances on the credit cards when loans were secured.
4. Interest rates at time exceeded twenty percent (20%) on 

some loans and for much of the time even the bank loans were at 

thirteen percent (13%) to fifteen percent (15%) when the prime rate 

was between eleven percent (11%) and thirteen percent (13%).

5. A substantial amount of my time, and that of my office 
manager, was required to find willing co-signors, obtain the loan, 
secure the co-signature, obtain borrower's insurance, keep track 
of due dates, pay-off, re-finance, or roll-over the loans, and keep 
records of payments of principal and interest.

6. At my direction, under my supervision, and in the normal 

course of the record-keeping practices of this office, data was 
maintained on payments of interest and principal and those records 
have been summarized and appear as attachments to this affidavit. 
The information contained there, as well as the factual statements 
in the accompanying motion and suggestions are true and correct to 

the best of knowledge and belief.

Sworn and subscribed to before me this 5th day of December,
1989.

My Commission Expires: October 26, 1992.



CHRONOLOGY OF INTEREST PAID

1984

September through December $ 8,625.93
1985 43,395.37
1986 51,506.70
1987

Through May 11 17.603.62
Subtotal of interest paid 9/84-5/11/87: $ 121,131.62
1987

May 12 through December 31 38,029.73
1988 50,834.02
1989

Through June 30 (all debts paid off when 
payment received from State) 32.243.56

Subtotal of interest paid 5/12/87-6/30/89: $ 121,107.31
Total Interest Paid: $ 242,238.93
Total Interest received from State: $ 113,379.44



CALCULATIONS OF INTEREST DUE

$1,614,437.43 
-  200 , 000.00 
- 100,000.00 
+ 42,090.45

47,333.00 
+ 72.702.49

$1,381,897.37 
- 471.195.36

$ 910,702.01 (could have been
invested to earn 
6.3% interest)

I. Net Return Had State Paid Fees Judgment on 5/11/87.

A. Interest that could have been earned (offset by 
payments that the State did make from 5/11/87 to 
6/23/89)

$910,702.01 x 6.3% per annum = $157.19 per day x 87
(87 days until 8/6/87 payment) = $ 13,675.53

-300,000.oo payment received from State on 8/6/87

$610,702.01 x 6.3% per annum = $105.41 per day x 269
(days until 5/2/88 payment) = 28,355.29

-500,000.oo payment received from State on 5/2/88
$110,702.01 x 6.3% per annum = $19.11 per day x 417

(days until 6/23/89 payment) = 7.968.87
Interest Benson could have earned (giving credit 
by offsetting payments made by State) $ 49,999.69

02/24/86 Fee Award:

03/05/86 Payment:
06/03/86 Payment:

06/30/86 Fee Award:

10/01/86 Payment:

05/11/87 Fee Award
Balance due 5/11/87:

Debt owed by Arthur Benson
Profit to Benson if State 
had paid judgment 5/11/87

Net Return Had State Paid Fees Judgment on 5/11/87 $ 49,999.69



II. Net Return Because of Benson's Extraordinary 
Debts and State's Delay in Payment to 6/23/89

A. Interest earned by payment from State of
6.3% interest from 5/11/87 to 6/23/89 $113,379.44

B. Interest Benson paid from 5/11/87 to
6/23/89: -121.107.31

Net Return Because Judgment paid 6/23/89: -$ 7,727.87

III. Interest Penalty Incurred by Benson: $ 57,727.56