Richard Mooney sued his former employer, Roller Bearing Company of America, alleging violations of both the federal Family and Medical Leave Act and the Washington Family and Medical Leave Act. Mooney claimed his termination was retaliatory, while the employer argued it was due to a pandemic-related reduction in force. After removing the case from state to federal court, a jury found in Mooney's favor and awarded $160,000 in damages. The verdict form did not distinguish between the federal and state claims. A dispute arose over which interest rate should apply to the prejudgment interest calculation: the higher Washington state rate Mooney sought, or the fluctuating federal rate applied by the district court.
The Ninth Circuit reviewed the issue de novo, noting that while federal rates generally apply to purely federal claims and state rates to purely state claims, the circuit had not previously addressed the scenario where a judgment is based equally on both without distinction. The court held that in the absence of a controlling statute, the choice of rate remains within the discretion of the district court. The court emphasized that prejudgment interest is an element of compensation, not a penalty, and the rate should be selected to provide fair compensation. In this case, the district court properly exercised its discretion by selecting the fluctuating federal rate, finding it was the most accurate way to compensate Mooney for the lost use of his wages. The court noted that Mooney did not contest the removal to federal court and that his litigation strategy was largely guided by federal law, including his reliance on federal caselaw and his proposal of a verdict form that collapsed the state and federal claims together.
This decision clarifies that in mixed-claim cases where the verdict is not segregated, district courts have broad discretion to choose the interest rate that best achieves fair compensation. Employers in the Ninth Circuit can expect that if a plaintiff's litigation strategy relies heavily on federal law and the claims are not distinguished, the federal interest rate will likely apply. The case was remanded for the calculation of damages based on the federal rate, and the court addressed other issues in a separate memorandum disposition.
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