Georgia Association of Retarded Citizens v. Dr. Charles McDaniel

855 F.2d 794, 12 Fed. R. Serv. 3d 533, 1988 U.S. App. LEXIS 12870, 1988 WL 90839
CourtCourt of Appeals for the Eleventh Circuit
DecidedSeptember 21, 1988
Docket86-8582
StatusPublished
Cited by44 cases

This text of 855 F.2d 794 (Georgia Association of Retarded Citizens v. Dr. Charles McDaniel) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Georgia Association of Retarded Citizens v. Dr. Charles McDaniel, 855 F.2d 794, 12 Fed. R. Serv. 3d 533, 1988 U.S. App. LEXIS 12870, 1988 WL 90839 (11th Cir. 1988).

Opinion

CLARK, Circuit Judge:

All the issues in this appeal concern the district court’s conclusion that an award of costs pursuant to Fed.R.Civ.P. 54(d) and 28 U.S.C. § 1920 does not bear interest. Although there is conflicting law in the Eleventh Circuit on this question, we conclude that when a district court awards costs to a prevailing party, the award bears interest from the date of judgment.

*795 I.

This lawsuit was filed in 1978 to redress alleged violations of the Education for the Handicapped Act (“EHA”), 20 U.S.C. § 1401 et seq. and section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. In an order dated April 3, 1981, the district court granted various forms of declaratory and injunctive relief to the plaintiffs. Georgia Association of Retarded Citizens v. McDaniel, 511 F.Supp. 1263 (N.D.Ga.1981). A panel of this court affirmed the district court’s judgment, 716 F.2d 1565 (11th Cir.1983). The Supreme Court vacated our judgment and remanded the case in light of its decision in Smith v. Robinson, 468 U.S. 992, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984). See McDaniel v. Georgia Association of Retarded Citizens, 468 U.S. 1213, 104 S.Ct. 3581, 82 L.Ed.2d 880 (1984). In Smith, the Court held that a plaintiff asserting a valid claim under the EHA could not (1) seek attorney’s fees under 42 U.S.C. § 1988 nor (2) proceed simultaneously under the Rehabilitation Act and seek attorney’s fees thereunder. On remand, we modified our opinion so as to correct a statement regarding the availability of attorney’s fees and to make clear that it affirmed only that portion of the district court’s judgment granting relief under the EHA. 740 F.2d 902, 903 (11th Cir.1984), cert. denied, 469 U.S. 1228, 105 S.Ct. 1228, 84 L.Ed.2d 365 (1985).

After the district court rendered its first judgment in 1981, the plaintiffs filed a motion for costs and attorney’s fees. Upon motion by the local defendants, the district court stayed ruling upon the motion for costs and fees pending the completion of the appellate process. After remand, in an order dated August 19, 1985, the district court denied the motion for attorney’s fees 1 and awarded $10,802.13 in itemized costs. On November 27, 1985, the district court modified its order awarding costs so as to delete $5,328.50 in expert witness fees taxed against the defendants. The plaintiffs were directed to submit a revised bill of costs showing the amount of expert witness fees which could be properly taxed under 28 U.S.C. § 1920. On January 23, 1986, upon consideration of the plaintiffs’ revised bill of costs, the district court issued an order awarding $6,067.63 in costs. The court also declared that the cost award was to bear interest from the date of judgment. The defendants then moved for reconsideration, arguing that the law of this circuit prohibited interest on awards of costs. The district court was persuaded to the defendants’ point of view; on June 27, 1986, it struck that portion of its January 23 order that had allowed interest on the cost award.

II.

Although the question of whether litigation costs are interest-bearing is of tremendous importance in the daily management of litigation, this court in its predecessor form transmitted substantially conflicting signals on the matter.

In Carpa, Inc. v. Ward Foods, Inc., 567 F.2d 1316 (5th Cir.1978), the court adhered to the “traditional view that costs do not bear interest” and held that a district court erred in awarding interest on attorney’s fees since the governing statute (the Clayton Act, 15 U.S.C. § 15) denominated fees as part of costs. Id. at 1322 (citing Duffer v. American Home Assurance Co., 512 F.2d 793 (5th Cir.1975)).

This rule of law remained undisturbed until the court decided Gates v. Collier, 616 F.2d 1268 (5th Cir.1980) (“Gates F’). In Gates, the district court awarded post-judgment interest on attorney’s fees and out-of-pocket costs pursuant to the Civil Rights Attorneys’ Fees Act, 42 U.S.C. § 1988 (“section 1988”). Like the Clayton Act, section 1988 makes attorney’s fees part of costs. A panel of this court found Carpa to be distinguishable and upheld the award of interest on attorney’s fees. The panel also held, however, that it was error to award interest on out-of-pocket costs. 616 F.2d at 1279 & n. 17 (citing Carpa; Duffer).

*796 Judge Hill dissented. Although he acknowledged that equitable considerations weighed in favor of the rule adopted by the majority, he opined that Carpa “prevented the court] from allowing interest on any part of costs,” including attorney’s fees. 616 F.2d at 1281 (Hill, J., dissenting). The dissent also disputed the majority’s conclusion that section 1988 and its legislative history supported disparate treatment of out-of-pocket costs and attorney’s fees awarded as part of costs. Id. at 1282.

The panel revisited the matter when the appellees petitioned for rehearing. In granting the petition for rehearing, the panel majority reversed itself on the question of interest on out-of-pocket costs. It agreed with Judge Hill that, with respect to interest, no principled distinction could be drawn between out-of-pocket costs and attorney’s fees awarded as costs. Thus it concluded that both types of costs were to bear interest. The panel summarized the disagreement among the judges as follows:

The majority, for reasons set forth in Judge Hill’s dissent, is now convinced that it was in error in distinguishing between so-called out of pocket costs, on the one hand, and attorney’s fees on the other.
The result is that, while the Court remains divided on whether Carpa has to be overruled to permit interest on attorneys fees all are in agreement that out of pocket costs and attorneys’ fees, now including all court costs, are to be treated alike with respect to interest.

Gates v. Collier,

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855 F.2d 794, 12 Fed. R. Serv. 3d 533, 1988 U.S. App. LEXIS 12870, 1988 WL 90839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/georgia-association-of-retarded-citizens-v-dr-charles-mcdaniel-ca11-1988.