Rolf v. Blyth, Eastman Dillon & Co. (1980)

The decision to award prejudgment interest is governed by the equities, reflecting “considerations of fairness” rather than “a rigid theory of compensation,” Blau v. 24 Lehman, 368 U.S. 403, 414 (1962), and we have concluded that the failure of securities law violators to enjoy a profit “does not, standing alone, make it inequitable to compel them to pay interest.” Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 87 (2d Cir. 1980).

The decision to award-prejudgment interest is governed by the equities, reflecting “considerations'of fairness” rather than “a rigid theory of compensation,” Blau v. Lehman, 368 U.S. 403, 414 , 82-S.Ct. 451, 7 L.Ed.2d-403 (1962), and we have concluded that the failure of securities law violators to enjoy a profit “does not, standing alone, make it inequitable to compel them to. pay interest.” Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 87 (2d Cir.1980).

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

Rolf v. Blyth, Eastman Dillon & Co. , 637 F.2d 77, 87 (2d Cir. 1980); but see SEC v. Rubin , No. 91 Civ. 6531, 1993 WL 405428 (S.D.N.Y.

Somewhat inconsistently, USI also asserted that FEA purchased worthless health spa contracts from HI, in order to inflate FEA's book value 47 See also Chung, Yong Il v. Overseas Navigation Co., 774 F.2d 1043, 1057 (11th Cir.1985), cert. denied, 475 U.S. 1147 , 106 S.Ct. 1802 , 90 L.Ed.2d 346 (1986) ("Prejudgment interest ... is in the nature of compensation for the use of funds."); Myron v. Chicoine, 678 F.2d 727, 734 (7th Cir.1982) (quoting Sanders v. John Nuveen & Co., 524…

See also Chung, Yong Il v. Overseas Navigation Co., 774 F.2d 1043, 1057 (11th Cir.1985), cert. denied, 475 U.S. 1147 , 106 S.Ct. 1802 , 90 L.Ed.2d 346 (1986) (“Prejudgment interest ... is in the nature of compensation for the use of funds.”); Myron v. Chicoine, 678 F.2d 727, 734 (7th Cir.1982) (quoting Sanders v. John Nuveen & Co., 524 F.2d 1064, 1075 (7th Cir.1975), vacated and remanded on other grounds, 425 U.S. 929 , 96 S.Ct. 1659 , 48 L.Ed.2d 172 (1976)) (“The doctrinal …

Awards of prejudgment interest are governed by considerations of fairness, Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir. 1980) and are awarded when it is necessary to make the wronged party whole.

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

See Congregation of the Passion v. Kidder Peabody & Co., Inc., 800 F.2d 177 , 182-83 (7th Cir.1986); Rolf v. Blyth, Eastman, Dillon & Co., 637 F.2d 77, 80 (2d Cir.1980).

See e.g., Bulk Oil (U.S.A.), Inc. v. Sun Oil Trading Co., 697 F.2d 481, 484-86 (2d Cir.1983) (defendant’s breach of contract caused plaintiff to suffer out-of-pocket interest expense on loan to finance aborted transaction; prejudgment interest granted on interest payments made by plaintiff, but prejudgment interest expressly disallowed on that part of contract price recovery that would have been used to pay off loan because this would constitute double recovery); (Blyth, Eas…

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980); Norte & Co. v. Huffines, 416 F.2d 1189, 1191 (2d Cir.1969), cert. denied sub nom, Muscat v. Norte & Co., 397 U.S. 989 , 90 S.Ct. 1121 , 25 L.Ed.2d 396 (1970); Quintel Corp. v. Citibank, N.A., 606 F.Supp. 898, 914 (S.D.N.Y.1985).

Later, in Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980), the Second Circuit stated: “An award of prejudgment interest is in the first instance, compensatory____ In addition to the compensatory principle, awards of prejudgment interest are governed by fundamental considerations of fairness.” Those comments apply to federal question cases such as this suit, Orshan having prevailed under 42 U.S.C. § 1983 .

Therefore “[r]equiring the payment of interest prevents a defendant 9 from obtaining the benefit of what amounts to an interest free loan procured as a result of 10 illegal activity.” SEC v. Moran, 944 F. Supp. 286, 295 (S.D.N.Y. 1996). 11 The decision whether to award prejudgment interest is “governed by the equities, 12 reflecting ‘considerations of fairness’ rather than ‘a rigid theory of compensation,’” and 13 “the failure of securities law violators to enjoy a profit ‘d…

In a portfolio mismanagement case, the Second Circuit found that "[t]he proper method of determining damages is to take the initial value of the portfolio, adjust it by the percentage change in an appropriate index during the aiding and abetting period, and subtract the value of the portfolio at the end of the period.” Rolf v. Blyth, Eastman Dillon & Co„ 637 F.2d 77, 84 (2d Cir.1980).

See SEC v. Musella, 748 F.Supp. 1028, 1043 (S.D.N.Y.1989), aff'd, 898 F.2d 138 (2d Cir.), cert. denied, 498 U.S. 816 , 111 S.Ct. 57 , 112 L.Ed.2d 32 (1990); Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86-87 (2d Cir.1980).

Hasho, 784 F.Supp. at 1112 (citing Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 87 (2d Cir.1980)); Norte, 416 F.2d at 1191 .

Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 86 (2d Cir.1980); SEC v. Stephenson, 732 F.Supp. 438, 439 (S.D.N.Y.1990).

West Virginia v. United States, 479 U.S. 305 , 310 n. 2, 107 S.Ct. 702 , 706 n. 2, 93 L.Ed.2d 639 (1987); Wickham Contracting Co. v. Local Union No. 3, IBEW, 955 F.2d 831, 834 (2d Cir.), cert. denied, 506 U.S. 946 , 113 S.Ct. 394 , 121 L.Ed.2d 302 (1992); Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 87 (2d Cir.1980).

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980); Norte & Co. v. Huffines, 416 F.2d 1189, 1191 (2d Cir.1969), cert. denied, 397 U.S. 989 , 90 S.Ct. 1121 , 25 L.Ed.2d 396 (1970).

Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 86 (2d Cir.1980); SEC v. Stephenson, 732 F.Supp. 438, 439 (S.D.N.Y.1990).

Mendez v. Teachers Ins. & Annuity Ass’n & College Retirement Equities Fund, 982 F.2d 783, 790 (2d Cir.1992); Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980).

Aug. 5, 1988), the Southern District adopted the report and recommendation of a Magistrate Judge, which made a finding as to certain actual damages, and in reliance on Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86-87 (2d Cir.1980), awarded prejudgment interest on those damages (Tri Component, supra, at p. *6).

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

Van Gemert v. Boeing Co., 553 F.2d 812, 815 (2d Cir.1977); Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980); Quintel Corp., N.V. v. Citibank N.A., 606 F.Supp. 898, 915 (S.D.N.Y.1985).

Although the award is generally compensatory in nature, i.e., designed to make whole a plaintiff deprived of the use of monies, the Court may also award interest in response to considerations of fairness, see Blau v. Lehman, 368 U.S. 403, 414 , 82 S.Ct. 451, 457 , 7 L.Ed.2d 403 (1962); Rolf, supra, 637 F.2d at 87, such as whether the defendant has had the benefit of access to the funds prior to judgment.

Further, awards of pre-judgment interest “are governed by fundamental considerations of fairness.” Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

Moreover, in this Circuit, “[a]n award of prejudgment interest is in the first instance, compensatory, and is customary in cases involving a breach of fiduciary duties.” Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

He contends that he should not have to pay prejudgment interest on money that he never received and for which he is liable only derivatively or vicariously. 1 In a Rule 10b-5 case, however, the Second Circuit has held that “the fact that the defendants were not unjustly enriched does not, standing alone, make it inequitable to compel them to pay interest.” Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 80-81 (2d Cir.1980) (broker-dealer liable when it “actively lulled the investor by expressing confidence in the adviser without bothering to investigate whether these assurances were well founded”).

“In addition ..., [such] awards ... are governed by fundamental considerations of fairness.” *1126 See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

United States v. California State Bd. of Equalization, 650 F.2d 1127, 1132 (9th Cir.1981); Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980).

See also Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77 (2d Cir. 1980) (“An award of prejudgment interest ... is customary in cases involving a breach of fiduciary duties”).

In an action under the Exchange Act, it is sufficient to allege actual knowledge of fraudulent acts, see, e. g., Gross v. Diversified Mortgage Investors, 431 F.Supp. 1080, 1088 (S.D.N.Y.1977), or that defendant acted in reckless disregard for its duty to plaintiffs “to the extent that the danger was either known ... or so obvious that the defendant must have been aware of it.” Rolf v. Blyth Eastman, Dillon & Co., Inc., 570 F.2d 38, 47 (2d Cir. 1978), appeal after remand, 637…

See, e.g., Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 84 (2d Cir.1980).

See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980).

See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980).

See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980).

See, e.g., Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77 (2nd Cir.1980) and MacKethan v. Burrus, Cootes, & Burrus, 545 F.2d 1388 (4th Cir.1976), cert. denied, 434 U.S. 826 , 98 S.Ct. 103 , 54 L.Ed.2d 85 (1977) (securities cases in which non-settling defendants were granted credit for amount of settlement paid by other defendants).

See, e.g., Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77 (2nd Cir.1980) and MacKethan v. Burras, Cootes, & Burras, 545 F.2d 1388 (4th Cir.1976), cert. denied, 434 U.S. 826 , 98 S.Ct. 103 , 54 L.Ed.2d 85 (1977) (securities cases in which non-settling defendants were granted credit for amount of settlement paid by other defendants).

See, e.g., Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980); Crane Co. v. American Standard, Inc., 603 F.2d 244, 248 (2d Cir.1979) (Crane III ); United States v. Fernandez, 506 F.2d 1200, 1203 (2d Cir.1974).

See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980); Norte & Co. v. Huffines, 416 F.2d 1189, 1191 (2d Cir.1969), cert. denied sub nom.

Waterside Navigation Ltd. v. International Navigation Ltd., 737 F.2d 150 , 153 (2d Cir.1984); accord Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 86 (2d Cir.1980); United States v. Consolidated Edison Co., *1438 452 F.Supp. 638, 658-59 (S.D.N.Y.), aff'd, 580 F.2d 1122 (2d Cir.1978).

See Rolf v. Blyth, 637 F.2d 77, 87 (2d Cir.1980).

See also Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 80 , (2d Cir.1980) (On appeal from remand, the Second Circuit specifically disavowed its earlier broad reading of Rolf, 570 F.2d 38 (2d Cir.), cert. denied, 439 U.S. 1039 , 99 S.Ct. 642 , 58 L.Ed.2d 698 (1978), stating that Rolf “does not impose liability on a broker-dealer who merely executed orders for ‘unsuitable’ securities made by an investment adviser vested with sole discretionary authority to control the acco…

See also Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77, 87 (2d Cir.1980) (“An award of prejudgment interest is in the first instance, compensatory ... ”) KAL Flight KE007 was shot down more than nine years prior to the judgment in this case.

See Rolf v. Blyth, Eastman Dillon & Co., Inc., 637 F.2d 77 (2d Cir.1980) (“An award of prejudgment interest is in the first instance, compensatory ... ”).

See Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 87 (2d Cir.1980); G & T Terminal Packaging, Co. v. Joe Phillips, Inc., 618 F.Supp. 127, 132 (S.D.N.Y.1985) (and cases cited therein), rev’d on other grounds, 798 F.2d 579 (2d Cir.1986). 15 The statutory “double” liquidated damages award provides a widely variable effective interest rate.

See also Rolf v. Blyth Eastman Dillon & Co., Inc., 637 F.2d 77 (2nd Cir.1980) (appeal after remand).

See, e.g., Rolf v. Blyth, Eastman Dillon & Co. Inc., 637 F.2d 77 , 86-87 (2d Cir.1980).

Cf, e.g., Beecher v. Able, 435 F.Supp. at 407 (finding that preannouncement drop in value was due to general economic factors); Feit, 332 F.Supp. at 586 (taking “market decline” into account in determining damages); see also Rolf v. Blyth, Eastman Dillon & Co., 637 F.2d 77, 81, 84 (2d Cir. 1980) (reducing recovery against § 10(b) aider and abettor by formula representing general market decline).