Labor & Employment Law Daily Wrap Up, PROCEDURE—9th Cir.: Prejudgment interest rate for prevailing WFMLA, FMLA plaintiff was discretionary, (Jun 6, 2025)

By Jason Albright, J.D.

“Prejudgment interest is designed to provide fair compensation to a prevailing party.”

Affirming application of a fluctuating federal rate in calculating prejudgment interest for a former employee who prevailed at trial on claims under the FMLA and the Washington Family and Medical Leave Act—receiving an award of compensatory damages against his former employer—the Ninth Circuit held that, when a judgment is based equally on federal and state claims, the district court has discretion to select a proper prejudgment interest rate. Here, the appeals court concluded, the district court properly exercised its discretion in applying a fluctuating federal rate, having found that that rate was the most accurate way to compensate the former employee for the lost use of his wages between his first lost paycheck and the jury’s verdict (Mooney v. Roller Bearing Co. of America Inc., Nos. 23-3552 and 23-3683 (9th Cir. June 5, 2025)).

Medical leave lawsuit. The plaintiff in the case sued his former employer, defendant Roller Bearing Company of America (RBC), alleging violations of the FMLA and the Washington Family and Medical Leave Act (WFMLA). His lawsuit arose out of his termination, which he claimed was due to his age, depression, and his decision to take leave under the FMLA. RBC, in turn, contended that his termination was due to a reduction in force in response to the COVID-19 pandemic.

On June 3, 2020, the former employee filed suit in King County Superior Court, and on July 1, 2022, RBC filed an uncontested motion to remove the case to federal court under both federal question and diversity jurisdiction.

Jury instructions, undistinguished claims. At trial, the jury was provided with nearly identical instructions for both the FMLA and WFMLA claims, and the verdict form combined both claims without distinction.

Award and appeal. The jury found RBC liable for these claims and awarded the former employee $160,000 in damages.

The parties disputed which rate should apply to the calculation of prejudgment interest, and the district court concluded that it had discretion to select the appropriate rate.

It ultimately chose to apply a fluctuating federal rate, and both parties appealed.

Matter of first impression. The Ninth Circuit initially observed that, when a judgment is based on federal claims, the federal rate generally applies to an award of prejudgment interest. And when a party prevails only on state claims, the state interest rate generally applies. The federal appeals court has not, however, addressed which rate should apply when the judgment is based on both state and federal claims without any distinction between them.

In this scenario, district courts in the Ninth Circuit have adopted different approaches. Some courts have “blended,” or averaged, state and federal rates. Others have applied federal law.

Prejudgment interest. The appeals court held that, when a judgment is based equally on both state and federal claims, the district court has discretion to select a proper prejudgment interest rate. As a general matter, “[i]n the absence of a controlling statute, the choice of a rate at which to set the amount of prejudgment interest is also within the discretion of a federal court.” And the Ninth Circuit saw “no reason to depart from this general rule.”

“[N]ecessarily fact-intensive.” Prejudgment interest, the appeals court explained, is designed to provide fair compensation to a prevailing party. This determination, it observed, “is necessarily fact-intensive,” and a federal district court may base its decision on, among other things, “the nature of the case, the plaintiff’s choice of forum, whether the plaintiff primarily relied on federal or state law for their substantive claims, and the impact of the rate on the award.”

Proper exercise of discretion. Here, the Ninth Circuit found, the district court properly exercised its discretion in applying a fluctuating federal rate, having found that that rate was the “most accurate way to compensate [the former employee] for the lost use of his wages between his first lost paycheck and the jury’s verdict.”

In addition, though the former employee chose to file in state court, he did not contest RBC’s removal to federal court, and more significantly, the district court found that he “asserted—and prevailed on—a federal claim” that largely guided his litigation strategy. He “primarily cited federal caselaw to support his WFMLA argument in his trial brief and to support his WFMLA jury instruction,” the appeals court noted. And that instruction was “nearly identical to his FMLA jury instruction.” The plaintiff also “collapsed the state and federal claims together,” according to the Ninth Circuit: “He proposed the verdict form’s language, adopted by the district court, which did not differentiate between his WFMLA and FMLA claims.”

The judgment of the district court applying a fluctuating federal rate was accordingly affirmed.

The case is Nos. 23-3552 and 23-3683.

Judge: Per curiam.

Attorneys: Mark Middaugh (Middaugh Law) for Richard Mooney. Kevin Blair Hansen (Peterson Russell Kelly Livengood) for Roller Bearing Co. of America Inc.

Companies: Roller Bearing Co. of America Inc.

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