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OSTERNECK V. ERNST & WHINNEY, 489 U. S. 169 (1989)

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U.S. Supreme Court

Osterneck v. Ernst & Whinney, 489 U.S. 169 (1989)

Osterneck v. Ernst & Whinney

No. 87-1201

Argued November 29, 1988

Decided February 21, 1989

489 U.S. 169


As part of the merger of a company that they owned with another company, petitioners exchanged stock in their company for stock in the other company. In approving the merger, petitioners allegedly relied on the other company's financial statements prepared by respondent accounting firm. Subsequently, petitioners concluded that certain of those statements misrepresented the company's financial condition. They then filed an action in Federal District Court against respondent and others, alleging violations of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and state common law. While returning a verdict against some of the defendants, the jury found in favor of respondent and another defendant. After judgment was entered, petitioners filed a timely motion for prejudgment interest. While that motion was still pending, petitioners filed a notice of appeal from the judgment in favor of respondent and the other defendant. Ultimately, the court granted the motion for prejudgment interest and ordered that the judgment be amended to include that interest. The Court of Appeals held that petitioners' motion for prejudgment interest was a motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e), which rendered the notice of appeal ineffective under Federal Rule of Appellate Procedure 4(a)(4), which provides that, if a party files a timely motion under Rule 59(e) to alter or amend the judgment a notice of appeal filed before the disposition of that motion "shall have no effect." The court also rejected petitioners' contention that Thompson v. INS, 375 U. S. 384, required it to hear their appeal because they had relied on several actions of the District Court that indicated that the judgment was final and appealable notwithstanding the pending motion for prejudgment interest.

Held: Petitioners' motion for prejudgment interest constituted a Rule 59(e) motion, and rendered ineffective under Rule 4(a)(4) their notice of appeal filed before a ruling on that motion. Pp. 489 U. S. 173-179.

(a) Prejudgment interest is part of the compensation due a plaintiff. A postjudgment motion for discretionary prejudgment interest involves the kind of reconsideration of matters encompassed within the merits of a judgment to which Rule 59(e) was intended to apply. Pp. 489 U. S. 174-176.

(b) To conclude that a postjudgment motion for discretionary prejudgment interest is a Rule 59(e) motion helps further the important goal of chanroblesvirtualawlibrary

Page 489 U. S. 170

avoiding piecemeal appellate review of judgments. Moreover, by preventing appellate review before such a motion is resolved, that conclusion gives added assurance that an appellate court will have the benefit of the district court's plenary findings with regard to factual and legal issues subsumed in the decision to grant prejudgment interest. Pp. 489 U. S. 177-178.

(c) On the record, the Court of Appeals correctly declined to apply the reasoning of Thompson, supra, to excuse petitioners' failure to file an effective notice of appeal. By its terms, Thompson applies only where a party has performed an act that, if properly done, would postpone the deadline for filing his appeal, and has received specific assurance by a judicial officer that this act has been properly done. That is not the case here. Pp. 489 U. S. 178-179.

825 F.2d 1521, affirmed.

KENNEDY, J., delivered the opinion for a unanimous Court.

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