Alaska Rent-A-Car, Inc. v. Avis Budget Group, Inc. , 738 F. App'x 960 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALASKA RENT -A-CAR, INC., No. 10-35137
Plaintiff-Appellee,
D.C. No.
v. 3:03-cv-00029-
TMB
AVIS BUDGET GROUP, INC., FKA
Cendant Corporation; AVIS BUDGET
CAR RENTAL, LLC, FKA Cendant
Car Rental Group, Inc., FKA
Cendant Car Rental Group, LLC,
Defendants-Appellants.
ALASKA RENT -A-CAR, INC., No. 10-35615
Plaintiff-Appellee,
D.C. No.
v. 3:03-cv-00029-
TMB
AVIS BUDGET GROUP, INC., FKA
Cendant Corporation; AVIS BUDGET
CAR RENTAL, LLC, FKA Cendant ORDER AND
Car Rental Group, Inc., FKA AMENDED
Cendant Car Rental Group, LLC, OPINION
Defendants-Appellants.
2 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
Appeal from the United States District Court
for the District of Alaska
Timothy M. Burgess, District Judge, Presiding
Argued and Submitted
July 25, 2011—San Francisco, California
Filed March 6, 2013
Amended June 19, 2013
Before: Andrew J. Kleinfeld, Johnnie B. Rawlinson,*
and Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Kleinfeld
SUMMARY**
State Law / Daubert / Batson / Attorneys’ Fees
The panel amended its opinion, filed March 6, 2013,
affirming the district court’s judgment, which held that
Alaska Rent-A-Car was a party to a settlement agreement and
that Avis had breached the agreement by using the same
*
The original panel, consisting of Judge B. Fletcher, Judge Kleinfeld,
and Judge Callahan, heard oral argument on July 25, 2011. Judge B.
Fletcher died on October 22, 2012, while the decision was pending, and
Judge Rawlinson was drawn to replace her. Judge Rawlinson has read the
briefs, reviewed the record, and listened to the tape of oral argument.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 3
personnel to sell and market both Avis and Budget Rent-A-
Car cars, and remanding for the district court to reduce the
prejudgment interest award.
The panel held that Alaska Rent-A-Car was a party to the
settlement agreement by virtue of its sufficiently timely
joinder. The panel also held that it need not decide whether
the district court’s denial of a peremptory challenge of an
Alaska Native juror was a Batson v. Kentucky, 476 U.S. 79(1986), error requiring reversal, because if there was error, it
was harmless. Addressing Avis’s objection under Fed. R.
Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals, 509
U.S. 579 (1993), the panel held that the district court did not
abuse its discretion by allowing the jury to listen to Alaska
Rent-A-Car’s expert witness on damages as well as Avis’s.
The panel also held that under New York law, there was
sufficient evidence to establish reasonable certainty for the
amount of damages awarded by the jury to Alaska Rent-A-
Car. The panel further held that the law of the forum, Alaska,
properly applied to diversity cases brought in or removed to
the United States District Court for the District of Alaska, and
the district court did not err by applying Alaska Rule of Civil
Procedure 82 to the attorneys’ fee award.
COUNSEL
Christopher Landau (argued), Stephen S. Schwartz, Kirkland
& Ellis LLP, Washington, D.C.; Howard S. Trickey, Matthew
Singer, Jermain, Dunnagan & Owens, P.C., Anchorage,
Alaska, for Appellants.
4 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
Susan Orlansky, Jeffrey M. Feldman, Feldman Orlansky &
Sanders, Anchorage, Alaska, for Appellee.
ORDER
The opinion filed March 6, 2013, and appearing at
709 F.3d 872 (9th Cir. 2013), is hereby amended. The
amended opinion is filed concurrently with this Order.
With these amendments, Judges Rawlinson and Callahan
have voted to deny the petition for rehearing en banc, and
Judge Kleinfeld has so recommended. The full court has been
advised of the petition for rehearing en banc and no judge has
requested a vote on whether to rehear the matter en banc.
Fed. R. App. P. 35.
The petition for rehearing en banc is DENIED. No future
petitions for rehearing or petitions for rehearing en banc will
be entertained.
OPINION
KLEINFELD, Senior Circuit Judge:
Several state law questions arise in this appeal, and three
federal law questions, whether expert testimony should have
been excluded under Daubert1, whether disallowance of a
1
Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579 (1993).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 5
peremptory challenge was Batson2 error and if so whether it
was harmless, and whether Alaska “English Rule” attorneys
fee awards3 may be awarded in a diversity action where
Alaska is the forum state but another state’s law governs the
dispute.
FACTS4
Alaska Rent-A-Car’s predecessor began doing business as
an Avis licensee in 1956, three years before Alaska attained
statehood. Most other Avis licensees had a defined territory
in a locality, not an entire state, within which they had the
exclusive right to rent cars on behalf of Avis. Avis
reasonably considered Alaska different.
In its 1959 agreement, the Alaska Avis licensee was
entitled to operate in the “entire State of Alaska,” about 20%
of the entire United States, but a negligible percentage of the
nation’s roads. The license was renewed in 1965, this time
giving Alaska Rent-A-Car exclusive rights in specific
locations within Alaska. A 1976 amendment added
additional locations to the license agreement, and gave Alaska
Rent-A-Car a right of first refusal for control of any license
Avis planned to grant anywhere in Alaska. It also gave
Alaska Rent-A-Car the right to expand into new territory,
such as temporary camps during the construction of the oil
2
Batson v. Kentucky, 476 U.S. 79 (1986).
3
Alaska Civil Procedure Rule 82.
4
“W e recount the relevant facts in the manner most favorable to the
jury’s verdict.” United States v. Hicks, 217 F.3d 1038, 1041 (9th Cir.
2000), cert. denied, 531 U.S. 1037 (2000).
6 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
pipeline from Prudhoe Bay to Valdez during the 1974–1977
period. The 1976 amendment stated:
It is additionally agreed: (a) That Alaska
conditions of terrain and weather as well as
changing and cyclical economic conditions
may result in customer demands for quick
service in new and even temporary locations
or camps. It is understood that Licensee may
utilize his floating fleet to meet such demands,
with full reporting of such circumstances to
Avis
Avis bought a company called Agency Rent-A-Car in 1995.
Some of Avis’s licensees claimed that Avis was breaching
their license agreements by operating another rental car
company in their territories. To protect itself against these
claims, Avis sued thirteen of its licensees, and sought class
certification, to obtain a judgment that its purchase of Agency
Rent-A-Car and its changed operations did not violate
licensee rights. Avis and named defendants settled in 1997,
without ever litigating to class certification or judgment. Our
case arises out of that settlement, which allows Avis to
purchase additional rental car companies, but requires that
“the sales, marketing and reservation activities, operations
and personnel of and for the Avis System will not be utilized
to market, provide, and/or make available car rental services”
for any additional rental car company purchased by Avis.5
5
The two appellants in this litigation are Avis Budget Car Rental, LLC
and its parent company, then HFS Car Rental, later Cendant, now Avis
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 7
The settlement agreement protected Avis licensees from the
risk of Avis using its personnel to steer customers and
potential customers towards another brand. Licensees would
typically only rent Avis cars, but Avis might own a
competitor operating in the same locality under a different
name.
Avis bought Budget Rent-A-Car out of bankruptcy in
2002. It then restructured its central operations, putting the
Avis and Budget marketing teams under unified management,
creating a single team to answer calls to both Avis and Budget
reservation lines, and combining the Avis and Budget national
corporate sales forces. The obvious threat from these actions
to Avis’s licensees was that Budget would bleed off some of
their customers and potential customers. People typically rent
cars online or by telephone from a national site or 800
number, and governments and big corporations typically
negotiate with the national entity, because they typically rent
cars for use away from home.
Alaska Rent-A-Car sued Avis claiming that Avis had
indeed breached the settlement agreement, causing Alaska
business to be switched to Budget Rent-A-Car, its local
competitor. The district court granted a partial summary
judgment, establishing that Alaska Rent-A-Car was a party to
the settlement agreement, and that Avis had breached the
agreement by using the same personnel to sell and market
both Avis and Budget cars. Damages were left for jury trial.
Budget Group, Inc. W e refer to appellants collectively here as Avis, but
note that the settlement agreement’s restrictions on buying an additional
car rental company were restrictions on the parent company.
8 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
The jury returned a verdict in favor of Alaska Rent-A-Car for
$16 million. Avis appeals.
ANALYSIS
I. Was Alaska Rent-A-Car a promisee under the
settlement agreement?
The question whether the 1995 settlement agreement
included Alaska Rent-A-Car was decided by partial summary
judgment, so we review de novo.6 Avis argues on appeal that
Alaska Rent-A-Car was not a party.
First, Avis argues that Alaska Rent-A-Car could not be
embraced by the settlement agreement, because the agreement
protected only licensees with “exclusive” license agreements,
that is, with exclusive territories within which Avis could not
promote competitors to the licensee except to the extent the
settlement agreement allowed. This argument is entirely
without merit. One reason why is that Alaska Rent-A-Car
plainly did have exclusive territories, the designated and
permitted locations within the State of Alaska. Were Alaska
Rent-A-Car to use the Avis brand to open a counter at the
Seattle airport, it would violate its licensing agreement, just
as any other Avis licensee would if it opened a counter at the
Anchorage airport. The other reason is that we can find no
language limiting permission to join in the settlement
agreement to licensees with exclusive licensing agreements.
The settlement agreement was offered to “all Avis System
6
See Sullivan v. Dollar Tree Stores, Inc., 623 F.3d 770, 776 (9th Cir.
2010).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 9
licensees/franchisees,” which Alaska Rent-A-Car indisputably
was.
Avis also makes the more substantial argument that
Alaska Rent-A-Car’s joinder was untimely. What color this
argument has arises from the fact that Alaska Rent-A-Car did
not send in a signed joinder to the settlement agreement until
July 2001, almost four years after the settlement and three and
a half years after Avis had sent its licensees a letter inviting
them to join in the settlement.
Avis’s letter was an offer, and Alaska Rent-A-Car’s
response was an acceptance. The parties do not dispute that
New York law controls on the timeliness of acceptance, and
New York law establishes the usual rule, that acceptance must
be within a “reasonable” time.7 Under New York law,
reasonableness is normally a question for a jury. However, a
court may decide it as a matter of law when rational jurors
could reach only one conclusion.8
Three or four years might well be unreasonable in many
circumstances, but not in this one. First, the offer stated no
time limit on acceptance, though Avis could easily have
expressly limited the duration of its offer. The reasonable
inference from Avis’s failure to impose a time limit is that it
did not intend for there to be a time limit, because it saw
advantage to joinders whenever they came in. Second, four
7
See, e.g., Sterngass v. Maisel, 519 N.Y.S.2d 569, 570 (N.Y. App. Div.
1987).
8
Cf. id. at 570; B/R Sales Co. v. Krantor Corp., 640 N.Y.S.2d 204, 205
(App. Div. 1996).
10 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
and a half years after Alaska Rent-A-Car joined, eight years
after the offer was made, Avis asked the court overseeing the
Agency settlement to declare the offer terminated, implying
that Alaska Rent-A-Car’s joinder came in plenty of time.
Third, Avis’s intent that no time limit should apply may be
inferred from its written confirmation of acceptances by six
other licensees who sent in their acceptances after Alaska
Rent-A-Car did. Fourth, Avis’s previous representations in
this litigation that Alaska Rent-A-Car had joined in the
settlement imply that it too interpreted its own offer to be
open to acceptance and timely accepted by Alaska Rent-A-
Car. Avis has cited no New York case involving anything
like parallel facts where an acceptance was deemed untimely,
and a rational juror could only conclude from Avis’s actions
that Alaska Rent-A-Car’s acceptance was made within a
reasonable time. The district court was correct in ruling that
Alaska Rent-A-Car was a party to the settlement agreement
by virtue of its sufficiently timely joinder.
II. Batson.
During jury selection, Avis made peremptory challenges
of the only two Alaska Natives on the panel.9 The district
court accepted one but denied the other, applying Batson v.
Kentucky.10 Avis argues that denial of its peremptory
challenge of the second Alaska Native juror, who sat on the
9
Ever since the many aboriginal peoples in Alaska, including Inupiat,
Yupik, several groupings of Athabaskans, Haida, Tsimshian, Tlingit,
Aleut, and many others united during the struggle for what became the
Alaska Native Claims Settlement Act, their and others’ custom has been
to refer to “Alaska Natives” as a uniting term.
10
Batson v. Kentucky, 476 U.S. 79 (1986).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 11
trial jury, was a Batson error requiring reversal. We reject
this argument. Even if the trial court erred, the error was
harmless.
Since liability was established by summary judgment, the
only issue for the jury was whether Alaska Rent-A-Car had
proved damages, and if so, how much. Avis had to start off
on the wrong foot, that it had made a promise to Alaska Rent-
A-Car and broken it. Faced with the problem of justifying a
zero or low damages award despite having broken its
promise, Avis needed a jury willing to deny an award to the
victim of a broken promise. Avis’s attorney used voir dire to
try to avoid jurors who would punish the broken promise even
if no damages were proved.
Avis asked prospective jurors whether any of them had “a
strong belief or hold a strong opinion that if someone breaks
a promise that they should be punished for that by having to
pay damages?” The first of the two Native veniremen,
Number 6, said she agreed that someone who breaks a
promise should be punished by having to pay damages, even
if there was no proof of any loss. But at a sidebar, Number 6
said she would nevertheless follow the judge’s instructions if
they were to the contrary. Avis exercised a peremptory
challenge against her. Despite a Batson challenge from
Alaska Rent-A-Car, the judge allowed Avis to use that
peremptory challenge. The judge accepted Avis’s lawyer’s
representation that he was not satisfied that her feelings, about
how damages ought to be awarded for breach of contract
regardless of whether actual loss was proved, would not affect
her verdict. No issue has been raised in this appeal about
allowing that challenge.
12 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
The issue goes to the challenge of the other Native
venireman, Number 15. When informed that he was almost
out of time to question prospective jurors, Avis’s counsel
chose to question Number 15, who said that whether she
would punish someone who broke a promise without harming
anyone “would depend on how the promises were made and
what’s been broken.” Two non-minority jurors said
substantially the same thing. But both of the unchallenged
jurors assured counsel they would obey the court’s
instructions regardless of their feelings. Number 15 did not
say she would obey the instructions despite her personal
views, but because the court’s time limit ran out, she was not
asked.
Responding to Alaska Rent-A-Car’s Batson challenge,
Avis’s lawyer said his gut feeling was that Number 15 viewed
punishment as appropriate for breach of contract regardless of
whether there was any harm. He pointed out that there were
no racial issues in this commercial dispute, and said his
challenge was not based on race. Alaska Rent-A-Car’s
lawyer and the judge both expressed their confidence that
Avis’s lawyer was not racially motivated (the trial was in
Alaska, where the lawyers and judges often have substantial
professional experience with, against, and before each other).
But the judge disallowed the challenge. He acknowledged
that Avis’s lawyer had not had sufficient time for a dialogue
on voir dire with Number 15, to see whether she would follow
instructions about damages despite her views to the contrary,
but he was not satisfied with striking both Native jurors on
the record before him. He said that he thought that Avis’s
lawyer had articulated sufficient non-discriminatory reasons
to strike Number 6, but that he did not “feel the same way in
regard to [Number 15].”
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 13
Batson applies to civil as well as criminal cases,11 so Avis
was entitled to its peremptory challenge unless it exercised it
in a manner violative of Batson. The dispute here arises at
step three of the three-part Batson test (prima facie case, race-
neutral explanation, finding of pretext).12
The step three inquiry is a difficult one. It “asks judges to
engage in the awkward, sometimes hopeless, task of second-
guessing a [lawyer’s] instinctive judgment – the underlying
basis for which may be invisible even to the [lawyer]
exercising the challenge.”13 In this case, step three is
particularly difficult because of the explicit finding that
Avis’s lawyer did not act with a racial motivation. The court
did not expressly find the evil to which Batson is directed,
“purposeful racial discrimination.”14
We need not decide, however, whether denying the
peremptory challenge was error. We held in United States v.
Lindsey15 that an erroneous denial of a peremptory challenge
does not require automatic reversal. We held that Rivera v.
11
Edmonson v. Leesville Concrete Co., Inc., 500 U.S. 614 (1991).
12
Batson, 476 U.S. at 93–98; Collins, 551 F.3d at 919.
13
Miller-El, 545 U.S. at 267–68 (2005) (Breyer, J., concurring).
14
United States v. Collins, 551 F.3d 914, 919 (9th Cir. 2009) (quotations
and citations omitted); accord Batson, 476 U.S. at 86, 98.
15
United States v. Lindsey, 634 F.3d 541 (9th Cir. 2011), cert. denied,
131 S. Ct. 2475 (2011).
14 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
Illinois16 overruled our holding in United States v. Annigoni17
that denial of a peremptory challenge required reversal, and
stated that “the Rivera Court directly undercuts our precedent
by determining that the erroneous denial of a peremptory
challenge may indeed be subject to harmless-error review.”18
We concluded that Rivera allowed us to “apply the standard
of review that is appropriate under the circumstances of the
district court’s error.”19 In Lindsey, we applied plain error
review, as Lindsey failed to object to the district court’s error
depriving him of a peremptory challenge. Here, Avis did
object.
The right to peremptory challenges in civil cases exists by
virtue of Federal Rule of Civil Procedure 47(b) and 28 U.S.C.
§ 1870, three challenges per party or side, not by virtue of the
Constitution. Erroneous denial of a challenge is therefore
subject to Federal Rule of Civil Procedure 61 on harmless
error, requiring us to disregard error not affecting “substantial
rights.”
16
Rivera v. Illinois, 556 U.S. 148 (2009).
17
United States v. Annigoni, 96 F.3d 1132 (9th Cir. 1996) (en banc).
18
Lindsey, 634 F.3d at 549. The 1st and 8th circuits have also
concluded that Rivera effectively overruled previous cases that had
adopted an automatic reversal rule when a trial court’s error impaired the
right to exercise peremptory challenges. Avichail ex rel. T.A. v. St. John’s
Mercy Health Sys., 686 F.3d 548, 552–53 (8th Cir. 2012); United States
v. Gonzalez-Melendez, 594 F.3d 28, 33–34 (1st Cir. 2010).
19
Id. at 550.
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 15
This case involved nothing bearing on race or ethnicity.
Number 15 was not challenged for cause, and the feelings she
expressed about damages were substantially identical to at
least two other jurors’ feelings. The district court allowed
Avis’s attorney to use his third peremptory challenge on
another juror if he wished, but counsel waived the
opportunity, thereby allowing three people with the same
uneasiness about breach without damages to stay on the jury
instead of two. The verdict was unanimous. We are unable
to see any way that “substantial rights,” that is, rights
affecting the substance of the case as opposed to the
procedural right to three peremptory challenges, could have
been affected by erroneous denial of this challenge.
III. Daubert.
Each side put on testimony of an expert witness on
damages. Avis objected under Federal Rule of Evidence 702
and Daubert v. Merrell Dow Pharmaceuticals20 and its
progeny to allowing Alaska-Rent-A-Car’s expert to testify.
Before it allowed Alaska Rent-A-Car’s expert to testify
about his opinion on damages, the court gave Avis the
opportunity to conduct a lengthy voir dire to inquire into the
facts and data underlying the expert’s conclusions. After that
voir dire, the court made a Daubert gateway determination.
It concluded that “there’s enough underlying data and . . . a
sufficient causal connection to allow [the expert’s]
testimony. . . . I think he’s qualified to give the testimony. I
think his testimony will assist the trier of fact and I think his
opinion is the result of reliable principles and methods. . . .
20
Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993).
16 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
[C]learly, [Avis has] areas for cross examination, and that’s
what it’s going to be subject to.”
The task, for both sides, was to figure out how much
business and how much profit Alaska Rent-A-Car had lost on
account of Avis’s breach of the settlement agreement. Avis
had breached when it bought Budget Rent-A-Car out of
bankruptcy in 2002 and then merged much of the two
companies’ national sales and marketing staffs into one.
As in any damages case, the calculation had to address a
hypothetical world that never existed, one in which other
things remained the same but the breach had not occurred. To
calculate damages from the breach, as opposed to damages
from competition, Alaska Rent-A-Car’s expert witness
compared Avis’s and Budget’s experience with Alamo-
National’s (Alamo) experience after Cerberus bought Alamo
out of bankruptcy at around the same time. His theory was
that Alamo and Budget both got infusions of capital and
management enabling them to compete, but differed in that
Cerberus did not rent cars through any other company, and
Avis did, through Budget. Thus Alamo could not benefit
from merging sales and marketing activities because Cerberus
had no other car rental company, but Budget could. His
assumption was that Budget would have performed much like
Alamo but for the benefit of a unified Avis-Budget sales and
marketing effort.
Budget rebounded much faster than Alamo. The witness
in effect treated the faster rebound of Budget as attributable
to the breach of the settlement agreement. He used Alamo’s
national rate of rebound as a rough approximation of how
Budget, had it not had the benefit of the breach, would have
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 17
performed in Alaska. He then projected how much market
share Budget gained each year due to the breach. He testified
that he used Alamo’s national rate of rebound as an
approximation for how Budget in Alaska would have
performed. He reasoned that the rental car market is a
national market, and that national rebound rates would not be
skewed by idiosyncratic local factors.
According to Alaska Rent-A-Car’s witness, Alamo’s
national market share dropped 35% after it went into
bankruptcy, slowly recovering after Cerberus bought it.
Budget was in bankruptcy a shorter time, and recovered faster
after Avis bought it. The witness, saying that he wanted to be
conservative in his estimates, assumed that Budget would
have lost 32.5% of its market share (slightly less than Alamo)
had Avis bought it out of bankruptcy but not breached the
settlement agreement.
Because the revitalized Budget would draw customers
from other car rental companies too, not just Avis, the witness
picked the Juneau airport to approximate how much of the
bite would come out of Alaska Rent-A-Car. Juneau had the
advantage of simplicity, because he could examine a market
before Budget entered and after Budget entered, to
approximate how much business it took from Alaska-Rent-A-
Car. Over the first three years of its entry into the Juneau
market, Budget got an average of 23.3% of the Juneau rental
car market. About 48% of that market share gain came from
Alaska Rent-A-Car customers, 52% from Hertz and other
competitors. So to get a statewide figure, the witness made
the assumption that after the breach, Budget got about half its
customers from Alaska Rent-A-Car statewide. He calculated
Budget’s market share after the bankruptcy, assumed that but
18 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
for the breach Budget’s rate of market share recovery would
have been similar to Alamo’s national rate of recovery, and
assumed that about half of its faster recovery came at the
expense of Alaska Rent-A-Car. These assumptions and
inferences generated lost profits calculations of $4.079
million from 2003 to 2008 due to the breach, and future lost
profits, discounted to present value, of $11.708 million.
Avis challenges the expert’s assumptions and
comparisons. It argues that differences between Alamo and
Budget, such as the much longer duration of Alamo’s
bankruptcy, and many other factors, made Alamo an invalid
comparison. Avis also argues that applying a national market
share comparison to Alaska overlooked very significant
differences in how the national and Alaska markets worked.
And it argues that Alaska Rent-A-Car’s extrapolation from
the Juneau market experience ignored the differences between
this small market, only 5% of the statewide rental car market,
and the market elsewhere in the state, where roads connected
towns (unlike Juneau), and doing business more often
required a rental car. Of course, Alaska Rent-A-Car’s expert
gave reasons for his use of all these comparisons, such as by
pointing out the clarity with which the Juneau market could
be examined. Because Budget entered Juneau in 2000,
Juneau could clearly show how much business Budget took
from Avis there.
All of Avis’s challenges to Alaska Rent-A-Car’s expert
are colorable, but none go to admissibility. They amount to
impeachment. Under Federal Rule of Evidence 702 the trial
court may exercise discretion to allow expert testimony if the
testimony “will assist the trier of fact to understand the
evidence or to determine a fact in issue;” (1) it is “based upon
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 19
sufficient facts or data;” (2) it is “the product of reliable
principles and methods;” and (3) the expert “has applied the
principles and methods reliably to the facts of the case.”21
This list of requirements makes the task of determining
admissibility sound more mechanical and less judgmental
than it really is. Under Daubert v. Merrell Dow
22
Pharmaceuticals and its progeny,
[T]he court must assess [an expert’s]
reasoning or methodology, using as
appropriate such criteria as testability,
publication in peer reviewed literature, and
general acceptance, but the inquiry is a
flexible one. Shaky but admissible evidence
is to be attacked by cross examination,
contrary evidence, and attention to the burden
of proof, not exclusion. In sum, the trial court
must assure that the expert testimony “both
rests on a reliable foundation and is relevant to
the task at hand.”23
“Expert opinion testimony is relevant if the knowledge
underlying it has a valid connection to the pertinent inquiry.
And it is reliable if the knowledge underlying it has a reliable
21
Fed. R. Ev. 702 (2009). Stylistic changes were made to Rule 702 in
2011, after this case had gone to trial. The changes were not substantive.
W e use the language as it was when this case was decided.
22
Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993).
23
Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010) (quoting
Daubert, 509 U.S. at 597) (footnotes and citations omitted).
20 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
basis in the knowledge and experience of the relevant
discipline.”24
The Daubert reliability requirement “is flexible” and
“Daubert’s list of specific factors neither necessarily nor
exclusively applies to all experts or in every case.”25 “The
‘list of factors was meant to be helpful, not definitive’ and the
trial court has discretion to decide how to test an expert’s
reliability as well as whether the testimony is reliable, based
on ‘the particular circumstances of the particular case.’”26
Basically, the judge is supposed to screen the jury from
unreliable nonsense opinions, but not exclude opinions
merely because they are impeachable. The district court is not
tasked with deciding whether the expert is right or wrong, just
whether his testimony has substance such that it would be
helpful to a jury. Avis does not challenge Alaska Rent-A-
Car’s expert’s credentials and qualifications. Nor does it
challenge his general methodology, comparing the unknown
to an analogous known experience. Instead, Avis challenges
three aspects of the witnesses testimony: using Alamo as the
comparator, using the national rather than the Alaska market
as a baseline, and extrapolating from the Juneau market to the
entire Alaska market. None of these challenges make the
district judge’s decision to admit the testimony an abuse of
discretion. They all go to the weight of the testimony and its
24
Id. at 565 (quoting United States v. Sandoval-Mendoza, 472 F.3d 645,
654 (9th Cir. 2006)).
25
Kumho Tire Co. Ltd. v. Carmichael, 526 U.S. 137, 141 (1999).
26
Primiano, 598 F.3d at 564 (quoting Kumho Tire, 526 U.S. at 151,
150).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 21
credibility, not its admissibility. Avis gave the jury good
arguments for rejecting the testimony, but the district court
did not abuse its discretion by allowing the jury to listen to
Alaska Rent-A-Car’s expert as well as Avis’s. “Given that
the judge is ‘a gatekeeper, not a fact finder,’ the gate could
not be closed to this relevant opinion offered with sufficient
foundation by one qualified to give it.”27
IV. Certainty of damages.
The jury returned a unanimous $16 million verdict for
Alaska Rent-A-Car, slightly more than the $15,787,182 in
damages that Alaska Rent-A-Car’s expert witness calculated.
Avis’s expert witness offered no total number at all to the
jury, just critiques of the other expert’s assumptions and
calculations, with some numbers differing from his for
component parts. Avis thus presented the case to the jury as
a $16 million or nothing choice. Avis argued in its close that
the burden of proof on damages was on Alaska Rent-A-Car,
and that its expert was effectively impeached by theirs, so no
damages should be awarded.
The district court found, and neither side disputes, that
New York law controls on the standard of certainty required
for damages for breach of contract. Avis moved
unsuccessfully for judgment as a matter of law that damages
had not been proved with sufficient certainty or for a new
trial. We review denial of a motion for judgment as a matter
of law de novo, but draw all inferences in favor of the
27
Id. at 568 (quoting Sandoval-Mendoza, 472 F.3d at 654).
22 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
verdict.28 “The test is whether the evidence, construed in the
light most favorable to the nonmoving party, permits only one
reasonable conclusion, and that conclusion is contrary to that
of the jury.”29 We review a ruling on a motion for new trial
for abuse of discretion, and reverse “only if the record
contains no evidence in support of the verdict or if the district
court made a mistake of law.”30
Under New York law, in order to recover lost profits
Alaska Rent-A-Car must prove that “(1) the damages were
caused by the breach; (2) the alleged loss must be capable of
proof with reasonable certainty, and (3) the particular
damages were within the contemplation of the parties to the
contract at the time it was made.”31 “Damages resulting from
the loss of future profits are often an approximation. The law
does not require that they be determined with mathematical
precision. It requires only that damages be capable of
measurement based upon reliable factors without undue
28
Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1005 (9th
Cir. 2004).
29
White v. Ford Motor Co., 312 F.3d 998, 1010 (9th Cir. 2002)
(quotation omitted).
30
E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 962 (9th Cir.
2009) (quotation omitted).
31
Ashland Mgmt. Inc. v. Janien, 604 N.Y.S.2d 912, 916 (N.Y. 1993).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 23
speculation.”32 Avis’s argument is a continuation of its
Daubert attack on Alaska Rent-A-Car’s expert’s testimony.
New York courts generally reject lost profits for (1) new
business ventures as being based on impermissible
speculation, such as profits from a contemplated stadium that
was never built33 and (2) established businesses projecting
32
Id. at 915; see also 36 N.Y. Jur. 2d Damages § 107 (“The plaintiff
must supply some basis of computation for ascertaining the loss with
certainty. . . . The plaintiff must offer some reasonable basis for
ascertaining the amount of profit lost; an allowance therefor cannot be
made on the basis of guesswork or conjecture. Absolute certainty of data
upon which loss of future profits are to be estimated is not required, but
some fairly definite basis for computation must be supplied. . . . No hard
and fast rule in this regard can be laid down because such losses are
determined according to the circumstances of each particular case. But lost
profits cannot be proved where a multitude of assumptions underlying the
plaintiff’s claim makes it impossible to satisfy the ‘reasonable certainty’
test, even if the business were considered to be an existing business”).
33
See, e.g., Kenford Co. v. County of Erie, 502 N.Y.S.2d 131, 133 (N.Y.
1986) (claim for lost profits for stadium too speculative because the
stadium had not been built yet, and lost profits calculation assumed
successful operation of the stadium, attracting sporting events, meetings,
conferences, and other forms of entertainment over a 20 year span); Blinds
to Go (U.S.), Inc. v. Times Plaza Development, L.P., 88 A.D.3d 838, 841
(N.Y. App. Div. 2011) (reversing an award of lost profits because, “[i]n
light of the tenant’s admission that it leased the subject premises to break
into a new market, and its own expert’s testimony demonstrating the
differences between the subject premises and the allegedly comparable
stores, the evidence on lost profits was so lacking that the verdict could
not have been reached on any fair interpretation of the evidence.”). W e
note, however, that “[T]here is no per se rule precluding a new business
from recovering lost profits.” Cifone v. City of Poughkeepsie,
650 N.Y.S.2d 797, 798 (N.Y. App. Div. 1996) (“A claim based on the loss
of anticipated profits in connection with a thwarted business venture may
be proved by methods other than by reference to the actual past
24 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
future profits without a past history of profits, such as one that
in its five years of existence had never made a profit.34
Alaska Rent-A-Car was neither. It had been operating a
successful business since before statehood. And New York
courts have upheld the award of lost profits, where, as here,
past performance combined with some indicia of likelihood
of future success were presented to the jury.35 This case is
analogous to Greasy Spoon, where the plaintiff was already
profit-making ‘experience’ of the enterprise in question, provided that the
future profits can be calculated with reasonable certainty.”) (quotation and
citation omitted).
34
See, e.g., LifeWise Master Funding v. Telebank, 374 F.3d 917, 932
(10th Cir. 2004) (applying New York law and rejecting lost profits as too
speculative because “[e]ven assuming that LifeW ise could show lost
profits damages despite never having been profitable, it has not done so
here in a manner that satisfies New York’s prohibition of speculative
damages. In its damages report, LifeW ise has failed to connect its past
losses with its proposed future earnings. It remains a fact that LifeW ise
sustained losses in every year of its over five years of existence, and
frequently experienced capitalization problems, yet the damages model
predicted only uninterrupted future growth.”).
35
See, e.g., Greasy Spoon, Inc. v. Jefferson Towers, Inc., 552 N.Y.S.2d
92, 94 (N.Y. 1990) (“Plaintiff established at trial that it was already
operating a successful restaurant business at a commercially desirable site.
Further, plaintiff’s witnesses gave evidence, based upon experience, as to
the level of profits that could reasonably be anticipated . . . . Unlike in
Kenford, where lost profits from a municipality’s decision not to construct
a stadium were denied in part because there were too many undetermined
variables, in this case most of the variables that would affect the success
of the thwarted business venture, i.e., location, capitalization and existing
or potential clientele, were established through competent proof. Thus,
the evidence at trial was sufficient to remove plaintiff’s lost profit claim
from the realm of impermissible speculation.”); cf. Wathne Imports, Ltd.
v. PRL USA, Inc., 953 N.Y.S.2d 7 (N.Y. App. Div. 2012).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 25
operating a successful restaurant (despite the name) and the
projection of lost profits was from adding a sidewalk cafe.36
A jury might have been persuaded by the impeachment
testimony, rejected Alaska Rent-a-Car’s expert’s damages
analysis and calculation, and awarded nothing. But it was not,
and the jury was entitled to decide. Drawing all inferences in
the favor of the non-moving party, as we must, the evidence
– including but not limited to the expert testimony – sufficed
to establish reasonable certainty for the damages awarded.
V. Attorney’s Fees
Alaska has, since Congress applied the general laws of
Oregon to the Territory of Alaska in 1884, followed the
English Rule rather than the American Rule on attorney’s
fees.37 Alaska is the only state that follows the English
Rule,38 that the prevailing party is generally entitled to an
attorney’s fees award, though many federal and state statutes
36
Greasy Spoon, 552 N.Y.S.2d at 94.
37
Susanne Di Pietro & Teresa W . Carns, Alaska’s English Rule:
Attorney’s Fee Shifting in Civil Cases, 13 Alaska L. Rev. 33, 38–39
(1996) (citing Frederic E. Brown, The Sources of the Alaska and Oregon
Codes Part II: T he Codes and Alaska, 1867–1902, 2 UCLA-Alaska L.
Rev. 87, 88 (1973)).
38
Edwards v. Alaska Pulp Corp., 920 P.2d 751, 755 (Alaska 1996);
Benjamin J. Roesch, Erie Similarities: Alaska Civil Rule 68, “Direct
Collisions,” and the Problem of Non-Aligning Background Assumptions,
23 Alaska L. Rev. 81, 81 (2006).
26 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
provide for awards in designated circumstances.39 Though
sometimes criticized,40 the rule remains robustly in force.
Present Alaska practice is set out in Alaska Rule of Civil
Procedure 82, which generally requires the award of
attorney’s fees to the prevailing party in civil cases.41 The
Alaska Supreme Court has promulgated Rule 82 pursuant to
its constitutional authority to “make and promulgate rules
governing practice and procedure in civil and criminal cases
in all courts.”42
The United States District Court for the District of Alaska
has itself for many years treated Alaska Rule 82 as generally
applicable in civil proceedings where federal law did not
provide otherwise.43 The district court followed its usual
practice in this case, awarding $1,605,000 in attorney’s fees
39
See, e.g., Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S.
240, 261–62 (1975).
40
See, e.g., Andrew J. Kleinfeld, Alaska: W here the Loser Pays the
W inner’s Fees, 24 Judges’ J. 4 (1985).
41
Alaska Civil Procedure Rule 82(a) (“Except as otherwise provided by
law or agreed to by the parties, the prevailing party in a civil case shall be
awarded attorney’s fees calculated under this rule.”).
42
Alaska Const. art. IV, § 15; see also State v. Native Village of
Nunapitchuk, 156 P.3d 389, 395 (Alaska 2007).
43
Although District of Alaska Local Rule 54.3(b) no longer provides
expressly, as it did until 2006, that “In a diversity case the court will apply
Rule 82, Alaska Rules of Civil Procedure,” it appears to assume that such
fees will still be awarded, since it provides that motions for attorney’s fees
must “set forth the authority for the award, whether Rule 82, Alaska Rules
of Civil Procedure” or some other source.
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 27
based upon the Rule 82 formula. As the district court held in
Ryan v. Sea Air, “Alaska follows the English Rule, by virtue
of which the prevailing party always recovers a portion of its
fees from the losing party,” and the United States District
Court treats this Alaska practice as “binding in diversity
cases” brought there.44 Ryan cites our 1979 decision in
Klopfenstein v. Pargeter, in which we upheld an Alaska Rule
82 attorney’s fees award in a diversity case, because “[i]n a
diversity action the question of attorneys fees is governed by
state law.”45
Two issues arise in this case. First, should federal law or
state law apply to an attorney’s fees award? Second, if state
law applies, should Alaska law or New York law control?
The first question is easily answered. As both parties
agree, state law applies. The Supreme Court held in Alyeska
Pipeline Service Co. v. Wilderness Society46 that for Erie
Railroad Co. v. Tompkins47 purposes, state law on attorney’s
fees is substantive, so state law applies in diversity cases.
“[I]n an ordinary diversity case where the state law does not
run counter to a valid federal statute or rule of court, and
usually it will not, state law denying the right to attorney’s
fees or giving a right thereto, which reflects a substantial
44
Ryan ex rel. Syndicates and Ins. Companies Subscribing to Policy
PHP91-4699 v. Sea Air Inc., 902 F. Supp. 1064, 1070 (D. Alaska, 1995).
45
Klopfenstein v. Pargeter, 597 F.2d 150, 152 (9th Cir. 1979).
46
421 U.S. 240 (1975).
47
304 U.S. 64 (1938).
28 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
policy of the state, should be followed.”48 We have of course
said the same thing.49
The second question, Alaska law or New York law, is
more intricate. The rule is that the federal court in which the
case is litigated should apply the forum state’s choice of law
rules.50 The parties agree that Alaska choice of law rules
apply.
Though federal law establishes that attorney’s fees law is
substantive for Erie purposes, it is not necessarily substantive
for choice of law purposes.51 Whether it is substantive or
procedural for choice of law purposes depends on how the
Supreme Court of the forum state would characterize it.
Some state Supreme Courts consider their rules governing
48
Alyeska Pipeline, 421 U.S. at 259 n.31 (quoting 6 J. Moore, Federal
Practice 54.77(2), pp. 1712-1713 (2d ed. 1974)).
49
See, e.g., MRO Communications, Inc. v. American Tel. & Tel. Co.,
197 F.3d 1276, 1282 (9th Cir. 1999) (“In an action involving state law
claims, we apply the law of the forum state to determine whether a party
is entitled to attorneys’ fees, unless it conflicts with a valid federal statute
or procedural rule.”).
50
See, e.g., Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S.
487, 496 (1941) (“The conflict of laws rules to be applied by the federal
court in Delaware must conform to those prevailing in Delaware’s state
courts. . . . Any other ruling would do violence to the principle of
uniformity within a state upon which the Tompkins decision is based.”).
51
See, e.g., Guaranty Trust Co. of New York v. York, 326 U.S. 99,
108–10 (1945); Sun Oil Co. v. Wortman, 486 U.S. 717, 726 (1988)
(“Guaranty Trust itself rejects the notion that there is an equivalence
between what is substantive under the Erie doctrine and what is
substantive for purposes of conflict of laws.”).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 29
attorneys fees to be procedural for choice of law purposes.52
If the Alaska Supreme Court would consider its attorney’s
fees rule procedural, then Alaska law, the English Rule,
would apply. If, however, the Alaska Supreme Court would
consider its attorney’s fees rule substantive, then New York
law, the American rule, would apply.
And that too is intricate. The Alaska Supreme Court has
never held that Alaska Rule of Civil Procedure 82 is
procedural for Alaska choice-of-law purposes. However, it
has stated in dicta in Ehredt v. DeHavilland that “attorney’s
fee are not an item of damage,” and that it would thus apply
Rule 82 even if another state’s substantive law applied.53 We
must follow the considered dicta, as well as the holdings, of
the Alaska Supreme Court when applying Alaska law.54 The
Alaska Supreme Court has also held, in State v. Native
52
See, e.g., Kirwan v. Chicago Title Ins. Co., 624 N.W .2d 644, 653
(Neb. 2001) (applying a Nebraska statue on attorney’s fees in insurance
actions, despite the fact that South Dakota law governed the underlying
dispute, because Nebraska deems its attorney’s fees statute to be
procedural); North Bergen Rex Transport, Inc. v. Trailer Leasing Co.,
730 A.2d 843, 848 (N.J. 1999) (applying New Jersey law on attorney’s
fees despite the fact that another state’s substantive law governed the
underlying dispute, because “attorneys’ fees are a matter of practice and
procedure, rather than of substantive law.”).
53
Ehredt v. DeHavilland Aircraft Co. of Canada, Ltd., 705 P.2d 446,
452 n.8 (Alaska 1985) (“Thus, even if we applied Florida law, Civil Rule
82 would control an award of attorney’s fees.”).
54
See Aceves v. Allstate Ins. Co., 68 F.3d 1160, 1164 (9th Cir. 1995)
(“The district court, like us, is bound to follow the considered dicta as well
as the holdings of the California Supreme Court when applying California
law.”).
30 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
Village of Nunapitchuk,55 that Rule 82 is procedural, not
substantive, though not in the choice of law context.56
Nunaptichuk dealt with whether Rule 82 is procedural for
purposes of the Alaska Constitution, which “commits the
enactment of all substantive law – that is all law except rules
of practice and procedure – to the legislature” but authorizes
the Supreme Court to “promulgate ‘rules governing practice
and procedure in civil and criminal cases in all courts.’”57
In analyzing Nunapitchuk, we note that Alaska generally
follows the Restatement (Second) of Conflict of Laws,58
which says that “[a] court usually applies its own local law
rules prescribing how litigation shall be conducted even when
it applies the local law rules of another state to resolve other
issues in the case.”59 Avis urges us to hold that Rule 82 is not
a rule “prescribing how litigation shall be conducted” because
the Alaska Supreme Court has said that Rule 82 has a
partially compensatory purpose. We reject this argument
because Nunapitchuk deemed Rule 82 to be “primarily
55
156 P.3d 389 (Alaska 2007).
56
Id. at 395, 402.
57
Id. at 395–96 (quoting Alaska Const. art. IV, § 15) (emphasis in
original).
58
See, e.g., Savage Arms, Inc. v. Western Auto Supply Co., 18 P.3d 49,
53 (Alaska 2001) (“W e look to the Restatement (Second) of Conflict of
Laws for guidance in resolving choice-of-law issues.”).
59
Restatement (Second) Conflict of Laws § 122.
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 31
concerned with . . . an effective and efficient system for the
administration of justice” despite its compensatory purpose.60
Based on the dicta in Ehredt and the holding and analysis
in Nunapitchuk, we conclude that the Alaska Supreme Court
would hold, for purposes of choice of law, that its attorney’s
fees rule is procedural. Rule 82 is thus substantive for Erie
purposes, procedural for Alaska constitutional purposes of
allocating authority as between the courts and the legislature,
and procedural for choice of law purposes. We therefore hold
that the law of the forum, Alaska, properly applies to diversity
cases brought in or removed to the United States District
Court for the District of Alaska. The district court did not err
by applying Alaska Rule of Civil Procedure 82 to the
attorney’s fee award.
VI. Prejudgment Interest.
The district court awarded prejudgment interest pursuant
to New York law of 9% per annum.61 The court used Alaska
Rent-A-Car’s expert’s analysis to separate lost profits before
judgment, 2003 to 2008, from lost profits projected to occur
after the 2009 judgment. The court then applied the New
York interest rate to the profits lost before the verdict on a
year by year basis (approximately 6 years interest on 2003
profits, 5 years interest on 2004 profits, and so forth). The
total interest awarded was $1,478,519.23. The court awarded
an additional $57,739.51 as interest on lost profits from the
date of the verdict to the date of judgment, plus $86,480.17 in
60
Nunapitchuk, 156 P.3d at 398.
61
N.Y. C.P.L.R. § 5004.
32 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
interest on the entire judgment from the date of the verdict
through the date of judgment. The parties agree that the
$57,739.51 was an error, double counting, and that the
judgment should be reduced by that amount.
Avis argues that the district court erred in one additional
respect, making its own judgment on how to separate past
from future lost profits, because the jury was not asked to do
so by special verdict. The argument is unpersuasive.
New York law62 provides for the court to make just such
a calculation as the district court made. By statute,
prejudgment interest “shall” be awarded for breach of
contract.63 The statute provides that where damages “were
incurred at various times, interest shall be computed upon
each item from the date it was incurred or upon all of the
damages from a single reasonable intermediate date.”64 The
statutory language does not require juries to determine these
various dates or the “single reasonable intermediate date.”
Instead, “[i]f a jury is discharged without specifying the date,
the court upon motion shall fix the date.”65 The New York
practice appears to be for the trial court to make a reasonable
calculation based on the evidence, as provided in the statutory
language, directing the court to choose a “reasonable
intermediate date” or to “upon motion . . . fix the date”
implies.
62
The parties do not dispute that New York law applies to this issue.
63
N.Y. C.P.L.R. § 5001(a).
64
N.Y. C.P.L.R. § 5001(b).
65
N.Y. C.P.L.R. § 5001(c).
ALASKA RENT -A-CAR V . AVIS BUDGET GROUP 33
Avis argues that two New York decisions establish that
prejudgment interest cannot be awarded on a verdict that
includes both past and future damages. These cases, Helman
v. Markoff66 and Brandt Corporation v. Warren Automatic
Controls Corporation,67 should be distinguished. In Brandt,
the plaintiff recovered a general verdict on two theories, one
of which was reversed on appeal, so there was no reasonable
way to tell whether much or all of the damages were on the
invalid theory. In Helman, plaintiff recovered a general
verdict on two causes of action, only one of which would
allow an award of prejudgment interest. By contrast, in this
case, no theory of recovery on which the damages award was
based is reversed, and the theory of recovery, breach of
contract, is one for which New York requires a prejudgment
interest award.
The district court had a reasonable basis in the record for
allocating portions of the judgment to different years and
calculating interest as it did. Alaska Rent-A-Car’s expert
provided precisely such a breakdown, with a year by year
table that the court used. The jury’s verdict was so close to
the expert witness’s calculation that the court could
reasonably infer that the jury accepted the substantial
correctness of his testimony, especially since Avis’s expert
witness provided no alternative calculation. Avis’s
alternative, no prejudgment interest, assumes that “the jury
66
Helman v. Markoff, 8 N.Y.S.2d 448 (App. Div. 1938), aff’d per
curiam, 20 N.E.2d 1012 (N.Y. 1939).
67
Brandt Corp. v. Warren Auto. Controls Corp., 322 N.Y.S.2d 291(App. Div. 1971).
34 ALASKA RENT -A-CAR V . AVIS BUDGET GROUP
may have awarded no damages at all subject to prejudgment
interest,”68 an assumption unsupportable on the record.
Denial of prejudgment interest would be contrary to the
New York statute providing that it “shall” be awarded for
breach of contract. Since the breach and damage began about
six years before the verdict, some sort of calculation of
prejudgment interest was required by New York law. Though
Avis essentially faults Alaska Rent-A-Car for not obtaining a
special verdict to facilitate the calculation, Avis also did not
request a special verdict separating out past and future
damages. Avis gambled on an all or nothing argument, the
jury awarded all, and Avis had not asked for an instruction
requiring the jury to break out the pre and post-verdict
amount. It cannot now fault the court for making a reasonable
allocation based upon evidence in the record that provided
good support for the calculation it made.
CONCLUSION
The judgment is AFFIRMED, except that we remand for
the district court to reduce the prejudgment interest award by
$57,739.51. Costs are awarded to Alaska Rent-A-Car.
68
Avis Reply Brief at 13 (emphasis in original).