When Does Postjudgment Interest Begin? Seventh Circuit Clarifies In Major Punitive Damages Dispute

A recent Seventh Circuit decision provides critical clarity on the accrual of postjudgment interest under 28 U.S.C. § 1961, particularly regarding punitive damages in high-stakes commercial litigation.

Postjudgment interest is a critical—and often overlooked—component of damage awards. It can quietly accrue into substantial sums while parties litigate appeals or post-trial motions. A recent decision by the Seventh Circuit reinforces that timing matters—and that clarity at the initial judgment stage can lock in the accrual of postjudgment interest, even if later modifications reduce the total amount of the award.

Federal Law and 28 U.S.C. § 1961: Defining the Accrual Date

In a long-running trade secrets dispute, a federal jury awarded nearly $1 billion in damages—split between compensatory and punitive damages. After multiple appeals, the final damages were significantly reduced. However, a legal fight ensued not over the damages themselves, but when postjudgment interest began to run on the punitive portion.

The defendant argued that interest on the punitive damages should only begin from the later judgment entered in 2022, not from the original 2017 judgment. The trial court agreed. But the Seventh Circuit reversed, holding that the interest should accrue from 2017 because the final punitive amount was clearly ascertainable at that time.

The court relied on 28 U.S.C. § 1961(a), which directs that postjudgment interest begins from "the date of the entry of the judgment." The biggest part of the dispute turned on what qualifies as a final, ascertainable award.

Why "Ascertainable" Damages Lock in Postjudgment Interest

It is important to highlight:

• The compensatory damages ($140M) and the ultimately-affirmed punitive damages ($140M) were both included in the 2017 judgment.
• The amount of punitive damages in the second judgment did not represent a new award or a different calculation, merely a constitutional cap on an existing number.
• Because the amount was "ascertainable" from the original 2017 judgment, interest began then—not from the 2022 order on remand.

The appellate panel clarified that earlier case law was no longer controlling and distinguished other cases where interest did not run from the initial judgment due to calculation changes or factual uncertainty.

Implications for High-Stakes Commercial Litigation

For clients involved in high-stakes commercial litigation, especially where damages include punitive or statutory penalties, this case underscores the importance of understanding how postjudgment interest is calculated and when it starts. A delay in final resolution may not delay the accrual of interest—meaning liabilities can increase substantially while parties litigate.

The Seventh Circuit's decision aligns with a principle that promotes fairness and finality: if a damages amount is clearly stated and affirmed—even if later reduced—interest runs from the original judgment date.

Postjudgment Interest Frequently Asked Questions

When does interest accrue?

Interest begins to accrue at the date of the judgment.

Does an appeal delay the start of postjudgment interest?

Postjudgment interest usually continues to accrue during the appeals process. If the original judgment amount is affirmed or only modified (rather than completely vacated), the interest accrual date often remains the date of the initial entry of judgment.

How is the postjudgment interest rate determined?

Regardless of variations in interest rates, interest accrues at 9% per statute.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.