Kathy Casto, Yvonne Casto, Debbi Casto, Margie Casto and Betti Joan Casto, Minors, by and Through City National Bank & Trust Co., and Peggy Casto and Charles Casto v. The Arkansas-Louisiana Gas Company

Summary

The Tenth Circuit held that Oklahoma law governed the award of prejudgment interest in diversity actions involving personal-injury damages. It affirmed interest on the compensatory personal-injury award but reversed interest on exemplary damages because those damages were punitive rather than compensatory.

Holdings

1. In a diversity action, the availability of prejudgment interest is governed by applicable state law rather than by an independent federal rule, and Oklahoma law governed here.
2. Oklahoma law authorized prejudgment interest on the damages awarded for personal injuries.
3. Prejudgment interest was not authorized on the punitive-damage award because punitive damages are penal rather than compensatory and are not damages by reason of personal injury within the Oklahoma interest statute.

Questions Presented

1. Whether Oklahoma or federal law governed the availability of prejudgment interest in the diversity personal-injury actions.
2. Whether Oklahoma law authorized prejudgment interest on the personal-injury damages.
3. Whether Oklahoma law authorized prejudgment interest on the punitive-damage award.

Disposition

reversed_and_remanded