The opinion of the court was delivered by: Karen E. Schreier Chief Judge
ORDER ON PREJUDGMENT INTEREST AND MOTION FOR ATTORNEYS' FEES
Plaintiff, Linda L. Bishop (Bishop), brought suit against defendant, Pennington County, claiming that she was sexually harassed and retaliated against for complaining about such harassment, in violation of Title VII, 42 U.S.C. § 2000(e) et seq., and the South Dakota Human Rights Act of 1972, SDCL 20-13-1 et seq. The court granted summary judgment in favor of Pennington County on Bishop's Title VII hostile work environment claim and all of her state-law claims. Bishop's Title VII retaliation claim was tried to a jury. The jury found in favor of Bishop and awarded her $40,000 in lost wages and fringe benefits and found that she was entitled to prejudgment interest on $40,000 during the period from November 1, 2004, to November 1, 2008. The jury also awarded Bishop $60,000 for mental anguish, humiliation, and emotional pain and suffering. Both parties have submitted proposed calculations of the amount of prejudgment interest Bishop is entitled to receive. Bishop also moves for an award of attorneys' fees, sales tax, and costs.
"Generally, [an] award of prejudgment interest, in the absence of statutory directives, rests in the discretion of the district court." Cargill, Inc. v. Taylor Towing Serv., Inc., 642 F.2d 239, 241 (8th Cir. 1981). Here, the court submitted to the jury the issue of whether Bishop is entitled to prejudgment interest on her damages for lost wages and fringe benefits. The jury found that Bishop is entitled to interest on $40,000 during the period of November 1, 2004, to November 1, 2008, so the court must determine the rate and amount of prejudgment interest.
Bishop proposes that the amount of prejudgment interest be calculated by dividing the $40,000 award into 17 monthly payments of $2,351.28, covering the period of November 1, 2004, through March 1, 2006, and 1 residual payment of $28.24 on April 1, 2006. Bishop suggests that the applicable interest rate is either 10 percent per year, as provided for by South Dakota law,*fn1 or the rate used by the Internal Revenue Service for underpayment of taxes set forth in 28 U.S.C. § 6621. Under Bishop's calculations, the total amount of prejudgment interest using the state rate is $13,408.99, and using the IRS rate is $9,373.50. Pennington County proposes that the court equally allocate the $40,000 award from November 1, 2004, to November 1, 2008, and use as the interest rate the average 1-year constant maturity Treasury yield referenced in 28 U.S.C. § 1961. Under Pennington County's calculations, the total amount of prejudgment interest is $3,263.37.
With respect to the allocation of the $40,000 award, the court agrees with Pennington County that the award should be equally allocated from November 1, 2004, to November 1, 2008. The jury specifically found that Bishop is entitled to prejudgment interest during that 48-month period, so Bishop's proposed calculation runs contrary to the express intent of the jury.
With respect to the rate of prejudgment interest, "[t]he question of whether interest is to be allowed, and also the rate of computation, is a question of federal law where the cause of action arises from a federal statute." Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1330 (8th Cir. 1995) (quoting Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1218 (8th Cir. 1981)). Here, the only claim submitted to the jury was Bishop's retaliation claim, which arose under Title VII, a federal statute. Her state-law claims were dismissed prior to trial. Thus, federal law governs the rate of prejudgment interest. The United States Court of Appeals for the Eighth Circuit has found that in cases arising under a federal statute, "28 U.S.C. § 1961 provides the proper measure for determining rates of both prejudgment and postjudgment interest." Id. at 1331. Section 1961 provides that interest shall be calculated "at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System." 28 U.S.C. § 1961(a). Interest under § 1961 shall be computed daily and compounded annually. 28 U.S.C. § 1961(b).
Pennington County used the average 1-year constant maturity Treasury yield as the rate of interest in its proposed calculation of Bishop's prejudgment interest, but failed to compound the interest annually. The court finds that Pennington County's calculation is reasonable, except that Bishop is entitled to the additional amount of interest she would earn if interest were compounded annually. Based on the court's calculations, Pennington County's proposed finding of $3,263.37 in prejudgment interest should be increased by $431.25 to reflect interest compounded annually. Bishop is entitled to recover $3,694.62 in prejudgment interest.
In a Title VII action, the court may award the "prevailing party . . . a reasonable attorney's fee (including expert fees) as part of the costs." 42 U.S.C. § 2000e-5(k). The $100,000 verdict against Pennington County makes Bishop a prevailing party, thereby entitling her to a reasonable attorneys' fee award. "The proper method for determining a reasonable attorney's fee is to multiply the number of hours reasonably expended on the litigation times a reasonable hourly rate." McDonald v. Armontrout, 860 F.2d 1456, 1458 (8th Cir. 1988) (internal quotation omitted). The resulting product is called the "lodestar," which is presumed to be the reasonable fee to which counsel is entitled. Id. (quoting Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 564, 106 S.Ct. 3088, 92 L.Ed. 2d 439 (1986)). The court should consider the factors identified in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), to set the reasonable number of hours and reasonable hourly rate components of the fee award formula. Id. at 1459. These factors are:
(1) the time and labor required; (2) the novelty and difficulty of the question; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
Delaware Valley, 478 U.S. at 562 (citing Johnson, 488 F.2d at 717-19).
The determination of the lodestar does not end the inquiry. "There remain other considerations that may lead the district court to adjust the fee upward or downward, including the important factor of the 'results obtained.' " Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 76 L.Ed. 2d 40 (1983). In determining whether to adjust the award, the court may also consider the other Johnson factors, but the "results obtained" factor ...