B-163682, MAR. 18, 1968

B-163682, MAR. 18, 1968

TO MR. E.D. CRUMPACKER:

SUBJECT: BETTY K. FURUMIZO, ET AL., V. UNITED STATES, ET AL.

U.S.D.C., DISTRICT OF HAWAII

CIVIL ACTION NO. 2091

YOUR LETTER OF FEBRUARY 19, 1968, REQUESTS THE PAYMENT OF INTEREST BY THE UNITED STATES ON THE JUDGEMENT ENTERED IN THE ABOVE-CAPTIONED CASE.

THE RECORD DISCLOSES THAT ON JUNE 22, 1965, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII ENTERED A JUDGMENT AGAINST BAKER AIRCRAFT SALES, INC., AND THE UNITED STATES IN FAVOR OF THE PLAINTIFFS, AND HELD THAT EACH SHOULD PAY ONE-HALF OF THE JUDGMENT (245 F.SUPP. 981). THE JUDGMENT AGAINST THE UNITED STATES WAS ENTERED UNDER THE FEDERAL TORT CLAIMS ACT.

APPEALS BY ALL PARTIES RESULTED IN AN AFFIRMANCE OF THE PLAINTIFFS' JUDGMENTS BY THE COURT OF APPEALS FOR THE NINTH CIRCUIT. THE OPINION OF THE COURT OF APPEALS, DATED AUGUST 9, 1967 (REHEARING DENIED SEPTEMBER 19, 1967), IS REPORTED AT 381 F.2D 965 (1967). SUBSEQUENTLY, ON DECEMBER 29, 1967, THE DISTRICT COURT ENTERED AN AMENDED JUDGMENT IN THE CASE "NUNC PRO TUNC AS OF JUNE 22, 1965," THE DATE OF THE ORIGINAL ADVERSE JUDGMENT AGAINST THE UNITED STATES. IT WAS FUTHER ORDERED IN THE AMENDED JUDGMENT "THAT EACH DEFENDANT SHALL PAY INTEREST AT THE RATE OF THREE PER CENTUM (3 PERCENT) PER ANNUM ON THE ENTIRE JUDGMENT OR ANY PART THEREOF NOT PAID BY SUCH PARTY UNTIL THE JUDGMENT IS FULLY SATISFIED.'

WE UNDERSTAND THAT NO FURTHER APPEALS WILL BE TAKEN AND THAT THE AMENDED JUDGMENT HAS BECOME FINAL. BAKER AIRCRAFT HAS PAID ITS SHARE OF THE JUDGMENT TOGETHER WITH THE PRESCRIBED INTERST AND THE UNITED STATES HAS PAID ITS SHARE OF THE JUDGMENT WITHOUT INTEREST. YOU, IN EFFECT, CLAIM THAT THE PLAINTIFFS ARE LAWFULLY ENTITLED TO INTEREST FROM THE UNITED STATES UNDER THE TERMS OF THE JUDGMENT.

THE PROPOSITION THAT INTEREST MAY BE CHARGED AGAINST THE UNITED STATES ONLY IF SPECIFICALLY PROVIDED BY STATUTE OR BY A VALID CONTRACT IS SO WELL ESTABLISHED AS TO REQUIRE NO DISCUSSION. THAT THIS PROHIBITION AGAINST CHARGING INTEREST IS APPLICABLE TO THE COURTS IS EQUALLY WELL ESTABLISHED. IN THE CASE OF UNITED STATES V NEW YORK RAYON IMPORTING CO., INC., 329 U.S. 654, THE UNITED STATES SUPREME COURT STATED ON PAGE 663:

"* * * BUT THE IMMUNITY OF THE UNITED STATES FROM LIABILITY FOR INTEREST IS NOT TO BE WAIVED BY POLICY ARGUMENTS OF THIS NATURE. COURTS LACK THE POWER TO AWARD INTEREST AGAINST THE UNITED STATES ON THE BASIS OF WHAT THEY THINK IS OR IS NOT SOUND POLICY. WE REITERATE THAT ONLY EXPRESS LANGUAGE IN A STATUTE OR CONTRACT CAN JUSTIFY THE IMPOSITION OF SUCH INTEREST. * * *" SINCE THE CASE HERE INVOLVED AROSE FROM A TORT, NO CONTRACT EXISTS AND, HENCE, IT IS APPARENT THAT INTEREST MAY BE PAID ON THIS JUDGMENT ONLY IF AUTHORIZED BY STATUTE.

THE AUTHORITY FOR THE PAYMENT OF INTEREST IS SET FORTH IN SECTION 2411 (B), TITLE 28, UNITED STATES CODE, AS FOLLOWS:

"EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (A) OF THIS SECTION, ON ALL FINAL JUDGMENTS RENDERED AGAINST THE UNITED STATES IN ACTIONS INSTITUTED UNDER SECTION 1346 OF THIS TITLE, INTEREST SHALL BE COMPUTED AT THE RATE OF 4 PER CENTUM PER ANNUM FROM THE DATE OF THE JUDGMENT UP TO, BUT NOT EXCEEDING, THIRTY DAYS AFTER THE DATE OF APPROVAL OF ANY APPROPRIATION ACT PROVIDING FOR PAYMENT OF THE JUDGMENT.'

SUBSEQUENTLY THERE WAS ENACTED INTO LAW SECTION 1302 OF THE SUPPLEMENTAL APPROPRIATION ACT OF 1957, PUBLIC LAW 814, APPROVED JULY 27, 1956, 70 STAT. 694. AS AMENDED BY THE ACT OF AUGUST 30, 1961, 75 STAT. 415, AND PUB.L. 89-506, APPROVED JULY 18, 1966, 80 STAT. 306, 31 U.S.C. 724A, THIS SECTION READS AS FOLLOWS -- QUOTING FROM THE CODE:

"THERE ARE APPROPRIATED, OUT OF ANY MONEY IN THE TREASURY NOT OTHERWISE APPROPRIATED, AND OUT OF THE POSTAL REVENUES, RESPECTIVELY, SUCH SUMS AS MAY ON AND AFTER JULY 27, 1956 BE NECESSARY FOR THE PAYMENT, NOT OTHERWISE PROVIDED FOR, AS CERTIFIED BY THE COMPTROLLER GENERAL, OF FINAL JUDGMENTS, AWARDS AND COMPROMISE SETTLEMENTS (NOT IN EXCESS OF $100,000, OR ITS EQUIVALENT IN FOREIGN CURRENCIES AT THE TIME OF PAYMENT, IN ANY ONE CASE) WHICH ARE PAYABLE IN ACCORDANCE WITH THE TERMS OF SECTIONS 2414, 2517, 2672, OR 2677 OF TITLE 28, TOGETHER WITH SUCH INTEREST AND COSTS AS MAY BE SPECIFIED IN SUCH JUDGMENTS OR OTHERWISE AUTHORIZED BY LAW: PROVIDED, THAT, WHENEVER A JUDGMENT OF A DISTRICT COURT TO WHICH THE PROVISIONS OF SECTION 2411 (B) OF TITLE 28 APPLY, IS PAYABLE FROM THIS APPROPRIATION, INTEREST SHALL BE PAID THEREON ONLY WHEN SUCH JUDGMENT BECOMES FINAL AFTER REVIEW ON APPEAL OR PETITION BY THE UNITED STATES, AND THEN ONLY FROM THE DATE OF THE FILING OF THE TRANSCRIPT THEREOF IN THE GENERAL ACCOUNTING OFFICE TO THE DATE OF THE MANDATE OF AFFIRMANCE (EXCEPT THAT IN CASES REVIEWED BY THE SUPREME COURT INTEREST SHALL NOT BE ALLOWED BEYOND THE TERM OF THE COURT AT WHICH THE JUDGMENT WAS AFFIRMED): * * *.'

WHILE THE FIRST PORTION OF SECTION 1302 APPROPRIATES MONEY FOR THE PAYMENT OF JUDGMENTS AGAINST THE UNITED STATES "TOGETHER WITH SUCH INTEREST AND COSTS AS MAY BE SPECIFIED IN SUCH JUDGMENTS" IT IS OBVIOUS THAT THIS PROVISION OF ITSELF DOES NOT AUTHORIZE THE INCLUSION OF INTEREST IN JUDGMENTS AGAINST THE UNITED STATES, BUT MERELY RENDERS MONEY AVAILABLE TO PAY SUCH INTEREST WHERE INTEREST IS PROPERLY INCLUDED IN A JUDGMENT PURSUANT TO A SPECIFIC STATUTE OR CONTRACT. ALSO, IT APPEARS FROM THE LEGISLATIVE HISTORY OF SECTION 1302 THAT THE LANGUAGE WITH REFERENCE TO INTEREST SPECIFIED IN THE JUDGMENT WAS INTENDED TO PERTAIN TO INTEREST ON THE CLAIM ITSELF AS DISTINGUISHED FROM INTEREST ON THE JUDGMENT. SEE PAGE 885, HEARINGS BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, 84TH CONGRESS, 2D SESSION, ON THE SUPPLEMENTAL APPROPRIATION BILL, 1957. IT IS CLEAR FROM THE WORDING IN THE JUDGMENT HERE INVOLVED THAT THE INTEREST SPECIFIED THEREIN IS INTENDED TO BE ON THE JUDGMENT ITSELF RATHER THAN THE CLAIM. MOREOVER, SINCE 28 U.S.C. 2674 PROHIBITS THE CHARGING OF INTEREST AGAINST THE UNITED STATES IN TORT CLAIMS PRIOR TO JUDGMENT, THE COURT COULD NOT PROPERLY HAVE INCLUDED IN THE JUDGMENT INTEREST ON THE CLAIM ITSELF.

THUS, THE ONLY STATUTORY AUTHORITY UNDER WHICH INTEREST WOULD BE PAYABLE ON THIS JUDGMENT IS SECTION 2411 (B) OF TITLE 28, UNITED STATES CODE, WHICH AUTHORIZES INTEREST ON ALL FINAL JUDGMENTS RENDERED AGAINST THE UNITED STATES IN ACTIONS INSTITUTED UNDER SECTION 1346 OF TITLE 28. SINCE TORT ACTIONS AGAINST THE UNITED STATES ARE INSTITUTED UNDER SAID SECTION 1346, IT FOLLOWS THAT INTEREST ON THE JUDGMENT HERE INVOLVED IS AUTHORIZED BY SECTION 2411 (B). HOWEVER, THE INTEREST AUTHORIZED TO BE PAID ON DISTRICT COURT JUDGMENTS BY 28 U.S.C. 2411 (B) IS LIMITED BY THE FIRST PROVISO OF SECTION 1302 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1957, QUOTED ABOVE. THAT PROVISO IN CLEAR AND UNEQUIVOCAL LANGUAGE LIMITS SUCH INTEREST TO THOSE JUDGMENTS WHICH BECOME FINAL AFTER REVIEW ON APPEAL OR PETITION BY THE UNITED STATES, AND FURTHER LIMITS THE PERIOD FOR WHICH SUCH INTEREST MAY BE PAID TO THE PERIOD FROM THE DATE OF THE FILING OF THE TRANSCRIPT OF THE JUDGMENT IN THE GENERAL ACCOUNTING OFFICE TO THE DATE OF THE MANDATE OF AFFIRMANCE.

IN THE PRESENT CASE THE ORIGINAL JUDGMENT WAS RENDERED BY THE DISTRICT COURT ON JUNE 22, 1965, AND A TRANSCRIPT THEREOF WAS NEVER FILED IN THE GENERAL ACCOUNTING OFFICE. THE AMENDED JUDGMENT, ALTHOUGH ENTERED NUNC PRO TUNC AS OF JUNE 22, 1965, IS DATED DECEMBER 29, 1967, AND A COPY THEREOF WAS FIRST FILED IN THIS OFFICE ON JANUARY 26, 1968. THE COURT OF APPEALS AFFIRMANCE OF THE ORIGINAL JUDGMENT WAS HANDED DOWN ON AUGUST 9, 1967, AND IT DENIED A REHEARING ON SEPTEMBER 19, 1967. WE HAVE BEEN INFORMALLY ADVISED BY THE DEPARTMENT OF JUSTICE THAT ON OCTOBER 9, 1967, A CERTIFIED COPY OF THE JUDGMENT OF THE COURT OF APPEALS WAS ISSUED TO THE DISTRICT COURT IN LIEU OF MANDATE OF AFFIRMANCE, AS PROVIDED FOR UNDER RULE 26 OF THE NINTH CIRCUIT RULES. SINCE THE DATE (OCTOBER 9, 1967) OF THE DOCUMENT ISSUED IN LIEU OF THE MANDATE OF AFFIRMANCE PRECEDED THE DATE OF THE FILING OF THE JUDGMENT (ORIGINAL AND AMENDED) IN THE GENERAL ACCOUNTING OFFICE, THE PAYMENT OF ANY INTEREST ON THE JUDGMENT IS PROHIBITED BY THE LIMITATION CONTAINED IN THE FIRST PROVISO OF SECTION 1302.