B-145389, APR. 18, 1961

B-145389: Apr 18, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

MARY STEELMAN: WE HAVE RECEIVED A LETTER DATED MARCH 7. THE CLAIM FOR INTEREST WAS DISALLOWED ON THE BASIS THAT SECTION 1302 OF PUBLIC LAW 814. LIMITS PAYMENT OF INTEREST ON JUDGMENTS OF THE DISTRICT COURTS TO SUCH JUDGMENTS AS HAVE BECOME FINAL AFTER REVIEW ON APPEAL OR PETITION BY THE UNITED STATES. THE UNITED STATES TOOK NO APPEAL IN THE INSTANT CASE AND HENCE THE CLAIM WAS DISALLOWED. INVOLVED A SITUATION WHERE A JUDGMENT OF THE COURT OF CLAIMS INCLUDED INTEREST ALTHOUGH THE STATUTE PROHIBITED THE PAYMENT OF INTEREST DURING THE TIME THE CLAIMANT WAS A RESIDENT OF ANOTHER COUNTRY. IN YOUR CASE THE JUDGMENT DID NOT INCLUDE INTEREST AND ACCORDINGLY THE CITED COURT DECISION IS NOT APPLICABLE TO THE FACTS HERE INVOLVED.

B-145389, APR. 18, 1961

TO MRS. MARY STEELMAN:

WE HAVE RECEIVED A LETTER DATED MARCH 7, 1961, FROM YOUR ATTORNEY, MR. BAILEY E. BELL, REQUESTING RECONSIDERATION OF OUR CLAIMS DIVISION SETTLEMENT DATED FEBRUARY 28, 1961, WHICH DISALLOWED YOUR CLAIM FOR INTEREST ON THE JUDGMENT RENDERED IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ALASKA, IN THE ABOVE-ENTITLED CASE. THE CLAIM FOR INTEREST WAS DISALLOWED ON THE BASIS THAT SECTION 1302 OF PUBLIC LAW 814, 84TH CONGRESS, APPROVED JULY 27, 1956, 70 STAT. 694, 31 U.S.C. 724A, LIMITS PAYMENT OF INTEREST ON JUDGMENTS OF THE DISTRICT COURTS TO SUCH JUDGMENTS AS HAVE BECOME FINAL AFTER REVIEW ON APPEAL OR PETITION BY THE UNITED STATES. THE UNITED STATES TOOK NO APPEAL IN THE INSTANT CASE AND HENCE THE CLAIM WAS DISALLOWED.

THE COURT DECISION, HIGGINSON V. SCHOENEMAN, 190 F.2D 32, CITED IN YOUR ATTORNEY'S LETTER, INVOLVED A SITUATION WHERE A JUDGMENT OF THE COURT OF CLAIMS INCLUDED INTEREST ALTHOUGH THE STATUTE PROHIBITED THE PAYMENT OF INTEREST DURING THE TIME THE CLAIMANT WAS A RESIDENT OF ANOTHER COUNTRY. IN YOUR CASE THE JUDGMENT DID NOT INCLUDE INTEREST AND ACCORDINGLY THE CITED COURT DECISION IS NOT APPLICABLE TO THE FACTS HERE INVOLVED. REGARD TO THE STATUTE OF ALASKA REFERRED TO BY YOUR ATTORNEY WHICH PROVIDES THAT JUDGMENTS IN THE STATE OF ALASKA SHALL BEAR INTEREST AT THE RATE OF SIX PERCENTUM PER ANNUM, SUCH STATUTE HAS NO APPLICATION TO JUDGMENTS RENDERED AGAINST THE FEDERAL GOVERNMENT. UNITED STATES V. SHERMAN, 98 U.S. 565, 566.

GENERALLY SPEAKING, PRIOR TO JULY 27, 1956, THERE WERE NO FUNDS AVAILABLE FOR THE PAYMENT OF JUDGMENTS RENDERED AGAINST THE UNITED STATES AND IT WAS NECESSARY THAT THE AMOUNT OF EACH JUDGMENT BE CERTIFIED TO THE CONGRESS FOR A SPECIFIC APPROPRIATION FOR PAYMENT. SECTION 1302 OF PUBLIC LAW 814 ESTABLISHED A PERMANENT APPROPRIATION FOR THE PAYMENT OF JUDGMENTS (NOT IN EXCESS OF $100,000 IN ANY ONE CASE) AND INTEREST THEREON IN CERTAIN CASES. THAT SECTION PROVIDES:

"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 PROVIDE (SIC) FOR, AS CERTIFIED BY THE COMPTROLLER GENERAL, OF JUDGMENTS (NOT IN EXCESS OF $100,000 IN ANY ONE CASE) RENDERED BY THE DISTRICT COURTS AND THE COURT OF CLAIMS AGAINST THE UNITED STATES WHICH HAVE BECOME FINAL, 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, U.S.C. 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): PROVIDED FURTHER, THAT WHENEVER A JUDGMENT RENDERED BY THE COURT OF CLAIMS IS PAYABLE FROM THIS APPROPRIATION, INTEREST PAYABLE THEREON IN ACCORDANCE WITH SUBSECTION 2516 (B) OF TITLE 28, U.S.C. SHALL BE COMPUTED FROM THE DATE OF THE FILING OF THE TRANSCRIPT THEREOF IN THE GENERAL ACCOUNTING OFFICE.'

THE JUDGMENT IN THE INSTANT CASE IS IN AN AMOUNT LESS THAN $100,000; WAS RENDERED BY A DISTRICT COURT AGAINST THE UNITED STATES; HAS BECOME FINAL; AND, NO APPROPRIATION FOR ITS PAYMENT HAS OTHERWISE BEEN PROVIDED. THUS, IT PROPERLY WAS PAYABLE FROM THE APPROPRIATION MADE BY SECTION 1302. IS WELL ESTABLISHED, HOWEVER, THAT INTEREST MAY BE CHARGED AGAINST THE UNITED STATES ONLY IF SPECIFICALLY PROVIDED BY STATUTE OR BY A VALID CONTRACT. THE CLAIM IS NOT THE TYPE WHICH DRAWS INTEREST AS A MATTER OF LAW NOR DOES IT ARISE UNDER A CONTRACT PROVIDING FOR INTEREST. IT THUS APPEARS INTEREST WOULD BE ALLOWABLE, IF AT ALL, ONLY BY VIRTUE OF 28 U.S.C. 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 QUOTED ABOVE. THE 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.

UNDER THE STATUTE YOUR CLAIM FOR INTEREST WOULD BE ALLOWABLE ONLY ON THE BASIS THAT THE GOVERNMENT'S ACTION IN FILING A NOTICE OF APPEAL ON NOVEMBER 28, 1960, WHICH WAS DISMISSED ON JANUARY 19, 1961, CONSTITUTED A "REVIEW" AND AN "AFFIRMANCE" BY THE COURT OF APPEALS. THE ISSUANCE OF A MANDATE OF AFFIRMANCE PRESUPPOSES A REVEIW OF THE MERITS AND THE MERE DISMISSAL OF THE NOTICE OF APPEAL IN NO SENSE INDICATES SUCH ACTION HAS TAKEN PLACE. IN YOUR CASE, THERE HAVING BEEN NO "REVIEW" OF THE MERITS AND NO MANDATE OF AFFIRMANCE HAVING BEEN ISSUED, INTEREST IS NOT PAYABLE UNDER SECTION 1302. SEE, IN THIS CONNECTION, 30 COMP. GEN. 238.

ACCORDINGLY, THE ACTION TAKEN IN THE SETTLEMENT IN NOT ALLOWING INTEREST ON THE JUDGMENT IS SUSTAINED.