B-158778, APR. 14, 1966

B-158778: Apr 14, 1966

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WAS ENTERED ON SEPTEMBER 2. ARE PROVIDED FOR BY THE SUPPLEMENTAL APPROPRIATION ACT. IT IS YOUR CONTENTION THAT INTEREST ON THE JUDGMENT IS PAYABLE. FROM THE DATE THE JUDGMENT WAS PRESENTED FOR PAYMENT. THE APPROPRIATION IS FOR THE PAYMENT OF INTEREST WHEN "PROVIDED BY LAW.'. THE RULE EMBODIED IN SECTION 2516 (A) IS "A COMPLETE ONE COVERING ALL TYPES OF CLAIMS. THAT THE SECTION IS APPLICABLE TO COURT OF CLAIMS JUDGMENTS HAS BEEN SPECIFICALLY HELD IN UNITED STATES V. ALTHOUGH IN THAT CASE THE ACTION IN THE COURT OF CLAIMS WAS FOUNDED UPON A JUDGMENT OF THE CUSTOMS COURT. IT IS CONTENDED THAT 28 U.S.C. 2517 (B) PROVIDES FOR THE PAYMENT OF INTEREST ON COURT OF CLAIMS JUDGMENTS AGAINST THE UNITED STATES.

B-158778, APR. 14, 1966

TO MR. RALPH HAMMAR:

YOUR LETTER OF FEBRUARY 24, 1966, REQUESTS REVIEW OF THE ACTION OF OUR CLAIMS DIVISION DATED FEBRUARY 18, 1966, WHICH DISALLOWED A CLAIM FOR INTEREST ON THE JUDGMENT RENDERED BY THE COURT OF CLAIMS IN THE CASE OF ERIE TECHNOLOGICAL PRODUCTS, INC. AND CLEVITE CORPORATION V. UNITED STATES, CT.CL. NO. 147-56.

THE JUDGMENT, INVOLVING A CLAIM FOR PATENT INFRINGEMENT, WAS ENTERED ON SEPTEMBER 2, 1965, FOR THE SUM OF $2,000,000. PAYMENT THEREOF AND OTHER DESIGNATED JUDGMENTS AGAINST THE UNITED STATES, ARE PROVIDED FOR BY THE SUPPLEMENTAL APPROPRIATION ACT, 1966, APPROVED OCTOBER 31, 1965, PUB.L. 89 -309, 79 STAT. 1133. THE ACT APPROPRIATES FUNDS FOR THE PAYMENT OF THE JUDGMENTS, INCLUDING ,SUCH AMOUNTS AS MAY BE NECESSARY TO PAY INTEREST (AS AND WHEN SPECIFIED IN SAID JUDGMENTS OR PROVIDED BY LAW).' IT FURTHER PROVIDES "THAT UNLESS OTHERWISE SPECIFICALLY REQUIRED BY LAW OR BY THE JUDGMENT, PAYMENT OF INTEREST WHENEVER APPROPRIATED FOR HEREIN SHALL NOT CONTINUE FOR MORE THAN THIRTY DAYS AFTER THE DATE OF APPROVAL OF THE ACT.'

THE JUDGMENT IN FAVOR OF ERIE TECHNOLOGICAL PRODUCTS, INC. AND CLEVITE CORPORATION DOES NOT PROVIDE FOR THE PAYMENT OF INTEREST. IT IS YOUR CONTENTION THAT INTEREST ON THE JUDGMENT IS PAYABLE, AS A MATTER OF LAW, FROM THE DATE THE JUDGMENT WAS PRESENTED FOR PAYMENT, SEPTEMBER 3, 1965, UNTIL NOVEMBER 16, 1965, THE DATE OF THE CHECK ISSUED IN PAYMENT OF THE JUDGMENT.

THE APPROPRIATION IS FOR THE PAYMENT OF INTEREST WHEN "PROVIDED BY LAW.' SECTION 2516 (A) OF TITLE 28, U.S.C. PROVIDES THAT INTEREST ON A CLAIM AGAINST THE UNITED STATES SHALL BE ALLOWED IN A JUDGMENT OF THE COURT OF CLAIMS "ONLY UNDER A CONTRACT OR ACT OF CONGRESS EXPRESSLY PROVIDING FOR PAYMENT THEREOF.' THE SECTION SETS FORTH THE TRADITIONAL RULE THAT INTEREST ON CLAIMS AGAINST THE UNITED STATES CANNOT BE RECOVERED IN THE ABSENCE OF AN EXPRESS PROVISION TO THE CONTRARY IN THE RELEVANT STATUTE OR CONTRACT. UNITED STATES V. THAYER WEST POINT HOTEL CO., 329 U.S. 585, 588. THE RULE EMBODIED IN SECTION 2516 (A) IS "A COMPLETE ONE COVERING ALL TYPES OF CLAIMS, INCLUDING THOSE ARISING OUT OF PRE-EXISTING JUDGMENTS.' UNITED STATES V. N. Y. RAYON IMPORTING CO., 329 U.S. 654, 661. THAT THE SECTION IS APPLICABLE TO COURT OF CLAIMS JUDGMENTS HAS BEEN SPECIFICALLY HELD IN UNITED STATES V. EASTPORT STEAMSHIP CORPORATION, 255 F.2D 795, 804. THE UNITED STATES COURT OF APPEALS, SECOND CIRCUIT, STATED:

"IN UNITED STATES V. NEW YORK RAYON IMPORTING CO. * * * THE SUPREME COURT HELD THAT THE PREDECESSOR OF SECTION 2516/A) APPLIED NOT ONLY TO ORIGINAL CLAIMS AGAINST THE UNITED STATES BUT ALSO TO JUDGMENTS OBTAINED AGAINST IT. ALTHOUGH IN THAT CASE THE ACTION IN THE COURT OF CLAIMS WAS FOUNDED UPON A JUDGMENT OF THE CUSTOMS COURT, THE RATIONALE UNDERLYING THE SUPREME COURT'S DECISION APPLIES EQUALLY TO JUDGMENTS RENDERED BY THE COURT OF CLAIMS.'

IT IS CONTENDED THAT 28 U.S.C. 2517 (B) PROVIDES FOR THE PAYMENT OF INTEREST ON COURT OF CLAIMS JUDGMENTS AGAINST THE UNITED STATES. THAT SECTION PROVIDES AS FOLLOWS:

"/B) PAYMENT OF ANY SUCH JUDGMENT AND OF INTEREST THEREON SHALL BE A FULL DISCHARGE TO THE UNITED STATES OF ALL CLAIMS AND DEMANDS ARISING OUT OF THE MATTERS INVOLVED IN THE CASE OR CONTROVERSY.'

WE DO NOT CONSTRUE THE SECTION AS A BLANKET CONGRESSIONAL AUTHORIZATION FOR THE PAYMENT OF INTEREST ON COURT OF CLAIMS JUDGMENTS AGAINST THE UNITED STATES. CONGRESS HAS AUTHORIZED PAYMENT OF INTEREST ON SUCH JUDGMENTS (1) WHEN AFFIRMED BY THE SUPREME COURT AFTER REVIEW ON PETITION OF THE UNITED STATES (28 U.S.C. 2516 (B) ( AND (2) WHERE IT IS DETERMINED THAT A CLAIM ON ACCOUNT OF WHICH THE GOVERNMENT WITHHELD PAYMENT OF THE JUDGMENT IS WITHOUT MERIT (31 U.S.C. 227). WHERE CONGRESS HAS AUTHORIZED THE PAYMENT OF INTEREST ON JUDGMENTS IT HAS EXPRESSLY PROVIDED THEREFOR IN CONSONANCE WITH SECTION 2516 (A). SEE 31 U.S.C. 724A. TO VIEW SECTION 2517 (B) AS A BLANKET AUTHORITY FOR THE PAYMENT OF INTEREST WOULD DO VIOLENCE TO THE PROVISIONS OF SECTION 2516 (A) AND ASCRIBE LITTLE SIGNIFICANCE TO SECTION 2516 (B) AND SECTION 227. RATHER, WE READ SECTION 2517 (B) AS MERELY STATING THE EFFECT THAT PAYMENT OF A JUDGMENT, INCLUDING INTEREST WHERE AUTHORIZED, SHALL HAVE. CF. EDGAR M. CARPENTER V. UNITED STATES, 123 CT.CL. 517, 520.

THAT THIS IS THE PURPOSE OF THE SECTION, AND NOT THE BLANKET AUTHORIZATION FOR PAYMENT OF INTEREST, IS APPARENT UPON LOOKING TO THE SOURCE FROM WHICH THE PRESENT SECTION STEMS, SECTION 285, TITLE 28, U.S.C. 1940 EDITION. THE EARLIER SECTION PROVIDES:

"THE PAYMENT OF THE AMOUNT DUE BY ANY JUDGMENT OF THE COURT OF CLAIMS, AND OF ANY INTEREST THEREON ALLOWED BY LAW, AS PROVIDED BY LAW, SHALL BE A FULL DISCHARGE TO THE UNITED STATES OF ALL CLAIMS AND DEMAND TOUCHING ANY OF THE MATTERS INVOLVED IN THE CONTROVERSY.'

IN LIGHT OF THE FOREGOING, AND AS THERE APPEARS TO BE NO CONGRESSIONAL AUTHORIZATION FOR THE PAYMENT OF INTEREST IN THIS CASE, THE DISALLOWANCE OF THE CLAIM IS SUSTAINED.