B-180210 February 27, 1974

B-180210 February 27, 1974

S. John Cottone, Esquire United States Attorney Middle District of Pennsylvania P.O. Box 309 Scranton, Pennsylvania 18501

Dear Mr. Cottone:

This refers to your letter of November 20, 1973, reference SJC:po, with enclosure, concerning the payment of interest in the above-entitled case.

Our Transportation and Claims Division, pursuant to section 1302 of Public Law 814, 84th Congress, as amended, 31 U.S.C. 724a, issued a certificate of settlement on September 17, 1973, in the amount of the judgment, $9,749.44 (without interest). While the judgment also provided for the payment of costs, no costs had been assessed against the United States at the time. Upon receipt in our Office of a certified copy of the costs taxed by the Court on August 27, 1973, in the amount of $204,60, our Transportation and Claims Division on October 12, 1973, issued another settlement in the amount of $204,60. The two checks were forwarded to you as United State Attorney, Scranton, Pennsylvania, for delivery to the parties entitled. In the certified copy of the costs taxed by the Court the following notation appears: "In addition to the above, Plaintiffs claim interest at the rate of 6% from the date of Judement." No interest was paid on the judgment for the reasons set out below.

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, as amened, 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 in pertinent part as follows:

"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):* * *"

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, there is no room for doubt that it properly was payable from the appropriation made by section 1302, as amended. It is well established, however, that interest may be charged against the United States only if specifically provided by statute or by a valid contract. See 51 Comp. Gen. 251, 24 A.L.R. 2d 985, sec. 19 (1952). The claim is not the type which draws interest as a matter of law nor did 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, as amended, 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.

Accordingly, since the United States took on appeal in the instant case, payment of interest on the judgment is not authorized. See United States v. Varner, 400 F.2d. 369 (1968); United States v. State of Maryland, 349 F.2d. 693 (1965); United States v. Culp, 346 F.2d. 35 (1965); United States v. Jacobs, 308 F.2d. 906 (1962); Chicago, Rock Island & Pacific Railroad Co. v. United States, 206 F. Supp. 795 (1962).

Sincerely yours,

Deputy Comptroller General of the United States