B-98868, JANUARY 19, 1951, 30 COMP. GEN. 315

B-98868: Jan 19, 1951

Additional Materials:

Contact:

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

 

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

MAKING THE UNITED STATES LIABLE FOR COURT FEES AND COSTS ONLY WHEN SUCH LIABILITY IS EXPRESSLY PROVIDED FOR BY AN ACT OF CONGRESS. 1951: REFERENCE IS MADE TO LETTER OF OCTOBER 13. REQUESTING TO BE ADVISED WHETHER FUNDS APPROPRIATED TO THE DEPARTMENT OF JUSTICE ARE AVAILABLE FOR THE PAYMENT OF THE FEES AND CHARGES PROMULGATED PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 40 OF THE BANKRUPTCY ACT. WHEREIN IT WAS HELD THAT. WERE AVAILABLE FOR THE PAYMENT OF COSTS OF LITIGATION IN BANKRUPTCY PROCEEDINGS. IT IS SUGGESTED. THAT SUBSEQUENT TO THE DATE OF SUCH DECISION THERE HAVE BEEN CHANGES IN THE LAW AND THE BANKRUPTCY PICTURE IN GENERAL WHICH MAY REQUIRE AN ANSWER DIFFERENT FROM THAT GIVEN IN THE DECISION REFERRED TO ABOVE.

B-98868, JANUARY 19, 1951, 30 COMP. GEN. 315

COURT COSTS - GOVERNMENT LIABILITY IN BANKRUPTCY PROCEEDINGS IN VIEW OF THE PROVISIONS OF 28 U.S.C. 2412 (A), MAKING THE UNITED STATES LIABLE FOR COURT FEES AND COSTS ONLY WHEN SUCH LIABILITY IS EXPRESSLY PROVIDED FOR BY AN ACT OF CONGRESS, AND OF THE ABSENCE OF ANY PROVISIONS IN THE BANKRUPTCY ACT, AS AMENDED, WHICH EXPRESSLY DIVEST THE UNITED STATES OF ITS STATUTORY IMMUNITY FROM THE PAYMENT OF SUCH CHARGES, COURT FEES AND COSTS PRESCRIBED PURSUANT TO SAID BANKRUPTCY ACT MAY NOT BE PAID FROM FUNDS APPROPRIATED TO THE DEPARTMENT OF JUSTICE.

COMPTROLLER GENERAL WARREN TO THE ATTORNEY GENERAL, JANUARY 19, 1951:

REFERENCE IS MADE TO LETTER OF OCTOBER 13, 1951, FROM THE ADMINISTRATIVE ASSISTANT ATTORNEY GENERAL, FILE A3-49-012, REQUESTING TO BE ADVISED WHETHER FUNDS APPROPRIATED TO THE DEPARTMENT OF JUSTICE ARE AVAILABLE FOR THE PAYMENT OF THE FEES AND CHARGES PROMULGATED PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 40 OF THE BANKRUPTCY ACT, AS AMENDED BY THE ACT OF JUNE 28, 1946, 60 STAT. 327, 11 U.S. CODE, 68 (C) (3).

AS INDICATED IN THE SAID LETTER, THIS OFFICE PREVIOUSLY RULED ON A SIMILAR QUESTION IN DECISION B-51568, DATED SEPTEMBER 10, 1945, WHEREIN IT WAS HELD THAT, IN THE ABSENCE OF STATUTORY AUTHORITY, NEITHER THE FUNDS APPROPRIATED TO THE DEPARTMENT OF JUSTICE, WHICH ACTS AS THE ATTORNEY FOR THE LOANING AGENCY, NOR THE FUNDS UNDER THE CONTROL OF THE LOANING AGENCY, WERE AVAILABLE FOR THE PAYMENT OF COSTS OF LITIGATION IN BANKRUPTCY PROCEEDINGS, EVEN THOUGH THE ESTATE INVOLVED MAY BE WITHOUT ASSETS. IT IS SUGGESTED, HOWEVER, THAT SUBSEQUENT TO THE DATE OF SUCH DECISION THERE HAVE BEEN CHANGES IN THE LAW AND THE BANKRUPTCY PICTURE IN GENERAL WHICH MAY REQUIRE AN ANSWER DIFFERENT FROM THAT GIVEN IN THE DECISION REFERRED TO ABOVE.

SECTION 68 (C) (3) OF TITLE 11, U.S. CODE, PROVIDES AS FOLLOWS:

(3) CHARGES FOR THE EXPENSE OF SPECIAL SERVICES RELATING TO OR IN CONNECTION WITH PROCEEDINGS BEFORE REFEREES SHALL BE MADE AND COLLECTED BY THE REFEREES IN ACCORDANCE WITH REGULATIONS TO BE PRESCRIBED BY THE DIRECTOR, WITH THE APPROVAL OF THE CONFERENCE, AND THE PROCESS SHALL BE PAID BY THE REFEREES TO THE CLERK FOR TRANSMISSION TO THE TREASURY OF THE UNITED STATES FOR DEPOSIT IN THE REFEREES' EXPENSE FUND.

PURSUANT TO THE ABOVE PROVISION OF LAW, A SCHEDULE OF FEES WAS PRESCRIBED BY THE DIRECTOR OF THE ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS AND APPROVED BY THE JUDICIAL CONFERENCE AND PROMULGATED BY BULLETIN 327 OF THE ADMINISTRATIVE OFFICE DATED JUNE 26, 1947, EFFECTIVE JULY 1, 1947.

NOTHING IS SAID IN BULLETIN NO. 327 WITH RESPECT TO THE LIABILITY OF THE UNITED STATES FOR PAYMENT OF FEES IN CASES IN WHICH IT IS INTERESTED, AND IT IS STATED IN THE LETTER FROM THE ADMINISTRATIVE ASSISTANT THAT YOUR OFFICE HAS NO INFORMATION REGARDING THE EXTENT TO WHICH CONSIDERATION WAS GIVEN TO THE RULE EXEMPTING THE SOVEREIGN WHEN THE SCHEDULE OF FEES WAS CONSIDERED BY THE JUDICIAL CONFERENCE. IT IS POINTED OUT, HOWEVER, THAT AT ITS SEPTEMBER 1947 SESSION THE CONFERENCE REFUSED TO GRANT TO THE RECONSTRUCTION FINANCE CORPORATION AN EXEMPTION FROM LIABILITY FOR SUCH FEES EVEN THOUGH SECTION 3 (A) OF THE RECONSTRUCTION FINANCE CORPORATION ACT AS AMENDED BY THE ACT OF JUNE 30, 1947, 61 STAT. 202 (15 U.S.C. 603), GRANTS THE CORPORATION THE SAME IMMUNITIES AND EXEMPTIONS FROM THE PAYMENT OF COSTS, CHARGES, AND FEES AS ARE ACCORDED THE UNITED STATES PURSUANT TO SECTIONS 543, 548, 555, 557, 578, AND 578A OF TITLE 28, U.S. CODE, 1940 EDITION.

GENERALLY, GOVERNMENT CORPORATIONS SUCH AS THE RECONSTRUCTION FINANCE CORPORATION WHICH MAY SUE AND BE SUED ARE, IN THE ABSENCE OF LEGISLATION TO THE CONTRARY, SUBJECT TO THE SAME STANDARDS APPLICABLE TO OTHER LITIGANTS, AND ARE NOT VESTED WITH GOVERNMENTAL IMMUNITY FROM THE PAYMENT OF COSTS. RECONSTRUCTION FINANCE CORP. V. J. G. MENIHAN CORP., ET AL., 312 U.S. 81. CF. NATIONAL HOME FOR DISABLED VOLUNTEER SOLDIERS V. PARRISH, 229 U.S. 494. HENCE, THE STATUTORY EXEMPTION FROM COSTS PROVIDED BY 28 U.S.C. 2412 (A) WHICH STATES THAT "THE UNITED STATES SHALL BE LIABLE FOR FEES AND COSTS ONLY WHEN SUCH LIABILITY IS EXPRESSED PROVIDED FOR BY THE ACT OF CONGRESS" WOULD NOT APPEAR TO BE APPLICABLE TO CORPORATIONS SUCH AS THE RECONSTRUCTION FINANCE CORPORATION. SO FAR AS CONCERNS THE ACTION OF THE JUDICIAL CONFERENCE REFERRED TO IN THE LETTER OF OCTOBER 13, 1950, APPARENTLY IT IS THE VIEW OF THE CONFERENCE THAT THE IMMUNITIES AND EXEMPTIONS EXPRESSLY GRANTED TO THE RECONSTRUCTION FINANCE CORPORATION, NOW RECODIFIED IN TITLE 28 AS SECTIONS 551, 604, 751, 1913, 1914 AND 1923, DO NOT EXTEND TO THE CHARGES FOR SPECIAL SERVICES ESTABLISHED PURSUANT TO 11 U.S. CODE 68 (C) (3). IN ANY EVENT THERE IS PERCEIVED NO PROPER BASIS FOR CONSTRUING THE ACTION OF THE JUDICIAL CONFERENCE AS A DETERMINATION THAT THE IMMUNITY OF THE UNITED STATES FROM COSTS IS NOT APPLICABLE IN RESPECT TO THESE CHARGES.

UNDER THE CIRCUMSTANCES, AND SINCE NOTHING IS FOUND IN THE BANKRUPTCY ACT, AS AMENDED, NOR IN BULLETIN NO. 327, EXPRESSLY PROVIDING THAT THE UNITED STATES SHALL PAY THE FEES AND COSTS HERE INVOLVED, IT MUST BE CONCLUDED THAT THE FUNDS APPROPRIATED TO THE DEPARTMENT OF JUSTICE ARE NOT AVAILABLE FOR THE PAYMENT OF THE CHARGES IN QUESTION.