B-191208-O.M. June 2, 1978
B-191208-O.M.: Jun 2, 1978
The claim by Mister Ralpho is based on title I of the Micronesian Claims Act of 1971. Alleging that his right to a fair hearing was abridged by the Commission's reliance upon "secret" extra-record evidence in determining the amount to be awarded him. The Circuit Court remanded the case to the District Court with instructions to direct the Commission "to give such relief as is appropriate. It appears that a petition for certiorari to the United States Supreme Court is being contemplated. The parties stipulated that plaintiff is entitled to receive at least $268. Pertinent statutory provisions are set forth below: 28 U.S.C. Shall be made on settlements by the General Accounting Office after certification by the Attorney General that it is in the interest of the United States to pay the same.
B-191208-O.M. June 2, 1978
Director, Claims Division.
Returned. The claim by Mister Ralpho is based on title I of the Micronesian Claims Act of 1971, 50 U.S.C. App. Secs. 2019 et seq. (Supp. V, 1975). That statute provides for a determination of damages by the Micronesian Claims Commission (Commission) and the subsequent payment from the Micronesian Claims Fund established by the Act. After exhausting the administrative remedies prescribed by the Act, claimant filed suit in the District Court for the District of Columbia, alleging that his right to a fair hearing was abridged by the Commission's reliance upon "secret" extra-record evidence in determining the amount to be awarded him. Ralpho sought mandatory, injunctive, and declaratory relief.
The District Court dismissed claimant's suit on the basis of section 201 of the Act, 50 U.S.C. App. Sec. 2020, which provides that settlements made by the Commission shall be " final and conclusive for all purposes." The Court of Appeals, District of Columbia Circuit, reversed the District Court and held that section 201 does not preclude judicial review of constitutional questions or of complaints that the Commission "has disregarded unambiguous statutory directives." Mister Ralpho v. Bell, 569 F.2d 607 (March 29, 1977)(reversing District Court), rehearing denied, 569 F.2d 636 (September 12, 1977). The Circuit Court remanded the case to the District Court with instructions to direct the Commission "to give such relief as is appropriate," if the District Court found merit in Mister Ralpho's due process complaints. It appears that a petition for certiorari to the United States Supreme Court is being contemplated. Against this background, the parties stipulated that plaintiff is entitled to receive at least $268, "notwithstanding the outcome of this litigation."
Pertinent statutory provisions are set forth below:
28 U.S.C. Sec. 2414:
"Payment of judgments and compromise settlements.
"Payment of final judgments rendered by a district court against the United States shall be made on settlements by the General Accounting Office. Payment of final judgments rendered by a State or foreign court or tribunal against the United States, or against its agencies or officials upon obligations or liabilities of the United States, shall be made on settlements by the General Accounting Office after certification by the Attorney General that it is in the interest of the United States to pay the same.
"Whenever the Attorney General determines that no appeal shall be taken from a judgment or that no further review will be sought from a decision affirming the same, he shall so certify and the judgment shall be deemed final. * * *"
31 U.S.C. Sec. 724a:
"Appropriations for payment of judgments and compromise settlements against the United States.
"There are appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the payment, not otherwise provided for, as certified by the Comptroller General, of final judgments, awards, and compromise settlements, which are payable in accordance with the terms of section 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: * * *" (Emphasis added.)
The above provisions of law limit our authority to payment of final judgments. It has been our position that a judgment cannot become "final" for purposes of 28 U.S.C. Sec. 2414 and 31 U.S.C. Sec. 724a as long as it remains subject to alteration through the appellate process. This position was stated in a decision to the Attorney General, B-172574, May 19, 1971, in which we held that even where the possibility of a change in the judgment by a higher court was remote, we could not consider the judgment to be "final" until the appellate process was completed.
In certain limited situations, we have recognized that two judgments in one case may both be considered "final judgments" for purposes of payment. For example, in B-178389-O.M., May 14, 1973, a judgment for $190,000 was reduced to $144,292 and, as reduced, submitted for payment. After the judgment had been paid by means of congressional appropriation, the court reinstated the original amount. Stating that, technically, the judgment as finally amended constituted only one judgment, we concluded that it was nevertheless in the interest of both parties to consider the original and amended judgment as two judgments, and permitted payment of the additional $46,000 from the indefinite appropriation. Similar reasoning was followed in B-184223-O.M., November 18, 1975. In that case, the Justice Department had submitted a judgment for $132,665 to the Treasury Department for congressional appropriation, while an appeal on an award of pre-judgment interest was pending. The appropriation was enacted, and shortly thereafter, the appeal was decided against the Government. We concluded that it was in the best interest of the parties to treat the amended judgment for the pre-judgment interest as a separate "final judgment" and therefore payable from the indefinite appropriation. Both of these cases were based in part on B-157802-O.M., November 22, 1971, in which the court had technically issued two judgments, each of which was less than-100,000 with the aggregate exceeding that amount. We concluded that both could be paid from the indefinite appropriation.
In all of these cases, the consequence of our decision was to make the indefinite appropriation available in situations where the alternative would have been to await a congressional appropriation. Also, in all of these cases, the litigation had been completed at the time of our decision. In Ralpho, the litigation is still in process. Also, the need to wait for a congressional appropriation is not a factor. Finally, there has been no judgment in Ralpho, but only a stipulation entered into by the parties. A stipulation could be payable if it were the basis for dismissal of the action, but this is not the case here. Thus, there is nothing in Ralpho that may properly be viewed as a "final judgment." It is our opinion therefore that-- assuming payment could be made from the permanent appropriation, which, as discussed below, is not free from doubt--we have no legal authority to make the requested payment of the stipulated amount at this stage of the litigation.
Your second question concerns the appropriation to be charged. As noted, the permanent appropriation is available for final judgments and compromise settlements which are "not otherwise provided for." As part of the Micronesian Claims Act, Congress created the Micronesian Claims Fund to pay claims adjudicated by the Commission pursuant to title I of the Act. Further, Congress expressly provided that pro rata payments be made if the "allowable and adjudicated" claims exceed the $10 million authorized for the Fund. 50 U.S.C App. Sec. 2019c(c). Thus, the Fund was seen as the limit of the Government's financial commitment under title I. Also, it is significant that the Government's contribution to the Fund was expressly termed an "ex gratia contribution," i.e., one for which there would be no legal liability but for the Act. Next, we note that Congress has recently authorized the appropriation of "such sums as may be necessary to satisfy all adjudicated claims and final awards made by the Micronesian Claims Commission to date," contingent upon a 50 per cent matching contribution by the Government of Japan. Pub. L. No. 95-134 (October 15, 1977), Sec. 105, 91 Stat. 1159, 1160. Finally, we note that the courts have thus far not attempted to address the merits of any particular claim. The Court of Appeals in the instant case has merely remanded the case, directing the District Court to consider plaintiff's due process allegations and, if found meritorious, to direct the Commission to grant appropriate relief. If this directive could be carried out, it would appear that the Micronesian Claims Fund would be the proper source for payment. However, there are complexities and uncertainties which render a definitive ruling at this time impossible.
According to the file, the amount prorated for Ralpho is approximately $120, yet the parties stipulated a minimum of $268 and the indications are that Ralpho's claim may ultimately be determined at a higher sum. Moreover, it appears that the balance of the Fund may already have been disbursed. 569 F.2d at 639. Thus the ultimate resolution may depend on whether Congress appropriates the additional funds authorized by Pub. L. No. 95-134. Secondly, the Micronesian Claims Commission terminated its existence on October 15, 1976. Since the Commission was established "under the control and direction of the Chairman of the Foreign Claims Settlement Commission" (FCSC)(50 U.S.C. App. Sec. 2019b(a)), the litigation has been pursued against, among others, the Chairman of the FCSC. However, the FCSC would not seem to have the authority to grant the relief contemplated by the Court of Appeals. In one recent discussion of the case, it was noted that "To enforce the Court's decision, Congress must resurrect the Commission or give the FCSC the authority to act in its place." 9 International Journal of Georgetown University Law Center 1283, 1293 (1977). Thus, there is some doubt that the District Court will be able to carry out the Appeals Court's directive to send the case back to the Commission for appropriate relief.
The Court of Appeals, in denying the petition for rehearing, recognized these problems but made no attempt to resolve them. It did recognize the possibility, however, that a judgment might ultimately be rendered which the courts would have no "physical power to enforce." 569 F.2d at 639, n. 23. In view of the various uncertainties, it is possible that, at some future stage of the litigation, the court may attempt its own determination as to the extent of liability to the claimant. If this should happen, it is conceivable that the award could take on the character of a money judgment against the United States and arguably be payable from the permanent appropriation. While we are inclined to view this situation as "otherwise provided for" for purposes of 31 U.S.C. Sec. 724a, a determination as to the proper source of payment cannot be made at this time, but will depend on the nature and language of such judgment as may ultimately be rendered.
Milton J. Socolar for Paul G. Dembling General Counsel
The Comptroller General
We are forwarding the Stipulation reached in Mister Ralpho v. J. Haymond Bell, et. al., for your consideration.
The Department of Justice has advised us that Mister Ralpho's action resulted from the destruction of his home by U.S. Forces in World War II. The stipulation provides that plaintiff is entitled to receive at least $268 under the Micronesian Claims Act, 50 U.S.C. 2013, et. seq., notwithstanding the outcome of the litigation. Justice views the $268 as "good faith" money and feels that nonpayment at this time will impair future litigation.
Our first question concerns the finality of the Stipulation. 31 USC 724a provides that the Comptroller General will certify for payment final judgments, awards, and compromise settlements. Since litigation is continuing in Mister Ralpho, the Stipulation does not appear to be final. We do not know if the final settlement in the case will be in the form of a judgment or a compromise.
Our second question concerns the appropriation to be charged. 31 U.S.C. 724a provides funds, not otherwise provided, for the payment of judgments. The Department of Interior has advised us that Mister Ralpho's action arose under Title I of the Micronesian Act, 35 Stat. 92.Section 104(a)(2) of the act provides that claims covered by Title I shall be paid from the Micronesian Claims Fund. Interior further advised that the remaining funds are limited and have been prorated for all outstanding claims under the act. Claimants can apparently receive the prorated amounts if they sign a release, which Mister Ralpho has refused to do. The amount prorated for Mister Ralpho is approximately $120.Since funds have been appropriated for claims under the act, but appear insufficient to pay for Mister Ralpho, we need to know whether we may charge the indefinite appropriation.
Our conversations with Interior have been with Mr. Brewster Chapman (343- 5216), and with Justice, Mr. Ronald Glancz (739-3424).If you need further information from our Division, please contact Mr. Gregory L. Francis on (no. illegible.)
G. V. Hunt Chief, Payment Claims Branch