The issue presented was whether interest should be paid on judgments rendered for the plaintiffs whose judgment payments were delayed solely because the United States appealed and lost. The plaintiffs were awarded judgments in their cases, and the court directed that payment be made in a lump sum to the Clerk of the District Court who would then distribute the money to the individual plaintiffs. After receiving the checks, but prior to distribution of the funds, the Internal Revenue Service asked that taxes should be withheld from the judgments. This request was not complied with because the judgments directed payment of the gross amount without providing that taxes should be withheld. The United States then filed motions to restrain distribution of the judgment money and to amend the judgments to require withholding taxes. The District Court denied these motions. The United States filed an appeal which was later dismissed after the parties entered into a stipulation. The plaintiffs contended that they were entitled to be paid interest on their original judgments because of the delay they encountered in receiving their money. GAO held that although the question raised on the appeal was a collateral issue, unrelated to the merits of the underlying judgment, the appeal had delayed the payment of the judgment in the same manner as a direct appeal on the merits of the judgment. Accordingly, the rule involving the payment of interest applied, and interest should be paid to all those plaintiffs in this case whose judgment payments were delayed as a result of the appeal.
Skip to Highlights