The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_1729/91_1729.zd

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SUPREME COURT OF THE UNITED STATES
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No. 91-1729
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UNITED STATES, et al., PETITIONERS v.
TEXAS et al.
on writ of certiorari to the united states court
of appeals for the fifth circuit
[April 5, 1993]

  Justice Stevens, dissenting.
  As the Court correctly notes, the requirement that
private parties must pay prejudgment interest on contrac-
tual debts owed to the United States is a common-law
rule of long standing.  Ante, at 4.  Over a century ago we
recognized an equally well-established exception to that
rule: the United States is not entitled to recover interest
from a State unless the State's consent to pay such
interest has been expressed in a statute or binding
contract.  United States v. North Carolina, 136 U. S. 211
(1890).  The reason for this exception is not any sover-
eign immunity attributable to a State, but the venerable
presumption that a sovereign State is always ready,
willing and able to discharge its obligations promptly.
  The presumption that a sovereign State is -always ready
to pay what it owes- may well have been just as fic-
tional as the presumption that the King could do no
wrong, but it nevertheless was firmly embedded in the
common law.  Moreover, even today the tradition of
according special respect to a sovereign State whenever
it is subjected to the coercive powers of judicial tribunals
is very much alive.  See e.g., Puerto Rico Aqueduct and
Sewer Authority v. Metcalf & Eddy, Inc., 506 U. S. ___,
___ (1993) (slip op., at 7).  The ancient common law
presumption and a continuing recognition of -the impor-
tance of ensuring that the State's dignitary interests can
be fully vindicated,- ibid., best explain why Congress
deliberately omitted any provision for the collection of
interest from a sovereign State when it enacted the Debt
Collection Act in 1982.
  The Court is also correct in noting that we are reluctant
to infer a legislative abrogation of the common law.  Ante,
at 4.  We presume that Congress understands the legal
terrain in which it operates, see Cannon v. University of
Chicago, 441 U. S. 677, 698-699 (1979), and we therefore
expect Congress to state clearly any intent to reshape that
terrain.  Before we can apply this reluctance to infer
legislative abrogations of the common law, however, we
must determine what that terrain was-or at least how
it might have been perceived-when Congress acted; Con-
gress cannot think it necessary, and we should not expect
it, to state clearly an intent to abrogate a common-law
rule that does not exist.
  When Congress enacted the Debt Collection Act of 1982,
the question whether interest might ever be collected from
a sovereign State unless explicitly authorized was unde-
cided by this Court.  We had never held that the United
States could demand prejudgment interest on a debt owed
to it by a State.  Not until five years later, in West
Virginia v. United States, 479 U. S. 305 (1987), did we
hold for the first time that in some circumstances the
United States may demand prejudgment interest from the
States themselves.  The Court therefore rewrites the
history of our common law when it predicates its entire
analysis of this case on what it creatively describes as
-the United States' federal common-law right to collect
prejudgment interest on debts owed to it by the States.-
Ante, at 1.  Only through hindsight-or by crediting
Congress with a prescience as to what the common law
would become-can the Court find that the 97th Congress
did not intend to abrogate a rule that did not then exist.
Congress had every reason to think it was writing on a
-clean slate,- ante, at 4-5, when it decided to exclude the
State from its definition of the class of persons who must
pay interest on debts to the United States.  There was no
occasion for Congress to specifically abrogate a principle
that it had no reason to think stood in its way.
  In Board of Comm'rs of Jackson County v. United
States, 308 U. S. 343 (1939), the Court held that the
United States, suing on behalf of a Native American,
could not recover prejudgment interest from a county even
though the county had improperly collected those taxes.
While noting that -interest in inter-governmental litigation
has no . . . roots in history,- id., at 351, the Court did not
rule out the possibility that in an unusual case, consider-
ations of fairness might make it appropriate to collect
such interest from a state agency.  See id., at 352.  Only
to that small extent, therefore, was any aspect of our
decision in Board of Comm'rs -reaffirmed,- ante, at 4, in
West Virginia, supra.
  In fact, in West Virginia, we rejected the balancing of
equities that Board of Comm'rs had suggested might be
the only basis for charging a State with prejudgment
interest.  There, the State of West Virginia had refused
to reimburse the Federal Government for costs advanced
to it under the Disaster Relief Act of 1970.  The Court
held that -any rule exempting a sovereign from the
payment of prejudgment interest not only does not apply
of its own force to the State's obligations to the Federal
Government, cf. Library of Congress v. Shaw, 478 U. S.
310 (1986), but also does not represent a policy the
federal courts are obliged to further.-  479 U. S., at
311-312 (footnotes omitted).  This was the first statement
by this Court suggesting that the States might be gener-
ally liable for prejudgment interest on the contractual
claims brought by the Federal Government.  And, even
though we came close to saying in West Virginia that such
interest is generally available, we did not go that far.
Even in 1987-five years after the Debt Collection Act
was passed-it was not clear to us, to Congress, or to the
States, that the obligation of a State to pay prejudgment
interest to the Government would extend to a typical
contract claim.
  Thus, even though the Court today suggests that its
decision is merely an application of Board of Comm'rs and
West Virginia, it actually takes a significant and indepen-
dent step toward equating the Government's right to
collect prejudgment interest from the States with the
Government's right to demand prejudgment interest from
all private parties in every case.  Even if such an equa-
tion were well advised, which it may well be, it would say
nothing about whether Congress had any reason to know
in 1982 that the common law was moving in that direc-
tion, much less that it had already arrived there.  Yet the
Court supports today's decision because the 97th Congress
did not clearly state its intention to abrogate a rule that
we now make clear for the first time.
  My point, in sum, is not that the States had an abso-
lute common law immunity from a claim for prejudgment
interest in 1982; it is only that the State's obligation to
pay such interest was so much less than a confirmed rule
that we cannot say that the 1982 enactment -left [it] in
place,- ante, at 9.  -[F]avoring the retention of long-estab-
lished and familiar principles,- Isbrandtsen Co. v. Johnson,
343 U. S. 779, 783 (1952), does not mean favoring the
retention of rules that have not yet fallen into place.
  I respectfully dissent.