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- NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
- being done in connection with this case, at the time the opinion is issued.
- The syllabus constitutes no part of the opinion of the Court but has been
- prepared by the Reporter of Decisions for the convenience of the reader.
- See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
-
- SUPREME COURT OF THE UNITED STATES
-
- Syllabus
-
- UNITED STATES et al. v. TEXAS et al.
- certiorari to the united states court of appeals for
- the fifth circuit
- No. 91-1729. Argued March 1, 1993-Decided April 5, 1993
-
- States participating in the Food Stamp Program receive from the
- United States Department of Agriculture coupons that they
- distribute to qualified individuals and households. If they distribute
- the coupons through the mail, they must reimburse the Federal
- Government for part of the replacement cost for any coupons that are
- lost or stolen. Texas, which contractually bound itself to comply with
- all federal regulations governing the program, incurred substantial
- mail issuance losses and was informed that prejudgment interest
- would begin to accrue on its debt unless payment was made within
- 30 days. After being denied administrative relief, Texas filed suit
- against the United States, arguing, inter alia, that the Debt
- Collection Act of 1982 (Act) abrogated the United States' common law
- right to collect prejudgment interest on debts owed to it by the
- States. The District Court granted summary judgment in favor of
- the United States, but the Court of Appeals reversed.
- Held: The Act left in place the States' federal common law obligation to
- pay prejudgment interest on debts owed to the Federal Government.
- Pp. 4-10.
- (a) It is a longstanding rule that a party owing debts to the Federal
- Government must pay prejudgment interest where the underlying
- claim is a contractual obligation to pay money. Also longstanding is
- the principle that statutes invading the common law are to be read
- with a presumption favoring retention of existing law except when a
- statutory purpose to the contrary is evident. This presumption is not
- limited to state common law or federal maritime law. Pp. 4-5.
- (b) The Act is silent as to the States' obligations to pay
- prejudgment interest. That the Act applies only to debts owed by a
- ``person'' establishes only Congress' intent to exempt the States from
- the obligation to pay interest in accordance with the Act's mandatory
- provisions, not an intent to relieve them of their common law
- obligation. Given the differences between the Act-which requires
- federal agencies to collect prejudgment interest at a pre-established
- rate-and the common law-which gives federal courts flexibility in
- determining whether to impose interest and the appropriate rate-it
- is logical to conclude that the Act was intended to reach only private
- debtors and to leave the States alone. The Act's purpose-to enhance
- the Government's debt collection ability-reinforces this reading of
- its plain language. Texas' proposed reading, however, would give
- delinquent States less incentive to pay their debts. Neither the fact
- that the Food Stamp Act has a mechanism to collect debts nor the
- fact that Congress did not see the States as the root of the debt
- collection problem when it passed the Debt Collection Act indicates
- that Congress meant to relieve the States of their common law
- obligation. Texas incorrectly argues that the reimbursement
- requirement is not subject to prejudgment interest because it is a
- penalty rather than a contractual obligation. Rodgers v. United
- States, 332 U. S. 371, 374-376, distinguished. Pp. 5-10.
- 951 F. 2d 645, reversed.
- Rehnquist, C. J., delivered the opinion of the Court, in which White,
- Blackmun, O'Connor, Scalia, Kennedy, Souter, and Thomas, JJ.,
- joined. Stevens, J., filed a dissenting opinion.
-