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1991
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91_1729a
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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
I II UNITED STATES v. TEXAS ____
Syllabus
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.