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Civil Resource Manual

211. Interest Recoverable By The Government

The United States is entitled to recover pre-judgment interest. Royal Indemnity Co. v. United States, 313 U.S. 289 (1941); Billings v. United States, 232 U.S. 261, 284-88 (1913); United States v. Eastern Airlines, Inc., 366 F.2d 316, 321 (2d Cir. 1966). Interest should be demanded in every case in which the collection of interest is appropriate. When the government prevails in a suit where there is no contract or instrument which contains a provision for interest, the rate of the interest to be recovered for delayed payment of the obligation to the United States should be determined by the interest provisions of the Debt Collection Act of 1982, 31 U.S.C. § 3717, and the Federal Claims Collection Standards, 4 C.F.R. § 102.13. See also Commercial Litigation Branch Monograph "Interest on Claims By and Against the Government" (June 1984).

When interest is provided for by note or contract, the complaint should ask for pre-judgment interest at the rate specified therein. When money is paid out or property is delivered as a result of fraud or deceit, interest should be demanded from the date the debtor received the benefit of the funds or property. In other cases, interest should be collected from the date of notice of overpayment, or the first demand for repayment, as the case may be. R.F.C. v. Service Pipe Line Co., 206 F.2d 814 (10th Cir. 1953). In suits for the recovery of balances due, the Postal Service interest may be recovered at the rate of six percent from the time of default. 28 U.S.C. § 2718. Interest is also expressly recoverable in suits to recover moneys paid or credits granted by the Postal Service as a result of mistake, fraudulent representation, collusion, or misconduct of a Postal Service officer or employee. 39 U.S.C. § 2605.

In admiralty suits, pre-judgment interest is awarded in the discretion of the district court to insure compensation of the injured party in full and "should be granted unless there are exceptional or peculiar circumstances." Mid-America Transp. Co. v. Rose Barge Line, Inc., 477 F.2d 914, 916 (8th Cir. 1973). A court sitting in admiralty need not fix interest at the legal rate allowed in the state where it sits. Complaint of M/V Vulcan, 553 F.2d 489, 491 (5th Cir.), cert. denied, 434 U.S. 855 (1977) (12 percent); Sea-Land Service, Inc. v. Eagle Terminal Tankers, Inc., 443 F. Supp. 532, 534 (W.D. Wash. 1977) (8 percent).

Post-judgment interest should be affirmatively and specifically provided for in the judgment, at the rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the judgment. However, civil judgments in favor of the United States bear interest as allowed by law, whether or not interest has been expressly provided for in the judgment. See 28 U.S.C. § 1961. Under that statute, the government is entitled to post-judgment interest on the entire judgment as rendered, including any pre-judgment interest included in the judgment. See United States v. Briggs Manufacturing Co., 460 F.2d 1195, 1196 (9th Cir. 1972).