United States v. Texas, 507 U.S. 529 (1993)

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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. 533-539. (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. 533-534. (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 preestablished 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 abil-


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