Availability of the Judgment Fund for the Payment of Judgments or Settlements in Suits Brought against the Commodity Credit Corporation Under the Federal Tort Claims Act, 89-46

• Decision Date: 05 December 1989
• Docket Number: 89-46
• Citation: 13 Op. O.L.C. 362
• Court: Opinions of the Office of Legal Counsel of the Department of Justice
• Parties: Availability of the Judgment Fund for the Payment of Judgments or Settlements in Suits Brought against the Commodity Credit Corporation Under the Federal Tort Claims Act

13 Op. O.L.C. 362

Availability of the Judgment Fund for the Payment of Judgments or Settlements in Suits Brought against the Commodity Credit Corporation Under the Federal Tort Claims Act

No. 89-46

United States Department of Justice

December 5, 1989

WILLIAM P. BARR Assistant Attorney General Office of Legal Counsel

Availability of the Judgment Fund for the Payment of Judgments or Settlements in Suits Brought Against the Commodity Credit Corporation Under the Federal Tort Claims Act

The Judgment Fund, the permanent appropriation established pursuant to 31 U.S.C. § 1304, is not available for the payment of judgments or settlements in suits brought against the Commodity Credit Corporation under the Federal Tort Claims Act.

MEMORANDUM OPINION FOR THE GENERAL COUNSEL DEPARTMENT OF AGRICULTURE

This memorandum responds to your office's request of February 9, 1989 ("February 9 Letter"), for the opinion of this Office concerning the availability of the permanent appropriation established pursuant to 31 U.S.C. § 1304 ("Judgment Fund") for the payment of judgments or settlements of suits under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671-2680, brought against the Commodity Credit Corporation ("CCC") 15 U.S.C. § 714. For the reasons set forth below, we conclude that the Judgment Fund is not available for the payment of such judgments and settlements.

I. Background

This question arose from a settlement reached in the case of First National Bank of Rochester v. United States, in the United States District Court, District of Minnesota Third Division, Civil No. 3-87-571. In that case, you believed that the settlement should be paid from the Judgment Fund, but the General Accounting Office opined that the Judgment Fund could not be used. See Letter for Mary E. Carlson, Assistant United States Attorney, from Kenneth R. Schutt, Judgment Group Manager, General Accounting Office (May 24, 1988). Although we understand that this compromise settlement was ultimately paid out of CCC funds, your office has requested that we provide an opinion on the availability of the Judgment Fund generally to the CCC for payment of judgments or settlements that arise under the FTCA.

The Automatic Payment of Judgments Act (the "Judgments Act" or "Judgment Fund statute"), ch. 748, § 1302, 70 Stat. 678, 694-95 (1956) [ 363] (codified as amended at 31 U.S.C. § 1304), creates a permanent appropriation for the payment of certain types of judgments and settlements obtained against the United States. Before passage of the permanent appropriation, most judgments against the United States required specific appropriations. See 66 Comp. Gen. 157, 159 (1986). Judgments obtained under the FTCA or the Suits in Admiralty Act, 46 U.S.C. §§ 741-752, for example, required a submission to Congress for appropriation. This cumbersome process led to undue delay in payment, resulting in excess charges for interest. Congress enacted the permanent Judgment Fund to provide a simpler payment mechanism. See 66 Comp. Gen. at 159. Section 1304 provides in pertinent part:

(a) Necessary amounts are appropriated to pay final judgments, awards, compromise settlements, and interest and costs specified in the judgments or otherwise authorized by law when -”

(1) payment is not otherwise provided for;

(2) payment is certified by the Comptroller General; and

(3) the judgment, award, or settlement is payable -”

(A) under section 2414, 2517, 2672, or 2677 of title 28;

(B) under section 3723 of this title; ....

31 U.S.C. § 1304(a). Section 1304(a) thus imposes three requirements -” all of which must be met -” before a judgment or settlement may be paid out of the Judgment Fund. First, the payment must not be "otherwise provided for." Second, the Comptroller General must certify payment. And finally, the judgment must be payable pursuant to one of a number of specified sections in the United States Code.

The second requirement -” the necessity for certification by the Comptroller General -” does not appear to impose any additional substantive requirements on access to the Judgment Fund. The Comptroller General's certification follows from satisfaction of the other two requirements and completion of the necessary paperwork.^[1] Thus, we need determine [ 364] only whether FTCA judgments or settlements against the CCC satisfy both of the two substantive requirements for Judgment Fund availability.^[2]

II. The CCC

By Executive Order No. 6340 President Roosevelt established the CCC in 1933 pursuant to the National Industrial Recovery Act, ch. 90, 48 Stat. 195 (1933). At its inception, the CCC was incorporated in Delaware, with its office and principal place of business in Washington. Although the United States owned all the capital stock of the CCC and the members of the board of directors, selected by the President, were officers in the federal government, the CCC operated as a private corporation. See Exec. Order No. 6340 (1933). The original articles of incorporation expressly state that the CCC would be treated like any other corporation under the laws of the State of Delaware.^[3] Under the 1935 Corporations Code in Delaware, as under current law, corporations could sue and be sued, Del. Code. ch. 65, art. 1, § 2 (1935), and the corporate entity, rather than the directors or shareholders, was liable for judgments against the corporation unless the execution of such a judgment could not be satisfied. Id. § 51.^[4]

The underlying liability of the corporation for judgments and settlements did not change as the CCC evolved from a presidentially-created, privately-incorporated entity to a statutory corporation. Between 1933 and 1948, when the CCC was reincorporated by statute, see the Commodity Credit Corporation Charter Act, ch. 704, 62 Stat. 1070 (1948) (codified as amended at 15 U.S.C §§ 714-714p) ("CCC Charter Act"), Congress enacted a series of laws "to continue the Commodity Credit Corporation as an agency of the United States, to revise the basis of annual appraisal of its assets, and for other purposes." S. Rep. No. 631, 78th Cong., 2d Sess. 1 (1944).^[5] These laws enabled Congress to determine the economic viability of the CCC through commercial-type audits and [ 365] appraisals. As the Senate report to one of these statutes notes, "[t]he Commodity Credit Corporation's fiscal responsibility is vested in the Corporation and not in the individual fiscal agents. In other words, the fiscal agents are responsible to the Corporation, which in turn is liable to the Federal Government for the Government's investment in the Corporation." Id. at 2.

In 1948, the CCC was re-established as a statutory corporation. See CCC Charter Act, ch. 704, 62 Stat. 1070 (1948) (codified as amended at 15 U.S.C. §§ 714-714p). The CCC was constituted as a "body corporate" which "shall be an agency and instrumentality of the United States, within the Department of Agriculture." CCC Charter Act § 2 (codified at 15 U.S.C. § 714). Section 4(c) provided that, among the general powers of the corporation, it "[m]ay sue and be sued, but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Corporation or its property." Id. § 4(c) (codified at 15 U.S.C. § 714b(c)). Section 4(c) also provided for bench trials for suits brought against the CCC, and specified a statute of limitations for actions brought by or against the CCC. It specifically applied the FTCA to the CCC, including the 1-year statute of limitations applicable to FTCA claims. See S. Rep. No. 1022, 80th Cong., 2d Sess. 11 (1948); H.R. Rep. No. 1790, 80th Cong., 2d Sess. 10 (1948).

The CCC was also expressly provided with the authority to settle and pay its legal obligations. Section 4(j) granted the CCC the authority to "determine the character of and the necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid." CCC Charter Act § 4(j) (codified at 15 U.S.C. § 714b©). Section 4(k) stated that the CCC "[s]hall have authority to make final and conclusive settlement and adjustment of any claims by or against the Corporation or the accounts of its fiscal officers." CCC Charter Act § 4(k) (codified at 15 U.S.C. § 714b(k)). The Senate Report explained that the power conferred by section 4(k)

has been exercised by the Commodity Credit Corporation since its creation, and the power and its exercise were recognized by the Congress in the act of February 28, 1944 (15 U.S.C, 1940 ed., Supp. V, 713), in which it was provided that the Corporation should "continue" to have authority to make adjustment and settlement of its claims or the accounts of its fiscal officers.... A corporation such as the Commodity Credit Corporation, engaged in a multitude of commercial transactions, must be able expeditiously to adjust, compromise, and settle its claims in order efficiently to conduct its business.

S. Rep. No. 1022 at 12. [ 366]

Moreover, just as the periodic pre-1948 evaluation and appraisal statutes reiterated the CCC's fiscal responsibility to the federal government, the 1948 statutory chartering of the CCC retained the pre-existing bases of the CCC's liability. Section 16 of the CCC Charter Act provided:

The rights, privileges, and powers, and the duties and liabilities of Commodity Credit Corporation, a Delaware corporation, in respect to any contract, agreement, loan, account, or other obligation shall become the rights, privileges, and powers, and the duties and liabilities, respectively, of the Corporation. The enforceable claims of or against the Commodity Credit Corporation, a Delaware corporation, shall become the claims of or against, and may be enforced by or against, the Corporation.

CCC Charter Act § 16 (codified at 15 U.S.C. § 714n).

III. Analysis

Th...