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BHARGAVA v. VENEMAN
May 7, 2001
The opinion of the court was delivered by: John M. Facciola, United States Magistrate Judge
Pending before me is Plaintiff's Motion to Grant Interest and Motion to
Restore Health Care Coverage. For the reasons discussed below, I will
deny plaintiff's motions.
This case was originally referred to me for settlement. On December
26, 2000, the parties in this matter settled the case. Pursuant to the
settlement agreement, federal defendant United States Department of
Agriculture ("USDA") agreed to pay plaintiff a sum of $150,000.00 as
"promptly as practicable consistent with the normal processing procedures"
of the United States Department of Justice and the Department of
Treasury. Defendant's Opposition to Plaintiff's Motions ("Def. Opp.") at
1. On March 5, 2001, plaintiff filed the motions at issue, and Judge
Huvelle referred those motions to me. Subsequently, on March 9, 2001,
the United States Attorney's Office for the District of Columbia received
the settlement check from the Department of Transportation. Def. Opp. at
1-2. Defense counsel then notified plaintiff that his settlement check
was available for plaintiff's retrieval. Plaintiff signed for and
received the settlement check on March 14, 2001. Def. Opp. at 2.
Plaintiff first argues that defendant is liable for interest on the
principle amount of the Settlement Award because defendant "failed to pay
in a timely manner." Plaintiff's Motion to Grant Payment of Interest
("Pl.'s Mot. Int.") at 1. Although the settlement agreement was
finalized on December 26, 2001, plaintiff contends that the draft
settlement agreement was "drawn and signed" by both parties on September
22, 2000, so Defendant had "ample time . . . to implement payment of
retirement annuity" and payment of the sum of $150,000. Pl. Mot. Int. at
1. Plaintiff therefore seeks to recover interest on the settlement award
from the USDA for the alleged delay in payment.
Plaintiff is not entitled to interest on the settlement award because
the USDA is shielded from an award of interest by sovereign immunity.*fn1
Waivers of sovereign immunity by the United States are to be strictly
construed. See Library of Congress v. Shaw, 478 U.S. 310, 318 (1986);
Brown v. Secretary of the Army, 78 F.3d 645, 649
(D.C. Cir. 1996). A
sovereign is immune from liability for interest unless the sovereign has
expressly waived its immunity either by statute or by contract. See
Shaw, 478 U.S. 310; Kingston Constructors, Inc. v. WMATA, 860 F. Supp. 886,
888 (D.D.C. 1994). "There can be no consent by implication or by use of
ambiguous language. . . . The consent necessary to waive [sovereign]
immunity must be express, and it must be strictly construed." Shaw at 318
(quoting United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 659
The USDA has made no contractual waiver of its immunity from an award
of interest on the Settlement Agreement. The Settlement Agreement
between plaintiff and the USDA contains no provision which waives its
sovereign immunity as to an award of interest on the settlement
agreement. Further, there is no statutory waiver of sovereign immunity
in this instance. 31 U.S.C.A. § 1304 (2000), which governs the
appropriation of funds to pay "final judgments, awards, compromise
settlements, and interest and costs," permits an award of post-judgment
interest against the United States only in certain circumstances.
MacDonald v. U.S., 825 F. Supp. 683, 684 (M.D.Pa. 1993). In pertinent
part, Section 1304 provides for interest against the United States only
(A) on a judgment of a district court, only when the
judgment becomes final after review on appeal or
petition by the United States Government, and then
only from the date of filing of the transcript of the
judgment with the Comptroller General through the day
before the date of the mandate of affirmance . . .
31 U.S.C.A. § 1304(b)(1) [emphasis added]. Consistent with the
courts' strict interpretation of waivers of sovereign immunity, section
1304 must be narrowly construed. See MacDonald at 684. Under this
statute, the United States expressly waives sovereign immunity as to the
payment of interest on judgments by the district courts. However, the
waiver of interest under this statute does not apply to compromise
settlements. Since the applicable statutory provision does not apply to
settlement agreements, there is no express statutory waiver of liability
for interest on the agreement at issue.
In the absence of a contractual or statutory waiver of sovereign
immunity, this Court finds that the USDA may not be held liable for an
award interest on the principle amount of the Settlement Agreement.
Additionally, plaintiff moves this Court for restoration of plaintiff's
health care coverage, and seeks damages in the amount of $50,000 for the
pain and suffering arising from what plaintiff argues was the termination
of his health care coverage by the USDA on December 30, 2000. Plaintiff's
Motion to Restore Health Care Coverage ("Pl. Mot. Restore") at 1.
Defendant counters that plaintiff's benefits were never terminated;
rather, the USDA asserts that, as is "common practice" when a federal
government employee retires, plaintiff's health insurance coverage was
transferred from the Department of Agriculture's payroll system to the
Office of Personnel Management. Def. Opp. at 2. The USDA argues that
when a government employee retires, it is not unusual for the retiree to
receive notice that his health insurance has been canceled or suspended.
Def. Opp. at 2-3; Hackney Aff. at 1. Despite such a notice, the
government contends that plaintiff's benefits are merely being
transferred to OPM, and plaintiff can continue to "use the full benefits
of his health insurance" during this transition period. Hackney Aff. at
Based on the uncontested evidence of the government that plaintiff's
benefits were never terminated and remain fully available to him, I will
deny plaintiff's Motion for ...
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