the united states was that instead of the award of interest under section five eighty would more than compensate the government why the trial court heard as a matter of law is because section five eighty is not about co tory interest it's not about making a person whole it's about precludes proper preventing surety from refusing to pay on their obligations and forcing the united states to actually bring a collection action nice they should also has a different language the kind of calls into question the compensatory construct because it talks about only interest at six percent rate so when you place an actual rate of interest you preclude the ability for that provision to actually provide compensatory interest compensatory that are you then suggesting there are many many many statutes across various areas of law where they actually have a set interest rate are you saying that in all of those statutes where the interest rate is that they would all be treated as penalties and therefore not interest soley because the rate is set in those statutes your honor i don't i don't believe that that would be true i don't know what those statutes would be but what makes this particular provision unique is that it it hinges it pivots on the united states actually bringing being forced to bring an action to recover duties from a surety who has made a promise to the united states to pay on demand congress as this court has recognized and work for congress recognized the fifteen eighty one anyway is the proper approach for anyone who wants to be heard if you think customs has made a decision that's an inappropriate or incorrect you bring it through provision that maybe maybe doesn't exist anymore that expressly said the united states can sue on it so that at the time it was inactive it looked like a perfectly ordinary you can sue the united states and when you sue you get six percent of that six percent was a pretty darn standard more or less inflation equaling rate in seven hundred ninety nine why doesn't all of now it's plenty compensatory i mean well it would be all the value of money is nowhere near six percent absolutely right and that's the very point it would be over compensating because that it would be if one were to look at it as being a compressed tory statute but i believe the reason we don't see that is compensatory is for the reason that your honor is is bringing out from the fact that there's a six percent at times six percent will be over but has it or else like an argument that any time congress sets out interest and mandates a statutory amount the minute that statutory amount is inconsistent with the rate of inflation according to that that statute is now a penalty statute and no longer a compensatory statute that doesn't work very well for me your honor i don't i don't know those provisions but i don't but i can say with the best of the city what if those provisions said that the united states had international trade so if there were a statute that said the united states would be forced to then go to all the trouble of bringing litigation against the party for whom it was expecting the revenue to be protected the public fisc you supposed to be protected by the s setback for over a decade and refused the bank notwithstanding the fact that they conceded liability under the bond itself then usually if the lower court didn't have the authority to decide that equitable interest was in appropriate in this case in light of the amount of compensation the government was already receiving we believe that the trial court below has complete discretion on whether or not to work equitable interest because that is a court or equitable interest because you don't think we deserve it that's one thing that's within the discretion of what the court didn't say was you can never have equitable interest because of the presence of five eighty so clearly the judge was not looking at it as five eighty is meant to be the exclusive form of compensation for the government's a clearly this court left open the possibility of equitable interest despite a five eighty award right your honor and in that in that respect it seems not but once you know that that's the way that judge she he decided the case that doesn't seem like a very case specific decision that equitable interest is not to be awarded in this case if we understand and that the judge recogniz allowed for the possibility of acquittal interest to be awarded alongside of interest and it doesn't seem like a big ruling of law it seems like more like a case specific decision about whether equitable interest is appropriate in this case well i think that you know whether or is don't warrant it but the trial court may also have been kind of telegraphing as as anyone if i thought your position is that the better view of the law of pre judgement interests is that you don't do a lot of political balancing you just look at what's necessary to make you whole which is happens to be the one thing that the judge in this case talked about yes your honor that is our position is that many circuit courts in the united states and also getting interest running and this interest will run compound interest because that's how you know that type of interest runs and that at the time when you do finally get paid based on the time value when you should be placed back into the position you want you should have been at the time the money was actually do another and all this time period needs to run interest to make you whole so yes our position is that there shouldn't be a balancing of the equities because if the money's doing howling and when you get paid ten twenty years late to make us whole the trial court would be correct and that's where that's where we differ with the trial court's opinion the trial court seems to believe that fighting is a compensatory provision we do not believe it's a compensatory provision we believe it's a provision that's meant to work as a deterrent that that a surety says well if i don't pay i know i will definitely be hit with six percent interest under five eighteen no matter what it does work as a deterrent when six percent substantially above market that would that may be true your honor but when when we are engaging in contracts we don't know at the time of the contract what the interest rate may be inflation can take over quickly and because five eighty interest is a separate separate for our purposes it's a separate concept that doesn't deal with compensating people the fact that it is set at six percent means any given day you're overcompensating work under charges when they don't pay that rate runs at the treasury rate so you now have congress designing a system that has fifteen zero five d interest it's running at the treasury rate the normal rate what you would expect so the fact that that exists like this in it we refer to the five in the interests since it is a statutory grant and not under the bond is not kept at the bond amount it seems to be accepted by all the parties here the point i'm trying to make perhaps in articulately is that fifteen or five d interest exists in that is truly compensatory there's no question when you read how to calculate it it runs on a failure to pay and is your competitor your compensating for not having turned over that money because you failed to pay simultaneously with this running a fifteen a five day interest congress also has another provision also in title nineteen which is five a year instead of rebuttal time would you like to save it yes  receive from six percent interest and made a determination that that i'm out more than over compensated the government for any interest do it because of the the balance of the ship it determined there was no reason decisions on whether fraud existed it made it was a lot of makes decisions on whether the liquidation process was appropriate and there was no fraud involved and no appeal of that at cherry hill the cherry hill charity in cherry hill was not apply was not making there were no determinations made under fifteen fourteen that  issues that pertain to the actual liquidation intrigues the surety is not involved in that process the surety only gets involved in the process subsequently when the importer defaults on the loss of duties d surely the surety aspect comes in later and the proper way for the surety to be if the surely doesn't pay the bond and the proper way for it to be addressed is to eventually fall a collection that time it was clear out of the under the law existed then that there was no obligation for a surety under contract law to do anything but wait until the suit was filed and raise its defenses against the suit and that some substantial amount of the government's demand that you all did not dispute right yes or was there a mechanism by which you could hand that money over to the government so it's not just kind of in escrow for you it's yours we know it's yours we see all claims to that money reducing the amount of money on which the government would have to sue you only so there would be only over the disputed amounts the result of which if there is such a process might be five eighty and other interest would run only on the disputed amount not the amount that was in their bank account is there a way that that works well i know you try to do something like that here right maybe not so successfully because you conditioned it but but is there a way in which that could condition was we would pay the principle the conditional lead didn't agree with what the condition customs put on it because they said they would not accept it unless one included interest or to insure the lease the the interest eventually would be calculated so in this situation as one situation the court in cousins actually accepted this specific offer they did not do it in the other the other remaining cases so that has been done and they could do it it was a question of what they wanted to do and i thought that that court was in litigation that particular case was litigated separately and the judge accepted that are that they know you're running low on time would you like to address your issue about whether five eighty interest should cover duties or duties plus fifteen l five d interest yes it should not cover five b d this is to be applied to the interest not to interest now you mean be fifteen of five what the government wants is to include the fifteen or five interest of calculated in some of these cases the bond is less than the mouth do up to the bottom out they wanted to just you know five letters and so when you apply five accept money ten three forty three was a unique scenario as we discussed earlier for the most part there was considered liability under virtually every bond for forget about the particular case can a surety that says we know we owe you eight million dollars we have a dispute with you over our remaining million here's eight million let's see if we can work out the million maybe you have to sue them a million at which point the five eighty interest would run assuming you win the lawsuit that that you get your five eighty and other interest on the million but not on the it is there a mechanism by which they can do that without your saying no we won't take it because we want the five eighty to run on the nine hundred obviously we have to work with my client on that but my understanding was always that we would be willing to take money that didn't have strings attached and then once when the court  in some way the offers that were made in this case because he said the first offer was sort of conditional on settlement but the second offer wasn't the second offer was please just take this money which is sort of the antidumping duty amount owed and let us just continue say no you have to it has to pay off the interest first then if there is money left over then you can start eating into the principle right and i think that that i mean if you really if you if you just step away from it though this court is clear rely on for why five eighty should cover both duties and interest why five eighty eight five why five eighty interest assume for a second i think it's interest why five eighty interest ought to shoots are brought for the recovery of duties so it just has to be a bond and then it has to suit one of those funds for the recovery of duties it doesn't say that we're limiting it to the recovery of duties it just says duty but leaving a dispute over interest to be resolved later then do you understand the statute as precluding five baby interest even if the government has to bring a lawsuit to get the interest because  interest is never called duties and duties are never called interest so if a suit is being brought soley to recover interest under fifteen zero five which is interest is not duties then how would fifty five eighty ever appl your honor if before the litigation is ever brought the complete amount of duties are paid yes and generally i mean with the with the bands that are do most of the time the bands are cut most of the time to bands are insufficient for the anti there's probably a very good argument that that wouldn't be finding any interest because there has to at least in within that litigation have to be some component of the will come tell duties although i you know i haven't really considered this fully and i you know as you know duties and fifteen zero five d d interest and yet a lawsuit if it were limited to fifteen zero five d interest would not be something under which the government can recover five media interest so does that indicate that maybe congress never intended interest on interest i don't think so your honor because it would require a payment by a surety prior to the litigation which we just figured out probably can't be done  will now i mean if the surety had actually paid the demand that was do the face of what they paid the trace amount and then continue to contest whether or not they actually owed the fifteen zero five d interest sure even though they had paid it like ok that's like your taxes right you can well if there's a dispute customs has a mechanism to place things in suspense in fact the payment that was made as part of the ten three forty three case was placed in suspense until the final resolution about how the interest is going to run because it doesn't make sense to start a forwarding that money on it's in a an account until the litigation has been figured out so the customs has that mechanism but the i guess the bigger issue here is why why are we even talking five eighty five he shouldn't even be in a court because if if you had a surety who was willing to make the payment in the first instance it wouldn't end up with the government really litigation they would have made a payment and then disputed the interest in a protest and then brought it as a fifty maybe one action equitable contracts and it would be within the domain of the surety because once again the united states should not be bringing actions against sureties to whom it afforded the luxury to make money by selling bonds it doesn't make any sense and i think this court  our next case for today