Opinion ID: 110252
Heading Depth: 1
Heading Rank: 3

Heading: The First Stated Issue

Text: The Interim Agreement of October 12, 1956, between the United States and Louisiana, referred to in this Court's Final Decree of December 12, 1960, see 364 U. S., at 503, came into being after the Court, on June 11, 1956, had provided: IT IS FURTHER ORDERED that the State of Louisiana and the United States of America are enjoined from leasing or beginning the drilling of new wells in the disputed tidelands area pending further order of this Court unless by agreement of the parties filed here. 351 U. S. 978. The Interim Agreement recites that the parties desire to provide for the impoundment of . . . sums . . . payable under mineral leases in the disputed area, pending the final settlement or adjudication of the said controversy. App. to Reply Brief for Louisiana 9a. It divided the submerged lands off the Louisiana coast into four zones therein described. The zone contiguous to the coastline was designated as Zone 1, the next most seaward as Zone 2, the next as Zone 3, and the most seaward as Zone 4. Id., at 10a-11a. It described the area comprising Zones 2 and 3 as the disputed area, id., at 11a, and it conferred upon the United States (with certain exceptions) the responsibility for collecting receipts from the disputed zones, id., at 26a-27a. By ¶ 7 (a), the United States agreed (with exclusions not material here) to impound in a separate fund in the Treasury of the United States a sum equal to all . . . payments heretofore or hereafter paid to it for and on account of each lease, or part thereof, in Zones 2 and 3. Id., at 14a. Certain other payments were to be impounded by Louisiana. Paragraph 9 of the agreement then provides: [T]he impounded funds provided for herein shall be held intact, in a separate account for each lease or portion thereof affected, by each party until title to the area affected is determined. Whereupon, except as otherwise herein provided: ..... (b) Any funds derived from an area finally determined to be owned by the State of Louisiana [with an exception not here material] shall be taken from the separate and impounded fund in the Treasury of the United States provided for herein, and paid to the appropriate officer of Louisiana. Id., at 18a-19a. Pursuant to these provisions of the Interim Agreement, the United States collected and retained payments on mineral leases for operations within the designated disputed area. As a consequence of the first supplemental decree, entered December 13, 1965, see 382 U. S., at 293, the United States paid Louisiana some $34 million of impounded funds. Indeed, with an additional payment of some $136 million in 1975, pursuant to the supplemental decree of June 16, 1975, see 422 U. S., at 14-15, all payments due Louisiana from the funds impounded by the United States have been made. But the United States has not paid Louisiana any interest on the funds so impounded, and has not made any payment for the use of those funds while they were held in the United States Treasury. Louisiana asserts a claim for such interest, apparently approximating $88 million, or for the value of the use of the money during the period of impoundment, and the United States resists these claims. Louisiana's position is at least fourfold: (1) The impoundment provisions of the Interim Agreement implied a trust that imposed on the United States the fiduciary duty of a trustee in its handling of the impounded funds. It is said that an escrow arrangement in fact was established. The presence of a trust is evident from the conduct and relationship of the parties, from documentary evidence, and from admissions by federal officials. (2) The United States used Louisiana's money for its own purposes and without authority under the Interim Agreement. The funds were deposited in the general account of the Treasurer of the United States where they were available, and used, to meet cash needs of the Federal Government. (3) The United States had the duty to invest the impounded funds for the benefit of both parties. This duty is implied from the provisions of the agreement; is imposed upon the United States as a trustee as a matter of law; was breached by the refusal of the United States to honor a request by Louisiana to invest the funds; is supported by the provisions of 31 U. S. C. § 547a to the effect that [a]ll funds held in trust by the United States . . . shall be invested in interest-bearing securities; and is not limited by the supplemental decree of June 16, 1975. (4) Equitable remedies to prevent the unjust enrichment of the United States at the expense of Louisiana are appropriate. We find no merit in any of Louisiana's contentions. The Interim Agreement provided only that the payments made to the United States on each lease within the disputed area were to be impounded in a separate fund in the Treasury of the United States and, upon determination of the ownership of the land, were to be taken from that separate and impounded fund and paid to the party entitled to them. The agreement contains no express provision for the payment of interest or for the use of the funds or for investment. Neither do we find anything in the agreement's use of the word impound or, indeed, in Louisiana's characterization of the arrangement as an escrow (a word that does not appear in the agreement), that implies an obligation on the part of the United States to pay interest or to pay for the use of the money. The word impound, in its application to funds, means to take or retain in the custody of the law. Black's Law Dictionary 681 (5th ed., 1979); Bouvier's Law Dictionary 1515 (8th ed., 1914). That obligation, as is an escrow, is to hold and deliver property intact. What actually happened here, of course, was that, as the funds were paid to the United States, the lessees' checks were cashed and the resulting cash was commingled with general funds of the Treasury and used in governmental operations. A separate account, No. 14X6709, nonetheless, was established on the books of the Treasury for these payments, and a credit entry covered every receipt from the disputed area. The United States did not stockpile that inflowing cash in a far corner of the Government vaults. But the special account was maintained and it accurately recorded the increasing potential liability of the United States to Louisiana. This was much more than a recordkeeping device. The receipts were never treated as governmental revenues. The recognition of a contingent liability, corresponding to the cash deposited, enabled the United States to make prompt payment to Louisiana without special congressional authorization or appropriation. There was no proof or even suggestion that at any time there were insufficient funds in the United States Treasury to pay any amount that might be determined to be due Louisiana from the impoundment. Apart from constitutional requirements, in the absence of specific provision by contract or statute, or express consent . . . by Congress, interest does not run on a claim against the United States. Smyth v. United States, 302 U. S. 329, 353 (1937); Albrecht v. United States, 329 U. S. 599, 605 (1947); United States v. N. Y. Rayon Importing Co., 329 U. S. 654, 658-659 (1947). See also 28 U. S. C. § 2516. It follows that the same is true as to any claim of duty to invest. We are persuaded, also, that the omission, in the Interim Agreement, of any provision for interest was a conscious one. When the agreement was signed in 1956, almost $60 million in disputed revenues already had accumulated. The importance of any interest obligation was obvious. And pertinent here is the fact that two of Louisiana's negotiators candidly conceded that they did not insist on an interest clause because they knew the United States would not agree to one. Tr. 70, 95, 98, 99, 102, 103, 163. Nor does Louisiana's intimation that it was willing to pass the matter in silence because the agreement was expected to be short lived carry weight. The agreement itself specified no term, and, in its ¶ 13, it provided for operations after a year had elapsed. We note, too, that Louisiana is not in a position to assert that it was unaware that the funds were not invested or that it did not know that the United States held itself not responsible for interest. The State received regular monthly reports of the amounts credited to the impounded account, as the agreement's ¶ 8 required. Those reports reflected no interest. Louisiana accepted the $34 million distribution, made pursuant to the 1965 decree, without complaint about the absence of interest. And communications flowed from officers of the State and its representatives in Congress, suggesting the deposit of some of the funds in Louisiana banks, presumably so that they might enjoy the free use of those funds. The Louisiana Legislature, it is true, on June 6, 1967, by House Concurrent Resolution No. 251, did call upon the United States to take such steps as are necessary to effect a prudent and effective investment of the funds now and hereafter so impounded. See 1967 Louisiana Legislative Calendar 161-162. The quoted language, however, was only precatory and suggestive; it was not demanding. At most, it amounted to a request for a change of status. A Treasury official, pleading absence of authority, promptly returned a negative answer. In fact, Louisiana apparently never took the position that it was entitled to interest upon, or payment for the use of, its share of the impounded funds until 1975 when it filed its objections to the accounting. And Louisiana made no request for modification of the Interim Agreement. The State thus acquiesced for two decades. We conclude that the United States fulfilled the obligations imposed upon it by the agreement; that the impoundment served its intended purpose; that there is no liability on the part of the United States for interest or for the use of the funds; and that the United States has no further obligation for payment beyond those it has performed.