United States v. American Home Assurance Co.
6 F. Supp. 3d 1371
Ct. Intl. Trade2014Background
- AHAC moved under USCIT Rules 67 and 67.1 to deposit principal amounts owed under several surety bonds into an interest-bearing court account and to allow withdrawal of funds at any time.
- The Government does not oppose depositing the principal into a depository but contends the deposit does not stop pre-judgment interest from accruing.
- Total principal due across three actions is $6,648,778.32, with $4,448,778.32 in Court No. 09-00403, $1,400,000.00 in Court No. 10-00125, and $800,000.00 in Court No. 10-00175; the fourth action (Court No. 10-00403) is not included in the deposit request.
- Rule 67 allows deposit of money with the court pending disposition of the funds, but it grants no automatic effect on pre-judgment interest unless the court so orders.
- The court must exercise its discretion to determine whether a depository fund will halt interest accrual and whether to enter judgment on the principal amounts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a Rule 67 deposit stop pre-judgment interest? | Government: deposit does not halt pre-judgment interest. | AHAC: deposit should stop accrual and support judgment entry. | Denied; Rule 67 deposit does not automatically stop pre-judgment interest. |
| Whether the court should enter judgment on the principal amounts in the three actions | Government seeks judgment on principal plus interest and penalties. | AHAC requests dismissal of principal with prejudice upon deposit. | Denied; court did not grant entry of judgment on principal at this stage. |
| What interest may be owed and at what rate | Government seeks statutory interest under 19 U.S.C. § 580 and pre-judgment interest. | AHAC asserts no authority to collect such interest and penalties. | To be resolved in context of cross-motions for summary judgment, not on Rule 67 motion. |
Key Cases Cited
- Gulf States Utils. Co. v. Ala. Power Co., 824 F.2d 1465 (5th Cir. 1987) (Rule 67 discretionary fund; court to decide impact on interest)
- Cordero v. De Jesus-Mendez, 922 F.2d 11 (1st Cir. 1990) (deposit decisions and impact on interest in depository funds)
- Kotsopoulos v. Asturia Shipping Co., S.A., 467 F.2d 91 (2d Cir. 1972) (deposit of funds and effect on interest accrual)
- Ziaee v. Vest, 916 F.2d 1204 (7th Cir. 1990) (policy on accrual of interest when payment conditions are imposed)