GEORGE P. SHULTZ, SECRETARY OF STATE, PETITIONER V. ALISON PALMER,
ET AL.

   GEORGE P. SHULTZ, SECRETARY OF STATE, PETITIONER V. MARGUERITE
COOPER, ET AL.

   No. 85-50

   In the Supreme Court of the United States

   October Term, 1985

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the District of Columbia Circuit

   Reply Memorandum for the Petitioner

   1. Respondents acknowledge that current rates are used in fee
awards to compensate ofr delay in payment (Br. in Opp. 6).  /1/ They
nevertheless insist that the "no-interest rule" (see Pet. 6) has no
application here because compensation for delay is a necessary part of
a "reasonable attorney's fee" (Br. in Opp. 6-9).

   This argument, however, entirely fails to respond to our submission
that the "no-interest rule," because grounded on the proposition that
"delay or default cannot be attributed to the government" (United
States v. Sherman, 98 U.S. 565, 568 (1878)), bars all claims against
the United States that are related to the belated receipt of funds.
See Pet. 7.  Thus, even if respondents are correct in asserting that
the use of current rates in private sector litigation may be
characterized as part of a "reasonable fee," /2/ in the absence of an
express waiver Congress cannot be deemed to have permitted the
enhancement of a money judgment against the United States to
compensate for delay in payment.

   This is a familiar principle in litigation involving interest.
While the term "just compensation" generally is understood to have an
interest component (see United States v. Alcea Band of Tillamooks, 341
U.S. 48. 49 (1951) for example, the Court repeatedly has held that
statutes or contracts providing for the payment of "just compensation"
do not authorize the award of interest against the United States.
See, e.g., ibid.; United States v. Goltra, 312 U.S. 203, 207-211
(1941).  Indeed, respondents' analysis would render the "no-interest
rule" nugatory by permitting the delay component of any monetary award
against the government to be characterized as a part of the damages
rather than as interest.

   2. Respondents also suggest that current rates are distinguishable
from interest because they are not "add(ed)" to the fee;  instead,
they are used to "arrive at" a reasonable fee (Br. in Opp. 10).  This
is so, they maintain, because an attorney embarking on litigation
involving fee shifting might set a higher rate in anticipation of
delayed payment, and that rate should be used in the calculation of
the fee (Br. in Opp. 9-10).  As we note in our petition (at 9-10),
however, this analysis rests on a fiction.  The rate used in
calculation of the lodestar is chosen at the completion of the
litigation.  Any difference between the attorney's historic rate and
his lodestar rate therefore represents a retrospective decision to
compensate him for delay attributed to the United States -- the
precise result that is forbidden by the "no-interest rule."

   In any event, respondents entirely fail to respond to the
proposition (see Pet. 10) that "it is the reason why the fee is
adjusted upward," rather than the method of adjustment that is
determinative for purposes of the "no-interest rule." Shaw v. Library
of Congress, 747 F.2d 1469, 1474 n.41 (D.C. Cir. 1984) (emphasis in
original), petition for cert. pending, No. 85-54.  In short, they have
offered no reason to believe that there is any relevant difference
between and award of interest and the use of current rates.  /3/

   For the foregoing reasons and the reasons stated in the petition,
it is respectfully submitted that the petition for a writ of
certiorari should be held for disposition in light of Library of
Congress v. Shaw, No. 85-54;  alternatively, the petition for a writ
of certiorari should be granted.

   CHARLES FRIED

      Acting Solicitor General

   SEPTEMBER 1985

   /1/ Respondents also contend that 42 U.S.C. 2000e-5(k) waives the
government's sovereign immunity even as to explicit awards of interest
(Br. in Opp. 4-5).  This contention is addressed in our reply
memorandum in Shaw v. Library of Congress, No. 85-54.

   /2/ The cases cited for this proposition by respondent (Br. in Opp.
8-9) state only that the use of current rates may be an acdeptable
method of adjusting the fee award for "inflation and interest." Ramox
v. Lamm, 713 F.2d 546, 555 (10th Cir. 1983);  Johnson v. University of
Alabama, 706 F.2d 1205, 1210-1211 (11th Cir.), cert. denied, 464 U.S.
994 (1983).

   /3/ In fact, as we note in our petition (at 7 n.6), use of current
rates is a decidedly less rational method of compensating for delay in
payment.  Respondents do not address this point.