Suing The US On A Debt

A tongue-in-cheek look at the debt limit crisis, reprinted from the last crisis in 2011.

One thing is for certain: there is no stopping them; the Treasury bondholders will soon be here. And I for one welcome our new creditor overlords. I’d like to remind them that as a trusted commentator on judicial assistance, I can be helpful in navigating the labyrinth of US civil procedure. In that spirit, here are some helpful hints on how to go about suing Uncle Sam for payment:

  • Which court? The Court of Federal Claims is probably the right court for bringing an action for debt against the United States. The court’s general jurisdictional statute, the Tucker Act, provides: “The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.”
  • Aliens (mostly) welcome! By statute: “Citizens or subjects of any foreign government which accords to citizens of the United States the right to prosecute claims against their government in its courts may sue the United States in the United States Court of Federal Claims if the subject matter of the suit is otherwise within such court’s jurisdiction.” This may be a significant limitation on the right of alien bondholders to obtain relief in the US courts.
  • Service of Process. Service of process in the Court of Federal Claims is simple. Under Rules 3 and 4, the plaintiff simply files a complaint with the court, and the clerk then delivers the complaint to the Attorney General, noting the delivery on the docket. The clerk’s entry on the docket is prima facie proof of service.
  • Getting Paid. This is the tricky part. Under Article I, Section 9 of the Constitution :”No money shall be drawn from the treasury, but in consequence of appropriations made by law.” Congress has appropriated money to pay judgments against the United States when certified by the Secretary of the Treasury. But of course the whole problem in the first place is that there isn’t enough money in the Treasury to pay all the debts and obligations of the United States unless the debt ceiling is raised! If the United States will not raise the debt ceiling to pay the judgment, I suppose it will just have to raise some revenue …

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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