In the 1985 case Library of Congress et al. v. Shaw, the United States Supreme Court ruled that federal agencies are immune from paying interest on court judgments unless Congress explicitly waives this immunity. The case arose when James Shaw sued the Library of Congress for racial discrimination and was awarded damages by a lower court, which also ordered that he be paid interest on his back pay award to compensate for inflation during the time it took to resolve his lawsuit. However, upon appeal, the Supreme Court reversed this decision stating that under sovereign immunity principles - a legal doctrine holding that governments cannot be sued without their consent - federal entities could not be held liable for such payments unless there was express congressional authorization permitting them to do so.

In the dissenting opinion for Library of Congress et al. v. Shaw, Justice Brennan disagreed with the majority's decision to deny attorney fees under Title VII of the Civil Rights Act due to a "no-interest rule." He argued that this interpretation was inconsistent with congressional intent and precedent set by prior court decisions which allowed such awards in similar cases. Brennan contended that denying these fees would discourage individuals from pursuing legitimate claims against government entities, undermining enforcement of civil rights laws. Furthermore, he noted that interest on delayed payment is fundamentally different from an award of attorney’s fees and should not be treated as equivalent under law. Therefore, he believed it was incorrect for the Court to apply a no-interest rule when calculating attorneys' fee awards in Title VII cases against federal defendants.