4-10.010
Judgment Against the Government—Generally
|
To prevent difficulties in payment and unnecessary appeals due to the
irregularity of form or the inclusion of items of recovery which are
improper, the United States Attorney should arrange to prepare the form of
judgment to be entered whenever possible, or, if this is not possible, be
sure to review the form of the proposed judgment before its entry.
See Civil Resource Manual at 212 as to the
allowance of interest. The limited circumstances in which court costs may
be included in judgments is discussed in the Civil
Resource Manual at 221. See Civil
Resource Manual at 220 as to attorneys' fees for plaintiff's counsel.
Except when a judgment is entered by consent in order to provide for the
payment of an agreed compromise, all adverse judgments should be brought to
the attention of the Civil Division immediately, with the United States
Attorney's reasoned recommendation for or against appeal. See USAM Title 2, for appeals generally.
The GAO has taken the position that it is without authority to offset or
withhold tax claims from "back pay" judgments rendered against the United
States, unless the judgment specifically states the amount of such
withholding. The Internal Revenue Service, which views such awards as
taxable income, has nevertheless requested that appropriate steps be taken
to ensure that applicable taxes are collected therefrom. Accordingly,
whenever a judgment for back pay (or for any other amount deemed to be
taxable income) is being entered, the attorney handling the case for the
government should either request the court to specify that applicable taxes
may be withheld, or separately agree with the plaintiff (in writing)
concerning an appropriate offset.
4-10.100
Payment and Satisfaction of Judgment Against the Government
|
A check in payment of an adverse judgment may be obtained in some cases
from the client agency, if it has an appropriation or other source of funds
available. Government corporations and "sue and be sued" officials and
agencies may have such an appropriation, or a revolving fund, from which
payment can be made. Adverse National Service Life Insurance (NSLI)
judgments (as distinguished from those which are entered as a result of
compromise) are payable by the Department of Veterans Affairs (VA) from
insurance trust funds. However, if the loss is due to the extra hazards of
war, the VA will pay the NSLI judgment from appropriations. Judgments in
Federal Tort Claims Act cases, with few exceptions, are paid with treasury
funds after certification by the Department of the Treasury. If the FTCA
judgment is based upon the activities of a Federally Supported Health
Center, the judgment is paid by the Department of Health and Human Services
rather than by the Treasury. Likewise, the
Postal Service pays judgments for its torts. In a few instances,
funds for the
payment of a judgment may be provided by an insurer, surety, or
indemnitor.
Normally, the Civil Division's communication advising that further
appellate
review will not be sought will provide information as to the method
of payment.
If payment cannot be obtained from the sources indicated above,
payment of final
judgments will be made pursuant to 31 U.S.C. § 1304.
See USAM 4-10.110. In the past, the judgment
fund, which
pays judgments pursuant to 31 U.S.C. § 1304, was administered
by the General
Accounting Office. Effective June 30, 1996, that authority was
transferred to
the Office of Management and Budget (OMB) pursuant to § 211 of
the
Legislative Appropriation Act of 1996, and redelegated by OMB to
the Department
of the Treasury, Financial Management Service.
In tort actions, parties in addition to the injured plaintiff may have a
legal interest in the funds generated by a judgment or settlement.
See United States v. Aetna Casualty & Surety Co., 338 U.S. 366
(1949). For example, a workers' compensation carrier may have a lien for
insurance payments it has already sent to the injured plaintiff. Any party
which is subrogated to an interest of a party plaintiff can separately
assert its rights. If the government pays the injured plaintiff the full
amount of damages, it may still be liable for payment to the subrogated
party for the amount the subrogated party paid out. Therefore, United
States Attorneys should design settlement documents and documents for
release of judgment so as to extinguish all claims arising from the subject
matter of the lawsuit, including not only the claim of the primary plaintiff
but also of all parties having a subrogated interest. If necessary, the
Department of the Treasury should be reques
ted to issue separate checks to insure extinguishment of separate
interest.
National Service Life Insurance judgments are frequently payable in
installments over a long period. In such cases, the installments payable to
the beneficiary and the beneficiary's attorney will be paid directly (and
separately) to them by the Department of Veterans' Affairs. See 38
U.S.C. § 3020.
[cited in
USAM 3-8.130]
4-10.110
Payment of Judgments by the Department of
the Treasury and Postal Service
|
Final judgments adverse to the United States can sometimes be paid by
the client agency, or an insurer, surety, or indemnitor. If payment cannot
be effected in that manner, payment can usually be made from the funds
appropriated pursuant to 31 U.S.C. § 1304. Thus, judgments (and certain
compromise settlements, see USAM
4-3.200), payable in accordance with 28 U.S.C. §§ 2414 or 2517,
which are final or of which further appellate review will not be sought, may
be paid by the Department of the Treasury, Financial Management Service
(FMS) or the Postal Service, as appropriate. (As noted earlier, prior to
June 30, 1996, the General Accounting Office ("GAO") was responsible for the
administration of the Judgment Fund, 31 U.S.C. § 1304. That authority
was transferred to OMB by § 211 of the Legislative Appropriations Act of
1996, and redelegated to the Department of the Treasury, Financial
Management Service.)
In cases delegated to them by the Civil Division, United States
Attorneys should submit adverse final money judgments or compromises which
cannot be paid by the client agency, insurer, surety, or indemnitor, to FMS
or the Postal Service as appropriate. Note that judgments adverse to the
United States are not "final" until the Solicitor General has determined
that no further appellate review will be sought and no judgments should be
sent to the FMS or Postal Service for payment until such a determination has
been made. (See USAM
2-2.121 et seq.). Also note that unique payment procedures make
it necessary to forward Swine Flu settlements through the Civil Division for
distribution to the FMS.
In order to facilitate prompt payment of such judgments or compromises,
standardized transmittal letters should be used whenever the Assistant
United States Attorney forwards final judgments or settlements to the FMS or
the Postal Service, as appropriate, for payment. Sample transmittal letters
may be found in the Civil Resource Manual at
224 et seq. In addition, an FMS Form 196, Adverse Judgment Data Sheet,
must be completed and submitted with the transmittal letter. Copies of the
FMS Form 196 can be obtained directly from FMS. These transmittal letters
and the FMS Form 196 will also be used by other Divisions of the Department
so that the FMS will receive the same basic data whenever payments are
requested.
Note that a different letter is to be used in cases forwarding a back
pay award for payment because deductions for certain items to be withheld
from such award must be made. See Civil
Resource Manual at 225.
There is also a separate data sheet required for awards of attorney fees
to enable FMS and OMB to gather specific data on the number and amounts of
such fees being paid by the government. Copies of that data sheet can also
be obtained from FMS.
[updated June 2007]
[cited in USAM 4-10.100]
| | | | | | | | |