4-10.000
JUDGMENTS
AGAINST THE
GOVERNMENT
4-10.010 Judgment Against the
Government --
Generally
4-10.100 Payment and
Satisfaction of Judgement
Against the Government
4-10.110 Payment of Judgments by
the
Department of the Treasury and Postal Service
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 Judgement 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.
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 2-2.120). 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.
| September 1997
| USAM Chapter 4-10
|