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Monday, March 18, 2013

The Judgment Fund: History, Administration, and Common Usage

Vivian S. Chu
Legislative Attorney

Brian T. Yeh
Legislative Attorney

The Judgment Fund is a permanent, indefinite appropriation that was created by Congress in 1956 to pay judgments entered against the United States. Generally, the United States cannot be sued unless it has waived its sovereign immunity. Originally, such waivers were rare, so individual claims were assigned to congressional committees, which in turn appropriated funds to satisfy the judgments. Prior to the creation of the Judgment Fund, the number of claims grew rapidly, taking up an increasing amount of Congress’s time and resources. Eventually, the Judgment Fund was created to reduce Congress’s workload, so that individual appropriations were not needed for each award entered.

The Fund’s administration has changed substantially since its inception, with varying degrees of control and oversight by Congress, the Government Accountability Office, and the Treasury Department. Originally, the Fund was limited to claims of less than $100,000, entered by the Court of Federal Claims or a U.S. District Court. As payments grew in size, Congress transferred authority to the Justice Department to make payments on behalf of the United States, as certified by the Attorney General.

Today, the Fund is administered by the Financial Management Service in the Treasury Department and is only accessible when certain closely circumscribed statutory requirements are met. Most importantly, an agency may not access the Fund when there is another appropriation that may be applied or when the plaintiff prevailed through an administrative remedy. In addition, the fund can only be used for monetary awards that are final, meaning the award cannot be changed or overturned. The awards must result from claims that were or could have been litigated in court.

This report sets out specific instances in which the Fund can be accessed and illustrates the procedural mechanisms for obtaining payment under certain statutory causes of action. Although primarily used for the payment of principal awards, attorneys’ fees and interest on awards may also be paid from the Fund. At the court’s discretion, certain costs enumerated in 28 U.S.C. §1920 may be awarded to the prevailing party. In addition, certain statutes, such as the Federal Tort Claims Act, provide that attorneys’ fees may be recovered by the prevailing party. In addition, interest that accrues after the judgment may also be payable from the Fund. This report provides examples of how the payments from the Fund may be made under the Equal Access to Justice Act, Contract Disputes Act, Notification and Federal Employee Antidiscrimination Act (No FEAR Act), and through tribe-specific judgment funds.

In addition, this report will briefly highlight several recently proposed changes to the Judgment Fund’s administration. In the 113
th Congress, the Judgment Fund Transparency Act of 2013 (H.R. 317) would require the Secretary of the Treasury to post on a public website the claimant, agency, fact summary, and payment amount for each claim paid out of the Fund. Introduced but not enacted in the 112th Congress, the Government Transparency and Recordkeeping Act of 2012 (S. 3415) would have required the Treasury Secretary to publicly report all payments from the Fund under the Equal Access to Justice Act since 2003 and all future claims. Amendments to the No FEAR Act that were proposed in H.R. 6780 (110th Congress) and H.R. 67 (111th Congress) would have impacted reimbursement of the Fund for payments under the No FEAR Act.

Date of Report: March 7, 2013
Number of Pages: 19
Order Number: R42835
Price: $29.95

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