Judgment Fund and Law Enforcement

B-259065 Dec 21, 1995 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Several federal agencies requested a decision on whether the Department of Justice's (DOJ) Judgment Fund can be used to pay litigative and administrative awards arising from the loss of cash or damage to personal property while in the government's custody as a result of law enforcement activities. GAO held that the Judgment Fund: (1) could be used to pay for monetary awards resulting from the government's failure to return seized property in good condition; (2) may be used to pay monetary awards ordered under the Tort Claims Act as long as they are final litigative awards or have been approved by DOJ; and (3) may not be used to pay for litigative awards for the return of cash credited to the DOJ Asset Forfeiture Fund. View Decision Matter of: Judgment Fund and Law Enforcement Seizure Claims File: B-259065 Date: December 21, 1995 As a general principle, the Judgment Fund, 31 U.S.C. Sec. 1304, is available to pay monetary awards arising from the government's failure to return seized property or to return such property in good condition. The fact that a court orders an award in response to a request for the exercise of equitable authority does not render the Judgment Fund unavailable to cover the award. This Office will certify for payment from the Judgment Fund, 31 U.S.C. Sec. 1304, litigative awards under the Federal Tort Claims Act, 28 U.S.C. ch. Sec. 171, that arise from seizures of property by law enforcement officials, as described in 28 U.S.C. Sec. 2680(c), and are referred by the Department of Justice. Litigative awards against the United States for the return of cash (or other property converted to cash) credited to the Justice Department's Asset Forfeiture Fund, 28 U.S.C. Sec. 524, must be paid from that fund, not from the Judgment Fund, Sec. 32 U.S.C. Sec. 1304. DECISION This decision addresses the use of the Judgment Fund, 31 U.S.C. Sec. 1304, to pay litigative and administrative awards arising from the loss of cash or the loss or damage to personal property while in the government's custody as a result of law enforcement activities. [1] The typical factual setting of the awards before us involved loss of or damage to cash or property seized by law enforcement officers. These seizures were incident to the arrest and detention of a person suspected or convicted of violating the law, or because the property was forfeited as the "fruit" of criminal activities, or because law enforcement officers regarded the property as tainted or illegally imported or exported. In virtually every case, the claimant initially sought return of the seized property, and later settled for or was awarded the payment of money in substitution for the property. Among the authorities cited by the courts and agencies in making these awards are the Administrative Procedure Act (APA), 5 U.S.C. 702, 704, Rule 41(e) of the Federal Rules of Criminal Procedure, the Tucker Act, 28 U.S.C. 1346(a), 1491, and the Federal Tort Claims Act (FTCA), 28 U.S.C. ch. 171. The awards in question here present three issues. First, are monetary awards that result from the exercise of a court's equitable authority to order the return of seized cash or property, such as the APA, payable from the Judgment Fund? Second, may FTCA awards on claims that appear to be within the scope of that act's exception for seizures of money or property by law enforcement officers, 28 U.S.C. Sec. 2680(c), be paid from the Judgment Fund? Third, where a court has ordered a monetary award in an action to secure the return of money (or property which has been converted to cash) deposited into the Justice Department's Asset Forfeiture Fund, is that award payable from the Judgment Fund or the Asset Forfeiture Fund? We conclude that the Judgment Fund is available for payment of monetary awards which result from requests for exercise of a court's equitable power to order the return of property. We also believe that the Judgment Fund is available to pay monetary awards ordered under the FTCA even if they appear to fall within the scope of the exception stated in section 2680(c), so long as they are final litigative awards or the Justice Department, in the exercise of its authority to supervise the various agencies, advises that it has approved the agencies' administrative allowance of such claims. However, the Judgment Fund may not be used to pay awards that represent the refund of moneys deposited into the Asset Forfeiture Fund. The Asset Forfeiture Fund must bear the burden of those awards. DISCUSSION Monetary Awards Made Under Equitable Authorities The Judgment Fund is a permanent, indefinite appropriation. 31 U.S.C. Sec. 1304. It is used to pay most litigative and many administrative awards against the United States.