B-242786 January 31, 1991

B-242786: Jan 31, 1991

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DIGEST The Judgment Fund is not available to pay an award of attorney fees and costs where the court's clear intention is to impose sanctions against the government in order to punish the government's behavior and to deter such behavior in the future. This conclusion is distinguished from Burson. Z-2908204 (B-242786) This is to advise you of the outcome of my conversations with Justice Department staff concerning payment of sanctions by the government in the captioned matter. That the Judgment Fund is not legally available to pay the award of sanctions here. As you will recall. Was precluded from revealing the fact that she planned to call some expert witnesses to advance the government's case. /1/ This effectively required her to violate Rule 26 of the Federal Rules of Civil Procedure (FRCP).

B-242786 January 31, 1991

DIGEST

DATE: January 31, 1991 TO: Judgment Group Manager, Claims/GGD - Ken Schutt THRU: Assistant General Counsel, QGC/AEMD - Tom Armstrong FROM: Attorney-Advisor, GGC/AFMD - Neill Martin-Rolsky

SUBJECT: Bradley v. United States, Z-2908204 (B-242786)

This is to advise you of the outcome of my conversations with Justice Department staff concerning payment of sanctions by the government in the captioned matter. Justice staff argue, essentially, that because the record in this case contains no judicial finding of contempt or willful violation of the law by the government, the court meant not to punish the government, but only to compensate the plaintiffs for their expenses. We disagree. The district court's order, when read in conjunction with the appellate court's instructions in remanding the case to the district court, clearly evidences an intent to punish the government and to deter similar conduct in the future. We conclude, therefore, that the Judgment Fund is not legally available to pay the award of sanctions here.

As you will recall, the underlying case arose from some alleged medical malpractice. In the course of discovery, due to internal budgetary policies of the Justice Department, the Assistant United States Attorney assigned to this case, Ms. Mattie Compton (8l7-334-3536), was precluded from revealing the fact that she planned to call some expert witnesses to advance the government's case. /1/ This effectively required her to violate Rule 26 of the Federal Rules of Civil Procedure (FRCP), as well as a local, district court procedural rule.

Several days before the trial was scheduled to begin, the AUSA learned that the Department had lifted the restrictive policy after having located additional funds. The AUSA immediately notified opposing counsel in an informal conversation of the fact and identities of her intended expert witnesses. Plaintiff quickly deposed those witnesses, while simultaneously asking the court to exclude them. The court denied the request on the ground that plaintiff had been able to quickly depose the experts before trial began. Upon completion of the trial, the court, relying heavily upon the testimony of the government's expert witnesses, ruled in favor of the government.

Upon appeal, the district court's judgment was vacated and remanded for a new trial. The district court was held to have abused its discretion in this regard and, in so doing, unfairly prejudiced the plaintiff's rights. Moreover, the district court was directed to assess sanctions against the government for failing to disclose its expert witnesses in a timely fashion. Bradley v. United States, 866 F.2d 120 (5th Cir. 1989). Upon remand the district court imposed sanctIons in the amount of 200,974.l2. /2/

The Judgment Fund is not available to pay awards intended to punish an agency. See 44 Comp.Gen. 312 (1964); B-239556, Oct. 12, 1990 (Z-289826l, Burson v. Marine Corp. Finance Center) . The district court's order, together with the appellate court's instructions on remand, clearly establish judicial intent to punish the Justice Department. The appellate court stressed its dissatisfaction with the Justice Department budgetary policy which caused the AUSA to breach her obligations under Rule 26 of the FRCP and the district court's local rules, and spoke of the need to punish the government and deter similar conduct in the future. See generally Bradley at 126-27; 127 n.11. It described the Justice policy as "predicated upon a [purposeful] disregard of the power of federal courts and the rights of opposing parties." Id. at 127. The court added that it is "hopeful that [its] decision will serve as a catalyst for appropriate changes in [Justice's] policies, to the extent that such policies still deter adherence to the applicable rules." Id. It directed the district court to impose sanctions, "not just to compensate the [plaintiffs], but to ensure that the government's conduct does not go unpunished, as it would if the case were remanded merely for a new trial." Id. at 128. The amount of the district court's award was intended to satisfy these directions, and was calculated to fully reimburse the plaintiffs for all attorney fees and costs incurred in the conduct of the first trial.

It seems clear, then, that the purpose in making this award was to compensate the plaintiffs' expenses, ensure the fair conduct of trials, compell compliance with judicial rules and orders, deter similar conduct in the future, punish defiance of the courts, and vindicate the power of the courts. Certification and payment of these sanctions from the Judgment Fund would tend to frustrate some of these purposes at least. Consequently, this judgment does not lie within the general scope of 31 U.S.C. Sec. 1304. /3/ In this regard, we suggest that payment of this award might be made from that appropriation which supports that element of the Justice Department who originated the policy that led to the court's sanction.

We note that the AUSA has requested expedited treatment of this matter, owing to the "tight" time provisions specified in the court's orders. I trust you will contact the AUSA if this presents a problem for you. Should there be any questions about this matter now or in the future, please feel free to contact me. Your "Z" file is returned as an attachment to this memorandum.

Attachment

cc: Ms. Green, Claims/GGD Mr. Kepplinger, OGC/AFMD

1. The policies at issue were apparently intended to avoid budgetary shortfalls during a period of tight" finances for the Department. I understand from conversations with the staffs of various elements of the Justice Department that different policies were adopted by different segments of the Department in order to cope with the financial crisis of that time. I was told that some of those policies, including the one at issue here, were more intrusive upon the litigative process than others, and the disparities within the Department in this regard provoked considerable internal debate.

2. The Justice Department decided not to appeal this sanction. As a separate matter, the Department decided that a new trial of this matter would not be cost-effective, and she underlying claims were settled for a total of $101,500. You have already certified payment from she Judgment Fund of the compromise settlements.

3. We distinguish our conclusion in this matter from Burson, B-239556, Oct. 12, 1990. In Burson, as here, the court awarded attorney fees and costs; unlike in this case, the Burson court did not indicate in any way that such award was to be other than compensative in nature.