State v. Bowsher

• Decision Date: 30 March 1990
• Docket Number: Civ. A. No. 88-3717.
• Citation: 734 F. Supp. 525
• Parties: STATE OF ALABAMA, et al., Plaintiffs, v. Charles A. BOWSHER, et al., Defendants.
• Court: U.S. District Court — District of Columbia

734 F. Supp. 525

STATE OF ALABAMA, et al., Plaintiffs, v. Charles A. BOWSHER, et al., Defendants.

Civ. A. No. 88-3717.

United States District Court, District of Columbia.

March 30, 1990.

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Andrew P. Miller, Bernard Nash, Peter J. Kadzik, Dickstein, Shapiro & Morin, Washington, D.C., Joe A. Walters, E. William Crotty, Donald S. Arbour, O'Connor and Hannon, Minneapolis, Minn., and Washington, D.C., for plaintiffs.

Sandra M. Schraibman, Mark H. Murphy, Dept. of Justice, Civ. Div., Washington, D.C., for defendants.

MEMORANDUM DECISION AND ORDER

REVERCOMB, District Judge.

The plaintiffs in this matter are twenty-three States who claim the right pursuant to their respective unclaimed property laws to custody of monies belonging to their respective citizens and contained in the United States Treasury trust fund receipt account "Unclaimed Moneys of Individuals Whose Whereabouts are Unknown" as established by 31 U.S.C. § 1322. The defendants in this matter are the Comptroller General of the United States ("Comptroller General") and the Secretary of the Treasury of the United States ("Secretary"). The plaintiffs seek to compel the Secretary and the Comptroller General to settle their claims for the monies in their favor and to disburse the monies accordingly. The plaintiffs also seek to compel the Secretary to provide information regarding the unclaimed monies.

This matter is before the Court pursuant to defendants' Motion for Judgment on the Pleadings or, in the Alternative, for Summary Judgment. The defendants contend that this action is barred by sovereign immunity, standing, ripeness, failure to state a claim, the Supremacy Clause and exhaustion.

I. STATUTORY AND ADMINISTRATIVE BACKGROUND

A. Unclaimed Monies Accounts

The account "Unclaimed Moneys of Individuals Whose Whereabouts are Unknown" is established in 31 U.S.C. § 1322.¹ That provision requires the Secretary to transfer to that account those funds which had been in trust fund accounts listed in 31 U.S.C. § 1321(a)(1)-(82) or analogous trust funds listed in § 1321(b) for more than one year and which represent money belonging to individuals whose whereabouts are unknown.² Section 1322 expressly provides that subsequent claims to those monies are to be paid from that account and that necessary amounts will be appropriated for payment of those claims.

The Treasury Department has designated two funds to receive deposits of monies deemed unclaimed pursuant to 31 U.S.C. § 1322. Trust fund account number 20X6133 serves as a depository for monies in the amounts of $25.00 or more which meet certain criteria, and miscellaneous receipt account number 1060 serves as a depository for monies in amounts of less than $25.00 and for those monies which do not otherwise meet the criteria for transfer into Account 20X6133.³ See 1 Treasury Financial Manual ("TFM") § 6-3030.

The separate accounts were created to facilitate bookkeeping by the Treasury. Account 1060 is a true "miscellaneous receipts" account; deposits made into this account (unlike Account 20X6133) are not directly available for disbursement. In the event that claims are received by the transferring agencies for items transferred to Account 1060, and the facts indicate that refunds are justified, such claims are paid from account 20X1807 ("Refund of Moneys Erroneously Received and Covered") in accordance with the provisions of 1 TFM § 6-3075.

B. Procedures for Transfer of Unclaimed Monies Into the Secretary's Custody

The Secretary directs the federal agencies to analyze their various trust, revolving and deposit accounts periodically to determine whether they are holding unclaimed monies and, if so, to take appropriate action to initiate the transfer of such monies to the "unclaimed moneys" accounts. 1 TFM § 6-3030. Although the Treasury Department serves a centralized role as custodian of government funds, it has neither the access to agency records necessary to determine which monies have been held for over one year in the agency accounts nor certifying authority to order the transfer of monies from those accounts to the unclaimed monies accounts. Agencies transfer monies into the unclaimed monies accounts by submitting either a Statement of Transaction (Standard Form 224) or its electronic equivalent. 1 TFM § 6-3040.

The Treasury Department, through its Financial Management Service ("FMS"), maintains only the cumulative or government-wide balance of the unclaimed monies accounts, which reflects the monthly composite balance of deposits and withdrawals. The FMS maintains no records about the nature or origin of any monies transferred into the unclaimed monies accounts by the various agencies, including those within the Treasury Department (e.g., Internal Revenue Service, Bureau of Public Debt). Any such records would be maintained exclusively by the various agencies themselves. 1 TFM § 6-3085. The exact nature of these records may vary from agency to agency. The FMS has no independent knowledge of the internal accounting practices of any other agency or bureau concerning unclaimed monies and has no government-wide auditing function.

C. The Claims-Payment Scheme

Accountability for public monies in civilian agencies generally rests with the certifying official of the transferring agency, who has been charged with the responsibility of reviewing, inter alia, the "information stated in the certificate, voucher, and supporting records ... and the legality of a proposed payment under the appropriation or fund involved" and, if appropriate, certifying vouchers for payment. 31 U.S.C. § 3528; see also 1 TFM §§ 6-3060, 3075. If the certifying official has a question regarding the legality or propriety of the claim — and if Congress has not vested claims settlement in that administrative agency — the agency can submit the matter to the General Accounting Office. 1 TFM § 6-3050; see also GAO Policy and Procedures Manual for Guidance of Federal Agencies, title 7, § 21.11 (1983).⁴

Should the transferring agency determine that the claim for monies is legal and proper, the certifying official will initiate payment through the certification of a Voucher and Schedule of Payment Standard Form 1166 or its electronic certification equivalent. 1 TFM § 6-3060. This payment voucher is then transmitted to a disbursing official, who for most civilian Executive Branch agencies is an employee or official of the Treasury Department.⁵ 31 U.S.C. § 3321(a). Since the Secretary's authority to act as disbursing official is expressly limited by 31 U.S.C. § 3321(a) to executive agencies, the Legislative and Judicial Branch agencies have their own disbursing authority. See 2 U.S.C. § 104a (House of Representatives); 2 U.S.C. §§ 142b, d, e (Library of Congress); 2 U.S.C. § 143 (Architect of the Capitol); 28 U.S.C. § 604(a)(8) (Administrative Office of the U.S. Courts).

Pursuant to 31 U.S.C. § 3325(a), "a disbursing official in the executive branch of the United States Government shall (1) disburse money only as provided by a voucher certified by (A) the head of the executive agency concerned; or (B) an officer or employee of the executive agency having written authorization from the head of the agency to certify vouchers." For those agencies for which Treasury Department officials are the disbursing officials, vouchers are sent by the transferring agencies to FMS' Regional Financial Centers instructing payments according to the information contained in the vouchers. The disbursing officials do not review the vouchers to determine the legality or propriety of the underlying claims but, rather, the Regional Financial Centers examine the vouchers to determine if they are in the proper format, have been duly certified and are correctly computed. 31 U.S.C. § 3325(a)(2). The FMS then mails out the payments to the address contained on the form. The Agency Confirmation Report is transmitted to the finance office of the transferring agency as a record of payment.⁶ The other agencies which have both certifying and disbursing authority will issue their own payments and notify the Treasury Department of the composite monthly balance. 1 TFM §§ 6-3060, 3075.

Payment of claims for monies in accounts 20X6133 or 1060 are not made through direct contact between the claimant and the FMS (unless the FMS also is the transferring agency for the particular monies claimed). Nor are payments from these accounts made by the General Accounting Office. They are made upon authorization of the individual agencies without claims settlement action by GAO. 1 TFM §§ 6-3050, 3060, 3075; see also GAO Policies and Procedures for Guidance of Federal Agencies, Title 7, § 21.11. The Treasury Department is not aware of the procedural requirements of other agencies or bureaus for perfecting claims, nor does the Treasury Department set out procedures for determining whether a claim is valid and recoverable.⁷

D. Plaintiffs' Contacts with the Defendants and the Transferring Agencies

None of the plaintiff States claim to have escheated the monies they seek, that is, to have obtained legal title to or actual ownership of the monies through due process procedures which divest the owners of their interests therein. The plaintiff States have not filed claims for custody of monies contained in the unclaimed monies accounts with the transferring agencies.⁸ Indeed, the plaintiff States have not even contacted the transferring agencies for information on how to proceed or for the identification of unclaimed monies which belong to the citizens of their respective States.

On December 14, 1988, six States, Arizona, Delaware, Illinois, Kansas, Kentucky and Pennsylvania, sent a letter to the Comptroller General which requested: (1) "an acknowledgment that the states have a valid claim" to unspecified monies in the unclaimed monies accounts; (2) a listing of existing trust funds from which the monies had been transferred and of...