In re Unclaimed Balance Account Can 200

608 F. Supp. 292, 27 Wage & Hour Cas. (BNA) 235, 1985 U.S. Dist. LEXIS 20710
CourtDistrict Court, E.D. Virginia
DecidedApril 16, 1985
StatusPublished

This text of 608 F. Supp. 292 (In re Unclaimed Balance Account Can 200) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Unclaimed Balance Account Can 200, 608 F. Supp. 292, 27 Wage & Hour Cas. (BNA) 235, 1985 U.S. Dist. LEXIS 20710 (E.D. Va. 1985).

Opinion

OPINION

WARRINER, District Judge.

The Clerk of the Court for the Eastern District of Virginia has requested that certain funds on deposit with the Treasurer of the United States in a Symbol 200 account, an account in the name of and to the credit of the United States District Court for the Eastern District of Virginia, be transferred to a Symbol X600 account, an account in the name of and to the credit of the United States. The Symbol X600 denominated account is generally unclaimed monies.

In support of the request the Clerk has submitted a memorandum dated 28 December 1983 from William M. Nichols, General Counsel, Financial Management Division of the Administrative Office, to Dewey R. Heising, Chief of the Financial Management Division, and a resulting memorandum from Mr. Heising dated 8 February 1984 to the Clerks of all United States District Courts.

The list of accounts submitted by the Clerk with the transfer request itemizing the amount of money on deposit from various lawsuits indicates that all of these funds are for unclaimed wages obtained from employers under provision of the Fair Labor Standards Act [29 U.S.C. §§ 201-219]. However, the precise statutory source of these wages is not identified. From the briefs accompanying the request it appears that the monies were received by the Court from actions brought either un[293]*293der 29 U.S.C. § 216 or under 29 U.S.C. § 217 or that portions were paid into court under one section and other portions under the other.

Under these circumstances the Court does not have sufficient information to determine whether or not it would be appropriate to make the transfer requested by the Clerk.

Section 216 sets out procedures for the disposition of unclaimed funds recovered from actions brought under that section. Section 216(c) provides:

Any sums thus recovered by the Administrator [Secretary of Labor] on behalf of an employee pursuant to this subsection shall be held in a special deposit account and shall be paid, on order of the Administrator [Secretary of Labor], directly to the employee or employees affected. Any such sums not paid to an employee because of inability to do so within a period of three years shall be covered into the Treasury of the United States as miscellaneous receipts.

Accordingly if the funds the Clerk requested be transferred are those that were recovered under § 216, this Court should not have received or held the funds in any event. They should have been held in “a special deposit account” subject to the order of the Secretary. Deposits of § 216 funds to the credit of the Court was error since such a fund would not be subject to the “order of the [Secretary].” The proper disposition of any such funds on deposit to the credit of the Court is to transfer the money to the Secretary of Labor who can then comply with the provisions of § 216(c) upon the expiration of the requisite three-year period.

Section 217 does not contain any provisions concerning the disposition of unclaimed wages. Section 217 deals with injunction proceedings aimed at enjoining violations by an employer who fails to pay the minimum wage or fails to pay his employees overtime compensation. It has been held that as part of its equity power a court may order the employer to make restitution for unpaid minimum wages and for overtime violations. See Mitchell v. Robert De Mario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960); Wirtz v. Milton J. Wershow Co., 416 F.2d 1071, 1072 (9th Cir.1969).

Generally when an award of restitution is made under § 217 the money is entrusted by the Court to the Secretary who sees to it that the aggrieved employees receive compensation. See Usery v. Godwin Hardware, Inc., 426 F.Supp. 1243, 1269 (W.D.Mich.1976). The Secretary of Labor, if he is unable to locate the employees, at times, will submit those unclaimed funds to the court. See, e.g., Usery, 426 F.Supp. at 1269. Because there is no statutory provision specifically mentioning the procedure to be followed in § 217 actions, I assume 28 U.S.C. §§ 2041 and 2042 control the disposition of § 217 funds when they have been returned to a court by the Secretary.

Section 2041 provides:

All monies paid into any court of the United States, or received by the officers thereof, in any case pending or adjudicated in such court, shall be forthwith deposited with the Treasurer of the United States or a designated depository, in the name and to the credit of such court. This section shall not prevent the delivery of any such money to the rightful owners upon security, according to agreement of parties, under the direction of the court.

Section 2042 provides:

No money deposited under § 2041 of this title shall be withdrawn except by order of court.
In every case in which the right to withdraw money deposited in court under § 2041 has been adjudicated or is not in dispute and such money has remained so deposited for at least five years unclaimed by the person entitled thereto, such court shall cause such money to be deposited in the Treasury in the name and to the credit of the United States. Any claimant entitled to any such money may, on petition to the court and upon notice to the United States attorney and [294]*294full proof of the right thereto, obtain an order directing payment to him.

Reading §§ 2041 and 2042 together establishes that funds received from the Secretary by the court in a § 217 action must be deposited with the Treasurer or with a designated depository in the name of and to the credit of the court. Once deposited the money must remain deposited as provided by § 2041 to the name of and to the credit of the court for five years unless it is earlier claimed by a claimant entitled to the funds. Only after the end of five years may the unclaimed funds be deposited to the credit of the United States.

The memo from Mr. Nichols mentioned above cites Hodgson v. Wheaton Glass Co., 446 F.2d 527, 535-36 (3d Cir.1971) and Usery v. Godwin Hardware, 426 F.Supp. 1243, 1269 (W.D.Mich.1976) for the proposition that when § 217 funds are paid to a clerk of the court by the Secretary, the clerk may “deposit the unclaimed wages into the Treasury ‘forthwith,’ to be held for the missing claimants. It is not necessary for the clerk to hold this type of money for five years under 28 U.S.C. § 2042.” The memorandum from Mr.

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608 F. Supp. 292, 27 Wage & Hour Cas. (BNA) 235, 1985 U.S. Dist. LEXIS 20710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-unclaimed-balance-account-can-200-vaed-1985.