Local Rule LR 67.1: REGISTRY AND OTHER FUNDS IN THE CUSTODY OF THE CLERK OF COURT

LR 67.1 REGISTRY AND OTHER FUNDS IN THE CUSTODY OF THE CLERK OF COURT

(A) Receipt and Deposit of Registry Funds.

(1) Generally. No money shall be sent to the Court or its officers for deposit in the Court's registry without a Court order signed by the presiding judge.

(2) Deposit with U.S. Treasury. Unless otherwise ordered by the presiding judge, all monies ordered to be paid to the Court or tendered by litigants and authorized by the Court for deposit into the registry of the Court must be deposited with the Treasurer of the United States in the name and to the credit of this Court pursuant to 28 U.S.C. § 2041 through depositories designated by the Treasury to accept such deposits on its behalf.

(B) Investment of Registry Funds with the Court Registry Investment System ("CRIS").

(1) Unless otherwise ordered by the presiding judge or impractical due to a short time-frame before disbursement, registry deposits which reasonably are expected to accrue to the ultimate benefit of private parties must be invested through the Court Registry Investment System ("CRIS") administered by the Administrative Office of the United States Courts under 28 U.S.C. § 2045. All monies made payable by decree of this Court to minor and incompetent plaintiffs which are not paid directly to the plaintiff's authorized representative shall be deposited into CRIS.

(2) Where, by order of the Court, funds on deposit with the Court are to be placed in some form of interest-bearing account, CRIS shall be the only investment mechanism authorized.

(3) Unless the Court specifically provides otherwise, the ultimate beneficiary or beneficiaries of any appreciation resulting from investment shall be that person or those persons ultimately found to be entitled to receive the principal thereof.

(4) Interpleader funds deposited under 28 U.S.C. § 1335 meet the IRS definition of a "Disputed Ownership Fund" (DOF), a taxable entity that requires tax administration. Unless otherwise ordered by the Court, interpleader funds must be deposited in the DOF established within the CRIS and administered by the Administrative Office of the United States Courts, which shall be responsible for meeting all DOF tax administration requirements.

(5) The Director of the Administrative Office of the United States Courts is designated as custodian for all CRIS funds. The Director or the Director's designee shall perform the duties of custodian. Funds held in CRIS remain subject to the control and jurisdiction of this Court.

(6) Money from each case deposited in CRIS shall be "pooled" together with those on deposit with Treasury to the credit of other courts in CRIS and used to purchase Government Account Series securities, which will be held at Treasury in an account in the name and to the credit of the Director of the Administrative Office of the United States Courts. The pooled funds will be invested in accordance with the principles of the CRIS Investment Policy as approved by the Registry Monitoring Group.

(7) An account will be established in the CRIS Liquidity Fund titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case based on the ratio each account's principal and earnings has to the aggregate principal and income total in the fund after the CRIS fee has been applied. Reports showing the interest earned and the principal amounts contributed in each case will be prepared and distributed to the Court and made available to litigants and/or their counsel.

(8) For each interpleader case, an account shall be established in the CRIS Disputed Ownership Fund ("DOF"), titled in the name of the case giving rise to the deposit invested in the fund. Income generated from fund investments will be distributed to each case after the DOF fee has been applied and tax withholdings have been deducted from the fund. Reports showing the interest earned and the principal amounts contributed in each case will be available through the FedInvest/CMS application for each court participating in the CRIS and made available to litigants and/or their counsel. On appointment of an administrator authorized to incur expenses on behalf of the DOF in a case, the case DOF funds should be transferred to another investment account as directed by Court order.

(9) The custodian is authorized and directed to deduct the CRIS fee of an annualized 10 basis points on assets on deposit for all CRIS funds, excluding the case funds held in the DOF, for the management of investments in CRIS. According to the Court's Miscellaneous Fee Schedule, the CRIS fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to Court cases.

(10) The custodian is authorized and directed to deduct the DOF fee of an annualized 20 basis points on assets on deposit in the DOF for management of investments and tax administration. According to the Court's Miscellaneous Fee Schedule, the DOF fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to Court cases. The custodian is further authorized and directed by this Order to withhold and pay federal taxes due on behalf of the DOF.

(C) Disbursement of Registry Funds.

(1) Generally. Withdrawal of registry funds must be authorized by Court order.

(2) Motion for Disbursement. All motions for disbursement of registry funds must specify the principal sum initially deposited, the amount(s) of principal funds to be disbursed, to whom (payee or attorney) the disbursement is to be made, and complete mailing instructions (full address and zip code of payee or attorney). Each motion must include a proposed order of disbursement.

(3) Orders of Disbursement. Before they are presented to the judge, all orders for disbursement of registry funds must be presented to a financial deputy clerk for a certification of the amount of funds deposited in the registry of the Court, including any interest earned. If counsel does not present the order to a financial deputy clerk for certification, then chambers staff must do so. Each proposed order of disbursement must contain the following language: "The clerk is authorized and directed to disburse funds on deposit in the registry of this Court in the principal amount of $____ plus all accrued interest, minus any statutory users fees, via EFT or check payable to [name of payee] and send to [payee or attorney]." If more than one payment is to be issued on a single order, the portion of principal due each payee must be separately stated in the order.

(4) Taxpayer Identification Numbers. Social Security numbers, tax identification numbers, and mailing addresses will not be included in a proposed order of disbursement, but that information will be provided by counsel for each payee in a cover letter or other document conveyed to but not filed with the Court. An AO213 (Request for Vendor Information and TIN Certification) form is required for each payee.

(5) Payee Name. On all payments drawn by the clerk on deposits made into the registry of the Court, the name of the payee must be recorded in the payment document as that name appears in the Court's order providing for disbursement.

(6) Time of Disbursement. The clerk will issue disbursements as soon after receipt of the Order for Disbursement as the business of the clerk's office allows, except when it is necessary to allow time for a check or draft to clear or when an order is appealable. The disbursement may not be made until the time for appeal has expired.

(D) Designated and Qualified Settlement Funds. If the Court establishes or approves a "designated or qualified settlement fund" that will be held in the registry of the Court, the Court either shall approve the person named in the settlement agreement as administrator or shall designate as administrator the party that deposited the funds into the Court's registry. See 26 U.S.C. § 468B and applicable Internal Revenue Service regulations, including 26 C.F.R. § 1.468B (57 Federal Register 60983-60995). The administrator shall be responsible for fulfilling all obligations of the fund relating to tax procedures, including all necessary filings and payments of taxes. If, for any reason, the order establishing the fund does not designate or approve an administrator, the party depositing the funds shall be deemed to be the administrator for the purposes of complying with the fund's tax obligations and requirements, including the filing of necessary returns and the payment of all taxes.

(E) Disbursement of Monies Other than Registry Funds. Funds other than registry funds must be disbursed by check drawn on the Treasury of the United States. The payee's name must be written as the name appears in the disbursement voucher approved by the clerk or designated approving officer. The name of the payee in the disbursement voucher must conform to the name appearing in the clerk's records of the case to which the disbursement relates. The clerk must endeavor to note of record the given name of all individuals making deposits of monies with the clerk. In those cases where the given name appears of record, disbursement vouchers and checks thereunder shall show the full given name, additional initials, if any, and the surname of the payee.