Correction: This article has been changed to correct the date upon which the federal courts expect to exhaust their funding reserves. The correct date is October 15.
As the federal government shutdown grinds on, the worst is yet to come for lawyers and their clients, federal agencies and the judiciary.
The nation’s federal courts expect by October 15 to exhaust funding reserves that so far kept workers at their desks. Federal judges at that point would continue to work, but each appellate, district and bankruptcy court across the country would have to decide just how much to scale back — from clerk’s office staff and human resources to information-technology teams.
Citing the shutdown, U.S. Department of Justice lawyers last week began asking judges to put thousands of civil cases on hold pending the resolution of an impasse that is keeping some 800,000 federal employees from their offices. Attorney General Eric Holder Jr. said the department could put prosecutors and investigators on furlough.
Wilmer Cutler Pickering Hale and Dorr partner Jamie Gorelick, who was the Justice Department’s deputy attorney general in 1996, during the last government shutdown, said the “hardest thing” is asking employees — including personnel who protect judges and staff prisons — to work without a paycheck.
“The decisions one needs to make about who is essential present extremely difficult choices,” said Gorelick, who leads the firm’s defense, national security and government-contracts practice group. “This is a foolish way to run a government.”
Lawyers for cases before the shuttered U.S. International Trade Commission, where large corporations fight over intellectual property infringement disputes, say preparation and out-of-court work can only last so long. In federal criminal cases, payments to private lawyers under the Criminal Justice Act could be suspended. Attorneys who practice in federal immigration courts fear a continued shutdown could further push back cases in a system long plagued by a backlog.
Trial dates for civil cases are being pushed back and judges are making case-by-case decisions whether to keep government lawyers coming to court — unpaid.
In Washington, U.S. District Judge Colleen Kollar-Kotelly rejected the government’s request to postpone the government’s antitrust case against the proposed US Airways/American Airlines merger. “It is essential that the Department of Justice attorneys continue to litigate this case,” wrote Kollar-Kotelly, noting, among other things, “the amount of money at stake in this merger.”
Lawyers for the airlines — including O’Melveny & Myers partner Richard Parker for US Airways and Jones Day partner John Majoras for AMR Corp. — were opposed to the government’s attempt to put the litigation on hold. “The longer the shutdown goes on, the greater the impact,” Majoras said.
If the shutdown persists, one thing is certain: Federal district judges will remain on the bench. Under federal law, trial judges are considered “essential” and must continue to work during any shutdown.
Each court must craft its own plan, however, to determine whether workers get sent home. Essential employees would likely include personnel that handle processing of criminal defendants. Chief Judge Morrison England Jr. of the U.S. District Court for the Eastern District of California said the judiciary’s in “unchartered territory right now.”
At least two courts­­ — the U.S. District Court for the Southern District of New York and the U.S. Court of Appeals for the Second Circuit — have already made it clear: No staff will be sent home.
“The dispensing of justice is mandated by the Constitution and essential to government, and the resolution of cases and controversies is the only work and product of the federal courts,” Second Circuit Chief Judge Robert Katzmann wrote in a September 30 order.
Interviews with nine federal judges and court officials revealed a growing sense of frustration over the shutdown. “We hope that the people who got elected to go to Washington to pass a budget will do their work,” Chief Judge Fred Biery of the U.S. District Court for the Western District of Texas said. “That’s kind of a basic thing they go up there to do. They can fight about all this other stuff at other times.”
Many U.S. district courts, already operating with reduced staff following layoffs and furloughs because of budget cuts this year, could soon decide to declare their remaining personnel exempt from the continued shutdown. “Whoever is left, believe me, they are so essential,” said Karen Redmond, spokeswoman for the Administrative Office of the U.S. Courts.
Robert Barth Jr., the clerk of court in the U.S. District Court for the Western District of Pennsylvania, said administrative functions such as human relations and procurement would likely be most affected. If the courts do go into full shutdown mode, he said, court officials would review any plan on a week-by-week basis.
The longer the shutdown goes, the more complicated the legal issues will become for lobbyists and for lawyers who practice in regulatory, litigation and government-contracts arenas.
Lawyers for major companies, for instance, are attracted by the speed of the International Trade Commission. Amid the shutdown, companies that include Samsung Electronics Co., Toshiba Corp., Panasonic Corp., Nokia Oyj and HTC Corp. now have stalled intellectual property infringement cases pending before the commission.
Louis Mastriani, a name partner at the boutique firm Adduci, Mastriani & Schaumberg, said companies and their lawyers are keeping busy — for now. “We’re actively working on preparing cases as well as preparing discovery, meeting and conferring with opposing counsel,” Mastriani said. “Once you’re into a third week with a fourth week looming, then I think the shutdown presents some problems.”
For lobbyists, fielding questions from clients about the future of legislation on Capitol Hill, the government shutdown has imposed significant uncertainty.
” ‘Who knows?’ is the answer,” said Ignacio Sanchez, a partner at DLA Piper who co-chairs the firm’s government-affairs practice group. “ Anyone who says it definitively would be lying.”
Contact Todd Ruger at email@example.com. Amanda Bronstad, Jenna Greene, Mike Scarcella and Zoe Tillman contributed.