Shutdown and Federal Courts: It Will Be Mostly Business As Usual

In our January 11, 2019 alert, we described how the current government shutdown, now the longest in U.S. history, could impact civil litigation in federal court. Yesterday the Administrative Office of the Courts (“AOC”) announced that federal courts could sustain funded operations through February 1. Still, as the government shutdown enters its fifth week with no clear end in sight, a total lapse in appropriations for federal courts seems likely. When that happens, only employees deemed “essential” to the exercise of courts’ Article III powers will be able to report to work without receiving pay until an appropriation is made. The effect of the shutdown continues to be a confusing patchwork among the federal courts, with most civil litigants being unaffected.

“Business as Usual”

Despite the looming shutdown, a number of federal courts have assured that operations will proceed as usual after the funds run out. Last Friday, for example, the Federal Circuit published an order stating that it would remain open during the shutdown, and, absent a grant of a motion for extension of time or a motion to stay, all deadlines would remain in effect and all oral arguments would proceed as scheduled. The court further explained that its electronic filing system (CM/ECF) would continue operating and that paper filings would continue to be accepted by mail and in person. The United States District Court for the District of Delaware also recently announced that even after funding lapses, “all employees will be required to report to work consistent with their normal schedules. To the extent possible, the Court will be open and operational without disruption, including by conducting jury trials and other criminal and civil proceedings.”  Similarly, the United States District Court for the District of Massachusetts announced that “[a]ll cases, both civil and criminal, [would] proceed as normal business before the court.” And just yesterday, the United States District Court for the Eastern District of Virginia issued a standing order regarding the court’s operation in the event of a lapse in appropriation. The court noted that it would “continue without interruption to hear and decide cases,” and that all activities necessary “to support and maintain the exercise of Article III judicial power” would continue without interruption. The court did not provide any further detail about which activities meet this criteria, but it did note that limited furloughs would be carried out.

Reports from our lawyers are that civil matters not involving the government are moving along apace. Brett Bartlett, Co-chair of Seyfarth’s National Wage and Hour Litigation Practice Group, explains that “on the whole, the number of cases filed by the U.S. Department of Labor pale in comparison to those pursued by private litigants.” This means that for clients with employment matters filed against them by private litigants, “it has been business as usual, at least so far.” The same appears to be true for matters involving the Departments of Labor and Defense, which are both fully funded for the 2019 fiscal year.

Cases involving intellectual property have also escaped the shutdown’s immediate effects, although that may change when funds for the United States Patent and Trademark Office (“USPTO”) dry up. Last month, the USPTO announced that it would remain open for business as normal by using prior fee collections. It noted, however, that it could only continue normal operations “for a few weeks,” and would “have to shut down” if its funds are exhausted before the shutdown comes to an end. If that happens, a small staff would continue to work to receive new applications and filings, receive payments, maintain IT infrastructure, and perform other limited functions. Although the USPTO stated that it would post updates regarding its operating status to its website, no such updates have been released. Thus, at least for now, the USPTO appears to be operating as normal in spite of the government shutdown.

“Serious Disruptions”

The United States Court of Appeals for the D.C. Circuit released a statement last week predicting “serious disruptions” for federal courts once the remaining funds are exhausted. The court did not explain what those serious disruptions would look like, and this week’s update is devoid of reference to “serious disruptions.” We anticipate that some courts may prioritize their criminal dockets and operate with limited, unpaid staff. Given the lack of funds, courts are unlikely to empanel new juries without the ability to pay them. Already-empaneled jurors will likely continue their work, though the danger still exists that these unpaid, unhappy jurors will make rushed decisions.

For those lawsuits that involve the government, the effect of the shutdown has been significant. Workplace discrimination suits have been hamstrung by a lapse in funding and furlough of attorneys for the Equal Employment Opportunity Commission (“EEOC”). Despite a year of aggressive EEOC case filings and eye-popping litigation activity, the EEOC’s litigation machine has ground to an abrupt halt. “Virtually all of the Commission’s cases, from single-Claimant to coast-to-coast systemic matters, are frozen, leaving employers who were hoping for an efficient end to these cases in litigation limbo,” explained Seyfarth Labor and Employment Partner Christopher J. DeGroff, who is Co-Chair of the Firm’s Complex Discrimination Litigation Practice Group. “The impact of the shutdown will be felt long after the stalemate is resolved, with hundreds of case management schedules across the country stuck in a forced ‘reboot.’” 

We will continue to monitor reports from the courts and elsewhere and anticipate a further array of conflicting messages as this shutdown drags on.