Drg Funding Corporation v. Secretary of Housing and Urban Development

STEPHEN F. WILLIAMS, Circuit Judge,

concurring:

In its action in the district court, DRG sought both review of HUD’s refusal to dismiss its “administrative offset” proceedings against DRG, and mandamus to enforce DRG’s previously acquired final judgment against HUD. If the statutory authority on which DRG relied were apt, circuit precedent would entitle DRG to mandamus to enforce its judgment, regardless of whether the administrative proceeding had reached a final decision or not. Hines v. United States, 105 F.2d 85 (D.C.Cir.1939) (applying 31 U.S.C. § 227 , the predecessor of 31 U.S.C. § 3728 ). Because the statute is inapplicable, however, mandamus is unavailable.

HUD rests its administrative offset on authority granted by 31 U.S.C. § 3716 . That section, however, states that it does not apply “when a statute explicitly provides for or prohibits using administrative offset to collect the claim or type of claim involved.” 31 U.S.C. § 3716 (c)(2). DRG argues that an *1217 other section, 31 U.S.C. § 3728 , is a statute explicitly providing such an alternative. 1 Section 3728 supplies the procedure for eases where a party has secured “a judgment against the United States Government presented to the Comptroller General,” 31 U.S.C. § 3728 (a), setting out a mechanism that requires the government, if it seeks an offset, to bring suit in district court on its offsetting claim:

§ 3728. Setoff against judgment

(a) The Comptroller General shall withhold paying that part of a judgment against the United States Government presented to the Comptroller General that is equal to a debt the plaintiff owes the Government.

(b) The Comptroller General shall—

(2)(A) withhold payment of an additional amount the Comptroller General decides will cover legal costs of bringing a civil action for the debt if the plaintiff denies the debt or does not agree to the setoff; and

(B) have a civil action brought if one has not already been brought.

31 U.S.C. § 3728 . Section 3728 was enacted in 1875, restated in 1933, and left unchanged when Congress overhauled title 31 in 1982 by passing the Debt Collection Act, including § 3716. See 1982 U.S.C.C.A.N. 4301.

In Hines v. United States we read the predecessor version of § 3728, 31 U.S.C. § 227 , 2 as saying that the United States cannot stave off enforcement of a judgment against itself, on grounds of some alleged offset, without filing suit against the plaintiff. Where it has failed to file suit, its duty to pay the judgment is purely ministerial and mandamus will lie. 105 F.2d at 93 . “It takes nothing short of [institution of suit] to justify withholding money adjudged by a court to be payable by the government. This mandate of the law is not met by the administrative finding of indebtedness.” Id. at 88 . See also National Bulk Carriers v. Warren, 82 F.Supp. 511, 512-14 (D.D.C.1949) (following Hines in refusing to allow government to offset judgment against it without filing suit; without such suit, the act “requires that mandamus shall issue”); United States v. Eastport Steamship Corp., 255 F.2d 795, 797-98 (2d Cir.1958) (noting that statute requires Comptroller General to institute legal proceedings to effect offset from judgment against the United States); id. at 806 (Medina, J., dissenting) (citing Hines for further proposition that mandamus is available to compel Comptroller General to pay judgment if he attempts offset without filing suit); Chapman v. United States, 347 F.Supp. 89, 94 (C.D.Cal.1972) (holding that in cases where taxpayer has obtained a judgment, predecessor of § 3728 overrides 26 U.S.C. *1218 § 6402 (a), which allows Secretary of the Treasury to offset tax refund if liability remains), rev’d on other grounds, 485 F.2d 1194 (9th Cir.1973). Cf. Citizens Bank and Trust Co. v. United States, 240 F.2d 863, 864 (D.C.Cir.1956) (citing Hines for proposition that mandamus lies against government officials to compel them to honor a money judgment); Eastport Steamship Co. v. United States, 130 F.Supp. 333, 334-35 , 131 Ct.Cl. 210 (1955) (government may offset claim against money judgment only if it has filed suit on the claim; majority holds that judgment creditor’s remedy is action for wrongful withholding while dissent says remedy is mandamus).

These cases are not inconsistent with the general proposition that mandamus is available only if other remedies are inadequate. See, e.g., Women’s Equity Action League v. Cavazos, 906 F.2d 742, 752 (D.C.Cir.1990) (denying wide-reaching mandamus as substitute for statutorily provided causes of action), cited at Maj.Op. at 1216. Clearly the courts in Hines and the other cases were aware of the familiar doctrine, but regarded the government’s proffered remedy of administrative process, followed by judicial review, as inadequate in light of the statutory right.

Further, the observation of the Hines court that “nothing” remained but the ministerial action of paying the judgment, compare Maj.Op. at 1216 n. 3, would be true here in precisely the same way it was true there, if § 3728 were applicable. Hines’s judgment was final and the United States was claiming that, rather than pay the judgment or file suit on its offset, it was free to withhold payment because of the agency’s administrative process. The court emphatically rejected the claim. Because the statute entitled the judgment creditor to payment unless the government filed suit, “nothing” remained to be done. 105 F.2d at 93 . The statute did not allow an agency to withhold payment on a judgment simply on an administrator’s say-so, whether final or not. Id. at 88 .

HUD argues, however, that § 3728 is inapplicable because DRG’s judgment against HUD is not a “judgment against the United States Government presented to the Comptroller General,” the terms triggering § 3728. HUD is an agency that may “sue and be sued,” under 12 U.S.C. § 1702 , and has an independent revolving fund for the payment of judgments. So the Comptroller General is simply not involved in payment of DRG’s judgment.

So far as appears (and DRG has the burden of showing that it is within the terms of the statute), HUD is correct. Although one statute states that “[ejxcept as provided by the Contract Disputes Act of 1978, payment of final judgments rendered by a district court ... against the United States shall be made on settlements by the General Accounting Office,” 28 U.S.C. § 2414 , which the Comptroller General heads, 31 U.S.C. § 702 (b), in practice the GAO’s involvement is narrower. 31 U.S.C. § 1304 (a) creates the judgment fund out of which payments certified by the Comptroller General are paid, but the judgment fund is used only if “payment is not otherwise provided for.” Id. § 1304(a)(1). According to a GAO publication, where a sue-and-be-sued agency conducts a business-type program funded by a revolving or special fund, judgments arising from the program are payable by the agency from the fund. U.S. General Accounting Office, Office of the General Counsel, Principles of Federal Appropriations Law (2d ed. 1994), 14-38. Here the parties agree that DRG’s judgment would — at least nominally— be paid from HUD’s General Insurance Fund, thereby short-circuiting the Comptroller General.

DRG responds, however, that in another litigation the government successfully thwarted an effort by DRG’s creditors to garnish its judgment against HUD by persuading the court that in fact that judgment was against the United States. Because HUD’s General Insurance Fund has been operating at a great loss for many years, the court found, it is funded by “what amounts to a permanent appropriation of funds from the U.S. Treasury,” and, “[a]s a practical matter,” payment of DRG’s claims “would expend itself on the public Treasury.” The Business Bank v. DRG Funding Corp., Civil Action No. 91-1985-SSH, Mem.Op. 10-11 (E.D.Va. July 16, 1993).

*1219 I assume in DRG’s favor that the government is bound on the point by judicial estop-pel, i.e., that having won a judgment on one premise it cannot turn tail and repudiate its success in another litigation. Compare Southern Pacific Transp. Co. v. ICC, 69 F.3d 583 , 591 n. 3 (D.C.Cir.1995) (noting our circuit’s past rejection of judicial estoppel), with Astor Chauffeured Limousine Co. v. Runnfeldt Investment Corp., 910 F.2d 1540, 1547-49 (7th Cir.1990) (analyzing and applying judicial estoppel). But even if the prior decision conclusively establishes that DRG’s judgment is against the United States for purposes of limits on garnishment arising out of sovereign immunity doctrines, that would fail to establish that DRG’s judgment is a judgment “against the United States Government presented to the Comptroller General” under 31 U.S.C. § 3728 . DRG treats § 3728’s reference to the Comptroller General as an irrelevant frill, but as a court we are not free to adopt so cavalier an attitude. After all, in a statute expressly spelling out duties of the Comptroller General, it would be odd to treat him and his presence as inconsequential.

There is little authority on the subject. Principles of Federal Appropriations Law notes that the general issue of application of § 3728 to judgments not payable through GAO is unresolved and that the tax cases involving offset have produced no consensus. Id. at 14-77. Our circuit held in Empire Ordnance Corp. v. Harrington, 249 F.2d 680, 682 (D.C.Cir.1957), that taxpayers who had obtained a judgment from the Tax Court, which the Internal Revenue Service was attempting to offset under 26 U.S.C. § 6402 (providing for offset of tax refunds), were not entitled to mandamus on their judgment. The opinion did not mention Hines , and indeed only mentioned the predecessor to § 3728 in passing, without noting the requirement that the government file suit. District courts have taken conflicting views of the IRS’s powers under 26 U.S.C. § 6402 . Compare Chapman v. United States, 347 F.Supp. 89, 94 (C.D.Cal.1972) (stating that IRS’s authority to make offsets under § 6402(a) has no application where the taxpayer has secured a judgment that triggers application of the predecessor to § 3728), with Heirich v. United States, 340 F.Supp. 283, 284 (N.D.Ill.1971) (where judgment for taxpayer was offset by IRS under § 6402(a), taxpayer must move before the district court to execute the judgment, and in such a proceeding, the merits of the government’s claim of a deficiency may be fully litigated). Cf. Snyder v. United States, 630 F.Supp. 182, 184 (D.Md.1986) (dictum approving of Heirich ).

DRG contends that HUD’s own Administrative Offset Regulations conflict with the literal reading of the statute and should control. Indeed, those regulations explicitly state: “Collection by offset against a judgment obtained by a debtor against the United States will be accomplished in accordance with 31 U.S.C. § 3728 .” 24 CFR § 17.116 . Moreover, the definitions section states that “United States includes an agency of the United States,” and “agency” means, among other things, “an Executive department” or “Government corporation” as defined in 5 U.S.C. §§ 101 or 103. 24 CFR § 17.60 (b). Not surprisingly, HUD is an executive department according to 5 U.S.C. § 101 , and the Government National Mortgage Association (against which DRG’s judgment also runs) is a government corporation. See 5 U.S.C. § 103 (identifying government corporations); 12 U.S.C. § 1717 (a)(2)(A) (establishing Ginnie Mae as a “body corporate” without capital stock within HUD). But because HUD is not vested with the enforcement of 31 U.S.C. § 3728 , which is directed to the Comptroller General, I do not see why we should defer to its interpretation. See Adams Fruit Co. v. Barrett, 494 U.S. 638, 649 , 110 S.Ct. 1384, 1390 , 108 L.Ed.2d 585 (1990) (“A precondition to deference under Chevron [U.S.A, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984)] is a congressional delegation of administrative authority.”); Crandon v. United States, 494 U.S. 152, 177 , 110 S.Ct. 997, 1011 , 108 L.Ed.2d 132 (1990) (Scalia, J., concurring in the judgment) (“specific responsibility for administering the law” is necessary to trigger Chevron deference); Professional Reactor Operator Society v. NRC, 939 F.2d 1047, 1051 (D.C.Cir.1991) (refusing to apply Chevron *1220 deference to NRC’s interpretation of the APA, citing Adams Fruit Co. and Crandon).

Because DRG has failed to show that the provisions for payment of its judgment bring it within the terms of § 3728,1 concur in the judgment affirming the district court’s denial of mandamus.

. HUD says that DRG did not make “[t]he argument" to the district court, but must be referring to the exception to finality for an outright violation of a clear statutory right, for DRG clearly raised the substantive issue of its entitlement to mandamus under § 3728 before the district court and the ALJ.

. 31 U.S.C. § 227 provided:

Offsets against judgments against United States. When any final judgment recovered against the United States duly allowed by legal authority shall be presented to the Comptroller General of the United States for payment, and the plaintiff therein shall be indebted to the United States in any manner, whether as principal or surety, it shall be the duty of the Comptroller General of the United States to withhold payment of an amount of such judgment equal to the debt thus due to the United States; and if such plaintiff assents to such set-off, and discharges his judgment or an amount thereof equal to said debt, the Comptroller General of the United States shall execute a discharge of the debt due from the plaintiff to the United States. But if such plaintiff denies his indebtedness to the United States, or refuses to consent to the set-off, then the Comptroller General of the United States shall withhold payment of such further amount of such judgment as in his opinion will be sufficient to cover all legal charges and costs in prosecuting the debt of the United States to final judgment. And if such debt is not already in suit, it shall be the duty of the Comptroller General of the United States to cause legal proceedings to be immediately commenced to enforce the same, and to cause the same to be prosecuted to final judgment with all reasonable dispatch. And if in such action judgment shall be rendered against the United States, or the amount recovered for debt and costs shall be less than the amount so withheld as before provided, the balance shall then be paid over to such plaintiff by such Comptroller General of the United States with 6 per centum interest thereon for the time it has been withheld from the plaintiff.