Petition for Writ of Certiorari — Train v. Campaign Clean Water, Inc.

Hn the Supreme Gourt of the United States

OcroBER TERM, 1973

No.

RusseLt FE. Train, ApMinistrator, UNirep Staves

ENVIRONMENTAL PROTECTION AGENCY, PETITIONER

v.

Campaign CLEAN Warver, INc.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

The Solicitor General, on behalf of the Adminis-

trator of the Environmental Protection Agency, peti-

tions for a writ of certiorari to review the judgment

of the United States Court of Appeals for the Fourth

Circuit in this ease.

OPINIONS BELOW

The opinion of the court of appeals (App. B, pp.

35A-53A)' is not reported. The opinion of the district

court (App. F, pp. 7T9A-LOOA) is reported at 361 F.

Supp. 689.

JURISDICTION

The judgment of the Court of Appeals for the

Fourth Cireuit (App. D, pp. 57A-58A) was entered on

Appendix references are to the combined appendix to the

petitions in <4ts ease and the companion case of 7'rain v. City of

New York.

(1)

534-087-774. ——1

LE MELTS Moe

tN: SSPE AER ERT ON Ng

ER ONE SA

SLOSS

LAURE

2

December 10, 1973. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

1. Whether the allotment by the Administrator of

less than the full amounts authorized to be appropri-

ated by Section 207 of the Federal Water Pollution

Control Act Amendments is subject to judicial review to

determine whether the Administrator abused his dis-

cretion in making the allotment.

2. Whether an action to compel the allotment of

additiona! amounts is barred by the doctrine of sover-

eign immunity.

STATUTES INVOLVED

Administrative Procedure Act Section 10(2), now

5 U.S.C. FO1(a)(2).

This chapter applies, according to the pro-

visions thereof, except to the extent that * * *

ageney action is committed to agency diseretion

by law.

The pertinent portions of the Federal Water Polln-

tion Control Act Amendments of 1972, 86 Stat. 816

(33 U.S.C. (Supp. [1) 1281 et seq.) provide:

Sec, 205, (a) Sums authorized to be appro-

priated pursuant to section 207 for each fiseal

year beginning after June 30, 1972, shall be

allotted by the Administrator not later than

the January Ist immediately preceding the

beginning of the fiseal year for which authorized,

except that the allotment for fiscal year 1973 shall

be made not later than 30 days after the date of

enactment of the Federal Water Pollution Con-

trol Act Amendments of 1972. Such sums shall

be allotted among the States by the Adminis-

trator in accordance with regulations pronul-

gated by him, in the ratio that the estimated

cost of constructing all needed publicly owned

treatment works in each State bears to the esti-

mated cost of construction of all needed pub-

liely owned treatment works in all of the States.

For the fiseal years ending June 30, 1973, and

June 30, 1974, such ratio shall be determined

on the basis of table TILT of House Publie Works

Committee Print No. 92-50, Allotments for fis-

eal years which begin after the fiseal year end-

ing June 30, 1974, shall be made only in aceord-

anee with a revised cost estimate made and sub-

mitted to Congress in accordance with section

‘N6(b) of this Act and only after such revised

cost estimate shall have been approved by law

specifically enacted hereafter.

(b)(1) Any sums allotted to a State under

subsection (a) shall be available for obligation

under section 203 on and after the date of such

allotment. Such sums shall continue available.

for obligation in such State for a period of one

vear after the close of the fiscal vear for which

such sums are authorized. Any amounts so al-

lotted which are not obligated by the end of

such one-year period shall be immediately re-

allotted by the Administrator, in accordance

with regulations promulgated by lim, generally

on the basis of the ratio used in making the

last allotment of sums under this section. Such

reallotted sums shall be added to the last allot-

ments made to the States. Any stun made avail-

able to a State by reallotmment under this sub-

section shall be in addition to any funds

otherwise aliotted to such State for grants

a ee ; a eee

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ale ARG ea ein te OSE RL cme eR Wate

—_

ee ee ee

4

under this title during any fiscal year.

(2) Any sums which have been obligated

under section 203 and which are released by

the payment of the final voucher for the project

shall be inunediately credited to the State to

which such sums were last allotted. Such re-

leased sums shall be added to the amounts last

allotted to such State and shall be immediately

available for obligation in the same manner

and to the same extent as such last allotment.

* * * 6 *

Sec. 207. There is authorized to be appro-

priated to carry out this title, other than sections

208 and 209, for the fiscal year ending June 30,

1973, not to exceed $5,000,000,000, for the fiscal

year ending June 3, 1974, not to exceed *6,000-

000,000, aud for the fiseal year ending June 30,

1975, not to exceed $7,000,000,000.

STATEMENT

As explained in the petition for a writ of certiorari

we are filing simultaneously in Train v. City of New

York, the expenditure of funds under the federal

grant program for building approved sewage treat-

ment plants created by Title LJ 0° the Federal Water

Pollution Control Act Amendments of 1972 involves

several stages. This case is another challenge to the

action of the Administrator on November 28, 1972,

taken pursuant to a direction of the President, in

allotting #2 billion of the “not to exceed” $5 billion au-

thorized to be appropriated in Section 207 of the Act

for fiseal year 1973, and allotting *3 billion of the ‘‘not

to exceed” $6 billion authorized for fiscal year 1974.

On January 15, 1973, the plaintiff, an organiza-

:—o ee ee ee ee ee

tion of Virginia ecologists, filed a complaint in the

United States District Court for the Eastern District

of Virginia aiieging that the defendant Administrator

had a duty to allot all sums authorized by Section 207

or alternatively that his failure to allot more than 45

percent of the funds authorized was an abuse of

discretion (Complaint £9). The district court held that

the Administrator had discretion under the statute to

allot less than the full amount authorized (App. F, pp.

95A-96A), but that his decision to allot only 45 per-

cent was an abuse of discretion (App. F, p. 99A).

On appeal, the court of appeals noting that the

plaintiff conceded that the Administrator had discre-

tion to allot less than the amounts authorized by

Congress (App B, p. 39A), reversed the holding of

an abuse of discretion on the ground that it was not

supported by the record (App. B, pp. 47A-53A).

The court of appeals held, however, that the exercise

of the Administrator’s discretion is subject to judicial

review by a hearing de novo in the district court and

remanded the case to that court for further proceed-

ings.

REASONS FOR GRANTING THE WRIT

The issues in this case are closely related to those

raised in the petition for certiorari in Train v. City

of New York, which we are filing simultaneously. In

City of New York the Court of Appeals for the District

of Columbia Circuit held that the Administrator has no

discretion to allot less than the amount Congress has

authorized to be appropriated. In the present ease,

on the other hand, the district court held that the

Administrator does have such discretion, and the court

6

of appeals found it unnecessary to decide that issue

because the plaintiff did not challenge the ruling.

The court of appeals did hold, however, that the ae-

tion of the Administrator in making the allotment

was subject to judicial review in the district court to

determine whether that action constituted an abuse

of discretion. We believe that the district court in the

present case correctly held that the Administrator has

such discretion, but that the court of appeals erred

in concluding that his exercise of that discretion is

subject to judicial review.

1. This case involves the important issue of the role

of the courts in reviewing decisions made by the exeeu-

tive branch relating to the conmitment and expenditure

of federal government funds where authority to control

the rate of such commitment and expenditure has ad-

mittedly been conferred on the Exeeutive Branch by

the Congress.

Section 10(2) of the Administrative Procedure Act,

now 5 U.S.C. 701(a)(2), precludes judicial review

under that Act of “agency action” that is “committed

to agency discretion by law.” In Panama Canal Co.

v. Grace Line, Inc., 356 U.S. 309, this Court held

that a suit to compel the Canal Company to proseribe

new tolls for the use of the Canal and to refund tolls

allegedly illegally collected raised an issue ‘‘eom-

mitted to agency discretion’ and not subject to ju-

dicial determination. The Court pointed out that

determining the proper level of tolls for the Canal

“involve[s] nice issues of judgment and choice * * *

which require the exercise of informed diseretion’’

and requires the Canal Company to make ‘questions

7

of judgment requiring close analysis and nice choices”

(356 U.S, at 317, 318).

That principle, we submit, is equally applicable to

this situation, so that the action of the Administrator

in allotting less than the amount appropriated simi-

larly is not subject to judicial reexamination, even

where it is claimed that such allotment constitutes an

abuse of discretion. In deciding in the fall of 1972

the amount of funds to allot for fiseal years 1973 and

1974, it was necessary to make estimates of the level

and timing of spending that would ensue from any

given level of commitment, the income resources likely

to be available to the federal government during those

years, the nature of competing program needs and de-

mands, the state of the economy, and the impact of the

spending on the economy. The very nature of those judg-

ments makes it inappropriate for the courts to attempt

to review the Administrator’s judgment, and particu-

larly under the necessarily vague standard of “abuse of

discretion.”

The court of appeals relied on dictum in Citizens to

Preserve Overton Park y. Volpe, 401 U.S. 402, 410,

referring to Section 10’:.) as “a very narrow excep-

tion” (App. B, p. 45A). But that dictum, uttered

in the narrow context of a wholly different case in-

volving different policy considerations, should not

control here. Overton Park involved a statute which

provided explicit directions to the Secretary of Trans-

portation relating to the use of park spaces for high-

ways. The issue here, on the other hand, is more like

that in Panama Canal Co., and that case, rather than

Overton Park, provides the governing principle.

8

2. In our petition for certiorari in the City of New

York case, we also explained why we believe that an

action to compel allotment is barred by the doctrine of

sovereign immunity. The arguments there made are

equally applicable to this suit.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted.

Robert H. Bork,

Solicitor General.

IRVING JAFFE,

Acting Assistant Attorney General.

Epmunp W. Kircu,

Assistant to the Solicitor General.

Robert EF. Korr,

Kvoe bk. Davies,

Attorneys.

Marcn 1974.

VERNMENT PRINTING OFFICE 1976

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INDEX

I a as ican tena tesnicictec ta esosinsearichanins een dation epee

Appendix B

Appendix

Appendix D

PEED, Bidnnonvnnscmens eases ahicacerse tee aomas iasree

DEE, Bean cdanednasepnmsenenncnsawnmeita

APPENDIX A

United States Court of Appeals

For the District of Columbia Circuit

No. 73-1705

Tne Crry or New York oN BEHALY OF TrseLr AND ALL

OTHER SIMILARLY Srrvuatrep MeUNicipaLiries Within

rie Srare or New York Crry or Derrorr, (PARTY

PLAINTIFF )

v.

Russect FE. TRAIN, AS ADMINISTRATOR OF THE UNITED

Srares ENVIRONMENTAL Prorecrion AGENCY,

APPELLANT

Appeal from the United States District Court for the

District of Columbia

—

Decided January 23, L974

—— %

Refore: Tamm, Ropixnson and Wufkey, Circuit

Judges.

Opinion for the Court filed by Circa? Judge TAMM.

Tam, Cirewt Judge: This suit was brought as a

class action by the City of New York (hereafter,

“City’?) on behalf of itself and all other similarly

situated municipalities within the State of New York.

1A

:

.

2

os EN SERS RATT

eee o - __

2a

The defendant below was Mr. Russell FE. Train, .

ministrator of the Enviroumental Protection Agen

(hereafter, “The Adiministrator’’). The City

Detroit, Michigan, was granted leave to interven:

party plaintiff. On May 8, 1973, the United St:

District Court for the District of Columbia gran

City’s motions for summary judgment and to mi

tain this lawsuit as a class action, concurrently de

ing the Administrator’s motion to dismiss. The .

ministrator bringy this appeal from the trial cou

ruling, and, for the reasons stated infra, we affirn

I. Backorousxp

This is but one of a mumber of cases? presen

pending across the country concerning allocation

‘Ruwell FE. Train, Administrator of the Environmes

Protection Agency has Leen substituted for William Ruck

haus. the Administrator of the EPA at the time this act

was commenced, Rule 43(¢)(1). Feo Ro Ape. Pro.

*We provide a list of cases filed ax of December 12, 19

“Anthony KR. Martin-Trigona v. William D. Ruckelsh:

N.D.UL, Civil Action No, 72-3044;

“Canqaign Clean Water, Inc. v. Rackelshaus, ELD. '

Civil Action No, 18-72-R. reversed and remanded, Campa

Clean Water, Inc. v. Train, No. 73-1745 (th Cir. December

197%):

“Gieorge EF. Brown, Jr. v. Ruckelshaus, C.D. Calif, ©

Action No. 73-144-AAH:

“Herbert (. Klein, et al. v. Ruckelshaus, DDC. ©

Action No, 151-75:

“State of Minnesota v. United States Environmental P

tection Ageney, et al., D. Minn., Civil Action No, 4-73 Civ. 1

“Mayor Morton Salkind, et al. v. Ruckelshaus, D. NUS.

Action No, 2027-72:

“City of Ive Angeles v. Ruckelshaus, C.D. Calif, Ci

Action No, 73-7%6-IWC:

“State of Texas v. Fri, WD. Texas, Civil Action No. A

CASS;

funds under the Federal Water Pollution Act Amend-

ments of 1972° (hereafter, ** Act’). In order to place

“State of Maine, et al. v. Robert W. Fri, et al, D. Maine,

Civil Action No. 14-51:°

Letter from National Association of Attorneys General to

Impoundment Mailing List, December 12, 1974; See also

Appellant's Br. at 2-4.

*Pub. Law 92-500, 86 Stat. $16, 33 U.S.C. ch. 26 $8 1251

et eq.

Title I of the act provides in pertinent part:

“TITLE I-RESEARCH AND RELATED PROGRAMS

“DECLARATION OF GOALS AND POLICY

“Sec, 101, (a) The objective of this Act is to restore

and maintain the chemical, physical, and biological integrity

of the Nation's waters. In order to achieve this objective it is

hereby declared that, consistent with the provisions of this

Act—

“(1) it is the national goal that the discharge of pollutants

into the navigable waters be eliminated by 1965;

“(2) it is the national goal that wherever attainable, an

interim goal of water quality which provides for the protection

aml propagation of fish, shellfish, and wildlife and provides

for recreation in and on the water be achieved by July 1, 1985;

“(3) it is the national policy that the discharge of toxic

pollutants in toxie amounts be prohibited;

“(4) it is the national policy that Federal financial assistance

be provided to construct publicly owned waste treatment

works:

“(5) it is the national policy that area-wide waste treatment

management planning processes be developed and implemented

to assure adequate control of sources of pollutants in each

State;

“e © on

Title 11 of the Act ($$ 201-212) entitled “Grants for Con-

struction of Treatment Worke” provides in pertinent part:

“Allotment

“Sec, 205. (a) Sums authorized to be appropriated pursuant

to section 207 for each fiseal year beginning after June %, 1972,

shall be allotted by the Administrator not later than the Janu-

4A

the instant dispute in its proper context it is necessary

to understand the legislative history of the Act. The

Act revised the procedures for funding federal aid to

local governments for the purpose of the construction

of sewage treatment plants. Prior to the Act’s passage,

ary Ist immediately preceding the beginning of the fiscal year

for which authorized, except that the allotment for fiscal

year 1974 shall be made not later than 20 days after the date

of enactment of the Federal Water Pollution, Control Act

Amendments of 1972. Such sums shall be allotted among the

States by the Administrator in accordance with regulations

promulgated by him, in the ratio that the estimated cost of

constructing all needed publicly owned treatment works in each

State hears to the estimated cost of construction of all needed

publicly owned treatment works in all of the States. For the

fixeal years ending June 30, 1973. and June 30, 1974, such

ratio shall be determined on the basis of table ITI of House

Publie Works Committee Print No. 92-50, Allotments for

fiseal years which begin after the fiscal year ending June 30,

1974, shall be made only in accordance with a revised cost

estimate made and submitted to Congress in accordance with

section 51G(b) of this Apt and only after such revised cost

estimate shall have been approved by law specifically enacted

hereafter.

“(bd(1) Any sums allotted toa State under subsection (a) shall

he available for obligation under section 203 on and after the date

of such allotment. Such sums shall continue available for obliga -

tion in such State for a period of one year after the close of the

fixeat year for which such sums are authorized. Any amounts so

allotted which are not obligated hy the end of such one-year period

shall be immediately reallotted by the Administrator, in accord-

ance with regulations promulgated by him. generally on the basis

of the ratio used in making the last allotment of sume under this

section. Such reallotted sums shall be added to the last allotments

male to the States. Any sum made available to « State by reallot-

ment under this subsection shall he in addition to any funds other-

wise allotted to such State for grants under this title during any

fixew! wear.

“(2) Any sums which have heen obligated under section 203 and

which are released by the payment of the final voucher for the

5A

these expenditures were first authorized and then spe-

cifically funded by the normal Congressional appro-

priation process. Due to the nature of this process,

local governmental recipients could not ascertain the

exact amount they would receive until after the formal

appropriation. As a result, local governments were

project shall be immediately credited to the State to which such

sums were last allotted. Such released sums shall be added to the

amounts last allotted to such State and shall be immeditaely avail-

able for obligation in the same manner and to the same extent as

such last allotment.

“Reimbursement and Advanced Construction

“Sec. 206.

“es * -

“(f)(1) In any case where all funds allotted to a State under

this title have been obligated under Section 203 of this Act, and

there is construction of any treatment works project without the

aid of Federal funds and in accordance with all procedures and

all requirements applicable to treatment works projects. except

those procedures and requirements which limit construction of

projects to those constructed with the aid of previously allotted

Federal funds, the Administrator, upon his approval of an appli-

cation made under this subsection therefor, is authorized to pay

the Federal share of the cost of construction of such project when

additional funds are allotted to the State under this title if prior

to the construction of the project the Administrator approves

plans, specifications, and estimates therefor in the same manner as

other treatment works projects. The Administrator may not

approve an application under this subsection unless an authoriza-

tion is in effect for the future fiscal year for which the application

requests payment, which authorization will insure such payment

without exceeding the State's expected allotment from such

authorization.

“(2) In determining the allotment for any fiscal year under this

title, any treatment works project constructed in accordance with

this section and without the aid of Federal funds shal] not be con-

sidered completed until an application under the provisions of this

subsection with respect to such project has been approved by the

I, AG We RR Rag

Rt

6A

hesistant to enter construction contracts with only a

nope that federal monies would be ultimately passed

to them.*

The Act was passed to insure that ultimate grantees

could rely in advance on the amounts available. Sec-

tion 101(a) declares that to clean the nation’s waters

“it is the national policy that Federal financial

assistance be provided to construct publicly owned

waste treatment works.” To this end, the Act created

a funding mechanism known as **contract authority”.’

The technical operation of the sections of the Act

relating to this “contract authority’ spending is at

the heart of this dispute and a thorough understand-

ing of the mechanism is, therefore, imperative.

There are six distinct steps involved in funding

under the Act. (1) Authorization by Congress to

Administrator, or the availability of funds from which this project

is eligible for reimbursement has expired, whichever first occurs.

“ Authorization

“Sec. 207. There is authorized to be appropriated to carry out

this title, other than sections 208 and 209, for therfiseal year ending

June 40, 1973. not to exceed $5,900,000,000, for the fiseal year end-

ing June 20, 1974, not to exceed $6,000,000,000 and for the fiscal

year ending June 30, 1975, not to exceed $7,000,100,000,"

‘It appears that there was a substantial gap between the

amounts authorized and the amounts appropriated. The Senate

Committee on Public Works, in its report on its version of the Act,

observed that :

“The lack of adequate funding of grants to assist States and

localities in constructing sewage treatment plants is causing critical

problems.

“Of the $3.4 billion authorized for this purpose by the 1966

legislation. only $2.2 billion was appropriated. The backlog of

projects eligible for Federal payments has reached a total of nearly

#2 billion.”

S. Rep. No. 92-414, 92nd Cong., 1st Seas. 5 (1971).

* See 3. Rep. No. 92-414 supra at 35.

chloe >

ree ee, oe

7A

appropriate funds (§ 207); (2) “allotment” of these

authorized sums among the various states, pursuant

to formula (§ 205); (3) review by the Administrator

of project proposals submitted by a particular munic-

ipality (§§ 203, 201(g) (2) and 204); (4) “obligation”’

by the Administrator of the federal share of an

approved project ($§ 203 and 201(g)(1)); (5) appro-

priation by Congress of funds to pay obligated con-

tracts as they fall due; and (6) disbursement of the

funds (§ 203 (b) and (¢)).

After the Act was enacted into law, over presiden-

tial veto,’ the President wrote to the Administrator,

directing him to allot “$2 billion of the amount au-

thorized for the fiseal year 1973, and no more than $3

billion of the amount authorized for the fiseal year

1974."? The Administrator followed orders and allo-

cated a total of $5 billion® for both fiseal years. It is

this final action by the Administrator which has been

labeled “*Presidential impoundment”’ and which was

snecessfully challenged in the trial court by plaintiff-

appellee City.

7 Nee Presidential Veto Message of October 17, 1972, 18 Cone.

Ree. S 18534 (daily ed. October 17, 1972).

* Letter from the President to Mr. William Ruckelshaus,

dated November 22, 1972, J.A. at loa.

*37 Fed. Reg. 26282 ( December 5, 1972).

* Not all commentators have agreed ow a precise definition of

“impounding”. Compare Boggs, Executive Impoundment of

Congressionally A ppropriated Funds, 24 U. Fos. L. Rev. 221,

222 (1972) with Note, 1m poundment of Funds, % VWanv. L. Rev.

10> ml (1973) and Fisher, Funds Impounded hy the Preai-

dent: The Constitutional Ixue, 38 Gro, Wasn. L. Rev. 124

(1969). It is true that we are concerned here with the mecha-

nism of contract authorization rather than direct appropriation.

We today only decide whether the Act permits withholding of

funds at the allotment stage. We will not, therefore, pursue the

sematic argument that because of the different funding mecha-

nism that is nof an “impoundment of funds” but rather a “far

Be Sor ee ee

SA

Il. Tue Triau Cover’s Ruuiwe

Plaintiff-appellee City ° basically argued below that

8$ 205(a) and 207 of the Act, read together, required

the Administrator to allot among the states the sums

of 5 billion and #6 billion in fiscal years 1973 and

1974 respectively, Once allotted, these amounts would

then be available for obligation under the Act. By the

allotment of only $5 billion total fer fiseal vear 1973

and 1974, it is argued that the Administrator violated

the statute,

The Administrator, defendant-appellant, made sev-

eral arguments in the trial court. He argued that (1)

more serious case.” See Brief of California Attorney General as

-lmicus Curice at 6. The wisest course to leave the search for

the proper definition of ~Impoundment™ to the legal commen-

tators.

On the subject of impoundment generally. especially the

constitutional problems, xe also Note. The Likely Law of

E-recutire Impoundment. 59 Tows L. Rev. 50 (1973). Com-

ment, Presidential Impounding or Funds: The Iudic jal Ru-

spor, WU. Cun L. Rev. 328 (1973): Note, Protecting

the Fises Evceutivn Tm pound ment aud Congressional Power.

S2 Varw LU. 1636 (1973)- Miller, Presidential Power to Im-

pound Appropriated Funds: An Evercixe in’ Constitutional

Decision-Making, 43 NCA. Rev. 502 (1965): Church. /m-

pound me nt of Appropriated Funds: The Decline of ('ongres-

sional Control Over Earecentivre Disere tim, 22 Srax L. Rev.

1240 (1970): Fisher, Presidential Spending Discretion and

Congressional Controls, 4 Law & Coxrvemy. Prom. 135 (Win-

ter. 1972): Stassen. Separation of Powers and the Uncommon

Tiefenses The Case Against Impounding of We apous System

Appropriations, a7 (ino. LO. 1150 (1960

The legal literature contains no detailed analysis of the

precise problem suh judice, Nec Note, supra, S52 Yaur Ld. at

152: Note, eed. 59 Towa L. Rew. et 55 n42: Note. supra,

6 Haev. DL. Rew, at 1526 0.116.

The arguments of plaintiff-interventor, City of Detroit.

were found by the trial court to be “substantially the same”

Pome

QA

the trial court lacked jurisdiction, the suit being

Larred by the doctrine of Sovereign Tnonunity: and

(2) that the claim failed to present a justiciable case

or controversy because (a) it was “hypothetical and

premature” and (b) it stated a “political question”

thus beyond the jurisdiction of the court. The trial

court found against the Administrator on all these

arguments,’ but appellant brings before this court

only two issies: (1) whether Sovereign Tnununity

bars this suit; (2) whether §$205(a) and 207 of

the Act confer discretion on the Administrator to de-

termine the sum to be alloted under the Act.

I}. Severrign IMMUNITY

It ix our opinion that the trial court was correct 1

holding that City’s suit is not barred by the principle

of sovereign immunity. Counsel for the Administrator

conceded at oral argument that the law of this circuit,

Seanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859,

873 (D.C. Cir. 1970): Coustractores Civiles de Centro-

america v. Hannah, 459 F.2d 1183, 1191 (0. Cir.

1972), permits the maintenance of this suit with the

Administrator as defendant.” In view of this conces-

as those of plaintiff City. and so all arguments were treated

together. City of New York v. Ruckleshaus. Civil Action No,

2466-72 (D.D.C. filed May 8, 1973) JA. at 55a ne}. We agree

and will not differentiate between plaintiff and plaintiff-

intervenor.

"City of New York, supra note 1”, JA. at Gaia.

"Tape of oral argument November 2, 1973, centains the

following colloquy :

“Judge Wilkey: Would you like to elaborate upon the ques-

tion of sovereign immunty ?

“Counsel: As 1 understand the doctrine of sovereign immit-

nity. as developing a close velat ionship between the merits and

the doctrine. The exception to the doctrine which is claimed to

be applicalje by the plaintifl here is that the Administrator

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sion, we need do no more than state that we hold the

suit is not barred. We agree with the reasoning of the

was essentially acting in violation of the statute, acting outside

the scope of his authority, and therefore not acting on behalf

of the sovereign but simply as an individual in excess acting

outside the law who should be ordered to act within the law.

Our contention is that he was acting within the statute, prop-

erly exercising his authority, therefore acting on behalf of the

sovereign and if we are persuasive on the merits, then we

should also win on the doctrine of sovereign immunity. The—

Now it may be and TI...

“Judge: [Inaudible] appreciate any idea of sovereign im-

munity does it? If you go on that theory the sovereign is no

better off than any other citizen.

“Counsel: T think we are getting close to that. There may

survive a zone of plausibly legal activities where the government

has a kind of special position—a certain deference that a court

will find a kind of protection of sovereign immunity reaches

somewhat beyond the very strictest construction of the statute.

I find the present state of the law in somewhat of a turmoil

and TI think this cireuit has developed a number of new doc-

trines which throw much of recent law into question, particn-

larly the Scaniell case and I don’t think the Supreme Court

has had the time to sort out the wisdom of that and the impact

of that, and I—

“Judge: Are you reserving the sovereign immunity argument

for the Supreme Court ?

“Counsel: We are reserving the argument for the Supreme

Court and we would be delighted, just delighted to prevail

on it here.

“Judge: That doesn’t leave you much choice in that regard

does it ?

“Counsel: You mean to reserve it or to—

“Judge: Yes. to reserve it.

“Counsel: Obviously the problem of the position of sovereign

immunity is one that impacts not just on this case but many,

many eases for the government and we are in a position where

we do not win frequently at the moment on the issue of sov-

ereign immunity, but where it is not yet responsible for us not

to urge it and hopefully there will be some more authorita-

Lr lly

11A

trial court and here adopt the opinion below on the ex-

tent that it treats the Sovereign Immunity question.”

IV. THe Mranine oF §§ 205(a) anv 207

We now turn to the analysis which is central to res-

olution of the matter sub judice, te. the meaning of

§§ 205(a) and 207 of the Act which are reproduced in

the margin supra. Appellee-City relies upon the phrase

‘shall be allotted’? in 6 205(a), arguing that by the

use of “shall”, rather than a word plainly conferring

ereater discretion (¢.9. ‘‘may’’). Congress intended

that allotment under the Act be mandatory. The Ad-

ministrator, on the other hand, asserts that changes in

these sections of the Act, prior to its enactment, show

a legislative intent to confer discretion upon the Ad-

ministrator. H.R. 11896, the hill from which §§ 205

and 207 ultimately were derived, was amended in con-

ference. The phrase ‘‘not to excced’? was inserted be-

fore each specified sum § 207 and the word ‘‘all’’ was

deleted from before the phrase *‘sums authorized to .

be appropriated’’ in § 205(a). Appellant argues that

these changes indicate that Congress intended to give

the Administrator absolute discretion over whether

and how much to allot under the Act.

A. The Overall Intent of the Act

Initially, it is to be noted that a “nlain meaning”

analysis will not suffice here. As the Administrator

admits “there is no happy marriage between the pro-

visions of the statute... .’’* We agree for we can

find no way to harmonize the term ‘shall allot’? and

the language concerning sums ‘not to exceed.”” Ac-

* SHOP LENG ARLIe

tive pronouncemen

years that will clarify where we stand.”

City of New York. supra note 10, J.A. at S6a-5ea.

Appellant's Reply Brief at 2.

ts from the Supreme Court within a few

IGP eter 1205- vee

12,

cordingly, we turn to an analysis of relevant legisla-

tive history to ascertain whether the legislature in-

tended any discretion at the ‘tallotment”’ stage of the

funding pegs rae The Wilderness Socicty v. Mov-

fon, Nos, 72-1796, 1797, 1798 (D.C. Cir. February 9,

1973 slip a at 22).

The legislative history is extensive, covering some

1700 pages.” Of particular importance are the views

expressed by Congressman William Harsha and Sen-

ator Edmund Muskie, sponsors of the legislation.’

The amendments upon which the Administrator relies

Were authored and sponsored by Congressman Harsha,

and are commonly referred to as the Harsha Amend-

ments,’

Seeeecnintonaies

"A Legislative History of the Water Pollution Control

Act Amendments of 1972.° Conunittee Print. Committers ou

Public Works. 924d Cong.. Ist) Sess. January L973. Senator

Muskie commented on the magnitude of the legislative task:

“T have been a Member of the Senate for 13 vears. and I

have never before participated in a conference which has con-

sumed so many hours, been so arduous in its deliberations. or

demanded so much attention to detail from the members. The

difficulty in reaching agreement on this legislation has been

matched only by the gravity of the problems with whieh it

seeks to cope.”

11S Cone, Rec. S 16869 (daily ed. October 4, 1972),

"See, 0. First National Bank of Logan. Utah v. Walker

Bank and Trust Co. 385 U.S, 252. 261 (1966); Schwegmann

Bros, vy. Calvert Distillers Corp.. 341 U.S. 384. 394-95 (1951).

Congressman Harsha is the ranking minority member of

the Tfouse Committee on Public Works whieh reported TLR,

11896, THe was the bill's fioor manager and alse a member of

the conference conmiittee whieh developed the final language

of the Net.

Senator Muskie is chairman of the Senate Subcommittee

on Air and Water Pollution which reported S. 2770, the Senate

version of the Aet. Tle was floor manager for that bill and

a member of the conference committee,

epee . —

. ae OR eas Rae TARE sire

13a

After a careful reading of the relevant legislative

materials, we believe that throughout the lengthy leg-

islative process, Congress manifested an intent to spe-

cifically commit fedeval funds. It did so in recognition

of the necessity of axsuring the states that federal aid

would be available. The need was recognized in W971

by the Senate subcommittee considering water

pollution:

At a bare mininuin the eredibility of the ex-

isting federal commitment must he re-estab-

lished by backing words of authorization with

Monies of appropriation, Whenever the nation

seeks to encourage cities to plan and construct

improvements which require many years to

complete, the Congress mist build reliability

into its federal grant incentives, Major facilities

‘“aunot be stopped in midstream, A change in

federal grant policy to establish a reliable com-

mitment is vital but is not the only change that

ean and should be made in the federal legisla-

tive and regulatory approach to water pollution

abatement,

U.S. Senate Committee on Public Works, Water Pol-

lution Control Legislation Hearings, pt. I, at 4 |

(1971).

This commitment continued and the subcommittee

on Air and Water Pollution concluded in 1972:

The language of subsection (b) [sve] of See-

tion 207 provides that funds authorized for

fiscal vears 1973, 1974, and 197, shall be avail-

able for obligation by contract upon their allo-

cation to the States. The importance of assured

Federal financial support to the achievement of

the objectives of this title and to our national

purpose of cleaning up polluted waterways can-

not be overstated. The task is a missive one in

terms of the work to be done ard the funds to

(

ts

wh

i

&

.

f

‘

¢

&

(BPC

he expended.

14a

S. Rep. No. 92-414, 92nd Cong., Ist Sess. 35 (1971).

The two principal sponsors of the Act both clearly

articulated their belief that federal money must be

spent, and, in fact, strongly indicated their recognition

that the full $18 billion would be allotted. Senator

Muskie stated:

The conferees spent hours and days studying

the problem of financing the cleanup effort re-

quired by this new legislation. The members

agreed in the end that a total of $18 billion had

to be committed by the Federal Government in

75 percent grants to municipalities during fiscal

vears 1973-75. That is a great deal of money;

but that is how much it will cost to begin to

achieve the requirements set forth in the

legislation. .. .

Mr. President, to achieve the deadlines we are

talking about in this bill we are going to need

the strongest kind of evidence of the Federal

yovernment’s commitment to pick up its share -

of the load. We eannot back down, with any

credibility, from the kind of investment in

waste treatment facilities that is called for by

this bill. And the conferees are convinced that

the level of investment that is authorized is

the minimum dose of medicine that will solve

the problems we face.

118 Cong. Rec. S 16870-71 (daily ed. October 4, 1972)

(emphasis added).

It is evident that Congress was concerned with pos-

sible inflationary effects. However, it is just as evident

that Congress believed that the full $18 billion ex-

penditure was necessary, Senator Cooper ™ stated:

T believe that the funding levels for these and

other provisions of the bill, which total over $24

Senator Cooper was the ranking minority member of the

Senate Committee on Public Works and a fioor manager of the

bill.

154A

billion—subject to the usual presidential respon-

sibility for evaluating these needs in relation

to other national priorities—are responsible,

are consonant with the magnitude of our Na-

tion’s water quality problems, and will not have

an inflationary effect upon our economy. of

“ * *

Contract authority is provided for Up to $5 bil-

lion in 1973, #6 billion in 1974, and $7 billion in

1975. This will be allocated to the States on the

basis of the Environmental Protection Agency's

annual assessment of needs established without t

regard to budgetary limitations and other non-

water quality factors.

Id. at S 16881 (emphasis added), Senator Bayh also

emphasized the necessity of a full Federal commit-

ment:

The conferees agreed to accept the House

passed authorizations tor grants to the States

for the construction of waste treatment plants,

including sewage collection systems. This is con- ‘

struction which is absolutely essential if we are :

to make any meaningful progress toward the

national goals established in the pill, The total

authorization for this purpose is #18 billion over

the 3 fiscal years ending in 1975. There is no

doubt that this money is needed, tor without

substantial authorizations he [sic] bill would be

little more than a series of empty promises.

The amounts allocated for grants for construc-

tion of treatment works will be distributed to

the States on the basis of need, with the Federal

share of construction costs being 75 percent.

Id. at 5 16892-95 (emphasis added). Congressman

Johnson made clear the intent of the House to spend

#18 Hillion to meet the water pollution problem. Li his

report to the House, he stated:

You may recall that the bill that passed this

body last March called for authorizing a little

more than #24.6 hillion, the Senate bill author-

Ht-N2h—T4 2

his

ized $20 billion, and the administration re-

quested ¥6 billion. The conferees have agreed on

essentially the same figures as in the House bill,

¥24.6 billion for the period through fiseal 1975.

A total of S18 billion of this stm is for con-

struction grants. and breaks down not te exceed

*5 billion for fises] 1973. $6 billion for fiseal

1974, and $7 billion for fiscal 1975.

Naturally, the large difference in what the

administration asked. and what the conference

bill provides, raises the question of why the

substantial discrepancy ?

There is only one answer to that and it is

that if we set out to do this job there is no way

we can accomplish it without paying the price.

If we want clean water, we have to nav for

clean water. If we want the States ind cities to

nove aggressively ahead in building waste treat-

ment plants they must have Federal aid, and

they must have confidence that Washington

will continue to live up to its commitments,

Id. at He 9130 (emphasis added),

The President, in his veto message to Congress on

October 17, shared this view that. the Act would

require ultimate exnenditure of $18 billion for sewage

treatment under § 207 of the Act:

Tam compelled to withhold my approval from

S. 2770, the Federal Water Pollution Control

Act Amendments of 1972—s. hill whose landable

intent is outweighed by its nneonscionable *24

hillion price tag. My proposed legislation, as

reflected in my budget, provided sufficient funds

to fulfill that same intent in a fiscally respon-

sible manner. Unfortunately the Congress ig-

nored other vital national concerns and broke

the budget with this legislation.

WS Cong. Bee. S W534 (daily ed. October 17, 1972),

In the discussion of the Aet prior to its being en-

acted over the veto, Congress aeain clearly expressed

17A

its intention to provide the full $18 billion, Senator

Muskie spoke of the President’s concerns:

But may I say to [Senator Scott], when we

pass a piece of legislation like this, with its

requirements imposed on industry, with its re-

quirements imposed on the States, with its re-

quirements imposed on the local governments,

the question that faces us then is, as we imposed

this commitment on them, what commitment are

we prepared to accept on the part of the Fed-

eral Government ?

This point was well debated in the Senate

when we took up this bill. I made it clear, the

committee made it clear, that what we were ask-

ing of the Congress was a commitment that

these people in other levels of government and

the private sector conld rely upon. Of course

there is a commitment. The President 3 vears

avo. in his state of the Union message, said he

had preempted the environmental issue and

that he was making a commitment.

& & &

The conferees spent hours and days studving

the problem of financing the cleanup effort re-

quired by this new legislation, and specifically

studving how much money would be necessary

to achieve the objective and goals of the act, as

set forth in section LO1(a).

118 Cong. Rec. S 18548 (daily ed. October 17, 1972).

Congressman Harsha responded in a like vein:

Mr. Speaker, there is another point which T

must raise. We have known all along that it

would take a massive amount of money and

time to rveelaim and to protect our precious

water resources. But, we dare net measure the

cost of this water bill merely in terms of dollars

alone. We eannot measure the wealth of our

great natural resources in dollars alone—and if

we wait too long, all the dollars on earth won't

ISA

buy back what we've lost. Under these cireum-

stances, I am firmly convinced that the price of

killing this water bill—of sustaining this Presi-

dential veto—is far, far too costly.

. =] @

Furthermore, the Fresident maintained that

a vote to override the veto of the Water Pol-

lution Control Act Amendments of 1972 was

a vote to inerease the likelihood of higher

taxes. So be it, the public is prepared to pay

for it. To say we can’t afford this sum of

money is to say we can’t afford to support life

on earth,

* +

Mr. Speaker, this is perhaps the most im-

portant environmental legislation the Congress

has yet enacted. The question is not, “Can we

afford to spend 818 billion over the next 3 years

for waste treatment plants?”’ but “Can we

afford not to?”

118 Cong. Rec. H 10268-69 (daily ed. October 18,

1972) (emphasis added).

The cardinal principle of interpretation is ‘‘to

give effect to the intent of Congress.’’ United States

v. American Trucking Assn’s, 310 O.S. 534, 542

(1940). We have included these extensive excerpts at

this point because we find them in a clear expression

of legislative will. We find that it was Congress’ in-

tention that the full $18 billion be spent to control

water pollution, Had the statute been clearly drawn,

this would end our inquiry, if in fact one need ever

have begun. Unfortunately, we must still confront

the problem of the Administrator’s arguable discre-

tion to allot or not allot. We do so in the belief that

the legislative history, as quoted above, manifests an

intent to create a procedure which would insure that

the total authorized funds would be made available to

the states. It is this goal which must guide us in in-

194

terpreting the funding mechanism, fer if discretion

in allotment would make the achievement of this goal

more difficult, it must be assumed that Congress in-

tended no such authorization. See, ¢.g., United States

v. Congress of Industrial Organizations, 335 U.S. 106,

112 (1948); Vermilya-Brown Co., Inc. v. Connell, 339

U.S. 377, 388 (1948).

B. THE MEANING OF THE HARSHA AMENDMENTS

We now turn to the analysis of §§ 205(a) and 207,

particularly with regard to the effect of the Harsha

Amendments. As we indicated earlier, it is important

to keep in mind the distinct stages involved in the

contract-grant mechanism. Appellant-Administrator

argues, primarily from the Harsha Amendments, that

the Act permits discretion at the allotment phase. Ap-

pellee-City counters that while the Administrator

might control the timing of future spending through

delay of obligation, he must fully allot. We agree with

Appellee because, after careful consideration of the

relevant history, we find it clear that the Congres-

sional intent, both before and after the Harsha amend-

ments, was to make allotment mandatory.

Section 205(a), by its terms, supports the Appellee.

It is mandatory in tone: ‘Sums authorized to be ap-

propriated pursuant to section 207 for each fiscal

year... shall be allotted by the Administrator. . . .”

(Emphasis added.)

The Appellant argues that the Harsha Amend-

ments, by adding “not to exceed” in § 207, manifest an

intent to make the allotment (under § 205) discre-

tionary. However, the imposition of a ceiling on auth-

orized appropriations is not inconsistent with the Ap-

peliees’ position concerning mandatory allotment.

Logically, it could be interpreted to mean that the

Cee

:

;

ESI Sy ees pe eee

Biiowisns

POA

amount obligated (later appropriated and expended)

In any fiseal vear mey be less than the maximum

amiount authorized. We concede that the elimination

of the word “all” from §205(a) is a source of con-

fusion, At least one court has chosen to rely en-

tively upon this svyntatical change, although there is

ho preeise explanation of its meaning. We consider

it more useful to examine the statements of sponsors

purporting to explain the intended effect of the

Harsha Amendments; we find that allotment remained

mandatory,

Perhaps the clearest statement in the Congressional

history is that of Senator Muskie in explaining the

purpose behind the Harsha Amendments:

In our last conference, the able and distin-

guished ranking minority member of the House

Committee on Public Works offered two amend-

ments which he indicated would reduce opposi-

tion to the bill from the White House and the

Office of Management and Budget. These two

amendments were accepted by vour conferees

and by other House conferees in order to re-

move the question of a veto on the basis of the

money authorized by the legislation.

Under the amendments proposed by Con-

gressman WILLIAM HARSHA and. others,

the authorizations for obligational authority are

“not to exceed” $18 billion over the next 3

vears. Also, “all” sums authorized to be obli-

gated need not be committed, though they must

be allocated, These two provisions were sug-

gested to give the administration some flexibil-

ity concerning the obligation of ecenstruction

grant funds.

The conferees do not expect these provisions

to be used as an excuse in not making the com-

* Campaign Clean Water v. Rueckleshaus, Civil No. 18-73-R

(E.D. Va. filed June 5, 1973) slip op. at 14.

Aste.

ee eer ae sures

21a

mitments necessary to achieve the goals set

forth in the act. At the same time, there may be

instances in which the obligation of funds to a

particular project ina particular State may he

coutrary to other public policies such as the

National Environmental Policy Act. In these

cases the conferees would, of course, expect the

administration to refuse to enter into contracts

for construction.

118 Cong. Ree. S W871 (daily ed. October 4, 1972)

(emphasis added). Senator Muskie stated clearly that

allotment ® under the Act is to be mandatery.

Congressman Harsha, in explaining the meaning of

his amendments, stressed that tlexibility with regard to

obligation was their purpose:

Furthermore, L want to point out that the elimi-

nation of the word “tall” before the word

“sums” in section 205(a) and the insertion of

the phrase “not to exceed” in section 207 was

intended by the managers of the bill to em pha-

size the President’s flexibility to control the

rate of spending.

Id. at He 9122 (emphasis added), It is our beiief that

Congressman Harsha, by emphasizing that the Presi-

dent could “control the rate of spending,” was clearly

referring to cortrol at the obligation stage. Had the

amendments been designed to confer discretion at the

allotment stage, Congressman Harsha could have so

stated: furthermore the Congressman had clearly in-

tended to obligate the entire $18 billion to meet the

pollution problem“ and his views as to the amend-

! Senator Muskie’s use of the term “allocate” viee the term

“allot” is of no import. The Senate version of the bill had used

the term “allocate.” Appellants concede this point, Nec Brief

for Appellant at 14.

“See Congressman Harsha’s remarks at) 11S) Cone. Ree.

H10268-69 appearing supra at 1S.

22a

ments must be read in light of his expressions of the

total legislative intent.

The Harsha Amendments were further analyzed in

a discussion among Congressmen Ford, Harsha, and

Jones.”

MR. GERALD R. FORD. Mr. Speaker . . .

I think it is vitally important that the intent

and purpose of section 207 is spelled out in the

legislative history here in the discussion on this

conference report.

As I unéerstand the comments of the gentle-

man from Ohio [Harsha], the inclusion of the

words in section 207 in tkree instances of “not

to exceed” indicates that is a limitation. More

importantly that it is not a mandatory require-

ment that in 1 year ending June 30, 1973, there

would be $5 billion and the next year ending

June 30, 1974, $6 billion and a third year end-

ing June 30, 1975, $7 billion ebligation or

expenditure ?

Mr. HARSHA. T do not see how reasonale

minds could come to any other conclusion that

the language means we can obligate or expend

up to that sum—anything up to that sum but

: not to exceed that amount. * * *

MR. GERALD R. FORD. Mr. Speaker, I

would like to ask the distinguished chairman of

the subcommittee and the chairman of the

House conferees whether he agrees with the

? gentleman from Ohio (Mr. Harsha).

‘ MR. JONES of Alabama. ... My answer is

; “ves.” Not only do I agree with him, but the

gentleman from Ohio offered this amendment

which we have now under discussion in the com-

mittee ef conference, so there is no doubt in

anybody’s mind of the intent of the language.

: It is reflected in the language just explained by

the gentleman from Ohio (Mr. Harsha).

** Congressman Jones was Chairman of the House conferees

and a floor manager for the bill.

234

MR. GERALD R. FORD. Mr. Speaker, this

clarifies and certainly ought to wipe away any

doubts anyone has. The language is not @ man-

datory requirement for full obligation and ex-

penditure up to the authorization figure in each

of the 3 fiscal years.

Td. at H 9123 (emphases added).

From these statements, we draw the conclusion that

the amendments were intended to grant the execu-

tive discretion in the obligation phase, not in the allot-

ment. phase. The President evinced a similar under-

standing in his veto message:

Certain provisions of [the bill] confer a meas-

ure of spending discretion ard flexibility upon

the President, and if forced to adnnister this

legislation I mean to use those provisions to put

the brakes on budget-wrecking expenditures as

much as possible.

But the law would still exact an unfair and

unnecessary price from the public. For I am

convineed ... that the pressure for full fund-

ing under this bill would be so intense that

funds approaching the maximum authorized

amount could ultimately be claimed and_ paid

out, no matter what technical controls the bill

appears to grant the Executive.

118 Cong. Ree. at S 1853435 (daily ed. October 17,

1972) (emphases added). It is true that the Presi-

dent’s statements concerning the Act are not to be

given the weight accorded to statements by member of

Congress. Nevertheless, it appears to have been the

President’s understanding that § 205 and § 207 con-

ferred upon the Administrator only “spending dis-

eretion and flexibility.’” He evidently felt that since

the sums had to be allotted and made available for

obligation, public pressure could force him to obligate

the funds.

f EPA EERIE NC Ain

24a

After the veto, both Senator Muskie and Congress-

man Harsha again explained the effeet of the amend-

ments upon the allotment phase. Senator Muskie re-

peated his position that the Administrator must allot

the sums authorized.” Congressman Harsha reiterated

his explanation of the amendments to the House, stat-

ing:

118 Cone. Rec. S 18547 (daily ed. October 17, 1972).

Furthermore, Mr. Speaker, we have empha-

sized over and over again that if Federal spend-

ing must be curtailed, and if such spending cuts

must affect water pollution control authoriza-

tions, the administration can impound the

money.

"Nee 118 Cone. Ree. at S 18546, S 18549 (daily ed. Oc-

tober 17, 1972). Senator Muskie illustrated his specific under-

standing that all funds would be alloted by introducing a

table of proposed expenditures premised entirely on ful] allot-

ment, His remarks:

“With respect to the budget impact, let me give the Senate

just one more factor to be included in the Record, a table

showing the expenditures projected under this bill. Task

unanimous consent that it be included in the Record at this

point.

“There being no objection, the table was ordered to be

printee in the Record, as follows:

“Rate of expendilures by fiscal year* under authorizations of S. 2771

“tin billions}

Fiseal year—

1973 1974 1975 Tetal

Fiscal vear:

Risch soca blmedavnaineculacsitinisctanduwesueneenis OO) ae $0. 25

7 EES RT RM a ee 1.00 ees 1.30

EA Rak. 0accncukcpinabvestckhawensien kawenmeed 1.50 1.20 $0. 35 3.08

eee abn sigh iateninic ak dkklne éhak ken eae sabia 2.00 1.80 1.40 5.20

|, ERS PP RS BF 1 eet Sees ee 25 2.40 210 4.75

ee PN SLICE TL CO ae .%o 2.80 3.10

Pe Oe See RS re a een Seay ee aS) a)

ES Se ak Se OR Eee eee eee 5.00 6.00 7.00 18, 00

“‘e Ist year, 5 percent of authorization, 24 year, 20 percent of authorization; 3d year, 30 percent

of authorization; 4th year, 40 percent of authorization: 5th year, 5 percent of authorization.” a

“> Fiseal year 1973, 85,000,000,000; fiscal year 1974, $6,000,000,000, fiscal year 1975, $7,000,000,000,"

SR Oe ROR eee

25a

T want to point out that the elimination of

the word “all’’ before the word “sums’’ in sec-

tion 205(a) and insertion of the phrase “not to

exceed’? in section 207 was intended to empha-

size the President's flexibility to control the

rate of spending.

* 7 ‘

Second, I would like to point out that the Ad-

ministrator of the Envirenmental Protection

Ageney must approve plans, specifications, and

estimates. This ts the pacing item in the expend-

ttures of funds, It is clearly the understanding

of the managers that under these circumstances

the E.recutive can control the rate of expendi-

tures.

118 Cong. Ree. H 10268 (daily ed. October 18, 1972

(emphases added). Congressman Harsha then ex-

plained the impact of the Act in future fiseal vears:

[Tlhe first major imnact of obligations from

the 85 billion authorizations for the fiseal vear

ending June 30, 1973, is in fiscal year 1975.

*

As a matter of fact, for fiseal vear 1973 if

all the money were obligated and placed under

contract, there would cnly be $20 million needed

to meet the obligations. . . .

Td, (emphases added). It seems clear that Congress-

man Harsha’s hypothetical concerning the obligation

of the entire $5 billion requires an underlying assump-

tion that all such sums must be allotted and thus

available for obligation.

C. THE ADMINISTRATOR'S ARGUMENTS

At this point we turn to an analysis of the Adminis-

trator’s arguments. We note that basically the Admin-

istrator argues an uncontested point, i.e. that the Ad-

ee Clie Ge AEE DOL PI IATL oe 9

26a

ministrator has control over the “rate of spending.”***

Indeed, as we have observed supra, the appellee

agrees and there is much legislative history to support

this view.” The Administrator then argues that such

conceded control over the “rate of spending” must

mean control at the allotment stage. We disagree. In

view of the seriousness of the question, we shall set

forth the Administrator’s various arguments fully.

First, the Administrator argues, Congressman Har-

sha, after explaining that the effeet of the amend-

ments weuld be to “emphasize the President's flexibil-

ity to control the rate of spending’’,” went on to state

his belief that the President could “control expendi-

tures” under the Act by the “same means” (eommonly

ealled *timpoundment’’) as he controlled expenditures

under the Federal-Aid Highways Act," 23 U.S.C.

§§ 101 ef seq. (1970). By this, the Administrator ar-

gues, Congressman Harsha meant that “impound-

ment” includes a reduction in “allotments,” as wel! as

in “obligation.”’ Therefore, it is argued, he intended

to indicate that discretion would be available at the

** We note, for example, that the caption of the Administ ra-

tor’s discussion of legislative history reads:

“C. The Legislative History of Sections 205 and 207 Makes

it Clear that Congress Understood that they were Designed

to Confer Control Over the Rate of Spending on the

Administrator.”

Appellant's Br. at 11.

** Nee, eg. remarks of Congressman Harsha at 118 Cone.

Ree. H 9122 (daily ed. October 4, 1972) reproduced fully

supra.

tg.

*“Furthermore, let me point out, the Committee on Public

Works is acutely aware that moneys from the highway trust

fund have been tmpounded by the Executive. Expenditures

from the highway trust fund are made in accordance with

similar contract authority provisions to those in this bill. Ob-

27a

allotment stage. (Appellant’s Brief at 11-12). We

cannot agree. As the Administrator concedes, the

statement reproduced in the margin supra at note 26

“present[s] some difficulty in interpretation” (Ap-

pellant’s Br. at 12) because “impoundment” under

the Federal-Aid Highways Act is achieved only by

the limiting of contracts awarded (i.e. obligation).

There is no possibility under that Act to reduce at the

“allotment stage.’ Whatever Congressman Harsha in-

tended te explain, the two acts eperate differently,

and we believe that he could not have been arguing by

analogy to discretion not conferred by the Highway

Act. Congressman Harsha was referetag to the ob-

ligation stage and not to allotment.*

viously expenditures and appropriations in the water pollu-

tion control bill could also be controlled. However, there is even

more flexibility in this water pollution control bill because we

have added ‘not to exceed” in section 207, as T indicated before.

“Surely, if the administration can impound moneys from

the highway trust fund which does not have the flexibility

of the language of the water pollution contro! bill, it can just

as rightly control expenditures from the contract authority

produced in (t)his legislation by that same means.”

LIS Cone. Rec. H 9122 (daily ed. October 17, 1972) (emphases

added). See also 118 Cone. Rec. H 10268 (deily ed. October 1s,

1972).

Called “apportionment” in the Highweyw Act. See 25

U.S.C. § 104 (1970).

* We note that it is unclear whether Congressman Harsha

was aware of the district court decision in State Highway

Commission of Missouri v. Volpe, 347 F. Supp. 950 (W.D. Mo.

1972), afd. 479 F. 2a Logo (sth Cir, 1973). If he had an

understanding of that decision which did not allow impound-

ing at the obligation stage, he would have known that the

Highway Act, with its different mechanisms, could not be an

analog to the Act here. We point this out only to say that

while we endeavor to read his words as he spoke them, there

was, in fact, a court decision then in existence which had fully

and carefully analyzed the Highway Act.

284

Next the Administrator attempts to explain the

seemingly clear remarks of Senator Muskie that the

Administrator must allot the ful! amounts authorized

in section 207. The Administrator argues that the

Senator’s statement ‘ ‘must be allocated’... seems

to contradict the changes in sections 205(a) and 207,

which relate only to allotment.” (Appellant’s Br. at

14.) We find this statement, appearing without

explanation, meaningless. Senator Muskie was, by

his own words, explaining to the Senete what the

amendments meant. His words do not contradict

anything at all; rather they seem to be a straight-

forward explanation of those amendments.

Next, the Administrator argues that Senator

Muskie’s remarks giving examples of instances where

obligation may be controlled *® amount to a ‘“‘non-

example”. (Appellant’s Br. 14.) We do not compre-

hend this -rgument. Senator Muskie gave as an exam-

ple the situation where the obligation of funds for a

particular project may be contrary to ‘‘other public

policies such as the National Environmental Policy

Act,” and thus monies would be properly withheld.

The Administrator apparently feels that, since there

exists elsewhere in the Act a power™ in the Adminis-

trator to disapprove projects which do not comply

with NEPA, Senator Muskie could not have been

**“The conferees do not expect these provisions to be used

as an exeuse in not making the commitments necessary to

achieve the goals set forth in the Act. At the same time, there

may be instances in which the obligation of funds to a par-

ticular project in a particular State may be contrary to other

public policies such as the National Environmental Policy

Act. In these cases the conferees would, of course. expect the

Administration to refuse to enter into contracts for construc-

tion.”

*” Sere $203 of the Act.

i ee

294

speaking of control of rate of spending. To the con-

trary, we consider this a proper illustration of the

stage at which Congress intended executive control,

i.e. at the obligation stage. The Senator’s example sup-

ports this, and we understand it as such.

118 Conc. Rec. S 16871 (daily ed. October 4, 1972).

The Administrator alleges that Senator Muskie

made a “serious error” in a colloquy with Senator

Dominick during post-veto discussion of the Act.” The

appellant claims that the Senator’s statement that

“there is plenty of flexibility in this bill for... the

Congress to control spending” is at odds with the fact

““Mr, Dominick. Is my understanding correct that the

amount authorized here is still subject to the appropriation

process?

“Mr. Muskie. Funds are made available through contract

authority which is subject to the control of the President and

also the Committee on Appropriations. Yes. As a matter of

fact, may I say to the Senator that the conferees adopted an

amendment proposed by Congressinan Harsha to indicate clearly

the intent of Congress with respect to that point.

“Mr. Dominick. And so the Committee on Appropriations

could by its action determine what contract authority the Presi-

dent would have. Is that correct ?

“Mr. Muskie. Under the amendments proposed by Congress-

man William Harsha and others. the authorizations for obliga-

tional authority are ‘not to exceed’ $18 billion over the next

% years. Also, ‘all’ sums authorized to be obligated need not

be committed, though they must be allocated. These two pro-

visions were submitted to give the administration some flexi-

bility concerning the obligation of construction grant funds.

“Mr. Cooper. Mr. President. will the Senator yield briefly?

I would like to be sure we are clear on this matter,

“Mr. Muskie. I yield.

“Mr. Cooper. Did I understand the question of the Senator

from Colorado to be whether the Appropriations Committee

could set a limit on the amount to be obligated ¢

“Mr. Dominick. That is the question I asked, I understood

from the Senator from Maine that the answer was in the

304

not contested, that the statute does not permit “the

Committee on Appropriations itself to set a limit on

the amount committed under the statute.” ” Appellant

argues, sub silentio, that Senator Muskie’s basic un-

derstanding of the funding mechanism is apparently

not to be trusted, and therefore, his numerous state-

ments as to mandatory allotment are not to be ered-

ited. We find no such “serious error.” In stating that

the Appropriations Committee may “anticipate” the

amount of contract authority under the Act, we agree

with appellee that Senator Muskie was apparently

doing no more than stating that the Appropriations

Committee could report out a particular appropria-

tions bill which would operate prospectively to limit

the Administrator’s authority to obligate amounts

less than previously allotted. Such a mechanism has

heen recognized by the Senate Appropriations Com-

mittee in at least one context.” In any event, we are

satisfied that Senator Muskie knew what he meant

affirmative: that the Appropriations Committee could set that

limit.

“Mr. Cooper. T thank the Senator. Out of this #24 billion

*6 billion is not subject to contract obligation. Is that correcé?

“Mr. Muskie. The Senator is correct. Mr. President. may

I say in addition to the Senator from Colorado the amount

of contract authority may be anticipated by the Appropria-

tions Committee. That is, years in the future up to 1975 the

Committee on Appropriations may set amounts which the ad-

ministration may ebligate in advance. So there is plenty of

flexibility in this bill for the President and the Congress to

control spending.

“Mr. Dominick. I thank the Senator for clarifying the

record.”

118 Coxe. Rec. S 18546 (daily ed. October 17. 1972).

* Appellee’s Br. at 28: Appellant's Br. at 17.

"See Senate Committe on Appropriations, Department of

Transportation and Related Agencies Appropriations. S. Rep.

No. 92-271. 92nd Cong... Ist Sess. 25-6 (1971).

31a

when, in the same dialogue with Senator Dominick,

he reiterated his understanding that “ ‘all’ sums au-

thorized to be obligated need not be committed, though

they must be allocated.”

The Administrator next contends that the trial

court’s finding that Congress intended control over the

rate of ‘‘obligation and expenditure” and not over

allotments ** must be erroneous because he asserts,

‘in terms of the impact on potential recipients con-

trol over allotments [sic] and contro] over obligations

would have the same effect.’’ (Appellant’s Br. at 21.)

We disagree emphatically. Discretion over allotments

necessarily confers discretion over the amount availa-

ble to be spent and thus grants the executive the

power to contravene the oft-stated legislative purpose

to make federal money available. Could the Adminis-

trator allot $0? Happily, this is not the case, but the

Administrator suggests no limit on his alleged discre-

tion not to allot. Such authority would be greater than

the power to control the rate of expenditures to which

the sponsors repeatedly referred. Further, discre-

tionary allotment would not be consonant with the

overall concern, clearly expressed,” of providing a

total of $18 billion to combat water pollution. We find

that discretion in obligation is distinctly different than

discretion in allotment, and that it was only the

former which this legislation was intended to confer.”

* City of New York v. Ruckleshaus, supra n.10, J.A. at 66a.

*5 Nee, ¢.g.. text at 12-19 supra.

* Of course, it could be argued that discretion at any stage

could contravene the basic purpose of the Act, 7c. to provide

$18 billion to meet the pollution problem. We express no

opinion as to whether or what extent the Administrator could

legally withhold funds at the obligation stage; that question

must await future resolution. Compare Georgia y. Nixon.

No. 63, Original, motion denied, 42 U.S.L.W. 3193 (U.S. Octo-

ber 9. 1973). See n.39 infra.

5233-925—74—_-3

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SEBS REE ENA ET IIS BET TIN HN

A OREO aR eae Pris

Borers co:

32A

Finally, the Administrator makes an argument to

this court not made to the trial court. He does so ap-

parently in response to the trial court’s findings and

reasoning with regard to § 205(b)(1) of the Act, the

*‘reallotment” provisions. The trial court’s statement

of the perceived effect of § 205(b)(1) is reproduced

in the margin.” The Administrator contends that the

trial court erred in its assumption that reduced allot-

ments have the effect of irrevocably denying state au-

thorization while reduced obligation does not because,

it is contended, allotments can be ‘taugmented’’. (Ap-

pellant’s Br. at 21.) We think that this is but another

vehicle for a now familiar argument, ¢.c. that ‘‘allot-

ment” control is identical with ‘‘obligation’’ control.

Therefore, appellant concludes, a construction such as

ours, which considers them separately must be erro-

neous.

We need not and do not reach the merits of this

contention concerning “augmentation”. The trial

* Another feature of the Act which is of some importance

in the resolution of issues before the Court is the reallotment

provision in §205(b)(1) of the Act. Once allotted to a State,

sums are available for obligation for approved projects there

‘for a period of one year after the close of the fiscal year for

which such sums are authorized.” If for any reason the sums

allotted are not fully obligated within that period, they are to

he reallotted ‘generally on the basis of the ratio used in making

the last allotment of sums under this section.” Such reallotment

sums remain avaitable for obligation and are added to the State's

allotment for the next fiscal year. Any suns authorized but

not allotted at the appropriate time are lost to the State under

the provisions of this Act. Thus, by refusing to allot the full

sums authorized, the Administrator controls the absolute amount

(as opposed to the rate) of spending without regard to the

standards set forth in, e.g., § 204, for determining whether sums

should be obligated.

New York City v. Ruckleshaus, supra n. 10, J.A. at 55a.

33A

court’s reasoning appears to us to be correct.” As to

the contention of the Administrator, we further ob-

serve that the Act nowhere mentions any type of later

augmentation procedure, and rather states in section

205(a) that ‘‘the allotment for fiscal year 1973 shall

be made not later than... .” (Emphasis added.)

However, believing as we do that there is a clear dis-

tinction under the Act between allotment and obliga-

tion and that there can be no diserction as to the

former, we find it unnecessary to consider whether

an allotment could be ‘‘augmented” in a later fiscal

year; full allotment must be made in each fiscal year.

D. SECTION 206(f)(1)

Having considered the contentions of the Admin-

istrator as to the proper meaning of sections 205 and

207, we turn to yet another consideration which we

find strongly supportive of our decision. It is elemen-

tary that a statute must be construed, if it is possible,

to give effect to all of the provisions. E.g., United

States v. Menasche, 348 U.S. 528, 538-39 (1955).

Section 206(f)(1) of the Act allows the Adminis-

trator to obligate funds for a particular state’s proj-

ect even if the funds allotted to that state have been

fully obligated. This is possible provided that ‘‘an

authorization is in effect for the future fiscal year for

which the application requests payment, which au-

thorization will insure such payment without exceed-

ing the State’s expected allotment from such author-

iation.” (Emphasis added.) Section 206(f)(1) would

have scant operative effect if the ‘‘state’s expected

* Accord, Campaign Clean Water yv. Ruckleshaus, Civil No.

18-73-R (E.D. Va. filed June 5, 1973) slip op. at 8, reversed

on other grounds, Campaign Clean Water v. Ruckleshaus,

F.2d . No. 73-1745 (4th Cir. December 10, 1973).

34A

allotment” could not be known because the Adminis-

trator had discretion to allot only a portion of such

authorization. This is further evidence of a legisla-

tive purpose to make allotment mandatory. In keep-

ing with the basic principal of statutory construction

represented in Menasche, we can see no other way to

preserve the force of § 206(f)(1), save mandatory

allotment.

V. CONCLUSION

The only question “ before this court is whether the

Administrator must make full allotments under the

Act. Our reading of the revelant statutory language

and careful analysis of the pertinent legislative his-

tory compells us to hold that §205(a) of the Act

requires the Administrator to allot the full sums

authorized to be appropriated in § 207;* therefore,

the decision of the trial court is

Affirmed.

*” There is no constitutional question in this case. Both sides

have agreed that if this court determines that the Act re-

quires full allotment there remains no constitutional power

in the executive to limit the allotments because, in the words of

appellant, “Allotment ... is not an act that of itself commits

the government to any cbligation.” (Appellant’s Reply Br. to

Supplemental Br. of Appellee t 2.) See also Supplemental Br.

of Appellee at 3-6. Compare Georgia y. Nixon, et al., No. 635,

Original, motion denied, 42 U.S.L.W. 3193 (U.S. October 9,

1973) which attempted to raise tiie question of the constitu-

tionality of refusal to obligate.

*° $5 billion for fiscal year 1973 and $6 billion for fiscal year ©

1974.

lat Ra NOP SPOS te AIS OS NE ot VERIO Bi Rite:

APPENDIX B

Unirep States Court oF APPEALS FOR THE

Fourtru Circuit

No. 73-1745

CaMPpailGN CLEAN Water, INC., APPELLEE

ue

Russet, FE. Train, ADMINISTRATOR, ENVIRONMENTAL

PROTECTION AGENCY, APPELLANT

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond,

Robert R. Merhige, Jr., District Judge

(Argued October 2, 1973—Decided December 10, 1973)

Before Haynswortu, Chief Judge, Russevi. and

FiEvp, Circuit Judges.

Rvsseii, Circuit Judge:

Like a number of other pending actions, this suit,

brought by an environmental group concerned with

See, City of New York v. Ruckelshaus (D.C. N.Y. 1973)

398 F. Supp. 669; Brown vy. Ruckelshaus and City vf Los

eAngcles v. Ruckelshaus (D.C.C.D. Cal. 1973) — ¥. Supp.

359A

iN

36A

\

water quality in Virginiz, involves the discretionary

power, if any, of the defendant Administrator, En-

vironmental Protection Agency, to aliot appropriation

authority for fiseal 1973 and 1974, particularly as

those allotments relate to Virgina, under the provi-

sions of Section 205 of the Federal Water Pollution

Control Act Amendments of 1972.’ The Act sets forth

a comprehensive legislative program for controlling

and abating water pollution.* In Subchapter IT of

that Act, provision is made for federal financial assist-

ance to states and localities in planning and construct-

ing sewage .treatment plants, designed to assist in

assuring the prompt attainment of specified standards

of water quality.. Under Section 207 of that Sub-

chapter, grant authorizations ° are made ‘‘for the fis-

cal year ending June 30, 1973, not to exceed $5,000,-

(00,000, for the fiscal year ending June 30, 1974, not

to exceed $6,000,000,000, * * *.’’ The grant authoriza-

tions in Sectidn 207 are supplemented by Section 205

which provides‘for the allotment by the Administrator

of such authorizations as approved among the States

(decided 8/17/73): Martin-Trigona vy. Ruckelshaus

(D.C.N.D. Til. 1973) F. Supp (decided June 28,

1973): Minnesota Vs USEPA (D. Minn. 1973) F. Supp.

. (decided June 25, 1973).

2 Section 1285, 33 U.S.C.

* Section 1251, ef seq.. 33 U.S.C. The legislative history is

set forth-in U.S. Code Cong. & Adm. News, 92d Cong., 2d Sess.,

pp. 3668, ef seq.

‘Section 1281, ef seg.. 33 U.S.C.

* Section 1287, 33 U.S.C.

*The statutes invelved in this action concern not direct

approptiations but what has often been described as “obliga-

tional authority”. The Office of Management and Budget, in

its listing of appropriated funds withheld from disbursement,

omitted those represented by “obligational authority”. Sce, Neo

FALE YL Ot DN REAR. ODE

37A

on a statutorily stated formula ‘‘not later than the

January Ist immediately preceding the beginning of

the fiscal year for which authorized, except that the

allotment for fiscal year 1973 shall be made not later

than 30 days after October 18, 1972.”’

On November 22, 1972, the President wrote the

Administrator directing the latter not to “allot among

the States the maximum amounts provided by section

207°’; specifically, he directed that, “[N]o more than

$2 billion of the amount authorized for the fiscal

year 1973, and no more than $3 billion of the amount

authorized for the fiscal year 1974 should be allotted.”’

In directing such action, the President referred to the

fact that the Act “permits a significant increase over

our programs to fund the construction of wastewater

treatment facilities’? and stated that budget requests

for funding such construction under the earlier pro-

grams in fiscal 1973 amounted to “#2 billion’’. In fix-

ing the allotments to be. made under Section 205, the

President observed that, “[T]hese amounts will pro-

York Times, Feb. 6, 1973, at 1, col. 1 (city ed.). In principle,

however. the difference between the two is unimportant, so far

as the issues in this proceeding are concerned. As one com-

mentator has aptly remarked, “Appropriations are passed in

various forms, and permit actual expenditures as well as the

incurring of obligations. However, there is another species of

financial authority, the contract authorization [also termed obli-

gational authority], which empowers the governmental unit

only to incur obligations. Under such contract authority power,

the agency will have to later request an appropriation to liqui-

date the obligations it has incurred.” Note, The Likely Law of

Executive Impoundment, 59 Towa L. Rev. 50, 54 (1973). There

is thus no reason to treat the two forms of authorizations other

than as appropriations and to adjudge the right of the execu-

tive to withhold the same in both instances. See, Note, 7m-

poundment of Funds, 86 Harv. L. Rev. 1505, 1506, n, 2 (1973).

fy

permenant wrae

388A

vide for improving water quality and yet give proper

recognition to competing national priorities for our

tax dollars, the resources now available for this pro-

gram and the projected condition of the Federal

treasury under existing tax laws and the statutory

limit on the national debt.”

The plaintiff brought this action for both declara-

tory and injunctive relief in connection with the ad-

ministration of the Act. By way of declaratory

relief, it asked judgment that ‘‘(a) the defendant

[Administrator] lacks the discretion to refuse to allott

among the states the full sums authorized by Congress ;

or, alternatively, (b) the defendant abused whatever

limited discretion he possesses by withholding a great-

er amount of funds than contemplated by the Congress

under the Act.” It, also, requested injunctive reiief,

“directing the defendant to allot among the states the

full sums of $5 billion and $6 billion authorized to be

appropriated by section 207 of the Act for fiscal years

1973 and 1974.” Without answering, the defendant

Administrator moved to dismiss on the grounds “that

the Court lacks jurisdiction over the subject matter

of this suit and that the Complaint fails to state a

claim upon which relief can be granted.” At the same

time, the plaintiff moved for summary judgment ‘on

the grounds that there is no genuine issue as to any

material fact and that, * * * plaintiff is entitled to

judgment as a matter of law.” After a hearing, the

District Court denied the motion of the defendant to

dismiss and granted in part the motion of the plain-

tiff for summary judgment.’ From that decision, the

defendant Administrator appeals. We remand for fiur-

ther proceedings.

*The decision of the District Court is reported in 361 F.

Supp. 689,

39a

I,

The defendant Administrator at the outset raised a

number of procedural barriers to the maintenance of

this action. It put in issue the standing of the plain-

tiff to maintain this action, the justiciability of the

issues, the prematureness of the proceedings, and

finally, the bar of sovereign immunity. These claims

were carefully considered in the thoughtful opinion

of the District Court and were found meritless. For

the reasons assigned by the District Court and for the

reasons hereafter developed, we agree.

IT.

Turning to the substantive controversy: The plain-

tiff concedes the Congress intended to give the execu-

tive certain discretion in making allotments under

Section 205; the defendant Administrator asserts the

existence of such discretion; and the District Court

found that there was such discretion.’ The existence

>‘ Thus the plaintiff in its brief, states the issues on appeal

to be “whether, in passing the Federal Water Pollution Con-

trol Act Amendments of 1972, Congress intended to give the

President boundless discretion to withhold funding under the

Act, or whether, as plaintiffs contend and the district court

held, the discretion granted the Executive is limited and was

grossly exceeded.”

While a number of courts have found a want of discretion in

the Administrator in fixing the authorized allotments, the com-

mentators on the Act are not as definite in their opinions. See,

for instance, Note, The Likely Law of Impoundment, 59 Towa

LL. Rev, 50. 55, n. 42 (1973) and Note, 7mpoundment, 86 Tare,

L. Rev, W05, 1526, n. 116; but ¢/., Note, Protecting the Fise:

Executive Impoundment and Congressional Power, 82° Yale

1, J, 1636, 1952. The issue of discretion, it is conceded by one of

the commentators is plainly “arguable”, something that cannot

be said, it suggests, with reference to the appropriation made in

Gp: com ee eed we te en “

404

of diseretion, therefore, is not in issue on this appeal.

The point of controversy is the extent of that disere-

tion and the power of the Court to review. The plain-

tiff, in the District Court, contended that the discre-

tion granted by Congress to the Administrator was

not “unbridled”; that specifically it was not broad

enough “to give the Administrator the diseretion to

gut the Act.”

In developing this contention, it emphasized the pur-

poses and goals of the Act and argued that the Ad-

ministrator’s discretion may not be exercised in a man-

support of the Federal Aid Highway Act, Section 101-44, 25

US.C., involved in State Highway Commission v. Volpe (Sth

Cir. 1973) 479 F.2d 1099, 50 Jowa LZ. Rev. at p. 55. In fact, Con-

gress made it as plain as it could in the Highway Act that it

intended to confer no right of impoundment on the executive.

(See Page 1111, 479 F.2d.)

Ralph Nader, in his testimony before the Senate Ad Hoc

Committee on Impoundments (hereafter referred to as Ya-

poundment Hearings) ranged himself with those who found dis-

cretion in the executive in executing Section 205. He testified

in this connection:

“Granted, the legislative history of these 1972 amendments

suggests that Congress may have intended to grant the Presi-

dent limited discretion in controlling the level of obligations.

However, the decisive overriding of the veto indicated a clear

congressional mandate to have suflicient funds immediately

available for obligation to meet the timetable for water quality

goals which the act established.” (at 34)

For a thoughtful statement of reasons for discretionary

spending authority in the executive, see Fisher, /residential

Npending Disevetion and Congressional Controls, appearing in

the Winter, 1972, issue of Law and Contemporary Problems

and quoted in 7mpoundment Hearings, at T19:

“The reform advocate is therefore advised to regard execu-

tive spending discretion as an essential, ineradicable feature

of the budget process. Expenditures deviate from appropri-

ations for a number of reasons, Appropriations are made

many months, and sometimes years, in advance of expenditures,

a

41a

ner and to an extent that the purposes of the Act are

frustrated and nullified and that Courts have both the

power and the duty to prevent such nullification. The

defendant, on the other hand, took the position that,

While the Administrator hed not by his limited allot-

ments frustrated the legislative purposes reflected in

the Act, he has absolute diseretion in making such

allotments, and that his exercise of discretion is im-

mune from judicial review, In resolving these con-

flicting positions, the District Court found that, on its

face, an “impoundment peliey,” by whieh 55° of the

Congress acts with imperfect knowledge in trying to legislate

in fields that are highly technical and constantly undergoing

change.

“New circumstances will develop to make obsolete and

mistaken the decisions reached by Congress at the appropria-

tion stage. It is not practicable for Congress to adjust to

these new developments by passing large numbers of sup-

plemental appropriation bills. Vere Congress to control ex-

penditures by confining administrators to narrow. statutory

details it would perhaps protect its power of the purse but

it would not protect the purse itself. Discretion is needed for

the sound management of public funcus.”

But, cf. the comment of the editor in 82 Vale 2.7. 1656, at

p. 1640. n, 26:

“It is important to note that this argument at its strongest

only establishes a limited kind of impoundment power for

the Executive, the power to impound when conditions intrinsic

to the program indicate that further spending would be waste-

ful. There is no principle that would indicate that the Presi-

dent must necessarily have all impoundment powers or none

at all.”

* The term “impoundment” has provoked some disagreement.

The editor in one recent Note would define it “as the execu:

tive practice of withholding appropriated funds or obligational

authority, beyond the bounds of any statutorily conferred dis-

cretion.” Note, 59 Jowa ZL. Rev. d0, 56 (1973). Similarly, Pro-

fessor Miller defines it as “deliberate attempts to seuttle proj-

ects authorized by Congress, but disliked by the Executive.”

42a

allocated funds will be withheld, is a violation of the

spirit, intent and letter of the Act and a flagrant

abuse of executive discretion.” ” It found authority to

declare judgment “that that policy is null and

void”." Though it thus found the allotments as fixed

by the Administrator invalid, it denied injunctive re-

lief on the ground the Court was not equipped +o

“supervise the Administrator in the administration of

the Act”, partially because of “the expert discretion

designed for the appropriations stage.” ” And, finally,

it limited the application of its judgment “to those in-

terests in Virginia represented by the plaintiff or-

ganization.” ”

As we have already stated, the rigitt of the defend-

ant to exercise discretion in making the allotment

under Section 205 is not challenged by this appeal:

that right is conceded. We ave not concerned with the

Impoundment fTeczings, at 752. This would limit the applica-

tion of the term to those acts of the Executive which represent

an illegal withholding of appropriated funds, Other authorities

use the term to identify any executive withholding of appro-

priated funds and make no effort to engage in the “semantic”

game. Thus, in the Note, Jmpoundment of Funds, 86 Harr.

L. Rer. 1505, nm. 1, impoundment is defined as a “refusal by

the executive, for whatever reason, to spend funds made avail-

able by Congress.” Another writer uses similar language, stat-

ing that, “In its broadest context, impoundment occurs when-

ever the President spends less than Congress appropriates for

a given period.” Fisher, Funds Impounded by the President:

The Constitutional [auc 28 Geo. Wash. L. Rer. 124 (1969).

This would seem the more sensible definition. Under this

definition, any withholding would be an impoundment and

whether such impoundment was permissible would depend

on the legislative intent.

“361 F.Supp. at 700,

"361 F.Supp. at 700,

** 361 F. Supp. at 700.

“261 F. Supp. at 701.

434

question whether an appropriation, either by its very

nature “ or under the terms of the Antideficiency Act,”

even in the absence of any expressed grant of execu-

tive discretion in its use, involves some element of

discretion in the executive. We are dealing here with

a legislative provision which it has been held (and

from this holding there is no appeal) does vest the

executive with discretion. In short, the issues on this

appeal are whether, accepting the holding that there

was discretion in this case, its exercise is judicially

reviewable, and, if reviewable, what standards or cri-

teria are to be used in assessing the validity of its

exercise. Those are the only issues posed by the appeal.

It is the defendant’s position that, by conceding

executive discretion in the fixing of the allotments

under Section 205, the plaintiff has admitted a want

of judicial power to review Ins exercise of that dis-

“It has been sometimes stated that an appropriation is “per-

missive rather than mandatory”, by which the author states “it

is meant that the Executive Branch is authorized but not re-

quired to spend funds up to a given amount for designated

purposes.” (Italics in text.) Miller, Presidential Power to Im-

pound Appropriated Funds; An Exercise in Constitutional De-

cision-Making, 42 N.C. L. Rev. 2, 511 (1965). In somewhat

similar vein, Professor Corwin summed the matter up with the

statement that the Constitution “assumes any expenditure is pri-

marily an executive function, and conversely that the partici-

pation of the legislative branch is essentially for the purpose

simply of setting bounds to executive discretion—a theory

confirmed by early practice under the Constitution.” Corwin,

The President: Office and Powers, 127-8 (4 ed. 1957).

See, also, McKay v. Central Electric Power Cooperative

(D.C. Cir. 1955) 223 F.2d 623, 625.

* Section 665, 31 U.S.C. This section authorizes the executive

to withhold funds “to provide for contingencies, or to effect

savings whenever savings are made possible by or through

changes in requirements, greater efficiency of operations, or

other developments subsequent to the date on which such appro-

Se ee, ee

444

cretion. He rests this argument upon Section 10 of the

Administrative Procedure Act,” which provides that

administrative action, the exercise of which is *‘com-

mitted to agency discretion” is not judicially review-

able. Cf., Davis, Administrative Law Treatise, 1970

Supp., § 28.16, p. 964. What the defendant urges is

similar to the administrator’s argument in Overseas

Media Corporation v. McNamara (D.C. Cir. 1967)

385 F.2d 308, 316, n. 14, i.c., that we should ‘‘adopt

the view that the [iegislative] act of committing a

matter to an agency's discretion forecloses court con-

sideration of an alleged abuse of that discretion”

priation was made available” (Italics added, 665(c)(2).) Two

constructions of the terms “savings” and “other developments”

have been advanced. Under a narrow view, these terms relate

to “developments within the individual programs involved, and

that impoundment is only permissible to the extent that it does

not interfere with achieving the underlying purposes of the

program involved.” Note, Jimpoundment, 86 Harv. L. Rev. at p.

1517 (1973). “According to a more expansive view, however,

‘other developments’ should refer to any subsequent develop-

ment, whether or not uniquely program related, which would,

in the administrator's mind, call for the making of savings

through reduced program expenditure. A determination that a

subsequent situation of inflation justified program reduction

or termination in order to cut government spending would fit

into this category.” Note, The Likely Law of Executive Im-

poundment, 59 Towa L. Rer. WO, 67 (1975). Most commentators,

however, lean to the narrow view. See 86 arr. L. Rev. 1517;

59 Iowa L. Rev. G7; 82 Yale L. J. 1642.

Mr. Fisher in an article quoted in the /mpoundment Hear-

ings, p. 399, takes this narrow view of the application of the

Act. In support he quotes from the language of House Appro-

priations Committee in reporting the Act:

“It is perfectly justifiable and proper for all possible econ-

omies to be effected and savings to be made. But there is no

warrant or justification for the thwarting of a major policy

of Congress by the impounding of funds.”

* Section 701, 5 U.S.C.

iiee~

454

under any circumstances. To that argument, the

Court in Overseas replied firmly, *‘The Legislative

history of the Administrative Procedure Act belies

this position.” ’ And this conclusion in Overseas was

confirmed in Citizens to "reserve Overton Park v.

Volpe (1971) 401 U.S. 402, 410, where, speaking of

this exception, the Court characterized it as “a very

narrow exception’, whose application, according to

“(T]he legislative history of the Administrative Pro-

cedure Act” is limited to “those rare instances where

‘statutes are drawn in such broad terms that in a

given case there is no law to apply.’ ’’ In resolving

whether the matter falls within that “rare’’ instance

in which the executive action is non-reviewable, the

problem is “that of determining when the agency

action is ‘committed to agency discretion’ within the

meaning of section 10 of the Administrative Procedure

Act, and when it merely ‘involves’ discretion which is

nevertheless reviewable.”” Ferry v. Udall (9th Cir.

1964) 336 F.2d 706, 711, cert. denied 381 U.S. 904.

Unquestionably, whether an agency, in exercising its

asserted discretionary power under a legislative au-

thorization, is acting in a manner consistent with the

legislative purpose and with proper regard for the

constitutional principle of separation of powers be-

tween the executive and legislative is an issue that

Section 10 did not intend to make non-reviewable; it

patently is not an issue “‘committed to agency discre-

tion’’. See, Note, Protecting the Fise: Exrceutive Im-

poundment and Congressional Power, 82 Yale L. J.

1636, at p. 1647; DeVito v. Shultz (IVC. Cir. 1969)

300 F. Supp. 381, 38° Hamel v. Nelson (D.C. Cal.

1963) 22€6 F. Supp. 96, 98. The power to spend rests

17 385 F. 24 at 316, 317, n. 14.

CARERS OO, eet SMOTHER TERN SEE NPI = iS ES TRIE SAREE IT ILE PME we

See oe SY) wet emus

are Ey nee

464

primariiy with Congress under the Constitution ;* the

executive, on the other hand, has the constitutional

duty to execute the law in accordance with the legis-

lative purpose so expressed.” When the executive

exercises its responsibility under appropriation legis-

lation in such a manner as to frustrate the Congres-

sional purpose, either by absolute refusal to spend or

by a withholding of so substantial an amount of the

appropriation as to make impossible the attainment

of the legislative goals,”’ the executive trespasses

beyond the range of its legal discretion and presents

* Article I, Section 9, Clause 7, Constitution.

*” Article IT, Section 3, Constitution.

See, also, Spaulding v. Douglas Aircraft Co. (D.C. Cal. 1945)

60 F. Supp. 985, 988, aff. 154 F. 2d 419:

“The parpose of the appropriations, the terms and conditions

under which said appropriations were made, is a matter solely

in the hands of Congress and it is the plain and explicit duty

of the executive branch of the government to comply with the

same.”

2°See statement of then Assistant Attorney General Rehn-

quist, quoted in the Impoundment Hearings, at 609:

“Tt is in our view extremely difficult to formulate a const itu-

tional theory to justify a refusal by the President to comply

with a Congressional directive to spend. It may be argued that

the spending of money is inherently an executive function, but

the execution of any law is, by definition, an executive function,

and it seems an anomalous proposition that because the Execu-

tive Branch is bound to execute the laws, it is free to decline to

execute them.’ Memorandum Re Presidential Authority to Im-

pound Funds Appropriated for Assistance to Federally Im-

pacted Schools (Dec. 1, 1969), reprinted in Jmpoundment Hear-

ings at 279, 283.”

It may be said, too, that, by absolutely refusing to spend or

obligate funds appropriated by Congress, the executive is for

all practical purposes exercising an “item veto”, terminating

or delaying a particular program, thereby avoiding the

embarrassment of a public veto message with the risk of a

Congressional overriding.

es

OO, A we a

474A

an issue of constitutional dimensions which is obvi-

ously open to judicial review. And it was this issue

and this issue alone to which the District Court care-

fully restricted itself in this case. It specifically

denied any power on its part to review or supervise

the defendant’s discretion so far as it was exercised

in a manner that was not so arbitrary or drastic as

to represent a nullification of legislative purpose.” We

agree generally with this construction of its power by

the District Court.”

Our only difficulty with the decision of the Dis-

trict Court relates to its conclusion on the issue of

arbitrary frustration of legislative policy by the

execiitive action taken. The District Court found that

an allotment under Section 205 in the amount of

*C't., Housing Auth., San Francisco +. United States Dept..

HUD, (DC. Cal. 1972) 340 F. Supp. 654, 656; Church, Zhe

Impoundment of Appropriated Funds: The Decline of Con-

gressional Control Over Executive Discretion, 22 Stan. L. Rev.

1240, 1252 (1970); Boggs. Executive Impoundment of Con-

qressionally Appropriated Funds, 24 U. of Fla. L. Rev. 221,

228 (1972); and Stassen, Separation of Powers and the Uncom-

mon Defense: The Case Against Impounding of Weapons Sys-

tem Appropriations, 57 Geo. LJ. 1159, 1201 (1969): and Miller,

Presidential Power to Impound Appropriated Funds: An

Evercise in Constitutional Decision-Making, 43 NCI. Rev.

502, 536 (1965).

The court’s power is well stated in 82 Yale L./J. at p. 1651:

“The court need not seek to derive some lower figure but

need simply test the contested impoundment against the

legislative intent as expressed in the act to determine whether

the impoundment was an abuse of discretion. It will derive

its own construction of the statute then test the administrative

action to see whether it could rationally be a ) carrying out of

the Act’s mandate.”

*? Of course, in the exercise of his bienitiies the Adminis-

trator may not consider factors that are irrelevant to the legis-

lative intent. Overton Park. supra (401 US. at 416).

635 925 74-4

Pee, ve eT

48a

55% of the authorization under Section 207, estab-

lished such a drastic and arbitrary administrative

reduction in the contract authorization as, on its

face, without any other evidentiary support, to require

a finding of executive nullification of the purposes of

the Act. With this factual finding, we are unable to

agree. The statement of the President must be read

in conjunction with the explanation given by the

Administrator both in his presentation to this Court

and in his Congressional appearances, for his allot-

ments as made. In his presentation to this Court, the

Administrator has disclaimed any purpose of evad-

ing the responsibilities given him under the Act. In

his appearance before the Senate ad hoe Subcommit-

tee on Impoundment of Funds on February 6, 1973,”

where he defended the allotments made for the years

in question here, he forcefully expressed his commit-

ment to the goals intended by the Act * and affirmed

that the reductions in the contract authorizations, as

represented by the allotments made by him under

Section 205 for fiseal years 1973 and 1974, were

arrived at on the basis of an administrative judgment

that greater authorizations could not be spent “in a

wise or expeditious manner”’*™ in achieving such goals

during those vears.

This judgment was based, in turn, he testified, on a

conclusion that “there was not sufficient technical ca-

pacity, technical capability, I think it was, or con-

tractual capacity” to carry out a greater or more

extensive program.” In reaching that conelusion, he

had taken note, according to his testimony, that there

* Impoundment Hearings, at 403, et seq.

** hid, p. 405.

*% Thid, p. 415.

2° hid, p. 416.

—

49a

were already available other contract authorizations

for the same purposes as that authorized under the

Act, which, when added to the authorizations actually

allotted by the Administrator, meant that “there was

37.25 billion released on the 27th of November [1975]

to be spent over the next 18 months” in meeting the

goals of the program.” He argued that to attempt a

more rapid rate of spending would inordinately inflate

the cost of the program without apprecia>ly accel-

erating the attainment of its goals. He pointed out in

partial confirmation of this opinion that “the con-

struction industry has inflated the cost of the building

of the project at the rate of 120 percent”, while at the

same time “the cost of living has gone up at the rate

of 40 percent.” *

27 Ibid, p. 416.

*8 Tbid, pp. 416-417.

In connection with this latter statement of the Administrator.

it may be observed that one of the disputed issues in some of the

controversies over executive impoundments concerns whether

there is legislative warrant under the particular legislation for

the executive to consider the need to thwart general inflation-

ary tendencies in the economy in determining a withholding of

appropriations. The claimed basis for the exercise of such power

is stated by the Department of Justice in its repiy to certain

questions propounded by the Chairman in the Jmpoundment

Hearings, pp. 837-8. It is not clear whether this issue is present

here. It is possible to interpret the testimony of the Adminis-

trator as indicating that it was the unique, inflationary forces

prevalent at the moment in that part of the construction in-

dustry involved in sewage plant development which were con-

sidered by him. Actually, however, the general objection to im-

poundment on the part of the Congress seems to be directed at

the re-ordering of priorities as a result of impoundment. Thus,

the Chairman of the Subcommittee at the Zmpoundment Hear-

ings, Senator Erwin, after quoting from Mr. Fisher to the effect

that, “Impoundment is not being used to avoid deficiencies, or

to effect savings, or even to fight inflation, but rather to shift the

PB seerseseeg:

504

The Administrator, also, asserted in his brief, with-

out contradiction by the plaintiff, that as of August

31, 1973, all of the States had utilized but 73 percent

of their 1973 allotments and 8 percent of their 1974

allotments. There is no way for us at this juncture

to venture an opinion whether the Administrator had

heen “dvagging his feet” in approving projects or

whether these figures indicate that the allotments made

represented reasonable goals for the two fiseal years

in controversy. The experience in the use of the

allotments so far in fiseal 1973 and.1974 is, though, a

matter that might well be considered in determining

whether the Administrator. in exercising his discretion

under Section 205, acted so arbitrarily as to frustrate

the attainment of the legislative goals.

Moreover, it must not be overlooked that the Admin-

istrator claims the power to increase allotments during

a fiscal year and has declared in this Court that,

should it appear that the allotments made for fiscal

vears 1973 and 1974 are not sufficient fo support the

applications made and qualifying under the standards

established, he will give consideration to making addi-

tional allotments out of the maximum authorizations

provided by Section 207.”

The Act itself grants contract authorizations for the

fiscal years 1973— 1974— 1975 in the overall amount of

$18 billion. It provides for reallotment of unused

allotments. The defendant asserts that, considered as

a whole, the Act gives the defendant the power to add

to allotments for any fiscal year, within, of course, the

scale of priorities from one Administrator to the next, prior to

Congressional action,” said, “That is our complaint.” Jmpound-

ment Hearings, p. 277.

*® This procedure, if followed, it could be argued, would carry

out the Congressional intent. ~

51a

legislative maximums, as the need demonstrates. Be-

cause he claims there has been no denial of any quali-

fied project in either fiscal year 1973 or fiscal year

1974, there is no demonstrable need for an increase in

the allotments heretofore made. Moreover, he avers

without contradiction by the plaintiff that no qualified

project for the Commonwealth of Virginia has been

denied contract authorization during fiseal 1973 or

1974. He goes further and asserts that if there are

qualifying projects from Virginia in the fiseal vears in

question that exceed the allotments already made, the

plaintiff has suffered no prejudice or injury unless he

[the Administrator] refuses to make additional allot-

ments to cover qualifying projects in Virginia in the

two fiscal years in question.

It is true, as the plaintiff argues, that Section 205

declares that allotments are to be made no “later than

the January Ist immediately preceding the beginning

of the fiscal vear for which authorized” but the defend-

ant presses the’ point that this provision simply estab-

lishes a date for initial allotments and was net in-

tended and does not represent a restriction on the de-

fendant’s right, if the need develops, to add to or to

increase the allotments as initially made.” Whether

this construction is sound—and we are strongly per-

suaded that it is—it would seem unlikely that any

party would have standing successfully to challenge

any increase made by the Administrator in the initial

allotment. In any event, this is an issue that should

be given consideration in determining whether the

action of the Administrator was arbitrary.

These observations do not establish that the District

Court’s conclusion was incorrect; they do indicate,

though, that the issue in controversy here is not one

*” See, Impoundment Hearings, pp. 840-1.

amen

52a

to be resolved by any per se rule but is one that re-

quires inquiry into the basis for the Administrator’s

action, After all, there is a presumption of legality

that attaches ordinarily to an administrator’s action

and the burden of establishing impropriety rests on

him who challenges. Even if the District Court had

concluded, as some other courts have, that the Admin-

istrator was without discretion in making allotments

under Section 205, he would still have been empowered

under the terms of the Antideficiency Act ‘to with-

hold funds for reasons of efficiency and economy”’;

and, if the plaintiff wished to challenge an impound-

ing of funds made under the authorization of the Anti-

deficiency Act, it would have had the burden of

showing *‘that the impoundment was in fact not war-

ranted by efficiencies or other new developments’,

and part passu, it would seem to follow that “a plain-

tiff challenging an assertion that the executive has

discretion to impound under a particular spending

bill must show that the discretion granted was less

than that claimed”. Note, Jmpoundment of Funds, 86

Harv. L. Rev. 1505, 1529 (1973).

Beyond the bare assumption that an expenditure of

approximately half the authorized appropriation es-

tablishes a frustration of legislative purpose the plain-

tiff has done nothing to satisfy its burden. Such an

assumption, in the face of other circumstances to

which we have adverted, and recognizing that the Dis-

trict Court has found at least some discretion in the

Administrator to fix the allotment, is insufficient to

support the conclusion reached by the District Court

that the allotments made were ‘‘a violation of the

spirit, intent and letter of the Act and a flagrant abuse

534A

of executive discretion’’, or involved a use of irrele-

rant factors in arriving at his action. That issue should

not have been resolved on the pleadings but a record

should have been made that would support the con-

clusion reached by the District Court." We accord-

ingly remand to the District Court for further pro-

ceeding in order to determine, on the basis of such

evidence as may be submitted by the parties, whether

as a fact the amount of allotments made by the Ad-

ministrator under Section 205 were “a violation of the

spirit, intent and letter of the Act and a flagrant

abuse of executive discretion”, or involved irrelevant

or improper standards in fixing such amount. In con-

nection with that inquiry, it will be appropriate for

the District Court to consider whether the factors used

by the defendant in fixing the allotments were the ones

that were “relevant” under a proper construction of

the discretionary power found to exist in the execu-

tive.”

REMANDED WITH DIRECTIONS

Cf, State of Minnesota v. United States Environmental

Protection Agency (D.C. Minn. 1973) — F. Suop. — (decided

June 25, 1973), in which the plaintiff, complaining, as the plain-

tiff does here, that the allotments were improper as they applied

to it, offered in affidavit form, proof that. projects in its state

had qualified for grant but were being denied approval because

of the paucity of the allotment.

* Nee, Citizens to Preserve Overton Park v. Volpe, supra, at

420 (401 ULS.).

APPENDIX C

Unrrep Srares Court oF APPEALS FOR THE District

or CoLUMBIA CrrcvuIT

No. 73-1705

SEPTEMBER TERM, 1973—CIVIL ACTION 2466-72

THe Crry or New York oN BEHALF OF ITSELF AND

ALL OTHER SIMILARLY SrruavTep MUNICIPALITIES

WITHIN THE State or New York Citry or Der-

TROIT, (PARTY PLAINTIFF )

’.

Russet, E. Tratx, as ADMINISTRATOR OF THE UNITED

STATES ENVIRONMENTAL PROTECTION AGENCY,

APPELLANT

Appeal from the United States District Court for

the District of Columbia

Before: Tama, Ropinson and Wiikey, Circuit

Judues.

DOA

oo --

DA

JUDGMENT

This cause came on to be heard on the record on ap-

peal from the United States District Court for the

District of Columbia, and was argued by counsel.

On consideration thereof It is ordered and adjudged

by this Court that the judgment ..........____ of the

District Court appealed from in this cause is hereby

affirmed, in accordance with the opinion of this Court

filed herein this date.

Per Curiam—For the Court:

Hveu EF. Kune,

Clerk.

Date: January 23, 1974.

Opinion for the Court filed by Circuit Judge Tamo.

———— ——— ee

APPENDIX D

United States Court of Appeals for the Fourth

Cirenit

No. 73-1745

Campaion Ciean Water, INC, ApreLuee

v.

Resse. FE. Traws, Apministratorn, EXVinon MENTAL

Prorection AGENCY, APPELLANT

APPEAL PROM THE UNITED BTATER DISTRICT COUKT FOR

THE BASTERN DISTRICT OF VIRGINIA,

JUDGEMENT

This cause came on to be heard on the record from

the United States District Court for the Eastern

District of Virginia, and was argued by counsel.

On consideration whereof, It is now here ordered

and adjudged by this Court that the case is remanded

to the United States District Court for the Eastern

District of Virginia, at Richmond for further pro-

57a

BSA

ceedings consistent with the opinion of this Court filed

herewith.

Filed December 10, 1973.

Witutam K. Scare, II,

Clerk.

A True Copy, Testes.

Wittiam K. Strate, IT,

Clerk.

Viroista Lirrorp,

Deputy Clerk.

te ee oR

APPENDIX E

Tus Crry or New York, oN BEHALF or ITSELF AND

ALL OTHER SIMILARLY SITUATED MUNICIPALITIES,

PLAINTIFF,

THe Crry or Derrorr, PiLarntirr-INTERVENOR

v.

WriuaM D. RvuckKetsuaus, aS ADMINISTRATOR OF THE

Unirep States ENVIRONMENTAL PROTECTION

AGENCY, DEFENDANT

Civ. A. No, 2466-72

United States District Court, District of Columbia,

May 8, 1973

Gascn, District Judge:

This is an action for a declaratory judgment and

mandamus to compel the defendant, William D.

Ruckelshaus, until recently Administrator of the

United States Environmental Protection Agency

(“the Administrator”) to comply with the Federal

Water Pollution Control Act Amendments of 1972, 86

Stat. 816 (hereafter termed ‘“‘the Act”).’, Plaintiff is

*This action was originally brought against William D.

Reekelshaus, who was serving as Administrator at that time.

During the pendency of the action, Mr. Ruckelshaus resigned

and his successor has not yet been appointed and confirmed.

by operation of Rule 25(d), Fed. R.Civ.P., the Acting Admin-

istrator is automatically substituted as the defendant. The action

59A

604

the City of New York, suing on behalf of itself and

all similarly situated municipalities within the State

of New York. The City of Detroit has been granted

leave to intervene as a party plaintiff seeking the same

relief. The action is brought pursuant to §505(e) of

the Act and 5 U.S.C. $$ 701-706; jurisdiction is al-

leged on the grounds of 28 U.S.C. 6§ 1331, 1332, and

1561.

Plaintiff and plaintiff-intervenor allege that § 205

(a), taken together with § 207, of the Act requires the

Administrator to allot among the states the sums of

#5 billion for fiscal year 1973 and $6 billion for fiscal

vear 1974, thereby making such sums available for

obligation on sewage treatment works construction

approved by the Administrator for federal funding.

It is further alleged that the Administrator has

violated this statutory requirement by promulgating,

at the express direction of the President of the United

States, a regulation, effective December 8, 1972,° which

allotted among the states for fiscal vears 1973 and

1974 *“‘sums not to exceed $2 billion and $3. billion

respectively.” The case is now before the Court on

plaintiff’s motion to determine that this suit may be

maintained as a class action, defendant’s motion to

dismiss, and the motions of plaintiff and plaintiff-

continues unabated unless the new Administrator comes forward

with evidence showing such a discontinuance of his predeces-

sors’ policy as to make the action moot. See Rule 25(d), 1961

Notes of the Advisory Committee on Rules; 3B J. Moore, Fed-

eral Practice, © 25.09[3], at 25-402 (2d ed. 1969). Since no such

showing has been made in the instant case, the actions of Mr.

Ruckelshaus are chargeable to the Acting Administrator for

purposes of this action, and the Court's order is binding upon

the Acting Administrator and his successors in office.

*37 Fed. Reg. 26282, § 35.910-1(a) 1972.

61a

intervenor for summary judgment.’ Also before the

Court for consideration are the pleadings, oppositions,

affidavits, and argument by counsel in open Court.

The Court’s characterization and analysis of the

issues in the case will be clearer if the mechanism set

up under the Act for funding the construction of

sewage treatment works is briefly outlined. The Act

reverses the normal procedure whereby sums are ap-

propriated by Congress and thereafter contractually

obligated by the appropriate agency. Instead, Congress

has, in 6207, authorized certain specific sums to be

appropriated to carry out the purposes of Title IL of

the Act, Grants for Construction of Treatment Works.

The Administrator is required by § 205 to allot the

sums among the states according to a time schedule

and needs formula set up under the Act. (Whether

the full sums authorized to be appropriated must be

allotted or only a portion of them—the size of the por-

tion being within the Administrator’s diseretion—is

the central issue disputed by the parties.) Once

allotted, the sums become available for obligation, 1.e.,

contract authority exists up to those amounts. The Ad-

*The contentions of the plaintiff-intervenor are substantially

the same as those made by the plaintiff. In the interest of

brevity, references throughout will be solely to the plaintiff un-

less the context requires otherwise.

* According to §205(a) sums are to be allotted among the

States “in the ratio that the estimated cost of constructing all

needed publicly owned treatment works in each State bears to

the estimated cost of construction of all needed publicly owned

treatment works in all of the States.” Congress has supplied the

figures for determining the ratios to be used for the fiscal years

ending June 30,1973, and June 30, 1974. (Table IIL of House

Public Works Committee Print No, 92-50). For subsequent

fiscal years, the allotments are to be made in accordance with a

revised cost estimate submitted by the Administrator to Con-

gress and “approved by law specifically enacted hereafter.”

ao----~

624

ministrator reviews grant applications submitted by

States and municipalities for federal funding of par-

ticular waste treatment projects to determine whether

they satisfy criteria set forth in the Act, e.g., in § 204.

Once the Administrator approves the plans, specifica-

tions, and estimates for a project, a contractual obli-

gation arises to pay the federal share allocable to that

project.” Funds are then appropriated to liquidate the

obligations as they fail due; the final step, actual dis-

bursement of the funds, is then made. It is clear from

this sequence that allotment is not tantamount to e.r-

penditure or even commitment of the funds.

Another feature of the Act which is of some impor-

tance in the resolution of issues before the Court is the

reallotment provision in § 205(b)(1) of the Act. Once

allotted to a State, sums are available for obligation

for approved projects there “for a period of one year

after the close of the fiscal year for which such sums

are authorized.” If for any reason the sums allotted

are not fully obligated within that period, they are to

be reallotted “generally on the basis of the ratio used

in making the last allotment of sums under this sec-

tion.”’ Such reallotted sums remain available for obli-

gation and are added to the State’s allotment for the

next fiscal year. Any sums authorized but not allotted

at the appropriate time are lost to the State under the

provisions of this Act. Thus, by refusing to allot the

full sums authorized, the Administrator controls the

absolute amount (as opposed to the rate) of spending

without regard to the standards set forth in, e.g., § 204,

for determining whether sums should be obligated.

® Section 202(a) sets the federal share of the cost of con-

struction of projects, as approved by the Administrator, at 75

percent. Section 203 of the Act specifies that the Administra-

tor’s approval creates contractual obligations on the part of

the United States.

6O3A

Having set forth the framework of the Aet within

which the dispute now before the Court has arisen, the

Court will proceed to the issues. First to be dealt with

are jurisdictional issues raised in the defendant’s

motion to dismiss and his opposition to plaintiff's

motion for summary judgment. Defendant contends

that this Court lacks the requisite jurisdiction because

the doctrine of sovereign immunity bars the suit and

because the action fails to present a justiciable case or

controversy. The Court does not agree with these con-

tentions and will deal with them only briefly.’

Two well-settled conmion law exceptions to the doe-

trine of sovereign immunity are set forth in two cases

cited by defendant, Dugan v. Rank, 372 U.S. 609,

621-622, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963), and

Larson v. Domestic & Foreign Conmerce Corpora-

tion, 337 U.S. 682, 689-690, 69 S.Ct. 1457, 93 L.Ed.

1628 (1949); and plaintiffs action falls squarely

within the exception covering suits challenging actions

by federal officers which go beyond the scope of their

statutory powers. Defendant is not aided by the gen-

eral rule set forth in Land vy. Dollar, 330 U.S. 731,

738, 67 S.Ct. 1009, 1012, 91 L.Ed. 1209 (1947), to the

effect that where the judgment sought ‘*would expend

itself on the public treasury or domain, or interfere

with the public administration,” the suit is in reality

brought against the sovereign: for as subsequent dis-

*It should be noted that these same contentions were made

recently In motions to dismiss by the defendant in three con-

solidated civil actions before Judge Jones of this Court. Local

2677, American Federation of Government Employees vy. Phil-

lips, 358 F.Supp. 60 (D.D.C.. 1973). In those suits, as in the

instant case, plaintiffs were challenging the actions of a federal

officer on the ground that they were in violation of his statutory

authority; Judge Jones rejected the defendant’s contentions

and proceeded to the merits of the case.

533-925—74—_5

PR a eee

oe

OE AEE TOE” RTE ONT

LE IILEX

cM:

ayes ee

WPI ays,

64a

cussion will reveal, the relief sought by plaintiff in

this action does not require the expenditure of un-

appropriated public funds (or indeed of any publie

funds at all), nor will it interfere with the lawful ex-

ercise of defendant's discretionary powers under the

Act.

A second reason for rejecting the sovereign im-

munity defense as a bar to this action is the fact that

plaintiff is seeking review in part on the basis of

the Administrative Procedure Act, 5 U.S.C. §§ 701-

706; the rule in this Cireuit is that the A.P.A. eon-

stitutes a waiver of sovereign immunity in actions to

which it applies. Scanwell Laboratories, Ine. v. Shaf-

fer, 137 U.S.App.D.C. 371, 385, 424 F.2d 859, 873

(1970) ; Constructores Civiles de Centroamerica, S.A.

v. Hannah, 148 U.S.App.D.C. 159, 459 F.2d 1183

(1972). Defendant has sought to distinguish Scanwell

by contending that there was no question there of any

“disposition” of government funds, whereas the in-

stant case presents a “‘dernand” for such funds. As

already indicated, this argument must fail because

defendant has misconstrued the nature of the relief

sought. Plaintiff is demanding only that funds be

allotted as, in its view, Congress required.

Defendant contends that this action fails, for two

reasons, to present a justiciable case or controversy.

First it is argued that the action is hypothetical and

premature and hence does not fall within the limits of

federal court jurisdiction as defined by Article IIT

of the Constitution. It is true that Article ITT confines

federal courts to the adjudication of cases and con-

troversies and forbids the rendering of advisory opin-

ions. Golden v. Zwickler, 394 U.S. 103, 108, 89 S.Ct.

956, 22 L.Ed.2d 113 (1969). Where a declaratory judg-

ment is sought, the plaintiff must show a “substantial

controversy between parties having adverse legal in-

654

terests of sufficient immediacy and reality” to warrant

its issuance. Maryland Casualty Company v. Pacific

Coal & Oil Company, 312 U.S. 270, 273, 61 S.Ct. 510,

512, 85 L.Ed. 826 (1941). Defendant contends that

because plaintiff has no guarantee that projects for

which it seeks funding under the Act will be approved,

refusal to allot, and thus make available for obliga-

tion, the full amounts authorized to be appropriated

in § 207 of the Act does not amount to action that is

adverse to any real or immediate interests of plain-

tiff. This argument fails on several grounds. Plaintiff

has filed an affidavit of the Commissioner of the De-

partment of Water Resources for the City of New

York averring that the City has reeeived approval

from the United States Environmental Protection

Agency (EPA) for two waste treatment projects, and

that because of the reduced allotments, plaintiff's

share of available federal funds “will permit only a

token start toward completion.” (Affidavit of Martin

Lang dated April 3, 1973, {"5-6).° Defendant has

not disputed these assertions of fact.

Even were plaintiff’s grant application still under

study, however, there would be more than a merely

speculative injury; for as affidavits filed by both plain-

tiff and plaintiff-intervenor indicate, the reduction in

allotments has resulted in serious planning delays that

will necessarily retard the development of sewage

treatment facilities. (Affidavit of Martin Lang, dated

February $, 1973, 911: affidavit of Gerald Remus,

dated March 15, 1973, §12). The seriousness of the

planning problem was understood by Congress. It was

7 Attached as Exhibit “B” to the affidavit is a copy of a

letter dated March 1, 1975, from Gerald M. Hansler, Regional

Adwinistrator, EPA, announcing approval of the plaintiff's

grant application for the two projects.

TANTO OAL, UIE INURE POST TER BARE

66a

one of the reasons for utilizing the device of allotment,

thereby making funds available for obligations,

in lieu of the ordinary appropriations procedure.

Congressman William Harsha, one of the managers

of the bill, observed during debate on a_ proposed

amendment to H.R. 11896*° which would have sub-

stituted the normal appropriations process for the

allotment mechanism that “it is essential that the

States, the interstate agencies and the cities have

both the ability for and a basis for long-range plan-

ning, construction scheduling and financing waste

treatment plants, including the sale of bonds that they

have to sometimes negotiate.” 118 Cong. Ree. H2727

(daily ed. March 29, 1972). When there is uncertainty

concerning how much will be allotted in a given year,

municipalities cannot properly plan the seale of proj-

ects for which to seek federal funding.

Still another way in which plaintiff is injured by

the Administrator’s refusal to allot the full amount of

the sums authorized to be appropriated by § 207 lies

in the permanent loss of funds not allotted at the ap-

propriate time. Such funds can not thereafter be

made available for obligation even if grant applica-

tions which, in the Administrator’s determination,

meet all the requirements of the Act are submitted

and the current allocations are insufficient to pay the

authorized federal share.

Considering all of the ways in which _ plaintiff’s

interests are imminently threatened by the Admin-

istrator’s action under challenge here, it seems clear

that there exists an injury sufficiently concrete to

ereate a real controversy in which plaintiff has a

* H.R. 11896 was the House version of the bill later enacted

as P.L. 92-500, 86 Stat. 816, the provisions of which are dis-

puted in the instant case.

hint odo

674A

genuine stake; and in ruling on the legality of the

Administrator’s action alleged to be the cause of this

injury, the Court is not rendering a mere advisory

opinion.

Defendant’s other ground for urging the Court to

find the subject matter of this action nonjusticiable is

the contention that the matter at issue is a “political

question”? which the Court is barred from consider-

ing by reason of the doctrine of separation of powers.

Certainly it is true that this Court could not decide

a ease if it presented a political question. Powell v.

MeCormack, 3995 U.S. 486, 518, 89 S.Ct. 1944, 23

L.ed2d 491 (1969): Coleman v. Miller, 307 U.S.

433, 59 S.Ct. 972, 88 L.Ed. 1385 (1939). Criteria to

be used in determining whether a political question

is presented have been set forth by the Supreme

Court in Baker v. Carr, 369 U.S. 186, 217, 82 S.Ct.

691, 710, 7 L.ed2d 663 (1962). There Mr. Justice

Brenan, writing for the majority, declared:

Prominent on the surface of anv case held to

involve a political question is found a textually

demonstrable constitutional commitment of the

issue to a coordinate political department; or a

lack of judicially discoverable and manageable

standards for resolving it; or the impossibility

of deciding without an initial policy determina-

tion of a kind clearly for nonjudicial discretion ;

or the impossibility of a court’s undertaking

independent resolution without expressing lack

of the respect due coordinate branches of gov-

ernment; or an unusual need for unquestioning

adherence to a political decision already made;

or the potentiality of embarrassment from mul-

tifarious pronouncements by various depart-

ments on cue question.

The Administrator contends that at least two of

the considerations listed by Mr. Justice Brennan are

Pees

TEER LS trib ter ita Mey Bot

Bide

DEERE LIS BLINN AANA IA AS Ss

68a

applicable to the instant ease, namely, (1) something

“very close’ to a “textually demonstrable’? eommit-

ment of power to control spending in the grant of exeeu-

tive power in Article LI of the Constitution; and (2)

a “lack of judicially diseoverable and manageable

standards for resolving’? the question whether par-

ticular expenditures should be made. Even assuming

arguendo that the Constitution gives to the President

and his subordinates unreviewable authority to de-

termine whether particular expenditures authorized by

Congress should be made at a particular time, it is

clear that the instant case presents none of the prob-

lems cited by the defendant. Counsel's position on this

point must fail simply because he has not correctly

characterized the issue before the Court. The Court

is not being called on to determine whether the Ad-

munistrator should, spend any given amount of money

for sewage treatment works. Rather the Court is being

asked by plaintiff to require the Administrator to

perform what it alleges to be a purely ministerial duty

under the Act, that of allotting—and thus making

available for obligation—the sums authorized to be

appropriated in Section 207 of the Act.’ There is no

“textually demonstrable constitutional commitment”

of this responsibility to the executive branch, and there

is no dfficulty in discovering standards for resolving

the issue before the Court. Kither the Administrator

*For this reason the instant ease is distinguishable from

Housing Authority of San Francisco v. U.S. Department of

Housing and Urban Development, 340 F. Supp. 654 (N.D.

Cal.1972), cited by the Administrator. In Housing Authority

the Court found the issue presented to be nonjusticiable be-

rause it found in the statute in question a legislative “inten-

tion of allowing spending discretion in the executive” and

no manageable standards for determining whether the discre-

tion had been abused. 340 F.Supp. at 656,

RHO Ann ER ee a

lettin Lr =

O9A

is required by the Act to allot the full anwunt of the

sums awithorized to be appropriated in § 207 or he is

not so bound.

The Court is not overstepping its authority in de

ciding this question, for as our Court of Appeals re-

cently declared: “In our overall pattern of govern-

ment, the judicial branch has the function of requir.

ing the executive (or administrative) branch to stay

within the limits prescribed by the legislative branch.”

National Automatic Laundry and Cleaning Council v.

Schulz, 143 U.S. App. D.C. 274, 280, 443 F.2d 689, 695

(1971). Even more recently, the Eighth Circuit Court

of Appeals, citing infer alia the opinion in Nalronal

Automatic Laundry determined that a challenge te

the legality of a decision by the Secretary of Trans-

portation to defer obligation of funds already ap-

portioned to the State of Missouri under the Federal-

Aid Highway Aet of 1956, as amended, 23 U.S.C. $101

et seq (1970), presented a justiciable issue. ‘The ques-

tion was whether the Seeretary had any discretion at

all so to act. The State Highway Commission of Mis-

sourl v. Volpe, 479 F.2d 1099 (8th Cir, 1973).

It seems clear, then, that for the reasons given and

on the basis of the authorities cited, this Court is not

barred from reaching the merits of this case either

by the doctrine of sovereign immunity or by a lack

of a justiciable case or controversy. Hence, it is ap-

propriate now to proceed to the question raised im

plaintiff's summary judgment motion, ie. whether

the Administrator had discretion to refuse to allot

the sums authorized to be appropriated in § 207 of

the Act, or—put the other way around— whether al-

lotment of those sums is a purely ministerial act. The

Court may resolve this question on summary judg-

ment beeause the defendant, in his Statement sub-

704

mitted pursuant to Local Rule 9(h), has not set

forth any specific facts showing that there is a gen-

uine issue for trial. See Rule 56(e), F.R.Civ.P.

Resolution of the issue whether the Administrator

is required under the Act to make the allotments in

question here turns primarily on the meaning of

§ 205(a) and 6207 of the Act, which read as follows:

**ALIAT MENT

“SEC, 205. (a) Sums authorized to be ap-

propriated pursuant to section 207 for each

fiseal year beginning after June 30, 1972, shall

be allotted by the Administrater not later than

the January Ist inmmediately preceding the be-

ginning of the fiscal year for which authorized,

except that the allotment for fiseal year 1973

shall be made not later than 30 days after the

date of enactment of the eral Water Pollu-

tion Control Act Amendments of 1972, Such

sums shall be allotted among the States by the

Administrator in accordance with regulations

promulgated by him, in the ratio that the esti-

mated cost of constructing all needed publicly

owned treatment works in each State bears to

the estimated cost of construction of all needed

publicly owned treatment works in all of the

States. For the fiseal years ending June 30,

1973. and June 30, 1974, such ratio shall be de-

termined on the basis of table IIL of House

Public Works Committee Print No. 92-50. Al-

lotments for fiseal vears which begin after the

fixes! year ending June 30, 1974, shall he made

onl, in accordance with a revised cost esti-

mate made and submitted to Congress in ac-

cordance with section 516(b) of this Act and

only after such revised cost estimate shall have

been approved by law specifically enacted bere-

after.

Tila

** AUTHORIZATION

“SEC. 207. There is authorized to be appro-

priated to carry out this title, other than sections

208 and 209, for the fiseal year ending June 30,

1973, not to exceed %5,000,000,000, for the fiscal

year ending June 30, 1974, not to exceed

#6,000,000,000, and for the fiscal year ending

June 30, 1975, not to exceed $7,000,000,000,""

In urging its interpretation of these sections, plaintiff

places emphasis on the phrase, ‘shall be allotted’ in

§205(a), contending that the use of ‘shall’ rather

than “may” makes plain the mandatory character of

this section. The Administrator defends his interpreta-

tion (namely, that he has discretion to decide how

much to allot) primarily on the grounds that H.R.

11896, the bill from which § 205 and § 207 of the Act

are derived, was amended in conference by the inser-

tion of the phrase “not to execed” before each of the

sums specified in 6 207 and by the deletion of the word

“all” before the phrase “Sums authorized to be appro-

priated” in §205(a); both amendments, it is con-

tended, are substantive changes meant to give the

Administrator the discretion to withhold allotments

as he has done, Given the arguments of the parties,

a “plain meaning” analysis is obviously inadequate to

the task at hand. Rather, the Court must examine the

relevant legislative history to determine whether Con-

gress intended to give the Administrator the kind of

discretion he claims to have under the Act. The

Wilderness Society v. Morton, 156 U.S, App.D.C, ——,

479 F.2d 842 (1973), at 855.

Of particular importance are the views of sponsors

of the legislation in question. See, e.g., First National

Bank of Logan, Utah v. Walker Bank and Trust Co.,

385 US, 252, 261, 87. Ct. 492, 17 L.ed.2d 343 (1966);

Dh 025-74 4

wee ee wee

724

Schweemann Bros. v. Calvert Distillers Corp., 341

ULS. 384, 394-395, 71 S.Ct. 745, 95 Led. 1035 (1951);

Kansas City, Mo. v. Federal Pacifie Electrie Co., 310

F.2d 271 (sth Cir. 1962), cert. denied, 371 U.S. 912,

83 S.Ct. 256, 9 L.ed.2d 171, and 373 ULS. 914, 83 S.C.

1297, 10 L.Ed.2d 415. Specifically, the Court ean

properly look to the expressed views of Congressman

William Harsha, who is the ranking minority member

of the House Committee on Public Works, which re-

ported H.R. 11896, and who was also the bill's floor

manager and a member of the conference committee

which worked out the final language of the Act, and

the views of Senator Edmund Muskie, who is Chair-

man of the Senate Subcommittee on Air and Water

Pollution, which reported the Senate version, 8, 2770,

and who was floor manager of that bill and a member

of the conference committee. It was Congressman

Harsha who sponsored the amendments on which the

Administrator relies,

An examination of pertinent portions of congres-

sional debates quoted by both plaintiff and defendant

reveals that Congressman Harsha intended his amend-

ments not to make any substantive change in the bill

but rather to clarify (or “emphasize,” to use his own

term) the point that the Administrator was to have

discretion regarding the obligation and erpenditure of

funds authorized to be appropriated under the Aet.

Thus, in explaining his amendment, Congressman

Harsha said: “I want to point out that the elimination

of the word “all” before the words “sums” in section

205(a) and insertion of the phrase “not to exceed”

in section 207 was intended by the managers of the bill

to emphasize the President's flexibility to control the

rate of spending.” 118 Cong. Ree, at H9122 (daily ed.

October 4, 1972) (emphasis added). Moreover, it is

clear from an exchange of remarks by Congressman

Ee eS NC ee a Sr ED

773A

Robert Jones of Alabama, Chairman of the conference

committee, Congressman Gerald Ford of Michigan,

and Congressman Harsha, that this intent was made

known to the House, which later voted in favor of the

legislation as amended. That exchange is recorded as

follows:

Mr. Geracp R. Forp:

Mr. Speaker .. . I think it is vitally important

that the intent and purpose of section 207 is

spelled out in the legislative histery here in the

discussion on this conference report.

As I understand the comments of the gentle-

man from Ohio [Harsha], the inclusion of the

words in section 207 in three instances of **not to

exceed” indicates that is a limitation. More im-

portantly that it is not a mandatory requirement

that in 1 vear ending June 30, 1973, there would

be $5 billion and the next year ending June 30,

1974, $6 billion and a third vear ending June 30,

1975, $7 billion obligation or expenditure?

Mr. Harsua. I do not see how »easonable minds

could come to any other conclusion than that the

language means we can obligate or expend up to

that sum—any thing up to that sum but not to

exceed that amount. * * *

Mr. Geratp R. Forp. Mr. Speaker, I would like

to ask the distinguished chairman of the sub-

committee and the chairman of the House con-

ferees whether he agrees with the gentleman

from Ohio (Mr. Harsha).

Mr. Jones of Alabama.

... My answer is “yes.” Not only do I agree

with sim, but the gentleman from Ohio offered

this amendment which we have now under discus-

sion in the committee of conference, so there is

no doubt in anybody’s mind of the intent of the

language. It is reflected in the language just ex-

ee by the gentleman from Ohio (Mr.

arsha).

744

Mr. Gerap R. Forp. Mr. Speaker, this clari-

fies and certainly ought to wipe away any doubts

anyone has. The language ts not a mandatory re-

quirement for full obligation and expenditure up

to the authorization figure in cach of the 3 fiscal

years.

Id.,at H9123 (emphasis added. )

The Administrator is not supported in his interpre-

tation of the Act’s legislative history by citing remarks

of Congressman Harsha concerning authority for

Executive “impoundment” of funds. During the de-

bates on H.R. 11896, Congressman Harsha took note

of recent impoundments by the Executive branch of

moneys allocated among the States under the Federal-

Aid Highway Act of 1956, and made the following ob-

servation :

[T]he Committee on Public Works is acutely

aware that moneys from the highway trust fund

have been impounded by the Executive. Ex-

penditures from the highway trust fund are

made in accordance with similar contract au-

thority provisions to those in this bill. Obviously

expenditures and appropriations in the water

pollution control bill could also be controlled.

However, there is even more flexibility in this

water pollution control bill because we have

have added “not to exceed” in section 207, as T

indicated hefore.

Surely, if the administration can impound

moneys from the highway trust fund which

does not have the flexibility of the language of

the water pollution control bill, it can just as

rightly control expenditures from the contract

authority produced in this legislation by that

same means.

Id., at 719122 (emphasis added).

The impoundments of Federal-Aid Highway Act

moneys referred to by Congressman Harsha were of

funds already allotted, i. e., the controls were being

75A

exercised at the obligation level rather than at the

allotment level.’ Thus, these comments tend to sup-

port the position of the plaintiff rather than that of

the defendant in regard to which administrative fune-

tions are discretionary and which mandatory under

the Act which this Court is called on to construe. It

seems obvious from the remarks just quoted that, as

Senator Muskie observed:

Under the amendments proposed by Con-

gressman WILLIAM HARSHA and others,

the cuthorizations for obligational authority

are “not to exceed” $18 billion over the next 3

years. Also, “all” sums authorized to be obli-

gated need not be committed, though they must

be allocated. These two provisions were sug-

gested to give the Administration some flexibil-

ity concerning the obligation of construction

grant funds.

Id., at S16871 (emphasis added).

The President appears to have coneurred in the

views of the sponsors concerning § 205 and § 207 of

the Act, for in his message explaining his veto of the

bill, he stated:

Certain provisions of ... [the bill] confer

a measure of spending discretion and flexibility

upon the President, and if forced to administer

this legislation I mean to use those provisions

to put the brakes on budget-wrecking expendi-

tures as much as possible.

But the Jaw would still exact an unfair and

unnecessary price from the public. For IT am

convinced ... that the pressure for full fund-

*° It should be noted that the Court of Appeals for the Eighth

Cirenit has construed the Federal-Aid Highway Act as _re-

quiring obligation of allotted funds, and has thus declared the

impoundments referred to by Congressman Harsha to be illegal.

State Highway Commission of Missouri v. Volpe, 479 F.2d 1099,

(8th Cir., 1973).

Pee ae

|

|

76A

ing under this ‘ill would be so intense that

funds approaching the marimum authorized

amount could ultimately be claimed and paid

out, no matter what technical controls the bill

appears to grant the Executive. 118 Cong. Ree.

at H10266 (daily ed. October 18, 1972) Ceni-

phasis added).

In other words, the President believed that the Act

required the Administrator to allot the full amount

authorized, and he feared that once the Administrator

had made the allotments, he might be under great

pressure to approve grant applications up to the

amount of the allotments. Congress, believing that the

needs to which the Act was addressed were sufficiently

urgent that expenditure of the full amounts author-

ized might be necessary,” and believing further that

the Administrator was given sufficient discretion to

avoid any hasty and improvident obligation of funds,

passed the biil over the President’s veto.

The question whether the entire amount should be

obligated is, of course, not before this Court. The only

question is whether the full allotments must be made,

and the answer to that on the basis of the foregoing

review of the sponsors’ comments seems clear. The

language of the pertinent sections of the Act, read

in the light of their legislative history, clearly indi-

cates the intent of Congress to require the Admiunis-

trator to allot, at the appropriate times, the full sums

‘The central purpose of the Act as set forth in the first see-

tion is to effectuate “the national goal that the discharge of pol-

lutants into the navigable waters be eliminated by 1985." §¢ 101

(a)(1). Congressman Harsha recognized that achieving this

goal might well require spending the entire $18 billion author-

ized to be appropriated; and he observed: “To say we can't

attord this sum of money is to say we can't afford to support

life on earth.” 118 Cong.Ree. H10268 (daily ed. October 1s,

1972).

77A

authorized to be appropriated by § 207. Hence, this

Court has no choice other than to declare that § 205(a)

of the Act requires the Administrator to allot among

the states $5 billion for fiscal vear 1973 and $6 billion

for fiscal vear 1974.

The only question remaining for decision is whether

plaintiff's action may be maintained as a class action

on behalf of all similarly situated municipalities with-

in the State of New York. Defendant has opposed

maintenance of this suit as a class action solely on

the ground that plaintiff does not satisfy subsections

(a)(3) and (a)(4) of Rule 23, Fed. R.Civ.P., ie., it

is contended that plaintiff's claim is not typical of

those of the proposed class members and that plain-

tiff cannot adequately represent the class) The Court

does not find these points well taken. Differences in

amounts which various municipalities might receive

from the State allotment have no bearing on the legal

issue of whether the aliotment as a whole should be

increased: Neither can such differences make the City

of New York something less than an adequate repre-

sentative of the class as required by Rule 25(a)(4).

Competition for shares of a common fund does not bar

a class action on behalf of all competitors when the

relief sought would lead to an increase in the total

amount of that fund. Berman v. Narragansett Racing

"As previous discussion has indicated, pp. 675-676, supra,

this construction of the Act does not infringe upon any pre-

rogative of the Executive branch. The Court is thus not con-

fronting any delicate constitutional question of the kind which

Mr. Justice Brandeis, in Ashwander y. Tennessee Vailey Au-

thority, 297 U.S. 288, 345-348, 56 S.Ct. 466, 80 L.Ed. 68s

(1936), counseled courts to avoid. Hence defendant's reliance on

Axhirander as authority for the proposition that the Act

should be construed so as to enhance his powers at the expense

of those of the Congress is not well taken.

73SA

Association, 414 F.2d 311, 317 (1st Cir. 1969), cert.

denied, 396 U.S. 1037, 90 S.Ct. 682, 24 L. Ed.2d 681

(1970). The Court finds that plaintiff satisfies all the

requirements of Rule 23(a) and 23(b)(1)(A),

(b)(1)(B), and (b) (2); accordingly, the suit can be

maintained on behalf of the proposed class.

PF A NBSP ha DE EGAET th BIB ARE RAN AROSE SP

APPENDIX F

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CAMPAIGN CLEAN Water, INc.

uv’.

Wittram DP. Rvueketsuavs, ADM. ENVIRONMENTAL

Prorection AGENCY

Civ. A. No. 18-73-R

United States District Court, EF. D. Virginia, Rich-

mond Division, June 5, 1973.

ORDER

Meruice, District Judge:

In accordance with the memorandum this day filed

and deeming it just and proper so to do, it is adjudged

and ordered that:

1) Upon the Court’s own motion, Robert W. Fri,

Acting Administrator of the Environmental Protee-

tion Agency, shall be, and is hereby, substituted for

William D. Rueckelshaus as the proper party defend-

ait.

2) Campaign Clean Water, Inc., is granted leave to

proceed in this action on behalf of its members and

those similarly situated in the Commonwealth of

Virginia.

3) Defendant’s motion to dismiss shall be, and the

same is hereby, denied.

4) Plaintiff’s motion for summary judgment shall

be, and the same is hereby granted.

5) It is declared that the announced policy of the

Administrator to refuse to allot $6 billion of the desig-

779A

\

*

SOA

nated $11 billion under Section 205 of the Federal

Water Pollution Control Act Amendments of 1972, 33

U.S.C. 1251 et seq., for the fiseal vears 1973 and 1974

constitutes an abuse of discretion under the authority

and powers conferred by the Act. Accordingly, said

policy shall be, and the same is hereby, declared null

and void.

6) The defendant is directed to report to the Court

within ten (10) days of this date those actions taken

to conform the administration of the Act to the prin-

ciples enunciated in the memorandum.

MEMORANDUM

Meruiae, District Judge:

Campaign Clean Water, an environmental group

organized to “promote the ecological and environ-

mental advancement of Virginia,”’ seeks in this action

to compel the defendant Administrator of the Environ-

mental Protection Agency (E.P.A.) to allot among the

states the full sums authorized to be appropriated by

Section 207 of the Federal Water Pollution Control

Act, as amended by Public Law 92-500 (the “ Act”)

and to estop him from withholding funds so allotted,

Jurisdiction is alleged pursuant to 28 U.S.C. §§ 1331

and 1361. The parties are presently before the Court

_ pursuant to plaintiff's motion for summary judgment

and defendant's cross-motion to dismiss. Respective

counsel have submitted comprehensive memoranda on

the issues raised, and it is upon same that this matter

is ready for disposition.

The facts are not in dispute. For preliminary pur-

poses they are as follows: On October 4, 1972 the

Congress passed a water pollution bill authorizing

appropriations in the amount of $11,000,000,000 for

waste treatment plant construction grants for fiscal

Sla

years 1973 and 1974. The bill was vetoed on October

17, 1972 by the President who stated that he found

the measure to be of an “inflationary” nature. The

Congress promptly overrode the veto. On November

28, 1972 the Administrator announced that pursuant

to the President’s direction he was allotting only

$5,000,000,000 of the total $11,000,000,000 for treat-

ment plant construction projects for fiseal years 1973

and 1974. It is the Administrator’s announced action,

which is popularly referred to under the rubric of

“impoundment of funds’’, which is challenged in this

suit.

The issues raised are as follows:

1. Whether plaintiff has standing to maintain this

action.

2. Whether this action is rendered moot by virtue

of City of New York v. Ruckelshaus, 358 F.Supp. 669,

CA No. 2466-72 (1).C.1973).

3. Whether the defendant is immune from this suit

by virtue of the sovereign immunity doctrine.

4, Whether this matter presents a justiciable con-

troversy.

5. Whether, upon the merits, plaintiff is entitled to

the relief sought.

These issues will be considered in seriatim.

I. STANDING

Campaign Clean Water, Ine., as deseribed in the

complaint, is a Virginia corporation “organized to

promote the ecological and environmental advanee-

ment of Virginia. Its officers, directors, and financial

eontributors include Virginia residents who use the

nation’s waters for both sport and commercial fishing

and for other recreational purposes.”* The affidavit of

the organization’s president, Newton H. Ancarrow,

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indicates that it was created through the efforts of

various groups. Ineluded among the feunders is the

Chesapeake Bay and its Tributaries Watermen’s

Union, whose members derive their income from shell-

fishing, and among its contributors are the Virginia

Beach Innkeepers Association and other individuals

who engage in boating and swimming on Virginia’s

waters and who own waterfront property. They allege

that their interests are impaired by the discharge of

untreated or inadequately treated sewage from overly

burdened waste treatment plants into the waters of

Virginia.

In particular, it is alleged that individual members

of the groups who have formed and contributed to

Campaign Clean Water, Inc., have suffered economic

injury from contaminated waters caused by sewage

discharge from several plants operated by the Hamp-

ton Roads Sanitation District. Members of the Chesa-

peake Bay and its Tributaries Watermens Union, for

example, allege that shellfish beds in the area have

been rendered unusable by such contamination. The

injuries of the various members of Campaign Clean

Water, Inc., are tied to the acts of the defendant by

the allegation, supperted by a letter from the General

Manager of the Hampton Roads Sanitation District,

that the withholding ef funds will have a disastrous

effect on future plans for water treatment plants on

Virginia's waters and will thus allow the injury to the

plaintiff's interests to continue.

The doctrine of standing, emanating from the case

or controversy requirement of Article ILL of the

Constitution and from general principles of judicial

administration, seeks to ensure that the plaintiff to an

action has *talleged such a personal stake in the out-

come of the controversy as to assure that concrete

adverseness which sharpens the presentation of issues

83a

upon which the Court so largely depends . . .” Baker

v. Carr, 369 U.S. 186, 204, 82 8.Ct. 691, 703, 7 L.Rd.2d

663 (1962). Problems of standing in actions against

public officials may arise in either of two contexts,

depending upon whether the plaintiff relies in’ his

action upon a statute authorizing the invocation of

the judicial precess,

The majority of cases in which the plaintiff relies

upon such a statute involves the Administrative Pro-

cedure Act (APA) and its language granting the

right of review to any party “suffering legal wrong

because of agency action, or adversely affected or

aggrieved by agency action within the meaning of a

relevant statute.’ 5 U.S.C. § 702. Standing in such

‘ases is available only where the plaintiff has alleged

active injury in fact at the hands of the defendant

and where the alleged injury was to an interest *targu-

ably within the zone of interests to be protected or

regulated” by the statutory requirements to which the

plaintiff seeks to compel adherence. Association of

Data Processing Service Organizations, Inc. v. Camp,

397 U.S. 150, 153, 90 S.Ct. 827, 830, 25 L.Ed.2d 184

(1970). Where the plaintiff does not rely upon a

specifie statute such as the APA, he still must meet

standing requirements which are virtually identical

to those imposed by the APA. Specifically, he must

allege an actual injury to himself and in addition

show that such injury is to an interest that is pro-

tected by the legal right which he asserts is violated

by the defendants’ act. Linda R. S. v. Richard D.,

410 U.S. 614, 93 S.Ct. 1146, 35 L.Rd.2d 586 (1973).

As the Supreme Court has framed the second aspect,

there must b. a “logieal nexus between the status

fof the plantiff} asserted and the claim sought to be

adjudi«ated.” Flast v. Cohen, 392 U.S. 83, 102, 88 S.Ct.

1942, 1953, 20 L.Ed.2d 947 (1968).

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Although the plaintiff does not invoke the APA

in pursuing this claim, the Court is satisfied that the

action is one which could have been brought pursuant

to that act. See City of New York vy. Ruckelshaus,

358 F.Supp. 669, CANo, 2466-72) (D.D.C.1973).

Even if it could not, however, the Court's foregoing

dixeussion leads it to conclude that generally the same

standards apply as would apply in an APA case, in

vither case, Campaign Clean Water clearly has stand-

ing in this action.

The allegations of the complaint and affidavit in-

dicate that individual members of groups belonging

to and contributing to the plaintiff suffer direct,

pecuniary injury as a result of waste contamination

in Virginia’s waters. Such injury is particularized

and sets these members apart from the public, in gen-

eral. Since an organization whose members are in-

jured may represent those members in judicial pro-

ceedings, Sierra Club v. Morton, 405 U.S. 727, 739,

92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); James Kiver

and Kanawha Canal Parks, Ine., v. Richmond Metro-

politan Authority, 359 F.Supp. 611 (E.D.Va.1973),

Campaign Clean Water, Ine., may assert these claims.

The fact that the groups representing the individuals

injured rather than the individuals themselves are

the actual members of Campaign Clean Water is un-

important, since it is the interests of the individual

persons that the plaintiff ultimately represents,

The Court further finds that the requisite nexus

letween the injury and the right asserted exists in

this case, The plaintiff by its allegations directly at-

tributes the injury incurred to the inadequacy of waste

treatment plants, particularly in the Hampton Roads

area, With federal money, new treatment plants wall

be built and old ones improved, all of which will lessen

the existing damage suffered by the plaintiff. Since

the plaintiff's assertion is that the defendant is under

a duty to release federal funds for waste

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