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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1975
- **Citation:** 420 U.S. 136

## Text

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

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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

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—_

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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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|
¢
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10a

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

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(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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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.”

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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 Conme

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385001_1612%3A03. Public record. Not legal advice.