Amicus Curiae Brief — Train v. Campaign Clean Water, Inc.

Supreme Court brief1975

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Text

TABLE OF CONTENTS

PAGE

Table of Authorities iii

Questions Presented 2

Statement of the Case 3

Interest of Amicus Curiae 4

Summary of Argument 6

Argument 7

I. The Act and Its Legislative History Indicate the

Administrator Has No Discretion to Curtail

Authorized Funds at the Allotment Stage 7

A. The Act Manifests Clear Congressional In-

tent to Attain Clean Water 7

B. The Statutory Scheme Imposes a Clear

Mandatory Duty Upon the Administrator

to Allot 12

C. The Amounts Authorized Were Based on

National Needs to Achieve the Act’s Pur-

poses. 15

D. The Allotment Scheme Was Established to

Aid the States in Planning to Meet Statu-

tory Requirements 18

PAE WPL PIS ERTS Te em ee a

II. The Administrator Has No Discretion to Re-

duce Allotments 24

re Va ee et

A. The Act Requires Full Allotment 24

AT ER aa rg oe eA arm 2 ee ‘ 2 a '

PAGE

B. If the Administrator Has Any Discretion

at the Allotment Stage, He Has Abused It 30

1. Discretion was not exercised within

the bounds delineated by the Act 30

2. The refusal to allot 55°- of the funds

authorized is a flagrant abuse of dis-

cretion because it effectively frustrates

the intent of Congress as embodied in

the Act 33

3. The President and the Administrator

cannot do indirectly what the Presi-

dent was forbidden by Congress to do

by veto 36

Ill. The Action of the Administrator Is Not So

“Committed ¥o Agency Discretion” As to Be

Nonreviewable edge 39

Conclusion es 42 »

SNR ALN SIE SIT ENE NE ITE, = |

TABLE OF AUTHORITIES

PAGE

Cases:

Campaign Clean Water, Inc. v. Ruckelshaus, z

361 F.Supp. 689 (E.D. Va., 1973) 31

Campaign Clean Water, Inc. v. Train,

489 F.2d 492 (1973) 41

Citizens to Preserve Overton Park v. Volpe,

401 U.S. 402 (1971) 39

City of New York, et al. v. Ruckelshaus,

358 F.Supp. 669 (1973) 23, 27

City of New York v. Train,

494 F.2d 1033 (1974) 14, 17, 18, 25

kendall v. United States, 12 Pet. 524 (1838) 38

Martin-Trigona v. Ruckelshaus, No. 72-C-3044

(N.D. Ill., June 29, 1973) 14

Local 2677, American Federation of Government

Employees v. Philiips, 358 F.Supp. 60

(D.D.C., 1973) 31

Richards v. United States, 369 U.S. 1 (1962) 40

Stark v. Wickard, 321 U.S. 288 (1944) 39

State Highway Commission of Missouri v. Volpe,

479 F.2d 1099 (8th Cir., 1973) 27, 30, 31, 32

State of Florida v. Train, Civ. No. 73-156

(N.D. Fla., Feb. 25, 1974) 14

State of Maine v. Train, Civ. No. 14-51

(D. Maine, June 24, 1974) 14

State of Minnesota v. Fri, No. 4-73 Civ. No. 133

(D. Minn. June 25, 1973) 5, 14, 32, 33

iil

;

PAGE

State of Ohio v. Environmental Protection Agency,

et al., Nos. C.73-1061 and C.74-104

(N.D. Ohio, June 26, 1974) 14

State of Texas v. Ruckelshaus, C.A. No. A-73-CA-38

(W.D. Texas, Oct. 2, 1973) 14

Statutes:

37 Fed. Reg. 26282 33

38 Fed. Reg. 5330, $35.903 (d) 34

38 Fed. Reg. 5331, $35.910-1(d) 14

Administrative Procedure Act, 5 U.S.C. $701

(Supp. V) (1966) 7,39

Federal Water Pollution Control Act Amendments of

1972, Pub. L.. 92-500 (Oct. 18, 1972), 86 Stat. 816,

33 U.S.C. 1251, et. seq.

Section 101(a) 3,7

Section 101(a)(1) ; 8

Section 101(a)(2) 8

Section 101(a) (4) 3,8

Section 201(a) 8

Section 201(g) (1) 8

Section 202 (a) 9

Section 203 9, 10,13

Section 203(a) 9

Section 203 (b) 9

Section 204 9, 10

Section 204(a) (2) 9

Section 204(a) (3) 9

Section 204(a) (4) 9

Section 204(a) (5) 9

Section 205 5, 8, 10, 12, 14, 24, 25, 28, 35

Section

205(a)

205(b) (1)

207

301

301 (a)

301(b)

301(b) (1) (B)

301(b) (1) (C)

302

303(e)

306

307

309(a) (3)

309(c) (1)

309 (d)

309(e)

402

402(b) (1) (A)

402 (k)

400

502(5)

505(a)

505(a) (1)

505 (a) (2)

505(g) .

509(b) (1) (F)

510

PAGE

8,12

5, 9, 12, 15, 24, 25, 26, 28, 35

11, 12, 35

11, 12

12, 35

PAGE

Secondary Authorities:

118 Cong. Rec. H.2726 20

} 118 Cong. Rec. H.2727 21

118 Cong. Rec. H.2728 21

; 118 Cong. Rec. H.9122 25, 27

118 Congo. Rec, H.9123 26

: 118 Cong. Rec. H.10266 36

; 118 Cong. Rec. H.10267 15

i 119 Cong. Rec. H.10268 27, 28

117 Cong. Rec. $.17445 23

j 118 Cong. Rec. $.16870 17

i 118 Cong. Ree. S.16871 29

3 118 Cong. Rec. $.18534-35 4

3 118 Cong. Rec. S.18546 17, 29

: 118 Cong. Rec. $.18547 28

: 118 Cong. Rec. $.18548 15

: 118 Cong. Ree, $.18549 29

F 119 Cong. Rec. 8.3808 3

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P vi

IN THE

Supreme Court of the Gnited States

October Term, 1973

No. 73-1377

RUSSELL E. TRAIN, Administrator, United States

Environmental Protection Agency, Petitioner

vs.

THE CITY OF NEW YORK on Behalf of Itself and

All Other Similarly Situated Munic »alities

Within the State of New York, et al.

No. 73-1378

RUSSZLL E. TRAIN, Administrator, United States

Environmental Protection Agency, Pctitioner

VS.

CAMPAIGN CLEAN WATER, INC.

ON WRITS OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA AND THE FOURTH CIRCUITS

BRIEF AMICUS CURIAE ON BEHALF

OF THE STATE OF MINNESOTA

es Dak des

TELE 8 TRY VAT ORE

POET RETNA ROOF LORIE

baal 2 eh ie Caters is WV

eee Se eh een Ba) eT.

QUESTIONS PRESENTED

1. May the Administrator of the U.S. Environmental Pro-

tection Agency ignore Congressional intent and the manda-

tory requirements of the Federal Water Pollution Control Act

Amendments of 1972 by refusing to allot to the States the full

sums authorized by Congress to be appropriated for the con-

struction of publicly owned sewage treatment works?

2. If the Administrator had any discretion in controlling

the rate of spending for construction of publicly owned sewage

treatment works was it erroneously exercised in that (a) it

was exercised at the allotment stage rather than obligation

siage; (b) the decision was based upon evaluation of compet-

ing national policies, priorities, goals, and objectives other

than those established by Congress; (c) the amount withheld

effectively frustrated achievement of the goals and purposes

of the Act, and (d) ‘1 impounding the funds the Administra-

tor sought to do indirectly what Congress directly forbade him

to do by overriding the Presidential veto of the Act?

3. Is the allotment of funds within the narrow exception

of being so “committed to agency discretion” that it is beyond

judicial review even though the Act provides adequate stan-

dards by which the discretion may be evaluated to determine

whether it was erroneously exercised?

STATEMENT OF THE CASE

The cases before the Court prevent issues of statutory con-

struction to determine the existence of discretion, or the extent

of any suck discretion, granted to the Administrator of the

United States Environmental Protection Agency (hereinafter

the Administrator) in allotting funds among the States pur-

suant to the Federal Water Pollution Control Act Amendments

of 1972 (hereinafter the Act).'

The pervasive objective of the Act as stated in Section

101(a) “is to restore and maintain the chemical, p‘iysical, and

biological integrity of the Nation’s waters.” Convress declared

in Section 101(a)(4) of the Act that “it is the national policy

that Federal financial assistance be provided ‘o construct pub-

licly owned treatment works; ... .” This pouicy is a vital

part of the Act and is essential to achieve its objective. Con-

gress authorized to be appropriated amounts not to exceed $5

billion for fiscal] 1973, $6 billion for fiscal 1974 and $7 billion

for fiscal 1975 to carry out this policy. Section 207.

The President vetoed the Act on October 17, 1972. The

President in his message to Congress stated:

Even if this bill is rammed into law over the better

judgment of the Executive—even if the Congress de-

faults its obligation to the taxpayers—I shall not de-

fault mine. Certain provisions of S. 2770 confer a

measure of spending discretion and flexibility upon

the President, and if forced to administer this legis-

1 Pub. L. 92-500 (Oct. 18, 1972), 86 Stat. $16, 33 USC. 1251, et seq

The Act is commonly referred to by section rather than by its

Code Citation. Therefore all references to the Act hereinafter will

be by section number of the Act as enacted, Pub. L. 92-500.

WP ee Oe Re Re rere cre PP

lation I mean to use those provisions to put the

brakes on budget-wrecking expenditures as much as

possible.

118 Cong. Rec. S. 18534-35 (Daily ed., October 17, 1972).

Congress considered the vcto message and overwhelmingly

overrode the veto. In the House, the vote was 247 to 23; in the

Senate, it was 52 to 12. The President’s intention was later

carried out by his directive to the Administrator to allot to

the States $2 billion instead of the $5 billion authorized for

fisca] 1973, $3 billion instead of the $6 billion authorized for

fiscal 1974 and, although not an issue herein, $4 billion instead

of the $7 billion authorized for figcal 1975.

Respondent City of New York has obtained from tne Court

below an order which compels the Administrator to allot

among the States the full amounts authorized by Congress.

Respondent Campaign Clean Water has obtained an order for

a de novo review of the Administrator's decision to determine

if he abused his discretion. Petitioner seeks review of both

cases, which have been consolidated in this Court.

INTEREST OF AMICUS CURIAE

The Court's decision in these cases will substantially affect

the State of Minnesota by setting a precedent which will be

decisive in its case against the Administrator in the United

States Court of Appeals for the Eighth Circuit. Minnesota ob-

tained from the United States District Court for the District

of Minnesota, Fourth District, an order to compel the Admin-

istrator to allot to Minnesota the full sums Congress autho-

rized to be appropriated for the construction of publicly owned

treatment works as provided in Sections 205 and 207 of the

Act.?

The Administrator appealed the order to the Court of Ap-

peals for the Eighth Circuit. Written briefs and oral argu-

ment have been presented to the Court of Appeals. The case

is presently pending for decision. Minnesota’s case involves

virtually identical issues to those involved in the cases present-

ly before the Court.

The Administrator’s action resulted in a drastically reduced

allotment to the State of Minnesota. For fiscal years 1973 and

1974 Minnesota received a total of $101.5 million instead of

the $222.5 million authorized, or a total reduction of $121 mil-

lion. The direct effect on Minnesota is that numerous sewage

treatment works in the State will not be constructed or up-

graded. Consequently, the cutback on the allotments to Minne-

sota guarantees that its municipalities and sanitary districts

will fail to meet the requirements and goals of the Act.

There is an adverse envircnmental effect from the Admin-

istrator’s refusal to allot because inadequately treated sewage

and industrial wastes will continue to be discharged into Min-

nesota waters. The stoppage of construction of treatment

works for fiscal 1973 is estimated to result in a flow of 285

million gallons per day of inadequately treated sewage. The

pollution and health effects from untreated sewage are well

established.

The State of Minnesota has great interest in achieving and

maintaining high water quality necessary for the propagation

2State of Minnesota v. Fri, No. 4-73, Civ. 133 (D. Minn., June 25,

1973). The opinion and order of Federal District Court Judge Miles

W. Lord has not been reported. The factual references made here-

in by the State of Minnesota are based on affidavits that are part

of the record in Minnesota's case. The affidavits were not disputed

by the Administrator

—

WP APT LOS

SANE ORIN Sy PSNI RTT aT

QE Re ETT ME oa

eerste:

of fish and wildlife and recreation in and on its waters. The

recreational benefits accruing to the State from fish and game

are estimated to be valued at approximately $200 million per

year. Pollution from untreated sewage primarily causes

oxygen depletion and artificial enrichment of lakes and rivers

which adversely affect the propagation of fish and recrea-

tional uses. Construction of secondary treatment facilities re-

duces or eliminates these detrimental effects.

Minnesota urges that the result in this case should be to re-

quire the Administrator to allot the Congressionally autho-

rized funds now withheld from the States.

SUMMARY OF ARGUMENT

1. Under the Act the Administrator has no discretion to

determine the amounts to allot among the States. The Act con-

tains mandatory language that the $5 billion and $6 billion

for fiscal years 1973 and 1974, respectively, “ shall be allotted

by the Administrator.” Congress intended the full sums au-

thorized to be appropriated to be allotted among the States.

This intent is manifested in the Act as a whole and its legis-

lative history.

2. If the Administrator has been granted any discretion

by the Act he exercised it erroneously. First, any discretion

rests at the obligation stage instead of the allotment stage.

Second, even if there existed discretion at the allotment stage

it was flagrantly abused by the Administrator. His discretion

is circumscribed by the bounds of the Act and may not be exer-

cised for reasons remote and unrelated to the Act. Third, the

refusal to allot 55% of Congressionally authorized funds was

an abuse of discretion because it was in derogation of the

policy and goals established by Congress in the Act. The im-

poundment of the authorized funds was an attempt to undo

what Congress accomplished by exercising its Constitutional

right to override the Presidential veto of the Act: emphatical-

ly mandating that the full $18 million be allotted to the States.

3. The Administrator’s action does not fall under the

narrow exception of the Administrative Procedure Act

making nonreviewable actions totally committed to Agency

discretion where the statutory authority is so broad that there

is no law to apply. The Act provides definite standards against

which the Administrator’s action can be reviewed to deter-

mine if he has misconstrued his powers and abused his dis-

cretion.

ARGUMENT

I. THE ACT AND ITS LEGISLATIVE HISTORY INDICATE

THE ADMINISTRATOR HAS NO DISCRETION TO CUR-

TAIL AUTHORIZED FUNDS AT THE ALLOTMENT

STAGE.

A. The Act Manifests Clear Congressional Intent to Attain

Clean Water.

The Act is a comprehensive and far-reaching law designed

to clean up the Nation’s waters. The pri visions for Federal

financial assistance to construct publicly owned treatment

works are major features of the Act and a keystone of the

statutory objective. It is important that these financial provi-

sions be put in proper context with other provisions of the Act

relevant to the statutory scheme to attain clean water.

The Act begins by stating that its objective “is to restore

and maintain the chemical, physical, and biological integrity

of the Nation’s waters.” Section 101(a). To achieve this ob-

PLE PNT SOONER ERLE IY

ta |

jective, Congress declared as goals of the Act that “the dis-

charge of pollutants into the navigable waters be eliminated

by 1985” and that “wherever attainable, an interim goal of

water quality which provides for the protection and propaga-

tion of fish, shellfish, and wildlife and provides for recrea-

tion in and on the water be achieved by July 1, 1983.” Section

101(a)(1), (2). Congress unequivocally stated in the Act that

“it is the national policy that Federal financial assistance be

provided to construct publicly owned waste treatment works.”

Section 101(a) (4).

Title Il of the Act is entitled “Grants for Construction of

Treatment Works.” The purpose of this title is “‘to require and

to assist the development and implementation of waste treat-

ment plants and practices which will achieve the goals of this

Act.” Section 201(a). The Administrator “is authorized to

make grants to any State, municipality, or to intermunicipal

or interstate agency for the construction of publicly owned

treatment works.” Section 201(¢)(1). Congress ‘authorized

to be appropriated to carry out this title . . . for the fiscal

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

the fiscal year ending June 30, 1974, not to exceed

$6,000,000,000 and for the fiscal year ending June 30, 1975,

not to exceed $7,000,000,000.” Section 207.

A state’s share of the authorized amounts for fiscal 1973

and 1974 is determined by a statutory formula based on “the

ratio that the estimated cost of constructing all needed publicly

owned treatment works in each State bears on the estimated

cost of construction of all needed publicly owned treatment

works in all of the States.” Section 205. Allotments to the

States commencing in fiscal 1975 are to be made in accordance

with revised cost estimates submitted to and approved by Con-

gress. Section 205(a).

The designated shares are to be allotted among the States

by the Administrator. Those allotted funds then are available

for grants to construct publicly owned treatment works within

the State. Section 203. An individual applicant for a grant sub-

mits plans, specifications, and estimates for each proposed

project to the Administrator for his approval. Approval of

the plans, specifications, and estimates by the Administrator

is deemed to constitute a contractual obligation of the United

States for the payment of its proportional contribution to such

project. Section 203(a).

Prior to final approval of a treatment works project, the

Administrator must consider the “limitations and conditions”

of Section 204. For example, the Administrator is to deter-

mine that (a) the treatment works is in conformity with any

applicable State plan under Section 303(e) of the Act, (b)

such works have been certified by the appropriate State water

pollution control agency as entitled to priority over such other

works in the State, (c) there are adequate provisions satis-

factory to the Administrator for assuring proper and efficient

operation and maintenance, and (d) the size and capacity of

the works relate directly to the needs to be served by the

works. Section 204(a)(2), (3), (4) and (5).

The Federal share of the construction costs for approved

projects is 75 per centum. Section 202(a). Expenditures of

allotted funds are to be made by the Administrator in the form

of payments to the recipient of a grant as the work progresses

and costs of construction are incurred on the project. Section

203(b).

The successive administrative stages involving Title II

grants thus include:

(a) the authorization of funds to be appropriat-

ed, Section 207,

SORRY

SPARS STENTS RL SAR es RRS

iz PALO ART RR TRE INR Bae Ry

(b) the allotment by the Administrator of these

funds among the States, Section 205,

fications and estimates of treatment works projects

to the Administrator for approval, Section 203,

(d) the review by the Administrator of the proj-

ects pursuant to the limitations and conditions of

Section 204,

(e) the approval by the Administrator of the

project which thereby obligates the Federal govern-

ment to pay 75 percent of the eligible costs, Section

203, and

(f) the payment to the grantees by the Admin-

istrator of project progress payments from the al-

lotted funds, Section 203, and the appropriation by

Congress of the funds necessary to cover the Admin-

istrator’s expenditures on the project.

The issues before the Court involve the Administrator’s ac-

tion at the allotment stage.

Title III of the Act is entitled “Standards and Enforce-

ment.” The discharge of any pollutant by any person is unlaw-

ful except when in compliance with various sections of the Act.

Section 301(a). Persons operating publicly owned treatment

works are included and are subject to enforcement actions.

Section 301(b) provides that “[{i]n order to carry out the

objective of this Act there shall be achieved . . .” for all pub-

licly owned treatment works secondary treatment by July 1,

1977, and the best practicabie waste treatment technology by

July 1, 1983. States are prohibited from adopting or enforcing

an effluent limitation that is less stringent than those estab-

lished under the Act. Section 510.

Title VI of the Act is entitled ‘Permits and Licenses.” Sec-

tion 402 establishes the National Pollutant Discharge Elimi-

nation System (hereinafter NPDES) which requires permits

be obtained for the discharge of pollutants. The discharges

from publicly owned treatment works require an application

for an NPDES permit. Section 402(k). These permits must

“insure compliance with, any applicable requirements of sec-

tions 301, 302, 306, 307 and 403; .. . .”” Section 402(b) (1)

(A). Neither the Administrator nor a State can issue a per-

tnit to a publicly owned treatment works under Section 402

which does not insure that requirements of the existing water

quality standards are complied with or that effluent limits of

secondary treatment are achieved by July 1, 1977.

Any person, which by definition includes a municipality or

a sanitary district, Section 502(5), found willfully or negli-

gently violating the effluent limitations of Section 301 is pun-

ishable by a fine of not less than $2,500 nor more than $25,000

per day of violation or by imprisonment for not more than one

year, or by both. Section 309(c)(1). Any person who merely

violates Section 301 effluent limitations is subject to a civil

penalty not to exceed $10,000 per day of such violation. Sec-

tion 309(d).

If the Administrator finds any person in violation of Sec-

tion 301, he is required to issue an order to obtain compliance

or to bring a civil action. Section 309(a)(3). A person who

violates an order issued by the Administrator is subject to the

civil penalty provision. Section 309(d). Whenever a munici-

pality is a party to a civil action brought by the United States,

the State is to be joined as a party. The State is liable to the

extent that its law “prevent[s] the municipality from raising

revenues needed to comply with such judgment.” Section

309(e).

Pee rereorespencerameien rere eereincte my, Su REALE

Bttosetsecrcx eed F

Any citizen adversely affected may commence a civil action

against any person who is alleged to be in violation of an ef-

fluent standard or limitation under the Act. Section 505(a)

and (g). Federal district courts are given jurisdiction over

these suits to enforce effluent standards and to apply any ap-

propriate civil penalty under Section 309(d) of the Act. Sec-

tion 505(a) (2). Any interested person may seek judicial re-

view of any NPDES permit issued or denied under Section

402. Section 509(b) (1) (F).

The statutory scheme includes a broad objective, with de-

clared goals and policies, established deadlines for achieve-

ment of effluent standards and limitations, permits for dis-

charge of pollutants, and strong enforcement penalties to as-

sure compliance. The Administrator’s refusal to allot 55% of

the funds authorized must be viewed from the total perspec-

tive of the Act. These features of the Act cannot be isolated

from Sections 205 and 207. Tine Administrator’s narrow focus

on Sections 205 and 207 distorts the clear thrust of the Act

which is to abate water pollution.

at. The Statutory Scheme Imposes a Clear Mandatory Duty

Upon the Administrator to Allot.

The requirement to allot the full amounts is clear and

unambiguous.

Sums authorized to be appropriated pursuant to sec-

tion 207 for each fiscal year beginning after June 30,

1972, shal? be allotted by the Administrator not later

than the January 1st immediately preceding the be-

ginning of the fiscal year for which authorized, ex-

cept that the allotment for fiscal year 1973 shall be

made not later than 30 days after the date of enact-

ment of the Federal Water Pollution “ontrol Act

Amendments of 1972.

(Emphasis added.) Section 205(a).

Contrary to the Administrator’s contention, the authorized

funds do not remain indefinitely available for allotment. Sec-

tion 205(b) (1) provides:

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 year after the close of the fiscal year

for which such sums are authorized. Any amounts so

allotted which are not obligated by the end of such

one-year period shall be immediately reallotted by the

Administrator, in accordance with regulations prom-

ulgated by him, generally on the basis of the ratio

used in making the last ailotment of sums under this

section. Such real'otted sums shall be added to the

last allotments made to the States. Any sum made

available to a State by reallotment under this sub-

section shall be in addition to any funds otherwise

allotted to such State for grants under this title

during any fiscal year.

(Emphasis added.)

Only the funds allotted by the Administrator remain avail-

able for obligation. If the Administrator does not follow the

statutory requirements by allotting and immediately reallot-

ting*® the authorized funds at the time and dates indicated,

3 The State of Minnesota in its case obtained an Order dated June

25, 1974, for supplemental injunctive relief compelling reallot-

ment in 1974 of the state’s share of unobligated 1973 funds.

It was Minnesota's position that if the Administrator did not

“immediately reallot” the fiscal 1973 funds which were ordered to

be allotted these funds would be irretrievably lost and not avail-

able for obligation. The Administrator by the supplemental Order

was thereby not allowed to accomplish by reason of a lengthy

appeal process what he was unable to accomplish under the Order

to allot the full sums authorized for Minnesota.

| See ee eee

the unallotted funds lapse and are irretrievably lost to the

States. The mandatory language of Section 205 precludes sup-

plemental allotments. Numerous courts have arrived at the

same conclusion. City of New York v. Train, 494 F.2d 1033

(1974); State of Ohio v. Environmental Protection Agency,

et. al., C. 78-1061 and C. 74-104 (N.D. Ohio, June 26, 1974);

State of Maine v. Train, Civ. No. 14-51 (D. Maine, June 21,

1974) ; State of Florida v. Train, Civ. No. 73-156 (N.D. Fla.,

Feb. 25, 1974); State of Texas v. Ruckelshaus, C.A. No. A-

78-CA-38 (W.D. Tex., Oct. 2, 1973); Martin-Trigona v.

Ruckelshaus, No. 72-C-3044 (N.D. DL, June 29, 1973); and

State of Minnesota v. Fri, No. 4-78, Civ. 188 (D. Minn., June

25, 1973).

The State of Minnesota does not desire to disparage the de-

clared intentions of the Administrator eventually to commit

the full amount of funds authorized by Congress. However,

the Administrator has indicated in the Federal Register that

“Tajllotments shall be made not later than the January

first preceding the beginning of the fiscal year for which au-

thorized, except for the allotment for fiscal year 1973 which

is made herein.” 38 Fed. Reg. 5331, $35.910-1(d), Feb. 28,

1973. Moreover, the Administrator has not indicated in the

Federal Register any intention to allot the full sums autho-

rized by Congress. No regulations have been promulgated re-

garding the procedure under which these funds are to be “sup-

plementally” allotted to the States. The only way the State of

Minnesota and other States can be legally certain that all au-

thorized funds will be made available to them for obligation

is by the Administrator’s adherence to the statutory allotment

requirement of the Act.

C. The Amounts Authorized Were Based on National Needs

to Achieve the Act’s Purposes.

The designated sums in Section 207 were based on estimates

of the needs of the Nation to construct and upgrade sewage

treatment works to meet the requirements of the Act. The

Congressional Record is replete with evidence supporting the

$18 billion figure.

The National League of Cities and the U.S. Conference of

Mayors estimated the total construction needs of municipali-

ties at approximately $35 billion between the years 1972 and

1977. 118 Cong. Rec. H. 10267 (Daily ed. Oct. 18, 1972). The

U.S. Environmental Protection Agency's own cost estimates

for constructing waste treatment facilities planned for fiscal!

years 1972 through 1974 was $14.5 billion. The former Ad-

ministrator of the Agency, William Ruckelshaus, explained

in his letter to the President urging him not to veto tim Act

that the dollar figures were consistent with the needs estimate

that his Agency had provided Congress.‘ The Ruckelshaus

letter states in pertinent part as follows:

The total value of construction initiated in the

near-term under the enrolled bill is expected to cor-

respond closely to the total value of construction that

would have been initiated under the Administration

bill. Under the Administration’s proposal, communi-

ties were free to continue to initiate reimbursable ,

projects, were not constricted by the $6 billion au-

thorization, and could have substantially increased

this amount. Reimbursable projects are precluded

4See also Senator Muskie’s explanation of how the Conferees ar-

rived at the authorized levels. 118 Cong. Rec. 8.18518 (Daily ed

Oct. 17, 1972).

PO erg vee

"Under the enrolied bill and the $18 billion contract

grant authority represents a ceiling, while the Ad-

ministration’s $6 billion proposal represented a floor.

With the projected close correspondence in a total

near-term value of construction starts, the potential

inflationary impact upon the entire construction

sector would be minimized.

The total amount of contract grant authority con-

tained in the enrolled bill is formulated from the Ad-

ministration’s estimate of construction needs as sub-

mitted to the Congress in February of this year. The

total Federal share of 75°: would amount to $13.6

billion. This needs estimate did not include funds for

combined storm and collection sewers, or for recycled

water supplies. These are project eligibilities newly

specified by the enrolled bill.

This needs estimate provided to the Congress was

constructed to support the commitment of the Presi-

dent in his State of the Union message of January 22,

1970, to “put modern municipal waste treatment

plants in every place in America waere they are

needed to make our waters clean again, and to do it

now.” This commitment was repeated in the Febru-

ary 1970, Message on the Environment, which enun-

ciated funding support for “every community that

needs it with secondary waste treatment, and also

special, additional treatment in areas of special need,

including communities of the Great Lakes.” The com-

mitment was re-endorsed in the February, 1971, Mes-

sage on the Environment with a statement that we

should provide “adequate funds to ensure construc-

tion of municipal waste treatment facilities needed to

meet water quality standards.”

(Emphasis added.) 118 Cong. Rec. S. 18546 (Daily ed. Oct.

17, 1972).

Senator Muskie asked the Senate some crucia] questions re-

garding the high costs of attaining clean water and gave the

following answers:

Can we aiford clean water? Can we afford rivers

and lakes and streams and oceans which continue to

make possible life on this planet? Can we afford life

itself? Those questions were never asked as we de-

stroyed the waters of our nation, and they deserve

no answers as we finally move to restore and renew

them. These questions answer themselves. And those

who say that raisiag the amounts of money called

for in this legislation may require higher taxes, or

that spending this much money may contribute to

inflation simply do not understand the language of

this crisis.

The conferees spent hours and days studying the

problem of financing the cleanup effort required by

this new legislation. The members agreed in the end

that a total of $12 billion had to be committed by the

Federal Government in 75% grants to municipalities

during fiscal years 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.

(Emphasis added.) 118 Cong. Rec. S. 16870 (Daily ed. Oct.

4, 1971).

The Court of Appeals for the District of Columbia in its de-

cision in City of New York v. Train, supra, extensively re-

viewed legislative history that preceded adoption of the $18

ee ee aba te

ree eee he

90 ili

billion figure and correctly found it to be a clear expression

of Congressional will.

We find that it was Congress’ intention that that full

$18 billion be spent to control water pollution.

494 F.2d at 1042.

This conclusion should also be reached by this Court. If the

full amount is not allotted, as the law requires, the needs and

voals of this Nation to clean up its waters will not be met. Sub-

sequent estimates now unfortunately demonstrate that the

Congressioral estimate itself was short.” Congress certainly

did not intend that the development of a shortgage would

justify a reduction in allotment.

I). The Allotment Scheme Was Established to Aid the States

in Planning to Meet Statutory Requirements.

In the developmental stayes of the Act amendments were

proposed in both houses of Congress to strike the contractual

obligation authority which binds the United States to pay its

proportional share upon approval of a project by the Admin-

istrator. The traditional method of funding has been the op-

posite: to reimburse the grantee through the annual appro-

priations process. The experience of Congress with the old

method was that it did not work as intended and that the re-

quirements of the Act necessitated a firm commitment that

could be relied on by potential grantees for long range plan-

ning purposes. Congressman Jim Wright, a member of the

House Public Works Committee and later a conferee, in de-

bating the issue on the floor of the House, made the follow-

ing points which emerged as the prevailing view in the House:

“The Administrators report to Congress indicates total national

neeis of S15 Dillion, of which 800.1 is eligible for federal grant

participation. “Report to Congress—Costs of Construction of Pub-

licly Owned Wastewater Treatment Works—1973 ‘Needs’ Survey.”

The bill requires that by 1976 every publicly owned

plant in the Nation must provide at least secondary

treatment, and that by 1981 it must employ as a

minimum “the best practicable technology.” ©

The bill promises that the Federal Government will

contribute its pro rata share of the cost.

But what good is that requirement, and what good

is that promise, if we do not absolutely intend to de-

liver upon our part of the bargain?

Why should advance obligational authority be nec-

essary? The events of the last few yea*s suggest the

answer.

The authorization for fiscal 1969 was $700 million,

but the appropriation was only $214 million—less

than one-third—and the amount actually spent was

only $134 million.

For the 4 years, 1968 through 1971, the shortfall

of appropriations below the amounts held out in the

authorization bill totaled approximately $1.2 billion.

And because of periodic adminisirative freezes on

construction grants, the shortfaJ! in the amounts

actually granted came to approximately $1.6 bil‘ion.

Mr. Chairman, many municipalities, faced with

truly critical water pollution problems and intent

on solving those problems in a timely fashion not-

withstanding the failure of the Federal Government

to live up to its part of the bargain, went ahead on

their own and built the plants.

Obviously it would not be our intention to penal-

ize those communities for having demonstrated the

STEER EEN MRR ERE Bie ARTA PIR BERR PNT

morose.

ve aes

* The dates w ere « hanged in the tinal version of the Act to 1977 and

1983 respectively

| Sean REMORSE yee. tee

initiative and determination to move ahead. And

so this bill authorized more than $2 billion to reim-

burse them for that portion of the authorized Federal

share that was withheld from them.

But other communities waited, because they were

unsure of the strength of the congressional commit-

ment. And because they waited, the cost both to them

and to the Federal Government is considerably great-

er today than it would have been had they been en-

couraged to proceed 4 years ago.

So this is the acid test. We decide right now just

how serious we are about cleaning up the streams of

this country. Do we mean it, or do we not? Are we

certain, or are we uncertain?

I for one am certain. I believe that most of the

Members are. I am ready to make that commitment.

I think the Public Works Committee is certain, and

the majority of the House is certain. We can prove

it by voting down this amendment and saying to the

communities of this Nation that once they put their

hands to the plow, they need not turn back.

(Emphasis added.) 118 Cong. Rec. H. 2726 (Daily ed. Mar.

29, 1972).

Congressman Harsha emphasized the need for advance plan-

ning and assured availability of funds.

Because of the magnitude of this program, it is

essential that the States, the interstate agencies and

the cities have both the ability for and a basis for

long-range planning, construction scheduling and

financing waste treatment plants, including the sale

of bonds that they have to sometimes negotiate.

Now, this can only be accomplished if there is

assured availability of Federal grant funds for

future years. This necessary assurance is not pro-

vided by merely advancing appropriations for 1 year.

That will not meet the needed assurance of long-term

planning. This is a continuing program.

The construction of a waste treatment plant con-

sists of planning; economic and engineering feasi-

bility studies; preliminary engineering for the prepa-

ration of plans, specifications, and estimates; the ac-

quisition of land where appropriate, and the actual

physical construction of the building itself. Under

this legislation each one of these steps is ordinarily

a separate project, a separate contract, and it is

funded as completed or as work p:ogresses. This is

not the case under existing law where 25 percent of

the total project must be completed before any pay-

ment can be made.

At the time any one of these preliminary steps is

taken, such as the plans, specifications, and esti-

mates, there is no assurance that appropriated funds

would be available for subsequent projects for land

acquisition and the actual building of this plant for

which the plans, specifications, and estimates are

being prepared. This, therefore, makes the orderly

continuous planning and scheduling of work im-

possible.

(Emphasis added.) 118 Cong. Rec. H. 2727, H. 2728 (Daily

ed. March 29, 1972).

;

Senator Muskie presented similar prevailing arguments in

the Senate.

a a

Mr. President, in this bill we have undertaken to

do something that we have never done before on a

problem with such long-range impact as this. We

have set deadlines that must be met by industry, and

presumably by all polluters, including governmental

polluters. We have set a deadline in 1976 and we have

set a deadline in 1981; and finally we set the goal of

no discharges of pollutants into any waterways by

1985.‘

There is only one way to meet deadlines like that,

and that is to make a total commitment now. If we

indicate in any way any reservations about our com-

mitment as a government and as a Congress to the

achievement of those goals in the point of view of the

public sector, what we have done is undermine the

credibility of our determination to insist on that goal

and its achievement by the private sector.

To achieve the deadlines we are talking about in

this bill—I think all of us in the committee are proud

of it, and we are committed to it—we are going to

need the strongest kind of evidence of the Federal

Government's commitment to pick up its share of the

load. We cannot budge, with any credibility, from the

kind of investment in waste treatment facilities that

is called for by this bill. The municipalities, through

the Conference of Mayors, have estimated at the

request of the committee that the initial investment

required is $30 to $35 billion. The authorization we

have provided in this bill of $14 billion* for 4 years

*The dates were changed in the final version of the Act to 1977,

1983, and 1985 respectively.

* This was changed to $18 billion in the final version of the Act.

to meet the Federal share is a hard, conservative

figure. All we are saying in asking the Senate to ap-

prove contract authority is a commitment now to that

$14 billion. If we have any hesitation about that

commitment, then we will eliminate the contract au-

thority and keep our options open.

(Emphasis added.) 117 Cong. Rec. S. 17445 (Daily ed. Nov.

2, 1971).

As noted by the District Court in City of New York v.

Ruckelshaus, supra, 674 F. Supp. at 674:

The seriousness of the planning problem was under-

stood by Congress. It was one of the reasons for util-

izing the device of allotment, thereby making funds

available for obligation [by contract authority], in

lieu of the ordinary appropriations procedure.

It strains credulity to assume that Congress established the

allotment and contract authority funding mechanism to cor-

rect the vagaries of the annual appropriation process, and

coincidently granted the Administrator discretion to undercut ;

its commitment by reintroducing the uncertainties of the old )

system back into the process. The firm commitment of Con-

gress vanishes with any exercise of discretion by the Admin-

istrator at the allotment stage. If the funding provisiors are

to have any meaning at all, it can only be concluded that Con-

gress did not intend the sums authorized for allotment to be

altered at the whim of the Administrator.

RETAINER EYEE TERE

BRE OS

Bessa PERT E RN PP ERY. Cat etme

Il. THE ADMINISTRATOR HAS NO DISCRETION TO RE-

DUCE ALLOTMENTS.

A. The Act Requires Full Allotment.

The Administrator contends that he has discretionary au-

thority to allot less than the full amounts authorized to be ap-

propriated. The basis for this contention rests entirely on

amendments that were agreed to by the House and Senate Con-

ferees considering the bill. The phrase “not to exceed” was

placed before the sums specified in Section 207 and the word

“all” was deleted before the phrase “‘[s]ums authorized to be

appropriated” in Section 205.° The Administrator’s position

is untenable.

The overriding intent of Congress was to commit the Fed-

eral government to a program assuring financial means to ac-

complish the tasks envisioned in the Act. The pertinent lan-

guage of the Act and its legislative history, as outlined in Part

*The two amendments in question were to Sections 205 and 207 of

the Act, as shown below (bracketed material deleted, italicized

materia! added):

ALLOTMENT

Section 205. (a) [All] sums authorized to be appropriated

pursuant to section 207 for each fiscal year beginning after

June 30, 1972, shall be allotted by the Administrator not later

than the January Ist immediate 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

the date of enactment of the Federal Water Pollution Control

Act Amendments. ...

AUTHORIZATION

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

this title . . . for the fiscal year ending June 30, 1973, not to

exceed $5,000,000,000, for the fiscal year ending June 30, 1974,

not to exceed $6,000,000,000 and for fiscal year ending June 30,

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

The “not to exceed” language was an amendment only to the House

version of $.2770; the words already appeared in the comparable

section of the Senate bill.

I of this amicus brief, clearly indicate that the Administrator

must allot the full sums authorized to be appropriated by Sec-

tion 207. Indeed, it is only by full allotment that there could

even be control over the rate of spending at subsequent stages.

The Amendments relied on by the Administrator were spon-

sored by Congressman William H. Harsha of Ohio.'® At the

time the Act was being considered, Congressman Harsha was

the ranking minority member of the House Public Works Com-

mittee, which reported on the House version of the Act. He

was also the floor manager of the bill and a member of the con-

ference committee. Congressman Harsha explained to the

House the meaning of his amendments.

. . . I want to point out that the limination of the

word “all’’ before the word “sums” in Section 205

(a) and insertion of the phrase “not to exceed” in

Section 207 was intended by the managers of the bill

to emphasize the President’s flexibility to control the

rate of spending.

(Emphasis added.) 118 Cong. Rec. H. 9122 (Daily ed. Oct. 4,

1972).

Significantly, Congressman Harsha was merely emphasizing

what the Act already provided: namely, full allotment and de-

ferred spending. At a later point of the debate, a colloquy be-

tween Congressmen Jones, Ford and Harsha revealed the

intent of the amendments.

Mr. Gerald R. Ford. Mr. Speaker. I think it is

vitally important that the intent and purpose of Sec-

tion 207 is spelled out in the legislative history here

in the discussion of this conference report.

10 The District Court in The City of New York v. Train, supra, noted

that the views of sponsors of the legislation at issue are of par-

ticular importance when reviewing its legislative history. 358

F.Supp. at 677.

Pe as oi eile

CPU ENKR ENS

Berseerasstgreccornygny ners

spn hee?

As I understand the comments of the gentleman

from Ohio [Harsha], the inclusion of the words in

Section 207 in three instances of ‘not to exceed” in-

dicates that is a limitation. More importantly, that it

is not a mandatory requirement that in one year end-

ing June 30, 1973, there would be $5 billion and the

next year ending June 30, 1974, $6 billion and a third

year ending June 30, 1975, $7 billion obligation or

expenditure? |

Mr. Harsha. I do not see how reasonable 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 [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 committee of conference, so

there is no doubt in anybody’s mind of the intent of

the language. It is reflected in the language just

explained by the gentleman from Ohio [Harsha].

Mr. Gerald R. Ford. Mr. Speaker. This clarifies

and certainly ought to wipe away any doubts anyone

has. The language is not a mandatory requirement

for full obligation and expenditure up to the au-

thorization figure in each of the three fiscal

years. ...

(Emphasis added.) 118 Cong. Rec. H. 9123 (Daily ed. Oct. 4,

1972).

This history necessarily reflects the understanding of the

Congress that there must be full allotment, for only by such

full allotment could it be possible for subsequent expenditures

to be made up to the authorization figure. From the above ex-

change it is clear that any discretion of the Administrator re-

garding the authorized funds was intended to be exercised only

through the mechanism of obligation and expenditure at later

stages, and not through the allotment process.

Congressman Harsha further noted that even in the exercise

of discretion by the Administrator at a later point in time such

discretion related solely to approval of plans, specifications

and estimates.

. . . I would like to point out that the Administrator

of the Environmental Protection Agency must ap-

prove plans, specifications and estimates. This is the

pacing item in the expenditures of funds. It is clearly

the understanding of the managers that under these

circumstances the Executive can control the rate of

expenditures.

(Emphasis added.) 118 Cong. Rec. H. 9122 (Daily ed. Oct. 4,

1972).'!

Congressman Harsha explained the impact of the Act’s

funding provisions in terms of expenditures in future fiscal

11 Congressman Harsha reiterated his comments on the floor of the

House after the President's veto. 118 Cong. Rec. H.10268 (Daily

ed. Oct. 18, 1972). Congressman Harsha cited as support for the

existence of flexibility the fact that impoundments by the execu-

tive branch of highway funds. 118 Cong. Rec. H.9122 (Daily ed.

Oct. 4, 1972). The District Court in The City of New York v.

Ruckelshaus, supra, 678 F.Supp. at 678, pointed out:

... The impoundments of Federal-Aid Highway Act moneys

referred to by Congressman Harsha were of funds allotted,

i.e., the controls were being exercised at the obligation level

rather than at the allotment level.

(Emphasis added.) Significantly, the very highway impound-

ments referred to by Congressman Harsha were declared to be

illegal by the Court in State Highway Commission of Missouri

v. Volpe, 479 F.2d 1099 (Sth Cir., 1973).

| eens CARRE OE.

yeers. In so doing, he demonstrated that it was his understanu-

ing that Sections 205: and 207 required allotment of the full

amount of the sums specified in Section 207.

(T]he first major impact of obligations from the $5

billion authorizations for the fiscal year ending June

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

As a matter of fact, for fiscal year 1973 if all the

money were obligated and placed under contract,

there would only be $20 million needed to meet the

obligations.

(Emphasis added.) 118 Cong. Rec. H. 10268 (Daily ed. Oct.

18, 1972).

Unquestionably, when Congressman HUarsha spoke hypo-

thetically of the obligation of the entire $5 billion, he neces-

sarily expressed his recognition that the entire $5 billion had

to be available by allotment for obligation. His statement was

intended to emphasize to the House that the President’s fear

about “budget-wrecking” was unwarranted in view of the fact

that there would be an inherent lag between the time when

funds were obligated and the time when they would actually

be spent.

Thus, the pacing of expenditures is built into the funding

mechanism, but such pacing is itself dependent upon full al-

lotment as an absolute prerequisite. Senator Muskie made the

same point to the Senate when he noted that the full $18 billion

authorized by the Act probably would not be spent until the

end of fiscal year 1979.'* Senator Muskie at the time was

12 Senator Muskie introduced into the record a table indicating the

impact of the $18 billion on the budget. It was estimated that due

to the extended period of time needed for construction that actual

expenditure under full obligation would be the following per-

centages of the sums authorized to be appropriated: for the first

year, 5 percent; the second year, 20 percent; the third year, 30

percent; the fourth year, 40 percent; and for the fifth year, 5 per-

cent. 118 Cong. Rec. S. 18547 (Daily ed. Oct. 17, 1972).

Chairman of the Senate Subcommittee on Air and Water Pol-

lution, which reported out the Senate version of the Act. He

was a floor manager of the bill and a member of the confer-

ence committee. Senator Muskie, in a specific reference to the

amendments proposed by Congressman Harsha, made it clear

to the Senate that the meaning of the Act is as contended by

the State of Minnesota and the City of New York herein.

Under the amendments proposed by Congreseman

William Harsha and others, the authorizations for

obligational authority are “not to exceed” $18 billion

over the next 3 years. Also “all” sums authorized to

be obligated need not be committed, though they must

be allocated. These two provisions were suggested to

give the administration some flexibility concerning

the obligation of construction grant funda.

(Emphasis added.) 118 Cong. Rec. S. 16871 (Daily ed. Oct. 4,

1972.'*

Incredibly, the Administrator points to the legislative hie-

tory and incredulously contends that Congressman Harsha,

Senator Muskie and others, when explaining their understand-

ing of the amendments, and in their use of such descriptive

terms as “the obligation of construction grant funds,” “the

expenditure of funds,” “controlling the rate of spending.” and

the “pacing item in the expenditure of funds,” did not thereby

intend to distinguish between the allotment stage, and the ob

ligation and expenditure stages, of the statutory scheme. The

Administrator's contention is based upon a palpable miscon-

struction of the Act's allotment provisions and constitutes «

misrepresentation of the legislative history.

14 Senator Muskie reiterated his comments on the fluor of (he Senate

after the President's veto. 118 Cong Ree &.1850 S100) (Deadly

ed. Oct. 17, 1972)

ee cae il Ane Pe age sa

th. «Of the Administrator Has Any Discretion at the Allot-

ment Stage, He Has Abused It.

1. Discretion was not exercised within the bounds delineated

by the Act.

The Administrator's discretion involves solely approval or

disapproval of projects based upon criteria set forth in the

Act. The Administrator has abused this limited discretion by

his refusal to allot over one half (55 percent) of funds au-

thorized by Congress to construct publicly owned treatment

works. The objectives of the Act, its goals, policies, effluent

limitation deadlines, and enforcement provisions have been ig-

nored by the Administrator. He has made no effort to justify

his action other than by reference to the President's evalua-

tion of competing national priorities, regardless of the de-

clared intent of Congress as stated by law.

The Administrator may not arrogate such legislative power

to himself. Congress alone enacts the law. Congress established

bounds within which the Administrator is required to work

in exercising any limited discretion he may have. These boun is

are delineated by the clear language of the Act. The Adminis-

trator may not look beyond these bounds for supporting ration-

ale to reduce the allotment of funds. If his decision had been

based on the needs and problems of sewage treatment facili-

ties construction, it might have been on more solid ground.

However, a decision based on totally unrelated considerations

is contrary to law. This principle was firmly established in

a case analogous to those before the Court, Le., State Highway

Commiasion of Missouri ¢. Volpe, 479 F.2d 1099, 1114 (8th

Cir., 1973). The issue before the court in Volpe was whether

the Secretary of Transportation may defer authority to obli-

gate highway funds previously apportioned to the State or

Missouri under the Federal-Aid Highway Act of 1956 when

the reasons given for deferment by the Secretary were the

status of the economy and the need to control inflationary

pressures. The funding scheme in the Highway Act is that

principally adopted by Congress in the Act under considera-

tion. The rationale of the Volpe case is irrefutable and should

be recognized by this Court.

To reason that there is implicit authority within the

Act to defer approval [of projects] for reasons total-

ly collateral and remote to the Act itself requires a

strained construction which we refuse to make. It is

impossible to find from these specific grants of au-

thority discretion in the Secretary to withhold ap-

proval on projects Congress has specifically directed

because of a system of priorities the Executive

choosen to impose on all expenditures. The Con-

gressional intent is that the Secretary may exercise

his discretion to insure that the roads are well con-

structed and safely built at the lowest possible cost,

all in furtherance of the Act, but when the impound-

ment of funds impedes the orderly progress of the

federal highway program, this can hardly be said to

ve favorable to such a program. In fact, it is in dero-

gation of it. It ia difficult to perceive that Congress

intended such a result.

(Emphasis added.) 478 F.2d at 1114. See also Campaign

Clean Water, Inc. v. Ruckelahaus, 361 F. Supp. 689 (E.D. Va.

1973); Local 2677, American Federation of Government Em-

ployees v. Phillips, 368 F. Supp. 60 (D.D.C., 1973).

The rationale of Volpe, supra, bears forceful application

to the present case. The Congressional intent as manifested

» the Act here absolutely requires the Administrator to pro-

— — = =

vide federal financial assistance for construction of publicly

owned sewage treatment works. The Administrator was given

discretion only to insure that the facilities ave well designed

and constructed for efficient operation and are capable of

meeting the needs of the people in the areas to be served at

the lowest possible cost. The Administrator's unlawful action

here has the effect of disapproving numerous projects with-

out proper review under the limitations and conditions of

Section 204, thereby subverting the legislative objective.

Judge Miles Lord, in considering State of Minnesota v. Fri,

supra, followed the rationale of Volpe, supra. He correctly

noted :

Nothing in the Act gives the Administrator the

authority to consider matters outside the corners

of the Act itself. In failing to allot all of the money

authorized in this matter, the Administrator is acting

in express violation of the Act itself as well as in vio-

lation of the purposes of the Act as set forth by Con-

gress. Furthermore, to the extent the Administrator

has some discretion in this matter, the refusal to allot

nearly half of the funds authorized for reasons not

related to the Act and its stated purposes marks a

clear abuse of such discretion.

(Emphasis added.) Slip Op. at 14.

The Administrator cannot be allowed to exercise discretion

as though the Act did not exist. The Act alone must be the

basis for any exercise of discretion by the Administrator.

2. The refusal to allot 55% of the funds authorized is a fla-

grant abuse of discretion because it effectively frustrates

the intent of Corgress as embodied in the Act.

The action of the Administrator drastically reduced the

States capacity to carry out the purposes of the Act to fund

the construction of sewage treatment facilities for the abate-

ment of pollution of the waters of the State. The present Min-

nesota allotment is $121 million short of full allotment for the

two fiscal years in question.'* The Minnesota Pollution Con-

trol Agency, the agency administering the federal grant pro-

gram, had pending 140 grant applications to upgrade or con-

struct publicly owned treatment works for fiscal year 1973.

These applications represented an estimated total construc-

tion cost of $212 million. If 75 percent federal funding were

available, this would amount to $160 million. Consequently,

the needs of Minnesota outstripped the Administrator’s al-

lotted amount for fiscal 1973 alone by a minimum of $119

million. Under the Administrator’s allotment only 13 of the

140 applicants of the MPCA would be fully funded and one

or two others stood to be partially funded. The total number

of grant applicants for fiscal 1974 is approximately 200. This

figure includes a carry-over of those projects from fiscal 1973

which were not funded. The Administrator’s allotment allows

funding of only five additional projects in fiscal 1974.'*

Minnesota’s case is not an isolated example. Its experi-

ence is duplicated in many, if not all States, with the result

that thousands of plant construction projects have gone un-

funded. Many more will go unfunded in the upcoming fiscal

'* Allotment Regulation, 37 Fed. Reg. 26282 (1972).

1* These facts were presented by affidavits in State of Minnesota v.

Fri, supra, and were not disputed by the Administrator

ene

ere

PIPL OT ETT IR MINT OE

years as the needs of the States go unmet. These monies will

not be forthcoming unless allotted as required by law. The

program initiated by the Act has effectively ground to a halt,

frustrating the express intentions of the Congress.'°

Furthermore, the intricate statutory scheme is so interre-

lated that the action of the Administrator has set off a

domino-like chain reaction. Not only are projects halted now

but municipalities are discouraged from proceeding with con-

struction plans on their own. EPA regulations prohibit the

awarding of any grant if initiation of the project construc-

tion has occurred, 38 Fed. Reg. 5330, §35.903(d) (1973). The

inevitable result is that no eligible applicant or grantee will

proceed with construction until the Administrator approves

its project and thereby legally guarantees 75 percent federal

funding. The Act holds out a generous “carrot” which no po-

tential recipient can, as a practical matter, refuse. Conse-

quently, no construction or upgrading of publicly owned treat-

ment works in Minnesota and other States will be initiated

until federal grants are made available for obligation by the

Administrator.

The resulting total paralysis of the program is an intoler-

able situation for potential grantees. They are faced with

statutory deadlines to meet specific effluent limitations. All

publicly owned treatment works in existence on July 1, 1977,

are required to have effluent limitations based on a minimum

of secondary treatment. More stringent standards may be ap-

plicable to public treatment works by July 1, 1977, if neces-

sary to meet water quality standards established pursuant to

16This Court should not be misled by Table I, Petitioner's Brief,

p. 49, showing that many States have not fully obligated the re-

duced allotments. Minnesota has numerous project applications

pending approval by the Administrator. Indeed Table I more cor-

rectly indicates the grant program is floundering because of the

Administrator's failure to make a full commitment of the funds.

State law or regulation. Section 301(b) (1) (B) and (C). This

means that all publicly owned treatment works presently have

less than three years to be in compliance with Federal and

State laws and regulations. Construction of major projects

cat) easily take three or four years. Those treatment works

that fail to meet the effluent standards face a civil penalty of

up to $10,000 per day of violation. Section 309(d). Any citi-

zen adversely affected by a violation of an effluent standard

may initiate legal action. The remedies available by a citizen

suit could include appropriate civil penalties under Section

309(d) of the Act. Section 505(a)(1) and (2). As a result,

without the allotment of the impounded funds, many commu-

nities, particularly smaller ones, will simply be unable to com-

ply with the effluent standards and will thereby be subject to

enormous penalties.

Congress could not have intended for its purposes to be so

effectively emasculated by the action of one official at one

stage of the statutory scheme. The Administrator suggests

that he has the authority and will eventually allot the full

amount of the authorized funds, and thus there is no adverse

effect on the States. This assumes that there is legal merit to

the Administrator’s interpretation of Sections 205 and 207,

an interpretation which must be rejected as a spurious after-

thought.

When Sections 205 and 207 are analyzed in the context of

the whole Act and its legislative history, the inevitable con-

clusion is that the Administrator must allot the full sums au-

thorized by Congress. It is inconceivable that Congress in-

tended to grant the Administrator unfettered discretion at

the allotment stage and thereby make the Act a series of empty

promises.

Failure to allot over half of the sums authorized for fiscal

year 1973 and 1974 was a clear abuse of discretion.

POF 1B AR ROME TY Peer of NTE RE eee BPP ea ton bee ee

Breverrrrens Yrs RE 8 HQT

3. The President and the Administrator cannot do indirectly

what the President was forbidden by Congress to do by

veto.

When the Act was first passed by Congress the President

exercised his veto power over it. At that time he understood

that Congress intended the full allotment of funds. In his veto

message he stated:

Certain provisions of . .. [the] bill confer a mea-

sure of spending discretion and flexibility upon the

President, and if forced to administer this legislation

I mean to use those provisions to put the brakes on

budgei-wrecking expenditures as much as possible.

But the iaw would still exact an unfair and unnec-

essary price from the public. For I am convinced

. . . that the pressure for full funding under this bill

would be so intense that funds approaching the mazi-

mum authorized amount could ultimately be claimed

and paid out, no matter what technical controls the

bill appears to grant the Executive.

(Emphasis added.) 118 Cong. Rec. H. 10266 (Daily ed. Octo-

ber 18, 1972).

The President recognized that the Act required the use of

the funds for the purposes appropriated and vetoed it for that

reason. Congress overrode this veto, reaffirming its strong

commitment to the program.

It is significant that the President, in vetoing the bill,

actually assumed an interpretation of the Act contrary to that

subsequently taken in impounding the funds. The President

initially assumed the existence of discretion only at the spend-

ing level. However, after the veto was overridden the Presi-

dent assumed the right to impound at the earlier stage of al-

lotment. The fact that the President originally interpreted the

Act in the same manner as that contended by the Respondents

constitutes a compelling argument against the subsequent

contrary interpretation taken by the President through the

Administrator. Presumably, the President concluded that he

would be under pressure to spend more than he desired unless

he impounded at the allotment stage. The President and the

Administrator cannot do indirectly what the President origi-

nally recognized he could not do directly.

Where the Executive Branch is mandated by Congress to

expend funds for a well-defined program containing specific

time tables set up to reach the desired goal, it is the duty of the

Executive to execute that law. The Executive may not decline

to execute it.

The position of the State of Minnesota is further supported

with compelling effect by a memorandum authored by Justice

William Rehnquist when he was serving as an Assistant At-

torney General in the Office of Legal Counsel of the Depart-

ment of Justice. The memorandum was addressed to the

Deputy Counsel to the President and concerned the President’s

authority to impound funds appropriated for aid to federally

impacted schools. It reads in part as follows:

With respect to the suggestion that the President

has a constitutional power to decline to spend appro-

vriated funds, we must conclude that existence of

such a broad power is supported by neither reason

nor precedent. There is, of course, no question that an

appropriation act permits but does not require the

executive branch to spend funds. See 42 Ops. A.G.

Nu. 32, p. 4 (1967). But this is basically a rule of

construction, and does not meet the question whether

the President has authority to refuse to spend where

en re ee

the appropriation act or the substantive legislation,

fairly construed, require such action.

It is in our view extremely difficult to formulate a

constitutional theory to justify a refusal by the Presi-

dent 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 Executive Branch is bound to execute the laws, it

is free to decline to execute them.

(Emphasis added.) The Rehnquist memorandum is reprinted

at 119 Cong. Rec. S. 3808 (Daily ed. March 1, 1973).

The principle that an administrative official may be com-

pelled to expend money mandated to be spent was estab-

lished long ago in Kendall v. United States, 12 Pet. 524 (1838),

where it was held that mandamus law to compel the Post-

master General to pay to a contractor an award which had

been arrived at in accordance with a procedure directed by

Congress for settling the case. Here the Executive Branch

should thus be compelled to act within the bounds defined by

the law by allotting the monies needed to implement the com-

prehensive program to attain clean water.

lil. THE ACTION OF THE ADMINISTRATOR IS NOT SO

“COMMITTED TO AGENCY DISCRETION” AS TO BE

NONREVIEWABLE.

The Administrator contends that his refusal to allot 55%

is nonreviewable because it comes within the admittedly “very

narrow” exception of the Administrative Procedure Act, 5

U.S.C. §701 (Supp. V) making actions “committed to agency

discretion by law” not subject to review. This contention has

no merit, for the exception is limited to cases where the stat-

ute is ‘“‘drawn in such broad terms that in a given case there

is no law to apply.” Citizens to Preserve Overton Park v.

_ Volpe, 401 U.S. 402, 410 (1971). In this case there is abundant

statutory language governing the bounds of the Administra-

tor’s actions. Once these limits are exceeded the action is re-

viewable. It is clearly the business of the judicial branch to

determine the limits of statutory grants of authority. Justice

Reed in Stark v. Wickard, 321 U.S. 288, 309-10 (1944), placed

the issue in proper perspective.

When Congress passes an Act empowering admin-

istrative agencies to carry on governmental activi-

ties, the power of those agencies is circumscribed by

the authority granted. This permits the courts to par-

ticipate in law enforcement entrusted to adminis-

trative bodies only to the extent necessary to protect

justifiable individual rights against administrative

action fairly beyond the granted powers. The respon-

sibility of determining the limits of statutory grants

of authority in such instances is a judicial function

entrusted to the courts by Congress by the statutes

establishing courts and marking their jurisdiction.

Cf. United States v. Morgan, 307 U.S. 183, 190-91.

This is very far from assuming that the courts are

charged more than administrators or legislators with

the protection of the rights of the people. Congress

and the Executive supervise the acts of administra-

tive agents. The powers of departments, boards and

administrative agencies are subject to expansion,

contraction or abolition at the will of the legislative

and executive branches of the government. These

branches have the resources and personnel to exam-

ine into the working of the various establishments

to determine the necessary changes of function or

management. But under Article III, Congress estab-

lished courts to adjudicate cases and controversies

as to claims of infringement of individual rights

whether by unlawful action of private persons or by

exertion of unauthorized administrative power.

In determining whether the Administrator’s action is in-

consistent with the Act, this Court should follow the basic

canon of construction observed in Richards v. United States:

We believe it fundamental that a section of statute

should not be read in isolation from the context of the

whole Act, and that in fulfilling our responsibility in

interpretating legislation, ‘‘we must not be guided by

a single sentence or member of a sentence, but

[should] look to the provisions of the whole law, and

to its object and policy.”

369 U.S. 1, 11-12 (1962).

The provisions of the Act provide the appropriate stan-

dards. A court by analysis of the Act can easily determine that

the latitude of the questioned discretion is not as broad as the

Administrator mistakenly asserts. The standards for review

are found in the purposes and policies of the Act, its objec-

ee wee SDI A RA 4 nae Ste AOE ees |

tives and goals, its project review provisions, its time limits

and its effluent limitations. As Judge Russel stated in Cam-

paign Clean Water v. Train, 489 F.2d 492, 498 (1973).

{T]he executive . . . has the constitutional duty to

execute the law in accordance with the legislative

purpose so expressed. When the executive exercises

its responsibility under appropriate legislation in

such a manner as to frustrate the Congressional] pur-

pose, either by absolute refusal to spend or by a with-

holding of so substantial an amount of the appropria-

tion as to make impossible the attainment of the leg-

islative goals, the executive trespasses beyond the

range of its legal discretion and presents an issue of

constitutional dimensions which is obviously open to

judicial review.

The Act does not confer upon the Administrator or his

agency the discretion to deny allotment of funds using any

other standards but those provided in the Act. Tne Adminis-

trator is asking the Couzt to recognize discretion that totally

disregards the Act and thereby negates the existence of any

law applicable to him. The Administrator’s contention is un-

tenable.

~~) eve eat sane

CONCLUSION

The State of Minnesota respectfully requests that the Court

hold that the Administrator is mandated by the Act to allot

to the States the full amount of sums authorized by Congress

for the construction of publicly owned sewage treatment fa-

cilities. In the alternative, the Court should hold that the ac-

tion of the Administrator constituted an abuse of discretion.

Respectfully submitted,

WARREN SPANNAUS

Attorney General

State of Minnesota

BYRON E. STARNS

Deputy Attorney General

PETER W. SIPKINS

Solicitor General

ELDON G. KAUL

Special Assistant

Attorney General

1935 W. County Road B2

Roseville, Minnesota 55113

Attorneys for the Amicus

State of Minnesota

August, J 974

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