Opposition Brief — Rogers v. United States

OcTOBER TERM, 1988

WALLACE ROGERS, SOUTHEAST KANSAS

COMMUNITY ACTION PROGRAM, INC., AND

THE ECONOMIC OPPORTUNITY FOUNDATION, PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

WILLIAM C. BRYSON

Acting Solicitor General

JOHN R. BOLTON

Assistant Attorney General

RICHARD G. TARANTO

Assistant to the Solicitor General

WILLIAM KANTER

ROBERT D. KAMENSHINE

Altorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

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QUESTIONS PRESENTED

1. Whether the Claims Court correctly dismissed peti-

tioners’ claims against the United States under the Fifth

Amendment’s guarantees of equal protection and due

process and under Section 601 of the Civil Rights Act of

1964, 42 U.S.C. 2000d.

2. Whether the Federal Circuit correctly rejected on

the merits petitioners’ several challenges to the decision of

the federal Community Services Administration — made in

the course of winding up its affairs before the agency ter-

minated its functions at the end of Federal Fiscal Year

(FFY) 1981—not to fund the two petitioner community

action agencies for the part of their 1981 program years

that extended into FFY 1982.

(I)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Army & Air Force Exchange Service v. Sheehan, 456 U.S.

ET RE Oe Se 1, ee ce 12

_ Bowen v. Gilliard, 107 S. Ct. 3008 (1987) .............. 14

Bowen v. Massachusetts, 108 S. Ct. 2722 (1988) ......... 12, 16

Brown v. GSA, 425 U.S. 820 (1976) ................... 13

Christianson v. Colt Industries Operating Corp., 108 S.

Ne ee en Ebes wees 16-17

Clark v. Library of Congress, 750 F.2d 89 (D.C. Cir.

TAS CET ESR gel Se SS 12

Clemente v. United States, 766 F.2d 1358 (9th Cir. 1985),

cert. denied, 474 U.S. 1101 (1986) .................. 12

Duarte v. United States, 532 F.2d 850 (2d Cir. 1976) ..... 12-13

Dugan v. Rank, 372 U.S. 609 (1963) .................. 6

Eastport S.S. Corp. v. United States, 372 F.2d 1002 (Ct.

atte AER i> RS ee 12

Guardians Ass’n v. Civili Service Comm’n, 463 U.S. 582

AS ESIEIIS RADE DE Soe 15

Jaffee v. United States, 663 F.2d 1226 (3d Cir. 1981),

a a Be | ra 12

Land v. Dollar, 330 U.S. 731 (1947) .................5. 6

Larson v. Domestic & Foreign Corp., 337 U.S. 682

EN ca SERS ee 6

Radin v. United States, 699 F.2d 681 (4th Cir. 1983) ..... 12

Reeside v. Walker, 52 U.S. (11 How.) 272 (1850) ........ 16

Richardson v. Belcher, 404 U.S. 78 (1971) ............. 14

Soberal-Perez v. Heckler, 717 F.2d 36 (2d Cir. 1983), cert.

SN EP PRPENUMIMED on ccc cise c cc cccccacenes 14

(III)

IV

Cases — Continued:

United States v. Mitchell, 463 U.S. 206 (1983) ..........

United States v. Testan, 424 U.S. 392 (1976) ............

Zinger Constr. Co. v. United States, 753 F.2d 1053 (Fed.

BARRE Ea oo ik a ae Oe re

Constitution, statutes and regulations:

U.S. Const.:

a De wa aes aa hiew ea ent

Se eee ee aca han ur ah doueaken ewe

I ers ig ok uite ace aes yh aid 7,

Anti-Deficiency Act, 31 U.S.C. 1512(c)(1)(a) ...........

Civil Rights Act of 1964, 42 U.S.C. 2000a ef seq.:

§ 601, 42 U.S.C. 2000d ............. 10-11, 12, 13,

Ds Se a ID 6 ooo nba ccbondedenccenes

DD FRE Se Ps ED ae See sede cecdescexees

Economic Opportunity Act of 1964, 42 U.S.C. 2701 ef

seq. (1976):

ee re IID 6 wk oon sos d cee s cases Pore

| ge ee

MO CR I ok occa se cadavacaessees

| Ge aie BI oo oc occ ccsnesanccstoss

ne ar re

Oe I dc cce cus cedscecnens

ee es I Sock dss vcdanecdicevcaces

err ere

Impoundment Control Act of 1974, 2 U.S.C. 681 ef seg...

Omnibus Budget Reconciliation Act of 1981, Pub. L. No.

EY oe ae el Roda sadea se dans

Rehabilitation Act of 1973, § 504, 29 U.S.C. 794........

Tucker Act:

AES ee ed Sa Se a ae ee

ee a ED nc eeworerstre let cess a a's

a I a aa os bebe hs ced h ents een kehanane

Se a IE os 6 6 he 4G Pe Rae ad ees Reem R eens

14, 15

14

Regulations — Continued: Page

45 C.F.R. (1980):

Pt. 1050:

Sections 1050.115-1 to 1050.115-8 ............ 10

Pt. 1067:

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eS PP rrr ye errs eee 4

OS ED 6d dc ceceseanadadie areas

POT eS RENE 2 Ey

Jn the Supreme Court of the Gnited States

OCTOBER TERM, 1988

No. 88-1088

WALLACE ROGERS, SOUTHEAST KANSAS

COMMUNITY ACTION PROGRAM, INC., AND

THE ECONOMIC OPPORTUNITY FOUNDATION, PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Federal Circuit (Pet. App. Al-A2) is unreported. The

opinion of the United States Claims Court (Pet. App.

A3-A25) is reported at 14 Cl. Ct. 39. The opinion of the

United States District Court for the District of Kansas dis-

missing petitioners’ complaint (App., infra, la-17a) is un-

reported. The opinion of the United States Court of Ap-

peals for the Tenth Circuit (Pet. App. A26-A39) ordering

the case transferred to the Claims Court is reported at 766

F.2d 430.

JURISDICTION

The judgment of the Federal Circuit (Pet. App. Al) was

entered on September 28, 1988. The petition for a writ of

(1)

2

certiorari was filed on December 27, 1988. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

As the successor to the Office of Economic Opportuni-

ty, the Community Services Administration (CSA) dis-

tributed funds to local community action agencies (CAAs)

to serve low-income citizens. 42 U.S.C. 2790(a) (1976);

Pet. App. A4, A27. On August 13, 1981, Congress en-

acted the Omnibus Budget Reconciliation Act of 1981

(OBRA), Pub. L. No. 97-35, 95 Stat. 357, which, effective

October 1, 1981, terminated CSA, repealed the statute (42

U.S.C. 2808 (1976)) under which funds for CAAs were ap-

propriated, and substituted a program of block grants to

States. Pet. App. A5, A28. Petitioners, two large CAAs

and one of their-low-income clients, challenge the manner

in which CSA distributed funds in terminating its ac-

tivities. Jd at A3.

1. Many CAAs, including petitioners, were budgeted

according to program years that did not coincide with

federal fiscal years (FFY). In 1975, CSA adopted a plan

for distributing funds that distinguished small CAAs

(those receiving less than $300,000 annually) from large

CAAs (those receiving more than that amount). Pet. App.

A4, A27-A28. Small CAAs (by far the majority) received

their funding in one yearly grant taken from one federal

fiscal year’s appropriations. Large CAAs, by contrast,

generally were funded by two separate grants: one for the

period from the beginning of the CAA’s program year to

September 30th (the end of the federal fiscal year);

another that covered the period from October Ist (t’ie be-

ginning of the subsequent federal fiscal year) to the end of

the CAA’s program year. Pet. App. A4-A5, A28.!

' The plan was initially established to help provide funds for the

large CAAs during and after a period of reduced CSA appropriations.

Pet. App. A4-AS.

3

When Congress ended the program of grants to CAAs

and substituted a block grant program in OBRA (Pet.

App. A5, A28-A29),? CSA had six weeks in which to wind

up its affairs. Rather than adopt a new fund-distribution

method, CSA chose to maintain its established funding

pattern during its waning days. Pet. App. A7, A29-A30;

App., infra, 15a. CSA made that decision with the aim of

achieving an equitable distribution of the remaining funds

while minimizing disruption. App., infra, 15a.

Most small CAAs already had been funded for their full

program years at the time Congress enacted OBRA. Pet.

App. A29; App., infra, 14a. The few remaining small

CAAs whose applications were pending cn August 13,

1981, were given their full funding. Pet. App. A29-A30.

The large CAAs also were funded according to the tradi-

tional pattern, but that meant less than full funding for

many of them. Jd. at A30. Such CAAs could be financed

only, to the extent that FFY 1981 appropriated funds ex-

isted. Fiscal year 1982 funds, which ordinarily would have

been the source of large CAAs’ second infusion of reve-

nue, had not been appropriated for CSA. Moreover, FFY

1981 funds that remained after funding of the small CCAs

were used to pay administrative expenses of closing the

agency (e.g., annual leave and termination benefits for

CSA’s employees) or set aside to provide for contingencies

pursuant to the Anti-Deficiency Act, 31 U.S.C. 1512(c)

(1)(a); some of this money then reverted to the United

States Treasury on the final day of FFY 1981.

2. Petitioners filed this lawsuit in federal district court

in Kansas on September 30, 1981, one day before the end

2 The State of Kansas, where the petitioner CAAs are located,

elected to participate for FFY 1982. App., infra, 5a. Under the pro-

gram, participating States had discretion to decide how to use federal

antipoverty funds, including discretion to make grants to former

CAAs. Ibid.

4

of FFY 1981. Pet. 14. They challenged the lack of funding

on a variety of statutory and constitutional grounds. After

denying requests for a temporary restraining order and

preliminary injunction, the district court granted the

government’s motion to dismiss. /bid.; App., infra, 4a. The

court first held that petitioners’ suit was premature because

the CAAs at that time were eligible to receive money under

the block grant program that replaced direct CSA funding.

App., infra, 4a-Sa. The court went on, however, to con-

sider and to reject petitioners’ claims on the merits.

The court concluded that CSA’s manner of winding up

violated neither 42 U.S.C. 2812(a) (1976), which set <. fund-

ing minimum for each CAA, nor 42 U.S.C. 2967 (1976),

which required disbursement of funds equitably between

rural and urban areas. App., infra, Sa-6a. The court ex-

plained that those provisions were repealed effective the

same date that CSA ceased funding the petitioner CAAs

(October 1, 1981, the beginning of FFY 1982). J/bid.

Similarly, the court ruled that, because the CSA program

was abolished entirely, the statutory and regulatory re-

quirements of notice and a hearing for denial of funding or

suspension of funding under the program (42 U.S.C.

2944(2) (1976); 45 C.F.R. Subpt. 1067.2 (1980)) were not

applicable to this case and hence were not violated; more-

over, the regulations expressly excluded cases of reduced

appropriations (45 C.F.R. 1067.2-4 (1980), an exclusion

that covered complete elimination of appropriations. App.,

infra, 7a. The court concluded that, because petitioners had

“no legitimate claim of entitlement to funds direct from the

federal government during fiscal year 1982” in the absence

of any appropriation of such funds to the CSA program

(id. at 8a), petitioners likewise had no property interest, for

procedural due process purposes, in receiving funds past

the end of FFY 1981. Jd. at 8a-9a.?

3 The next two contentions addressed and rejected in the court’s

opinion, but not raised in the petition for a writ of certiorari, were

Petitioners also contended that CSA’s distribution vio-

lated a statutory requirement that funds be distributed

equitably, deprived them of equal protection, and was

arbitrary and capricious in violation of the Administrative

Procedure Act (APA). App., infra, lla. The court re-

jected all of those contentions, finding that, although a

pro rata distribution among all CAAs might have been

fairer (id. at 13a), the policy followed by CSA in its final

days was entirely rational. The policy continued the fund-

ing scheme that had been in place since 1975, and the pro

rata alternative would have required CSA to retrieve funds

from the many small CAAs that had already been fully

funded before the enactment of OBRA on August 13,

1981. Jd. at 13a-16a.

3. On appeal, the Tenth Circuit held that the case fell

within the Claims Court’s exclusive jurisdiction and, with-

out addressing the merits, therefore ordered the case trans-

ferred pursuant to 28 U.S.C. 1631. Pet. App. A26-A39.

The court reasoned that the Claims Court had exclusive

jurisdiction under the Tucker Act, 28 U.S.C. 1491(a)(1), if

three conditions were met: “(1) the action is against the

United States; (2) the action seeks monetary relief in excess

of $10,000; and (3) the action is founded upon the Consti-

tution, federal statute, executive regulation, or govern-

ment contract.” Pet. App. A33. The court of appeals

found that all three conditions were met in this case.

The court explained that the complaint in fact sought

money from the United States, although in form it sought

only declaratory and injunctive relief —namely, a declara-

that CSA’s actions constituted an illegal impoundment of unexpended

FFY 1981 funds, in violation of U.S. Const., Art. 2, § 3, and the Im-

poundment Control Act of 1974, 2 U.S.C. 681 ef seqg., and violated .

the agency’s regulation stating that “whenever possible the grantee’s

fundings will coincide with the grantee’s program year” (45 C.F.R.

1067.30-5(8) (1980)). App., infra, 9a-lla.

6

—*

tory judgment that CSA’s funding decision was unlawful

on various grounds, and an injunction requiring the de-

fendant federal officials (the head of CSA and the head of

the Office of Management and Budget) to pay to peti-

tioner Southeast Kansas Community Action Program,

Inc. (SEK-CAP), the balance (eight months’ worth) of its

program-year funds. Pet. App. A33-A34.* The amount re-

quested was in excess of $200,000. Jd. at A34. The court of

appeals explained that, because the underlying purpose of

the suit was to obtain more than $10,000 in money from

the federal government, the Claims Court had exclusive

jurisdiction under the Tucker Act, and that jurisdiction

could not be avoided simply “by framing a complaint in

the district court as one seeking injunctive, declaratory or

mandatory relief.” Pet. App. A34-A35. The court also ob-

served that, “[a]lthough the United States was not a named

party in this action, the effect of suing defendants in their

official capacities while seeking monetary relief is to make

the action one against the United States.” Pet. App. A37

(citing Dugan v. Rank, 372 U.S. 609, 620 (1963); Larson

v. Domestic & Foreign Corp., 337 U.S. 682, 704 (1949);

Land v. Dollar, 330 U.S. 731, 738 (1947)). Finally, the

court determined that, in addition to the constitutional,

statutory, and regulatory grounds, the action was based

on a contract: it sought “funds for the remainder of SEK-

CAP’s 1981 program year on the basis of an alleged agree-

ment that once its grant was approved and the $114,222

payment was made on June 1, such funds would be pro-

vided.” Pet. App. A38-A39. Accordingly, there was ex-

clusive Claims Court jurisdiction because the action was

+ Petitioner Economic Opportunity Foundation (EOF), the second

CAA plaintiff in the district court, was not a party to the appeal. Pet.

App. A29 n.4. Petitioner Wallace Rogers was a low-income resident

of Kansas served by SEK-CAP. 7d. at A29. ~

ee

ee

7

“in essence against the United States,” sought “monetary

relief,” and was based on an “alleged agreement” and on

“other claims premised on constitutional, statutory and

regulatory grounds.” /bid.

4. After the case was transferred and an amended

complaint was filed against the United States by all three

petitioners, the Claims Court granted the government’s

motion to dismiss and for summary judgment.’ The court

concluded that the failure to provide the two CAAs fund-

ing for the period after September 30, 1981, did not breach

_an implied-in-fact contract and was not arbitrary and

capricious (Pet. App. A10-A18) and did not violate statu-

tory and regulatory guarantees of fair procedure and

equitable treatment (id. at A20-A21). The court also ruled

that the remaining claims were outside its jurisdic-

tion—the CAA petitioners’ Fifth Amendment procedural

due process and equal protection claims (Pet. App.

A22-A23), and petitioner Rogers’ statutory race discrimi-

nation claim (id. at A23-A24).

On the merits, the court began by explaining that the

dispute came down to whether funds were available to pay

the two CAAs for the part of their 1981 program years ex-

tending into FFY 1982. Pet. App. All. Plainly no FFY

1982 funds were available, because CSA, which was termi-

nated on October 1, 1981, received no FFY 1982 appropri-

ations. Jd. at Al2. The court also concluded that there was

no error in CSA’s decision not to distribute to the peti-

tioner CAAs any of the FFY 1981 funds remaining in the

agency on August 13, 1981, the day the CSA-dismantling

~ Statute was enacted. With those funds, CSA decided, in

‘> Although petitioner EOF had not appealed the final judgment

entered against it by the district court in Kansas, the government did

not object on res judicata grounds to EOF’s renewing its claim in the

Claims Court.

8

accord with its past practice, to continue to fund small

CAAs for their full program years but to provide funding

only up to September 30, 1981, for the large CAAs,

expecting the FFY 1982 block grant funds to make up the

balance of the large CAAs’ program years. Pet. App. Al2.

After the re-funding of all small CAAs in petitioners’

region, $1.4 million in unobligated funds remained. /d. at

Al13. Rather than distributing those funds to the large

CAAs in the region, CSA decided, in late September 1981,

to use the funds to cover expenses of terminating the agen-

cy and to serve, pursuant to the Anti-Deficiency Act, as a

reserve to meet obligations of the agency that might come

to light later. Jbid. On September 30, 1981, $8 million of

CSA appropriations, the remainder of all funds held for

close-out and Anti-Deficiency Act purposes, lapsed into

the Treasury. Ibid.

The Claims Court held that CSA’s decisions after

August 13, 1981, regarding the distribution of the FEY

1981 funds had a rational basis and were not arbitrary or

capricious or an abuse of discretion. First, continuing the

small CAA/large CAA funding pattern was rational: CSA

could not fully eliminate the distinction between small and

large CAAs without retrieving already distributed funds;

the existing pattern had been established since 1975; CSA

reasonably anticipated that FFY 1982 block grant funds

would fill the gap for large CAAs;* and CSA determined

that there was insufficient time and money to develop a

new funding pattern in the waning months of CSA’s exist-

ence, without unduly interfering with the orderly close-

out. Pet. App. Al4-A15. Second, the transfer of certain

funds to the contingency reserve was specifically author-

6 In fact, as petitioner SEK-CAP acknowledged in its brief in the

Tenth Circuit (at 15), SEK-CAP did receive a block grant from the

State of Kansas for FFY 1982.

9

ized by the Anti-Deficiency Act, 31 U.S.C. 1512(c)(1)(a),

and the amount CSA set aside for that purpose was hardly

excessive. Pet. App. AlS-A16. Third, CSA acted reason-

ably in setting aside certain funds for administrative close-

out costs; until October 1, 1981, the CSA director, who

was concerned about the need to meet the agency’s obli-

gations to its employees, had solid grounds to believe that

Congress would not appropriate any additional money to

cover those costs. Jd. at Al6-A17. The court concluded:

“Faced with limited time and money, CSA attempted to

dole out its resources in such a way as to protect its em-

ployees and at the same time to fund as many CAAs as

possible.” Jd. at Al7. See also id. at Al4 (“the evidence

suggests that CSA made every effort to fund all CAAs to

the maximum degree possible while at the same time at-

tempting to attend to an orderly close-out”).

The court similarly rejected the breach-of-contract

claim that there were “available” FFY 1981 funds that had

to be given to the petitioner CAAs: “The fact that for the

past two years CSA had sufficient funds available to pay

plaintiffs’ second grants from * * * funds remaining from

the preceding FFY, does not obligate CSA to do so in this

case.” Pet. App. Al7-A18. Moreover, the distribution of

FFY 1981 funds to small CAAs and the application of the

remaining funds to termination expenses and to an Anti-

Deficiency Act contingency reserve were “within CSA’s

discretion.” Pet. App. Al8. Hence, the court concluded:

“At the close of FFY 1981, because of these obligations,

there were not sufficient * * * funds available with which

to fund [petitioners].” /bid.’

7 The Claims Court also rejected petitioners’ contention, under 42

U.S,C. 2971b (1976) (requiring publication of all rules, regulations,

guidelines, and application forms), that the “failure to publish specific

guidelines in the Federal Register concerning the mechanics of the split

funding policy” rendered it void in this case. Pet. App. A1l8-A19.

eee

10

The Claims Court next rejected petitioners’ claims of

statutory and regulatory violations. First, the court held

that CSA did not violate 42 U.S.C. 2944 (1976) and 45

C.F.R. 1050.115-1 to 1050.115-8 (1980), which required

notice and an opportunity to be heard when re-funding

was “denied” or when funding was “terminated.” See Pet.

App. A20. Petitioners conceded that re-funding had not

been denied (ibid.); and the court explained that there had

been no “termination of funding,” because “[o]n the date

the second grant payment was due * * *, CSA did not

have any funds available,” and hence “[t]he condition

precedent to the [petitioners’] contract with CSA—the

availability of funds—did not occur” (ibid.). Second, the

court held that the statutory requirements of equitable

distribution of funds between rural and urban areas, 42

U.S.C. 2967, 2833(b) (1976), were not violated. All CAAs

received full funding during FFY 1981; and on the day

that FFY 1982 began, the cited statutes were repealeu. Pet.

App. A21.

The Claims Court then determined that it lacked juris-

diction under the Tucker Act over the petitioners’ due

process and equal protection claims and over peti-

tioner Rogers’ race discrimination claim under 42 U.S.C.

Although the court stated that “the details of the policy probably

should have been published,”*it pointed out that “not only did [peti-

tioners] have knowledge of a policy that had been going on for six

years, but [they] * * * initially benefited from the policy.” Jd. at A19.

The court also pointed out that, “[rjegardless, in this case, properly

promulgated CSA regulations [45 C.F.R. 1067.30-5(8) (1980)], while

expressing a preference for program year funding, effectively state[d]

a policy that CSA funding might not coincide with the grantee’s pro-

gram year.” Pet. App. Al9.

® The court also rejected petitioners’ argument that CSA violated

the regulation directing that funding should coincide with program

years “whenever possible.” Pet. App. A21-A22. Petitioners do not

renew that claim in this Court. |

11

2000d. Pet. App. A22-A24. With respect to the constitu-

tional claims, the court explained that since the Tucker

Act is merely jurisdictional and does not grant substantive

rights, it furnished jurisdiction only if the constitutional

guarantees relied on by petitioners mandate monetary

compensation. Pet. App. A22. The court found that it

lacked jurisdiction over the procedural due process and

, equal protection claims because “these components of the

Fifth Amendment standing alone do not mandate pay-

ment of monetary damages.” Pet. App. A23. The court

found that it lacked jurisdiction over petitioners Rogers’

statutory claim of race discrimination for a different

reason. The court stated that “[c]Jlaims of racial

discrimination based upon a statute may only be brought

in a United States District Court.” Jd. at A23-A24.9

5. The Federal Circuit affirmed. Pet. App. Al-A2. It

found that the Claims Court had convincingly explained

that CSA, in “facing the uncommon requirement to per-

manently close itself down, had acted in all respects within

its discretion and in accordance with law.” Jd. at A2. The

court of appeals further ruled that the Claims Court “was

also correct in its determination that it had no jurisdiction

over the due process, equal protection, and discrimination

claims.” Ibid.

ARGUMENT

1. Petitioners challenge the Claims Court’s holding

that it lacked jurisdiction over petitioners’ equal protec-

tion, due process, and 42 U.S.C. 2000d claims. Whatever

° Finally, the Claims Court rejected petitioners’ claim that CSA’s

failure to expend its entire FFY 1981 appropriation, and its allowing

of $8 million to revert to the Treasury, violated the Impoundment

Control Act of 1974, 2 U.S.C. 681 ef seq. Pet. App. A24. Petitioners

do not raise that issue before this Court.

12

the correctness of that holding,'® we believe that peti-

tioners’ challenge does not merit this Court’s review. The

10 The Tucker Act “does not create any substantive right enforce-

able against the United States for money damages.” United States v.

Testan, 424 U.S. 392, 398 (1976). See United States v. Mitchell, 463

U.S. 206, 216 (1983). The Act, instead, is a limited waiver of sovereign

immunity for substantive rights “found in some other source of law,

such as ‘the Constitution, or any Act of Congress, or any regulation of

an executive department.’ ” Mitchell, 463 U.S. at 216 (quoting 28

U.S.C. 1491). See Army & Air Force Exchange Service v. Sheehan,

456 U.S. 728, 734 (1982). The “asserted entitlement to money damages

depends upon whether any federal statute ‘can fairly be interpreted as

mandating compensation by the Federal Government for the damage

sustained.’ ” Testan, 424 U.S. at 400 (quoting Eastport S.S. Corp. v.

United States, 372 F.2d 1002, 1008-1009 (Ct. Cl. 1967)).

How those principles apply in this case depends on whether the re-

quired pay-mandating provisions must be the provisions creating the

allegedly breached duty (here, the Fifth Amendment due process

clause and 42 U.S.C. 2000d) or whether it is sufficient that the

program-creating statute itself (here, the CSA statute) is pay-

mandating. Even if the latter approach is correct (as the government

has maintained in other cases), however, it remains unclear whether

the CSA statute was pay-mandating in the sense required for the

Tucker Act. Cf. Bowen v. Massachusetts, 108 S. Ct. 2722, 2738 n. 42

(1988) (questioning pay-mandating character of Medicaid statute).

The Claims Court’s jurisdiction over all three claims at issue is,

accordingly, at least uncertain.

If the provisions creating the allgedly breached duty must them-

selves be pay-mandating, then the Claims Court was correct, because

the due process clause and 42 U.S.C. 2000d do not mandate compen-

sation by the federal government. As to the due process clause, see

Clark v. Library of Congress, 750 F.2d 89, 103 n.31 (D.C. Cir. 1984)

(“The courts have uniformly held that jurisdiction under the ‘founded

upon the constitution’ grant of the Tucker Act is limited to claims

under the ‘takings clause’ of the Fifth Amendment.”); Clemente v.

United States, 766 F.2d 1358, 1363 (9th Cir. 1985), cert. denied, 474

U.S. 1101 (1986); Radin v. United States, 699 F.2d 681, 685 n.8 (4th

Cir. 1983); Jaffee v. United States, 663 F.2d 1226, 1230-1231 (3d Cir.

1981), cert. denied, 456 U.S. 972 (1982); Duarte v. United Stai2s, 532

13

jurisdictional ruling does not conflict with the decision of

any other court of appeals'' and raises no question of

general importance. Moreover, the lower courts’ rulings

on the merits of petitioners’ other claims effectively dis-

pose of the three unreviewed claims, showing them to be

insubstantial.

Thus, it is clear from the district court’s statutory and

constitutional due process rulings (App., infra, 7a-9a) and

from the Claims Court’s rulings on the statutory and

breach-of-contract claims (Pet. App. A1l7-A21) that the

petitioner CAAs had no property interest in funding past

the end of FFY 1981. Their hope of receiving a second

F.2d 850, 851-852 (2d Cir. 1976). As to 42 U.S.C. 2000d, the discus-

sion at pages 14-15, infra, shows that the provision does not impose a

compensation obligation on the federal government for its own dis-

crimination independent of discrimination by a recipient of federal

funds. ——

The Claims Court gave a different reason for its conclusion that it

| had no jurisdiction over the claim under 42 U.S.C. 2000d. It ruled that

) the district courts have exclusive jurisdiction over statutory race dis-

crimination claims, pointing to 28 U.S.C. 1343. Pet. App. A23. That

provision, however, which grants the district courts jurisdiction over

certain statutory civil rights claims, does not declare such jurisdiction

to be exclusive. Moreover, the decisions cited by the Claims Court

(ibid.) ultimately rely on this Court’s decision in Brown v. GSA, 425

U.S. 820 (1976), which holds only that employment discrimination

claims against the federal government may be brought exclusively

under the specific jurisdictional provisions of Section 717 of the Civil

Rights Act of 1964, 42 U.S.C. 2000e-16.

Whatever the correct conclusion about Claims Court jurisdiction

over the statutory race discrimination claim, however, that claim, for

reasons stated in the text, is wholly insubstantial.

'! The Tenth Circuit’s determination that this case fell within the ex-

Cclusive jurisdiction of the Claims Court meant only that, if any court

had jurisdiction to award monetary relief against the United States on

the basis of petitioners’ allegations, the Claims Court did. Thus, the

Tenth Circuit decision does not conflict with the decision below.

Iii iaiiaiaiiaiaiemaiiidaiiuaiaa

14

grant payment from additional funds, just as it did not

support a claim for denial of statutorily mandated due

process, would not support a parallel claim of a Fifth

Amendment due process violation. See Richardson v.

Belcher, 404 U.S. 78, 80-81 (1971). Similarly, it is clear

from the district court’s APA and equal protection rulings

(App., infra, 1la-16a) and from the Claims Court’s APA

rulings (Pet. App. Al4-A17) that CSA’s funding decisions

were entirely rational (and not race-based). Hence, there is

no need for further litigation of petitioners’ equal protec-

tion claim. See Bowen v. Gilliard, 107 S. Ct. 3008, 3015

(1987).

Petitioner Rogers’ claim of race discrimination under

Section 601 (Title VI) of the Civil Rights Act of 1964, 42

U.S.C. 2000d, also is insubstantial. That provision

declares: “No person in the United States shall, on the

ground of race, color, or national origin, be excluded

from participation in, be denied the benefits of, or be sub-

jected to discrimination under any program or activity re-

ceiving Federal financial assistance.” Thus, the provision

prohibits only the recipients of federal funds from

discriminating; while the federal government might have

to cut off funds from a recipient who is discriminating (42

U.S.C. 2000d-1), Section 601 does not impose any inde-

pendent non-discrimination obligation on the federal

government itself — where no recipient of federal funds is

alleged to discriminate. See Soberal-Perez v. Heckler, 717

F.2d 36 (2d Cir. 1983), cert. denied, 466 U.S. 929 (1984);

compare Section 504 of the Rehabilitation Act of 1973, 29

U.S.C. 794 (barring discrimination “under any program or

activity receiving Federal financial assistance or under any

program or activity conducted by any Executive age.acy or

by the United States Postal Service” (emphasis added)).

Here, Rogers’ claim focuses only on the federal agency’s

allegedly discriminatory decision, in concluding its opera-

15

tions, to continue to differentiate between large and small

CAAs instead of adopting a new pro rata method. The

claim thus falls outside the scope of Section 601.

Rogers’ Title VI claim is insubstantial for another

reason as well. Rogers does not allege intentional dis-

crimination.'? Yet a majority of this Court has stated that

discriminatory intent is required for a violation of 42

U.S.C. 2000d. See Guardians Ass’n v. Civil Service

Comm'n, 463 U.S. 582, 610 (1983) (Powell, J., concurring

in the judgment); id. at 612-613 (O’Connor, J., concurring

in the judgment); id. at 639-642 (Stevens, J., dissenting).

As noted, both the district court and the Claims Court

found that CSA’s funding decisions were supported by ra-

tional policies unrelated to race.

In short, the constitutional claims and the statutory

racial discrimination claim have no foundation independ-

ent of those already addressed and rejected. In these cir-

cumstances, there is no reason for this Court to review the

Claims Court’s holding that it had no jurisdiction over

those claims.'? For the same reason, review is not war-

ranted of petitioners’ contention that, assuming that the

'2 Petitioner Rogers “alleges that black people suffered dispropor-

tionately under the split funding policy” in that “[t}he practical effect

of the policy of CSA was to allow rural community action agencies,

which were generally small rural and white, to continue through the

transition to the block grant funding program without any problems”

whereas “urban agencies and large rural agencies having significant

segments of the black population among their constituents and

management staff were faced with a difficult situation.” Pet. 17-18.

'3 We note, too, that one of the two CAA petitioners, EOF, did not

appeal from the final judgment entered against it in the district court

of Kansas (see notes 4, 5, supra) and that the claims of damages by

petitioner SEK-CAP and its client petitioner Rogers are weakened by

the fact that SEK-CAP obtained block grant funding for its program

in FFY 1982 (see note 6, supra).

16

Claims Court lacked jurisdiction over the three claims, it

should have transferred them to the district court under 28

U.S.C. 1631: it is not “in the interest of justice” (28 U.S.C.

1631) to transfer for additional litigation claims that are

insubstantial and that have effectively been adjudicated

under other rubrics. See Zinger Constr. Co. v. United

States, 753 F.2d 1053, 1055 (Fed. Cir. 1985).'* In sum,

review of the Claims Court’s dismissal of the equal protec-

tion, due process, and Title VI claims is not warranted.'*

'4 Relevant to the possibility of transfer isthe question whether the

district court in Kansas could hear any of the claims at issue. This

Court recently held in Bowen v. Massachusetts, 108 S. Ct. at 2740,

that a district court had jurisdictign to reverse the decision of the

Secretary of Health and Human Services not to reimburse a State for

its expenditures under the Medicaid program. Although the scope of

the ruling is not clear, the case involved a claim under a statute that ex-

pressly commanded the payment of money in specified circumstances,

in the context of a continuing financial relationship between the

federal government and a State. In the present case, the claims at issue

were made not under a pay-directing provision of the-€SA statute

itself, but under the Constitution and Title VI; moreover, there was no

continuing financial relationship between CSA and the CAAs,

because the CSA program was repealed as of the end of FFY 1981.

Whether Bowen would support jurisdiction in the district court in

Kansas is, accordingly, uncertain. In addition, it is by no means clear

that the district court could today entertain a request for an injunction

directing the payment of FFY 1981 funds that are no longer available.

Cf. Reeside v. Walker, 52 U.S. (11 How.) 272, 290-291 (1850) (under

U.S. Const., Art. I, § 9, Cl. 7, courts cannot order payment of funds

unless appropriated by Congress for that purpose).

'S If this Court were to conclude otherwise, we suggest that an ap-

propriate disposition would be to vacate the decision of the Federal

Circuit and remand the case with instructions to remand to the Claims

Court for reconsideration of its jurisdictional determinations in light

of our present filing and in light of this Court’s decisions in Christian-

son v. Colt Industries Operating Corp., 108 S. Ct. 2166 (1988), and

Bowen v. Massachusetts, supra. In Colt Industries, the Court held,

among other things, that where a case is transferred, law-of-the-case

17

2. Petitioners also ask this Court to review the lower

courts’ rejection of a number of their challenges on the

merits. For the reasons given by the Claims Court, how-

ever (see pages 7-10, supra), those chaHenges were correct-

ly rejected. Moreover, petitioners do not suggest that the

rejection of their claims conflicts with any decision of this

Court or of any other court. Finally, there is no continuing

significance to the issues, as they concern the manner in

which one federal agency, now long defunct, chose to

wind up its affairs.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WILLIAM C. BRYSON

Acting Solicitor General

JOHN R. BOLTON

Assistant Attorney General

RICHARD G. TARANTO

Assistant to the Solicitor General

WILLIAM KANTER

ROBERT D. KAMENSHINE

Attorneys

APRIL 1989

principles require that, “if the transferee court can find the transfer

decision plausible, its jurisdictional inquiry is at an end.” 108 S. Ct. at

2179.

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APPENDIX

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS

Civil Action No. 81-4212

WALLACE ROGERS; SEK-CAP, INC., AND

ECONOMIC OPPORTUNITY FOUNDATION, PLAINTIFFS

Vv.

DWIGHT INK, DIRECTOR OF THE COMMUNITY SERVICES

ADMINISTRATION; AND DAVID STOCKMAN, DIRECTOR OF THE

OFFICE OF MANAGEMENT & BUDGET, ET AL., DEFENDANTS

[Filed Aug. 24, 1982]

MEMORANDUM AND ORDER

This is an action for declaratory, injunctive and other

relief brought on behalf of the Southeast Kansas Com-

munity Action Program and the Economic Opportunity

Foundation, Inc., two community action agencies, and by

Wallace Rogers, who is a black, low-income resident of

Pittsburg, Kansas, who participates and benefits from the

programs operated by the Southeast Kansas Community

Action Program. Plaintiffs seek to compel the Director of

the Community Services Administration, and David

Stockman, the Director of the Office of Management and

Budget, to temporarily and permanently fund the opera-

tions of the Southeast Kansas Community Action Pro-

gram and the Economic Opportunity Foundation.

(la)

2a

Southeast Kansas Community Action Program is a non-

profit corporation which was formed pursuant to § 210 of

the Economic Opportunity Act of 1964. 42 U.S.C. § 2790.

The Southeast Kansas Community Action Program serves

Allen, Montgomery, Labette, Bourbon, Lynn, Crawford

and Cherokee Counties in Kansas.

Plaintiff Economic Opportunity Foundation, ie | is a

non-profit corporation also organized pursuant to § 210

of the Economic Opportunity Act of 1964. The Economic

Opportunity Foundation serves primarily Wyandotte

County, Kansas. Both agencies allegedly serve the needs of

the low-income populations of these counties. For the past

several years, it is alleged these community action pro-

grams have received funding from the federal government.

Plaintiff Wallace Rogers is a 66-year old black man

residing in Pittsburg, Kansas. He is alleged to be a low-

income person who participates in the programs operated

by the Southeast Community Action Program.

Defendant Dwight Ink is sued in his official capacity as

Director of Community Services Administration. Defend-

ant Ink is responsible for awarding and administering

grants of money authorized under the Economic Oppor-

tunity Act. His responsibility is to administer all provi-

sions of the Economic Opportunity Act as they relate to

these plaintiffs.

Defendant David Stockman is sued in his Official

capacity as the Director of the Office of Management and

Budget. Following the enactment of the Omnibus Recon-

ciliation Act of 1981, David Stockman is the successor in

authority to Dwight Ink as regards these funds and these

community action agencies.

The Economic Opportunity Act of 1964 authorized the

establishment of an agency within the federal government

3a

called the Community Services Administration. The Com-

munity Services Administration administers the policies of

the Economic Opportunity Act. Specifically, the Com-

munity Services Administration funds community action

agencies which serve low-income citizens in an effort to

help eradicate the causes of poverty. See 42 U.S.C.

§ 2790(a).

._ The Director of the Community Services Administra-

tion is authorized to designate community action agencies

in communities in the United States, and to award these

agencies grants for the purpose of carrying out community

action programs. Funds are appropriated by Congress

under § 221 of the Economic Opportunity Act of 1964. 42

U.S.C. § 2808.

On August 13, 1981, Congress enacted the Omnibus

Budget Reconciliation Act of 1981, which effectively

abolished the Community Services Administration and re-

pealed 42 U.S.C. § 2808, under which community action

programs had been funded since 1965. In place of direct

federal funding of community service agencies, Congress

has established a block grant program whereby federal

money is granted to the states directly for their use in com-

bating the causes of poverty.

Because the community service agency was abolished as

of October 1, 1981, and because there were no more funds

available to fund community action programs directly,

plaintiffs will not be funded for the upcoming year. Plain-

tiffs seek an order of the court compelling defendants to

fund their community action programs for next year, and

to afford them certain rights they feel are theirs under the

law. This matter is before the court on defendants’ motion

to dismiss.

On October 5, 1981, this Court, through the Honorable

Richard D. Rogers, denied plaintiffs’ motion for a tem-

porary restraining order on the ground that plaintiffs

4a

failed to demonstrate probable success on the merits.

Judge Rogers concluded: “Plaintiffs have failed to demon-

strate that the actions of defendants were probably arbi-

trary and capricious or in violation of the law.” The court

has considered the motion to dismiss, the arguments of

counsel and the issues of law, and finds that defendants’

motion to dismiss should be sustained.

This matter is before the court on a motion to dismiss.

Both parties have elected to treat the motion to dismiss as

one for summary judgment, in that both parties have in-

cluded material outside the pleadings.

Plaintiffs argue that summary judgment is not proper in

this case, and at this time, because there remain seven

issues of fact to be litigated. The court finds that these are

not issues of fact, but rather are conclusions of law. The

court finds that there are no facts in dispute in this case,

and that each of the conclusions of law proposed by plain-

tiffs must be decided in favor of defendants.

A. Is this lawsuit premature?

Congress has enacted the Omnibus Budget Reconcilia-

tion Act of 1981, which effectively abolishes the Com-

munity Services Administration as of October 1, 1981.

Congress has decided to abolish the program under which

community action programs are directly funded by the

federal government. In place of direct funding, Congress

has determined that the public would be better served by a

block grant program. 42 U.S.C. § 9901. See also, 42

U.S.C. § 9912.

Under the new block grant program, the Secretary of

Health and Human Services is authorized to make grants

directly to the states. Each state will receive an annual

Sa

block grant to be used as it sees fit in its anti-poverty ef-

forts. For fiscal year 1982, the states may choose to

operate their anti-poverty programs under the block grant

program, or to have the Secretary of Health and Human

Services operate the community action programs under

the pre-existing plan. Beginning in fiscal year 1983, and

continuing into the future, all states are going to be re-

quired to operate under the block grant program.

The Governor of the State of Kansas has chosen to ad-

minister his state’s anti-poverty program. This program is

authorized to begin on October 1, 1981. As of that date,

plaintiffs became eligible to receive funds pursuant to the

block grant program. See 42 U.S.C. §§ 9902, 9904.

Because plaintiffs are eligible to receive money under

the block grant program from the state of Kansas, they

have not shown that they were directly harmed by the con-

gressional decision to dissolve the Community Services

Administration and to terminate direct funding under the

Economic Opportunity Act of 1964. The court therefore

finds that this lawsuit is premature and should be dis-

missed on that ground. Even were the suit not premature,

plaintiffs must fail on the merits, however.

B. Have defendants’ actions reduced the funding provided to the

State of Kansas below the statutory minimum prescribed by 42

U.S.C. § 2812(a)?

Section 2812(a), Title 42, United States Code, forbids

the director of the Community Services Administration to

reduce the total funding provided to any community ac-

tion agency in any state below a certain minimum figure.

In winding up the affairs of the Community Services Ad-

ministration, the director in Washington has apparently

determined that surplus funds available for Kansas com-

munity action agencies should be distributed in such a

manner so as to fund completely four smaller community

—EE7————

6a

action agencies, and to cut off the funding in part to the

three larger community action agencies. Plaintiffs in this

case are two of those three large community action agen-

cies. Plaintiffs allege that the defendants’ decision has

reduced the total funding for the state below the minimum

required in 42 U.S.C. § 2812(a).

The United States Congress has expressly repealed 42

U.S.C. § 2812(a). See 42 U.S.C. § 9912(a). This repeal

became effective October 1, 1981. The Director’s decision

not to refund plaintiffs for fiscal year 1982 was a decision

which became effective October 1, 1981. Therefore, when

the Director’s decision became effective, his decision was

not in violation of the statutory provisions cited to this

court by plaintiffs. The court does, therefore, overrule

plaintiffs’ objection to the motion to dismiss on this

ground.

C. Have defendants violated the statutory requirements of

Rural-Urban Equity?

In 42 U.S.C. § 2967, and again in § 2833(b), the Direc-

tor of the Community Services Administration is required

to distribute funds equitably between residents of rural

and urban areas. Plaintiffs have reason to believe that de-

fendants’ decision to cut off funding to them may have

violated these statutory requirements.

The court resolves this issue in a manner similar to the

issue described just above. Sections 2967 and 2833, 42

U.S.C., were abolished by Congress and repealed effective

October 1, 1981. See 42 U.S.C. § 9912(a). The Director’s

funding decision in regard to plaintiffs did not become ef-

fective until October 1, 1981, the same date upon which

these statutes were repealed. Therefore, the Director’s

decision could not violate these statutes.

7a

D. Plaintiffs’ rights to due process.

Plaintiffs argue that they have not been granted the due

process hearing mandated by statutes and regulations and

by the Constitution of the United States.

Before it was repealed by Congress, 42 U.S.C. § 2944(2)

and 45 C.F.R. § 1067.2, required notice and opportunity

to be heard before an application or refunding was denied.

Plaintiffs argue that they were not refunded, and that no

hearing was had before their refunding was denied. They

also argue that their financial assistance was suspended

without notice and opportunity to be heard.

The court finds no merit in either argument. Financial

assistance to plaintiffs was neither suspended nor denied.

Congress has instead decided to abolish the entire system.

Therefore, the statutory and regulatory provisions cited to

the court do not apply to this case. Even if they did, the

regulatory scheme, by its own terms, does not apply in

cases of reduced appropriations. 45 C.F.R. § 1067.2-.4.

The decision by Congress to dismantle the entire Com-

munity Services Administration is certainly a reduction in

appropriations. Therefore, plaintiffs had no statutory or

regulatory right to a due process hearing.

Nevertheless, plaintiffs argue that they possess a right to

a due process hearing under the Constitution of the United

States. The United States Supreme Court has defined the

kind of interest necessary to trigger constitutional

guarantees of due process. Certain property interests are

protected by procedural due process. To have a property

interest in a government benefit, “a person clearly must

have more than an abstract need or desire for it. He must

have more than a unilateral expectation of it. He must, in-

stead, have a legitimate claim of entitlement to it...”

Board of Regents v. Roth, 408 U.S. 564, 577 (1972).

8a

Plaintiffs can have no legitimate claim of entitlement to

funds direct from the federal government during fiscal

year 1982. Congress has chosen, effective October 1, 1981,

to dismantle the entire Community Services Administra-

tion, and to stop funding directly community action agen-

cies such as the plaintiffs. Therefore, if Congress has

decided to stop funding plaintiffs, plaintiffs can have no

legitimate claim of entitlement to those funds.

Plaintiffs claim, however, that they were entitled to be

funded during fiscal year 1982 with funds left over from

fiscal year 1981. The plaintiff agencies, in the past, were

not funded from one fiscal year to another. Plaintiffs,

rather, were funded on a program-year basis. A program

year began in one fiscal year and ended in another fiscal

year. Plaintiffs’ last program year was funded by the direc-

tor of this region. Plaintiffs allege that they were told they

would be funded for their entire program year. That por-

tion of plaintiffs’ program year, which was in fiscal year

1981, was guaranteed to be funded through funds appro-

priated for fiscal year 1981. The remainder of the program

year, which went through into fiscal year 1982, was “guar- ©

anteed” to be funded by fiscal year 1982 funds.

It is alleged that plaintiffs received their 1981 funding,

but that the remainder of the funds for the program year,

which were to come from fiscal 1982 funds, have been

denied plaintiffs. Obviously, this denial is a direct result of

the congressional decision to dismantle the Community

Services Administration and to stop funding directly com-

munity action programs such as plaintiffs’. Plaintiffs

allege that this “promise” or “understanding” between

plaintiffs and the regional director give them a legitimate

claim of entitlement to funding throughout the remainder

of their program year.

Plaintiffs’ claim of an informal agreement may indeed

give rise {o protected property interests. Perry v. Sinder-

Fed hed OS LT

9a

mann, 408 U.S. 593 (1972). This would possibly be the

case had plaintiffs’ financial assistance been terminated.

MIL-KA-KO Research & Development Corp. v. Office of

Economic Opportunity, 352 F.Supp. 169, 173 (D. D.C.

1972). This is not the case, however, when Congress has

chosen to dismantle the entire funding program. The dis-

mantling of the Community Services Administration, and

the decision not to directly fund community action agen-

cies, is a disappointment of a “unilateral expectation” of a

benefit, and is not entitled to the constitutionally required

burden of procedural due process. Therefore, we find that

there is no theory under which it may be held as a matter

of law that plaintiffs’ due process rights were violated.

E. Were defendants’ actions an illegal impoundment of funds?

It is alleged that defendants’ refusal to use fiscal year

1981 funds for the purposes of funding plaintiffs’ pro-

grams which continued into fiscal 1982 represents a viola-

tion of the United States Constitution, Article 2, § 3, and

the Impoundment Control Act of 1974, 31 U.S.C. § 1400,

et seq. Plaintiffs have apparently abandoned the conten-

tion they raised at the hearing on the temporary restrain-

ing order that § 682(e) of the Reconciliation Act which

recalled unexpended funds constituted an unlawful im-

poundment of funds.

In the court’s order of October 5, 1981, denying a tem-

porary restraining order, Judge Rogers relied on § 682(e)

of the Reconciliation Act and concluded that plaintiffs

had failed to demonstrate the defendants had acted ultra

vires by recalling unexpected funds. The court stands by

that ruling. Section 682(e) authorizes the defendants to

transfer certain balances if they were not expended.

Plaintiffs’ lawsuit does not state a cause of action for

violation of the Impoundment Control Act. The Im-

10a

poundment Control Act of 1974 requires the executive

branch of government to comply with certain reporting re-

quirements before funds are impounded. Congress did not

intend the act to create a claim upon which relief can be

granted to individuals, corporations or organizations in

cases where the executive has failed to report to Congress

the withholding of funds.

Congress has expressly provided that lawsuits based on

violations of the Impoundment Control Act must be

brought by the Comptroller General. 31 U.S.C. § 1406.

Even a lawsuit by the Comptroller General requires the

tacit approval of Congress in each case. 31 U.S.C. § 1406.

Where a statute “limits a thing to be done in a particular

mode, it includes the negative of any other mode.” Botany

Mills v. United States, 278 U.S. 282 (1929). In the Im-

poundment Control Act of 1974, Congress authorizes

suits by the Comptroller General for violation of the act’s

provisions. The court finds that this provision negates the

notion of a private cause of action. Where a statute, as

here, provides a particular remedy, the court is extremely

reluctant to imply the existence of other remedies. 7rans-

america Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11

(1979).

The court is convinced that plaintiffs have no cause of

action under the Impoundment Control Act of 1974, and

the court concludes that dismissal of this part of plaintiffs’

complaint is proper. Public Citizen v. Stockman, 528

F.Supp. 824, 828-30 (D. D.C. 1981); Rocky Ford Housing

Authority v. United States Department of Agriculture,

427 F.Supp. 118, 134 (D. D.C. 1977).

F.. Did defendants’ actions violate their own regulations?

Section 1067.30-5(8), 45 C.F.R., provides that “when-

ever possible the grantee’s fundings will coincide with the

Pe A at SEL i Ay ROA Di a tO ee tk ai

lla

grantee’s program year.” Plaintiffs argue that the failure

of the Community Services Administration to fund plain-

tiffs for their entire program year is a violation of the

Community Service Administration’s own regulations.

The court has examined this regulation in full, and finds

that it only states a policy. The regulations state that

whenever possible, the grantee’s program year should be

funded in its entirety. The regulation, however, does not

speak in mandatory terms. The regulation does not require

funding to coincide with the grantee’s program year, and

we hold that no cause of action exists against the Com-

munity Services Administration if a particular grantee’s

fundings do not coincide with their program year.

—

G. Miscellaneous objections.

Plaintiffs argue that defendants’ actions violated the

Statutory requirement that funds be distributed on an

equitable basis, the constitutional requirement of equal

protection, the statutory requirement that funds be dis-

tributed on the basis of legitimate project concerns, and

the ban in the Administrative Procedure Act of ail arbi-

trary and capricious action.

Upon close examination, this multi-headed argument

resolves itself into two main contentions. First, plaintiffs

are arguing that they have been denied equal protection.

Second, plaintiffs argue that defendants’ decision repre-

sents an arbitrary and capricious decision_or otherwise an

abuse of discretion.

The federal government is bound by the Fifth Amend-

ment to the Constitution of the United States to accord to

its citizens equal protection of law. This equal protection

requirement is at least as strong as that which applies to

the states. Bolling v. Sharpe, 347 U.S. 497, 499 (1954). In

addition, the Economic Opportunity Act of 1964 requires

12a

the director to “assure that financial assistance under this

subchapter will be distributed on an equitable basis in any

community and within any state so that all significant seg-

ments of the low-income population are being served.” 42

U.S.C. § 28368). Plaintiffs argue that defendants’ deci-

sion has led to a distribution of funds which violate these

requirements.

What has occurred in this case is that smaller communi-

ty action agencies were funded for the fiscal year 1981

from 1981 funds. Plaintiffs were larger community action ———

agencies. Plaintiffs were not funded on a fiscal-year basis,

but rather on a program-year basis. Plaintiffs’ program

year began sometime in the middle of fiscal year 1981, and

was scheduled to terminate sometime in the middle of

fiscal year 1982. The procedure used with these large com-

munity action agencies was that the beginning of their pro-

gram year was funded with funds appropriated during that

fiscal year, and the end of their program year would be

financed with funds appropriated for the next fiscal year.

To illustrate, had the Community Services Administration

not been dissolved by an act of Congress, plaintiffs would

have been funded during their program year by receiving

fiscal year 1981 funds for the first half of their program

year and fiscal year 1982 funds for the second half of their

program year.

Therefore, plaintiffs began their program year with the

expectation of finishing their program year. However,

Congress determined that the Community Services Ad-

ministration, and its enabling legislation, should be re-

pealed. Therefore, there would not be any fiscal year 1982

funds available for plaintiffs to use to finish their program

year. There were, however, some funds remaining in the

pipeline, so to speak. With these left-over or unexpended

funds, the Director of the Community Services Ad-

ministration, or his authorized agents, have determined

l3a

that some smaller community action agencies could be

funded for an additional period of time in fiscal year 1982

with left over funds from fiscal year 1981. Plaintiffs, how-

ever, did not receive any additional funding from these

unexpended 1981 funds. Plaintiffs allege that this consti-

tutes a denial of equal protection. Plaintiffs would rather

the regional director had pooled the available funds for a

pro rata distribution to all of the community action agen-

cies in Kansas.

While in the face of things it seems that a pro rata dis-

tribution would have been more fair than the procedure

followed in this case, the court is unable to say that plain-

tiffs have been denied equal protection under the law.

There is no evidence before the court that defendants’

decisions were made without a rational basis.

Equal protection requires that government regulations

and decisions be rationally supportable. Dandridge v.

Williams, 397 U.S. 471, 483 (1970). The policy of dis-

tinguishing between large and small community action

agencies has existed since 1975. Because community action

agencies have different program years, the Community

Services Administration has been able to stagger its work-

load in processing grant applications for those community

action agencies which are funded on a program-year basis.

Since 1974, the Community Services Administration has

never had sufficient appropriations to be able to fund all

community action agencies from the beginning of their

year. Because the majority of community action agencies

are “small” community action agencies whose funding is

Staggered based on a program year, the Community Serv-

ices Administration has been able to process grant applica-

tions for most of them in advance of the end of the federal

fiscal year, thus avoiding the accumulation of an unman-

ageable workload around September 30 and a resulting

delay in funding.

_l4a

The Community Services Administration did not alter

their policy following Congress’ decision to dissolve the

administration. As of August 13, 1981, there was less than

Thirty Million Dollars of unobligated funds from fiscal

year 1981 remaining within the agency. Although this

seems like a great amount of money, it represents approxi-

mately only eight percent of the Community Services Ad-

ministration’s fiscal year 1981 appropriation.

Most small community action agencies had already re-

ceived funding for their full program year, which was to

begin prior to August 13, 1981. Because the Community

Services Administration was abolished as of October 1,

1981, and because it therefore has no appropriations for

fiscal year 1982, no community action agency has received

funding from fiscal 1982 funds.

The policy of the Community Services Administration

since 1975 has been to divide grantee[]s who receive funds

into two categories, large community action agencies and

small community action agencies. Large community ac-

tion agencies are those which receive more than Three

Hundred Thousand Dollars annually; small community

action agencies receive less than that amount. Large com-

munity action agencies generally receive funds in two in-

stallments; one installment would run from the beginning

of that community action agency’s program year until the

end of the fiscal year on September 30, and another from

the beginning of the next federal fiscal year on October |

until the end of the community action agency’s program

year. This is called split-funding and results in large com-

munity action agencies having their program years funded

from the appropriations for two separate federal fiscal

years. By contrast, small community action agencies

receive their funding in one yearly installment provided at

the beginning of their program year and taken from one

fiscal year’s funds.

lSa

The Director of the Community Services Administra-

tion determined that it would be more equitable and less

disruptive to fund all grantees according to their historical

funding patterns. Of necessity, this means that the small

community action agencies had received funding for their

full program year which began prior to August 13, 1981,

when the block grant program was enacted. To fully il-

luminate the distinction between small and large com-

munity action agencies, and to provide each community

acction agency with an equitable pro rata share of fiscal

year 1981 funds would have required the Community

Services Administration to attempt to withdraw funds

already committed to those community action agencies

whose 1981 grant applications were approved and funded

prior to August 13. The Director of the Community Serv-

ices Administration made an administrative decision to

commit the funds to the small community action agencies

and to allow the funding for the larger community action

agencies, like plaintiffs, to run out when the 1982 fiscal

year began on October 1, 198[1]. This was strictly a judg-

ment call, and we do not find it to be either irrational or

inequitable. Because most of the community action agen-

cies are small community action agencies, this policy en-

abled most community action agencies to receive twelve

months of funding from fiscal year 1981 funds.

Similarly, we do not find defendants’ actions to consti-

tute arbitrary, capricious actions or an abuse of discretion,

which we may scrutinize under the Administrative Pro-

cedure Act. 5 U.S.C. § 706(2)(a).

In applying the arbitrary and capricious standard of

§ 706(2)(a), the court must consider whether the decision

was based on consideration of relevant factors and

whether there has been a clear error of judgment. Bowman

Transportation, Inc. v. Arkansas-Best Freight System,

Inc., 419 U.S. 281 (1974), rehearing denied 420 U.S. 956

+

l6a

(1975), on remand 399 F.Supp. 157 (W.D. Ark. 1975),

aff'd. 425 U.S. 901 (1976). The court may set aside an

agency action which is arbitrary and capricious or involves

an abuse of discretion if the court is of the opinion that the

agency action was clearly wrong. Hughes Air Corp. v.

Civil Aeronautics Board, 482 F.2d 143 (9th Cir. 1973).

The court must give great deference to decisions of an ad-

ministrative agency, and may reverse such determinations

only when they are clearly wrong. Malis v. Hills, 588 F.2d

545 (6th Cir. 1978). The court finds that defendants’ deci-

sion did not constitufe a clear error of judgment, and was.

not clearly wrong. The arbitrary and capricious standard

of review does not require that the administrative agency’s

position be supported by substantial evidence, but only

that it have a rational basis in law. Hurley v. United

States, 575 F.2d 792, 794 (10th Cir. 1978). The court finds

that defendants’ decisions do indeed have a rational basis

in law.

Therefore, the court finds that defendants’ motion to

dismiss should be sustained. Inasmuch as it appears from

the record that plaintiffs are no longer represented by

counsel, the court will direct the clerk of this court to for-

ward a copy of this Memorandum and Order directly to

plaintiff Wallace Rogers, 1011 South Elm, Pittsburg, Kan-

sas, and to the two organizational plaintiffs if their ad-

dress can be discovered.

IT IS BY THE COURT THEREFORE ORDERED that

defendants’ motion to dismiss is hereby granted. IT IS

FURTHER ORDERED that a copy of this Memorandum

and Order be forwarded individually to each plaintiff in

this action, and copies to counsel for defendants.

Bi i

17a

DATED: This 24th day of August, 1982, at Kansas

City, Kansas.

/s/ Dale E. Saffel

DALE E. SAFFEL ~

United States District Judge

ws US. GOVERNMENT PRINTING OFFICE: 1989—241-699/00182