Petition — Portsmouth Redevelopment & Housing Authority v. Pierce

In the Supreme Court of the United States

October Term, 1983

PORTSMOUTH REDEVELOPMENT AND HOUSING AUTHORITY,

a political subdivision of the Commonwealth of Virginia,

Petitioner,

SAMUEL R. PIERCE, JR.,

SECRETARY OF HOUSING AND URBAN DEVELOPMENT, et al.,

Respondent,

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Gordon B. Tayloe, Jr.

Ralph W. Buxton

COOPER, DAVIS, KILGORE, PARKER,

LEON & FENNELL P.C.

500 Central Fidelity Bank Building

Portsmouth, Virginia 23704

Phone No. (804) 397-3481

Counsel for Petitioner

—oooooooooooooooEE

QUESTION PRESENTED

—_—

Whether the "sue and be sued"

clause in 42 U.S.C. §1404(a), a waiver

of immunity, coupled with federal ques-

tion issues involving federal constitu-

tional, statutory and common law, grant

jurisdiction pursuant to 28 U.S.C. §1331

to the District Court to determine by

declaratory judgment and injunctive

relief whether the Secretary of the

United States Department of Housing and

Urban Development erroneously applied

Section 211 (a) of the Housing and

Community Development Amendments of 1979

to: (1) the existing Annual Contribu-

tions Contract entered into in 1976

between the United States Department of

Housing and Urban Development and the

Portsmouth Redevelopment and Housing

i

Authority pursuant to the United States

Housing Act of 1937, 42 U.S.C. §1437 et

seq; and (2) the application of the

Portsmouth Redevelopment and Housing

Authority for Comprehensive Improvement

Assistance Program funds pursuant to 42

U.S.C. §14371.

THE PARTIES TO THE PROCEEDING BELOW

Philip Abrams, Assistant Secretary

for Housing, United States Department of

Housing and Urban Development, and I.

Margaret White, Area Manager of the

Richmond, Virginia Area Office of the

United States Department ot Housing and

Urban Development, were also parties

below represented by the United States

Department of Justice.

ii

TABLE OF CONTENTS

QUESTION PRESENTED 1

THE PARTIES BELOW ii

TABLE OF CONTENTS iii

TABLE OF AUTHORITIES vi

PRAYER FOR WRIT 1

OPINIONS BELOW 2

JURISDICTION 3

STATUTES INVOLVED 3

STATEMENT OF FACTS 4

REASONS FOR GRANTING THE 11

WRIT

i. The Court of Appeals

has decided a federal

jurisdictional ques-

tion in a way in con-

flict with applicable

decisions of this Court. 11

y The Court of Appeals

has rendered a decision

in conflict with the de-

cisions of other federal

courts of appeal on the

same matter. , 22

iii

36 The question presented

is one of national im-

portance, 27

CONCLUSION 28

CERTIFICATE OF SERVICE 30

APPENDIX

A. Opinion and Order ot

the U.S. Circuit

Court of Appeals A-1 to A-23

B. Opinion and order of

the U.S. District

Court B-1 to B-54

C. Pertinent Provisions

of Statutes and

Regulations

BA Federal Question,

28 U.S.C. §1331 C-1

me The Tucker Act,

ae: GU.6.€.

§§1346 (a) (2)

and 1491 C-1 to C=-4

36 Anti-Deficiency

Act, 31 U.8,C.,

§1502 C-4 to C=-5

4. Housing Act of

1948, 42 U.S.C.

§1404a C-5 to C-6

De U.S. Housing Act

of 1937, 42

U.S.C. §1437g (a)

{prior to 1979] C-6 to C-7

iv

Section 211 (a)

of the Housing

and Community

Development

Amendments of

1979

U. S. Housing

Act of 1937, 42

U.S.C. §1437g

(a) (1) [After

1979]

24 C.F.R.

§869.105 (a)

C-7 to C=-8

C-8 to C-10

C-10

TABLE OF AUTHORITIES

Page

Cases

American Science and Engineer-

ing, inc. Vv. Califano,

F.2aq 58 (ist Cir.

1978) 23

Armor Elevator Co. v. Phoenix

Urban Corp., 655 F.2d 19

(Ist Cir. 1981) 25

Cook v. Arentzen, 582 F.2d

870 (4th Cir. 1978) 23

Dugan v. Rank, 372 U.S. 609

(1963) 22

Estate of Watson v. Blumenthal,

~~~ 586 F.od 925 (2nd Cir. 1578) 23

Ferguson v. Union National

ank of Clarksburg,

West Virginia,

126 F.2d 753 (4th Cir.

1942) 15

F.H.A. v. Burr, 309 U.S. 242

a a $334,

16,20

George H. Evans & Co. v.

United States, 169

F.2d 500 (3rd Cir.

1948) 24

Hoopa Valley Tribe, 596 F.2d

4 .S. ct. Cl. 1979) 23

Industrial Indemnity, Inc. v.

Landrieu, 615 F.2d 644

(5th Cir. 1980) 26

International Engineering

CO., Div. ° ns -O,

Inc. v. Richardson,

S12 Fl2a 573 (D.C.

Cir. 1975) 23

Keifer & Keifer v. Re-

Construction Finance

Corporation, 306 U.S.

381 (1939) i ee

13,15

Larson v. Domestic Foreign

Commerce Corp., 3237

U.S. 682 9) 21

Lee v. Thornton, 420 U.S.

139 (1975) 21

Lindy v. Lynn, 501 F.2d

1367 (3rd Cir. 1974) 23

Lomas & Nettleton Co. v.

Pierce, 636 F.od 971

(5th Cir. 1981) 26

vii

Mar v. Kleppe, 520 F.2d 867

(10th Cir. 1975) 25

Marcus Garvey Square v.

Winston Burnett Const.,

et al, 595 F.2d 1l26

(9th Cir. 1979) 26,27

Reconstruction Finance Cor-

oration v. J. G. Meninan,

TT U.S 7 eaceeeee:- - - = SE539,%9

S.S. Silberblatt, Inc., et

al, v. East Harlem

Pilot Block, et al,

608 F.20 268 (2nd Cir.

1979) 25

Trans-Bay Engineers and

Sarleere inc. v.

Hills, 551 F.2d 370

(D.C. Cir. 1976) 25,26

United States v. Adams,

34 F.od 1261 (10th

Cir. 1980) 26

United States v. King,

Sor US I (1968

United v. Testan,

424 U.S. 392 (1976) 21

21

viii

Statutes

Anti-Deficiency Act,

31 U.S.C. §1502 4,9,12,15,19,22

Department of Housing

and Urban Develop-

ment Act, 42 U.S.C.

§3534 13

Department of Housing

and Urban Development-

Independent Agencies

Appropriation Act,

1982, Pub. L. No.

97-101,

95 STAT. 1417 18

Department of Housing and

Urban Development-

Incependent Agencies

Appropriaton Act, 1983,

Pub. L. No. 97-272,

96 STAT. 1160 18,19,20

Federal Question, 28

U.S.C. §1331 3,10

Housing Act of 1948

42 U.S.C. §1404 (a) 4,10,14,23

Housing and Community

Development Amendments

of 1979, Section 211 (a) 5,6,7,8,9

National Housing Act,

12 U.S.C. §1701 et seq. 20

ix

The Tucker Act, 28 U.S.C.

§§1346 (a) (2)

and 1491 4,10,12,15,

United States Housing

Act of 1937:

42 U.S.C. §§1437-1437n

42 U.S.C. §1437g (prior

to 1979)

42 U.S.C. §1437g (a) (1)

42 U.S.C. §14371

Virginia Housing Authorities

Law, §36-1, et seg.,

Code of Virginia

MISCELLANEOUS

24 C.F.R. §869.105 (a)

16,23

7,8,9

No.

IN THE SUPREME COURT

OF THE UNITED STATES

OCTOBER TERM, 1983

PORTSMOUTH REDEVELOPMENT AND

HOUSING AUTHORITY, a political

subdivision of the Commonwealth

of Virginia,

Petitioner,

Vv.

SAMYJEL R. PIERCE, JR.,

Secretary of Housing and Urban

Development, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Petitioner, Portsmouth Redevelop-

ment and Housing Authority, prays that a

Writ of Certiorari issue to review the

opinion and judgment of the United

States Court of Appeals for the Fourth

Circuit rendered in this case on April

27, 1983, and the denial of Portsmouth

Redevelopment and Housing Authority's

petition for rehearing in banc, dated

June 20, 1983. A stay was granted

pursuant to Rule 41(b) F.R.A.P. on June

20, 1983.

OPINIONS BELOW

The opinion of the United States

Court of Appeals for the Fourth Circuit,

as yet unreported, appears in Appendix

A. The opinion of the United States

District Court for the Eastern District

of Virginia, also as yet unreported,

appears in Appendix B.

JURISDICTION

The Opinion of the United States

Court of Appeals for the Fourth Circuit

was rendered on April 27, 1983.

Portsmouth Redevelopment and Housing

Authority's "Motion for Rehearing In

Banc" was denied on June 20, 1983. This

Petition for a Writ of Certiorari was

filed within 30 days of the granting of

the Portsmouth Redevelopment and Housing

Authority's “Alternative Motion to Stay

the Mandate of the Court Pending Appli-

cation for Writ of Certiorari to the

Supreme Court" pursuant to Rule 41(b),

F.R.A.P. The jurisdiction of this Court

is invoked under 28 U.S.C. §1254(1).

STATUTES INVOLVED

Federal Question, 28 U.S.C. §1331

(set out in Appendix C-1).

Tucker Act, 28 U.S.C. §§1346 (a) (2)

and 1491(a) (set out in Appendix C-1 to

C-4).

Housing Act of 1948, 42 U.S.C.

§1404a (set out in Appendix C-5 to C-6).

The U.S. Housing Act of 1937, 42

U.S.C. §1437 et seq. (only §1437g set

out in Appendix C-6 to C-10).

STATEMENT OF FACTS

Portsmouth Redeve lopment and

Housing Authority (Authority) is a

political subdivision of the Common-

wealth of Virginia created under Title

36 of the 1950 Code of Virginia, as

amended. The Authority operates 2,356

public housing units for low-income

persons in Portsmouth, Virginia. It

receives several types of federal

subsidies pursuant to an Annual

Contributions Contract (ACC) with the

United States Department of Housing and

Urban Development (HUD) and the

provisions of the United States Housing

Act of 1937, 42 U.S.C. §§ 1437-1437n

(the "Act"). Additional annual

contributions for operating expenses

(operating subsidies) are made available

to the Authority in accordance with the

terms of its ACC and 42 U.S.C. §1437g

(Appendix C-6 to C-10). In 1976, when

the Authority and HUD entered into the

ACC, §1437g provided, in part: "The

Secretary shall embody the provisions

for such annual contributions in a

contract guaranteeing their payment

subject to the availability of funds."

In 1979, Congress, pursuant to Section

21l(a) of the Housing and Community

Development Amendments of 1979 (Section

21l(a)), amended 42 U.S.C. 1437g by

adding the following clause to the

sentence quoted: "and such contract

shall provide that no disposition of the

low-income housing project, with respect

to which the contract is entered into,

shall occur during and for ten years

after the period when contributions were

made pursuant to such contract unless

approved by the Secretary." Pub. L. No.

96-153, §211(a) (3), 93 Stat. 1110, 42

U.S.C. §1437g (a) (1) (1979) (Appendix

C-7). Subsequent to the enactment of

Section 2ll(a), the Secretary of HUD

(Secretary) promulgated a regulation

which unilaterally directed each public

housing authority with an existing ACC

to execute an amendment thereto

requiring the authority to operate its

projects as low income housing for a

period of ten years after operating sub-

sidies cease. See 24 C.F.R. §869.105 (a)

(1980) (Appendix C-10).

The Authority refused to execute an

amendment to its ACC contending: (1)

Section 2ll(a) did not apply to existing

ACC's; (2) 24 C.F.R. §869.105(a) had no

statutory basis and thus was illegal and

unenforceable because it required

operation of the projects as low income

housing whereas Section 211l(a) only

prohibited disposition of the projects;

and (3) the enforcement of 24 C.F.R.

§869.105 (a) was an unconstitutional

taking of a property interest (contract

rights) without due process. The

Authority could not operate its projects

as low income housing now without the

operating subsidies, and it would not be

able to do so for ten years after

operating subsidies cease.

As a result of the Authority's

retusal to amend its ACC, HUD began

withholding operating subsidies. In

addition, HUD declined to consider the

Authority's application for funds under

the Comprehensive Improvement Assistance

Program (CIAP), 42 U.S.C. §14371. The

parties have stipulated that the CIAP

application would have been approved

were it not for the Authority's refusal

to execute the amendment.

The Authority filed an Amended

Complaint seeking the U. S. District

Court to: (1) Declare Section 211 (a)

not applicable to _ the existing ACC

between the Authority and HUD; (2)

declare 24 C.F.R. §869.105(a) invalid as

having no statutory basis; (3) declare

Section 21ll(a) cannot be applied as a

condition to the approval of the Author-

ity's CIAP application; (4) direct an

accounting of sums owed by the Secretary

to the Authority as a result of the

erroneous interpretation of Section

21ll(a); and (5) order such injunctive

relief as was necessary to affectuate

its declaratory judgments.

The Secretary filed a motion to

dismiss for lack of jurisdiction,

alleging that the action was essentially

a contract claim against the United

States for an amount exceeding $10,000

and jurisdiction therefore belonged

exclusively to the United States Claims

Court under the Tucker Act, 28 U.S.C. §§

1346(a) (2) and 1491. The district court

denied HUD's motion, ruling that the

case was not ex contractu against the

United States. The district court ruled

that 42 U.S.C. §1404(a) waived sovereign

immunity, and 28 U.S.C. §1331 granted

federal question jurisdiction in that

federal constitutional, statutory and

common law questions were raised by the

Amended Motion for Judgment. The

district court decided the merits of the

case in the Authority's favor and issued

the requested declaratory and injunctive

relief.

The Circuit Court of Appeals for

the Fourth Circuit vacated the district

court's order ruling the gravament of

the Authority's claim was ex contractu

10

against the United States; the claim was

for more than $10,000 and that the

United States Claims Court had exclusive

jurisdiction. It is for a review of that

opinion that the Authority seeks a Writ

of Certiorari.

REASONS FOR GRANTING THE WRIT

1. THE COURT OF APPEALS HAS DECIDED

A FEDERAL JURISDICTIONAL QUESTION

IN A WAY IN CONFLICT WITH APPLICABLE

DECISIONS OF THIS COURT.

(a) The Court of Appeals below

overlooked or ignored Keifer & Keifer v.

Reconstruction Finance Corporation, 306

U.S. 381 (1939); Federal Housing Admin-

istration v. Burr, 309 U.S. 242 (1940);

and Reconstruction Finance Corporation

v. J. G. Menihan, 312 U.S. 81 (1941)

11

and, as a consequence, its holding is in

conflict with said decisions. The Court

of Appeals' ruling that a governmental

agency is the United States, the sover-

eign, and thus the Tucker Act is the

only applicable waiver of immunity is

contrary to these decisions. The cited

cases of this Court hold that’ the

transactions of governmental agencies

"are akin to those of private enter-

prises and the mere fact that it is an

agency of the government does not extend

to it the immunity of the sovereign.”

Menihan, supra, at p. 83. The United

States Housing Authority was specifical-

ly listed as such a federal agency with

a "sue and be sued" clause in footnote 3

beginning on page 390 of Keifer, supra.

The functions, powers and duties of the

12

United States Housing Authority have

been transferred by statute to the

Secretary. 42 U.S.C. §3534.

The above cited cases of this Court

also stand for the proposition that a

waiver of governmental immunity should

be liberally construed and not restrict-

ed unless specifically stated by Con-

gress. In Keifer, supra, at pp. 395 and

396, this Court said:

» « » In the light of these stat-

utes it ought not to be assumed

that when Congress consented 'to

suit' without qualification, the

effect is the same as though it had

written ‘in suits on contract,

express or implied, in cases not

sounding in tort.' No such dis-

tinction was made by

Congress. ... There is equally

no warrant for importing such a

distinction here. To do so would

make application of a steadily

growing policy of governmental

liability contingent upon irrele-

vant procedural factors. These, in

13

our law, are still deeply rooted in

historical accidents to which the

expanding conceptions ot public

morality regarding governmental

responsibility should not be

subordinated.

The Court of Appeals' decision that

the Secretary is the sovereign United

States and that the failure to include

the words "in any court of competent

jurisdiction, State or Federal" in

§1404a denied this "sue and be sued"

clause the power to grant subject matter

jurisdiction placed a restriction on

§1404a without showing that such a

restriction is consistent with the

statutory or constitutional scheme, that

the restriction is necessary to avoid

grave interference with the performance

of a governmental function or that it

14

was plainly the purpose of Congress to

use §1404a in such a narrow sense.

In Ferguson v. Union National Bank

of Clarksburg, West Virginia, 126 F.2d

753 (4th Cir. 1942), the Court of

Appeals relied upon Keifer, Burr and

Menihan, supra, in holding "the juris-

diction of a United States District

Court to entertain a suit against

governmental agencies and corporations

is not limited by the provisions of the

Tucker Act. .. ." (citations omitted).

Ferguson, supra, at pp. 756 and 757. In

fact, the result in Ferguson was that

the "sue and be sued" clause therein

involved, by itself, granted subject

matter jurisdiction to the district

court.

15

The holding of the Court of Appeals

that the source of the funds requires

the exclusive jurisdiction of the United

States Claims Court under the Tucker Act

is also in conflict with the Burr case.

It does not matter that the "origin" of

the funds was the public treasury as

long as these funds have been set aside

for the Secretary and are now in his

control. The Court in Burr, supra, at

p. 250, said:

The result is that only those funds

which have been paid over to the

Federal Housing Administration in

accordance w.th §1 and which are

in its possession, severed from

Treasury funds and Treasury con-

trol, are subject to execution.

Clearly, Burr recognized that the

origin of the funds would be the Trea-

sury, but Burr was concerned with

16

control of the funds, not the source.

The operating subsidies and CIAP funds

involved here are within the control of

the Secretary. The Authority will not

have to execute against the Treasury to

obtain the funds. The Temporary Re-

Straining Order, the Preliminary Injunc-

tion and the Order (Appendix B-48) of

the District Court required the

Secretary to retain control of the funds

and to hold same in reserve subject to

further orders of the District Court.

We know the Secretary has control

of the funds because the Secretary has

been paying operating subsidies to the

Authority since and pursuant to the

District Court's Order of November 29,

1982, and the Secretary has entered into

a contract with the Authority for CIAP

17

funds. No execution against the Trea-

sury was necessary for the Authority to

obtain the funds.

The decision of the Court of

Appeals cites the Appropriations Act,

Pub. L. No. 97-101, 95 STAT. 1417,

(Appendix A-11). This act provided the

funds for the Secretary's programs and

operations for the fiscal year ending

September 30, 1982. Apparently, the

Court of Appeals used this citation to

show that the source of the funds was

the Treasury and that "No part of any

appropriation contained in this Act

shall remain available for obligation

beyond the current fiscal year unless

expressly so provided herein." See Sec,

404, 95 STAT 1436. However, the Court

of Appeals overlooked Appropriations

18

Act, Pub. L. No. 97-272, 96 STAT. 1160,

which provided the Secretary's funds for

fiscal year ending September 30, 1983.

In the paragraph entitled, "Payments for

Operation of Low-Income Housing Proj-

ects," under Title I of the Act on page

2 (96 STAT. 1161) is found the follow-

ing:

, . Provided further, That funds

heretofore provided under. this

heading in Public Law 97-101 shall

remain available for obligation tor

the fiscal year ending September

30, 1983, and shall be used by the

Secretary for fiscal year 1983

requirements in accordance with

section 9(a), notwithstanding

section 9(d) of the United States

Housing Act of 1937, as amendec.

(Emphasis added).

In any event, the permanent injunction

of the District Court, cited above, and

31 U.S.C. §1502 (Recodification 1983)

19

(Appendix C-4, 5), which the Court of

Appeals also overlooked, would prevent

the funds in question from being re-

turned to the Treasury's control.

The fact that the funds originated

in the Treasury is of no legal conse-

quence here. The Burr case supports

this conclusion. The source of the

Secretary's funds under the National

Housing Act is also, with the exception

of insurance premiums paid by private

mortgagees, the U.S. Treasury. See

paragraph entitled "Federal Housing

Administration Fund" under Title I of

the Appropriations Act, Pub. L. No.

97-272, 96 STAT. 1162.

(b) The Circuit Court of Appeals'

holding that the United States Claims

Court has jurisdiction to render

20

declaratory judgment and injunctive

relief is in conflict with the following

applicable decisions of this Court:

United States v. Testan, 426. U8... (396

(1976); United States v. King, 395 U.S.

1 (1969); Lee v. Thornton, 420 U.S. 139

(1975). Thus, the United States Claims

Court could not provide the Authority

with complete relief, especially

regarding the equitable relief sought in

its CIAP claim.

Likewise, this Court has previously

decided that the district court has

jurisdiction (1) when a federal officer

acts beyond his statutory powers and (2)

even though within the scope of his

authority, the powers themselves or the

manner in which they are exercised are

constitutionally void. Larson Vv.

21

Domestic Foreign Commerce Corp., 337

U.S. 682 (1949); Dugan v. Rank, 372 U.S.

609 (1963).

The Circuit Court of Appeals

disregarded the above authorities

without discussion.

2. THE COURT OF APPEALS HAS

RENDERED A DECISION IN CONFLICT

WITH THE DECISIONS OF OTHER FEDERAL

COURTS OF APPEAL ON THE SAME JURIS-

DICTIONAL ISSUE.

All the Circuit Court of Appeals

and the United States Claims Court

appear to be in agreement that the

United States Claims Court has exclusive

jurisdiction in contract disputes

against the United States involving more

than $10,000 if there is no waiver of

sovereign immunity and grant of subject

22

matter jurisdiction other than the

Tucker Act. See Lindy v. Lynn, 501 F.2d

1367 (3rda Cir., 1974); American Science

and Engineering, Inc. v. Califano, 571

F.2d 58 (lst Cir. 1978); International

Engineering Co., Div. of A-T-O, Inc. ¥.

Richardson, 512 F.2d 573 (D.C. 1975),

cert. denied, 423 U.S. 1048 (1976); Cook

v. Arentzen, 582 F.2d 870 (4th Cir.

1978); Estate of Watson v. Blumenthal,

586 F.2d 925, (2nd Cir., 1978); and The

Hoopa Valley Tribe v. United States, 596

F.2d 435 (Ct. Cl. 1979).

However, the Circuit Court of

Appeals for the Fourth Circuit apparent-

ly relied on the above authorities even

though it acknowledged 42 U.S.C.

§1404(a) was a waiver of the Secretary's

defense of sovereign immunity.

23

(Appendix A-20). The Court also

acknowledged the Authority's claim would

require disposition of questions of

federal law. (Appendix A-16).

In cases, with similar facts,

against officers of the United States

and/or federal agencies the Circuit

Courts of Appeal are in disagreement as

to whether the district court has

jurisdiction of matters involvin

contracts or disputes in excess of

$10,000 when there exists a waiver of

immunity ["sue and be sued" clause]

coupled with federal constitutional,

Statutory and common law questions.

Circuit Court of Appeals cases

ruling the district court has_ such

jurisdiction are: George H. Evans & Co.

v. United States, et al, 169 F.2d 500

24

(3rd Cir., 1948); Mar v. Kleppe, 520

F.2d 867 (10th Cir., 1975); Trans-Bay

Engineers and Builders, Inc. v. Hills,

551 F.246 370 (D.C. Cir. 1976); §&.8.

Silberblatt, Inc. v. East Harlem Pilot

Block, 608 F.2d 28 (2nd Cir. 1979); and

Armour Elevator Co. v. Phoenix Urban

Corp., 655 F.2d 19 (lst Cir., 1981).

The theory of these cases rests

upon the Congressional intent in enact-

ing the waiver of immunity by

considering whether the claim against

the government officer and/or federal

agency is of the type for which a

private enterprise doing business in the

commercial world would be liable.

Therefore, a judgment against a federal

officer paid from funds within the

officer's control would not prevent a

25

district court from exercising subject

matter jurisdiction. Trans-Bay Engi-

neers & Builders, Inc. v. Hills, supra,

S. 376,

Circuit Court of Appeals cases

ruling the district court does not have

jurisdiction are: Industrial Indemnity,

Inc. v. Landrieu, 615 F.2d 644 (5th

Cir., 1980); Lomas & Nettleton Co. v.

Pierce, 636 F.2d 971 (5th Cir., 1981);

Marcus Garvey Square v. Winston Burnett

Const., 595 F.2d 1126 (9th Cir., 1979);

and and United States v. Adams, 634 F.2d

1261 (10th Cir., 1980).

The theory of these cases is based

upon the position that funds whose

origin was the Treasury always remain

"Treasury Funds" even though they later

come within the control of federal

26

agencies engaged in the business of

commercial enterprise and thus the suit

is against the sovereign and the Tucker

Act provides the only waiver of immunity

and subject matter jurisdiction. Marcus

Garvey Sguare v. Winston Burnett Const.,

supra, p. 1131.

This conflict among the Circuit

Courts of Appeals should be resolved by

this Court.

3. THE QUESTION PRESENTED IS ONE

OF NATIONAL IMPORTANCE.

The national impact of the dispute

on the merits between the Authority and

the Secretary is not before this Court

at this time, nevertheless, the juris-

dictional issue now before this Court is

ot national importance. There are

27

numerous federal agencies operating in

the commercial world for whom Congress

has enacted waivers of immunity.

Whether these federal agencies with

tunds within their control may be sued

in the district court regarding Federal

guestions is an issue which this Court

should decide.

CONCLUSION

This Petition makes clear that the

Circuit Court of Appeals’ ' opinion

vacating the declaratory judgment and

injunctive relief awarded by the Dis-

trict Court to the Authority is (1) in

conflict with applicable decisions of

this Court and (2) in conflict with

decisions of other federal Courts of

Appeals. In addition, this

28

jurisdictional issue is of national

importance inasmuch as many federal

agencies had their immunity waived by

Congress are involved in the commercial

world.

The confusion which now exists

between the Circuit Courts of Appeals

May provide appellate courts flexibil-

ity, but it places an unnecessary

hardship on the district court judges,

attorneys practicing in the federal

courts, and most of all on those who

seek to resolve disputes in the federal

courts. The issue is ripe for this

Court to decide. A Writ of Certiorari

should be granted.

29

Respectfully submitted,

PORTSMOUTH REDEVELOPMENT

AND HOUSING AUTHORITY

sy Aorolonhe) on Dror [

Gordon B. Tayloe, J

Gordon B. Tayloe, Jr.

Ralph W. Buxton

Counsel for Petitioner,

Portsmouth Redevelopment

and Housing Authority

P. O. Box 1475

Portsmouth, Virginia 23705

CERTIFICATE OF SERVICE

I hereby certify that on this

19th day of July, 1983, three copies of

the oregoing Petition for Writ of

Certiorari were mailed, postage prepaid,

to each of the following:

Ms. Freddie Lippstein

Attorney

Appellate Staff

Civil Division, Room 3616

Department of Justice

Washington, D. C. 20530

30

Ms. Suzanne Grealy Curt

Trial Attorney

U. S. Department of Housing and

Urban Development

Washington, D.C. 20410

Ms. Elsie Munsell

United States Attorney

c/o Michael L. Rhine

Assistant United States Attorney

Walter E. Hoffman Federal

Court Bldg.

Norfolk, Virginia 23501

I further certity that all parties

required to be served have been served.

}

Seton B. Bho r.

P. O. Box 1475

Portsmouth, Va. 23705

31

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NO. 82-2138

Portsmouth Redevelopment

and Housing Authority, Appellee,

Vv.

Samuel R. Pierce, Jr.,

Secretary of the United

States Dept. of Housing

and Urban Development;

Philip Abrams, Assistant

Secretary for Housing,

United States Dept. of

Housing and Urban De-

velopment; I. Margaret

White, Area Manager,

United States Dept. of

Housing and Urban De-

velopment, Appellants.

Appeal from the United States District

Court for the Eastern District of

Virginia, at Norfolk. Robert G. Doumar,

Judge.

Argued March 9, 1983

Decided April 27, 1983

Before MURNAGHAN and CHAPMAN, Circuit

Judges, and BUTZNER, Senior Circuit

Judge.

Freddi Lipstein, Appellate Staff, Civil

Division, Dept. of Justice (Gershon M,.

Ratner, Associate General Counsel for

Litigation, Howard M. Schmeltzer,

Special Assistant, Suzanne Grealy Curt,

U.S. Dept. of Housing & Urban Develop-

ment; J. Paul McGrath, Assistant Attor-

ney General, Elsie Munsell, United

States Attorney on brief) for appel-

lants; Ralph W. Buxton and Gordon B.

Tayloe, Jr. (Cooper, Davis, Kilgore,

Parker, Leon & Fennell, P.C., on brief)

tor appellee.

BUTZNER, Senior Circuit Judge:

The Secretary of the Department of

Housing and Urban Development (HUD)

appeals from the district court's grant

of summary judgment awarding Portsmouth

Redevelopment and Housing Authority

certain declaratory and injunctive

relief. Because the district court

lacked subject matter jurisdiction, we

vacate its order and remand the case

with instructions to transfer it to the

United States Claims Court.

I

The Authority is a municipal

corporation which operates a number of

low income housing facilities in

Portsmouth, Virginia. It receives

several types of federal subsidies

pursuant to an annual contributions

A-3

contract (ACC) with HUD and the pro-

visions of 42 U.S.C. §§1437-1437n.

Supplemental contributions for operating

expenses (operating subsidies) are made

available to the Authority on an annual

basis in accordance with the terms of

its ACC and 42 U.S.C. §1437g. At the

time the Authority and HUD entered into

the ACC, section 1437g provided in part:

"The Secretary shall embody the pro-

visions for such annual contributions in

a contract guaranteeing their payment

subject to the availability of funds.”

In 1979 Congress amended section 1437g

by adding the following clause to the

sentence we have quoted: "and such

contract shall provide that no disposi-

tion of the lower income housing proj-

ect, with respect to which the contract

A~4

is entered into, shall occur during and

for ten years after the period when

contributions were made pursuant to such

contract unless approved by the Secre-

tary." Pub. L. No. 96-153, §211(a) (3),

93 Stat. 1110, 42 U.S.C.

§1437g (a) (1) (1979). Pursuant to his

general rule making powers under 42

U.S.C. §3535(d), the Secretary of HUD

promulgated a regulation that requires

each public housing agency operating

under an existing annual contributions

contract to execute an amendment to its

contract embodying the new language of

section 1437g(a) (1). See 24 C.F.R.

§869.105(a) (1980).

The Authority refused to execute an

amendment to its ACC, and HUD began

withholding operating subsidies. In

aA@-§

addition, HUD declined to consider the

Authority's application for funds under

the Comprehensive Improvement Assistance

Program (CIAP), 42 U.S.C. §14371. The

parties have stipulated that the CIAP

application would have been approved

were it not for the Authority's refusal

to execute the amendment.

The Authority filed a complaint in

federal district court seeking to enjoin

HUD from withholding operating subsidies

due under its ACC. The original com-

plaint requested that HUD be required to

release $676,085, the amount of funds

allegedly wrongfully withheld during

fiscal years 1981-82 and 1982-83, and

that it be enjoined from requiring the

Authority to execute an amendment as a

prerequisite to receiving operating

A- 6

subsidies or having its CIAP application

considered. An amended complaint filed

by the Authority excluded the request

for specific monetary relief and instead

asked the court to "direct an accounting

of those sums owed ... as a result of

the [Secretary's] erroneous interpreta-

tion of [section 1437g(a)(1)] and the

resulting wrongful withholding of

operating sudsidies and CIAP funds."

The Secretary tiled a motion to

dismiss for lack of jurisdiction,

alleging that the action was essentially

a contract claim against the federal

government for an amount exceeding

$10,000 and jurisdiction thus belonged

exclusively to the Claims Court under

the Tucker Act, 28 U.S.C. §§1346(a) (2)

and 1491. The district court denied

A-7

HUD's motion, ruling that HUD had waived

its sovereign immunity in 42 U.S.C.

§1404a and that the district court had

federal question jurisdiction under 28

U.S.C. §1331. The court decided the

merits of the case in the Authority's

favor and issued the requested

declaratory and injunctive relief.

We agree with the Secretary that

subject matter jurisdiction over this

action belongs exclusively in the Claims

Court. Because we dispose of this

appeal on jurisdictional grounds, we do

not address the merits of the Authori-

ty's claim except to the extent they

bear on the question of jurisdiction.

II

The Tucker Act establishes three

conditions which, if satisfied, vest

A-8

subject matter jurisdiction exclusively

in the Claims Court. The action must be

against the United States, seek monetary

relief in excess of $10,000, and be

founded upon the Constitution, federal

statute, executive regulation, or

government contract. See 28 U.S.C.

§§1346(a) (2) and 1491.

It is not necessary that the United

States be denominated as a party. An

action against a federal agency or

ofticial will be treated as an action

against the sovereign if "the judgment

sought would expend itself on the public

treasury or domain, or intertere with

the public administration, or if the

effect of the judgment would be to

restrain the Government from acting, or

compel it to act." Dugan v. Rank, 372

A-9

U.S. 609, 620 (1963) (citations omit-

ted).

This is a suit against a federal

official for acts performed within his

official capacity, and, consequently, it

amounts to an action against the sover-

eign. See Southern Sog, Inc. v. Roland,

644 F.2d 376, 380 (5th Cir. 1981);

Ippolito-Lutz, Inc. v. Harris, 473

F.Supp. 255, 259 (S.D.N.Y. 1979).

Furthermore, any monetary judgment

recovered in this case would expend

itself on the public treasury. There is

no “separate fund" for the payment of

operating subsidies within HUD's exclu-

sive control, "the origin of which [1s]

not the public’ treasury." South-

ern Sog, Inc., 644 F.2d at 379; see also

Lomas & Nettleton Co. v. Pierce, 636

A-10

F.2d 971, 973-74 (5th Cir. 1981). The

funds appropriated to HUD for payment of

operating subsidies clearly originate in

the public treasury, and they do not

cease to be public funds after they are

appropriated. / Therefore, both because

this is a suit against a tederal offi-

cial and any judgment recovered would

expend itself on the public treasury, we

construe this action as one against the

United States for purposes of the Tucker

Act.

The second requirement for Tucker

Act jurisdiction is that the claim seek

monetary relief in excess of $10,000.

. See, e.g., Appropriations Act,

Pub. L. No. 97- , 95 Stat. 1417, 1418

and 1436 (1981).

A-11

The Authority's primary objective in

this action is to recover money alleged-

ly wrongfully withheld by the federal

government. The amount involved far

exceeds the jurisdictional prerequisite.

Although the Authority's amended com-

plaint phrases its request for money as

a reguest for equitable relief, Claims

Court jurisdiction cannot be avoided by

framing an essentially monetary claim in

injunctive or declaratory terms. Hoopa

Valley Tribe v. United States, 596 F.2d

435, 436 (Ct. Cl. 1979).

The Authority also contends that in

light of the other equitable claims at

stake, the Claims Court would be unable

to render a complete and effective

remedy because it lacks the power to

grant injunctive or declaratory relief.

A- 12

This argument lacks merit for two

reasons. First, where a claim primarily

seeks monetary relief, it is improper to

deny the Claims Court jurisdiction

simply because it cannot grant the

precise equitable relief sought.

American Science & Engineering, Inc. v.

Califano, 571 F.2d 58, 62 (lst Cir.,

1978). <A district court does not gain

jurisdiction over a Tucker Act claim

simply because the complaint couples

requests for monetary relief with

requests for injunctive relief. Cook v.

Arentzen, 582 F.2d 870, 878 (4th Cir.

1978).

Furthermore, the Claims Court can

issue declaratory relief that is "tied

to and subordinate to a monetary award."

S. J. Groves & Sons Co. v. United

A-13

States, 495 F.Supp. 201, 209 (D. Colo.

1980); see also Gentry v. United States,

546 F.24 343, 346 (Ct. Cl. 1976). A

1972 amendment to 28 U.S.C. §1491 endows

the Claims Court with limited equitable

jurisdiction incidental to its jurisdic-

tion over monetary claims because it

provides: "In any case within its

jurisdiction, the [Claims Court] shall

have the power to remand appropriate

matters to any administrative or execu-

tive body or ofticial with such direc-

tion as it may deem proper and just."

See also S. J. Groves & Sons Co., 495

F.Supp. at 209. Therefore, the Claims

Court is capable of awarding the Author-

ity the relief it seeks.

The third and final requirement for

Tucker Act jurisdiction is that the

A-14

claim be founded upon the Constitution,

federal statute, executive regulation,

or government contract. The Authority

contends that this action arises out of

federal law and that the district court

has jurisdiction under 28 U.S.C. §1331.

The gravamen of the Authority's

claim is that HUD cannot modify its

contractual obligation to pay operating

subsidies by unilaterally altering the

terms of the ACC. The answer to this

issue depends on whether Congress

antended to authorize the Secretary to

modify existing annual contributions

contracts by incorporating the new

provisions of § 1437g(a)(1), and, if

this was its intention, whether the

modification infringes any constitution-

ally protected interests of the

A-15

Authority. The primary basis for the

Authority's challenge to the Secretary's

actions, therefore, is the government

contract. Although disposition of this

claim necessitates adjudication of some

questions of federal law, "efforts to

ground [jurisdiction] on the federal

question statute have consistently been

rejected by courts because the effect

would be to undercut the exclusive

jurisdiction of the Court of Claims."

American Science & Engineering, Inc.,

571 F.2d at 63.

Furthermore, the Tucker Act gives

the Claims Court jurisdiction over

actions against the United States

founded upon the Constitution, federal

statutes, and regulations, as well as

upon government contracts.

A-16

Consequently, the Claims Court is the

proper forum for this action, whether it

is characterized as one in contract or

one to interpret provisions of the

Constitution, federal statutes, or

regulations pertaining to the contract.

Lee v. Blumenthal, 588 F.2d 1281, 1282

(9th Cir. 1979); see also Estate of

Watson v. Blumenthal, 586 F.2d 925, 929

(9th Cir. 1978).

Finally, the Authority contends

that the district court has jurisdiction

under 42 U.S.C. §1404a. That section

provides that the "United States Housing

Authority may sue and be sued only with

respect to its functions under this

chapter, and sections 1501 and 1505 of

this title." The Authority argues that

section 1404a both waives sovereign

A-17

immunity and supports federal question

jurisdiction by the district court.

In support of its position, the

Authority relies on Ferguson v. Union

National Bank, 126 F.2d 753, 756-57 (4th

Cir. 1942), where this court interpreted

12 U.S.C. §1702, another "sue and be

sued" clause. Section 1702 provides

that the "Secretary shall, in carrying

out the provisions of this [chapter], be

authorized, in his official capacity, to

sue and be sued in any court of

competent jurisdiction, State or

Federal." In Ferguson, we reasoned that

Congress could not have intended for

suits over $10,000 to be brought in "any

state court of general jurisdiction, but

in the federal jurisdiction only in the

Court of Claims." Ferguson,

A-18

126 F.2d at 756. Consequently, we held

that section 1702 not only waived

sovereign immunity but also conferred

subject matter jurisdiction in the

federal district court. Although the

Authority does not contend that section

1702 governs this action, it argues that

sections 1404a and 1702 are similar and

that Ferguson, by analogy, is applica-

ble.

The two "sue and be sued" clauses

are substantially different, however,

and it is precisely this difference that

renders Ferguson inapposite. Section

1404a does not contain the critical

language "in any court of competent

jurisdiction, State or Federal," and

thus the basis for our reasoning in

Ferguson does not exist here. See A. L.

A-19

Rowan & Son v. HUD, 611 F.2d 997,

1000-01 n.3 (5th Cir. 1980). Therefore,

although section 1404a waives sovereign

immunity, unlike section 1702 it does

not vest jurisdiction in the district

court. See Jemo Associates v. Greene

Metro. Housing Authority, 523 F.,Supp.

186, 187 (S.D. Ohio 1981).

In sum, because this essentially is

a contract claim against the federal

government for monetary relief in excess

of $10,00U0, the Claims Court has

exclusive jurisdiction under 28 U.S.C.

§§1346(a) (2) and 1491. Accordingly, the

district court was without jurisdiction

to hear this case. We vacate the

district court's judgment and remand

with instructions to transfer the case

A-20

to the Claims Court pursuant to 28

U.S.C. §1406(c).

A-21

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NO. 82-2138

PORTSMOUTH REDEVELOPMENT

AND HOUSING AUTHORITY,

Appellee,

versus

SAMUEL R. PIERCE, JR.,

etc., et al,

Appellants.

ORDER

Upon consideration of the appel-

lee's petition for rehearing and sug-

gestion for rehearing en banc, and no

A-22

judge having requested a poll on the

suggestion for rehearing en banc,

It is ADJUDGED and ORDERED that the

petition for rehearing is denied.

It is FURTHER ORDERED that upon

motion of the Portsmouth Redevelopment

and Housing Authority the mandate is

stayed for 30 days, pursuant to Rule

41(b), pending application to the

Supreme Court for a writ of certiorari.

Entered at the direction of Judge

Butzner for a panel consisting of Judge

Murnaghan, Judge Chapman, and Judge

Butzner.

For the Court,

/s/ William K. Slate, II

~~ CLERK

FILED

JUNE 20, 1983

U. S. Court of Appeals

Fourth Circuit

A-23

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DASTRICT OF VIRGINIA

Norfolk Division

PORTSMOUTH REDEVELOPMENT

AND HOUSING AUTHORITY,

Plaintiff,

Vv. CIVIL ACTION

NO. 82-772-N

SAMUEL R. PIERCE, JR.,

SECRETARY OF THE

UNITED STATES DEPARTMENT

OF HOUSING AND URBAN DE-

VELOPMENT, et al.

Defendants.

MEMORANDUM OPINION

This matter was tried before the

Court on November 16, 1982. At trial

the detendants renewed an earlier motion

to dismiss this action and submitted a

motion tor summary judgment. The

plaintiff responded to the defendant's

motions and also requested an entry of

summary judgment in its favor. All

parties have agreed that there are no

material facts in dispute.

On September 30, 1982, the plain-

titf, the Portsmouth Redevelopment and

Housing Authority (hereinafter PRHA),

filed its complaint which it amended on

October 25, 1982. In Count I of the

amended complaint, PRHA alleged that

defendant Pierce, the Secretary of the

United States Department of Housing and

Urban Development (hereinafter "the

Secretary") had improperly withheld

consideration of PRHA's pending applica-

tion for annual low income housing

operating subsidies on the ground that

PRHA refused to execute an amendment to

a 1976 Annual Contributions Contract

(which contract guaranteed the payment

B-2

of annual operating subsidies so long as

funds are available for the term of the

agreement in accordance with the then

applicable statute). The amendment

would have required PRHA to maintain the

low income character of its housing

projects for a period of ten years after

the federal operating subsidy contribu-

tions had ceased. PRHA contends that

the Secretary exceeded the authority

granted to him by Congress when he

promulgated 24 C.F.R. §869.105(a), the

regulation requiring local housing

authorities to execute the contractual

amendment as a prerequisite to obtaining

current annual operating subsidies. As

applied to PRHA, it is also alleged that

this regulation deprives this. local

housing authority of rights guaranteed

B-3

to it under its contract and the Fifth

Amendment.

A similar contention is raised by

PRHA in Count II of the amended com-

plaint. In Count II, PRHA alleges that

it submitted a proper and timely appli-

cation to HUD for Comprehensive Improve-

ment Assistant Funds (hereinafter "CIAP"

funds) pursuant to 42 U.S.C. §1437(1).

PRHA states that it is in immediate need

of these funds to finance’ certain

repairs; in particular funds are needed

to repair or replace a rapidly deteri-

orating heating distribution system in

one ot its housing projects. PRHA

charges that the Secretary has been

unwilling to consider PRHA's application

tor CIAP funds in the absence of PRHA's

execution of the amendment to the 1976

B-4

Annual Contributions Contract, which

amendment would require PRHA to operate

the six subsidized projects as such for

ten years after the subsidy payments had

ceased,

The plaintiff asks this Court to

declare that 24 C.F.R. §869.105(a)

should not be applied by the Secretary

in his consideration of the plaintiff's

application for operating subsidies or

CIAP funds because PRHA has an existing

contract. PRHA also seeks an injunction

requiring the Secretary to consider its

application tor the funds in the absence

of the challenged amendment to the

Annual Contributions Contract. The

Secretary contends the present statutes

allowing for the payment of these

subsidies authorize the promulgation and

B-5

enforcement of the regulation requiring

the amendment to the existing contracts,

and therefore he can require the housing

authority to operate the low rent

housing projects for ten years after the

cessation of operating subsidies.

The defendants have elected not to

file an answer to the complaint. The

defendants agree that the factual

averments of the plaintiff are correct,

but contend that the plaintiff's legal

conclusions regarding the particular

statutes and regulation are erroneous.

In lieu of an answer, the defendants

have filed a motion to dismiss on the

ground that this Court lacks jurisdic-

tion contending that the Court of Claims

has exclusive jurisdiction and a motion

for summary judgment on the ground that

B-6

there are no genuine issues of material

fact and the defendants are entitled to

judgment as a matter of law.

The defendants' motions to dismiss

and for summary judgment are DENIED.

Summary judgment will be entered in

favor of the plaintiff PRHA in a manner

more fully set forth below.

I.

The Court will first address the

threshold jurisdictional question raised

by the defendants in their motion. The

defendants contend that jurisdiction

over this action lies exclusively in the

Court of Claims because the defendants

maintain that the plaintiff's alle-

gations are fundamentally contractual in

mature and are in excess of $10,000.

B-7

The plaintiff argues that this action is

not ex contracto, but rather is one

which stems from the Secretary's wrong-

ful exercise of the authority granted to

him under 42 U.S.C. §1437 (g) and

§1437(1). Therefore, this Court does

have the requisite jurisdiction under 28

U.S.C. §1331 to entertain this action.

Jurisdiction over the plaintitt's

claim is conferred upon this Court by 28

U.S.C. §1331. Section 1331 of Title 28

provides that the district courts shall

have original jurisdiction of all civil

actions arising under the Constitution,

laws or treaties of the United States.

28 U.S.C. §1331 (1982 Cum. Supp.).

Pursuant to 28 U.S.C. §1346(a)(2), the

district court shall have original

jurisdiction concurrent with the Court

of Cléims with regard to any civil

action or claim against the United

States "not exceeding $10,000 in amount,

founded either upon the Constitution, or

any Act of Congress, or any regulation

of the executive department, or upon any

express or implied contract with the

United States, or for liquidated dam-

ages, in cases not sounding tort, except

that the district courts shall not have

jurisdiction of any civil action or

Claim against the United States tounded

upon any express or implied contract

with the United States or for liquidated

or unliquidated damages in cases not

sounding in tort which are subject to

Sections 8(g)(1) and 10(a)(i) of the

Contract Disputes Act of 1978. 28

U.S.C. §1346(a) (2) (1982 Cum. Supp.).

B-9

Under 42 U.S.C. §1404 (a), the

United States Housing Authority may sue

and be sued with regard to the perfor-

mance of its functions under this

Chapter.+ In Ferguson v. Union National

Bank of Clarksburg, West Virginia, 126

F.2d 753 (4th Cir. 1942), the Fourth

Circuit held that a similar sue and be

sued provision involving the Federal

Housing Administrator operated as a

waiver of the Agency's sovereign immuni-

ty and could support tederal question

jurisdiction over the civil action by a

: The functions, powers and

duties of the United States Housing

Authority have been transferred by

statute to the Secretary cf Housing and

Urban Development. 42 U.S.C. §3534

(1977).

district court. See also United States

v. Adams, 634 F.2d 1261 (10th Cir.,

1980). Although subsequent decisions

have interpreted that such a sue and be

sued clause would not operate as com-

plete waiver of the sovereign immunity

of the United States when the federal

government is the real party in inter-

est, see e.g. Marcus Garvey Square v.

Winston Burnett Construction Co. f

California, 595 F.2d 1126 (9th Cir.,

1979); Armor Elevator Co., inc. v.

Phoenix Urban Corp., 493 F.Supp. 876 (D.

Mass. 1980), such a rule will not

foreclose the maintenance of PRHA's

action in this Court because the United

States is not the true party in interest

here.

B-11

Admittedly, if this Court were to

construe PRHA's claims as those which

merely required a judicial construction

of the 1976 Annual Contributions Con-

tract culminating in a damage recovery

in excess of $10,000 then the action

would have been brought against the

United States for damages, this Court

may lack jurisdiction and the action

might be appropriate for transter to the

Court of Claims. See Mecapulse, Inc. v.

Lewis, 672 F.2d 959 (D.C. Cir. 1982);

International Engineering Co. Division

of A-T-O, Inc. v. Richardson, 512 F.2d

573 (B.C. Cis. 1975).

However, the basis of PRHA's claims

transcends the 1976 agreement. It is

the Secretary's alleged improper exer-

cise of his statutory authority by

B-12

refusing to consider PRHA's application

for §1437(g) and §1437(1) funds which

provides the underlying basis for this

action. This issue cannot be resolved

simply by a judicial interpretation of

the 1976 agreement. To the contrary,

the Secretary's present and _ future

obligations vis-a-vis PRHA are equally,

if not more, dependent upon those

equitable rights generated by HUD's

activities performed in accordance with

the federal statutes and regulations

governing the contracts which the agency

has sponsored and prescribed as a

prerequisite to federal aid. Rooted

both in federal statutory law and

federal common law, PRHA's claims for

relief give this Court §1331 jurisdic-

tion. Trans-Bay Engineers & Builders,

B-13

Inc. v. Hills, 551 F.2d 370, 377 (D.C.

Cir. 1976). See Illinois v. City of

Milwaukee, Wisconsin, 406 U.S. 91

(1972). Cf. Rowe v. United States, 633

F.2d 799 (9th Cir. 1980) (the district

court has §1331 jurisdiction to review

agency action under the Administrative

Procedure Act, subject only to preclu-

sion of review statutes created or

retained by Congress) (citing Califano

v. Sanders, 420 U.S. 99, 105 (1977).

The conclusion that this Court has

jurisdiction to adjudicate this dispute

is further buttressed by the

well-established rule that the Court of

Claims has no inherent power to grant

injunctive or declaratory relief. See

United States v. Testan, 424 U.S. 392

(1976); Richardson v. Morris, 409 U.S.

B14

464 (1973) (per curiam); Rowe v. United

States, supra at 802; Berdick v. United

States, 612 F.2d 533 (Ct. Cl. 1979). It

is clear that a complete and effective

remedy could not be rendered here by any

court which lacked injunctive or

declaratory powers because future rights

and obligations are as much at stake as

present rights and obligations. In

resolving this dispute, a court must not

only consider the various rights and

responsibilities of the parties actually

named in this litigation, but it must

also take into account the immediate

needs and the future well-being of the

tenants residing in Portsmouth's

federally//subsidized low-income housing

go

projects.

If called upon to adjudicate the

merits ot PRHA's claims, the Court of

Claims would face the difficult task of

finding satisfactory substitutes for

declaratory and/or injunctive powers in

its efforts to formulate an appropriate

remedy. This Court, however, faces no

such obstacles. It has these extraordi-

nary powers at its disposal and it would

have little difficulty fashioning a

remedy which could take into account the

competing rights and interests involved

in this litigation.

Time considerations also militate

against the transfer of this action to

the Court of Claims. November 30, 1982

is the target date for final review of

applications for CIAP funding’ and

execution of agreements actually

B-16

granting the same. (See discussion,

infra).

The Court is ot the opinion that it

does have subject matter jurisdiction to

consider the merits of PRHA's claims.

The defendants' motion to dismiss the

action for lack of jurisdiction is

DENIED.

II.

Having determined that it has

jurisdiction, this Court turns now to

the merits of PRHA's complaint. The

parties have agreed that there are no

factual issues in dispute. A brief

summary of the government's participa-

tion in the establishment and operation

of those low income housing programs at

issue here and its recent dealings with

B-17

PRHA will provide the backdrop for the

claims set torth in the complaint.

As with most litigation, the

primary basis for the litigation lies

“7s only in what is apparent trom the

complaint or the applicable statutes,

but also in the problems attendant to

how, to whom and by whom such statues

are applied.

The Portsmouth Redevelopment and

Housing Authority is a municipal corpo-

ration created by and organized under

the laws of Virginia. It is managed by

a Board of Commissioners who are pub-

lic-minded citizens and who perform

their duties as a service to the commu-

nity without pay.

Portsmouth is a city with a commer-

cial underpinning which is largely

B-18

governmental. Because of this, it has

been known to possess a relatively weak

tax base. Additionally, Portsmouth

maintains a substantial number of public

housing and subsidized public housing

units. At present, the city has approx-

imately 2,356 public housing units.

The United States Housing Act

originally authorized the distribution

of funds to local housing authorities to

subsidize the interest payment on bonds

which were issued to ftinance the con-

struction of low income housing. These

subsidies are disbursed to local housing

authorities in accordance with con-

tracts, known as forty year annual

contributions contracts. In exchange

for debt service subsidies local housing

authorities are required to provide

B-19

housing for low income persons. See 42

U.S.C. §1437(a) (1978 and 1982 Cum.

Supp.).

Prior to 1969, local housing

authorities, such as PRHA, were able to

charge a minimal rent which was de-

termined in relation to its ability to

operate the project. In 1969 Congress

enacted the Brooke Amendment which tied

rent to a specific portion of the

tenant's income. That statute is

presently codified in 42 U.S.C. §1437 (a)

(1978 and 1982 Cum. Supp.). To compen-

sate for the limits imposed upon the

rents to be charged, Congress authorized

the payment of an annual operating

subsidy which was guaranteed over the

lifetime of an annual contributions

B-20

contract, so long as the funds were

available. *

. Prior to the 1979 amendment,

Section 1437(g) (a) read as follows:

(a) In addition to- the

contributions authorized to be made

for the purposes specified in

section 1437c of this title, the

Secretary may make

annualcontributions to public

housing agencies for the operation

of low-income housing projects.

The contributions payable annually

under this section shall not exceed

the amounts which the Secretary

determines are required (1) to

assure the low-income character of

the projects involved, and (2) to

achieve and maintain adequate

operating services and_ reserve

funds. The Secretary shall embody

the provisions for such annual

contributions in a contract

guaranteeing their payment subject

to the availability of tunds. For

purposes of making payments under

thsi section, the Secretary shall

establish standards for costs of

operation and reasonable

projections of income, taking into

(Footnote Continued)

B- 21

In 1979, Congress passed an

amendment to 42 U.S.C. §1437(g) (a). It

added the following language:

The Secretary shall embody the

provisions for such annual contri-

butions in a contract guaranteeing

their payments subject to the

availability of funds, and such

contract shall provide that no

disposition of the low-income

housing project, with respect to

which the contract is entered into,

shall occur during and for ten

years after the period when contri-

butions were made pursuant to such

contract unless approved by the

Secretary.

(Footnote Continued)

account the character and location

ot the project and characteristics

of the families served, or the

costs of providing comparable

services as determined in

accordance with criteria or a

formula representing the operations

of a prototype well-managed

project.

B- 22

42 U.S.C. §1437(g) (a) (1) (1982

Cum. Supp.).

Pursuant to his general rule making

powers under 42 U.S.C. §3535(d) (1977),

the Secretary promulgated 24 C.F.R.

§869.105(a) > which essentially requires

3

follows:

That regulation provides as

ACC Amendment. As a condition

for the first HUD approval for

payment of Operating Subsidy with

respect to the projects under a

particular ACC for a PHA fiscal

year beginning after the effective

date of this part, the PHA and HUD

shall enter into an amendment to

the ACC for all projects under the

Acc. This ACC amendment’ shall

provide that the ACC provisions

related to project operation shall

continue in effect with respect to

each project under the ACC for a

period of 10 years after the end of

the last PHA fiscal year for which

Operating Subsidy is paid

(Footnote Continued)

B-23

an authority which seeks annual operat-

ing subsidies to continue operating such

units as low income housing units tor a

period of ten years after the receipt of

the last operating subsidies.

In 1980, Congress instituted the

Comprehensive Improvement Assistance

Program. 42 U.S.C. §1437(1) (1981

Cum.Supp.). This program authorizes the

Secretary to make available financial

assistance to public housing agencies to

improve the physical condition and to

upgrade the management and operation of

low-rent public housing projects.

(Footnote Continued)

with respect to the project.

24 C.F.R. §869.105(a) (1980).

B-24

III.

In 1976 PRHA entered into a consol-

idated Annual Contributions Contract

with HUD. This agreement effectively

consolidated four separate Annual

Contributions Contracts entered into by

the parties from 1952-1956. The follow-

ing projects are covered by this 1976

Annual Contributions Contract: (1) the

Dale Home Project which is comprised of

300 dwelling units; (2) the Swanson Home

Project which is comprised of 210

dwelling units; (3) the Jeffrey Wilson

Home which is comprised ot 400 dwelling

units; (4) the Ira Barbour Park Project

which is comprised of 665 dwelling

units; (5) the Lincoln Park Project

which is comprised of 188 dwelling

units; and (6) the Washington Park

B-25

Project which is comprised of 160

dwelling units.

Section 415(D) of the Annual

Contributions Contract requires’ the

government to make additional annual

contributions to PRHA for each fiscal

year in an amount which together with’

all other operating receipts of the

projects will be sufficient to pay the

operating expenditures of such projects

in accordance with the operating budgets

for such projects as approved by the

government, and with respect to a

project for which payments of debt

services or basic annual contributions

will be made for a period of less than

torty years, in an amount and (for

purposes as approved by the government

to provide for necessary initial

B-26

expenses not charged to the development

of the project. Under paragraph D(1) of

Section 415, PRHA is under a duty to

submit to the government together with

the operating and development budgets

for the projects an estimate of the

amount of additional annual contribu-

tions which will be necessary for the

period covered by such budget. The

government may approve the estimate in

full or in a reduced amount and the

amount sO approved pursuant to _ such

estimate or any revision thereof shall

constitute the maximum amount of addi-

tional Annual Contributions payable in

respect to the projects tor the period

covered by such budget.

Sometime in the spring of 1981,

HUD, pursuant to 24 C.F.R. §869.105(a),

B-27

advised PRHA that it would be required

to execute the amendment to the 1976

Annual Contributions Contract as a

prerequisite to consideration of PRHA's

application for annual operating sub-

Sidies. At least some of PRHA's commis-

sioners recognized the tremendous

implications of such an amend-

ment--namely, the prospect of finding

satistactory, alternative sources of

tunding once the federal operating

subsidies ceased and/or exposure to some

form of liability should they tail to

locate the same--because on July 14,

1981, a resolution was passed at a

meeting of the PRHA commissioners,

stating that PRHA would only execute the

B-28

so-called "Amendatory Agreement No. gn4

to the 1976 Annual Contributions Con-

tract under duress. Resolution #893 was

communicated by letter dated July 15,

‘ Amendatory Agreement No. 6

would have added the following language

to the 1976 Annual Contributions

Contract:

Notwithstanding any other

provision of this contract, no

disposition of any low-income

housing project covered by this

contract shall occur during and for

ten years after the period when

contributions were made for the

operation of the project, unless

approved by the Government. In

addition, the Government agrees to

provide assistance for the

operation of any such project, as

provided by Section 415 of this

contract, as long as the low-income

nature of the project is

maintained. The provision ot

Article II, III, IV and V of this

contract, relating to operations,

are hereby extended for the

duration ot such assistance.

B-29

1981 to the area manager of HUD. On

August 12, 1981, counsel for HUD's

Richmond area office advised PRHA that

it would not process and forward to the

Office of Finance and Accounting a

request for operating subsidies which

reflected that PRHA had signed the

amendment to the Annual Contributions

Contract under duress.

PRHA has requested $247,272 in

operating subsidies for the balance of

fiscal year 1981-1982. Additionally,

PRHA has sought $401,813 in operating

subsidies as an advancement for fiscal

year 1982-1983. The City of Portsmouth

recently voted not to furnish to PRHA

with the funds necessary to meet its

operational demands in the event that

B-30

PRHA's request for operating subsidies

is denied by HUD.

By letter dated March 5, 1982, PRHA

wrote to the Richmond area manager of

HUD, requesting that PRHA not be com-

pelled to execute Amendatory Agreement

No. 6 aS a prerequisite to HUD's consid-

eration of PRHA's application for CIAP

funds. Thereafter, on May 17, 1982,

PRHA forwarded to HUD's area manager a

copy of Resolution #936 which was

adopted on May 5, 1982. Akin to Resolu-

tion #893, Resolution #936 expressed

PRHA's willingness to execute the clause

amending the 1976 Annual Contributions

Contract.

On August 3, 1982, PRHA submitted

its preliminary application for CIAP

funds. This application set forth a

B-31

breakdown of the ee funding

need by PRHA for the years 1981-1985, in

addition to any priorities assigned to

particular projects. PRHA requested

$7,321,028.00 in CIAP funds trom which

$2,881,444.00 were to be used for the

repair and/or replacement of the aging

heat distribution system at the Jetfrey

Wilson Project.

CIAP funds are earmarked for annual

allocation on September 30th. Applica-

tions for CIAP funds must be received by

the agency on or before November 12th.

At that time, they are reviewed with an

eye toward a target approval date of

November 30th. The parties have stip-

ulated that PRHA's application for CIAP

funds would have been approved by HUD

but for PRHA's continuing refusal to

B-32

execute the contractual amendment, which

amendment required PRHA to comply with

the disputed portions of the 1979

amendment to 42 U.S.C. §1437(g) (a) (1)

and the regulation 24 C.F 8.

§869.105(a).

IV.

The legitimacy of the Secretary's

actions with regard to the operating

funds depends upon the interpretation of

that part of §1437(g) (a) (1) which

requires him to embody provisions for

annual contributions in a _ contract

guaranteeing their payment subject to

the “availability of funds."

The Secretary concedes that the

money sought by PRHA has been appropri-

ated and is available for disbursement

B-33

to PRHA. He argues, however, that the

phrase "availability of funds" does not

only connote an appropriation by Con-

gress, but rather implies any conditions

which the Secretary may impose upon a

local housing authority in a given

fiscal year, provided ‘that any such

condition is reasonable and fosters a

legitimate governmental purpose. This

power purportedly encompasses even the

government's unilateral? alteration of

rights under existing contracts with

private concerns.

° The inclusion of the added

requirement has been characterized as a

"unilateral" act on the part of the

Secretary by the Assistant General

Counsel of Housing (See Gelletich

Deposition at 27).

B- 34

It has been held that, unless

Congress provides otherwise, when it

contracts with a private party, the

United States is subject to the same

laws and principles which govern indi-

vidual parties to a contract. Priebe v.

United States, 332 U.S. 407 (1947);

United States v. Bostwick, 94 U.S. [4

Otto) 53 (1876). Although the United

States is not included within the

Constitutional prohibition preventing

states from passing laws which impair

the obligations of contracts, it is

prohibited from depriving persons or

corporations of property without due

process of law. The government of the

United States is as much bound by the

terms and obligations of its contracts

as is an individual. If the federal

B-35

government repudiates its obligations

under a valid agreement, its acts

constitute as much a repudiation, with

all the wrong and reproach that that

term implies, as it would be if the

wrongdoing party had been as_ state,

municipality, or a citizen. The Sink-

ing-Fund Cases, 99 U.S. (9 Otto) 700,

719 (1878). See Lynch v. United States,

292 U.S. 571 (1934).

Neither the language set forth in

the 1976 Annual Contributions Contract

nor the language of §1437(g) (a) (1)

supports the Secretary's interpretation

that an existing agreement guaranteeing

the annual distribution of operating

subsidies can be arbitrarily and

B- 36

unilaterally°® altered by the government

simply because the government believes

that any such change would further an

interest, albeit reasonable, of the

federal government. What is clear from

the language of §1437(g) (a)(1) is that

any future annual contributions contract

shall provide that no disposition’ of

6 The evidence indicated that

HUD officials not only perceived the

Secretary's action as unilateral in

nature, but that the regulation appeared

to be inconsistent with the statute.

(See August 12, 1982, letter from HUD's

regional counsel to Michael Kay).

: The term "disposition" has

been defined as the parting with,

alienation of or giving up property.

BLACK'S LAW DICTIONARY 423 (5th ed.

1979). The statute, therefore, appears

to speak to a housing authority's desire

to sell or alienate its projects.

the low-income housing project, with

respect to which such future contract is

entered into, shall occur during and for

ten years after the period when contri-

butions were made pursuant to- such

contract unless approved by the Secre-

tary. Even this statute with its most

liberal construction, in no way refers

to any duty or vests any power in the

Secretary to alter the right of a party

under an existing Annual Contributions

Contract by requiring amendment thereto

sufficient to condition that party's

annual receipt of operating subsidies

upon the maintenance of the projects for

ten years after the federal subsidies

have ceased.

By compelling the execution of such

an amendment, the Secretary has

B- 38

arbitrarily imposed upon PRHA additional

duties not contemplated by the parties

at the time the 1976 Annual Contribu-

tions Contract was executed. The

Secretary's acts do not amount to a

legitimate exercise of his wholly

independent rulemaking powers, which

would leave the basic rights and obliga-

tions ot the parties under the contract

intact. To the contrary, the Secre-

tary's repudiation not only impairs the

contractual rights of PRHA, but eftec-

tively undermines the basic thrust of a

contract which guarantees the payment of

operating subsidies. See Thorpe v.

Housing Authority of the City of Durham,

393 U.S. 268, 279-80 n. 33 (1969).

This Court also cannot overlook the

inevitable dilemma facing PRHA and its

B-39

tenants should the Secretary be permit-

ted to encumber the contract with an

additional duty. Beginning in the year

1992, PRHA would be forced to locate an

adequate, alternate source of funding

for a period of ten years to replace the

federal subsidies in order to maintain

operation of its low income housing

projects. If recent events portend the

tuture, it will be extremely difficult

for PRHA to obtain the funding necessary

to operate its projects once the federal

government subsidies are no longer

forthcoming. How can the commissioners

of PRHA possibly assume that once the

federal subsidies have ceased the City

of Portsmouth will see tit to furnish

the necessary operating subsidies for

ten years when the City has adamantly

B-40

refused to help PRHA out of the predica-

ment in which it now finds itself.

Having determined that Congress,

througn §1437(g) (a) (1) could not and did

not intend to condition the receipt of

annual operating subsidies upon the

execution of the amendment to PRHA's

existing 1976 Annual Contributions

Contract, this Court concludes that the

Secretary's decision to refuse to

consider PRHA's application for operat-

ing subsidies absent the execution of

such an amendment is arbitrary, capri-

cious, without statutory basis and in

contravention of the plaintiff's rights

under contract and the Fifth Amendment.

Vv.

The Court will now address the

Secretary's unwillingness to consider

B-41

PRHA's application for CIAP funds due to

PRHA's decision not to execute the

amendment to the 1976 Annual Contribu-

tions Contract. It is undisputec that

local housing authorities do not have an

absolute right to receive CIAP funds.

Under 42 U.S.C. §1437(1) (c) (2), compre-

hensive improvement assistance tor

existing public housing may be made

available for projects which are owned

by public housing agencies, are operated

as rental housing projects, receive

assistance under Section 1437(c) or

Section 1437(g) of this title, are not

assisted under §1437(f) of this title

and meet such other requirements consis-

tent with the purpose of this section as

the Secretary may prescribe. 42 U.S.C.

§1437(1) (c) (1) - (4) (Cum. Supp. 1981).

B- 42

The purposes of the CIAP program are set

forth succinctly in subparagraph (a) of

§1437(1). The purposes of the CIAP

program are to improve the physical

condition of existing public housing

projects and to upgrade the management

and operation of such projects in order

to assure that such projects continue to

be available to serve low income tam-

ilies. 42 U.S.C. §1437(a) (1) and (2)

(emphasis added).

There is no language in this

subsection or in the remaixing portions

of §1437(1) which would suggest that one

of the purposes of the CIAP funding

program is to condition the consid-

eration of an application for CIAP funds

on the execution of an amendment to the

Annual Contributions Contract. Congress

B-43

specitically omitted the language

embodied in §1437(g) from §1437(1). If

they intended it to apply, they merely

should have added it. Congress estab-

lished these funds for the physical

improvement and upgrading of existing

projects. S

It is readily apparent from the

face of §1437(1) that these funds were

not intended to be used as a means for

extending the duration of the low income

character of the projects because unlike

8 Congress should certainly have

conditioned these funds had it chosen to

do so. The Secretary endeavors to

utilize awarding of funds to update one

of Portsmouth's projects while requiring

Portsmouth to continue low income

housing for 10 years after cessation of

funds for 5 other projects.

B-44

companion §1437(g) (a) (1), this statute

does not speak to any need to incorpo-

rate into the contract for CIAP tunds

the language that no disposition of the

low-income housing project, with respect

to which the contract is entered into,

shall occur during and for ten years

atter the period when contributions were

made pursuant to such contract unless

approved by the Secretary.

The Secretary seeks to do indirect~-

ly, through PRHA's application for CIAP

funds, what he clearly cannot do direct-

ly through the PRHA's application for

operating subsidies; that is to force an

amendment to the 1976 Annual Contribu-

tions Contract. For the same reasons

which governed its decision regarding

the operating subsidies, the Court views

B-45

the rights of PRHA and its tenants under

the 1976 Annual Contributions Contract

as inviolate and subject only to the

“availability” of funds" for the annual

contributions. As such, it cannot

countenance the Secretary's attempt to

change the rights and duties established

under that contract by utilization of

tinancial assistance which Congress has

provided to local housing authorities

under a separate statute, for distinct

reasons and by different rules. The

Secretary simply has no authority to

condition PRHA's application for ‘AP

funds on the execution of the amendment

to the parties' 1976 Annual Contribu-

tions Contract.

This opinion is being entered on

the 29th day of November, 1982 in order

B-46

to meet the Secretary's target date for

the award of the funds of November 30,

1982, and, therefore, the Court reserves

the right to correct, amplify, modify

and elaborate on its reasons in a

supplemental opinion.

United States District

Judge

At Nortolk, Virginia

November 29, 1982

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF

VIRGINIA

Norfolk Division

PORTSMOUTH REDEVELOPMENT

AND HOUSING AUTHORITY,

Plaintiff,

Vv. CIVIL ACTION

NO. 82-772-N

SAMUEL R. PIERCE, JR.,

SECRETARY OF THE UNITED STATES

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT, et al.,

Defendants.

ORDER

Upon consideration of the entire

matter and in accordance with the

contemporaneous memorandum opinion,

summary judgment is entered in favor of

the Portsmouth Redevelopment and Housing

B-48

Authority, and it is hereby ORDERED and

declared as follows:

(1) That the temporary injunction

entered by written order of this Court

on October 28, 1972 is hereby renewed

and extended and made permanent except

as the same may be modified in accor-

dance with the memorandum opinion and/or

turther order of this Court or any court

of competent jurisdiction.

(2) That Section 21l(a) of the

Housing and Community Development

Amendment of 1979 now codified as 42

U.S.C. §1437(g) (a) (1) pertaining to the

disposition of the low-income housing

projects, does not apply under these

facts to operating subsidies provided

for in the Annual Contributions Contract

entered into by the Portsmouth

B- 49

Redevelopment and Housing Authority,

Contract No. P-5515 dated July 1, 1976,

in the manner and form as maintained by

the Secretary under Regulation 24 C.F.R.

§869.105(a).

(3) That under the facts in this

case, the present application of the

Portsmouth Redevelopment and Housing

Authority now pending with the Secretary

for Comprehensive Improvement Assistance

Program Funds ("CIAP") under authority

of 42 U.S.C. §1437(1) shall be con-

sidered by the Secretary insofar as it

may pertain to projects contained within

Contract No. P-5515, dated July 1,

1976, without regard to whether or not

an amendment to said contract is entered

into by the Portsmouth Redevelopment and

Housing Authority agreeing to

B-50

continue to operate the projects con-

tained within said contract as

low-income housing for a period of ten

years after the receipt of funds in

accordance with 24 C.F.R. §869.105(a).

(4) That the Secretary, pursuant

to its Contract P-5515 with the

Portsmouth Redevelopment and Housing

Authority, continue to fund _ further

operating subsidies in accordance with

this contract, so long as funds are

available, and the Court finds that

currently there is “availability of

funds" in accordance with said contract

and in accordance with 42 4U«.S.C.

§1437(g) prior to its amendment and the

current interpretation thereof by the

Secretary in 24 C.F.R. §869.105(a).

B-51

(5) That the target date of

November 30, 1982 being tomorrow, that

the CIAP funds requested by the City of

Portsmouth in accordance with this

opinion be considered and the Secretary

make a determination without regard to

24 C.F.R. §869.105(a) as said regulation

does not pertain under the facts of this

case to the existing contract of the

Portsmouth Redevelopment and Housing

Authority with the Secretary contrary to

the interpretation placed on said

regulation but the said Secretary.

(6) That an accounting be and the

same is hereby ORDERED to make a deter-

mination of what funds the Portsmouth

Redevelopment and Housing Authority may

be entitled to and this matter shall

remain on the docket for an accounting

B-52

of said funds pursuant to the equitable

jurisdiction of this Court to authorize

an accounting of funds due and owing the

Portsmouth Redevelopment and Housing

Authority.

(7) That this order and opinion

may be modified and altered in further-

ance of the memorandum opinion and upon

further consideration inasmuch as this

date, November 29, 1982, is one day

prior to the target date of November 30,

1982, when the CIAP funds are targeted

to be awarded by the Secretary.

(8) That this matter is continued

on this docket for turther order of this

Court.

B- 53

It is so ORDERED.

/s/ Robt. G. Doumar

United States

District Judge

Norfolk, Virginia

November 29th, 1982.

B-54

APPENDIX C

PERTINENT PROVISIONS OF STATUTES

AND REGULATIONS INVOLVED

28 U.S.C. §1331 Federal Question

The district courts shall have

Original jurisdiction of all civil

actions arising under the Constitu-

tion, laws, or treaties of the

United States.

THE TUCKER ACT

28 U.S.C. §1346(a) (2)

"United States as Defendant"

(a) The district courts

shall have original jurisdiction

concurrent with the United States

Claims Court, of:

x « *

(2) Any other civil action or

Claim against the United States,

not exceeding $10,000 in amount,

founded either upon the Constitu-

tion, or any Act of Congress, or

any regulation of an executive

department, or upon any express or

implied contract with the United

States, or for liguidated or

unliquidated damages in cases not

sounding in tort, except that the

district courts shall not have

jurisdiction of any civil action or

claim against the United States

founded upon any express or implied

contract with the United States or

for liquidated oor unliquidated

damages in cases not sounding in

tort which are subject to sections

8(g) (1) and 10(a)(1) of the Con-

tract Disputes Act of 1978. For

the purpose of this paragraph, an

express or implied contract with

the Army and Air Force Exchange

Service, Navy Exchanges, Marine

Corps Exchanges, Coast Guard

Exchanges, or Exchange Councils of

the National Aeronautics and Space

Administration shall be considered

an express or implied contract with

the United States.

28 U.S.C. 1491 (a)

Claims against United States Generally

(a) (1) The United States

Claims Court shall have jurisdic-

tion to render judgment upon any

claim against the United States

founded either upon the Constitu-

tion, or any Act of Congress or any

regulation of an executive depart-

ment, Or upon any express or

implied contract with the United

States, or for liquidated or

C=2

unliquidated damages in cases not

sounding in tort. For the purpose

of this paragraph, an express or

implied contract with the Army and

Air Force Exchange Service, Navy

Exchanges, Marine Corps Exchanges,

Coast Guard Exchanges, or Exchange

Councils of the National Aeronau-

tics and Space Administration shall

be considered an express or implied

contract with the United States.

(2) To provide an_- entire

remedy and to complete the relief

afforded by the judgment, the court

may, aS an incident of and collat-

eral to any such judgment, issue

orders directing restoration to

office or position, placement in

appropriate duty or retirement

status, and correction of applica-

ble records, and such orders may be

issued to any appropriate official

of the United States. In any case

within its jurisdiction, the court

shall have the power to remand

appropriate matters to any adminis-

trative or executive body or

official with such direction as it

may deem proper and just. The

Claims Court shall have jurisdic-

tion to render judgment upon any

claim by or against, or dispute

with, a contractor arising under

section 10(a)(1) of the Contract

Disputes Act of 1978.

(3) To afford complete reliet

on any contract claim brought

C=-3

before the contract is awarded, the

court shall have exclusive juris-

diction to grant declaratory

judgments and such equitable and

extraordinary relief as it deems

proper, including but not limited

to injunctive relief. In exercis-

ing this jurisdiction, the court

snall give due regard to the

interests of national defense and

national security.

MONEY AND FINANCING--

APPROPRIATION ACCOUNTING

31 U.S.C. §1502. BALANCES AVAILABLE

(a) The balance of an appro-

priation oor fund limited for

obligation to a definite period is

available only for payment of

expenses properly incurred during

the period of availability or to

complete contracts properly made

within that period ot availability

and obligated consistent with

section 1501 of this title.

However, the appropriation or fund

is not available for expenditure

for a period beyond the period

otherwise authorized by law.

(b) A provision of law

requiring that the balance of an

appropriation or fund be returned

to the general fund ot the Treasury

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at the end of a definite period

does not aftect the status of

lawsuits or rights of action

involving the right to an amount

payable from the balance,

HOUSING ACT OF 1948

42 U.S.C. §1404a. United States Housing

Authority; right to sue,

The United States Housing

Authority may sue and be sued only

with respect to its functions under

this chapter, and sections 1501 to

1505 of this title, Funds made

available for Carrying out the

functions, powers, and duties of

the Authority (including appro-

priations therefor, which are

authorized) shall be available, in

such amounts as may from year to

year be authorized by the Congress,

for the administrative expenses of

the Authority, Notwithstanding any

other provisions of law except

Provisions of law enacted after

August 10, 1948 expressly in

limitation hereof, the United

States Housing Authority, or any

State or local public agency

administering a low-rent housing

Project assisted pursuant to this

chapter or sections 150] and 1505

of this title shall continue to

have the right to maintain an

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action or proceeding to recover

possession of any housing accommo-

dations operated by it where such

action is authorized by the statute

or regulations under which such

housing accommodations are

administered, and, in determining

net income for the purposes of

tenant eligibility with respect to

low-rent housing projects assisted

pursuant to this chapter’ and

sections 1501 to 1505 of the title,

the United States Housing Authority

is authorized, where it finds such

action equitable and in the public

interest, to exclude amounts or

portions thereof paid by the United

States Government for disability or

death occurring in connection with

military service.

UNITED STATES HOUSING ACT

OF 1937

42 U.8.C. “$1437gla) {Prior to 1979}

Annual contributions for operation of

low-income housing projects

(a) In addition to the

contributions authorized to be made

for the purposes specified in

section 1437c of this title, the

Secretary may make annual contribu-

tions to public housing agencies

for the operation of low-income

housing projects. | The

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contributions payable annually

under this section shall not exceed

the amounts which the Secretary

determines are required (1) to

assure the low-income character of

the projects involved, and (2) to

achieve and maintain adequate

operating services and _ reserve

funds. The Secretary shall embody

the provisions for such annual

contributions in a contract guaran-

teeing their payment subject to the

availability of funds. For pur-

poses of making payments under this

section, the Secretary shall

establish standards for costs ot

operation and reasonable projec-

tions of income, taking into

account the character and location

of the project and characteristics

of the families served, or the

costs of providing comparable

services as determined in accor-

dance with criteria or a formula

representing the operations of a

prototype well-managed project.

SECTION 211(a), HOUSING AND

COMMUNITY DEVELOPMENT

AMENDMENTS OF 1979

Sec. 2ll(a) Section 9(a) of the

United States Housing Act of 1937 is

amended--

(1) by inserting "(1)" after

"(a)";

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(2) by striking out "(1)" and

"(2)" in the second sentence and

inserting in lieu thereof "(A)" and

“as

(3) by inserting the following

before the period at the end of the

third sentence: ", and such con-

tract shall provide that no dispo-

sition of the low-income housing

project, with respect to which the

contract is entered into, shall

occur during and for ten years

after the period when contributions

were made pursuant to such contract

unless approved by the Secretary";

and. . « -»

42 U.S.C. §1437g(a) (1) [After 1979)

Annual contributions for operation of

lower-income housing projects (a)

determination of amounts; contract

authorization, standards of payments.

In addition to the contribu-

tions authorized to be made for the

purposes specified in section 1437c

of this title, the Secretary may

make annual contributions to public

housing agencies for the operation

of lower income housing projects.

The contributions payable annually

under this section shall not exceed

the amounts which the Secretary

determines are required (A) to

assure the lower income character

of the projects involved, (B) to

achieve and maintain adequate

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operating services and reserve

funds and (C) with respect to

housing projects developed under

the Indian and Alaskan Native

housing program assisted under this

chapter, to provide’ funds (in

addition to any other operating

costs contributions approved by the

Secretary under this section) as

determined by the Secretary to be

required to cover the administra-

tive costs to an Indian housing

authority during the development

period of a project approved

pursuant to section 1437c of this

title and until such time as the

project is occupied. The Secretary

shall embody provisions for such

annual contributions in a contract

guaranteeing their payment subject

to the availability of funds, and

such contract shall provide that no

disposition of the lower income

housing project, with respect to

which the contract is entered into,

shall occur during and for ten

years after the period when contri-

butions were made pursuant to such

contract unless approved by the

Secretary. For purposes of making

payments under this section, the

Secretary shall establish standards

for costs of operation and reason-

able projections of income, taking

into account the character and

location of the project and charac-

teristics of the families served,

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26 C.

upon

or the costs of providing compara~

ple services as determined in

accordance with criteria or a

tormula representing the operations

of a prototype well-managed proj-

ect.

REGULATION

F.R. §869.105(a). Extension of ACC

Payment of Operating Subsidy.

(a) ACC Amendment. As a condition

for the first HUD approval for

payment of Operating Subsidy with

respect to the projects under a

particular ACC for a PHA fiscal

year beginning after the effective

date of this Part, the PHA and HUD

shall enter into an amendment to

the ACC for all projects under the

ACC. This ACC amendment’ shall

provide that the ACC provisions

related to project operation shall

continue in effect with respect to

each project under the ACC for a

period of 10 years after the end of

the last PHA fiscal year for which

Operating Subsidy is paid with

respect to the project.

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