Amicus Curiae Brief — Bowen v. Massachusetts

Nos. 87-712 and 87-929

IN THE SUPREME COURT OF THE UNIT

OCTOBER TERM, 1987

OTIS R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, et al.,

Petitioners,

Vv.

COMMONWEALTH OF MASSACHUSETTS

COMMONWEALTH OF MASSACHUSETTS,

Cross Petitioner,

Vv.

OTIS R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, et al.

On Writs of Certiorari to The United States

Court of Appeals For the First Circuit

BRIEF CF AMICI CURIAE VICTORIA GRIMESY,

LISA M. MAYO, ERIKA SMITH, LUCY RICO,

MICHELLE BOLES, GINA MOSQUEDA, CENTER ON

LAW AND SOCIAL POLICY, MICHIGAN LEGAL

SERVICES, NATIONAL HEALTH LAW PROGRAM,

NATIONAL HOUSING LAW PROJECT, NATIONAL

LEGAL AID AND DEFENDER ASSOCIATION,

NATIONAL SENIOR CITIZENS LAW CENTER, SOLANO

COUNTY LEGAL ASSISTANCE, IN SUPPORT OF THE

COMMONWEALTH OF MASSACHUSETTS

RICHARD ROTHSCHILD

Attorney of Record

MARK GREENBERG

Western Center on Law and

Poverty, Inc.

3535 West Sixth St.

Los Angeles, California 90020

(213) 487-7211

(Counsel for Amici continued on next page)

Counsel for Amici (continued)

TAMARA DAHN

Solano County Legal Assistance

930 Marin St.

Vallejo, California 94590

(707) 643-0054

GILL DEFORD

National Senior Citizens Law

Center

1052 W. Sixth St., #700

Los Angeles, California 90017

(213) 482-3550

CHARLES GREENFIELD

Legal Aid Society of Santa

Clara County

210 S. First St.

San Jose, California 95113

(408) 998-5200

JANE PERKINS

RODGER SCHWARTZ

National Health Law Program

2639 S. La Cienega Bl.

Los Angeles, California 90034

(213) 204-6010

PETER REID

Legal Aid Society of San Mateo

County

298 Fuller St.

Redwood City, California 94063

(415) 365-8411

MANUEL ROMERO

National Housing Law Project

1950 Addison St., 2nd Floor

Berkeley, California 94704

(415) 548-9400

TABLE OF CONTENTS

INTEREST OF THE AMICI..... —~weTTTrTeCrrrerry 1

SUMMARY OF ARGUMENT *“eeee#e#eeesekees5nh,eee#ee#ee##e###e#*# #@# @ *ee 8 4

Be The Tucker Act does not divest a....8

District Court from exercising

jurisdiction over a state’s third

party complaint seeking federal

financial participation for costs

arising in an underlying action

between beneficiaries and the

state.

A. Course of Events in........e.-.

Grimesy v. McMahon v. Bowen

B. A third party complaint.......

seeking to enjoin denial of

federal financial

participation for costs not

yet incurred does not meet

the elements of a Tucker Act

claim.

C. A finding that the Tucker.....

Act divests a district court

of jurisdiction in Social

Security Act third party

complaint litigation would

cause severe problems of

judicial and program

administration.

ie HHS’ Position would......

result in multiple

forums and duplicative

litigation.

ii. HHS’ Position would.......31

have the effect of

creating a national

trial court and a

National Court of

Appeals for Social

Security Act litiga-

tion.

II. An expansive construction of the....36

Tucker Act raises troublesome

implications in other areas of

law affecting federal program

beneficiaries.

A. Federal Housing Programs....... 36

B. Other Federal Programs......... 45

CONCLUSION. cccccccccccccccccceceseseecess 48

ii

TABLE OF AUTHORITIES

Cases Page(s)

Amoco Prod. Co. v. Hode@l,....eeeeeeeee ee 44

815 F.2d 352 (5th Cir. 1987),

cert. petition pending

Committee for Fairness, et al.,.........36

v. Pierce,

C.A. No. 87-0324 JHP (D.D.C.)

Commonwealth of Massachusetts v......... 33

Departmental Grant Appeals Board,

815 F.2d 778 (lst Cir. 1987)

Coma AS VW. PAORORs cccccceeseccceecsececece 36

649 F. Supp. 1133 (D. Mass.

1986), aff’d, No. 87-1120 (ist

Cir., Feb. 19, 1988)

Council of Large Public Housing......... 37

Authorities v. HUD,

C.A. No. 82-1210 NHJ (D.D.C.)

BGGIMOR Vo JORGRM coc cccccceescecececss -31

415 U.S. 651 (1974)

PEAGIY GV. TBs ccc ccc cccecsecesceoecceves 39

755 F.2d 1052 (3d Cir. 1982)

Grimesy v. McMahon v. Bowen,.........pasSsim

Federal Circuit Court of Appeals

Case No. 87-1228; Ninth Circuit

Court of Appeals Case No. 87-

1745

Jiminez v. Cohen,..... eek kee sade ee ee us 12

No. 85-5285 (E.D. Pa. July 14,

1986)

Johnson v. Secretary of HUD,...........-. 44

710 F.2d 1130 (5th Cir. 1983)

iil

Kali Ve HOCKIOE, ccccccccccccccccccceseeehe

800 F.2d 971 (9th Cir. 1986)

Laguna Hermosa Corp. v. Martin,......... 21

643 F.2d 1376 (9th Cir. 1981)

Mam VW. PAGEOB, ccccccccesecoeccoss weTirTy |

803 F.2d 1552 (llth Cir. 1986)

Maryland Dept. of Human Resources v.....33

Dept. of Health and Human Services,

763 F.2d 1441 (D.C. Cir. 1985)

McCarthy v. HeintZ,.cccccccccccce wrTrrry

Civ. No. H-85-597 (MJB)

(D.Conn. Apr. 23, 1986)

Merrill Tenant Council v. HUD,........ --44

638 F.2d 1086 (7th Cir. 1981)

MOET IOOR V. BOGRIGE, ccccdccccecscecccece 12

602 F.Supp. 1482 (D.Minn. 1984),

aff’d, 787 F.2d 1285 (8th Cir.

1986)

New Mexico V. ROGAN, -ccccccccccsccccccesse 44

745 F.2d 1318 (10th Cir. 1984),

cert. denied, 471 U.S. 1065

(1985)

PORES Ve Bic ccccocceceoevcsesece setesece 39

713 F.2d 1341 (7th Cir. 1983),

subsequent decision sub nom

Cowherd v. HUD, 827 F.2d 40

(7th Cir. 1987)

Portsmouth Redevelopment & Housing...... 44

Authority v. Pierce,

706 F.2d 471 (4th Cir.), cert.

denied, 464 U.S. 960 (1983)

Rowe VW. Umited States, cccccccccccccceces 21

633 F.2d 799 (9th Cir. 1980),

cert. denied, 451 U.S. 970 (1981)

iv

Buse ll GV. TAMPERE, coccessececcocececese 39

621 F.2d 1037 (9th. Cir. 1980)

State of Minnesota by Noot v. Heckler,..33

718 F.2d 852 (8th Cir. 1983)

Femante Gee FUSCiGs VW. Baildcccecccessces 39

413 F.Supp. 389 (E.D. Pa. 1975)

TROMRS GV. PEGORI cccceccccecccececes OES

662 F. Supp. 519 (D. Kan. 1987),

appeal _ pending, Case No. 87-2121

(10th Cir.)

Topps v. Bowen,..... eoccccccccccccecssecha

No. 85-NC-0187W (N.D. Utah, Jan.

13, 1986)

Trans-Bay Engineers and Builders,....... 44

Inc. v. Hills,

551 F.2d 370 (D.C. Cir. 1976).

United SERSGS GT. BiMBpccccccccccseses 6, 20

395 U.S. 1, 3 (1968)

United States v. Mitchell,........... .

463 U.S. 206 (1983)

United States v. MottazZ,.........2.08. 6, 19

476 U.S. 834, 106 S.Ct. 2224

(1986)

GRiGeS SERS GT. BOMBRMs cc cccccccesececs 18

424 U.S. 392 (1976)

CEG VW. GRE GUE. ceccccceseetececes 29

216 Ct.Cl. 418 (1978)

Statutes

Housing and Community Development....... 39

Amendments of 1978,

12 U.S.C. §17012Z-11

Tax Reform Act of 1986, P.L. 99-514..... 14

Vv

a ren

ee ee eee iceciecepens 40

ie ee, Bs in cantnake&e ee

ee Me reer Tere eer

28 U.S.C. §1295(a) (3).

.

.

.

.

.

.

.

N

>

ES a er

0 ee. - OR ee ee ns i ectecescasendn

oe ae ee: oe

Os I ccc seeeteessnd cased

42 U.S.C. §1404a........ coerce ccccces ~ +40

Regulations

24 C.F.R. §290.25(b) (1978)........ ja cauee

36 CuP Rs GROSSO) CIOTOD 6c cdccecccsscD®

vi

INTEREST OF THE AMICI

In the pending case, the Court is

being asked to decide whether the Tucker

Act prevents a district court from exercis-

ing jurisdiction over a state’s action

challenging a disallowance of funds in the

Medicaid Program. The resolution of this

issue will have profound importance for

other Social Security Act litigation, and

may affect access to the district courts

and regional courts of appeals in many

other areas of law.

Disallowance litigation is only one

type of litigation affecting administration

of the grant-in-aid programs under the

Social Security Act. The other major type

of litigation occurs when program benefici-

aries sue a state for alleged violations of

the Act. In such instances, the state

often files a third party complaint against

the federal government, alleging that if

the state is liable to program beneficiar-

ies, the federal government should be

obligated to provide federal financial

participation in the state’s costs. The

disposition of Bowen v. Massachusetts may

have a critical effect on such third party

complaint litigation.

Amici include the plaintiffs in

Grimesy _v. McMahon v. Bowen, currently

pending before the Federal Circuit Court of

Appeals (Case No. 87-1228) and before the

Ninth Circuit Court of Appeals (Case No.

87-1745). As more fully set forth below,

the Grimesy litigation offers an example of

the implications of HHS’ Tucker Act juris-

dictional arguments when applied to third

party complaint litigation. HHS has argued

in Grimesy that when a class of welfare

recipients sues state officials for pros-

pective relief and back benefits, and the

state files a third party complaint against

HHS, the third party complaint arises in

part under the Tucker Act and may only be

heard in the United States Claims Court.

Relief for plaintiffs in Grimesy has been

stayed pending resolution of this jurisdic-

tional issue.

Amici believe that the Grimesy litiga-

tion helps illustrate some of the problems

that would result if HHS’ Tucker Act

jurisdictional argument were accepted in

this case. Applying HHS’ jurisdictional

argument to third party complaint litiga-

tion would lead to duplicative litigation

in multiple forums, and could cause chaotic

dispositions of issues arising under the

Social Security Act.

In addition to the Grimesy plaintiffs,

amici include legal services organizations

and public interest law offices who repre-

sent indigent clients in issues concerning

federal grant-in-aid programs, federal

housing programs, and other federally

funded programs for the poor.

Amici have an interest in this case

because the result may affect Social

Security Act litigation whenever benefici-

aries sue a state and the state initiates a

third party complaint against HHS. Amici

believe the position being urged by HHS

would result in countless’ procedural

problems for Social Security Act and

related litigation.

Amici also fear that the expansive

view of the Tucker Act urged by HHS could

adversely affect access to the federal

courts in other areas affecting the poor.

HHS’ Tucker Act argument, if accepted,

would shift much of the nation’s litigation

on the rights of beneficiaries and states

in federal grant-in-aid programs to the

United States Claims Court and the Federal

Circuit Court of Appeals. This would

create a morass of procedural and substan-

tive problems. Amici wish to suggest some

of the most troublesome ramifications of

the position espoused by HHS.

e) G N

The broad construction of the Tucker

Act being urged by the United States raises

serious problems in contexts other than

Medicaid disallowances.

The implications of the broad con-

struction are illustrated by Social Secur-

ity third part complaint litigation. This

is litigation where beneficiaries sue a

state for violation of the Social Security

Act, and the state files a third party

complaint against HHS. The third party

complaint typically seeks to insure federal

financial participation in the costs of any

orders issued by the court in the underly-

ing litigation.

In Grimesy v. McMahon, now pending

before the Federal and Ninth Circuits, HHS

contends that a state’s third party com-

plaint in such a case arises in part under

the Tucker Act. This contention is incon-

sistent with established Tucker Act prece-

dent. A Tucker Act claim based on a

federal statute must seek a money judgment

based on a statute that mandates compen-

sation for damages’ sustained. United

States _ v. Mitchell, 463 U.S. 206, 216-17

(1983). A state’s third \party complaint

alleges no wrongful withholding of funds,

and no wrongful conduct for which the state

is entitled to “compensation” for “damages

sustained.” Moreover, a Tucker Act claim

must be for “actual, presently due money

damages”, ite Ss Vv. ing, 395 U.S.

1, 3 (1968), based on the past acts of the

federal government. tate Vv.

Mottaz, 476 U.S. 834, 106 S.Ct. 2224, 2234

(1986). A state’s third party complaint

cannot allege an entitlement to any actual,

presently due amount, and cannot allege

entitlement based on any past acts of the

United States.

If the Tucker Act were broadly con-

strued to divest district courts of juris-

diction over state third party complaints

in Social Security litigation, there would

be two major undesirable consequences.

First, such a result would ensure bifurca-

tion of cases, since the Claims Court could

not exercise jurisdiction over the case

between beneficiaries and the state. The

bifurcation would create inefficiency,

confusion, and potential chaos at both the

trial and appellate stages.

Second, such a result would shift much

Social Security Act litigation to the

Claims Court and Federal Circuit Court of

Appeals. Neither court has expertise in

Social Security Act litigation. There is

no evidence of Congressional intent to

shift such cases to these courts. It would

be difficult for low income beneficiaries

to regularly litigate in Washington. It

would be inappropriate to shift the fre-

quently controversial litigation brought by

indigent claimants to a trial court lacking

the protections of the Article III

judiciary. If the Federal Circuit were

made a de facto national court of appeals

for Social Security Act litigation, there

would be increased burdens on both that and

this court.

Finally, the government has recently

made an even more expansive Tucker Act

jurisdictional argument in the context of

federal housing programs. The United

States has suggested that an action for

declaratory and injunctive relief arises

under the Tucker Act when it has financial

consequences, even when the plaintiffs do

not seek money. Thomas v. Pierce, 662 F.

Supp. 519 (D. Kan. 1987) appeal pending,

No. 87-2121 (10th Cir. 1988). This argu-

ment, if accepted, could convert virtually

any case in which program beneficiaries

allege illegal conduct by the United States

into a Tucker Act action. The Court should

reject this major alteration of jurisdic-

tion in the federal courts.

I. The Tucker Act does not

divest a District Court

from exercising juris-

diction over a state’s

third party complaint

seeking federal finan-

cial participation for

costs arising in an

underlying action

between beneficiaries

and the state.

Apart from disallowance cases, there

is another major area of litigation con-

eerning grant-in-aid programs under’ the

Social Security Act. This other category

arises when program beneficiaries sue a

state for alleged violation of the Social

Security Act. In such cases, the states

often file a third party complaint against

HHS, alleging that has been following the

directives of HHS, and that if the state

practice violates federal law, so do HHS’

directives. Typically, the state seeks

injunctive relief to prohibit HHS’ from

sanctioning the state for compliance with

court orders, and to require HHS to provide

federal financial participation in the cost

of compliance with the court’s order.

Amici believe this category of cases

is distinguishable from disallowance

litigation. Even if this Court holds that

the Claims Court has exclusive jurisdiction

over disallowance cases, the Court could

still make clear that state claims in third

party complaint litigation do not arise

under the Tucker Act. Alternatively, the

Court could reserve the issue for another

day. However, amici fear that an expansive

construction of the Tucker Act here could

encourage lower courts to find the Tucker

Act precludes district court jurisdiction

over third party complaints in these cases.

However the Court decides this case,

there are considerations in both Tucker Act

jurisprudence and in the practical reali-

ties governing Social Security Act litiga-

tion that should lead to a holding that

district court jurisdiction in these third

party complaint cases is not limited by the

Tucker Act.

In the following section, amici will

describe the facts of Grimesy v. McMahon v.

Bowen, an example of such third party

complaint litigation. They will then

explain both why this category is disting-

uishable from disallowance litigation, and

why an expansive construction of the Tucker

Act in the disallowance context could cause

- 10 =

severe damage in third party complaint

litigation. The difficulties posed by

applying an expansive view of Tucker Act

jurisdiction in third party complaint

litigation help to demonstrate some of the

disturbing implications of HHS’ argur.znts

in this case.

A. Course of Events in

Grimesy _v. McMahon v.

Bowen

The Grimesy litigation! began when

AFDC Program beneficiaries sued California

officials for injunctive relief and back

benefits based on an illegal program

practice.2 J.A. at 23. Plaintiffs filed

1 The following description is based

on the pleadings and orders, as they appear

in the Joint Appendix ("J.A.”) on file in

Federal Circuit No. 87-1228.

2 AFDC is a cooperative federal

state program of assistance to families

with needy children, pursuant to Title IV-A

of the Social Security Act, 42 U.S.C. §601

et seq.

The legal issue in Grimesy concerned

counting of income in AFDC. California,

when determining AFDC eligibility and

benefits for families in which the parent

was between the age of 18 and 19, “deemed

(continued...)

- ll -

suit in state court. The state removed the

case to the United States District Court

for the Northern District of California.

J.A. at 18. Since the state engaged in its

practice at the direction of the Secretary

of Health and Human Services (HHS), the

state filed a third party complaint against

HHS. J.A. at 85-87. The third party

complaint alleged that AFDC is a coopera-

tive federal-state program and that the

state is entitled to receive federal

2(...continued)

available” the income of the parents of the

18 year old parent, regardless of whether

the parent was still in school. Plaintiffs

contended that deeming of grandparent

income when an eighteen year old parent was

not in school or not expected to graduate

by age nineteen violated both the Social

Security Act, 42 U.S.C. §602(a)(39), and

state law. The district court, and every

court that addressed the issue concluded

that the challenged practice violated

federal law. See J.A. at 90-94; Kali v.

Heckler, 800 F.2d 971 (9th Cir. 1986);

Morrison v. Heckler, 602 F.Supp. 1482

(D.Minn. 1984), aff’d, 787 F.2d 1285 (8th

Cir. 1986); Jiminez v. Cohen, No. 85-5285

(E.D. Pa. July 14, 1986); McCarthy v.

Heintz, Civ. No. H-85-597 (MJB) (D. Conn.

Apr. 23, 1986); Topps v. Bowen, No. 85-NC-

0187W (N.D. Utah, Jan. 13, 1986).

- 12 -

financial participation (FFP) for expendi-

tures made pursuant to an approved state

plan. The state sought an order providing

that if it were liable to plaintiffs, HHS

be required to provide FFP for the AFDC

program expenses incurred as a result of

compliance with the court’s order. J.A. at

87. HHS did not object to the district

court’s jurisdiction.

On June 25, 1986, the district court

issued an order holding both the state’s

practice and the federal regulation on

which the state practice was based violated

the Social Security Act and were invalid.

J.A. at 90-94.: The court enjoined the

state practice, and enjoined HHS ' from

taking any action whatsoever against the

state by way of compliance proceedings,

audit disallowance or otherwise because of

the state’s compliance with the order.

J.A. at 93. Both the state and HHS ap-

pealed to the United States Court of

Appeals for the Ninth Circuit. (Ninth Cir.

- 13 -

Cases No. 86-2403, 86-2559). Each defend-

ant subsequently dismissed their appeal,

after the enactment of legislation which

barred the practice plaintiffs challenged

in the litigation. 2

On July 23, 1986, the district court

issued a subsequent order holding class

members were entitled to corrective pay-

ments for the benefits lost while the

state’s unlawful practice was in effect.

J.A. at 95-96.

On December 22, 1986, the district

court entered an order implementing a

procedure for provision of the corrective

benefits. J.A. at 1-8. The order included

a paragraph enjoining HHS from sanctioning

the state for its compliance with the order

or denying federal financial participation

for the administrative and program costs

3 On October 22, 1986, Congress

enacted the Tax Reform Act of 1986, P.L.

99-514. The Tax Reform Act amended 42

U.S.C. §602(a) (39) to prohibit any deeming

of grandparents’ income when an eighteen

year old parent seeks AFDC benefits.

- 14 -

incurred in complying with the order. J.A.

at 8. The court also issued an order

denying HHS’ motion to reconsider its

orders of June 25 ana July 23. J.A. at 9-

15.

HHS then filed notices of appeal in

both the Federal and Ninth Circuits. It

alleged that the part of the state’s third

party complaint seeking federal financial

participation in the cost of retroactive

benefits arose under the Tucker Act, and

that therefore the state’s claim should

have been filed in the United States Claims

Court. See Fed. Cir. Case No. 87-1228, HHS

Substitute Br., at 1-2. HHS contends that

the Federal Circuit has exclusive jurisdic-

tion over the question, and that its Ninth

Circuit appeal is only protective in

nature. HHS Substitute Br., at i. The

jurisdictional issues are currently pending

before both courts.

To date, HHS has limited its argument

to contending that the state’s third party

- 15 -

complaint should have been heard in the

Claims Court, and appealed to the Federal

Cireuit. However, HHS has not precluded

the possibility of arguing that when a

state’s third party complaint arises in

part under the Tucker Act, the Federal

Circuit should exercise exclusive jurisdic-

tion over the entire underlying

Litigation. 4

4 HHS’ Federal Circuit Brief in

Grimesy contains this suggestive text:

"This Court has also held that exclu-

sive appellate jurisdiction in the Federal

Circuit lies over appeals including non-

Tucker Act issues that would have been

decided by the regional courts of appeals

had they not appeared in the same case as a

Tucker Act claim. It is beyond cavil that

the plaintiffs’ petition for relief from

California, as contrasted with the Califor-

nia’s third party complaint against the

federal government, cannot be construed as

coming within the scope of the Tucker Act.

Nevertheless, this Court has stated that

where the jurisdiction of the district

court “was based, in whole or in part” (28

U.S.C. 1295(a)(2)) on a non-tax Tucker Act

Claim, the entire appeal is within the

exclusive jurisdiction of the Federal

Circuit, no matter what other claims have

been joined with the Tucker Act claim in

the complaint. Perhaps, although this

Court need not consider that question

today, this principle would extend so far

(continued...)

- 16 -

Disposition of Grimesy in the Federal

Circuit has been stayed pending resolution

of this case; HHS’ corresponding request to

the Ninth Circuit is pending. See Fed.Cir.

Case No. 87-1228, Order, January 19, 1988.

B. A third party complaint

seeking to enjoin

denial of federal

financial participation

for costs not yet

incurred does not meet

the elements of a

Tucker Act claim.

Whether or not a disallowance case

arises under the Tucker Act, a third party

complaint seeking to require the federal

government to share in the costs of com-

pliance with a court order is not a claim

arising under the Tucker Act.

In United States v. Mitchell, 463 U.S.

206 (1983), this Court restated the test

4(...continued)

as to bring within the jurisdiction of this

Court non-Tucker Act claims raised by other

parties in a multiple party cases, such as

this one.”

HHS Substitute Br., at 30, n.10 (citations

omitted).

-17 -

for determining whether claims founded on a

federal statute are subject to Tucker Act

jurisdiction:

The claim must be one

for money damages

against the United

States, and the claim-

ant must demonstrate

that the source of

substantive law he

relies upon ’can fairly

be interpreted as

mandating compensation

by the Federal Govern-

ment for the damages

sustained.’

463 U.S. at 216-17, quoting United States

v. Testan, 424 U.S. 392, 400 (1976) (cita-

tions omitted).

A third party complaint seeking to

require HHS to share in the cost of com-

pliance with any court orders issued in an

underlying action does not meet the Mit-

chell test. A complaint in such a case

does not seek “compensation” and does not

allege any right to “damages.” It does not

allege wrongful withholding of funds, or

any wrongful conduct, by HHS. It is a

contingent request that if the state is

- 18 -

held liable, the court order HHS to provide

federal participation for all AFDC program

expenses incurred as a result of compliance

with the court’s order.

In substance, such a complaint seeks

declaratory relief. The state alleges no

present injury, since there has been no

determination of state liability, and no

statement that HHS would refuse to provide

federal participation for those costs. The

state simply seeks a declaration of rights

against HHS in case of state liability.

The state does not seek “damages” within

any ordinary meaning of the word.

Moreover, “damages for the [federal]

Government’s past acts” is “the essence of

a Tucker Act claim for monetary relief.”

United States v. Mottaz, 476 U.S. 834, 106

S.Ct. 2224, 2234 (1986) (emphasis added).

In the third party complaint, the state

does not sue HHS for losses previously

incurred by the state. The claim is made

before any determination that the state is

- 19 -

liable to program beneficiaries. The claim

is entirely contingent: that if the court

holds the state liable to program benefi-

ciaries, the court should require HHS to

provide federal financial participation for

the resulting costs.

Further, under United States v. King,

395 U.S. 1, 3 (1968), a Tucker Act claim

must be for “actual, presently due money

damages.” A state’s third-party complaint

can allege no certain sum. This is not a

matter of artful pleading. No amount is

“actually, presently due” from HHS. The

district court’s final order cannot specify

an actual, presently due amount, because

the court cannot adjudicate an amount.

Typically, the state will not know the

amount of its claim for federal financial

participation until class members complete

a claiming process. This may be months or

years after completion of proceedings on

the merits of the case. The court can only

resolve the principle of entitlement to

- 20 -

federal financial participation. This is

far from the “actual, presently due”

standard of King.

The fact that a declaration of a

state’s right to federal financial partic-

ipation may eventually lead to the payment

of money is not enough to make it a claim

for money damages. "A district court does

not lose jurisdiction over a claim for non-

monetary relief simply because it may later

be the basis for a money judgment.” Laguna

Hermosa Corp. v. Martin, 643 F.2d 1376,

1379 (9th Cir. 1981) (action seeking

declaration of contract rights against

United States not a Tucker Act action);

Rowe v. United States, 633 F.2d 799 (9th

Cir. 1980), cert. denied, 451 U.S. 970

(1981) (action to compel award of oil and

gas leases not a Tucker Act claim).

To date, HHS has limited its claim to

asserting that the portion of the third

party complaint seeking federal participa-

tion in the cost of back benefits arises

- 21-

under the Tucker Act. However, it seems

impossible to draw a viable distinction

between the claims for participation in

prospective relief and back benefits. In

both situations, the claim has’ fiscal

consequences, but does not meet any tradi-

tional notion of money damages.

We are aware of no case in which an

action seeking to direct the government to

pay an unspecified amount at an unspecified

time in the future for expenses not yet

incurred was held to arise under the Tucker

Act. In this sense, the third party com-

plaint is distinguishable from a disal-

lowance case, where a state seeks to

recover a sum certain based on a specific

past act of HHS. However this Court

resolves the disallowance issue in the

pending case, the Court’s opinion should

make clear that the Tucker Act does not

extend to the circumstance of a state’s

third party complaint against HHS in

beneficiary/state litigation.

- 22 -

.

:

C. A finding that’ the

Tucker Act divests a

district court of

jurisdiction in the

Social Security Act

third party complaint

litigation would cause

severe problems of

judicial and program

administration.

There are strong policy reasons to

resolve any uncertainty against finding

that the Tucker Act divests district courts

from jurisdiction in Social Security Act

third party complaint litigation. To the

extent that a finding that the district

court is without jurisdiction in the

disallowance context could lead to a

comparable result in the third party

complaint context, these policy reasons

should militate against finding the dis-

trict court divested from jurisdiction in

the case before the court.

Initially, it is important to recog-

nize that the real dispute is not about

whether issues concerning Social Security

Act program administration are subject to

judicial review; it is about where review

- 23 -

should take place. If the position of the

states and program beneficiaries is adopt-

ed, a district court can hear the state’s

third party complaint along with the

primary case between beneficiaries and the

state, and all issues can be appealed to

the appropriate regional circuit. If HHS

is correct, the state’s third party com-

plaint must go to the Claims Court, with

exclusive appellate jurisdiction in the

‘Federal Circuit Court of Appeals. 28

U.S.C. §1295(a) (3).

Adoption of HHS’ position would have

two undesirable policy impacts: it would

lead to fragmented litigation in multiple

forums, and it would shift many of the most

fundamental issues regarding beneficiary

rights and operation of federal grant-in-

aid programs from district courts) and

regional courts of appeals to the Claims

Court and the Federal Circuit Court of

Appeals. These effects become apparent by

considering the impact of a finding that

- 24 -

j

the Claims Court has exclusive jurisdiction

over part or all of a state’s third-party

complaint.

i. HHS’ Position would

result in multiple

forums and duplicative

litigation.

HHS’ position would result in duplica-

tive litigation in multiple forums whenever

program beneficiaries seek prospective and

retroactive relief, and the state files a

third party complaint against HHS.

If a court accepted HHS’ position that

a state claim for FFP for back benefits

must be heard in the Claims Court, there

would be two possible procedural results.

Either the third party complaint would be

bifurcated and the back benefits part sent

to the Claims Court, or the entire third

party complaint sent to the Claims Court.

As all parties seem to recognize, bifurca-

tion is undesirable because it results in

duplication, confusion, and difficult

issues of collateral estoppel. However,

even if the entire third party complaint is

- 25 -

sent to the Claims Court, there will still

be an unresolvable bifurcation problem.

First, consider the effects of bifur-

cating the third party complaint. Since

issues concerning back benefits are usually

substantially identical to those concerning

prospective relief, bifurcation at the

district court/Claims Court level would

merely waste resources. Either one court

would consider itself bound by the decision

of the other, or each court would consider

itself free to consider the merits of the

underlying dispute without regard for the

other. In either case, no policy would be

served by this duplicative litigation.

Even if one court deferred to the

other at the trial court level, what would

happen on appeal? Conceivably, there could

2 Grimesy is atypical in one respect:

HHS raised independent defenses to whether

it must join in the cost of paying back

benefits while no longer defending on the

merits of the case. Usually, the legal

issues that determine entitlement to

prospective relief also determine entitle-

ment to back benefits.

- 26 -

be appeals from either beneficiaries or the

state in the primary case; those appeals

would go to the regional court of appeals.

There could also be appeals from either HHS

or the state concerning the third party

complaint. Would appeals concerning

prospective relief go to the regional

circuit and appeals concerning retroactive

relief go to the Federal Circuit? If so,

how would the two courts of appeal be

expected to administer simultaneous appeals

on overlapping issues involving the same

case? The possibilities for conflict are

apparent.

The Grimesy litigation demonstrates

that these concerns are real. In Grimesy,

HHS initially appealed the order for

prospective relief to the Ninth Circuit.

It only dismissed the appeal after it

concluded that congressional legislation

made its appeal moot. Six months after

appealing the prospective order to the

Ninth Circuit, HHS appealed the order

- 27 -

concerning retroactive benefits to the

Federal Circuit.© If the first appeal were

still pending, would HHS expect’ both

appeals to proceed simultaneously? If the

legality of HHS’ regulation was relevant to

both prospective and retroactive relief,

could both appellate courts decide it?

Should one court defer to the other?

Moreover, what if the beneficiaries had ob-

jected to some part of the order for

retroactive relief, and also appealed?

What if the state appealed either the order

for prospective relief, or retroactive

relief, or both? Both appellate courts

would be asked to resolve identical issues

with overlapping parties in components of

the same case at the same time. The pos-

sibilities for chaos are tremendous under

HHS’ construction.

The alternative to bifurcating the

6 HHS also appealed this order to the

Ninth Circuit, but (subsequently) denomi-

nated this appeal as a “protective” appeal.

- 28 -

Oe Sew Fg

i ee >.

:

3

a

state’s third party complaint would be for

the Claims Court to exercise pendent

jurisdiction over the entire third party

complaint. But this would not resolve the

procedural morass.

Necessarily, the third party complaint

would be bifurcated from the beneficiaries’

action against the state, because the

Claims Court could not exercise pendent

party jurisdiction over the beneficiaries’

action. See Uram v. United States, 216 Ct.

Cl. 418, 420 (1978) (Court of Claims cannot

render judgment against third party unless

that party makes claim for money against

U.S. or U.S. makes claim for money against

third party).

Assuming the third party complaint was

bifurcated, which action would proceed

first? Logically, the beneficiaries’

action should proceed, since the state’s

third party complaint is wholly contingent.

But the state would undoubtedly contend

that it is :-rely following the directions

- 29 -

ee es ee ee

Na a srt ge 9)

of the federal government, and that the

real dispute is between beneficiaries and

HHS. Since HHS is no longer a party in the

district court, and beneficiaries cannot be

parties in the Claims Court, there is no

forum for resolution of their dispute.

Whichever case proceeded first, there

would still be the problem of appellate

sequence and duplication. Would there be

simultaneous appeals in the regional and

Federal Circuit? Should one defer to the

other? The only alternatives would be for

one appellate court to rubber-stamp the

other’s decision, or risk conflicting

decisions by two appellate courts in the

same case. 7

7

Under some circumstances, there

might even be three appellate courts

involved in the same case. In the Grimesy

litigation, plaintiffs initially filed

their complaint for prospective relief and

back benefits in state court, and the state

removed the action to federal court. The

state agreed to waive the Eleventh Amend-

ment, so that the federal court could issue

any back benefit award. Had the state not

done so, the federal court would have

lacked jurisdiction over the back benefit

(continued...)

- 30 -

;

These convoluted procedural difficul-

ties are not hypothetical. Grimesy illus-

trates how they can and will occur if the

state third party complaint is held to be,

in whole or in part, beyond the juris-

diction of the district court.

ii. HHS’ Position would

have the effect of

creating a national

trial court and a

National Court of

Appeals for Social

Security Act litiga-

tion.

HHS’ position is also _ undesirable

because it would have the effect of cen-

tralizing much Social Security Act litiga-

tion in the Claims Court and _ Federal

Circuit Court of Appeals. If the basic

issues concerning operation of grant-in-aid

programs are all centralized in the Claims

7(...continued)

claim, Edelman v. Jordan, 415 U.S. 651

(1974), and would have had to remand that

claim to state court. At that point, the

case could have generated decisions on

closely related issues by the state appel-

late court, regional circuit court of

appeals, and Federal Circuit Court of

Appeals.

- 31-

"

0 na calle Aan ttl thinte i Bee

hwo tw

ee ee ee ee

a ee

Hy

{

:

f

Ps

:

}

Court and Federal Circuit, the federal

judicial structure will be seriously

disrupted.

First, neither the Claims Court nor

the Federal Circuit Court of Appeals

purport to have expertise in issues con-

cerning the grant-in-aid programs under the

Social Security Act. In contrast, the

district courts and regional courts. of

appeals have decades of experience in

considering such issues.

Second, there is no evidence that

Congress, in enacting the Federal Courts

Improvement Act of 1982, P. L. No. 97-164,

96 Stat. 25, suggested any expectation that

the Claims Court and the Federal Circuit

Court of Appeals would now become the

primary forums for resolution of issues

under the Social Security Act grant-in-aid

programs. Indeed, there is not even a

reference to such a possibility in the

legislation or its history.®

Third, the beneficiaries of Social

Security Act programs ce typically the

poorest members of our society. They would

be the most disadvantaged if they were

routinely compelled to litigate appellate

claims in Washington, D.C. When low income

people can obtain representation in civil

matters, the representation is typically

from legal services organizations with very

limited budgets. If significant numbers of

the cases necessitate the expense of

8 it appears that all of the cases

considering the applicability of the Tucker

Act to the Social Security Act grant-in-aid

programs have arisen after the enactment of

the Federal Courts Improvement Act of 1982.

See, e.g., Commonwealth of Massachusetts v.

Departmental Grant Appeals Board, 815 F.2d

778 (lst Cir. 1987); Maryland Dept. of

Human Resources v. Dept. of Health and

Human Services, 763 F.2d 1441 (D.C. Cir.

1985); State of Minnesota by Noot vv.

Heckler, 718 F.2d 852 (8th Cir. 1983). If

the United States had envisioned that the

Claims Court and Federal Circuit would

become major forums for Social Security Act

litigation, it is hard to understand why

the suggestion was never made to Congress

while the FCIA was under consideration.

- 33 -

litigating in Washington, the cost will

necessarily reduce resources available for

representation in other cases. The origi-

nal rationale for allowing concurrent

district court jurisdiction over Tucker Act

claims not exceeding $10,000 was so that

litigants with small claims not be forced

to expend the resources of litigating in

Washington, D.C. ° It is fundamentally

inconsistent with that goal to shift Social

Security Act litigation away from local

courts to centralized adjudication in

Washington.

Fourth, the Claims Court is not only

an inconvenient forum for indigent plain-

tiffs; it also lacks the protections of an

Article III court. Its members do not have

life tenure, and depend on executive

renomination and Congressional reapproval

to maintain their positions. This makes it

a particularly inappropriate forum for low

income persons, who must often bring

politically controversial suits seeking to

- 34 -

protect or establish their rights.

Finally, there may be some areas of

law where the advantages of resolution ina

Single forum outweigh the advantages of

presenting the issues to various district

and appellate courts, but Social Security

Act litigation is not such ane area.

Numerous issues regularly arise under the

Act regarding eligibility, benefits,

financial determinations, and local admin-

istrative practices. Under our federal

appellate structure up to now, it has been

possible for these issues to be litigated

in various forums, so that this Court need

only address the issues where conflicts

arise in the circuits, or the issues are of

exceptional importance. If these cases are

centralized in the Claims Court and Federal

Circuit, then there will be no opportunity

for the winnowing process that normally

occurs as issues are heard by a number of

courts. Instead, this Court will be forced

to either intervene after initial decisions

- 35 -

by a single appellate court, or to leave in

the hands of that single court fundamental

decisions on areas of crucial concern to

low income citizens who rely on the Social

Security Act programs.

II. An expansive construc-

tion of the Tucker Act

raises troublesome

implications in other

areas of law affecting

federal program benefi-

ciaries.

A. Federal Housing Programs

The federal government’s contention

that any claim that may result in money

damages belongs in the Claims Court is not

limited to the Social Security Act disal-

lowance context. The government has also -

raised the Tucker Act issue in cases

involving claims by program beneficiaries

under the nation’s housing laws. ? It is

9 See Thomas v. Pierce, 662 F. Supp.

519 (D. Kan. 1987), appeal pending, Case

No. 87-2121 (10th Cir.); Mann v. Pierce,

803 F.2d 1552 (11th Cir. 1986); Conille v.

Pierce, 649 F. Supp. 1133 (D. Mass. 1986),

aff’d, No. 87-1120 (list Cir., Feb. 19,

1988); Committee for Fairness, et al., v.

Pierce, C.A. No. 87-0324 JHP (D.D.C.);

(continued...)

- 36 -

appropriate for the Court to be aware of

both the sweeping nature of the govern-

ment’s efforts to redefine the federal

judicial scheme, and of the dramatic impact

such alteration would have on the right of

program beneficiaries to seek redress for

grievances historically entertained by the

district courts.

Housing cases are often brought in

federal district court by tenants or

homeowners seeking judicial review of a

U.S. Department of Housing and Urban

Development (HUD) or Farmers Home Admini-

stration (FmHA) decision which has adverse-

ly impacted on their right to receive

specified housing benefits under the

federal housing statutory scheme.!9 while

the litigation may result in the expendi-

9(...continued)

Council of Large Public Housing Authorities

v. HUD, C.A. No. 82-1210 NHJ (D.D.C.).

10 see cases cited in n.9, supra, and

n.12, infra.

- 37 =

ture of monies by HUD or FmHA, this result

is secondary to the primary goal of estab-

lishing the federal agency’s duty to act in

a specified manner. Thus, the immediate

and prerequisite relief sought is declara-

tory or injunctive relief.

Nevertheless, as demonstrated below,

the federal government’s position has been

that the plaintiffs must pursue such claims

in the Claims Court because the claim will

have financial consequences, and that no

other independent source of waiver of

sovereign immunity exists or is applicable.

The following case is illustrative.

In Thomas v. Pierce, 662 F. Supp. 519

(D. Kan. 1987) appeal pending, No. 87-2121

(10th Cir. 1988), low-income tenants sought

judicial review of HUD’s actions-in selling

a low-income housing project with only

partial subsidy, effectively removing two-

thirds of the units from lower-income

- 38 -

use.11 As in numerous similar cases heard

by federal district courts since 1975,12

plaintiffs sought judicial review pursuant

to the Administrative Procedure Act (APA)

11 In 1978 Congress enacted legisla-

tion establishing standards governing the

disposition of HUD-owned multi-family

properties. See Housing and Community

Development Amendments of 1978, 12 U.S.C.

§1701z-11. HUD implemented regulations

requiring, inter alia, that formerly

subsidized projects, such as the one in

Thomas, be sold in a manner to ensure their

preservation as decent and affordable

housing. 24 C.F.R. §§290.25(b), §290.27(b)

(1987).

12 Both before and after passage of

the Housing and Community Development

Amendments of 1978, HUD’s property disposi-

tion decisions have been challenged in

court, with cases brought before the 1978

legislation claiming that HUD had not

complied with the National Housing Act or

national housing goals. See Russell v.

Landrieu, 621 F.2d 1037 (9th. Cir. 1980);

Tenants for Justice v. Hill, 413 F.Supp.

389 (E.D. Pa. 1975). After Congress

codified and expanded these judicial

holdings in 1978, HUD’s actions continued

to be challenged. See Frisby v. HUD, 755

F.2d 1052 (3d Cir. 1985); Paris v. HUD, 713

F.2d 1341 (7th Cir. 1983), subsequent

decision sub nom Cowherd v. HUD, 827 F.2d

40 (7th Cir. 1987). Until Thomas, the

federal government had not taken the

position that tthe Tucker Act _ provided

exclusive jurisdiction to the Claims Court

for claims under the property disposition

provisions of the Act.

- 39 -

(S$ U.S.C. § 706). Plaintiffs requested

declaratory and injunctive relief to

require HUD to comply with the statute and

regulations, and require HUD to repurchase

the project and reprocess it with the

required rental subsidies.13

In Thomas, the District Court dis-

missed the case, accepting the federal

government’s contention that neither 5

U.S.C. §702 of the APA nor 12 U.S.C. §1702

or 42 U.S.C. §1404 of the housing statutes

waived HUD’s sovereign immunity. Plain-

tiffs appealed to the Tenth Circuit, where

the federal government for the first time

contends that the APA waiver is also

unavailable because under the Tucker Act,

the Claims Court is available for plain-

tiffs’ claim.1}4 If the government’s

13 plaintiffs in Thomas have also

relied on the waiver of sovereign immunity

provided in 12 U.S.C. §1702 and 42 U.S.C.

§1404a of the Housing Acts for HUD’s

actions with respect to the Section 8 program.

14 yUD’s brief in Thomas, filed in the

Tenth Circuit on January 14, 1988, states,

(continued...)

- 40 -

position prevails in Thomas, plaintiffs

will be forced to litigate their claim for

declaratory and injunctive relief in the

Claims Court, with any appeal being heard

in the Federal Circuit. Such a result

14(.. continued)

at p.25:

From an objective analysis of

what the suit will require the

sovereign to do, the relief

sought is akin to money damages.

It will require that HUD obtain

(from somewhere) extensive

additional money to pay for 88

more Section 8 units over fifteen

years. Needless to say, from the

sovereign’s perspective, this

appears to be relief in the form

of money damages for which it has

not consented to be sued in this

forum.

In footnote 2 on page 25, HUD elaborates:

Under the Tucker Act, 28 U.S.C.

§1491, the United States has

consented to suit with respect to

certain claims for money damages.

. 8 ‘the Court of Claims is

further empowered under the 1972

amendments to 28 U.S.C. §1491 to

award limited equitable relief in

order to ‘provide an entire

remedy and to complete the relief

afforded by the judgment...’

Thus, the Court of Claims could

afford appellants the relief

sought. (Emphasis added.)

‘ - 41 -

would run contrary to the accepted and

well-established practice of bringing such

entitlement or grant-in-aid lawsuits in the

district courts.15

Thomas represents one step beyond the

position being espoused by HHS in its brief

in this case. Here, HHS asserts that a

claim for prospective relief should be

heard in the Claims Court when it is joined

with an action challenging a disallowance,

because the disallowance action seeks the

payment of money. In Thomas, the United

States asserts that a claim for declaratory

and injunctive relief must be heard in the

Claims Court if the relief sought has

financial consequences for the government,

even though plaintiffs do not seek money

from the United States. This view of

“money damages” would mean that virtually

any case in which program beneficiaries

seek injunctive relief to correct wrongful

conduct by the United States would be held

15 See n.12, supra.

- 42 -

to belong in the Claims Court.

The Thomas position is wholly incon-

sistent with Congressional intent. There

is no evidence of Congressional intent to

shift jurisdiction for cases brought by

program beneficiaries involving entitlement

Or grant-in-aid programs to the Claims

Court. Indeed, the history of housing

program beneficiary litigation demonstrates

that until recently, it was accepted

practice that such cases could properly be

brought in the district courts by a waiver

of sovereign immunity provided by either

the APA or housing acts. Yet, the govern-

ment would have the Court turn the APA on

its head by depriving district courts of

jurisdiction in cases where there is a

-prospect of monetary expenditures as a

result of complying with the court’s

declaratory or injunctive relief.

Moreover, a review of the litigation

arising under federal housing laws demon-

strates that the federal government seeks

- 43 -

to deprive district courts of jurisdiction

over any housing case where there will be

financial consequences of complying with

judicially imposed declaratory or injunc-

tive relief, regardless of the source of

authority relied upon by plaintiffs for

waiver of sovereign immunity.1l®

16 Despite the government’s acknow-

ledgement on page 38, n.32 of their brief

that there are statutes in which Congress

has provided a separate waiver of sovereign

immunity to pursue monetary claims, the

government has refused to recognize that

the waivers contained in 12 U.S.C. §1702 or

42 U.S.C. §1404 of the Housing Acts as

sufficient to afford district court juris-

diction over housing cases with monetary

consequences. See, e.g., Johnson vy.

Secretary of HUD, 710 F.2d 1130 (5th Cir.

1983); Merrill Tenant Council v. HUD, 638

F.2d 1086, 1090 (7th Cir. 1981); Trans-Bay

Engineers and Builders, Inc. v. Hills, 551

foam see (8.C, Cir. 1976). Propelled by

decisions such as Amoco Prod. Co. v. HKodel,

815 F.2d 352 (5th Cir. 1987), cert. peti-

tion pending; New Mexico v. Regan, 745 F.2d

1318 (10th Cir. 1984), cert. denied, 471

U.S. 1065 (1985); and Portsmouth Redevel-

opment & Housing Authority v. Pierce, 706

F.2d 471 (4th Cir.), cert. denied, 464 U.S.

960 (1983); and as demonstrated in Thomas,

Supra, the government apparently intends to

pursue its position in every housing case

where the possibility of monetary conse-

quences exists. This policy is consistent

with the government’s contention in this

case that the “exclusive jurisdiction of

(continued...)

- 44 -

B. the deral Programs

Program beneficiaries of a myriad of

federal entitlement and grant-in-aia

programs seek enforcement of rights and

benefits under such programs by challenging

conduct of federal agencies in the federal

district courts. In programs ranging from

food stamps, education, social security,

school lunches, to health and welfare

benefits, the federal reporters are filled

with judicial decisions construing the

rights of beneficiaries under such programs

in cases heard by the district courts and

regional courts of appeals.

The government’s' position, as it

emerges from this case, Grimesy, and

Thomas, would fundamentally alter the prac-

tice of having such actions heard in

district courts, with appeals to the

16(. . .continued)

the Claims Court extends to any case that

includes a Tucker Act claim.” (Brief of

Petitioners/Cross Respondents at p. 41,

n. 35.)

- 45 -

regional courts of appeals. Virtually any

case that was not purely prospective in

nature would risk being shifted to the

Claims Court and Federal Circuit. Program

beneficiaries would be forced to abandon

Claims seeking correction of wrongful

government conduct if they wished to have

actions for prospective relief heard in the

district courts. This would flow from the

fact that virtually every case brought by

program beneficiaries seeking declaratory,

injunctive or mandatory relief to correct

wrongful agency action necessarily has a

direct or indirect financial consequence.

While artful pleading should not be

permitted to distort a suit for money

damages into an equitable action, the

converse is equally true: the government

should not be permitted to distort suits

for equitable relief into ones for money

damages.1/7 Typically, program benefi-

17 see Brief of the Petitioners/Cross

Respondents, at p. 22.

- 46 -

Ciaries seeking judicial review of alleged

agency misconduct sue for injunctive and

declaratory relief, not only in form but in

reality. They seek judicial review of a

policy, regulation or practice which

impinges on the ability of the aggrieved

beneficiary to obtain statutory entitle-

ments. The relief they seek cannot be

provided by the Claims Court.-. For example,

the Claims Court cannot require a federal

agency to use Notice-and-Comment' rule-

making. It cannot enjoin an agency from

arbitrary and capricious action, or require

an agency to foilow a certain procedure.

The Claims Court cannot prohibit an agency

from making future decisions. The only

thing the Claims Court can do is to order

an agency to pay money and any relief

necessary to accomplish that act. It can

do nothing about preventing an agency from

repeating the offending conduct in the

future. This kind of relief is available

only in the district court.

- 47 -

— — —————L

If this Court were to accept the

government’s broad view of “money damages”,

and its broad view of the jurisdictional

implications of a claim for “money damages”

against the United States, the district

courts would be divested from jurisdiction

over cases involving government benefits of

any type, whenever beneficiaries sought to

correct wrongful agency conduct. Such a

result would not further Congressional

intent, would not lead to a reasonable

allocation of responsibilities in the

federal court system, and would impair the

abilities of federal program beneficiaries

to seek relief for wrongful government

conduct.

CONCLUSION

This Court should hold that the Tucker

Act does not divest a district court from

exercising jurisdiction over a disallowance

action. If the Court concludes that a

disallowance action arises under the Tucker

Act, it should make clear that the decision

- 48 -

does not determine the related but distinct

issue of Tucker Act jurisdiction for a

state’s third party complaint seeking to

require federal financial participation in

an underlying action between beneficiaries

and a state.

Respectfully submitted,

March 29, 1988 TAMARA DAHN

GILL DEFORD

MARK GREENBERG

CHARLES GREENFIELD

JANE PERKINS

PETER REID

MANUEL ROMERO

RICHARD ROTHSCHILD”

RODGER SCHWARTZ

*attorney of Record

- 49 -