UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
December 11, 1973
COMMONWEALTH OF PENNSYLVANIA et al.
Caspar W. WEINBERGER et al.
Aubrey E. Robinson, Jr., District Judge.
The opinion of the court was delivered by: ROBINSON, JR.
AUBREY E. ROBINSON, Jr., District Judge.
This is an "impoundment" case brought by five states
and their chief educational officers. It is presently before the Court on cross-motions for summary judgment. Plaintiffs seek to compel the Executive Branch of the Federal Government to apportion, obligate and disburse
to the states their share of approximately $20
million in funds appropriated by Congress for the operation of state educational programs under Title V of the Elementary and Secondary Education Act of 1965.
Plaintiff Commonwealth of Pennsylvania also seeks to denominate the case as a class action on behalf of all other states not named Plaintiffs herein, and on behalf of the District of Columbia.
Defendants have interposed what has now become a standard litany of defenses: no justiciable case or controversy, sovereign immunity, unconsented suit for money damages, executive discretion, historical precedent and statutory authority for impoundment. While the Court has fully reviewed these arguments, it has concluded that they are without merit and do not warrant further discussion.
The primary legal issues here are 1) whether Congress has mandated that the appropriated funds be apportioned and disbursed under the statute and 2) if so, whether the expiration of the 1973 Fiscal Year on June 30, 1973, effected a reversion of the appropriated funds to the Treasury such that they are no longer available to the Defendants and relief herein is thereby barred.
Title V of the Elementary and Secondary Education Act of 1965 established a program of federal grants to strengthen state departments of education. Part A of Title V
provides grants, inter alia, for statewide educational planning, collection and dissemination of educational data, support of special studies, publications, and experimental and research programs.
Part C of Title V
provides grants for comprehensive educational planning and evaluation on the state and local level.
The financing mechanism for Title V programs begins with Congressional appropriation of funds. From the amount appropriated, the statute requires
that the Commissioner of Education " shall apportion " the appropriated funds among the states and territories according to a prescribed formula.
Upon apportioning the appropriated funds the Commissioner notifies the states of the amounts available to them. On the basis of this notification the states prepare formal applications for grant awards. Upon approval of the formal applications the Commissioner issues grant awards, the formal documents obligating the funds to the States.
Thereafter the states draw these funds by means of vouchers which ultimately reach the Treasury Department and are recorded there as disbursements on the proper accounts.
Thus the act of apportioning the appropriated funds among the states is only the first step in the disbursement process, a step which does not involve the actual expenditure of funds.
In practice, however, the states generally apply for, and the Commissioner generally awards, the entire amount apportioned. Awards by the Commissioner are subject to the states having "approved programs" for expenditure of the funds. Defendants have not contended that any plaintiff state does not have an approved program.
Appropriations for Title V of the Elementary and Secondary Education Act for the 1973 Fiscal Year (FY 1973) were made by Public Law 92-334, a joint resolution of the Congress signed by the President. This was a "continuing resolution" providing funding for ongoing programs pending enactment of a formal Appropriation Act. Public Law 92-334 provided that where both houses of Congress had approved continued funding of a program, but at different levels, funding would be at the lower of the two levels approved by either house of Congress.
The Senate version of the Labor-HEW Appropriation Act of 1973
had approved $55 million for Parts A and C of Title V. The House version of the same Act
had approved $43 million for Part A and $10 million for Parts C of Title V. Accordingly, under the continuing resolution the amount actually appropriated was the lesser of the House or Senate versions, in this instance $43 million for Part A and $10 million for Part C.
Defendants do not dispute that these are the amounts actually appropriated.
Statutory language that an official "shall" perform an act has been repeatedly held to be mandatory in nature.
It deprives the official of discretion and makes the commanded act a duty, a ministerial act. The legislative history of the provision here involved makes clear its mandatory nature.
Thus, the Commissioner of Education was required by statute to apportion to the states the full amount of appropriated funds for Parts A and C of Title V.
It is not readily ascertainable, however, whether the statute mandates the Commissioner to approve all applications and actually disburse all apportioned funds. The statutory language with regard to these steps is not the mandatory "shall", but discretionary language that the Commissioner "may", and "is authorized to" make grant awards.
Yet this Court would find it implicit in the statutory scheme, absent express indications to the contrary, that in providing the Commissioner with some discretion as to grant awards the Congress did not intend to allow him the opportunity to completely suspend or severely limit, for reasons unrelated to the program, the operations of an ongoing program reviewed, approved and fully funded by the Congress with Presidential approval.
Such an approach would place administrative fiat above the law.
It is not necessary to rely on implication, however, for Congress has made clear its intent to require full funding of education programs. Section 415 of the General Education Provisions Act,
20 U.S.C. § 1226, contains the controlling language which has now been repeatedly held
to express Congressional intent to mandate full funding of ongoing programs:
Notwithstanding any other provision of law, unless expressly in limitation of the provisions of this chapter, funds appropriated for any fiscal year to carry out any of the programs to which this chapter is applicable shall remain available for obligation and expenditure until the end of such fiscal year.
This provision is not on its face an unambiguous command to spend, thus the Court must look to Congressional intent in order to clarify its meaning. This section was added in 1968
without extended discussion at the tine as to its meaning or intended effect.
The two instances where the provision was discussed, however, indicate clearly that it was intended to deny to the Administration any statutory authority to refuse to spend appropriated education funds.
This meaning was more expressly declared in 1970 when the section was amended to apply to expenditure as well as obligation of funds. The Senate Report forthrightly expressed the intent of the amendment and the original section:
The Committee . . . agrees that section  is permanent legislation exempting all appropriations to the Office of Education from statutory controls other than those specified in the authorizing legislation and in appropriations acts. . . .
Significantly, the Senate Report also notes the Administration's interpretation of Section 415 as a mandatory spending provision:
The Vocational Education Amendments of 1968 contain a provision permanently exempting appropriations made to the Office of Education from administrative controls on obligation and spending.
In this light the Court finds that Congress intended Section 415 as a prohibition on impoundment of funds for education programs covered by these provisions. Accordingly, it is defendants duty to accept, review, and approve or disapprove for program-related reasons, applications for grant-awards up to the full amounts appropriated by Congress and apportioned to the states. Before requiring such action, however, the Court must examine the Defendants' contentions that relief herein is barred by the expiration of Fiscal Year 1973, the lapse of the appropriations therefor and reversion of the disputed funds to the Treasury.
A. The funds at issue here were appropriated for Fiscal Year 1973, which ended June 30, 1973. Plaintiffs contend, however, that the relevant appropriations were extended and made available for "obligation and expenditure" for an additional fiscal year by operation of a 1970 amendment to the General Education Provisions Act known as the Tydings Amendment:
Notwithstanding any other provision of law, unless enacted in specific limitation of the provisions of this subsection, any funds from appropriations to carry out any programs to which this chapter is applicable during any fiscal year, ending prior to July 1, 1973, which are not obligated and expended prior to the beginning of the fiscal year succeeding the fiscal year for which such funds were appropriated shall remain available for obligation and expenditure during such succeeding fiscal year.
The Tydings Amendment applies to education appropriations generally, and its application to the programs here in issue is not disputed. The meaning and effect of the Amendment, however, are disputed.
A "plain meaning" analysis of the Amendment would support Plaintiffs interpretation, for § 1225(b) contains no words of limitation which would restrict its applicability to the programs here in issue. Yet Defendants rely upon three arguments to persuade the Court that Congress did not intend the extra year of availability for "obligation and expenditure" of education funds to apply at the Federal level. Defendants contend that the extra time period is available only to state and local educational agencies.
Defendants first argument focuses on the fact that subsection 1225(b) was offered as an amendment to Section 414 of the General Education Provisions Act, 20 U.S.C. § 1225.
That section had previously related expressly, and solely, to expenditures at the state and local levels (allowing calculation of expenditures on a school year basis, rather than fiscal year basis.) Defendants argue that the Tydings Amendment was added to this section because it, too, was intended to apply only to state and local agencies, and that this is the reason for its placement in Section 414 (20 U.S.C. § 1225). Yet this argument cuts both ways. Section 1225(a) expressly relates to the "agency or institution" on the state or local level. Thus Congress knew how to limit its language to those levels when it wanted to do so. The fact that the language of subsection 1225(b) is not so limited can just as well mean, then, that Congress did not intend to limit its application to the state and local levels. In this context an argument premised on the placement of a subsection is tenuous at best.
The second basis offered by Defendants for their interpretation of the Tydings Amendment is the legislative history of that provision. Defendants cite Senator Tydings' comments on the Senate floor
wherein he stated rather clearly that his amendment was designed to alleviate planning problems brought on by the necessity for "lead-time" in budget and program development and implementation at the state and local levels. Yet Defendants would draw from this an implication nowhere expressly stated or supported in the legislative history, i.e. that only state and local educational agencies were to have any flexibility in fund carry-over to allow for this adequate program planning and implementation. The problems toward which the Amendment was directed arose on the local level and the solution was directed there. Yet that does not necessarily mean that the Federal agencies involved were not to play any role in the solution. Carry-over of obligating authority in the Federal Office of Education would enable it to better facilitate local efforts to plan and develop a program before applying for funding, secure in the knowledge that the funds would not lapse if an application was not filed and an award made before June 30. Thus carry-over of Federal authority is entirely consistent with the purposes espoused by Senator Tydings. To say the least, it is not necessarily inconsistent with the legislative history, as Defendants would have it. At best the legislative history supports Plaintiffs interpretation, at worst it is ambiguous. Thus the Court cannot accept Defendants efforts to limit the express language of the statute.
The third basis proffered by Defendants for their limited reading of the Tydings Amendment is the argument that a broad literal reading of the section would render it inconsistent with the next section, § 415 of the General Education Provisions Act, 20 U.S.C. § 1226.
Review of the statute and the relevant legislative history, however, has convinced the Court that these sections were intended to serve different purposes and are entirely consistent with each other in their application.
Section 415 was added in 1968. Its purpose was, as noted earlier, to assure the continued availability of education appropriations throughout the fiscal year, to assure that the funds would not be "withheld" during the fiscal year by the Administration on the basis of budget ceilings and the like. It was not intended to lengthen, or to limit, the fiscal year as the period of time during which appropriated funds were "available" for obligation under the controlling Appropriations Act. The Tydings Amendment, on the other hand, was expressly intended to extend the period of time during which appropriated education funds could be legally obligated and expended. During that extended time period, § 415 continues to operate as Congress intended, prohibiting any other actions which would limit the availability of the funds. It is unfortunate, and perhaps confusing, that both sections use the word "available" in a similar context but with a different intent and a different meaning. Yet where Congressional intent and meaning are clear from the legislative history, as they are here, it is the duty of the Court to implement that intent. In this case the Court finds that Congress intended the Tydings Amendment to operate to make the disputed funds available for obligation until June 30, 1974.
Lastly, Defendants argue that to read the Tydings Amendment as extending for an additional fiscal year the availability of the education funds here in issue is inconsistent with Public Law 92-334, the continuing resolution discussed earlier which made the final appropriations for FY 1973. As last amended by Section 102 of Public Law 93-9, this appropriations resolution read as follows:
Appropriations and funds made available and authority granted pursuant to this joint resolution shall remain available until (a) enactment into law of any appropriation for any project or activity provided for in this joint resolution, or (b) enactment of the applicable Appropriation Act by both Houses without any provision for such project or activity, or (c) June 30, 1973, whichever first occurs.
While there is a facial inconsistency between this language and application of the Tydings Amendment to extend the availability of these education funds to June 30, 1974, the inconsistency disappears when reviewed in light of Congressional intent and basic principles of statutory construction. First of all Congress has expressly provided in the Tydings Amendment that its operation is to be "notwithstanding any other provision of law, unless enacted in specific limitation of this subsection." Secondly, the continuing resolution for appropriations was a general measure, providing funds for ten separate Appropriations Acts. It was originally intended as a stopgap measure pending enactment of specific Appropriations Acts, which never came about for Labor-HEW appropriations in 1973. The Tydings Amendment is a measure specifically directed at education funds, designed to better implement the programs supported by those funds. It is a basic premise of statutory construction that in such circumstances the more specific measure, here the Tydings Amendment, is to be held controlling over the general measure where inconsistencies arise in their application. In this light the language of the continuing resolution is no bar to application of the Tydings Amendment.
B. Assuming for the moment that Defendants' interpretation of the Tydings Amendment is correct, and that the disputed funds were therefore available only for FY 1973, the Court finds that Plaintiffs would still prevail. Under the Budget and Accounting Act, federal funds are ordinarily available for obligation only during the fiscal year for which they were appropriated.
Appropriated funds which are unobligated during the designated fiscal year revert to the general fund of the United States Treasury, and are withdrawn from the appropriated accounts not later than September 30 of the succeeding fiscal year.
Defendants contend that by virtue of these provisions the impounded funds here in dispute are no longer available for obligation and that it is therefore impossible for the Court to grant the relief sought herein.
The statutory section providing for reversion of unobligated funds
contains a proviso, however, to the effect that an agency head may direct restoration of reverted funds to appropriate accounts upon determining that such action is necessary "to liquidate obligations and effect adjustments." Thus reversion is not absolute, but is subject to some discretion by agency heads in post-reversion "restoration" of accounts. This Court cannot accept Defendants' argument that an agency head can reach and restore reverted funds but that the Federal judiciary cannot.
Defendants acknowledge that the "legislative history makes clear that this (proviso) was intended to apply . . . where an obligation has already been recorded and where an adjustment must be made as to the amount."
In the present case obligations of $37,900,000
were recorded when the amount should have been $53 million. This Court finds that the proviso of 31 U.S.C. § 701(a) (2) indicates that funds are available to require "Adjustment" of the obligated amount up to $53 million. The Court finds no inconsistency between this result and the legislative history of Section 701.
Adjustments were to be made to correct errors, underestimates, and the like, which resulted in the recording of an obligation at an amount less than it should have been. In the present case, the Commissioner of Education made an error of law as to the extent of his discretion in limiting funding for non-program reasons. That error is likewise subject to correction by adjustment.
More importantly, the proviso is significant here as an indication that reversion is not an absolute bar to reaching funds after the fiscal year. Once it is determined that the funds can be reached it is the power of the Court, rather than the operation of the proviso, which will effect their restoration.
There is a second problem with Defendants' argument of reversion by virtue of Section 701 of the Budget and Accounting Act. The language of the section provides that any unobligated balance "shall be withdrawn and shall revert." Defendants argue that reversion occurred automatically on June 30, 1973. Yet, it is not clear from the statutory language, nor from the legislative history,
whether withdrawal and reversion are independent functions or were intended as sequential functions, i.e. reversion would not occur until withdrawal was accomplished.
In the present case, there was never a formal withdrawal of the disputed funds because withdrawal was barred by the Temporary Restraining Order entered herein September 28, 1973, and subsequent Preliminary Injunction. If reversion does not occur until after withdrawal, no reversion of funds herein has yet occurred. The Court deems it unnecessary to pursue this avenue further, however, in light of the result reached above.
Defendants final contention is that even if the disputed funds have not reverted to the Treasury, nevertheless, the authority of Defendants to obligate the funds expired on June 30, 1973. There are several answers to this. First of all, it can well be said that Defendants are to "adjust" an outstanding obligation, which they concede is possible,
rather then to issue a new obligation. Secondly, the equitable power of the Federal Courts is broad, and it is a well-established prerogative of the Court to treat as done that which should have been done.
Here the Court has found that the funds should have been obligated in FY 1973. The statutory specifications of authority to obligate Federal funds define and limit Defendants' standard operating authority, but do not purport to circumscribe the powers of the Federal Courts to provide appropriate relief when the disputed funds are found to be available.
Plaintiffs' motion for summary judgment will be granted, Defendants' cross-motion will be denied. Defendants will be ordered 1) to apportion to the States all funds appropriated by Congress for Titles V-A and V-C of the Elementary and Secondary Education Act for Fiscal Year 1973, not heretofore apportioned; 2) to notify the States of such apportionment and of the fact that applications for grant awards of these funds will be accepted for a reasonable period; 3) to accept, review, and approve or disapprove for program-related reasons, applications from the States for grant-awards of these funds; 4) to take prompt and appropriate steps to implement disbursement of funds to successful grant-award applicants, all in accord with standards and procedures generally applicable prior to the impoundment of funds challenged herein.
Defendants have opposed certification of this case as a class action on the grounds that the number of potential plaintiffs is not so large as to make joinder of all members impracticable. This Court expressly finds that such joinder would be impracticable, that the other prerequisites of Rule 23(a), Federal Rules of Civil Procedure, have been met and that Defendants have acted or refused to act on grounds generally applicable to the class, Rule 23(b) (2) and that the motion to certify a class action on behalf of all the states and the District of Columbia should be granted.
Counsel for Plaintiffs is to submit appropriate Orders within ten (10) days of date.