may implement the proposed conversion to a part B program at any time. EDS' part B proposal expires on December 31, 1977. NFIA filed the instant lawsuit November 29, 1977, seeking to enjoin any action by HUD in connection with the proposed takeover.
Plaintiff's Complaint frames two general issues: whether the Secretary's decision to convert to a part B program satisfies the legal requirements of the NFI Act and whether the proposed contract with EDS is permissible under the terms of the Act. This Court approaches these issues from the standpoint of considering both preliminary and final relief.
With respect to preliminary relief, this Court is not persuaded that NFIA has met any of the standards articulated in Virginia Petroleum Jobbers Association v. Federal Power Commission, 104 U.S.App.D.C. 106, 259 F.2d 921, 925 (1958). Leaving the merits aside, the Court finds no showing of irreparable injury on these facts. The loss which plaintiff confronts is not the sort of loss recognized as necessitating interim relief. See Virginia Jobbers, 104 U.S.App.D.C. at 110, 259 F.2d at 925; Sampson v. Murray, 415 U.S. 61, 88, 94 S. Ct. 937, 39 L. Ed. 2d 166 (1974). Further, the Court concludes that any harm to NFIA would be more than outweighed by the injury to the interests of the Government if an injunction is granted. Potential disruption to the FNI program would be intolerable. For the same reason, the public interest militates against any delay in the implementation of the proposed part B program.
With respect to the merits, this Court concludes that the actions of the Secretary have been within her authority under the NFI Act and do not amount to either an abuse of discretion or an error of law. The Court is mindful that its review in the present case is limited. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971). With respect to the report submitted by the Secretary to Congress per 42 U.S.C. § 4071, this Court will not evaluate the substance of that report or substitute its judgment for that of the Secretary or the Congress. See National Association of Government Employees v. Schlesinger, 397 F. Supp. 894 (E.D.Pa.1975), aff'd, 523 F.2d 1051 (3d Cir. 1975). The Court is satisfied that the contents of the report meet the requirements of § 4071(b)(1)-(4). That is enough.
The crux of this lawsuit is whether the Secretary's determination to convert to a part B program comports with 42 U.S.C. § 4071(a). The Court is persuaded that it does. The Court is aware of the strong Congressional preference for a part A program. However, § 4071(a) allows the Secretary to convert from part A if the Secretary determines that operation of the flood insurance program as provided for in part A "cannot be carried out, or that such operation, in itself, would be assisted materially by the Federal Government's assumption" of operational responsibility.
While NFIA emphasizes the first clause of § 4071(a) and points to ostensible success of the NFI program under its management, what is crucial in this case is the second clause of § 4071(a) and the "materially assist" provision. On these facts this Court cannot say that the Secretary's determination that conversion to part B would materially assist the NFI program is clearly erroneous or without a rational basis. In light of the course of the negotiations between HUD and NFIA and the disagreements between the parties, and given the necessity of an operational NFI program, the Secretary's decision does not appear arbitrary or capricious. Nor is the Court persuaded that the Secretary applied an incorrect standard in reaching her determination. That determination appears supported on the record in this action and the legislative history of the NFI Act does not compel a different conclusion.
Finally, this Court is not convinced that the proposed contract with EDS violates the terms of either 42 U.S.C. § 4071 or § 4082. HUD proposes to utilize only government employees or insurance entities with respect to the insurance aspects of the part B program and proposes to employ EDS in a ministerial capacity. The Court is satisfied with these representations and any challenge to the functions which EDS performs appears premature.
In conclusion, the Court determines that the Secretary has acted within her authority under the NFI Act and that her actions have a rational basis, are not based upon an impermissible and invalid interpretation of the statute, and are not clearly erroneous. Judgment for defendant is, therefore, in order.
One other issue remains. At hearing in this matter, counsel for plaintiff made oral application to the Court for a stay pending appeal in the event the Court was disposed to rule against plaintiff's position. Counsel for HUD opposed such a stay. The Court deems it proper to rule with respect to the oral motion and for the reasons indicated herein with respect to plaintiff's showing under Virginia Jobbers, the Court determines that a stay is inappropriate.