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FOLEY v. CARTER

November 16, 1981

William E. FOLEY, Plaintiff,
v.
James Earl CARTER, Defendant



The opinion of the court was delivered by: SMITH, JR.

MEMORANDUM

William E. Foley, Director of the Administrative Office of the United States Courts, originally brought this action in November of 1979 against President Jimmy Carter seeking mandamus and declaratory relief. This Court granted plaintiff Foley summary judgment on March 24, 1980, holding as a matter of statutory construction that the "cap" of 5.5% imposed by section 101(c) of Public Law 96-86 in lieu of the 12.9% increase in salaries due on October 1, 1979, for officials covered by the Adjustment Act did not apply to the Judicial Branch. Foley v. Carter, 526 F. Supp. 977 (D.D.C.1980) at 11. *fn1" Upon appeal, the Court of Appeals elected to certify certain questions of law to the Supreme Court, holding all motions filed in abeyance. While these questions were pending before the Supreme Court, that court filed its opinion and judgment in United States v. Will, 449 U.S. 200, 101 S. Ct. 471, 66 L. Ed. 2d 392 (1980). *fn2" In light of its disposition of the Will cases, the Supreme Court declined to consider the questions certified by the Court of Appeals in these cases. Accordingly, on May 20, 1981, the Court of Appeals for this Circuit entered a per curiam order dismissing these appeals "insofar as they pertain to Article III judges," and with respect to all other issues, remanding the cases to this Court "for further consideration in light of the decision by the Supreme Court in the Will cases." Thereafter, several more motions were filed in the Court of Appeals by the parties, seeking modification or reconsideration of the May 20, 1981 order. By a separate order dated August 21, 1981, the Court of Appeals vacated the earlier order. Denying the President's motion for entry of a Munsingwear order, the Court of Appeals again ordered that the judgment of the District Court "is vacated insofar as it adjudicated claims of Article III judges who have now received the salary increases at issue, and the case is remanded to the District Court for further consideration in light of Will, et al. v. United States ...." The Court of Appeals' August 21, 1981 order noted that several motions filed in that Court remained to be decided, yet in its accompanying memorandum the Court of Appeals declined to address those issues until they had been aired before and resolved by this Court. Plaintiff Foley has since filed a memorandum pursuant to the mandate of the Court of Appeals, defendant Reagan (the President) has filed a second motion for summary judgment and plaintiff has responded.

 From the outset, the central issue in these cases has been the constitutional applicability to the Judicial Branch of section 101(c) of Public Law 96-86, 93 Stat. 657, enacted October 12, 1979, which purported to reduce to 5.5% the 12.9% adjustment in salaries which had accrued October 1, 1979, or October 8, 1979, to certain officials of the Judicial Branch under the Executive Cost-of-Living Adjustment Act, Public Law 94-82, 89 Stat. 419 (codified at 28 U.S.C. § 461 (1976)) (the Adjustment Act), and related provisions of law. The intricacies of the complex, interlocking statutory mechanism which fixes the compensation of high-level Executive, Legislative and Judicial officials can be summarized for purposes here. The salaries of high-level officials of all three Branches are initially set under the Postal Revenue and Federal Salary Act of 1967, 2 U.S.C. §§ 351-61 (the Salary Act). The Salary Act provides for a quadrennial review of these officials' salaries beginning in 1969. In addition, the Adjustment Act, passed in 1975, subjects the salaries covered by the Salary Act to the same annual adjustment made in the General Schedule under the Federal Pay Comparability Act of 1970, 5 U.S.C. §§ 5305-06 (the Comparability Act). Under subsection 5305(a) of this Act, the President has discretion, following consideration of the report of an appointed pay agent and the advice of the Advisory Committee on Federal Pay, to adjust the GS rates pursuant to the principles of comparability found in subsection 5301(a), or, if he determines that because of a national emergency or economic condition affecting the general welfare it would be inappropriate in any year to make the adjustment required under subsection 5305(a), then he is directed to prepare and submit to Congress an "alternative plan" under subsection 5305(c). This alternative plan must be submitted before September 1, 5 U.S.C. § 5305(c)(1), and becomes effective on the first day of the applicable pay period beginning on or after October 1 unless Congress disapproves the plan within thirty days after it is transmitted, in which case the pay adjustments originally recommended to the President become effective, 5 U.S.C. § 5305(c)(2).

 The controversy in the instant case centers on the operation of these statutes during fiscal year 1980 (October 1, 1979 through September 20, 1980), during which Public Law 96-86 was operative. On August 31, 1979, acting under section 5305(c) of the Comparability Act, the President submitted to Congress an alternative plan for a proposed cost-of-living increase for federal employees for fiscal year 1980. This alternative plan limited adjustments to a 7% increase at each grade in lieu of the 10.41% increase recommended by the appointed pay agent. 15 Weekly Comp. of Pres.Doc. 1530 (Aug. 30, 1979). Neither House of Congress disapproved the alternative plan within thirty days of its transmission, thus it automatically became effective. As a result, on October 1, 1979, all Article III judges became entitled to increases of about 12.9%. See 449 U.S. at 208, 101 S. Ct. at 477. *fn3" Also on October 1, 1979, bankruptcy judges and magistrates were entitled to Adjustment Act increases of 7.02%. *fn4" Other non-Article III officials of the Judiciary, including Circuit Executives and Clerks of Court, became entitled to the 5.5% increase for fiscal year 1979 on October 1, 1979, and to an additional 7.02% increase as of October 8, 1979. *fn5" On October 12, 1979, however, the President signed Public Law 96-86, which limited salary increases for certain officials to be paid with funds appropriated for fiscal year 1980 to 5.5%. The second paragraph of Public Law 96-86, section 101(c), provided:

 
For the fiscal year 1980, funds available for payment to executive employees, which includes Members of Congress, who under existing law are entitled to approximately 12.9 percent increase in pay, shall not be used to pay any such employee or elected or appointed official any sum in excess of 5.5 percent increase in existing pay and such sum if accepted shall be in lieu of the 12.9 percent due for such fiscal year.

 On November 15, 1979, President Carter, through the Office of Personnel Management, issued two bulletins, Bulletin 534-5 relating to the Executive Pay Schedule, and Bulletin 531-80 relating to the General Schedule, both of which gave retroactive effect to Public Law 96-86, readjusting the payable rates for all salary systems retroactively to October 1, 1979, and nullifying the cost-of-living increases effective and payable for the period from October 1 through October 11, 1979.

 The Supreme Court held in Will that Adjustment Act increases take effect at the start of the first pay period of the fiscal year, 449 U.S. at 204, 205, 101 S. Ct. at 475-476; that section 101(c) of Public Law 96-86 was intended to apply to judges as well as to officials of the other two Branches, id. at 230, 101 S. Ct. at 488; and that, as applied to Article III judges Public Law 96-86 violated the Compensation Clause, id. at 210 n.8, 230, 101 S. Ct. at 478 n.8, 488. Will did not address the effect of these provisions of law on the pay of non-Article III judicial officials. Plaintiff continues to press his claim before this Court that some 870 non-Article III members of the Judicial Branch were unconstitutionally deprived of pay increases due them under the Adjustment Act.

 I.

 The parties are agreed that section 101(c) of Public Law 96-86 did apply to all members of the Judicial Branch, to non-Article III officials as well as to Article III judges. *fn6" Nevertheless, the President argues that no justiciable controversy remains in this case because Public Law 96-86 expired by its terms at the end of fiscal year 1980, on September 30, 1980. Moreover, he contends that Foley has no standing to seek a declaratory judgment concerning the constitutional application of Public Law 96-86 to non-Article III members of the Judicial Branch, because Foley cannot demonstrate any injury to himself from such application, nor has he been authorized to seek declaratory relief on behalf of anybody else who may have suffered such injury.

 With regard to the claim that plaintiff Foley has not suffered actual or threatened injury so as to have standing, this Court noted previously that Foley, as Director of the Administrative Office of the United States Courts, is under a duty to "disburse directly or through the several United States marshals, moneys appropriated for the maintenance and operation of the courts," 28 U.S.C. § 604(a)(8), including payment of appropriate salaries, certain of which are adjusted annually under the Adjustment Act. Will held that it was the intent of Congress in section 101(c) of Public Law 96-86 to "stop for that year (fiscal year 1980) the application of the Adjustment Act." 449 U.S. at 224, 101 S. Ct. at 485. As was the situation before Will and is still the situation now with regard to non-Article III judicial officials, Foley cannot calculate the rate of adjustment for the pay schedules of these officials for the fiscal year 1980 until he knows whether Public Law 96-86 is lawfully applicable to them. *fn7"

 The expiration of Public Law 96-86 on September 30, 1980, in no way solved Foley's dilemma with regard to the increase to be paid for fiscal year 1980. In order not to invoke the forfeiture provision of section 101(c), Foley withheld all increases in pay during fiscal year 1980 from all of the officials to whom Public Law 96-86 might apply. *fn8" To date these officials have accepted no increase for fiscal year 1980, and it appears that funds to pay the full increases are still available. *fn9"

 Thus, regardless of the expiration of Public Law 96-86, this Court finds plaintiff Foley faced with essentially the same dilemma with which he was faced when he filed his complaint two years ago, except that Will settled the rights of Article III judges. On the one hand, the Director faces constitutional challenge from non-Article III judicial officials for disbursing anything less than the full amount of the increases that became effective at the start of fiscal year 1980; on the other hand he faces legal action by the Executive Branch under the Anti-Deficiency Act, 31 U.S.C. § 665(a), should he make adjustments for those officials at a rate greater than the 5.5% limit set by the pay freeze for that year. The Director is thus properly before the Court, for the injury he alleges is sufficiently "distinct and palpable," Warth v. Seldin, 422 U.S. 490, 501, 95 S. Ct. 2197, 2206, 45 L. Ed. 2d 343 (1975), as well as one that the remedial powers of the Court can redress, Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 43, 96 S. Ct. 1917, 1926, 48 L. Ed. 2d 450 (1976); see also National Treasury Employees Union v. Nixon, 160 U.S. App. D.C. 321, 492 F.2d 587 (D.C.Cir.1974) (interpretation of interrelation of federal pay statutes is the essence of judicial duty).

 The President urges upon the Court the general rule that a suit for a declaratory judgment challenging the interpretation or constitutionality of a statute no longer presents a justiciable case or controversy when that statute expires or is repealed during the course of the lawsuit. See, e.g., Kremens v. Bartley, 431 U.S. 119, 126-27, 97 S. Ct. 1709, 1713-1714, 52 L. Ed. 2d 184 (1977); Fusari v. Steinberg, 419 U.S. 379, 387, 95 S. Ct. 533, 538, 42 L. Ed. 2d 521 (1975); Allee v. Medrano, 416 U.S. 802, 818, 94 S. Ct. 2191, 2201, 40 L. Ed. 2d 566 (1974); Diffenderfer v. Central Baptist Church, Inc., 404 U.S. 412, 414, 92 S. Ct. 574, 575, 30 L. Ed. 2d 567 (1972). This case, however, does not present the concerns raised in the cases cited. In the case most similar on the facts, Diffenderfer v. Central Baptist Church, 404 U.S. 412, 92 S. Ct. 574, 30 L. Ed. 2d 567 (1972), plaintiffs challenged a Florida statute which authorized a tax exemption for church property used as a commercial parking lot as being in violation of the First Amendment. The Supreme Court held that subsequent repeal of the statute made the relief sought, a declaratory judgment on the constitutionality of the repealed statute, inappropriate. 404 U.S. at 414-15, 92 S. Ct. at 575-576. The Court specifically noted, however, that this was not a case "capable of repetition," id. at 414, 92 S. Ct. at 575 (quoting Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S. Ct. 279, 283, 55 L. Ed. 310 (1911), nor was it a case that might produce irreparable injury if not decided immediately. Plaintiff Foley's predicament, however, is one which, in addition to presenting a still ...


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