The opinion of the court was delivered by: GREEN
This action is before the Court on cross-motions for summary judgment. As set forth below, the Court grants plaintiffs' motion and denies defendant's motion.
The plaintiffs are the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (the UAW), and five members: Marian Jackson, Reginald James, Emmett Pompey, Effie Simmons, and Helen Vance. The defendant is the Secretary of the United States Department of Labor, Raymond Donovan (the Secretary).
State employment agencies, acting as the agent of the Secretary, denied the individual plaintiffs' requests for payment of training costs under the Trade Act of 1974, 19 U.S.C. § 2101 et seq., as amended by Title XXV of the Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 357.
The complaint challenged the Secretary's interpretation of Title XXV of the Budget Act in two respects. First, workers who had received approval for training before October 1, 1981, the effective date of the Budget Act, were denied consideration for payment of their training costs after October 1, 1981. See General Administration Letter No. 4-82, § 9(c)(2) (U.S. Dept. of Labor, Employment and Training Administration, November 13, 1981). Second, States were prohibited from approving training when the costs would exceed the amount of funds allocated to them by the Secretary. Id., § 9(c)(1)(g).
Plaintiffs raised a third challenge as a result of discovery. The Secretary refused to allocate to the States monies in addition to a supplemental appropriation of $25 million to pay for approved training of dislocated workers in fiscal year 1982. At the same time, he returned $89 million to the United States Treasury of unused funds for fiscal year 1982 from the Employment and Training Administration account that he concedes could have been used for approved training.
The plaintiffs argue that the Secretary abused his discretion by refusing to spend any monies from this account for approved training. The Secretary maintains that his decision not to spend monies from this account for training dislocated workers was within his absolute discretion. Further, he contends that the unallocated monies in any event are beyond recall.
The Court examines first the Secretary's challenges to the subject matter jurisdiction of the Court and the standing of plaintiffs to bring this action. The resolution of this action on the merits requires analysis of the Trade Act amendments in the Budget Act and the continuing resolutions that funded the Department of Labor in fiscal year 1982.
II. Subject Matter Jurisdiction
The Trade Act authorizes the Secretary on behalf of the United States to enter into an agreement with a State agency. The cooperating State agency, "as agent of the United States," provides payments and refers dislocated workers for training where appropriate. 19 U.S.C. § 2311(a) (Supp. V 1981).
A "determination" by a State agency regarding entitlement to program benefits is subject to review "in the same manner and to the same extent as determinations under the applicable State law and only in that manner and to that extent." 19 U.S.C. § 2311(d) (1976). State law is defined as the unemployment insurance law of the State approved by the Secretary. Id., § 2319(10) (1976).
The Secretary contends that section 2311(d) divests the Court of jurisdiction over this action. The Court disagrees. Despite a similar provision in the unemployment compensation law, 5 U.S.C. § 8502(d) (1976), federal courts have long reviewed challenges under federal statutory and constitutional law to the administration of unemployment compensation programs. See, e.g., Christian v. New York Department of Labor, 414 U.S. 614, 39 L. Ed. 2d 38, 94 S. Ct. 747 (1974), vacating and remanding on other grounds, 347 F. Supp. 1158 (S.D.N.Y. 1972); California Human Resources Department v. Java, 402 U.S. 121, 28 L. Ed. 2d 666, 91 S. Ct. 1347 (1971), affirming, 317 F. Supp. 875 (N.D.Cal. 1970). Plaintiffs are not seeking review of the individual determinations on their applications for payment of approved training costs. They seek review of the Secretary's interpretation and administration of the amended Trade Act. They claim that the Secretary has violated the Trade Act and the Constitution. In these circumstances, section 2311(d) does not divest the Court of jurisdiction.
The Secretary argues next that the plaintiffs have not shown any injury in fact. The four individual plaintiffs who received approval for training before October 1, 1981, the Secretary contends, did not show they incurred training expenses after that date or requested payment. The Secretary says that Marian Jackson, the sole plaintiff who applied for training approval after October 1, 1981, did not obtain approval for a reason other than unavailability of funds. And the UAW, the Secretary maintains, has failed to show any of its members were denied reimbursement for training because of the unavailability of funding.
Article III of the Constitution limits the judicial power of the United States to resolving "cases" and "controversies." As part of the case and controversy requirement, "the party who invokes the court's authority [must] show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant, and that the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable decision." Valley Forge College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982) (citations omitted). See also, Havens Realty Corporation v. Coleman, 455 U.S. 363, 372, 71 L. Ed. 2d 214, 102 S. Ct. 1114 (1982); Common Cause v. Department of Energy, 226 U.S. App. D.C. 266, 702 F.2d 245, 250 (D.C. Cir. 1983).
Contrary to the Secretary's contention, the record shows clearly that three of the four individual plaintiffs who received approval for training before October 1, 1981 expended funds for training and requested payment after that date. Accordingly, plaintiffs have shown the injury in fact required by Article III of the Constitution for their first claim.
Reginald James was separated from employment with Chrysler Corporation on February 6, 1979. He received approval for a training course in welding technology on July 13, 1981. His request for refund for post-October tuition was denied on December 1, 1981. Emmett Pompey was separated from employment with Chrysler Corporation on August 6, 1979. He received approval for a course in auto mechanics on September 29, 1981. The course was scheduled to run from September 22, 1981, until June 1983. His request for post-October reimbursement was denied on December 8, 1981. Effie Simmons was separated from employment with General Motors Corporation on October 12, 1979. She received approval for a training course as a word processing operator on June 22, 1981. The course began immediately thereafter and was to continue until December 8, 1981. Ms. Simmons' request that the Secretary pay her post-October tuition was denied.
Many persons in approved training before the effective date of the Trade Act amendments, such as Ms. Simmons, had their benefits reduced or terminated and were unable to continue self-financed training. The Trade Act provides for payment of 26 weeks of extended benefits to persons enrolled in approved training. 19 U.S.C. § 2293(a)(1) (1976). The 1981 amendments limited these extended benefits to the 26-week period following the last week of entitlement to regular Trade Act benefits. Section 2505(a)(3) of the Budget Act, 19 U.S.C. § 2293(a)(3) (Supp. V 1981). Plaintiffs have dropped their initial challenge to the Secretary's denial of extended benefits.
The Court finds that Helen Vance, the fourth individual plaintiff who received pre-Budget Act approval, lacks standing. Helen Vance was separated from employment with Ford Motor Company on January 20, 1981. She began a course in business and public administration on June 1, 1981, without obtaining approval of the appropriate State agency. Her subsequent application for approval was denied on September 15, 1981, and she did not appeal. Consequently, she lacks standing to present plaintiffs' first claim.
Plaintiffs' second claim concerns the denial of training approval on the basis of lack of available funds to otherwise eligible workers after October 1, 1981. Marian Jackson is the sole individual plaintiff presenting this claim. Ms. Jackson was separated from employment with Ford Motor Company on August 24, 1979. She applied initially for self-financed training as a medical technician on June 5, 1981. That application was denied on June 24, 1981. Ms. Jackson's appeal resulted in a remand for redetermination on October 27, 1981. Ms. Jackson was informed by letter on December 15, 1981 that her application was being held in abeyance because no money was available. The determination affirming the denial of her application issued on February 26, 1982. The determination, however, referred to extended benefits only. The sole determination regarding approval of Ms. Jackson's costs of training was the December 15, 1981 letter holding her application in abeyance for lack of funds. Therefore, the Court finds that she has standing to contest the Secretary's challenged policy.
In addition, other UAW members have been denied approval because of the challenged policy. The UAW presented affidavits from two members showing they were denied training approval after October 1, 1981, because of unavailability of funds. Pamela Romero was separated from employment with A.C. Sparkplug in March 1981. She applied for approval of a nursing or physical therapy program in November 1981. Her application was denied because funds for training were frozen. Clifford Tucker was separated from employment with Chrysler Corporation in December 1980. He applied for approval of a program in auto technology to start in September 1981. He was informed throughout the fall of 1981 and the winter and spring of 1982 that no funds were available to pay his costs, and approval was denied.
The Supreme Court has recognized that:
An association has standing to bring suit on behalf of its members when (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief ...