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NATIONAL TREASURY EMPLES. UNION v. DEVINE

December 30, 1983

NATIONAL TREASURY EMPLOYEES UNION, Plaintiff,
v.
Donald J. DEVINE, Director, Office of Personnel Management, Defendant, National Federation of Federal Employees and American Federation of Government Employees, AFL-CIO, Plaintiffs-Intervenors



The opinion of the court was delivered by: PARKER

 BARRINGTON D. PARKER, District Judge:

 Introduction

 On November 12, 1983, Congress hastily passed House Joint Resolution 413 ("H.J.Res. 413"), the Second Continuing Resolution for Fiscal Year 1984, which became Public Law 98-151 when signed by President Reagan on November 14, 1983. The Joint Resolution was a stop-gap emergency appropriation measure which became necessary because funding authorization for various agencies of the federal government and a multitude of programs had expired two days earlier, on November 10, 1983. The issue presently before this Court is whether, and to what extent, section 101(f) of H.J.Res. 413 affects or limits personnel regulations previously issued by the Office of Personnel Management ("OPM") in final form on October 25, 1983. That issue involves troublesome questions of statutory interpretation and Congressional intent. The plaintiff National Treasury Employees Union ("NTEU"), a bargaining representative for 110,000 federal employees, contends that the Joint Resolution bars the implementation of the OPM regulations. The defendant Donald J. Devine, Director of OPM contends that this Court is without jurisdiction to consider the issue, and alternatively, that H.J.Res. 413 does not affect or limit the responsibilities of the OPM in any way.

 The matter was presented before the Court on the government's motion to dismiss and on cross motions for partial summary judgment. The issues were carefully briefed and ably argued. For the reasons set out below, the Court grants the relief sought by the National Treasury Employees Union and determines that the challenged regulations of the Office of Personnel Management published on October 25, 1983 should not be implemented.

 Background

 A.

 On November 7, 1983, NTEU filed a complaint challenging the October 25 personnel regulations issued by OPM. The regulations related to reduction in force (RIF) procedures, performance management systems for federal employees, and pay administration in the federal sector under the Fair Labor Standards Act. 29 U.S.C. §§ 201 et seq. The reduction in force and the performance management system proposals were to become effective on November 25, 1983, and the pay administration proposals on February 22, 1984. *fn1" 48 Fed.Reg. 49462-98 (1983) (to be codified at 5 C.F.R. §§ 300, 335, 351, 430-31, 451, 531-32, 540, 551, 771).

 NTEU sought declaratory and injunctive relief and requested the Court to set aside and declare those regulations null and void. In an amended complaint, filed November 21, 1983, it also requested that the OPM Director be enjoined to withdraw the proposals because of H.J.Res. 413, the continuing funding resolution for Fiscal Year 1984.

 Despite the enactment of H.J.Res. 413, Director Devine announced on November 21, 1983, that the regulations would become effective as scheduled on November 25, 1983. Thereafter, NTEU applied for and on November 23 was granted a temporary restraining order, staying implementation of the regulations. *fn2" As a result of an agreement and subsequent representations of the parties, the temporary restraining order was extended through December 19, 1983. Because the matter appeared susceptible to final resolution on the merits by way of cross motions for summary judgment, an expedited schedule for briefing was arranged. The matter was ably argued on the merits by counsel on December 16 and 20, 1983. The government agreed to an extension of the temporary restraining order through December 31, 1983.

 On November 29, 1983, the plaintiff and the defendant stipulated that the cross motions for summary judgment would address only the first cause of action set out in the plaintiff's Amended Complaint of November 21. The stipulation also provided, inter alia, that should plaintiff be awarded judgment on that cause, a final judgment would be entered under Rule 58, Fed.R. Civ.P. The Amended Complaint alleges:

 
FIRST CAUSE OF ACTION
 
38. In passing H.J.Res. 413, Congress demonstrated its intention to bar totally the operation of OPM's October 25, 1983 regulation affecting employee compensation and RIF rights in the Federal sector.
 
39. By declaring that these regulations, which embody OPM's earlier proposed regulations of March and July, 1983, are to become operative on November 25, 1983, defendant Devine has willfully violated H.J.Res. 413.
 
40. In view of H.J.Res. 413, OPM's regulations of October 25, 1983 should be declared null and void and ordered to be withdrawn. *fn3"

 B.

 The history of the regulations and Congress's apparent serious misgivings with them sheds considerable light on the effect of H.J.Res. 413 on the October 25 regulations. In accordance with the rule-making requirements of the Administrative Procedure Act (APA), 5 U.S.C. § 553, the regulations were first published and subjected to notice and comment on March 30, 1983. 48 Fed.Reg. 13341 et seq. Responding to widespread criticism, OPM published and invited comment on a new version of the regulations, on July 14, 1983. 48 Fed.Reg. 32279 et seq.

 Congress, however, was not satisfied with even the second proposed version, and on August 15, 1983, prohibited OPM from expending any funds before October 15, 1983, "to adopt, to issue, or to carry out a final rule or regulation, a final revision, addition, or amendment to regulations, or a final statement of policy" based on the proposed regulations published March 30 and July 14, 1983. *fn4" See 129 Cong.Rec. H6440-41 (daily ed., Aug. 3, 1983); id. at S11431-36. When Congress enacted that restriction on the expenditure of funds, OPM's funding was due to expire with the end of fiscal year 1983, so that the restriction extended some 15 days beyond the period for which OPM was funded at the time.

 However, even before OPM issued the final regulations on October 25, 1983, Congress had again begun the process aimed at barring OPM's expenditure of funds on personnel regulations. On October 18, 1983, -- just three days into the "restrictionless" period and one week before OPM's issuance of the final rules -- the House Appropriations Committee reported H.R. 4139. H.R.Rep. No. 417, 98th Cong., 1st Sess. (1983). That bill proposed appropriations for the fiscal year ending September 30, 1984 for a number of federal agencies, including OPM, the Federal Labor Relations Authority and the Merit Systems Protection Board. Section 508 *fn5" of that bill, the Hoyer (D.Md.) amendment, provided:

 
None of the funds appropriated under this Act shall be obligated or expended to implement, promulgate, administer, or enforce the proposed Office of Personnel Management regulations and the proposed Federal Personnel Manual issuances published in the Federal Register on March 30, 1983, . . . as superseded by proposed regulations and Federal Personnel Manual issuances published in the Federal Register on July 14, 1983. . . .

 Obviously, because H.R. 4139 was reported to the House prior to October 25, 1983, it made no specific mention of the final October 25th regulations.

 The House did not turn to H.R. 4139 until after OPM issued its regulations on October 25. On October 27, 1983, the House passed H.R. 4139, with the Hoyer amendment left unchanged, despite the fact that in the intervening period OPM issued its final regulations.

 Though the Senate did not act on H.R. 4139 or on the Senate version of the regular appropriations bill, *fn6" H.R. 4139 was still enacted into law, albeit not via the typical appropriations route. Because the First Continuing Resolution only funded the federal government from October 1 to November 10, 1983, Congress was again compelled to suspend the regular appropriations process and turn to a continuing resolution. On November 12, 1983, -- two days after funding for the federal government had expired -- Congress passed H.J.Res. 413, the Second Continuing Resolution for Fiscal Year 1984, which as noted previously, became Public Law 98-151 on November 14, 1983. Importantly, H.J.Res. 413 incorporated by reference H.R. 4139, including the Hoyer amendment. The relevant provision of H.J.Res. 413 provides that:

 
The following sums are hereby appropriated . . . Section 101(f): Such amounts as may be necessary for continuing the activities . . . which were provided for in H.R. 4139, the Treasury, Postal Service and General Government Appropriations Act, 1984, as passed by the House of Representatives on October 27, 1983, to the extent and in the manner provided for in such Act. . . .

 (Emphasis added).

 In sum, H.J.Res. 4139 was reported out of committee before OPM issued its final regulations -- and therefore contained no mention of them -- and was passed by the House and incorporated into H.J.Res. 413 without any reference to the October 25th regulations after OPM issued those regulations.

 Despite the enactment of H.J.Res. 413 with its incorporation of H.R. 4139 and the Hoyer amendment's restrictions on OPM spending, Director Devine announced on November 21, 1983, that the final regulations would become effective as scheduled. That announcement was based on an opinion from OPM's general counsel, which, in summary, opined:

 
Notwithstanding limiting language in the Second Continuing Resolution of FY 1984, OPM's new rules on RIF, performance management, and overtime pay go into full force and effect on November 25, 1983, and all Government departments and agencies will be bound by them. The most prudent interpretation, however, holds that OPM is without funds to assist in the implementation of the new rules or to ...

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