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June 5, 1986

JOHN MELCHER, Plaintiff,

The opinion of the court was delivered by: GREENE

United States Senator John Melcher of Montana, the plaintiff in this action, has challenged the process by which five members of the Federal Reserve Board's Federal Open Market Committee (hereinafter FOMC) are selected. The gravamen of his complaint is that these five members, known as the "Reserve Bank members," are selected in violation of the appointments clause, Article II, § 2, cl. 2 of the Constitution, because they are selected by the boards of directors of the several Federal Reserve Banks -- private individuals -- rather than by the President of the United States with confirmation by the Senate. See 12 U.S.C. § 263(a). *fn1"

 The adjudication of Senator Melcher's cause has travelled a long and somewhat tortuous course, due essentially to recent changes in the state of the law in this area. Thus, the action had to be stayed September 26, 1984, pending the appeal in Committee for Monetary Reform v. Board of Governors, No. 83-1730 (D.D.C. Oct. 26, 1983), aff'd, 247 U.S. App. D.C. 48, 766 F.2d 538 (D.C. Cir. 1985), which was claimed to be dispositive of the issues here. The decision in that case, when it was issued, was found to be in significant tension with an earlier case, Riegle v. FOMC, 211 U.S. App. D.C. 284, 656 F.2d 873 (D.C. Cir. 1981), and this necessitated new submissions and a hearing on the motion to dismiss. Between Riegle and Committee for Monetary Reform, the Supreme Court decided Allen v. Wright, 468 U.S. 737, 104 S. Ct. 3315, 82 L. Ed. 2d 556 (1984), which also had an impact on the issues here, and finally, the recent decision in Synar v. United States, 626 F. Supp. 1374 (three judge court), prob. juris. noted, Bowsher v. Synar, 475 U.S. 1009, 106 S. Ct. 1181, 89 L. Ed. 2d 298 (1986), generated still another round of pleadings from the parties and required renewed consideration by the Court.

 After consideration of numerous submissions by all parties, and after hearing, the Court now decides the question of Senator Melcher's ability to pursue his claim in federal court.


 Supreme Court pronouncements establish a two-part test for standing questions. A litigant must (1) allege a "distinct and palpable" injury to himself; and (2) show that the injury is "'fairly' traceable to the challenged action" and that it is capable of being redressed by a favorable decision. Allen v. Wright, supra, 104 S. Ct. at 3325; Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472-73, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982); Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975).

 The first prong of this test may be termed the "injury" requirement, while the second constitutes the "causation" requirement. See Allen v. Wright, supra, 104 S. Ct. at 3326 n.19.

 The standing doctrine is, of course, one means for limiting court intervention to the resolution of those controversies envisioned by the framers of Article III. The courts' role in the constitutional scheme consists of deciding highly particularized disputes between individual litigants and avoiding broad public policy determinations that are more appropriately made by the political branches. The injury requirement ensures that the judicial process will be "more than a vehicle for the vindication of the value interests of concerned bystanders," Valley Forge College, supra, 454 U.S. at 473 (quoting United States v. SCRAP, 412 U.S. 669, 687, 93 S. Ct. 2405, 37 L. Ed. 2d 254 (1973)); the causation requirement "tends to assure that the legal questions presented to the court will be resolved, not in the rarified atmosphere of a debating society, but in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action." Id. at 472.

 If plaintiff is correct that five members of the FOMC exercise their powers in derogation of the Constitution's appointments clause, the injury suffered by the United States Senate as an institution is fairly obvious: that body is deprived of its constitutionally delegated power to review the credentials of persons exercising executive authority. See Moore v. U.S. House of Representatives, 236 U.S. App. D.C. 115, 733 F.2d 946, 951 (D.C. Cir. 1984); Riegle v. FOMC, 211 U.S. App. D.C. 284, 656 F.2d 873, 878 (D.C. Cir. 1981); Kennedy v. Sampson, 167 U.S. App. D.C. 192, 511 F.2d 430, 435 (D.C. Cir. 1974). Senator Melcher's individual standing to assert the Senate's interest in safeguarding its confirmation power has been sustained in a case that is -- on the standing issue at least -- on all fours with this one:


Assuming that the five Reserve Bank members of the FOMC are officers who must be appointed with the advice and consent of the Senate, [an individual Senator's] inability to exercise his right under the Appointments Clause of the Constitution is an injury sufficiently personal to constitute an injury-in-fact.

 Riegle v. FOMC, 656 F.2d at 878. See also, Moore v. U.S. House of Representatives, supra, 733 F.2d at 951-53 (individual members of House possessed standing to challenge origination of revenue bill in Senate). The conclusion that standing exists in this case is buttressed by Synar v. United States, supra, 626 F. Supp. at 1374. Synar held that members of Congress could challenge an automatic deficit reduction procedure, *fn2" on the ground that the procedure granted to the Comptroller General and the President power to nullify the members' votes on appropriations legislation. *fn3" Synar v. United States, 626 F. Supp. at 1381-82.

 The existing procedure for appointing FOMC members, if unconstitutional, similarly deprives Senator Melcher of his vote for or against confirmation. The fact that Synar involved a nullification of prior votes, while this case involves a deprivation of Melcher's right to vote in the first instance, is a distinction without difference. In either case, the plaintiff suffers a "'specific and cognizable' [injury] arising out of an interest 'positively identified by the Constitution.'" Id. (quoting United Presbyterian Church v. Reagan, 238 U.S. App. D.C. 229, 738 F.2d 1375, 1381 (D.C. Cir. 1984) (quoting Moore v. United States House of Representatives, supra, 733 F.2d at 951)). Just as the automatic deficit reduction act "interfere[d] with [plaintiffs'] 'constitutional duties to enact laws regarding federal spending,'" id., so the invalid appointment of FOMC members interferes with Senator Melcher's constitutional right and duty to advise and give consent to executive appointments. See also, Crockett v. Reagan, 232 U.S. App. D.C. 128, 720 F.2d 1355, 1357 (D.C. Cir. 1983) (Bork, J., concurring) (action which nullifies or diminishes congressman's vote creates injury-in-fact necessary for standing).

 The causation prong of the analysis is more difficult, but also leads to a conclusion that standing exists. The gravamen of Senator Melcher's complaint is that 12 U.S.C. § 263(a) is unconstitutional, and that the defendants in this action, who were appointed pursuant to that section, cannot legally exercise the powers they have adopted.

 To be sure, it can be argued that the defendants' allegedly illegal exercise of executive power is not the direct cause of plaintiff's injury, for it is the appointment of these defendants without the Senate's advice and consent, rather than their activities after appointment, that directly causes the injury. On this basis, it could be said that the only proper defendants in this case are the directors of the Federal Reserve banks who appointed these defendants.

 The Court of Appeals has previously addressed this argument and rejected it. Riegle v. FOMC, supra, 656 F.2d at 879 (D.C. Cir. 1981). The court noted that the causation prong of the standing analysis is satisfied where it is shown that "prospective [judicial] relief will remove the harm." Id. (quoting Warth v. Seldin, supra, 422 U.S. at 498-99). A declaration that appointments under section 263(a) are unconstitutional would, quite obviously, constitute an advisory opinion if it did not also amount to a declaration that persons appointed under that section have no lawful authority and can be enjoined from exercising executive powers. Thus, it was proper for Senator Melcher to name the Reserve Bank members of the FOMC in his complaint.

 His failure also to name the persons purportedly exercising an illegal appointment power does not deprive him of standing, where the named defendants satisfy both rationales underlying the Supreme Court's standing pronouncements, for two reasons. First, the named defendants, like Senator Melcher, have a very real stake in the outcome of the dispute. They are far more than "concerned bystanders," Valley Forge College, supra, 454 U.S. at 473 (quoting United States v. SCRAP, supra, 412 U.S. at 687); rather, they are the most obvious beneficiaries of the disputed appointments process. Second, invalidation of section 263(a) will, for the reasons already stated, necessarily deprive the defendants of their powers, a result that certainly qualifies as "a concrete factual context conducive to a realistic appreciation of the consequences of judicial action." Id. at 472.


 That brings the Court to the most difficult question in this case: whether it should invoke the doctrine known as equitable discretion laid down by Riegle v. FOMC, supra, and decline to entertain the lawsuit notwithstanding the fact that the Senator possesses Article III standing.

 In Riegle, Senator Donald W. Riegle, Jr., of Michigan, brought a suit that is identical to this one in all pertinent respects. Like Senator Melcher, Senator Riegle sued the FOMC and its Reserve Bank members, alleging that 12 U.S.C. § 263(a) violates the appointments clause and seeking an injunction against the exercise of voting powers by the individual defendants. The Court of Appeals ruled that Senator Riegle had standing to sue. 656 F.2d at 878-79. But because frequent attempts had been made in Congress to change the manner of selecting FOMC members, the court stated that it was wary of allowing a legislator to seek resolution of disputes with his legislative colleagues by suing in the courts on a hotly contested issue. Without denying standing, therefore, the court exercised a concept known as "equitable discretion" to dismiss the action. Id. at 879-82.

 Significantly, however, the court limited its concept of equitable discretion as follows: legislators will be denied access to the courts only when private plaintiffs are available to bring the type of suit brought by the legislator. *fn4" The court dismissed Riegle's suit because there were many private plaintiffs available: "a major corporation, pension fund, or other major investor." Id. at 881.

 In a subsequent Court of Appeals case, Committee for Monetary Reform v. Board of Governors, supra, 766 F.2d 538 (D.C. Cir. 1985), the court heard a challenge to the FOMC brought by the very private plaintiffs it had intimated were available when it decided Riegle. Notwithstanding the Riegle statement, the court denied them standing, holding that the connection between their injury (high interest rates) and the alleged constitutional violation (the appointment process employed to select FOMC members) was simply too tenuous to support standing under recent Supreme Court decisions. In the view of the court, the plaintiffs could not show that a different appointment process would produce different members who would adopt different interest rate policies. Id. at 542. *fn5"

 The Court of Appeals could not appropriately resolve the tension between Riegle and Committee for Monetary Reform because no congressional plaintiffs were present in the latter case. This Court, however, must address the obvious inconsistency between the two decisions. If both precedents are mechanically applied, the result is that section 263(a) is immune from constitutional attack. Private plaintiffs lack standing to challenge it, *fn6" and congressional plaintiffs are barred by the doctrine of equitable discretion. This result was clearly not contemplated by the Riegle court, which squarely grounded its holding on the assumption that "a similar action could be brought by a private plaintiff." Riegle, supra, 656 F.2d at 882. Nor was it accepted by the Committee for Monetary Reform court, which noted that " Riegle was decided prior to the Supreme Court's most recent [standing] articulations." 766 F.2d at 544 n.37. The Committee for Monetary Reform court was fully aware of the argument that its denial of standing to private plaintiffs might mean that "a subsequent action brought by a Senator may not be dismissed on prudential grounds," but "expressed no opinion on the question, the resolution of which must await another day." Id. at 544 n.38. *fn7"

 That day has now arrived. Fortunately, the task of reconciling two seemingly conflicting precedents is less difficult than at first appears. It is apparent that the law of standing has changed substantially since the time when Riegle was decided, and those changes have been most significant for plaintiffs such as those who brought Committee for Monetary Reform. Thus, while it is arguable whether private plaintiffs could have survived a careful standing analysis when Riegle was decided, it is beyond question that private plaintiffs lack standing to challenge the FOMC and its Reserve Bank members today, after the Supreme Court's decision in Valley Forge,8 and Allen v. Wright.9

 Valley Forge and Allen v. Wright both make clear that standing by private parties will not be supported by a possibility that judicial action can redress plaintiff's injury. Certainty in the causal chain between plaintiff's injury, defendant's conduct, and judicial relief altering that conduct must be present. That refinement in the court's standing analysis was not obvious when Riegle was decided. *fn10"

  Accordingly, Riegle itself impels this Court to conclude that equitable discretion may not appropriately be applied to deny standing to plaintiff in this case, inasmuch as no private plaintiff is available to enforce the appointments clause of the Constitution. Under those circumstances, this Court would be acting well beyond its authority if it declined to hear Senator Melcher's case. *fn11" The Court's discretion to refuse a constitutionally proper plaintiff access to the courts, because of legitimate separation of powers concerns, is not so broad that the Court may abdicate its own role in the constitutional scheme and effectively immunize section 263(a) from any judicial review whatsoever. See Marbury v. Madison, 5 U.S. 137, 1 Cranch 137, 176, 2 L. Ed. 60 (1803) ("it is, emphatically, the province and duty of the judicial departments to say what the law is").

 An appropriate order accompanies this Opinion.


 In accordance with the reasons stated in the Opinion issued this date, it is this 5th day of June, 1986

 ORDERED that defendants' motion to dismiss be and it is hereby denied; and it is further

 ORDERED that supplemental briefs on the respective motions for summary judgment be filed on or before June 16, 1986, that oppositions thereto be filed on or before June 23, 1986; and that no replies will be permitted; and it is further

 ORDERED that a hearing on the motions for summary judgment shall be held at 10:00 a.m., July 1, 1986, in Courtroom No. 1.

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