EPA contends that Congress has prohibited such suits by passing the Federal Tort Claims Act, which contains a limited waiver of sovereign immunity but prohibits suits for damages caused by federal employees performing discretionary functions.
Despite EPA's insistence to the contrary, this case is not a "misgovernment" case. Rochester's complaint is not grounded solely upon EPA's error in initially failing to inform Congress of Rochester's pending appeal. Rather, Rochester is concerned with the irreparable harm it faces should the EPA refuse to obligate Section 206 funds or process Rochester's pending appeals prior to Congress' rescission of its budgetary authority. The Federal Tort Claims Act is not a bar to this Court's review.
Next, EPA argues that this suit is prohibited by the Tucker Act, 28 U.S.C. §§ 1346(a)(2) and 1491, which bars district court actions, based upon statute, regulation, or contract, where the claim is for money in excess of $ 10,000, and that exclusive jurisdiction lies in the Claims Court. Once again, EPA misses the mark. Plaintiffs are not seeking money damages in this action. Rather, they are seeking injunctive relief requiring EPA to preserve nearly $ 4 million in unobligated funds appropriated under Section 206 until the resolution of their administrative appeals. That money is involved does not change the character of this case from equitable to legal in nature. See Bowen v. Massachusetts, 487 U.S. 879, 108 S. Ct. 2722, 2731-32, 101 L. Ed. 2d 749 (1988) (plaintiff seeking injunction correcting an allegedly unlawful disallowance of a federal Medicaid grant states an equitable, rather than legal, claim). Our court of appeals has repeatedly recognized that district court review of the type of action at issue here is appropriate and not barred by the Tucker Act. See Esch v. Yeutter, 278 U.S. App. D.C. 98, 876 F.2d 976, 977-83 (D.C. Cir. 1989) (plaintiff seeking injunction to prevent Secretary of Agriculture from denying farm subsidy benefits); National Ass'n of Counties v. Baker, 268 U.S. App. D.C. 373, 842 F.2d 369, 372-77 (D.C. Cir. 1988) (plaintiffs seeking declaratory and injunctive relief to compel Secretary of Treasury to release funds appropriated under Revenue Sharing Act), cert. denied, 488 U.S. 1005, 109 S. Ct. 784, 102 L. Ed. 2d 775 (1989); Maryland Department of Human Resources v. Department of Health & Human Services, 246 U.S. App. D.C. 180, 763 F.2d 1441, 1446-51 (D.C. Cir. 1985) (plaintiff seeking declaratory and injunctive relief to prevent defendants from reducing funds due to plaintiff under Title XX of Social Security Act).
Finally, EPA contends that the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et seq., does not provide a waiver of sovereign immunity. According to EPA, the APA does not offer a basis for attack against congressional action, which EPA asserts is at issue here. Nor does the APA permit Rochester to challenge EPA, defendant contends, because EPA has not taken any final agency action subject to APA review. EPA's argument is unavailing. As to EPA's first argument, Rochester is not challenging congressional action and this Court's exercise of its equitable powers to preserve these funds does not interfere with Congress' exclusive power to appropriate funds. See, infra, II.B. As to EPA's second argument, Jacksonville Port Authority, Schweiker, West Virginia Ass'n of Community Health Centers, and National Ass'n of Regional Councils make clear that district courts have jurisdiction in cases such as this, where injunctive relief is sought to suspend a reversion of previously appropriated funds back to the federal Treasury, so long as the suit is filed prior to the reversion date. That EPA has not taken any final agency action does not therefore prevent district court review under these circumstances. An analogous situation arose in Schweiker, where plaintiffs sought reimbursement for expenditures they incurred in operating various programs under the Social Security Act. At issue in Schweiker was a rule issued by the Department of Health and Human Services which barred payment of certain funds to which plaintiffs claimed entitlement. Plaintiffs filed their complaint two days before the final rule was published, seeking to reserve a portion of otherwise unobligated funds for fiscal year 1981 in the event that they succeeded on their pending claims. Recognizing plaintiffs' precarious position, our court of appeals had no difficulty concluding that it had the power to hear plaintiffs' claim:
Appellants could not have been expected to file suit earlier than they did because HHS had not yet issued a final rule barring payment of the disputed claims. As it was, appellants filed suit two days before the final rule was published. Had they done so earlier, their suit would probably have been dismissed as premature, on the ground that HHS could still provide complete relief in a final rule.
Schweiker, 684 F.2d at 998. Had plaintiffs in Schweiker waited until after the end of the fiscal year, the funds would have lapsed and reverted back to the Treasury, leaving plaintiffs with no adequate remedy.
Like Schweiker, forcing plaintiffs here to await final agency action in the face of the imminent congressional rescission of the $ 47.7 million of unobligated Section 206 funds would leave them without an adequate remedy. Plaintiffs are in a classic "Catch-22." If they wait for final agency action, the disputed funds would be rescinded, leaving them without a source of funds should they ultimately prevail on their administrative appeals. On the other hand, should they file suit prior to the rescission, as they in fact have done, they face the argument raised by EPA here, that there is no final agency action for this court to review. As illustrated by Schweiker and the other cases from this circuit, district court review under such circumstances is entirely appropriate.
Furthermore, the more than four year delay in the processing of plaintiffs' administrative appeals (including the two year delay directly at EPA) should not be laid entirely at plaintiffs' feet. Plaintiffs have not slept on their rights. They have pursued their appeals through the multi-leveled review process at both the state and federal level pursuant to EPA regulation. They should not be penalized for EPA's inefficient and lengthy appeals process. Had EPA resolved this matter expeditiously, plaintiffs would not find themselves in their present position. If EPA had resolved the appeals in plaintiffs' favor, plaintiffs would have their Section 206 funds; if EPA had ruled against plaintiffs, there would be a final agency action from which plaintiffs could seek judicial review.
As the case law makes clear, once the statutory lapse date, or in this case, the date of rescission, passes, the disputed funds revert back to the Treasury and are no longer available for obligation. Plaintiffs waited as long as could reasonably be expected to file suit. Under these circumstances, EPA's argument that this Court lacks jurisdiction borders on frivolity.
B. Congressional Appropriations Power
EPA also characterizes this case as a "preemptive effort to override an act of Congress calling for the return of $ 48 million to the federal Treasury."
EPA argues that Congress, which has exclusive power under Article I, § 8, cl. 1 and Article I, § 9, cl. 7 of the United States Constitution to control the appropriation of federal funds, therefore has "exclusive power to decide whether or not to fund the Clean Water Act reimbursement grants program, and whether to rescind funding, even in the midst of the judicial or administrative process."
EPA asks this Court to characterize the instant action as an effort to prevent Congress from exercising its power of rescinding previously appropriated funds and asserts that no person has power to bring suit to prevent legislation.
Not only does EPA mischaracterize the nature of this case, it ignores the fact that this same argument was specifically rejected by our court of appeals in Schweiker :
We have made it clear that the power to prevent the statutory lapse or reversion of an agency's budget authority does not conflict with Congress' exclusive power to appropriate funds.