identify the owners of the unclaimed monies nor disburse the monies to plaintiffs without a certifying voucher from the transferring agency to which the defendants contend the plaintiffs must apply.
The defendants further contend that even if the plaintiffs could demonstrate an injury, they fail to meet the causation requirement because the "plaintiffs cannot credibly claim that 'but for' the alleged actions of the defendants, they would have received the monies, since the initial decision whether plaintiffs' claims should be paid rests with independent third parties that are not parties to this action." Defendants' Motion for Judgment at 31-32. Again, however, the defendants are not comprehending the thrust of the plaintiffs' complaint which is that they do not have to apply to those independent third parties for the relief that they seek. In other words, the plaintiffs are claiming that as a matter of state law the defendants are the precise parties who should, in the first and final instance, make the decision whether the plaintiffs claims should be recognized and the monies disbursed accordingly.
Finally, the defendants contend that the plaintiffs cannot establish the redressability requirement of standing. Specifically, the defendants contend that Congress has set up a statutory scheme whereby the Secretary has no authority to disburse monies for four of the transferring agencies (House of Representatives, Library of Congress, Architect of the Capitol and Administrative Office of the U.S. Courts), no authority to disburse for the Departments of Navy, Army and Air Force (with limited exceptions), and no authority to disburse monies without a certified voucher from the remaining transferring agencies. The defendants contend that this Court cannot order them to comply with the plaintiffs' proposed relief because to do so would require the defendants to circumvent the statutory scheme as established by Congress.
The defendants rely upon Haskins Bros. & Co. v. Morgenthau, 66 App. D.C. 178, 85 F.2d 677 (D.C.Cir. 1936), where the court held that the defendants "duties are to receive and preserve the public money and not to disburse it except conformably to law" and that accordingly "we know of no power in this or any other court to compel the Secretary of the Treasury or the Treasurer of the United States, in a suit brought against them in their official capacities, to pay out money in the treasury in a manner contrary to that directed by Congress." Id. at 680-81; see also Royal Indemnity Co. v. United States, 313 U.S. 289, 294, 85 L. Ed. 1361, 61 S. Ct. 995 (1941); Fansteel Metallurgical Corp. v. United States, 145 Ct. Cl. 496, 172 F. Supp. 268, 270 (1959).
Obviously this Court can do no more than order the defendants to comply with the law but the very question begged is whether the defendants' interpretation of the statutory scheme for the disbursement of unclaimed monies under § 1322 is correct. If the defendants' interpretation of the statutory scheme is incorrect then this Court can order the defendants to comply with it and to enact regulations accordingly. See Center for Auto Safety v. National Highway Traffic Safety Administration, 253 U.S. App. D.C. 336, 793 F.2d 1322, 1334 (D.C.Cir. 1986) (standing granted to consumer organizations challenging new fuel economy standards for cars because injury, the lack of fuel efficient vehicles, would be redressed by ruling requiring increased fuel efficiency); Action Alliance of Senior Citizens v. Heckler, 252 U.S. App. D.C. 249, 789 F.2d 931, 936-39 (D.C.Cir. 1986) (plaintiffs challenging Health and Human Services' regulations granted standing since, inter alia, a court-ordered change in the regulations at issue would redress their injury). Furthermore, even assuming that the defendants' interpretation is correct, the plaintiffs' alternatively challenge its constitutionality under the Tenth Amendment. This Court certainly has the power to strike down the statutory and administrative scheme relied upon by the defendants if it in fact violates the Tenth Amendment. Marbury v. Madison, 5 U.S. 137, 176-80, 2 L. Ed. 60 (1803).
Accordingly, this Court rules that the plaintiffs have standing to bring this action.
The basic rationale for the ripeness doctrine is
to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.
Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967). Courts determine ripeness by evaluating "both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." 387 U.S. at 148-49.
A. Fitness of Decision for Judicial Review
In determining fitness of the issues for review, courts look to "whether the issue presented is a purely legal one, whether consideration of that issue would benefit from a more concrete setting, and whether the agency's action is sufficiently final." Ciba-Geigy Corp. v. United States Environmental Protection Agency, 255 U.S. App. D.C. 216, 801 F.2d 430, 435 (D.C.Cir. 1986). As the Supreme Court has provided, in order to be "ripe for review" the "disagreement must not be nebulous or contingent but must have taken on fixed and final shape so that a court can see what legal issues it is deciding, what effect its decision will have on the adversaries, and some useful purpose to be achieved in deciding them." Public Serv. Comm'n v. Wycoff Co., 344 U.S. 237, 244, 97 L. Ed. 291, 73 S. Ct. 236 (1952).
The defendants contend that the plaintiffs' action must fail under the ripeness doctrine because "there has been no final agency action by either of the defendants or any other agency on the merits of plaintiffs' entitlement to custody of the monies." Defendants' Motion for Judgment at 44. Again, however, such a position ignores the fundamental import of the plaintiffs' claims and essentially begs the question that is presented in this case. Although the defendants correctly represent that there has been no agency decision denying the merits of the plaintiffs' claims of entitlement to the monies, the defendants at the same time claim that they are not the proper parties to make that determination and that the plaintiffs must apply to the transferring agencies. The plaintiffs, on the other hand, contend that they do not have to apply to these transferring agencies and have accordingly filed this suit to compel the defendants to make a determination on and disbursement of the monies to which the States claim they are entitled. Although the defendants contend there are complex factual issues which have never been addressed, i.e., the amounts being claimed, the underlying funds from which those monies have been transferred, and the particular interests of the individual states and of the federal government, before these issues can be addressed it must first be determined who should address those issues, namely, the defendants or the transferring agencies. The issue of who must resolve the underlying factual issues is precisely what this matter is all about and is fit for review.
The defendants contend that when weighing hardship, "the fact that there are available administrative remedies which are not even referred to, much less shown to have been exhausted, is also crucial." However, in the decisions relied upon by the defendants the administrative channels themselves were not being challenged. In the instant case, the plaintiffs are contending that they do not have to comply with the administrative remedies to which the defendants refer. The hardship of requiring the plaintiffs to follow these challenged administrative procedures is twofold. First, as a practical matter, the burden and cost to the plaintiffs of applying to seventeen separate transferring agencies is obviously greater than if the plaintiffs could apply directly to the defendants for relief. The defendants at the hearing in this matter in fact recognized the increased efficiencies to the plaintiffs if they could compel the defendants to act on their claims.
More fundamentally, however, to require the plaintiffs to comply with the administrative procedures they are challenging as in violation of their unclaimed property laws and the Tenth Amendment would impose on them the very hardship and injury that they are trying to prevent by the filing of this action.
Accordingly, this Court rules that the plaintiffs' complaint is ripe for review. The plaintiffs have established the fitness of the issue for review and have demonstrated that they would suffer hardship if judicial review were denied.
V. FAILURE TO STATE A CLAIM
For purposes of a motion to dismiss, the complaint is to be construed in the light most favorable to the plaintiffs and its allegations taken as true. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); Shear v. National Rifle Ass'n, 196 U.S. App. D.C. 344, 606 F.2d 1251, 1253 (D.C.Cir. 1979); United States v. Kearns, 193 U.S. App. D.C. 344, 595 F.2d 729, 731 (D.C.Cir. 1978). As stated by the Supreme Court:
In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.
Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). This Court's inquiry is directed to whether the allegations constitute a statement of a claim under FED.R.CIV.P. 8(a). Investors Syndicate of America, Inc. v. City of Indian Rocks Beach, 434 F.2d 871, 879 (5th Cir. 1970).
The defendants contend that the "plaintiffs have failed to allege any duty -- statutory or otherwise -- on the part of the Secretary to provide the information sought" and to disburse the monies. Defendants' Motion for Judgment at 48. Each of the plaintiff States has an unclaimed property statute which permits it to obtain custody and possession of the funds in the unclaimed monies accounts which are now held by the Secretary and to require the holder of monies to identify the owners. The Amended Complaint, on its face, states that the plaintiffs are seeking relief pursuant to these statutes. The right and capacity of the States to rely upon their unclaimed property laws in a cause of action with respect to property held by the federal government is well-established. See Roth v. Delano, 338 U.S. 226, 94 L. Ed. 13, 70 S. Ct. 22 (1949); Anderson National Bank v. Luckett, 321 U.S. 233, 88 L. Ed. 692, 64 S. Ct. 599 (1944); United States v. Klein, 303 U.S. 276, 82 L. Ed. 840, 58 S. Ct. 536 (1938); United States v. Alabama, 434 F. Supp. 64 (M.D.Ala. 1977).
The defendants' recapitulation of the federal statutory and administrative scheme to support their argument that the plaintiffs have failed to state a claim is again begging the question in this case. The federal statutory and administrative scheme relied upon by the defendants may constitute a defense to the cause of action under the Supremacy Clause or the doctrine of exhaustion but it is not relevant to whether the plaintiffs have stated a claim pursuant to their state unclaimed property laws.
This Court rules that the plaintiffs have stated a claim upon which relief can be granted.
VI. SUPREMACY CLAUSE
The defendants contend that to require them to comply with the plaintiffs' unclaimed property laws rather than the federal statutory and administrative scheme outlined in Part I of this opinion, supra, would violate the Supremacy Clause. The Supremacy Clause of the Constitution provides that "the Laws of the United States which shall be made in Pursuance" of the Constitution "shall be the supreme law of the land." Art. VI, cl. 2. See City of New York v. Federal Communications Comm'n, 486 U.S. 57, 108 S. Ct. 1637, 100 L. Ed. 2d 48 (1988); Free v. Bland, 369 U.S. 663, 666, 8 L. Ed. 2d 180, 82 S. Ct. 1089 (1962) ("the relative importance to the State of its own law is not material when there is a conflict with a valid federal law, for the Framers of our Constitution provided that the federal law must prevail" and "any state law, however clearly within a State's acknowledged power, which interferes with or is contrary to federal law, must yield").
The Court's inquiry is "directed toward whether there is a valid federal law, and if so, whether there is a conflict with State law." Hancock v. Train, 426 U.S. 167, 48 L. Ed. 2d 555, 96 S. Ct. 2006 (1976). Federal law preempts state law
when Congress, in enacting a federal statute, expresses a clear intent to preempt state law . . ., when there is outright or actual conflict between federal and state law . . ., where compliance with both federal and state law is in effect physically impossible . . ., where there is implicit in federal law a barrier to state regulation . . ., where Congress has legislated comprehensively, thus occupying an entire field of regulation and leaving no room for the States to supplement federal laws . . ., or where the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress.