Senator Vance Hartke, Chairman, Veterans' Affairs Committee; Senator Henry M. Jackson, Chairman, Interior & Insular Affairs Committee; Senator Gale W. McGee, Chairman, Post Office & Civil Service Committee; Senator Warren G. Magnuson, Chairman, Commerce Committee; Senator Lee Metcalf, Chairman, Joint Committee on Congressional Organization; Senator John Sparkman, Chairman, Banking, Housing & Urban Affairs Committee; Senator Stuart Symington; Senator Harrison A. Williams, Jr., Chairman, Labor & Public Welfare Committee; Representative J. J. Pickle; Representative Benjamin Rosenthal; Representative Morris K. Udall ; and Public Citizen, Inc. Urging Affirmance G. RICHARD FOX, St. Louis, Mo. Of Counsel W. THOMAS JACKS UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 72-1512 THE STATE HIGHWAY COMMISSION OF MISSOURI, PLAINTIFF-APPELLEE, v. JOHN A. VOLPE, SECRETARY OF TRANSPORTATION, AND CASPAR A. WEINBERGER, DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET, DEFENDANTS-APPELLANTS. Brief of Amici Curiae Senator Samuel J. Ervin, Jr., et al. urging affirmance INTERESTS OF AMICI CURIAE This brief is being submitted by the amici curiae Senator Samuel J. Ervin. Jr., et al urging this Court to affirm the decision of the United States District Court for the Western District of Missouri, Central Division, which held that the actions of the defendants in refusing to permit the State of Missouri to expend the full amount of the funds due it under the Federal-Aid Highway Program were unlawful. This case raises significant questions concerning the interpretation of a federal statute which the defendants claim gives them discretion to refuse to spend money which the Congress has appropriated for a specific purpose. Defendants also contend that even if they have acted in excess of the authority given them by Congress, the District Court lacked subject matter jurisdiction over this case, and that, as a "political question" it was non-reviewable by the judicial branch. Amici curiae have moved this Court for permission to file this brief because of the importance of the questions concerned and their interests in them. Seventeen of the amici are United States Senators, three are members of the United States House of Representatives, and the amicus, Public Citizen, Inc., is a non-profit organization whose activities include efforts to insure that Government officials carry out the laws as written by the Congress. The seventeen Senators include the Majority Leader and Assistant Majority Leader of the Senate, the Chairman of all but three of the standing committees of the Senate, and both Senators from Missouri. In addition to his duties as Chairman of the Government Operations Committee, the amicus Senator Samuel J. Ervin, Jr., as Chairman of the Subcommittee on Separation of Powers of the Senate Judiciary Committee, has held extensive hearings on the very practices which are challenged here. Because of the importance of the issues raised on this appeal and because of their interests in them which are more fully set forth in the accompanying motion, amici have prepared this brief for the Court's consideration. STATEMENT OF ISSUES PRESENTED FOR REVIEW I. Was the District Court correct in holding that it had jurisdiction over and subject matter of this action? 1 As the accompanying motion sets forth, these three chairmen could not be contacted in time to permit them to decide whether to join this brief, and their absence in no way signifies a decision on their part not to associate themselves with the position taken herein. 28 U.S.C. §§ 1331 (a), 1361 Sikorka v. Brenner, 379 F. 2d 134 (D.C. Cir. 1967) II. Does this action present a non-justiciable "political question"? Powell v. McCormack, 395 U.S. 486, 548-549 (1969) Housing Auth. v. HUD, 340 F. Supp. 654 (N.D. Cal. 1972) Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 613–614 (1952) III. Was the District Court correct in holding that defendants lacked the discretion to withhold obligational authority from plaintiff for reasons related to control of inflation? A. Have defendants been given that discretion by Congress? 23 U.S.C. §§ 101(c), (d), 104, 106(a), 109, 118, 120 note United States v. Guerlain, Inc., 155 F. Supp. 77, 82 (S.D.N.Y. 1957), jdgmt vacated on other grounds, 358 U.S. 915 (1958) Red Lion Broadcasting Co. v. F.C.C., 395 U.S. 367, 380–81 & n. 8 (1960) B. Is the executive branch constitutionally empowered to decline to adhere to Congress' intent that contractual authority not be withheld from the states under the Federal-Aid Highway Program? U.S. Const., Art. I, §§ 7, 9; Art. II, § 3 Kendall v. United States, 12 Pet. [37 U.S.] 524 (1838) STATEMENT OF THE CASE This suit by the State Highway Commission of Missouri (“Highway Commission") seeks to set aside certain decisions of the Secretary of Transportation ("Secretary") and the Director of the Office of Management and Budget ("Director of OMB") which limited to an amount substantially less than that authorized by Congress the sum which plaintiff was permitted for federal-aid highway construction during the relevant period. After a trial without a jury, the District Court held that it had jurisdiction and that it was not within the discretion of the Secretary to withhold obligational authority from plaintiff for reasons relating to control of inflation. 1. The Operation of the Federal-Aid Highway Program The Federal-Aid Highway Act of 1956, as amended, provides for partial federal funding of four systems of roads: the Interstate System, the federal aid primary system, the federal aid secondary system, and the federal aid urban system. Seven stages pertinent to the present discussion are involved in the federal funding of a particular highway construction project. First, Congress authorizes the appropriation of funds. The authorization of funds for the Interstate System for fiscal years (FY's) 1957 through 1976 is provided for each fiscal year in detail by Section 108(b) of the Federal-Aid Highway Act of 1956, 70 Stat. 378, as amended, [reprinted in the note to 23 U.S.C.A. § 101 (1972 pocket part)]. Second, the funds authorized for a given fiscal year are apportioned by the Secretary among the states in accordance with formulae prescribed by statute. See 23 U.S.C. § 104 (b). Beginning with FY 1960, Congress directed that all funds be apportioned as far as practicable (not to exceed eighteen months) in advance of the beginning of the fiscal year for which they are authorized. 23 U.S.C. § 104 (b) (5). As soon as that apportionment has taken place, the funds allotted to each state "shall be available for expenditure ***" 23 U.S.C. § 118(a). When used in Section 118, "expenditure" actually means "obligation," so that a state may begin to enter into contracts with road-builders for highway construction as soon as the funds are appropriated to it. See 42 Op. Att'y Gen. No. 32, p. 2 (1967). Apportioned sums remain available for obligation for two years past the fiscal year for which they were authorized; after that, they are to be reallotted to other states. 23 U.S.C. $ 118(b). 2 Most federal funding under the Federal-Aid Highway Act to date has been for the Interstate System, and to the extent that the operation of that System differs from that of other highway systems, this discussion will deal exclusively with the Interstate System. Any differences between the operations of the various systems are relatively slight, however, and are immaterial to the issues raised by this appeal. 3 In apportioning obligational authority among the states, the Secretary performs a purely ministerial function. As has been stated by F. C. Turner, Federal Highway Administrator, Department of Transportation: "There is absolutely no discretion of any kind in our office with respect to how much any state gets in any of these [four] categories of funds. The apportionment is specified in the law and we distribute it right to the dollar." Hearings on Executive Impoundment of Appropriated Funds Before the Subcommittee on Separation of Powers of the Senate Committee on the Judiciary, 92nd Cong., 1st Sess. 80 (1971) [hereinafter cited as "Senate Hearings (Turner testimony)"]. Once apportionments have been made, the third stage in the funding process begins the submission by the states to the Secretary of general programs of proposed construction projects. 23 U.S.C. § 105. After the Secretary has approved such a program, the fourth stage ensues, in which the Secretary is asked to approve plans for specific projects included in the approved program. 23 U.S.C. § 106(a). In deciding whether to approve a project, "the Secretary shall be guided by the provisions of section 109 [of 23 U.S.C.]." Id. His approval is evidenced by the execution of a formal project agreement with the state highway department, 23 U.S.C. § 110 (a), and “shall be deemed a contractual obligation of the Federal Government for the payment of its proportional contribution thereto." 23 U.S.C. § 106. Thereafter, the state may commence stages five (letting of construction contracts) and six (construction). The seventh and final stage is the appropriation by Congress of money from the Highway Trust Fund to pay the state the federal share of construction costs incurred in the partial or total completion of the project. The Highway Trust Fund, which was created by section 209 of the Federal-Aid Highway Act of 1956, 70 Stat. 397, [reprinted in note to 23 U.S.C.A. § 120], consists of monies received by the Treasury in payment of certain highway user taxes, including taxes on diesel fuel, gasoline, trucks, buses, tires, etc. Although the designated tax revenues are automatically deposited in the Highway Trust Fund, they may only be withdrawn from the Fund upon appropriation by Congress. Id. § 209 (f). To guard against the depletion of the Trust Fund, the Secretary is expressly given the power by statute to withhold obligational authority in apportioning the authorized amounts for a given fiscal year, if the Secretary of Treasury determines that "*** the amounts which will be available in the Fund will be insufficient to defray the expenditures which will be required as a result of the apportionment to the States of the amount authorized ***" Id. Furthermore, the amount which Congress may appropriate in any given year cannot exceed the amount available in the Trust Fund. See 42 Op. Att'y Gen. No. 32 (1967). However, there is no suggestion by defendants that any of the impoundments at issue in this case were prompted by a concern that the Trust Fund was in danger of being exhausted. 2. The History and Nature of the Administrative Practice of Withholding from the States Obligational Authority Provided for by Act of Congress The practice of refusing to permit states to enter into highway construction contracts to the extent authorized by Congressional enactment was initiated in FY 1967. In a message to Congress of September 8, 1966, President Johnson stated that a $3 billion reduction in "lower priority Federal expenditures" was necessary to curb inflation. In accordance with this pronouncement, the Director of the Bureau of the Budget (now the Director of OMB) ordered the reduction in FY 1967 of obligational authority under the federal-aid highway program by $700,000. An additional reduction of $600 million was ordered on January 23, 1968, for calendar year 1968. Senate Hearings, supra note 28 at 59 (Turner testimony). A further-and qualitatively different-restriction was imposed by the enactment in June 1968 of the Revenue and Expenditure Control Act of 1968, P.L. 90-364, §§ 202, 203, 82 Stat. 251. 271-72, which required that new obligational authority for calendar year 1968 be limited to $10 billion. Pursuant to this explicit Congressional direction (which must be distinguished from the administrative practice within the executive branch that is at issue in this appeal), the federal-aid highway program was suspended entirely for three months, resulting in a $200 million reduction in releases of obligational authority. A third-and again distinguishable-reduction in obligations for highway construction occurred on September 4, 1969, when President Nixon, after announcing a cutback in federal construction programs, requested states to cut back temporarily on their own construction projects. Voluntary compliance by some states resulted in the obligation of approximately $1.08 billion less for highway construction during FY 1970 than authorized by Congress. Senate Hearings, supra note 2. at 60 (Turner testimony). The President subsequently withdrew his request in March 1970. Another withholding of contractual authority under the federal-aid highway program occurred in FY 1971, when the $5.425 billion Congressional authorization was reduced to $4.6 billion. This reduction was made partially in response to a Congressionally mandated spending ceiling, P.L. 91-305, 84 Stat. 376, 405–406, and partially to carry out restrictive fiscal policies announced by the President on July 18, 1970. Finally, for FY 1972 and FY 1973, reductions of obligational authority of approximately $488 million and $1.7 billion, respectively, were made solely pursuant to administrative directives of defendant Director of OMB. At issue in the instant case is the discretion of the defendants to withhold obligational authority from the States pursuant to administrative decisions of the executive branch based on grounds unrelated to the highway project. These administrative impoundments occur in the fourth of the seven funding stages enumerated heretofore-the stage in which the Secretary approves or disapproves specific construction projects submitted by the States. The practice of officials in the Department of Transportation in recent years has been to apportion to the States the full sum authorized by Congress for a given fiscal year, but subsequently to issue a directive to each State informing it that only a designated portion of the authorized amount may actually be obligated, the remainder being “frozen.” Senate Hearings, supra note 2, at 81 (Turner testimony). The Department of Transportation will then refuse to authorize a State to advertise for bids on projects which, altogether otherwise acceptable, would cause the State in question to exceed the administrative "ceiling" placed on its obligational authority. Id. at 60. Thus, the procedure envisioned by 23 U.S.C. $118, whereby funds become available for obligation as soon as they are apportioned, is discarded, and in its place is substituted a process created by administrators rather than by legislators. The amici curiae do not now contest the withholding of authorized obligational authority when, as in calendar year 1968 and, to some extent, in FY 1971, the withholding is pursuant to a Congressional mandate to cut spending. Nor. of course, do we challenge voluntary reductions in the obligation of authorized sums, such as occurred in FY 1970. The kind of administrative impoundments which occurred in FY's 1968, 1972, and 1973, however, are of a different type entirely and, in our view, are unlawful. To date, the impoundments have been detrimental-although not fatal-to the federal-aid highway program. Because authorized funds remain available for obligation for two fiscal years beyond the fiscal year for which they were authorized, no actual lapses of obligational authority have yet occurred. But officials of the Department of Transportation have conceded that, as frozen funds continue to accumulate, some obligational authority may be lost completely. Moreover, as the District Court found, the withholding of obligational authority causes "continuing inflation of highway costs, and interruption of efficient obligation of the funds apportioned to Missouri" and presumably to other States. 347 F. Supp. at 953. The detrimental effects of the impoundment practices at issue in this case are, therefore, substantial. ARGUMENT I. THE DISTRICT COURT CORRECTLY HELD THAT IT HAD JURISDICTION OVER THE Subject matter jurisdiction in the case at bar rests on at least two grounds. First, the mandamus statute, 28 U.S.C. § 1361, provides a basis for jurisdiction where government officials have exceeded the bounds of their discretion by failing to perform a duty owed to plaintiff. As is established in part III of this Argument, defendants lacked the discretion to withhold obligational authority from the States for anti-inflationary reasons; therefore, they may be compelled under Section 1361 to do that which they have been directed to do by Congress. Second, this is a civil action "wherein the matter in controversy exceeds the sum or value of $10,000 * * * and arises under the Constitution [and] laws * * * of the United States," thus conferring federal jurisdiction under 28 U.S.C. § 1331(a). Although this ground was not expressly cited by plaintiffs in their original or amended complaints, the bases for its invocation-such as defendants' duties under a federal statute, the violation of those duties, and the amount in controversy-were alleged therein. The original and amended complaints thus satisfied the requirement of Rule 8(a) Fed. R. Civ. P. that the pleading contain 4 See letter from defendant Weinberger to defendant Volpe dated August 4, 1970 (Ex. C to Affidavit of John R. Provan) (Defendants' Appendix at —); see also 6 Pres. Docs. 940 (1970) (Ex. D to Provan Affidavit) (Defendants' Appendix at —). Senate Hearings, supra note 2, at 82 (Turner testimony). "a short and plain statement of the grounds upon which the court's jurisdiction depends," and the absence of a specific reference to Section 1331 in the pleadings is immaterial. See Sikora v. Brenner, 379 F.2d 134 (D.C. Cir. 1967). II. THIS ACTION DOES NOT PRESENT A NON-JUSTICIABLE "POLITICAL QUESTION" Defendants' contention that this case should not be decided on its merits because it presents a "political question" is without merit. First, it should be noted that defendants have erred fundamentally in their characterization of the questions presented for resolution. This Court is not, contrary to appellants' assertions (Brief, p. 48), being asked to decide the policy question "of whether these funds should be expended." This Court is being asked to decide whether Congress in the Federal-Aid Highway Act of 1956, denied defendants the discretion to withhold from plaintiff for anti-inflationary reasons the obligational authority provided for by Congress. The standards for determining whether this issue presents non-justiciable "political questions" were provided by the Supreme Court in Baker v. Carr, 369 U.S. 186, 217 (1962), as follows: "Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question." In their brief (pages 49-50) defendants emphasize what they perceive in this case to be "a lack of judicially discoverable and manageable standards” and "the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government." If this Court were being asked to decide the substantive policy question of whether and at what rate funds should be obligated for federal-aid highway construction, then defendants' worst fears would be realized. However, all this Court is being asked to do is decide a question of statutory interpretation, a task which it is called upon to perform daily. As the Supreme Court stated in Powell v. McCormack, 395 U.S. 486, 548-549 (1969): "Respondents' alternate contention is that the case presents a political question because judicial resolution of petitioners' claim would produce a "potentially embarrassing confrontation between coordinate branches" of the Federal Government. But, as our interpretation of Art. I, § 5, discloses, a determination of petitioner Powell's right to sit would require no more than an interpretation of the Constitution. Such a determination falls within the traditional role accorded courts to interpret the law, and does not involve a “lack of the respect due [a] coordinate [branch] of government,” nor does it involve an "initial policy determination of a kind clearly for nonjudicial discretion." Baker v. Carr, 369 U.S. 186, at 217 *** Our system of government requires that federal courts on occasion interpret the Constitution in a manner at variance with the construction given the document by another branch. The alleged conflict that such an adjudication may cause cannot justify the courts' avoiding their constitutional responsibility." The case of Housing Auth. v. HUD, 340 F. Supp. 654 (N.D. Cal. 1972), on which defendants place heavy reliance, is distinguishable from this case. The question which that Court decided to be "political" was whether the President had abused the discretion given him by Congress to impound funds to such an extent that the impoundment amounted to an unconstitutional "item veto." The Court stated: "Plaintiffs have also argued that by impounding part of the funds appropriated by Congress and signed into law by the President, that the President has made an unconstitutional item veto. The Court has already noted the discretionary nature of the legislation and appropriation here in issue. It appears to the Court that the plaintiffs are asking for a determination of when the executive's use of his admitted discretion (see Subcommittee Report above) goes too far and becomes an abusive item veto. Although there may be such a point, the Court finds itself unable to decide such an issue. |