Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-98-05576/USCOURTS-caDC-98-05576-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 13, 1999 Decided January 4, 2000

No. 98-5576

National Center for Manufacturing Sciences,

Appellant

v.

Department of Defense, et al.,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 95cv01817)

Stanley Yorsz argued the cause for appellant. With him on

the briefs were Jeffrey J. Bresch and Attison L. Barnes, III.

Lisa Goldfluss, Assistant U.S. Attorney, argued the cause

for appellees. With her on the briefs were Wilma A. Lewis,

U.S. Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.

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Before: Sentelle, Rogers and Tatel, Circuit Judges.

Opinion for the court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: Plaintiff-appellant National Center for Manufacturing Sciences ("NCMS") appeals from a

judgment of the district court dismissing its complaint for

failure to state a claim. NCMS claims that appellees, Department of Defense ("DOD") and Department of the Air

Force ("Air Force") (along with various officials), improperly

held back approximately $15 million of funds authorized and

appropriated by Congress and earmarked for NCMS. Because we conclude that Congress rescinded the earmark in

section 1006 of the National Defense Authorization Act for

Fiscal Year 1995, we affirm the district court's dismissal of

the action.

I. Background

NCMS is a non-profit research and development manufacturing consortium that receives funding, in part, through

congressional appropriations earmarks. This dispute centers

on whether NCMS is entitled to approximately $15 million of

an original $40 million earmark appropriated for fiscal year

1994.

On November 11, 1993, Congress appropriated

$12,314,362,000 under the heading "Research, Development,

Test and Evaluation, Air Force," which was "to remain

available for obligation until September 30, 1995." One earmark provision stated: "Provided further, That not less than

$40,000,000 of the funds appropriated in this paragraph shall

be made available only for [NCMS]...." Department of

Defense Appropriations Act, 1994, Pub L. No. 103-139, 107

Stat. 1418, 1431-33 (1993) ("1994 Appropriations Act"). Later that month, Congress passed the National Defense Authorization Act for Fiscal Year 1994 ("1994 Authorization Act"),

Pub. L. No. 103-160, 107 Stat. 1547 (1993). Section 201 of

this act authorized $12,289,211,000 for the Air Force--

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$25,151,000 short of the amount appropriated. 107 Stat. at

1583.

The Air Force and NCMS entered into a Cooperative

Agreement on September 19, 1994, whereupon the Air Force

released $24,125,000 of the 1994 funds. The remaining

$15,875,000 of the original $40 million was not released,

although the agreement said a release could occur if funds

were made available for allotment.

On October 5, 1994, Congress passed the National Defense

Authorization Act for Fiscal Year 1995 ("1995 Authorization

Act"), Pub. L. No. 103-337, 108 Stat. 2663 (1994). Section

1006, in particular subsection 1006(d), refers to the status of

1994 defense appropriations. We set forth the text of the

section here:

SEC. 1006. AUTHORITY FOR OBLIGATION OF

CERTAIN UNAUTHORIZED FISCAL YEAR 1994

DEFENSE APPROPRIATIONS.

(a) AUTHORITY.--The amounts described in subsection

(b) may be obligated and expended for programs, projects, and activities of the Department of Defense in

accordance with fiscal year 1994 defense appropriations

except as otherwise provided in subsections (c) and (d).

(b) COVERED AMOUNTS.--The amounts referred to

in subsection (a) are the amounts provided for programs,

projects, and activities of the Department of Defense in

fiscal year 1994 defense appropriations that are in excess

of the amounts provided for such programs, projects, and

activities in fiscal year 1994 defense authorizations.

(c) PROGRAMS NOT AVAILABLE FOR OBLIGATION.--Amounts described in subsection (b) which

remain available for obligation on the date of the enactment of this Act may not be obligated or expended for

the following programs, projects, and activities of the

Department of Defense (for which amounts were provided in fiscal year 1994 defense appropriations): [programs

unrelated to NCMS]

(d) MANUFACTURING TECHNOLOGY.--The Secretary of Defense may obligate fiscal year 1994 defense

appropriations under the Manufacturing Technology Development program which remain available for obligation

on the date of the enactment of this Act in accordance

with the competition and cost-sharing requirements of

subsection (d) of section 2525 of title 10, United States

Code, as amended by section 256 of this Act, notwithstanding any other provision of law that specifies (or has

the effect of requiring) that a contract be entered into

with, or a grant be made to, a particular institution or

entity.

(e) DEFINITIONS.--For the purposes of this section:

(1) FISCAL YEAR 1994 DEFENSE APPROPRIATIONS.--The term "fiscal year 1994 defense appropriations" means amounts appropriated or otherwise made

available to the Department of Defense for fiscal year

1994 in the Department of Defense Appropriations Act,

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1994 (Public Law 103-139).

(2) FISCAL YEAR 1994 DEFENSE AUTHORIZATIONS.--The term "fiscal year 1994 defense authorizations" means amounts authorized to be appropriated for

the Department of Defense for fiscal year 1994 in the

National Defense Authorization Act for Fiscal Year 1994

(Public Law 103-160).

108 Stat. at 2835-36.

A few weeks prior to the passage of the 1995 Authorization

Act, NCMS filed suit in the district court seeking the unpaid

$15 million. The complaint invoked the mandamus statute, 28

U.S.C. s 1361 (1994), the Declaratory Judgment Act, 28

U.S.C. s 2201 (1994), the Administrative Procedure Act, 5

U.S.C. ss 701-06 (1994), and requested specific performance

of the Cooperative Agreement. After preliminary injunctive

relief was denied, the Air Force filed a motion to dismiss, or

in the alternative, to transfer the claim to the Court of

Federal Claims as a contract action against the government

under the Cooperative Agreement. The district court granted the transfer motion. NCMS appealed to the Federal

Circuit, who reversed and remanded to the district court,

holding that the action was not a contract action. See National Ctr. for Mfg. Sciences v. United States, 114 F.3d 196

(Fed. Cir. 1997).

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Upon return of the case to the district court, the district

court initially denied appellees' motion to dismiss. On reconsideration, however, the court granted the motion to dismiss

in December of 1998. Noting that the parties agreed that the

$40 million had been both authorized and appropriated, the

court held that subsection 1006(d) of the 1995 Authorization

Act rescinded the unobligated $15 million. NCMS appeals

the dismissal, which we review de novo. See, e.g., Moore v.

Valder, 65 F.3d 189, 192 (D.C. Cir. 1995).

Upon initial review of the record, it was unclear whether

the Air Force had retained funds with which NCMS's claim

could be satisfied. We therefore ordered supplemental briefing prior to oral argument on the issue of mootness in light of

City of Houston v. Department of Hous. and Urban Dev., 24

F.3d 1421 (D.C. Cir. 1994). City of Houston makes clear that

once an appropriation lapses or the relevant funds have been

obligated, "a court cannot reach them in order to award

relief." Id. at 1426. Taking care to avoid such an "insuperable" difficulty and ensure that we had the power to remedy

appellees' alleged wrong, we requested the additional briefing. 13A Charles Alan Wright, et al., Federal Practice and

Procedure s 3533.3 (2d ed. 1984). We find that the case is

not moot. Appellees' brief clarifies that while the specific

funds referred to by subsection 1006(d) were reallocated,

there are sufficient remaining funds in the fiscal year 1994

Research, Development, Test, and Evaluation, Air Force account available to liquidate NCMS's claim.

II. Discussion

Section 114 of 10 U.S.C. states, in relevant part, that "[n]o

funds may be appropriated for any fiscal year to or for the

use of any armed force or obligated or expended for ... any

research, development, test, or evaluation, or procurement or

production related thereto ... unless funds therefor have

been specifically authorized by law." 10 U.S.C. s 114(a)(2)

(1994). Authorization acts limit the amount of funds Congress can appropriate for a given purpose. See Office of

Management and Budget, The Budget System and Concepts 2-

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3 (1997). Because of the existence of 10 U.S.C. s 114, it is

clear that any monies appropriated for NCMS by Congress

for research must be authorized before they can be appropriated and distributed. The parties agree that NCMS's $40

million earmark was both appropriated and authorized. They

dispute whether section 1006 rescinded the unpaid portion of

that earmark. We hold that it does.

Section 1006(d) states that 1994 defense appropriations in

NCMS's research province "which remain available for obligation" may be obligated by competition notwithstanding any

specific grants otherwise. The $15 million of unreleased

funds, which was "available for obligation" because it was

already authorized, was thus freed from its earmark status by

this provision. Therefore, NCMS no longer has any rights to

the funds on which its claim is based.

Attempting to avoid this result, NCMS claims that section

1006 only applies to previously unauthorized funds (i.e., the

$25 million shortfall between the 1994 Authorization Act and

1994 Appropriation Act) and thus had no effect on the unreleased $15 million. It also argues that funds are "available

for obligation" when they are appropriated. This is generally

true because authorization acts generally precede appropriations acts, and not all appropriations require matching authorizations. But funds which must be authorized by statute and

are not so authorized cannot be "available for obligation."

Because 10 U.S.C. s 114(a)(2) requires authorization of these

funds before they become available, appropriation alone is

insufficient. Section 1006 itself is an authorization section

which would be unnecessary but for the authorization requirement. Therefore, the term "available for obligation" in the

context of section 1006 refers to funds that are authorized.

Nothing limits the operation of subsection 1006(d) to previously unauthorized funds.

Other subsections, and indeed the title of section 1006,

refer to unauthorized funds, but none of those various subsections alter the effect of subsection (d). A brief review of the

sections makes this clear.

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Subsection (a) provides "AUTHORITY" to "obligate[ ]"

certain funds as long as subsection (c) and (d) do not provide

otherwise. This subsection was necessary because authorization for defense spending is required by statute. Conferring

the required authority by stating the funds "may be obligated," subsection (a) demonstrates that funds "available for

obligation" in section 1006 are authorized.

Subsection (b) describes which funds are authorized by

subsection (a). The language describes the funds that made

up the $25 million shortfall between the 1994 Authorization

Act and 1994 Appropriations Act.

Subsection (c) acts to limit the authority conferred by

subsection (a). It requires that the newly authorized funds

"may not be obligated or expended" on certain enumerated

programs. Note that subsection (c), by its terms, applies

only to funds defined in subsection (b).

Subsection (d) operates on its own. It refers to appropriations which remain available for obligation, and it is not

limited only to funds authorized via subsection (a). While

subsection (c) limits its operation to amounts available for

obligation under subsection (b), subsection (d) contains no

such limitation. It applies to all funds and not only those

freed up by subsection (a).

Although subsection (b) refers to previously unauthorized

funds, and subsection (a) refers to what they can be spent on,

neither of these subsections modify subsection (d). NCMS

argues that the mention of subsection (d) in subsection (a)

limits the application of subsection (d) to only unauthorized

funds. This has it backwards. Instead, subsection (d) is

limiting the operation of subsection (a).

Perhaps the matter would have been clearer if Congress

had enacted subsection (d) as a freestanding section, but its

placement is not illogical. Instead of repeating the language

of subsection (d) in subsection (a), it was rational to merely

reference subsection (d) and retain it within section 1006.

Further, the title of section 1006, which suggests that the

entire section addresses only previously unauthorized funds,

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is also no impediment. The plain meaning of a statute cannot

be limited by its title, see Pennsylvania Dep't of Corrections

v. Yeskey, 118 S. Ct. 1952, 1956 (1998), and provisions in a

statute do not always align with its title, see Hadden v. The

Collector, 72 U.S. (5 Wall.) 107, 110 (1866). There is no

reason to cloud the plain meaning of subsection (d) because of

its placement in section 1006.

Therefore, we hold that the operation of subsection 1006(d)

is not limited to funds authorized by subsection 1006(a).

Subsection (d) allowed the funds that NCMS seeks to be

obligated pursuant to the competition provisions of 10 U.S.C.

s 2525, "notwithstanding" the provision of the 1994 Appropriations Act that "specifie[d]" that "a grant be made to" NCMS.

Because NCMS no longer has a legal right to the funds it

seeks, it cannot state a claim upon which relief can be

granted.

III. Reconsideration Issue

Appellant raises additional issues which are without merit.

While there is no need to comment on the majority of these

arguments, we shall devote a small amount of time to one of

them.

Appellant claims that the district court improperly granted

appellees' motion for reconsideration of the motion to dismiss

because, in its view, no clear errors of law existed in the

initial ruling. It thus contends that the district court could

not reverse itself. Not only is appellant's argument incorrect,

it is pointless.

True, a district court should not grant a motion for reconsideration unless the moving party shows new facts or clear

errors of law which compel the court to change its prior

position. See, e.g., Moro v. Shell Oil Co., 91 F.3d 872, 876

(7th Cir. 1996); Assassination Archives & Research Ctr. v.

CIA, 48 F. Supp. 2d. 1, 13 (D.D.C. 1999). But here the

motion was correctly granted based upon on what the court

found to be clear errors of law. Even if the district court's

finding that clear errors of law existed were incorrect, there

is nothing to be gained by appealing that specific holding

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because an appeal of the underlying merits issue will dispose

of the question. If we had held that the district court erred

in its interpretation of section 1006, we would have reversed

the ruling on the motion to dismiss. It is a waste of time to

go further and argue that the district court also should not

have granted the motion for reconsideration. Because of the

merger of the issues, our job is done.

IV. Conclusion

We conclude that the district court correctly granted appellees' motion to dismiss for failure to state a claim. We hold

that subsection 1006(d) of the 1995 Authorization Act rescinded the unreleased portion of NCMS's funding earmark for

fiscal year 1994. Accordingly, NCMS has no legal entitlement to the funds claimed. The district court's judgment is

Affirmed.

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