Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-01363/USCOURTS-ca10-88-01363-0/pdf.json

Parties Involved:
Department of Labor
Respondent
Oro Development Corporation
Petitioner

Document Text:

FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

Uoited Stares Court of Appeals 

Tenth Circuit 

JUN 19 1990 

&OBERT L. HOECK.ER 

Clerk 

ORO DEVELOPMENT CORPORATION, 

Petitioner, 

v. 

UNITED STATES DEPARTMENT OF LABOR, 

Respondent. 

) 

) 

) 

) 

) No. 88-1363 

) (OOL No. 86-JTP-6) 

) (On Petition for Review 

) of an Order of the 

) Department of Labor) 

) 

ORDER AND JUDGMENT* 

Before MOORE, BRIGHT,** and BRORBY, Circuit Judges. 

**Honorable Myron H. Bright, Circuit Judge, United States Court of 

Appeals for the Eighth Circuit, sitting by designation. 

At all times relevant to this appeal, the petitioner was the 

grantee of certain Comprehensive Employment and Training Act of 

1973 (CETA) as amended, 29 U.S.C S 801, et~, (repealed 1982) 

and Job Training Part nership Act (JTPA), 29 U.S.C. S 1501, 

et~, grants. Petitioner administered these grants, which were 

aimed at increasing the employment opportunities for migrant and 

seasonal farmworkers in Oklahoma. The petitioner appeals the 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 88-1363 Document: 010110036837 Date Filed: 06/19/1990 Page: 1 
• 

Secretary of Labor's disallowance of some costs charged to one 

CETA grant (No. 99-2-288-31-36) and one JTPA grant (No. 

99-4-0228-56-162-02). For the reasons set forth below, we affirm. 

The total sum of costs disallowed by the Secretary was 

$33,365.00. Of this sum, $32,251.00 represented legal and 

consulting fees incurred by petitioner in contesting cost 

disallowances which related to different, earlier CETA grants. 

The petitioner charged these legal and consulting costs to both 

the CETA and JTPA grants. The remaining $1,114.00 in costs 

represented the interest expense incurred by petitioner in the 

purchase of telephone equipment. This latter sum was charged to 

the JTPA grant only . 

Initially, we note that the petitioner's argument that the 

Secretary lacked jurisdiction under 29 u.s.c. S 159l(e) to 

initiate the recoupment proceedings that led to this appeal, at 

least to the extent that they involved the subject CETA grant, is 

without merit. See Inland Manpower Ass'n v. United States Dep't 

of Labor, 882 F.2d 343 (9th Cir. 1989). 

The Secretary properly disallowed the subject legal and 

consulting costs on the ground that they did not relate to the 

grants to which they had been charged. The clear, specific 

language of the pertinent regulations provides that such costs are 

unallowable. See 41 C.F.R. S 1.15.603-1 A.4.a.(l) (1984) and 

A.4.b., as well as S 1-15.603-2 21. The interest costs are 

unallowable under 41 C.F.R. S 1-15.603-2 19.a. 

We determine that the petitioner's due process right was not 

violated by the Department of Labor's shift in its disallowance 

2 

Appellate Case: 88-1363 Document: 010110036837 Date Filed: 06/19/1990 Page: 2 
• 

rationale between the grant officer and the administrative law 

judge review stages of the administrative proceedings. No proper 

reason has been advanced which barred the administrative law judge 

from considering regulations and their interpretations not 

previously applied by the grant officer as a basis to disallow 

cost expenditures. Furthermore, petitioner has demonstrated no 

prejudice stemming from this action, nor any violation of due 

process. 

We conclude that the Secretary did not abuse her discretion 

in declining to weigh the equities in disallowing the subject 

costs. The regulatory prohibitions on the allowance of the costs 

are clear, and the pe titioner failed to advance a substant i al 

argument for the exercise of the Secretary's disc r etion. See 

Action, Inc. v. Donovan, 789 F.2d 1453, 1460 (10th Cir. ---~------------

1986)(Secretary must respond with statement setting forth reasons 

for exercise or lack of exercise of discretion when substantial 

argument in favor of waiver of recoupment is made). 

The "final decision and order" of the Secretary of Labor is 

AFFIRMED . 

ENTERED FOR THE COURT 

PER CURIAM 

3 

Appellate Case: 88-1363 Document: 010110036837 Date Filed: 06/19/1990 Page: 3