b'Constitutional Limits on \xe2\x80\x9cContracting Out\xe2\x80\x9d Department of\nJustice Functions under OMB Circular A-76\nL itig a tio n o n b e h a l f o f th e U nited S ta te s m u st be c o n d u c te d o r c lo s e ly s u p e rv is e d by o ffic e rs o f\nth e U n ite d S ta te s w h o have b een a p p o in te d in c o n fo rm ity w ith th e A p p o in tm e n ts C la u s e an d\nw h o a re u n d e r th e s u p erv isio n o f th e A tto rn e y G e n e r a l a n d th e P r e s id e n t.\xe2\x80\x99\n\nC e r ta in p ro g r a m a n a ly s t, p ro g ram m o n ito r a n d h is to ric a l re s e a rc h su p p o rt p o s itio n s in th e D e \xc2\xad\np a r tm e n t o f J u s tic e d o n o t in v o lv e g o v e rn m e n ta l a u th o rity th a t can o n ly b e e x e rc is e d by\no ff ic e rs o f th e U n ite d S tates, but in s te a d in v o lv e in fo rm a tio n g a th e rin g a n d re p o rtin g d u tie s\nw h ic h m a y c o n s titu tio n a lly be p e rfo r m e d by p riv a te p a rtie s o n a c o n tra c t b a sis .\n\nApril 27, 1990\nM e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l\nJ u s t ic e M a n a g e m e n t D iv is io n\n\nYou have asked for our advice concerning the constitutional limitations\non employing private contractors or individuals to perform certain tasks now\nperformed by Department of Justice employees. First, you have asked us to\nexplore any constitutional questions raised by the contracting out of fortyeight program analyst and program manager positions responsible for grant\nactivities in the Office of Juvenile Justice and Delinquency Prevention\n(\xe2\x80\x9cO JJDP\xe2\x80\x9d) and the Bureau of Justice Assistance (\xe2\x80\x9cBJA\xe2\x80\x9d). According to the\nD epartm ent\xe2\x80\x99s notice in the January 8, 1990 Commerce Business Daily, the\nfunctions performed by these positions include, but are not limited to, the\nfollowing:\nFirst, the development, monitoring, and promotion of criminal\njustice (including drug prevention), juvenile justice and delin\xc2\xad\nquency prevention, and related programs administered by State\nand local government agencies and other public and nonprofit\n* E d ito r\'s n o te: T h e O ffice o f Legal C o u n se l has d isav o w e d the interpretation o f the A ppointm ents\nC la u se s e t fo rth in th is o p in io n . See M em o ran d u m for th e G eneral C ounsels o f the Federal G o v e rn \xc2\xad\nm en t, fro m W alter D ellin g er, A ssistant A tto rn e y G eneral, Re: The Constitutional Separation o f Powers\nbetw een the President and Congress, at 2 0-21 n.53 (M ay 7, 1996).\n\n94\n\n\x0corganizations and institutions. (Congress sets certain require\xc2\xad\nments which these agencies must meet to qualify for federal\nassistance.) Second, the provision of technical assistance to\nState/local agencies in the form of short-term training on tech\xc2\xad\nnical matters; dissemination of information (publications,\ninstitutes, conferences, seminars, etc.); provision of information\nto develop programs proposals; and preparation of program plans.\nThe notice also indicates that as a general matter, personnel holding these\npositions are \xe2\x80\x9cresponsible for administering the Federal part of the state or\nlocal government\xe2\x80\x99s criminal justice or related programs.\xe2\x80\x9d It is our under\xc2\xad\nstanding that employees in these positions presently monitor the programs\nof state and nonprofit grantees and report on their compliance with federal\nlaw and grant specifications. While these reports may form the basis for\nfederal funding decisions made by the Administrator of OJJDP or the Direc\xc2\xad\ntor of BJA, no final decisions concerning program compliance or federal\nfunding can be made by any of the forty-eight employees who presently\noccupy these positions. In addition, some of these employees may assist in\nthe formation of program initiatives within the framework of overall policy\ngoals set by the Administrator or the Director. Finally, some of these posi\xc2\xad\ntions involve rendering non-binding advice to grantees concerning compliance\nwith federal law. However, all final decisions as to actual compliance with\nfederal law rest with the Administrator and the Director.\nSecond, you have asked our opinion concerning the contracting out of\nhistorical research support positions in the Office of Special Investigations\n(\xe2\x80\x9cOSI\xe2\x80\x9d) of the Criminal Division. The work contracted out in this context\nwould involve translation, research, and secretarial support services for OSI\nhistorians investigating individuals suspected of having committed war crimes\nduring World War II.\nFinally, you have expressed the need for more general guidance concern\xc2\xad\ning the constitutional limitations on the application of OMB Circular A-76\nto Department of Justice functions.1 In particular, you have inquired whether\nwe adhere to the views expressed in an opinion issued by this Office in 1983\nthat concludes that legislation providing for the use of private counsel to\nrepresent the United States in debt collection actions is constitutionally prob\xc2\xad\nlematic. See Memorandum to Deputy Attorney General Schmults, from\nAssistant Attorney General Olson, Office of Legal Counsel (May 20, 1983).\n\' It ap p ears to us that, absent presidential d irectiv es to the contrary, the A ttorney G eneral, as the h e ad o f\nthe D ep artm en t o f Justice and the P resid en t\'s c h ie f legal advisor, has the final a u th o rity to d e te rm in e\nw hat po sitio n s w ithin the D epartm ent o f Justice are suitable to be co nsidered fo r c o n tractin g o ut. See S\nU .S .C . \xc2\xa7 301 (\xe2\x80\x9cT h e h ead o f an E xecutive d e p a rtm e n t. . . m ay p rescribe re gulations fo r the g o v e rn m e n t\no f h is d ep artm en t, the co n du ct o f its em ployees, the distrib u tio n and perform ance o f its b u sin ess, and\nthe custody, use, and preservation o f its records, p apers, and p ro p erty.\xe2\x80\x9d ); see also Olympic Fed. Sav. &\nLoan A ss\'n v. Office o f Thrift Supervision, T i l F. Supp. 1183, 1197 (D .D .C . 1990) (\xe2\x80\x98\xe2\x80\x98[T ]he A tto rn ey\nG en eral is charged w ith responsibility fo r en suring that only law fully appointed officials act on b e h a lf\no f the U n ited S tates, an d c o n seq u en tly his in terp retatio n o f law on this subject is e n title d to g reat\nd e fe re n c e .\xe2\x80\x9d ).\n\n95\n\n\x0cII. Analysis\n\nThe Constitution provides that \xe2\x80\x9c[t]he executive Power shall be vested in a\nPresident o f the United States of America,\xe2\x80\x9d and charges the President to\n\xe2\x80\x9ctake Care that the Laws be faithfully executed.\xe2\x80\x9d U.S. Const, art II, \xc2\xa7 1, cl.\n1; art. II, \xc2\xa7 3. The very core of the executive power is the authority to\npursue civil and criminal enforcement actions on behalf of the United States.\nSee Buckley v. Valeo, 424 U.S. 1, 138 (1976) (per curiam) (\xe2\x80\x9cA lawsuit is the\nultim ate remedy for a breach o f the law, and it is to the President . . . that\nthe Constitution entrusts the responsibility to \xe2\x80\x98take Care that the Laws be\nfaithfully executed.\xe2\x80\x99\xe2\x80\x9d); Morrison v. Olson, 487 U.S. 654, 691 (1988) (\xe2\x80\x9cno\nreal dispute that the functions performed by the independent counsel are\n\xe2\x80\x98executive\xe2\x80\x99\xe2\x80\x9d); Springer v. Philippine Islands, 277 U.S. 189, 202 (1928) (au\xc2\xad\nthority to enforce the laws and to appoint agents to do so are executive\nfunctions); M yers v. United States, 272 U.S. 52 (1926) (same). More gener\xc2\xad\nally, the executive power encompasses the interpretation and effectuation of\nall public law. Bowsher v. Synar , 478 U.S. 714, 733 (1986) (\xe2\x80\x9cInterpreting a\nlaw enacted by Congress to implement the legislative mandate is the very\nessence o f \xe2\x80\x98execution\xe2\x80\x99 of the law.\xe2\x80\x9d).\nObviously, the President alone cannot assure the faithful execution of the\nlaws, and the Appointments Clause provides the constitutional mechanism\nfor the delegation of the executive power to a corps of federal officers under\nthe President\xe2\x80\x99s control to assist him in executing the laws. See M yers, 272\nU.S. at 133 (\xe2\x80\x9cEach head of a department is and must be the President\xe2\x80\x99s alter\nego in the matters of that department where the President is required by law\nto exercise authority.\xe2\x80\x9d); see a lso In re Neagle, 135 U.S. 1, 63 (1890) (\xe2\x80\x9cThe\nConstitution, section 3, Article 2, declares that the President \xe2\x80\x98shall take care\nthat the laws be faithfully executed,\xe2\x80\x99 and he is provided with the means of\nfulfilling this obligation by his authority to commission all the officers of\nthe United States, and, by and with the advice and consent of the Senate, to\nappoint the most important o f them and to fill vacancies.\xe2\x80\x9d).\nThe Appointments Clause has both a \xe2\x80\x9chorizontal\xe2\x80\x9d and a \xe2\x80\x9cvertical\xe2\x80\x9d role to\nplay in the separation of powers. Horizontally, it assures that executive\npower is not exercised by individuals appointed by, or subservient to, an\xc2\xad\nother branch o f government. Vertically, the clause protects against the\ndelegation of federal executive authority to private entities outside the con\xc2\xad\nstitutional framework.2\n\n2 T h e \xe2\x80\x9c v e rtic a l\xe2\x80\x9d p ro te c tio n s o f the A p p o in tm en ts C lau se un d ergird the \xe2\x80\x9chorizo n tal" separation o f pow \xc2\xad\ne rs. I f th e fe d e ra l e x ec u tiv e , legislative, a n d ju d ic ia l po w ers could be granted to priv ate e n titie s to be\nw ie ld e d o u ts id e o f c o n stitu tio n a l strictu res, the carefu l sep aration and interm ingling o f pow ers in the\nC o n stitu tio n its e lf w o u ld be rendered a p a p e r g esture. Cf. Northern Pipeline Constr. Co. v. M arathon\nP ipeline Co., 4 5 8 U .S . 5 0 (1 9 8 2 ) (holding u n co n stitu tio n al d e leg ation o f A rticle III duties to ju d g e s not\na p p o in te d in c o n fo rm ity w ith the A p p o in tm en ts C la u se ); A .L A . Schechter Poultry Corp. v. United\nStates, 295 U .S . 495 (1 9 3 5 ) (federal le g islativ e p o w er m ay not be d elegated to p rivate parties). In\nad d itio n , th e \xe2\x80\x9c v ertical\xe2\x80\x9d o r \xe2\x80\x9cnondelegation\xe2\x80\x9d aspect o f the A ppointm ents C lause ensures that the President,\nth ro u g h a u n itary e x ecu tiv e branch, can b e held politically accountable for his execution o f the law s.\n\n96\n\n\x0cThe Appointments Clause, Article II, Section 2, Clause 2, provides that:\n[The President] shall nominate, and by and with the Advice\nand Consent of the Senate, shall appoint Ambassadors, other\npublic Ministers and Consuls, Judges of the supreme Court,\nand all other Officers of the United States, whose Appoint\xc2\xad\nments are not herein otherwise provided for, and which shall\nbe established by Law; but the Congress may by Law vest the\nAppointment of such inferior Officers, as they think proper, in\nthe President alone, in the Courts of Law, or in the Head of\nDepartments.\nIn Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam), the Supreme Court\nexamined the reach and requirements of the Appointments Clause in the\ncontext of a constitutional challenge to the composition of, and authority\nwielded by, the Federal Election Commission. The Commission was com \xc2\xad\nposed o f six voting members. The President pro tempore of the Senate, the\nSpeaker of the House, and the President each appointed two of the voting\nmembers. None of the voting members of the Commission was nominated\nby the President and confirmed by the Senate in accordance with the Ap\xc2\xad\npointments Clause.\nBy statute the Commission was charged with what the Supreme Court\nviewed as three distinct types of tasks. First, the Commission was to gather,\norganize, and make available to the public data concerning campaign spend\xc2\xad\ning and the administration of elections. The Court characterized these as\n\xe2\x80\x9crecordkeeping, disclosure, and investigative functions.\xe2\x80\x9d Id. at 110. Sec\xc2\xad\nond, the Com m ission was granted extensive power to issue binding\nadministrative rules, to \xe2\x80\x9cformulate general policy\xe2\x80\x9d concerning the enforce\xc2\xad\nment of applicable statutes, and to issue advisory opinions concerning election\nlaw requirements. Id. at 110-11. Finally, the Commission was granted what\nthe Court characterized as \xe2\x80\x9cdirect and wide ranging\xe2\x80\x9d enforcement powers.\nId. at 111. The Commission was authorized to institute civil actions to\nenforce statutory requirements, to sue for the return of campaign \xe2\x80\x9cmatching\nfunds\xe2\x80\x9d to the United States Treasury, and to issue \xe2\x80\x9cfindings\xe2\x80\x9d of failure to file\nexpenditure reports. Id.\nThe Court began its analysis by rejecting the notion that the locution\n\xe2\x80\x9cOfficers of the United States\xe2\x80\x9d in the Appointments Clause was merely a\ncreature of \xe2\x80\x9cetiquette or protocol.\xe2\x80\x9d Instead, the Court viewed the term as a\nreference to those persons who may exercise \xe2\x80\x9csignificant authority\xe2\x80\x9d under\nthe laws of the United States. The Court stated:\nWe think that the term \xe2\x80\x9cOfficers of the United States\xe2\x80\x9d as used\nin Art. II, defined to include \xe2\x80\x9call persons who can be said to\nhold an office under the government\xe2\x80\x9d in United States v.\n\n97\n\n\x0cG erm aine, [99 U.S. 508 (1879)], is a term intended to have\n\nsubstantive meaning. We think its fair import is that any ap\xc2\xad\npointee exercising significant authority pursuant to the laws\no f the United States is an \xe2\x80\x9cOfficer of the United States,\xe2\x80\x9d and\nmust, therefore, be appointed in the manner prescribed by \xc2\xa7 2,\ncl. 2 of that Article.\nId. at 125-26.\n\nW hile the Buckley Court did not offer a comprehensive definition of what\nconstitutes \xe2\x80\x9csignificant authority\xe2\x80\x9d for purposes of the Appointments Clause,\nthe C ourt\xe2\x80\x99s treatment of the various powers and duties conferred upon the\nFederal Election Commission offers significant guideposts. First, the Court\nmade clear that \xe2\x80\x9cvesting in the Commission primary responsibility for con\xc2\xad\nducting civil litigation in the courts of the United States for vindicating\npublic rights, violate[s] Art. II, \xc2\xa7 2, cl. 2, of the Constitution.\xe2\x80\x9d Id. at 140.\nThe Court indicated that \xe2\x80\x9c[s]uch functions may be discharged only by per\xc2\xad\nsons who are \xe2\x80\x98Officers of the United States\xe2\x80\x99 within the language of that\nsection.\xe2\x80\x9d Id.\nThe Court also held that the Commission\xe2\x80\x99s \xe2\x80\x9cbroad administrative powers:\nrulemaking, advisory opinions, and determinations of eligibility for funds\nand even for federal elective office itself,\xe2\x80\x9d constituted \xe2\x80\x9csignificant authority\xe2\x80\x9d\nthat could only be executed by properly appointed officers of the United\nStates. Id. at 140, 141-42. The Court indicated that \xe2\x80\x9ceach of these functions\nalso represents the performance of a significant governmental duty exercised\npursuant to a public law.\xe2\x80\x9d Id. at 141.3\nFinally, the Court held that the Commission, as then constituted, could\nexercise powers of \xe2\x80\x9can investigative and informative nature, falling in the\nsame general category as those powers which Congress might delegate to\none o f its own committees.\xe2\x80\x9d Id. at 137. These information gathering duties\nwere, in the Court\xe2\x80\x99s view, \xe2\x80\x9csufficiently removed from the administration and\nenforcement of the public law as to permit their being performed by persons\nnot \xe2\x80\x98Officers of the United States.\xe2\x80\x99\xe2\x80\x9d Id. at 139.4\n\n1 It sh o u ld b e no ted th at the "advisory\xe2\x80\x9d o p in io n s o f the Federal E lection C om m ission w ere so in nam e\no n ly . T h e sta tu te p ro v id e d th at any in d iv id u a l w ho a c te d in good fa ith on the b a sis o f such an opinion\n\xe2\x80\x9c s h all b e p re su m ed to be in com pliance\xe2\x80\x9d w ith federal e le ctio n law \xe2\x80\x9c n o tw ithstanding any o th e r provision\no f law .\xe2\x80\x9d Buckley, 4 2 4 U .S . at 110-11.\nJ T h e c o n stitu tio n a l c o n c e rn s ex p ressed by th e B uckley C o u rt are th e m selv e s re fle c te d in O M B C ir\xc2\xad\nc u la r A -7 6 . T h e C irc u la r recognizes th a t \xe2\x80\x98\xe2\x80\x98[c je rta in fu n c tio n s are in h e re n tly G o v e rn m e n ta l in n a tu re ,"\nd e fin e d as fu n c tio n s \xe2\x80\x9c w h ic h require e ith e r the ex ercise o f d iscretio n in a p p ly in g G o v e rn m e n t a u th o rity\no r th e u se o f v a lu e ju d g m e n t in m aking d e c isio n s fo r the G o v e rn m e n t.\xe2\x80\x9d O M B C irc u la r N o. A -76 \xc2\xa7\xc2\xa7 5b,\n6 e (R ev . A u g . 4 , 1983). Listed e x am p les include \xe2\x80\x9cc rim in a l in v e stig atio n s, p ro se cu tio n s and o th e r\nju d ic ia l fu n c tio n s ; m a n a g em e n t o f G o v e rn m e n t p ro g ram s re q u irin g v alue ju d g m e n ts ,\xe2\x80\x9d and \xe2\x80\x9c sele c tio n\no f p ro g ra m p rio ritie s ." Id. \xc2\xa7 6 e (l). T h e C irc u la r in d ic a te s th at it is the policy o f the U n ited S ta te s to\n\xe2\x80\x9c [r]e ta in G o v e rn m e n ta l [f u n c tio n s [i]n -h o u s e ,\xe2\x80\x9d and th a t th ese fu n c tio n s \xe2\x80\x9csh all be p erfo rm ed by G o v \xc2\xad\ne rn m e n t e m p lo y e e s .\xe2\x80\x9d Id. \xc2\xa7 5(b).\n\n98\n\n\x0cBuckley thus makes it clear that the exercise of rulemaking or policymaking\nfunctions requires proper authority under the Appointments Clause. See\nalso Olympic Fed. Sav. & Loan A s s \xe2\x80\x99n. v. Office o f Thrift Supervision, 732 F.\nSupp. 1183 (D.D.C. 1990) (Director of the Office of Thrift Supervision exer\xc2\xad\ncises significant rulemaking and regulatory authority and thus under Buckley\nmust be appointed in accordance with the Appointments Clause). On the\nother hand, information gathering, investigative, and advisory functions that\ndo not involve final actions affecting third party rights may be performed by\nprivate parties or \xe2\x80\x9cindependent\xe2\x80\x9d contractors. Similarly, purely ministerial\nand internal functions, such as building security, mail operations, and physi\xc2\xad\ncal plant maintenance, which neither affect the legal rights of third parties\noutside the Government nor involve the exercise of significant policymaking au\xc2\xad\nthority may be performed by persons who are not federal officers or employees.\nApplying these criteria to the two types of functions at issue here, we\nconclude that both the forty-eight program analyst and program monitor\npositions and the historical research support positions do not involve the\nexercise of \xe2\x80\x9csignificant authority pursuant to the laws of the United States,\xe2\x80\x9d\nas that phrase is used in Buckley. We emphasize that under Buckley private\nindividuals may not determine the policy of the United States, or interpret\nand apply federal law in any way that binds the United States or affects the\nlegal rights of third parties. Nor can any private individuals make funding\ndecisions. See Letter for Marshall J. Breger, Chairman of the Administrative\nConference of the United States, from Deputy Attorney General Bums at 4\n(Nov. 10, 1986) (\xe2\x80\x9cBums Letter\xe2\x80\x9d) (\xe2\x80\x9c[W]e do not believe that individuals who\nare not officers of the government may commit or dispose of the property of\nthe United States.\xe2\x80\x9d). Properly appointed federal officials must maintain both\nlegal and effective control over the direction of United States policy in this\narea as well as control over the allocation of federal funds.\nAs we understand it, however, the program analysts and monitors in\xc2\xad\nvolved here simply study and make recom m endations concerning the\ncompliance of various state and local programs with federal funding require\xc2\xad\nments. While the employees who presently occupy these positions may\nadvise and assist in policy formation, they cannot determine the final policy\nof the Department of Justice. Nor can these employees take any indepen\xc2\xad\ndent action on behalf of the United States affecting the rights o f grantees.\nThe prior opinions of this Office indicate that such \xe2\x80\x9cstudy and report\xe2\x80\x9d func\xc2\xad\ntions need not be performed by officers of the United States within the\nmeaning of the Appointments Clause. See, e.g., Memorandum for the Attor\xc2\xad\nney General, from Theodore B. Olson, Assistant Attorney General, Office of\nLegal Counsel, Re: Enrolled Bill S. 118, \xe2\x80\x9cTo Provide fo r the Establishment\no f a Commission on the Bicentennial o f the Constitution\xe2\x80\x99\xe2\x80\x99 (Sept. 29, 1983)\n(Commission on the Bicentennial of the Constitution); Memorandum for\nRobert A. McConnell, Assistant Attorney General, Office of Legal Affairs,\nfrom Ralph W. Tarr, Deputy Assistant Attorney General, Office of Legal\n\n99\n\n\x0cCounsel, Re: Enrolled Bill H R. 1900 (Apr. 6, 1983).5\nWe also conclude that under Buckley, the duties of the historical research\nsupport positions may be performed by private persons. As a general matter,\nthe investigation of criminal activity is an inherently governmental function\nperformed exclusively by federal officers within the executive branch. Thus,\nwe have no doubt that the authority to seek and execute search warrants, or\nto make arrests in the name o f the United States is \xe2\x80\x9csignificant authority\xe2\x80\x9d\nunder Buckley. However, as w e understand it, the historical research support\npersonnel at issue here conduct background research and translation under\nthe direction o f the OSI historians who are properly appointed federal offic\xc2\xad\ners. These support personnel have no authority to take or authorize any\nlegal action on behalf of the United States. Rather, they are simply charged\nwith library research, translation, and collation of data. The functions to be\nperformed by these individuals are more akin to those of an expert witness\nor consultant than they are to those of an FBI agent or a federal prosecutor.\nSuch purely informational tasks may be performed by private individuals.\nSee Memorandum for Richard C. Stiener, Chief, United States National Cen\xc2\xad\ntral Bureau, INTERPOL, from Larry Simms, Deputy Assistant Attorney\nGeneral, Office of Legal Counsel, Re: Establishment o f an Interpol Subbureau\nin Puerto Rico (Jan. 19, 1984) (information gathering and sharing functions\no f United States National Central Bureau of INTERPOL may be performed\nby persons not officers of the United States); id. at 12 n .ll (noting that\n\xe2\x80\x9c [e]ven private citizens can be an important source of information in the\ncause o f law enforcement\xe2\x80\x9d).\nAs a general matter, we also reaffirm the consistent position of this Of\xc2\xad\nfice and the Department of Justice that the authority to direct litigation on\nbehalf of the United States may not be vested in persons who are not offic\xc2\xad\ners of the United States appointed in the proper manner under Article II,\nSection 2, Clause 2 o f the Constitution. See, e.g., Brief for the United States\nas Amicus Curiae Supporting Appellees at 17, Morrison v. Olson, 487 U.S.\n654 (1988) (No. 87-1279) (\xe2\x80\x9c[T]he duty of the President to \xe2\x80\x98take Care\xe2\x80\x99 means\nthat he, with the help of the Senate in certain cases and acting on his own or\nthrough his heads of departments in others, is responsible and accountable\nto the people for selecting those persons who will exercise significant au\xc2\xad\nthority in executing the law.\xe2\x80\x9d); Bums Letter at 2 (\xe2\x80\x9c[A]ny broad delegation of\nauthority to private persons to conduct litigation in the name of the United\nStates is likely to raise constitutional problems.\xe2\x80\x9d).\nThis position is dictated both by the Supreme C ourt\xe2\x80\x99s decision in Buckley\nand by the broader separation of powers concerns underlying the Supreme\nC ourt\xe2\x80\x99s Appointments Clause jurisprudence. See Buckley, 424 U.S. at 139\n(\xe2\x80\x9c [A]ll such suits [civil and criminal], so far as the interests of the United\n\n5 It is q u ite p o s sib le th a t O M B C ircu lar A -7 6 \xe2\x80\x99s d e fin itio n o f in h e re n tly g o v e rn m e n ta l fu n c tio n s c o v \xc2\xad\ners a w id e r ran g e o f fu n c tio n s than those th a t entail the e x e rc ise o f \xe2\x80\x9csig n iftean t a u th o rity \xe2\x80\x9d u n d e r Buckley.\nT h is o p in io n d o e s n o t a d d re ss that issue.\n\n100\n\n\x0cStates are concerned, are subject to the direction, and within the control of,\nthe Attorney-General.\xe2\x80\x9d) (quoting The Confiscation Cases, 74 U.S. (7 Wall.)\n454, 458-59 (1869)); see also United States v. San Jacinto Tin Co., 125 U.S.\n273, 279 (1888) (the Attorney General \xe2\x80\x9cis undoubtedly the officer who has\ncharge of the institution and conduct of the pleas of the United States, and\nof the litigation which is necessary to establish the rights of the govern\xc2\xad\nment\xe2\x80\x9d).6 Thus, both the Appointments Clause and more general separation\nof powers concerns make it clear that the vesting of independent litigation\nauthority in persons who are not federal officers or employees and who are\nnot subject to executive branch discipline and control is unconstitutional.\nWere this not so, Congress could displace particular litigation authority from\nthe executive branch and vest it in a private interest group or even in the\nHouse or Senate Counsel.\nWe note that the Department\xe2\x80\x99s support for the Debt Collection Act Amend\xc2\xad\nments o f 1986, Pub. L. No. 99-578, 100 Stat. 3305 (codified at 31 U.S.C. \xc2\xa7\n3718(b)), is fully consistent with this position. Those amendments autho\xc2\xad\nrized the Attorney General to retain private counsel to assist in the collection\nof non-tax debts owed to the United States. In signing that legislation into\nlaw. President Reagan stated:\nI am approving [the debt collection amendments] knowing\nthat the Attorney General will take all steps necessary to en\xc2\xad\nsure that any contact entered into with private counsel contains\nprovisions requiring ongoing supervision of the private coun\xc2\xad\nsel so that all fundamental decisions, including whether to\ninitiate litigation and whether to settle or compromise a claim,\nare executed by an officer of the United States, as required by\nthe Constitution.\nPub. Papers of Ronald Reagan 1454 (1986).\nThe Department has issued regulations requiring the designation of \xe2\x80\x9can\nAssistant U.S. Attorney to serve as the Contracting Officer\xe2\x80\x99s Technical Rep\xc2\xad\nresentative (\xe2\x80\x9cCOTR\xe2\x80\x9d) on the contracts with private debt collection lawyers\n4 We n o te that apart from the constitutional c o n strain ts exam ined in Buckley there is stro n g su pport in\nthe statutes o rganizing the litigation authority o f the ex ecu tiv e branch fo r the p ro p o sitio n that on ly\no fficers o f the U n ited S tates m ay conduct litig atio n in the nam e o f the U n ited States. S e c tio n 3106 o f\ntitle 5 pro v id es that, in g en eral, agency and dep artm en t heads \xe2\x80\x9c m ay not em p lo y an atto rn e y o r co u n sel\nfor the co n d u ct o f litigation in w hich the U nited States . . . is a party, o r is interested, o r fo r the secu rin g\no f e vidence therefor, but shall refer the m atter to the D ep artm en t o f Justice.\xe2\x80\x9d W ithin the D e p artm e n t o f\nJu stic e itself, statu to ry stru ctu re reflects c o n stitu tio n al design. A ll litigation m ust b e c o n d u cted by\nofficers u n d e r th e control and supervision o f the A tto rn ey G eneral. See, e.g., 28 U .S.C . \xc2\xa7 5 1 5 (b ) (\xe2\x80\x9c E ach\na ttorney sp ec ia lly retained un d er the authority o f the D epartm ent o f Justice shall be co m m issio n ed as a\nspecial a ssistan t to the A ttorney G eneral o r special attorney, an d shall take the oath re q u ire d by law .\xe2\x80\x9d );\n28 U .S .C . \xc2\xa7 516 ( \xe2\x80\x9c [T ]he conduct o f litig atio n in w hich the U nited States . . . is a party . . . is reserved to\nofficers o f the D ep artm en t o f Justice, un d er the d irectio n o f the A ttorney G e n eral.\xe2\x80\x9d ); see also 28 U .S .C .\n\xc2\xa7\xc2\xa7 519, 547.\n\n101\n\n\x0cin their respective districts.\xe2\x80\x9d 28 C.F.R. \xc2\xa7 11.2 (1989). Under the regulations,\nthese COTRs \xe2\x80\x9cwill be responsible for assisting the contracting officer by\nsupervising the work of the private counsel in their respective districts and\nproviding necessary approvals with respect to the initiation or settlement of\nlawsuits or similar matters.\xe2\x80\x9d Id. In addition, the Department\xe2\x80\x99s Request for\nProposals (\xe2\x80\x9cRFP\xe2\x80\x9d), issued pursuant to the debt collection amendments, makes\nit clear that the COTR must review all major pleadings in debt collection\nactions before they are filed by the private attorney. The Department has\nindicated that it considers this kind of close supervision of private attorneys\n\xe2\x80\x9cnecessary to meet constitutional .concerns and preserve the authority of the\nAttorney General over litigation.\xe2\x80\x9d Bums Letter at 3.\n\nConclusion\nIn sum, we reaffirm the longstanding position o f this Office and the De\xc2\xad\npartment that litigation on behalf of the United States must be conducted or\nclosely supervised by properly appointed officers of the United States, offic\xc2\xad\ners who are themselves under the supervision of the Attorney General and\nthe President. In addition, any significant policymaking duties under federal\nlaw or discretionary acts which affect the rights of citizens cannot be under\xc2\xad\ntaken by private parties. On the other hand, advisory and information gathering\nfunctions, as well as purely ministerial and internal management matters,\nneed not be performed by officers of the United States. We therefore con\xc2\xad\nclude that the forty-eight program analyst and program monitor positions and\nthe historical research support positions do not involve governmental author\xc2\xad\nity that can only be exercised by officers, but instead involve information\ngathering and reporting duties which may constitutionally be performed by\nprivate parties on a contract basis.\nWILLIAM P. BARR\nAssistant Attorney General\nOffice o f Legal Counsel\n\n102\n\n\x0c'


b'April 22, 1977\n\n77-22\n\nMEMORANDUM OPINION FOR THE\nACTING ASSISTANT ATTORNEY GENERAL,\nTAX DIVISION\nProposed Tax Assessment Against the United States\nPostal Service\n\nThis is in response to your request for our opinion as to the available\nremedies to resolve a dispute between the Internal Revenue Service\n(IRS) and the Postal Service. In our opinion, the question for consider\xc2\xad\nation is the justiciability of a dispute between the IRS and another\nexecutive branch entity regarding Federal taxes to be paid by the latter.\nWe conclude that there is no reasonable basis to believe that such a\ndispute over the allocation of funds between two executive agencies, a\nmatter that does not concern any adverse private person as a \xe2\x80\x9creal\nparty in interest,\xe2\x80\x9d is justiciable. If formally asked this question by the\nPostal Service and IRS, we would so respond. Having so concluded,\nwe see no need for us to consider the question of what administrative\nsteps must be taken to bring the matter into a litigating posture.\nThe dispute involves the Airport and Airway Revenue Act of 1970,\nwhich imposes a 5 percent tax on the amount paid for the transporta\xc2\xad\ntion of property by air. 26 U.S.C. \xc2\xa74271.1 The tax is imposed upon the\nperson making the transportation payment subject to the tax. The\nlegislative history of the statute clearly indicates that the Postal Service\n1 T he provision reads in pertinent part as follows:\n\xc2\xa7 4271. Imposition o f tax\n(a) In general.\xe2\x80\x94T here is hereby imposed, upon the am ount paid w ithin o r w ithout\nthe U nited States for the taxable transportation . . . of p roperty a tax equal to S\npercent o f the am ount so paid for such transportation. T h e tax imposed by this\nsubsection shall apply only to am ounts paid to a person engaged in the business o f\ntransporting property by air for hire.\n(b) By w hom paid.\xe2\x80\x94\n(1) In general.\xe2\x80\x94. . . the tax imposed by subsection (a) shall be paid by the\nperson making the paym ent subject to tax.\n\n79\n\n\x0cis subject to the transportation tax,2 and, so far as we are aware, the\nPostal Service has not disputed this. The particular issue concerns the\nproper computation of the tax. The IRS in Revenue Ruling 74-512\nrequired the Postal Service to pay the 5 percent tax not only on the\nline haul charge it pays to air carriers for transportation of mail, etc.,\nbut also on terminal handling charges, including receipt of mail, load\xc2\xad\ning, unloading, and transfer of mail between planes. The Postal Service\ndisagrees with this interpretation o f \xc2\xa7 4271 and has refused payment of\nthe tax on the terminal handling charges, although it has apparently\npaid the line haul charges.\nSection 4291 of Title 26 provides, with certain exceptions, that per\xc2\xad\nsons receiving payments for services or facilities subject to tax 3 shall\ncollect the tax from the person making the payment; but an administra\xc2\xad\ntive regulation, Treas. Reg. \xc2\xa7 154.2-1(f)(1), provides that in the case of\namounts subject to tax that are paid by the Postal Service, the tax shall\nbe paid directly to the IR S by the Postal Service as if it were a\ncollecting agent.4\nWe understand that the IRS is presently holding in abeyance a\nproposed tax assessment of some $10 million against the Postal Service.\nThe IRS has raised the question whether it may follow its regular\nassessment procedure, under which the Postal Service would be re\xc2\xad\nquired to pay the tax, claim a refund, and bring suit against the United\nStates for the refund in order to contest the IRS\xe2\x80\x99 interpretation of\n\xc2\xa74271.\nThe leading case on the issue of justiciability in this context is United\nStates v. I.C.C., 337 U.S. 426 (1949). The question there was whether\nthe United States as a shipper was barred from challenging in the\nFederal courts an Interstate Commerce Commission order denying the\nGovernment a recovery in damages for the exaction of an allegedly\nunlawful railroad rate. Both the Commission and the United States\nwere made defendants, the latter because of the statutory requirement\nthat any action to set aside an order of the Commission had to be\n2 T h e H ouse C om m ittee report states:\nT h e exem ptions for transportation furnished to State and local governm ents, the\nU nited States, and nonprofit educational organizations are term inated. R em oving the\nexem ption for transportation furnished to the U nited States subjects the Post Office\nto the 5 percent property tax o n am ounts it pays for the transportation o f mail by air.\nIt did not seem appropriate t o continue special exem ptions for these governm ental\nand educational organizations since this tax is now generally view ed as a user charge.\nIn this situation there would appear to be no reason w hy these governm ental and\neducational organizations should not pay for their share o f the use o f the airw ay\nfacilities. H. Rep. No. 601, 91st Cong., 1st Sess., at 46 (1969). A ccord, S. Rep. No.\n706, 91st C ong., 2d Sess., at 18 n. 5 (1970).\n3 A cco rd in g to Rev. Rul. 74-512, in m ost cases the Postal Service pays an air c arrier to\nperform these services.\n4 T h e IR S has inform ed us th a t although T reas. Reg. \xc2\xa7 154.2\xe2\x80\x941(f)(1) arguably is con\xc2\xad\ntra ry to \xc2\xa74291, in its view, if th e Postal S ervice paid the claimed tax pursuant to this\nregulation, the Postal Service w ould not be barred from bringing suit for a refund by the\nrule th at a m ere volunteer who p a y s a tax m ay not sue for a refund. T h e refund statutes\nand regulations d o not expressly c o v e r this situation. See 26 U.S.C. \xc2\xa7 6415.\n\n80\n\n\x0cbrought against the United States. A three-judge district court dis\xc2\xad\nmissed the case on the ground that the Government could not sue itself.\nThe Supreme Court reversed in a unanimous opinion, holding that\n\xe2\x80\x9ccourts must look behind names that symbolize the parties to determine\nwhether a justiciable case or controversy is presented,\xe2\x80\x9d at 430. It\nviewed the case as one involving controversies of a type that were\ntraditionally justiciable, stating at 430-431:\nThe basic question is whether railroads have illegally exacted sums\nof money from the United States. Unless barred by statute, the\nGovernment is not less entitled than any other shipper to invoke\nadministrative and judicial protection. To collect the alleged illegal\nexactions from the railroads the United States instituted proceed\xc2\xad\nings before the Interstate Commerce Commission. In pursuit of the\nsame objective the Government challenged the legality of the\nCommission\xe2\x80\x99s action. This suit therefore is a step in proceedings to\nsettle who is legally entitled to sums of money, the Government or\nthe railroads. The order if valid would defeat the Government\xe2\x80\x99s\nclaim to that money. But the Government charged that the order\nwas issued arbitrarily and without substantial evidence. . . . Con\xc2\xad\nsequently, the established principle that a person cannot create a\njusticiable controversy against himself has no application here.\nIn our opinion, the Court\xe2\x80\x99s analysis does not support the position that\nthe Postal Service and IRS are entitled to judicial resolution of their\ndispute. The only significant similarity is that the dispute involves large\nsums of money; otherwise, the situations are markedly dissimilar. In\nUnited States v. I.C.C., as the Court noted, \xe2\x80\x9cthe basic question [was]\nwhether railroads have illegally exacted sums of money from the\nUnited States\xe2\x80\x9d; here the basic question is which of two governmental\nentities is entitled to money appropriated by Congress. It is in essence\nan interagency dispute. The question of which agency should have the\nmoney is peculiarly inappropriate for judicial determination; we do not\nbelieve that a question of this kind is one that, in the words of the\nCourt, \xe2\x80\x9cinvolves controversies of a type which are traditionally justicia\xc2\xad\nble.\xe2\x80\x9d 337 U.S. at 430.\nSubsequent judicial holdings confirm our view. The lower court\ndecisions following United States v. I.C.C. have interpreted it as up\xc2\xad\nholding Federal jurisdiction over a suit by the Government against\nitself only if one of the real parties in interest is a truly adverse private\nparty. United States v. Easement and Right o f Way, 204 F. Supp. 837\n(D. Tenn. 1962), was a condemnation suit brought by the Tennessee\nValley Authority (TVA) in which it sought to join as a defendant the\nFarmers Home Administration (FHA), Department of Agriculture,\nwhich held a mortgage security interest in the land involved. The court\nheld that this could not be done, stating that \xe2\x80\x9cthere could not be any\nissue between the TV A and the FHA, both being the United States,\nwhich this Court could litigate or adjudicate. Any differences between\n81\n\n\x0cthese agencies would at most be interagency disputes which are not\nsubject to settlement by adjudication.\xe2\x80\x9d 204 F. Supp. at 839. A similar\nanalysis was applied in Ishverlal M adanlal & Co. v. SS Vishva Mangal,\n358 F. Supp. 386 (D. N.Y. 1973), a suit brought by the Indian Supply\nMission on behalf of the Indian government against a vessel and its\now ner (a corporation formed by the merger of a private corporation\nand a second corporation wholly owned by the Indian government) for\ndamage to the cargo. Although the plaintiff was the Supply Mission,\nthe real party in interest was the cargo insurer. The court held that the\nsuit .was justiciable. It interpreted United States v. I. C. C. as holding that\nthe courts should \xe2\x80\x9clook to the real parties in interest and to the nature\nof the underlying controversy in order to ascertain whether or not\nthere is a real controversy and jurisdiction exists.\xe2\x80\x9d 358 F. Supp. at 390.\nThe court noted that in U.S. ex rel. Chapman v. F.P.C., 345 U.S. 153\n(1953), a proceeding by the Secretary of the Interior for judicial review\nof an order by the Federal Power Commission, the real party in interest\nadverse to the Secretary was a private power company licensed by the\nCommission.\nIn Chapman, the Supreme Court did not discuss the justiciability\nissue.5 The only Supreme Court opinion to address this question since\nUnited States v. I.C.C. is United States v. Nixon, 418 U.S. 683 (1974),\nwhich involved quite unusual facts. In Nixon, the Court upheld the\njurisdiction of a Federal district court over the Special Prosecutor\xe2\x80\x99s\nattempt to enforce a documentary subpoena directed to President\nNixon, w ho claimed executive privilege. The President argued that\nthere was no case or controversy because the dispute was solely an\nintrabranch dispute between members o f the executive branch. The\nSupreme Court rejected this argument, citing United States v. I.C.C.,\nand other decisions of the Court.8 It noted that the material was sought\nfor use in a Federal grand jury proceeding, and that the enforceability\nof a subpoena and the claim of a privilege were traditionally justiciable\nissues (at 696-697). Moreover, the concrete adverseness necessary to\nsharpen the issues was present. See, 418 U.S. at 697. Although the\nSpecial Prosecutor was an agent o f the executive branch, he had been\ndelegated the authority by the Attorney General to challenge the Presi\xc2\xad\ndent\xe2\x80\x99s refusal to produce evidence.\nA lthough a number of the cases cited by the Court involved intra\xc2\xad\nbranch disputes, they provide little guidance, because the Court did not\ndiscuss the issue. See, United States v. Marine Bancorporation, 418 U.S.\n5 T h e C o u rt observed that the S ecretary had standing, but it stated that the difference\nin view s betw een the members o f the C o u rt precluded a single opinion on this issue, and\nthat setting out the divergent view s w ould \xe2\x80\x9cnot further clarification o f this com plicated\nspecialty o f federal jurisdiction, th e solution o f w hose problem s is in any event m ore o r\nless determ ined by the specific circum stances o f individual situations . . .\n345 U.S. at\n156.\n\xe2\x80\xa2 T h e C o u rt stated (p. 693): \xe2\x80\x9cT h e m ere assertion o f a claim o f an \xe2\x80\x98intra-branch dispute,\xe2\x80\x99\nw ith o u t m ore, has never operated to defeat federal jurisdiction; justiciability does not\ndepend on such a surface inquiry."\n\n82\n\n\x0c602 (1974); United States v. Connecticut National Bank, 418 U.S. 656\n(1974); Powell v. McCormack, 395 U.S. 486 (1969);7 Federal Marine\nBoard v. Isbrandtsen, 356 U.S. 481, 483 n. 2 (1958); Secretary o f Agricul\xc2\xad\nture v. United States, 347 U.S. 645 (1954); United States ex rel. Chap\xc2\xad\nman, supra; I.C.C. v. Jersey City 322 U.S. 503 (1944).\nThus the few cases dealing explicitly with this problem require at a\nminimum that there be an issue of the kind traditionally viewed as\njusticiable, and also that there be sufficient adverseness to sharpen the\nissues. With regard to the adverseness of the parties, the Postal Service,\nlike the Special Prosecutor in Nixon and the regulatory agencies in\xc2\xad\nvolved in United States v. I.C.C. and U.S. ex rel. Chapman v. F.P.C.,\nhas a degree of independence from the executive branch. It is an\n\xe2\x80\x9c independent establishment of the executive branch of the Government\nof the United States.\xe2\x80\x9d 39 U.S.C. \xc2\xa7201. [Emphasis added.] It was re\xc2\xad\nmoved from direct political control,8 and given considerable indepen\xc2\xad\ndence in managing its finances.9 It has the authority to sue and be sued\nin its official name, 39 U.S.C. \xc2\xa7401(1), and, with the prior consent of\nthe Attorney General, it may employ its own attorneys to conduct its\nlitigation. 39 U.S.C. \xc2\xa7 409(d).\nBut we do not believe that there is a nongovernmental \xe2\x80\x9creal party in\ninterest\xe2\x80\x9d here. Congress intended to apply the tax in \xc2\xa74271 to the\ntransportation of the mails and other transportation *\'furnished to the\nUnited S t a t e s [Emphasis added.]10 We recognize that the individual\nusers of the mails and of the airports and airways have an interest in the\noutcome of this dispute; the mail rates may increase if the Postal\nService\xe2\x80\x99s costs increase, and a decrease in revenues collected under\n\xc2\xa74271 might ultimately result in the imposition of a higher rate of tax\non those who use the airports and airways. However, these broad\ninterest groups are not identifiable individuals or entities like the rail\xc2\xad\nroads and private power companies in United States v. I.C.C. and U.S.\nex rel. Chapman, respectively, who were active parties in the agency\n7 T he C ourt did reject the argum ent that the case was nonjusticiable because judicial\nreview w ould im properly interfere w ith the functioning o f the coordinate legislative\nbranch. 395 U.S. at 548-49.\n\xe2\x80\x9c A Board o f G o vernors is appointed by the President for a fixed term . 39 U.S.C. \xc2\xa7 202.\nThese G overnors, not the President, \xe2\x80\x9cshall appoint and shall have the pow er to rem ove\nthe Postm aster G eneral . . [and to fix his] pay and term o f service . . .\n39 U.S.C.\n\xc2\xa7 202(c). T he G o vernors and the Postm aster G eneral then appoint his D eputy and fix his\nterm. 39 U.S.C. \xc2\xa7 202(d). See H.R. Rep. No. 1104, 91st Cong., 2d Sess. at 11-13 (1970);\nH .R D oc. No. 313, 91st Cong., 2d Sess. at 52.\n\xe2\x80\xa2 In enacting the Postal R eorganization A ct, C ongress\xe2\x80\x99 purpose was to authorize the\noperation o f the Postal Service in \xe2\x80\x9ca business-like w ay.\xe2\x80\x9d H.R. Rep. No. 1104, 91st Cong.,\n2d Sess. 11 (1970). T he Postal Service Fund is available to the Service w ithout fiscal year\nlimitation. 39 U.S.C. \xc2\xa7 2003. It is required to submit a yearly budget, including a state\xc2\xad\nment o f the am ounts it requests to be appropriated, and the President is required to\ninclude these am ounts \xe2\x80\x9cw ith his recom m endations but w ithout revision, in the budget\ntransm itted to C ongress.\xe2\x80\x9d 39 U.S.C. \xc2\xa7 2009. It is authorized to \xe2\x80\x9cdeterm ine the character\nof, and necessity for, its expenses,\xe2\x80\x9d to "determ ine and keep its ow n system o f accounts,\xe2\x80\x9d\nto "settle and com prom ise claims by o r against it,\xe2\x80\x9d and \xe2\x80\x9csue and be sued in its official\nnam e." 39 U.S.C. \xc2\xa7401.\n10 H.R. Rep. No. 601, supra, n. 2.\n\n83\n\n\x0cand judicial proceedings, vigorously defending their private interests. In\ncontrast, nearly all citizens use the mails, and of course many individ\xc2\xad\nuals and businesses use both the mails and the airports and airways. The\ninterests represented by both the Postal Service and the IRS are facets\nof the public interest, not truly private interests adverse to those of the\nFederal Government as a whole.\nFor the foregoing reasons, it is our opinion that the question here\ninvolved in not susceptible of resolution by the courts.\nL\n\neon\n\nU\n\nlm an\n\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n84\n\n\x0c'