Opinion ID: 1217251
Heading Depth: 2
Heading Rank: 3

Heading: The CFC's Administrative Procedure Act Analysis

Text: Finally, we must address the CFC's opinion on whether a federal court could review the Secretary's decision to accelerate an arbitrage rebate under I.R.C. § 148(f)(3). The U.S. Constitution limits a federal court's jurisdiction to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority. U.S. Const. art. III, § 2, cl. 1. If the Constitution, statute, or treaty does not confer jurisdiction on a federal court, it has no power to resolve the merits of the controversy before it. Consequently, a federal court should not render an opinion on the merits when it determines that it lacks jurisdiction over the matter: Federal courts are not in the business of rendering advisory opinions. C & H Nationwide, Inc. v. Norwest Bank Tex. NA, 208 F.3d 490, 493 (5th Cir.2000); see also Alabama v. Shelton, 535 U.S. 654, 676, 122 S.Ct. 1764, 152 L.Ed.2d 888 (2002) (Scalia, J., dissenting) ([T]he Court has no business offering an advisory opinion. ...). In this case, the CFC rendered an advisory opinion on whether § 148(f)(3) grants the Secretary unfettered discretion to accelerate an arbitrage rebate and thus makes the Secretary's accelerating decision unreviewable under the Administrative Procedure Act (APA). See Strategic Hous., 86 Fed.Cl. at 552-53. Before addressing the merits, the CFC noted that it is well-settled that the Court of Federal Claims lacks jurisdiction to review an agency's decision under the APA. Id. at 552. It further noted, [B]ecause the court cannot entertain actions based upon the APA, plaintiff cannot seek judicial review of the IRS's action on that basis. Id. Notwithstanding its lack of jurisdiction, the court continued: Even if plaintiff could invoke the APA, it does not apply where `agency action is committed to agency discretion by law.' Id. (quoting 5 U.S.C. § 701(a)(2)). The court then conducted an APA analysis. See id. at 552-53. The CFC should not have conducted an APA analysis after recognizing that it lacked jurisdiction. Consequently, we vacate that portion of the CFC's judgment addressing whether § 148(f)(3) grants the Secretary unfettered discretion to accelerate an arbitrage rebate.