Opinion ID: 729792
Heading Depth: 2
Heading Rank: 2

Heading: 1986 Amendments to Section 1619

Text: 15 In 1986, as part of the omnibus Anti-Drug Abuse Act, Congress amended 1619 to read in relevant part: 16 If-- [a]ny person who is not an employee or officer of the United States . . . (B) furnishes to a United States attorney, the Secretary of the Treasury, or any Customs Officer original information concerning . . . (ii) any violation of the customs laws . . . which is being, or has been, perpetrated or contemplated by any other person; and (2) such . . . information leads to a recovery of . . . (B) any fine, penalty, or forfeiture of property incurred; the Secretary may award and pay such person an amount that does not exceed 25 percent of the net amount so recovered. 17 19 U.S.C. Section(s) 1619(a) (1994) (emphasis added). See Anti-Drug Abuse Act of 1986, Pub. L. No. 99-570, Title III, Section(s) 3125, 100 Stat. 3207, 3207-88 (codified at 19 U.S.C. Section(s) 1619(a)). 18 The Government renewed the argument, below and in this court, that Congress, this time by eliminating the previous set-percentage formula for calculating the reward due under section 1619, gave the Secretary unlimited discretion in determining whether to give an award at all, and that the statute was therefore not money mandating. The trial court agreed with the Government, and concluded that the statute is no longer money mandating so as to support Tucker Act jurisdiction. 19 In so doing, the trial court declined to follow an earlier decision of the Court of Federal Claims, Lewis v. United States, 32 Fed. Cl. 59 (1994), which held that the statute continued to be money mandating after the 1986 amendment. The Lewis court reasoned that the amendment was intended only to provide flexibility in the Secretary's determination of the appropriate reward, not to permit withholding of any reward when the informant met the statutory requirements. The Lewis court stated: 20 [W]hile the 1986 amendment permits Customs to utilize a sliding scale when determining the appropriate amount of an award for an informant, the statute continues to mandate the payment of some award . . . . As noted above, the 1986 amendment merely attempted to alter the level of incentives offered to informants, and in fact did not alter the wording of the section except to provide the Secretary more leeway as to the exact amount of the reward. In no way can the amendment be interpreted, however, to provide zero compensation for original information. Such an arbitrary interpretation would destroy the informant's monetary incentive and severely curtail the quality and quantity of original information received by Customs. Thus, contrary to [the Government's] assertions, if an informant provides original information and complies with the statute in all other ways, Customs does not possess the discretion to make no award at all. 21 Since the history of 19 U.S.C. Section(s) 1619 and the established precedent clearly indicate that Customs must provide some level of award to informants under the 1986 amendment, the statute remains sufficiently money-mandating [to provide the court with jurisdiction to hear Lewis's claim under the statute]. 22 Id. at 64. 4 Another case before the Court of Federal Claims has since concluded, following Lewis, that section 1619 continues to require some award and thus remains money mandating. Freed v. United States, 34 Fed. Cl. 715, 717-18 (1996). 23 As an abstract matter, the Government's reading of the statute is not without force. In a not wholly dissimilar situation, our predecessor court concluded that a statute authorizing the award of incentive pay left the decision to the discretion of an executive officer. Because the statute did not mandate any payment, the decision was not subject to review under the Tucker Act. Adair v. United States, 648 F.2d 1318 (Ct. Cl. 1981). In that case Congress gave the Secretary of Health, Education, and Welfare authority to promulgate regulations defining categories of medical officers who, under terms of the legislation, would qualify for certain incentive payments. Officers who did not meet the terms of the Secretary's regulations sued, claiming a right to the payments. The court held that the discretion granted the Secretary in defining who was to be eligible for the payments precluded a recovery under Testan. The court did not find the case sufficiently like Tyson to bother citing or discussing that case. 24 But we do not write on a clean slate, or come to this provision in the law in the abstract. As stated above, the pre-1986 version of section 1619, which provided that the Government may pay an award to claimants satisfying the statutory conditions, has long been understood to mandate the payment of an award. In such a situation, Congress may be presumed to have been aware of this construction when it amended the statute in 1986. See Anthony v. Office of Personnel Management, 58 F.3d 620, 626 (Fed. Cir. 1995). Yet Congress provided no indication in either the statutory language or legislative history that it intended to reject or alter this construction and to render awards wholly discretionary. Cf. 28 U.S.C. Section(s) 524(c)(1)(C) (establishing Justice Department's Assets Forfeiture Fund for, inter alia, at the discretion of the Attorney General, the payment of awards for information or assistance leading to a civil or criminal forfeiture involving any Federal agency participating in the Fund) (emphasis added). The legislative history accompanying the changes at issue stated that the amendment 25 allow[s] Customs officers to exercise some discretion in determining the percentage of an informant's award. Under present law, when Customs makes a recovery of property, or penalties, the person who provided the original information is entitled to an award of 25 percent of the recovered value, but not more than $250,000 (until 1984, this was $50,000). The amendment would permit an award in a lesser amount up to the 25 percent/$250,000 maximum depending on the information provided. . . . The award is only payable after the government has made a recovery based on the information . . . . 26 H.R. Rep. No. 794, 99th Cong., 2d Sess. 16-17 (1986) (emphasis added). Contrary to the Government's position, Congress did not indicate any intention to give the Secretary absolute discretion to deny an award under the moiety statute when the conditions for award are met. Rather, it is clear that Congress intended only to give the Secretary some discretion in making awards of less than 25 percent of the value of the fines, penalties, or forfeited property resulting from the original information provided by an informant. Nowhere did Congress indicate any intention to disturb the longstanding judicial interpretation of the moiety statute as money mandating. See Lindahl v. Office of Personnel Management, 470 U.S. 768, 782-83 (1985) (Congress's failure expressly to repeal prior judicial construction of scope of review of disability determinations creates presumption that Congress intended to embody that construction in amended statute). 27 The 1986 amendments and their legislative history emphasize Congress's desire to develop a balanced, coordinated, multifaceted strategy for combating the narcotics drug . . . trafficking in the United States, in part by increasing investigations of large drug smuggling networks and increasing funds and resources for drug interdiction. Pub. L. No. 99-570, Title III, Section(s) 3002, 3003, 100 Stat. 3207, 3207-73 to 3207-74. Such efforts clearly are aided through encouraging citizens to disclose useful information that may assist the investigation of drug trafficking. See H.R. Rep. No. 794, 99th Cong., 2d Sess. 3 (1986) (In the final analysis, the war against drugs . . . must involve not just interdiction, but . . . a far higher level of citizen participation and awareness.). It is precisely the recognition of Congress's desire to preserve the incentive for such citizen participation that prompted the Court of Claims, in Tyson and its progeny, to construe section 1619 as mandating recovery when the statutory conditions are met. 28 We therefore conclude that section 1619 continues to require the payment of some award to claimants who have met the statutory conditions for recovery, i.e., who have provided original information involving a violation of the customs or navigation laws that has led to the recovery of a fine, penalty, or property. Contrary to the Government's contention, this satisfies the requirement under Eastport that the particular provision of law relied upon grants the claimant, expressly or by implication, a right to be paid a certain sum. Eastport, 372 F.2d at 1007. The fact that the Secretary retains some discretion to determine the amount of an award, within prescribed limits, does not preclude the statute from being money mandating. E.g., Bradley v. United States, 870 F.2d 1578 (Fed. Cir. 1989) (although Government retained broad discretion in determining wage increases under prevailing rates legislation, [i]nasmuch as discretion is not unlimited, the statute must be deemed to be a pay-mandating statute). The cases cited by the Government to demonstrate that wholly discretionary payments do not support Tucker Act claims are inapposite, since in this case, Congress has indicated that the Government lacks such unbounded discretion. 5 29 The Tyson court, of course, addressed the pre-1986 statute, which it recognized provided that a person furnishing original information leading to a recovery would be paid a fixed compensation, i.e., 25 percent of the Government's recovery. The trial court in this case concluded that meaningful judicial review was impossible when a sliding scale was applied to the amount of award, stating that [c]ourts lack the necessary tools for evaluating the Secretary's exercise of discretion in this context. 32 Fed. Cl. at 474. The Government concurs, arguing that section 1619 provides no standards by which to assess the agency's policy-based determination of an appropriate award. Indeed, the Government suggests that this lack of standards would preclude APA-style review in the district courts as well as the Court of Federal Claims, under the discretionary function exception to the APA. See 5 U.S.C. Section(s) 701(a)(2) (1994) (exempting from APA review a decision left to the discretion of the agency). 30 We are unpersuaded that the lack of statutory guidelines on the appropriate amount to be awarded in a given case renders an award nonjusticiable. In the first place, most of the potential challenges to an award determination -- whether information provided by the claimant was original, whether it led to a seizure, whether proper procedures were followed in deciding the claim -- will involve straightforward statutory application and record review of fact-finding, complicated only perhaps by accommodating confidentiality concerns surrounding the relevant evidence. Second, other sources of guidance or constraint on the Government's discretion in making awards, such as Treasury regulations or Customs' Fines, Penalties & Forfeitures Handbook, may focus the claims and the trial court's analysis. In this case, for example, Appellant has alleged that the Government failed to follow prescribed procedures in reviewing his claim, and denied him an award in part due to Appellant's arrest for drug smuggling even though the Handbook provides that [t]he fact that the claimant has been involved in violations of the laws enforced by Customs would not prevent recognition or approval of his claim. Department of the Treasury Office of Commercial Operations, Fines, Penalties, & Forfeitures Handbook (April 1986), at INF-3. 6 Finally, Congress and this court have recognized that the Government has broad discretion to determine the proper amount of an award in order to fashion appropriate incentives for informants to cooperate. Correspondingly, a reviewing court must afford considerable deference to such determinations, and disturb them only when they are based on fact findings not supported by the record or an incorrect interpretation of the applicable law, or are so ridiculously low as to constitute an affront to congressional intent. Freed, 34 Fed. Cl. at 719. We are confident in the ability of the trial court to apply this standard faithfully and justly. 31 We therefore hold that section 1619 continues to provide Tucker Act jurisdiction over claims based on allegations that the claimant has satisfied the requirements of section 1619 and the Secretary has improperly withheld an award. The proper standard of review for the trial court is that enunciated by the Tyson court: a decision of the Treasury to deny an award will be upheld unless it is arbitrary, capricious, an abuse of discretion, otherwise not in accordance with law, procedurally defective, or unsupported by evidence in the record. Tyson, 32 F. Supp. at 136-37. On appeal, we review the judgment of the trial court to determine if the court properly applied that standard to the facts of the case. 32 The trial court thus erred in dismissing Appellant's claim for lack of jurisdiction. We reverse the judgment of the Court of Federal Claims on this issue and remand for further proceedings in accordance with this decision. We also vacate the trial court's dismissal for lack of jurisdiction of Appellant's claim for an accounting of the monies allegedly recovered pursuant to original information provided by Appellant. If Appellant is able to prove below that he met the statutory conditions for recovery under section 1619, then the trial court in the exercise of its jurisdiction may order the Government, if needed, to render an accounting of the seizures resulting from Appellant's information. Klamath & Modoc Tribes & Yahooskin Band of Snake Indians v. United States, 174 Ct. Cl. 483, 490-91 (1966); see Florida Keys Aqueduct Auth. v. United States, 231 Ct. Cl. 911 (1982) (Court of Claims has jurisdiction over inartfully pleaded claim for declaratory judgment that actually sought determination of amortization credit as preliminary to computation of money damages due.). (Some or all of the relevant information may be disclosed in any further discovery proceedings conducted between the parties on remand. See Klamath, 174 Ct. Cl. at 491-92.)