Opinion ID: 6971731
Heading Depth: 2
Heading Rank: 2

Heading: Plaintiffs Whose Appeals Were Decided Favorably

Text: The plaintiffs who already have had their appeals favorably decided by the FSM are in a decidedly different position than the other plaintiffs. The district court nonetheless held that these plaintiffs also lacked standing under the Constitution’s redressability prong and under the prudential “zone of interests” test. We reverse this determination and hold that these plaintiffs have standing to sue under § 10(a) of the APA.
While the district court found that these plaintiffs had satisfied Article Ill’s injury-in-fact and causation requirements, 5 it held that they had faded to establish redress-ability because it lacked jurisdiction over the FSM and that, even if it ordered FEMA to pay to the FSM the promised 75 percent of all costs incurred in the individual and family grant program, “there is no guarantee that the FSM would reinstate its IFG program and pass those funds through to the plaintiffs.” (emphasis added). The plaintiffs argue that the district court erred in requiring them to make an unduly high showing of redressability, and that their claims satisfy the correct standard — that it is “likely” that their injury will be redressed by a favorable decision. We agree. Plaintiffs need not demonstrate that there is a “guarantee” that their injuries will be redressed by a favorable decision. In fact, we recently emphasized that plaintiffs “must show only that a favorable decision is likely to redress [their injuries], not that a favorable decision will inevitably redress [their injuries].” Beno v. Shalala, 30 F.3d 1057, 1065 (9th Cir.1994) (citing Lujan, 504 U.S. at 561, 112 S.Ct. 2130). The plaintiffs who already have had their appeals favorably decided by the FSM satisfy this standard. In cases similar to the one before us, the Supreme Court has stated that plaintiffs lack standing primarily when the funding agency is not before the court, Lujan, 504 U.S. at 568-71, 112 S.Ct. 2130 (plurality opinion), or when redressability “depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or predict.” ASARCO, Inc. v. Kadish, 490 U.S. 605, 615, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989) (plurality opinion). See also Beno, 30 F.3d at 1065 (citing with approval these plurality holdings). Neither of these problems is present in this case. First, the funding agency (FEMA) is before the court. Second, the FSM’s decision whether to pass on to these plaintiffs any funds received from FEMA is not “unfettered.” To the contrary, the agreement it signed with FEMA, which is mandatory and binding under the regulations, requires it “[immediately upon receipt of funds, [to make] disbursements ... to applicants.” FEMA-FSM Agreement of Jan. 8, 1991, Exhibit A at 2. 6 The agreement further provides that all excess funds “(including those which the FSM passes on to applicants) ... shall be returned to FEMA.” Id. at 3 (emphasis added). Thus, the FSM would not even have any incentive to keep individual and family grant funds for itself. Finally, we would in any event presume that a public agency that receives funds that are for the specific purpose of compensating specific individuals, in specific amounts set forth in claims that have been approved by that agency, would not divert the funds for its own use. See, e.g., Banks v. Secretary of Indiana Family & Soc. Servs. Admin., 997 F.2d 231, 241 (7th Cir.1993). Under these circumstances, the fact that FEMA is required by law to give the funds to the plaintiffs through the conduit of the FSM, an entity which is beyond the court’s reach, does not adversely affect these plaintiffs’ ability to seek relief in federal court. To paraphrase the Seventh Circuit’s analysis of a comparable case, “briefly put,” the plaintiffs argue that FEMA “has deprived it of money to which it otherwise would have been entitled.” Family & Children’s Center, Inc. v. School City of Mishawaka, 13 F.3d 1052, 1059 (7th Cir.1994) (holding that Children’s Center could assert right of disabled children to receive money under the IDEA even though Act requires defendant to provide money only “to children”). The defendants’ speculation that the FSM “might conspire to evade th[e] mandatory language” of the regulations and its agreement “does not defeat plaintiffs’ standing.” Beno, 30 F.3d at 1066; see also Banks, 997 F.2d at 241 (rejecting argument that plaintiffs’ injuries were not redressable because the Secretary “lacks adequate means to insure a state’s compliance with the Medicaid Act”). There is, certainly, a substantial likelihood that these plaintiffs will receive funds from FEMA if it is ordered to provide them. That is sufficient for our purposes.
The plaintiffs bring suit under § 10(a) of the APA, which entitles persons aggrieved by final agency action to seek judicial review. See 5 U.S.C. § 702. Article VII § 172(b) of the Compact of Free Association specifically provides: (b) The Governments of ... the Federated States of Micronesia and every citizen of ... the Federated States of Micronesia shall be considered a “person” within the meaning of ... the judicial review provisions of the Administrative Procedures Act, 5 U.S.C. §§ 701-706.... The Supreme Court has interpreted that statute to impose a prudential standing requirement in addition to the requirements] imposed by Article III---- For a plaintiff to have prudential standing under the APA, “the interest sought to be protected by the complaintant [must be] arguably within the zone of interests to be protected or regulated by the statute ... in question.” National Credit Union Admin. v. First Nat’l Bank & Trust Co., — U.S. -, -, 118 S.Ct. 927, 933, 140 L.Ed.2d 1 (1998) (quoting Association of Data Processing Serv. Org. v. Camp, 397 U.S. 150, 152-53, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) (brackets and ellipsis in original)). The district court held that the plaintiffs failed to satisfy this prudential requirement because the “mechanism” that the Stafford Act employs to disburse funds is “by granting funds to the States, and not to individuals directly.” Thus, the district court concluded, “it appears that the [individual and family grant] program was really designed to help States, rather than individuals, in dealing with major disasters within their borders.” We disagree with this highly formalistic reasoning. The plaintiffs in this ease — the victims of a natural disaster — most certainly fall within the Stafford Disaster Relief Act’s zone of interests. The Supreme Court has explained the zone-of-interests inquiry as follows: The “zone of interest” test is a guide for deciding whether, in view of Congress’ evident intent to make agency action presumptively reviewable, a particular plaintiff should be heard to complain of a particular agency decision. In cases where the plaintiff is not itself the subject the of contested regulatory action, the test denies a right of review if the plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit. The test is not meant to be especially demanding; in particular, there need be no indication of congressional purpose to benefit the would-be plaintiff. Clarke v. Securities Indus. Ass’n, 479 U.S. 388, 399-400, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987); see also United States v. Mindel, 80 F.3d 394, 397 (9th Cir.1996). The Court, in fact, recently clarified this rule, holding that APA plaintiffs need only show that their interests fall within the “general policy” of the underlying statute, such that interpretations of the statute’s provisions or scope could directly affect them. National Credit Union Admin., — U.S. at -, 118 S.Ct. at 933 (quoting Data Processing, 397 U.S. at 157, 90 S.Ct. 827). The plaintiffs’ interests in this ease are in no way “marginally related to or inconsistent with the purposes implicit in the statute.” Clarke, 479 U.S. at 399, 107 S.Ct. 750. To the contrary, the Stafford Act expressly authorizes FEMA “to make a grant to a State for the purpose of making grants to individuals or families adversely affected by a major disaster.” 42 U.S.C. § 5178(a) (emphasis added). The regulations state that “[t]he [individual and family] grant program is intended to provide funds to individuals or families to permit them to meet those disaster-related expenses or serious needs for which assistance from other means is either unavailable or inadequate.” 44 C.F.R. § 206.131(b). It is therefore clear that the Stafford Act was primarily designed to help individuals, not states, obtain disaster relief. Even if states that receive disaster assistance are also within the Act’s zone of interests, the Act’s real beneficiaries, the individuals and families who suffer losses due to natural disasters, fall well within the Act’s general poliey concerns. 7