Opinion ID: 274953
Heading Depth: 2
Heading Rank: 2

Heading: Standing by regulation.

Text: 38 Elsewhere in their briefs appellees insist that freedom from competition is not the basic issue here but in fact their complaint is one of individual injury by reason of unfair treatment by the Administrator's noncompliance with his own regulations. 11 Appellees claim that Alabama Power, Kansas City Power, and T. V. A. are distinguishable since the regulations were not promulgated at the time of these decisions. 12 39 Therefore, we are instructed that we must search the regulations to determine whether appellees have any legally enforceable rights to give standing to sue. The language of the bulletin sets forth the procedure that is to be followed by the Administrator in conducting a survey to consider a borrower's loan application. The power supplier has no enforceable right or privilege to obtain a contract or to otherwise have its proposal accepted. 13 The regulation states the Administrator will endeavor to make the proposals of the suppliers reasonable within a definite period of time. 14 If appellees' position is correct, short of obtaining a determination of reasonable, they could always cite the Administrator as failing to endeavor to make the proposals reasonable. The regulations say the Administrator will inform the suppliers of the deficiencies. But the regulation does not give the supplier the unconditional right to have its proposal accepted. On the contrary, these requirements are designed to place sufficient information in the hands of the Administrator in order that it  be considered in evaluation of loan applications related to the problems and needs covered by the survey. 40 Appellees contend they have standing since they belong to a special class which is the intended beneficiary of the regulations promulgated by the Administrator. See Kentucky Utilities Co. v. T. V. A., 6 Cir., 375 F.2d 403, decided November 15, 1966. They claim the objectives of the regulations are to protect the rights of the private power suppliers. We would agree with the general proposition that Congress through the REA is not interested in using governmental power to supplant private enterprise. See H.R. Rep. No. 423, 89th Cong., 1st Sess. 33 (Sen. Holland). However, such an expression of policy in and of itself does not grant a legally enforceable right in the utility to maintain it. Tennessee Electric Power Co. v. T. V. A., 306 U.S. 118, at 141, 59 S.Ct. 366. The authority of the REA to grant loans to electrical cooperatives could otherwise be thwarted. As the House Committee on Appropriations said, the right to make loans for generating and transmission purposes is deemed absolutely essential to enable REA coops to obtain reasonable contracts with private suppliers with regard to rates, terms and conditions. H.R.Rep. No. 355, 88th Cong., 1st Sess. 7, (1963). 15 The announced responsibility of the REA in conducting the power supply survey, which is the gist of the regulation in question, is twofold: (1) to render assistance to borrowers in obtaining the most advantageous power supply arrangement, and (2) to conserve REA funds. 16 See Bulletin 111-3, supra. The bulletin does make a general policy statement that the power supply survey assure adequate review of existing and proposed power supply alternatives and encourage closer cooperation between borrowers and other electric power suppliers. However, this statement must be read in conjunction with the expressed concern of the REA that the terms and conditions of power supply arrangements are major and critical factors in REA borrowers ability to carry forward the rural electrification program. If anyone is the beneficiary of the regulation, it is the rural consumer of cheap but efficient electrical energy. The intent of the regulation is to assure the borrower, not the private power supplier, the most advantageous power supply arrangement. 41 It is difficult to conclude that the purpose of the regulations is to provide previously nonexistent rights to the private power supplier. The federal program under the REA is specifically for the benefit of rural families to have modern and efficient electrical facilities at the lowest rates possible. The implementation of the REA program requires a pragmatic concern for both economy and facility to the borrower, as well as to the consumer. In overseeing the Act, Congress properly is concerned in the conservation of the funds involved. This discerning interest may work to the advantage of the private power supplier, but in many instances it also can result in their economic disenchantment. In administering the REA program freedom from competition is not a legitimate end of the legislation or the regulations promulgated thereunder. More appropriately, we feel the responsibilities under the regulation are as set forth in its preamble. The language and the legislative background of the regulation makes it apparent that Congress was merely seeking a more effective means to police the REA loans. 17 Under such circumstances we find Congress did not intend to create any legally enforceable rights for the private power supplier. Lack of Judicial Reviewability 42 However, notwithstanding appellees' claim to certain benefits under the regulations, they have otherwise failed to state a justiciable controversy. 18 Their complaint relates to a phase of an incomplete process of the exercise of administrative discretion. The agency conduct does not invoke any final or adjudicatory order or process which legally wrongs appellees. Every step delineates an investigative stage directed toward accumulation of factual material for the Administrator's expertise evaluation. 19 The ultimate authorization of the loan, which appellees really want to prevent, does not and cannot involve a legal wrong to appellees. 43 It is patent the judicial action sought by appellees is still subject to subsequent revisory executive or legislative action. 20 Appellees attack the negotiation stages only. These lead up to (1) a finding of reasonableness or unreasonableness of the supplier's proposal, (2) evaluation of all proposals for further consideration of the borrower's loan application, (3) certification of approval of the loan to the Secretary of Agriculture, the Comptroller General, the House of Representatives and the United States Senate. 21 See Bulletin 111-3, supra. See Jaffe, Judicial Control of Administrative Action, 100-3, supra. Even then the Secretary of Agriculture must ultimately approve and request the Secretary of the Treasury to loan the money to the Administrator, 7 U.S.C. § 903. Appellees concede in their brief, as well as in oral argument before the court, they are not attacking the certification, see n. 11, supra. 22 It is clear that appellees are attacking a step in a pending proceeding leading to an ultimate decision not other wise judicially reviewable. United States v. Los Angeles and S. L. R. Co., supra. Cf. Chicago & Southern Air Lines, Inc. v. Waterman Steamship Corp., 333 U.S. 103, at 112-113, 68 S.Ct. 431, 92 L.Ed. 568. 23 44 Appellees submit that appellants' procedural efforts were arbitrary, capricious 24 and illegal. 25 Assuming they were, appellees cannot succeed in doing indirectly that which they concede they cannot do directly, to-wit, enjoin the loan. Congress has steadfastly refused to provide judicial review under 7 U.S.C. § 901 of the REA Act. 26 This silence could be premised on the concern that the private supplier could otherwise interfere with REA loans in each instance where the Administrator finds the public suppliers proposal unreasonable. 45 The studied expertise of the Administrator, the Comptroller General and Congress as to comparative cost studies, efficiency, flexibility and overall utility should remain in their capable hands and not the courts. The decisions entail engineering know-how and accounting procedures which the executive and legislative branches of government are better equipped to handle than the judiciary. The exercise of judgment by the Administrator, Congress or the Comptroller General invokes far more than performing, a ministerial act. We are concerned with an area of the law where generally the Executive and the Legislative are supreme. Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309, 78 S.Ct. 752; United States v. Carmack, 329 U.S. 230, 67 S.Ct. 252; United States v. George S. Bush & Co., 310 U.S. 371, 380, 60 S.Ct. 9441, 84 L.Ed. 1259. 27 United States v. Wiley's Cove Ranch, 8 Cir., 295 F.2d 436; Duba v. Schuetzle, 8 Cir., 303 F.2d 570; Kansas City Power & Light Co. v. McKay, supra; R E A v. Central Louisiana Electric Co., supra. The promulgation of the regulations in question unequivocally demonstrates that the Administrator relies upon Congressional guidance and sanction. Although we doubt that Congress and the Comptroller General will desire to review every loan made by the REA they do possess the machinery and the ability for review, as in the instant case, where the parties are in good faith in attempting to reach a meeting of the minds. 28 Under the facts presented here notwithstanding the regulations, the character of the agency action involved falls short of presenting a justiciable controversy. 46 The preliminary restraining order entered on June 27, 1966, should be dissolved by the District Court and the appellees' case dismissed for lack of jurisdiction. 47 Reversed in accordance with the opinion.