Opinion ID: 2735161
Heading Depth: 3
Heading Rank: 1

Heading: Appropriations Clause

Text: The crux of Petitioners’ Appropriations Clause argument is that, “[h]aving disbursed funds to the DSIs from the Treasury without lawful authority, [BPA] acted in direct violation of the Constitution. Therefore, it now has a duty to seek recovery of these illegally-paid funds.” (citations omitted). Viewed as a general challenge to BPA contractual damages waiver provisions, this argument is foreclosed by Alcoa, 698 F.3d at 791. Alcoa rejected the argument “that BPA is constitutionally obligated to sue for any damages to which it is entitled.” Id. at 791. In so ruling, Alcoa noted that the BPA administrators have statutory authority to compromise or settle claims, and held that a bilateral waiver provision is consistent with that authority, as it balances in advance the risk of being sued for damages against the against BPA by the customers of its direct customers. Ass’n of Pub. Agency Customers v. Bonneville Power Admin., 733 F.3d 939, 949–55 (9th Cir. 2013). 24 ICNU V. BPA opportunity to obtain damages from the contracting party. Id. at 792. Viewed as a narrow, case-specific challenge, the Appropriations Clause argument fares no better. Any disbursements BPA made under the invalidated monetary benefits provisions likely did not violate the Appropriations Clause. BPA is funded by a permanent appropriation, or revolving fund, which the BPA Administrator has wide latitude in spending. See 16 U.S.C. § 838i (establishing revolving fund within the U.S. Treasury for BPA); see also 3 General Accounting Office, Principles of Federal Appropriations Law 15-159 (discussing BPA revolving fund) and 2-17 (defining revolving funds as permanent appropriations). So there may well have been an adequate appropriation for the subsidies, even though they were later held invalid. We need not wade further into the “largely uncharted area” of Appropriations Clause law, however. Md. Dep’t of Human Res. v. U.S. Dep’t of Agric., 976 F.2d 1462, 1486 (4th Cir. 1992) (Hall, J., concurring in part and concurring in the judgment). Even if the subsidy payments did rise to an Appropriations Clause violation, petitioners have pointed to no convincing authority establishing that BPA would therefore have a constitutional duty to recover the subsidies. Certainly, the text of the Appropriations Clause provides no basis for inferring such a duty, nor do the cases relied upon by petitioners. Office of Personal Management v. Richmond, 496 U.S. 414, 416 (1990), held only that a court cannot order an agency to expend funds contrary to statute — not that, if an agency has already done so, the Appropriations Clause requires the agency to get the funds back. Certainly ICNU V. BPA 25 agencies are generally permitted to seek recovery of erroneously or illegally disbursed funds. Even in the absence of a specific statutory cause of action, “[t]he Government by appropriate action can recover funds which its agents have wrongfully, erroneously, or illegally paid,” so long as there is no clear statutory barrier to doing so. United States v. Wurts, 303 U.S. 414, 415–16 (1938).6 But that recovery authority does not suggest that the government has a constitutional duty to seek a refund every time an erroneous or illegal payment has been made. To the contrary, Wurts suggested that Congress may statutorily preclude agencies from recovering erroneously paid funds so long as it “clearly manifest[s] its intention” to do so. 303 U.S. at 416 (internal quotation marks omitted). If the Appropriations Clause imposed an affirmative constitutional duty upon agencies to recover erroneously paid funds, Congress could not eliminate the duty by statute.7 6 See Wisc. Cent. R.R. Co. v. United States, 164 U.S. 190, 212 (1896) (“parties receiving moneys illegally paid by a public officer are liable ex aequo et bono to refund them”); United States v. Fowler, 913 F.2d 1382, 1386–87 (9th Cir. 1990) (holding that government agent’s error in disbursing funds does not waive government’s right to reimbursement); Old Repub. Ins. Co. v. Fed. Crop Ins. Corp., 746 F. Supp. 767, 769–70 (N.D. Ill. 1990) (discussing statutory authority under which government may recover funds erroneously or illegally paid). 7 Petitioners also point to Fansteel Metallurgical Corp. v. United States, 172 F. Supp. 268, 270 (Ct. Cl. 1959), which stated that “when a payment is erroneously or illegally made, it is in direct violation of article IV, section 3, clause 2 of the Constitution” and “it is not only lawful but the duty of the Government to sue for a refund thereof.” Fansteel is not, of course, binding on us, and we decline to follow it. Fansteel misreads Wurts as holding that government has a duty to recover illegally paid funds; in fact, Wurts held only that the government “can recover funds 26 ICNU V. BPA