Court Opinion

ID: 8915124
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:41:47.221285+00
Date Added: 2024-06-11T17:08:54.418921
License: Public Domain

REINHARDT, Circuit Judge,
dissenting.
I dissent from that part of the majority’s opinion which treats the VA’s refusal to exercise its discretion under section 1816(a).
The district court found that the VA refused to exercise section 1816(a) assignment authority during 1974-1976 in the Los Angeles region and concluded that in so doing the VA had illegally failed to exercise its discretion. The majority does not dispute the factual finding. Yet it reverses the district court’s conclusion of law and decides that the VA is merely “empower[ed]” to utilize assignment-refunding and is therefore free to ignore the existence of the statutory provision entirely, as the district court found it did here. Under this construction of the statute, the Administrator can refuse to exercise any of the discretion given him by section 1816(a), without providing or, more important, having any reason for so doing. This interpretation is unsupported by precedent or the rules of statutory construction. Therefore, I would affirm that portion of the district court’s judgment (1) finding that the VA’s failure to take any action regarding VA guaranteed home loans under section 1816(a) constitutes an illegal failure to exercise its discretion, and (2) requiring the VA to consider refunding and assignment of plaintiff’s loan obligation.
The majority concludes that the VA has no statutory duty to implement the provisions of section 1816(a), but cites only a dictum from Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309, 318, 78 S.Ct. 752, 757, 2 L.Ed.2d 788 (1957), in support of its novel position.
That authority is not persuasive here. So far as I can determine, Mr. Justice Douglas’ dictum has never been cited by any federal court. Moreover, the case itself has never been cited, nor relied on, by the Supreme Court in any of the dozens of later cases treating the reviewability of an agency’s action or inaction.
In other cases raising the question whether “agency action is committed to agency discretion by law,” 5 U.S.C. § 701(a)(2) (1976), current law requires a reviewing court “to determine ‘whether nonreviewability can fairly be inferred.’ ” Morris v. Gressette, 432 U.S. 491, 501, 97 S.Ct. 2411, 2418, 53 L.Ed.2d 506 (1977), quoting Barlow v. Collins, 397 U.S. 159, 166, 90 S.Ct. 832, 837, 25 L.Ed.2d 192 (1970). This test is not *703similar or even related to the standard suggested by the majority. Nor is it qualified by any references to “large or loose statutory terms.” Panama Canal Co., 356 U.S. at 318, 78 S.Ct. at 757. Moreover, although Panama Canal Co. has not been formally overruled, its usefulness for any purpose is doubtful. As the Fifth Circuit stated in Chevron Oil Co. v. Andrus, 588 F.2d 1383, 1391, n. 14 (5th Cir. 1979), “[T]he continued vitality of the Panama Canal Co. case as precedent is questionable.”
The majority’s treatment of our Circuit’s precedent is equally unsatisfactory. It merely purports to distinguish three cases supporting a view contrary to its own: Rockbridge v. Lincoln, 449 F.2d 567 (9th Cir. 1971); Abrams v. Hills, 547 F.2d 1062 (9th Cir. 1976) cert, dismissed, 439 U.S. 1001, 99 S.Ct. 607, 58 L.Ed.2d 675 (1978); and Standard Oil Co. of California v. FTC, 596 F.2d 1381 (9th Cir. 1979) overruled on other grounds, 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980). In each of these cases we required an administrator to exercise discretion and implement the statutory authority. The majority distinguishes these cases by saying that the statutes there involved reflected a Congressional intent that some regulation occur.
The majority’s rationale for distinguishing our applicable precedent is unpersuasive. The government, which suggested the rationale in its brief, gleans a Congressional intent in Rockbridge from the unsurprising idea that the statute there construed was “passed with a specific set of legislative objectives in mind.” I trust that neither the government nor the majority intends to imply that section 1816(a) was passed without any legislative objectives in mind. That proposition would violate the horn-book rule that statutes must be construed to have both meaning and purpose. In Professor Llewellyn’s formulation: “If a statute is to make sense, it must be read in the light of some assumed purpose. A statute merely declaring a rule, with no purpose or objective, is nonsense.” Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons about how Statutes are to be Construed, 3 Vand.L.Rev. 395, 400 (1950). Making that assumption, the majority’s suggestion appears to be that since section 1816(a) was incorporated in a statute which had only a general set of legislative objectives, Congress did not intend to require that the specific provision be implemented. Whatever may recommend this concept, the majority offers no reasoning or explanation in support of it.
In enacting section 1816(a) Congress quite sensibly refrained from instructing the VA as to the particular circumstances under which it should accept assignments of loans and refund them, preferring to leave these practical decisions to the discretion of the agency. The majority characterizes Congress’ action as an “absence of any standards or procedures governing the administrator’s exercise of the assignment refunding option .... ” Ante at 700, and then, relying on this supposed absence of standards, leaps to the conclusion that section 1816(a) need not be implemented. There is no precedent supporting this leap in logic; nor is there any basis for the majority’s newly discovered principle of administrative law — if standards are not set forth, the statute is lawful but the agency charged with its enforcement is free to ignore it.
The notion that Congress must or should state a standard, policy or principle in every regulatory statute is denied in the cases1 *704and by the commentators.2 Without an explicitly declared Congressional intent, a court should not announce an absence of any standards but should look to whatever intent may be fairly inferred from the entire legislative scheme.3
Here, it seems clear that Congress intended to grant veterans as much reasonable forebearance in servicing their loans as possible. Indeed, just a year after the 78th Congress created the loan guarantee program, the 79th Congress extensively expanded its scope by adding three new sections allowing different financing techñiques to allow maximum forebearance. Act of December 28, 1945 ch. 588, § 8, 59 Stat. 623, 626 (1945) (current version in part at 38 U.S.C. § 1816 (1976)) (amending Serviceman’s Readjustment Act of 1944, ch. 268, §§ 500-505, 58 Stat. 284 (1944))4 These provisions, which include the precursor of section 1816(a), set out repurchase, refinancing and insurance techniques for preserving veterans’ titles to their homes. If Congress intended to provide reasonable forebearance to veteran borrowers, which it did, provided various financing techniques, which it did, it seems a reasonable inference that it intended the techniques to be used.5
*705I cannot concur in the majority opinion for another reason. I simply cannot reconcile the majority’s earlier conclusion that the VA’s exercise of its discretion in “deciding1” not to assign and refund appellee’s home loan is not reviewable with its later conclusion that the VA is merely empowered, under the statute, to exercise discretion, is not required to do so, and that its failure to exercise any discretion at all was lawful. Throughout the earlier part of its analysis, the majority refers to the VA’s decision not to assign and refund appellees’ loan. It holds, “We thus conclude that the VA’s decision not to assign and refund appellees’ home loan is not judicially reviewable.” Ante at 700 (emphasis added). And yet in the next part of its analysis, it approves the VA’s failure to make a decision as to appellees’ loan, and as to all other loans, on the theory that the VA is merely empowered to exercise its discretion but need not actually do so.
Earlier, in dealing with the question whether the court may review a particular decision of the VA not to refinance a specific loan, the majority approves the following contention of the VA: “[T]he decision whether or not to employ the assignment-refunding option is ‘committed to agency discretion’ within the meaning of the Administrative Procedure Act, 5 U.S.C. § 701(a)(2), and thus is not reviewable under that Act.” Ante at 699. I agree.6 But implicit in the VA’s (and the majority’s) contention is the proposition that the
agency must exercise the discretion which is committed to it. It must do so by making decisions as to whether or not to employ the assignment-refunding option. While we cannot review the agency’s decisions after it makes them, we can and must review the agency’s attempt to ignore its discretion and its failure to make any decisions at all.
The majority’s analysis suffers from other internal inconsistencies. For example, the statement at footnote 9, where the majority relies on the section 1816(a) “remedy” to support the conclusion that no private cause of action exists cannot be harmonized with the section of the opinion under discussion here. While I do not quarrel with the footnote 9 conclusion that Congress intended section 1816(a) to provide a remedy for veterans, I find it troublesome that the majority relies on the existence of that remedy as a basis for holding that veterans have no private right of action and then subsequently concludes that the VA may simply ignore the provision and, without any reason, deprive all veterans of this “remedy” entirely.
My conclusion is not that section 1816(a) assignments must be instituted once a month, once per thousand defaults or with any other particular frequency. Nor am I contending that we may review a decision by the VA not to pay the holder of an obligation the unpaid balance in a particular case in which the VA has made the specific judgment not to do so. My conclu*706sion is simply that the VA cannot ignore the statute.7
Because the majority legitimizes the VA’s neglect of its discretion, I dissent.

. In a different time, standardless Congressional delegations raised different issues. E.g., Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935). The unmistakable thrust of later cases is that standardless statutes are necessary to the conduct of government and that the judicial and executive branches “are and must be coordinate branches not only for carrying out policies determined by the legislative branch but also for determining basic policy.” K. Davis, Administrative Law Text 30 (3d ed. 1972); See Fahey v. Mallonee, 332 U.S. 245, 67 S.Ct. 1552, 91 L.Ed. 2030 (1947).
As in Fahey, I would suggest that a standard-less statute indicates a Congressional judgment that the relevant policy issue is sufficiently complex so as to preclude the statement of specific standards. That judgment does not mean that Congress has retained the policy judgment of whether to create a program. Rather, it means that the basic framework of a *704program is created and the job of formulating the complex policies necessary to operate the program is delegated to the administrative agency. This principle supports my conclusion that the VA Administrator “cannot ignore the statute,” an idea which the majority characterizes as a “vague admonition.” Ante at 700 n. 13. See text accompanying n. 7, post at 706.
Armed with the “vague admonition” that the Administrator must exercise the discretion vested in him by Congress, I believe the VA could properly perform its job of determining when the assignment and refunding of loans should be made.

. E.g., 1 K. Davis Administrative Law Treatise § 3:5 (2d ed. 1978).

. See Rockbridge v. Lincoln, 449 F.2d at 570-71.
“The Rule of Inferred Intent” assumes that every statute is logical and complete and that this completeness can provide appropriate meaning to unglossed terms. See Driedger, A New Approach to Statutory Interpretation, 29 Canadian Bar Review 838 (1951), reprinted in 4 Sutherland Statutory Construction 25, 26 (C. Sands ed.) (1975).
In Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935), Justice Cardozo said: “[T]he meaning of a statute is to be looked for, not in any single section, but in all the parts together and in their relation to the end in view.” Id. at 439, 55 S.Ct. at 256. (Cardozo, J., dissenting) (citation omitted).

. The act also liberalized the legislative scheme by extending the time for loan applications, and providing an automatic 50% guaranty of agreed on loans. See H.R.Rep.No.1449, 79th Cong., 1st Sess. 602 (1945), reprinted in 1945 U.S.Code Cong. Serv. 935.

. This inference finds support in the statutory requirement that a lender notify the Administrator thirty days prior to suit or foreclosure. Section 1816(a) provides in part:
Before suit or foreclosure the holder of the obligation shall notify the Administrator of the default, and within thirty days thereafter the Administrator may, at the Administrator’s option, pay the holder of the obligation the unpaid balance of the obligation plus accrued interest and receive an assignment of the loan and security.
Thus in every case of potential default, a lender must send notice to the VA. There is nothing precatory about that. I find the fact that the notification requirement appears in the same sentence of § 1816(a) as does the assignment-refunding authority to be significant. It is clear that Congress required such notifications so that the VA could consider them in determining whether to enter into particular loan assignments. If Congress had thought the VA could simply ignore the provisions of § 1816(a), as the majority suggests, it would hardly have bothered to require all lenders to send the foreclosure notices in every case. Put affirmatively, since Congress required this information to be conveyed to the VA in all cases, it must at least have intended the VA to consider whether to assign and refund veteran’s obligations in some cases.
For its contrary conclusion, the majority quotes language in H.R.Rep. No. 926, 79th Cong., 1st Sess. 4 (1945). The majority relies on an emphasized clause of the quoted language for the proposition that Congress may not have intended that section 1816(a) be used for the purpose of refinancing a veteran’s loan. The majority errs in relying on the emphasized clause. The clause is taken verbatim from an amendment first proposed in the House bill, but subsequently removed from the bill by the Conference Committee. See 59 Stat. 623, 630 (1945). The language relied on by the majority is therefore entirely unpersuasive if not irrelevant on the question whether Congress intended that the VA exercise the section 1816(a) authority granted it by the Act.

. It is clear that the VA and the majority are referring to the decision whether to employ the option in a particular case, and not the decision whether to recognize the assignment-refunding option at all. Shortly after it quotes the VA’s contention, the majority says “Neither the statute nor the formal regulations published pursuant to 5 U.S.C. § 553 provide any legal standards by which a decision to assign and refund could be reviewed ...” Ante at 699 (emphasis added). Similarly in describing the discretion given to the VA, the majority says
The decision to accept an assignment of a veteran’s loan necessarily involves a consideration of myriad factors, including, but not limited to, internal VA management considerations relating to budget and personnel, the risk of loss to the VA, the adequacy of prior loan servicing, and the circumstances of the borrower’s default. The application of these factors, as well as the determination of other relevant factors and the weight to be attributed to each, has been entrusted to the unfettered discretion of the VA. Even if legal standards for review could be divined, it is clear that, absent allegations that the agency has improperly considered factors outside those entrusted to its discretion, the decision whether to assign and refund raises issues not well-suited for determination by the courts.
Ante at 700.
Thus both the majority and the VA recognize that Congress afforded the VA the discretion to make specific decisions and that it is the actual exercise of this discretion which is not subject to judicial review.

. To reach the conclusion 1 reach here, it is not necessary to decide the question whether the VA could make a deliberate reasoned decision not to implement the assignment-refunding program, although I believe it could not. Nor need we decide whether the VA could suspend implementation of the program for a particular period if it concluded that it had valid reasons for doing so. In this case the record reveals no decision of any kind by the VA, and certainly no decision by the VA to refuse to utilize the assignment-refunding program. Thus, in view of the district court’s finding, I can only conclude that the VA simply ignored the law.