Court Opinion

ID: 8414810
Source: CourtListenerOpinion
Date Created: 2022-11-02 21:20:37.342767+00
Date Added: 2024-06-11T16:48:10.444552
License: Public Domain

MATHESON; J,,
concurring in part and dissenting in part.
I join Judge Moritz’s opinion except for Part II.C., which holds that, to the extent HUD no longer has the Tribes’ particular funds, sovereign immunity bars the Tribes from recovering. The majority1 concludes that HUD enjoys sovereign immunity because the agency has allocated the money the Tribes seek and ordering HUD to pay the Tribes from any other source-would constitute impermissible “money damages.”
The Supreme Court has explained that the' nature of the relief sought, not the source of the funds, determines whether sovereign immunity applies. The Tribes are seeking specific relief—enforcement of NAHASDA’s mandate. They are not seeking damages, and therefore the waiver of sovereign immunity in the Administrative Procedure Act (“APA”), 5 U.S.C. § 702, applies.
Although sovereign immunity poses no bar to the Tribes’ recovery, a different limitation—the Appropriations Clause— may prevent them, from, obtaining their funds.2 HUD can disburse funds only according to the terms of the appropriations it receives from Congress. The district court did not determine whether HUD has appropriations available to satisfy the Tribes’ entitlements under NAHASDA, I therefore agree that we should vacate the judgments, but I would remand for the district court to address the appropriations issue.
The following discussion attempts to expand and support these points.
A. Sovereign Immunity, APA § 702, Specific Belief, and “Money Damages”
“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). “[A] waiver of sovereign immu*1230nity must be unequivocally expressed in statutory text.” FAA v. Cooper, 566 U.S. 284, 290, 132 S.Ct. 1441, 182 L.Ed.2d 497 (2012) (quotations omitted).
Section 702 of the APA provides such a waiver:
A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States....
5 U.S.C. § 702 (emphasis added).
The Supreme Court addressed the meaning of § 702’s “money damages” phrase in Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). Massachusetts claimed the federal government owed it Medicaid payments. Under Medicaid, the federal government provides financial assistance to states to provide low-income individuals with health care. See id. at 883-84, 108 S.Ct. 2722. When the federal government “disallowed”—i.e., refused to pay—certain expenses, Massachusetts sued for the money by asking the district court to reverse the disallowances. Id. at 886-88, 108 S.Ct. 2722. The Supreme Court held Massachusetts’s case fell within § 702’s waiver because it “[was] not a suit seeking money in compensation for the damage sustained by the failure of the Federal Government to pay as mandated; rather it [was] a suit seeking to enforce the statutory mandate itself, which happenfed] to be one for the payment of money.” Id. at 900, 108 S.Ct. 2722. The Court explained that § 702 does not bar actions that seek “monetary relief,” only ones seeking “money damages.” See id. at 896-97,108 S.Ct. 2722.
Interpreting § 702, the Court distinguished substitutionary relief, which compensates the plaintiff for its losses, from specific relief, which gives the plaintiff the thing to which it is entitled. See id. at 893, 108 S.Ct. 2722. For example, when a plaintiff suffers “an injury to his person, property, or reputation,” an award of “monetary compensation,” or “damages,” serves to substitute for that loss. Id. By contrast, “specific relief’ includes “an order ... for the recovery of specific property or monies, ejectment from land, or injunction either directing or restraining the defendant officer’s actions.” Id. (quotations omitted). The Court quoted the D.C. Circuit: “ ‘Damages are given to the plaintiff to substitute for a suffered loss, whereas specific remedies “are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he was entitled.” ’ ” Id. at 895, 108 S.Ct. 2722 (quoting Md. Dep’t of Human Res. v. Dep’t of Health and Human Servs., 763 F.2d 1441, 1446 (D.C. Cir. 1985) (Bork, J.) (in turn quoting D. Dobbs, Handbook on the Law of Remedies 135 (1973))).
Monetary relief can be specific or substi-tutionary. Thus, “[t]he fact that a judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the relief as ‘money damages.’ ” Id. at 893, 108 S.Ct. 2722. Money is often substitutionary, such as when it compensates a plaintiff for a personal injury, but the monetary relief in Bowen was specific because Massachusetts sought “to enforce the statutory mandate itself, which happened] to be one for the payment of money.” Id. at 900, 108 S.Ct. 2722.
In contrast to Bowen, the Supreme Court ruled in Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 256-57, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999), that sovereign immunity barred the plaintiffs *1231lawsuit because it sought substitutionary relief. Blue Fox was a subcontractor on an Army construction project. Id. The general contractor became insolvent and left the project without paying Blue Fox under the subcontract. Id. Blue Fox sued the Army in federal district court, attempting to acquire and enforce an “equitable lien” on the Army’s remaining project funds. Id. at 258, 119 S.Ct. 687. The Supreme Court held sovereign immunity barred Blue Fox’s lawsuit. Id. at 263, 119 S.Ct. 687. Bowen⅛ analysis of § 702, the Court explained, turns on the distinction “between specific relief and compensatory, or substitute, relief,” not on whether the action is equitable or legal. Id. at 261-62, 119 S.Ct. 687. Blue Fox sought substitutionary relief because “by their nature” equitable liens “[do] not give the plaintiff the very thing to which he was entitled; instead [they] merely grant[ ] a plaintiff a security interest in the property, which the plaintiff can then use to satisfy a money claim.” Id. at 262-63, 119 S.Ct. 687 (brackets, citation, and quotations omitted). The lien was “a means to the end of satisfying a claim for the recovery of money,” and was substitute, not specific, relief. Id.
Together, Bowen and Blue Fox reveal that .the function of the remedy is critical to whether the action falls within § 702’s waiver. In Bowen, the remedy was fulfilment of the plaintiffs statutory entitlement to federal payments under Medicaid. 487 U.S. at 900, 108 S.Ct. 2722. The Bowen suit fit within § 702’s waiver because it gave the plaintiff the specific thing—federal Medicaid payments—to which it was entitled. In Blue Fox, the plaintiff sought, through an equitable lien, “money in the hands of the Government as compensation for the loss resulting from the default of the prime contractor.” 525 U.S. at 263, 119 S.Ct. 687. The Blue Fox suit was outside § 702’s waiver because it did not concern the thing the plaintiff was owed—payment from the general contractor—and was thus substitutionary.
In sum, under the Supreme Court’s cases, the distinction between specific and substitutionary relief turns on the nature of the relief, not on the source of funds.
B. Application
This case is similar to Bowen. The Tribes seek enforcement of their entitlement to NAHASDA funds. See 25 U.S.C. § 4111(a)(1) (“[T]he Secretary shall ... make grants under this section on behalf of Indian tribes ....”). The Tribes do not allege the government destroyed or damaged their housing units or that other harms arose from the government’s recapture of grant funds or failure to pay in a timely fashion. The Tribes seek only the grant funds themselves—the very thing to which they are entitled.- As in Bowen, the Tribes have sued as statutory beneficiaries to enforce a mandate for the payment of money by the federal government. This is not a suit for damages, § 702’s waiver applies, and sovereign immunity poses no bar.3
*1232C. The Majority’s Arguments
The majority does not contend this case is closer ■ to Blue Fox than Bowen. Its analysis rests on a meaning of “substitu-tionary” relief drawn from out-of-circuit cases that differs from the Supreme Court’s precedent. The majority concludes the Tribes are requesting substitutionary relief because HUD has already disbursed the wrongfully recaptured funds and would now have to repay the Tribes with other moneys. I address this rationale and then discuss the two cases the majority relies on for support.
1. Source of the funds
The majority contends the district court awarded substitutionary relief because HUD has disbursed the funds that should have gone to the Tribes. Maj. op. at 1226-27. Under this view, the source of funds to pay the Tribes matters. But using different dollars to satisfy the Tribes’ specific entitlement does not make the Tribes’ relief substitutionary. As discussed above, the function of the remedy determines whether it is specific or substitutionary. The Tribes are requesting specific relief because, just like in Bowen, they seek enforcement of “the statutory mandate itself, which happens- to be one for the payment of money.” 487 U.S. at 900, 108 S.Ct. 2722. In Bowen, Massachusetts was not asking to recover the exact same' dollars the government had refused to pay it. Any dollars would do. See id. at 884 n.3, 887 nn. 8-9, 108 S.Ct, 2722 (noting it was unclear what had happened to the particular Medicaid funds).4
■ Other forms of tangible property—the majority uses the example of a house—can have unique aspects that make replacement by similar goods a close but imperfect substitute. But money is fungible, or, as the majority says, “money is money.” Maj. op. at 1226. The Tribes do not care, just as Massachusetts - in Bowen did not care, which dollars they receive as long as their NAHASDA grant funds are paid to them. The majority errs in treating this dispute as though it were over rare coins. In Bowen, Justice Scalia recognized in dissent that the Court’s discussion of “the very thing” to which Massachusetts was entitled was money, not particular currency, See 487 U.S. at 917-19 & n.3, 108 S.Ct. 2722 (Scalia, J., dissenting).
The majority’s house example shows why the Tribes are seeking specific, not substitutionary, relief under Bowen. The majority posits that if HUD had wrongfully given one tribe’s house to another tribe, the most that the wronged tribe could recover would be the house’s monetary equivalent, which would be substitute relief and “money damages."' Maj. op. at 1226-27. But that is not the situation we face here because money is interchangeable and houses are not. The Bowen Court discussed in-kind benefits to explain why suits for money can constitute specific relief:
*1233In the present case, [the State] is seeking funds to which a statute allegedly entitles it, rather -than money in eom-pensation for the losses, whatever they .may be, that [the State] will suffer or has suffered by virtue of the withholding of those funds. If the program in this case involved in-kind, benefits this would be altogether evident, The fact that in the present case it is money rather than in-kind, benefits that pass from the federal government to the states ... cannot transform the nature of the relief sought—specific relief, not relief in the form of damages.
Bowen, 487 U.S. at 895, 108 S.Ct. 2722 (majority opinion) (emphasis added) (quoting Md. Dep’t of Human Res., 763 F.2d at 1446).
When a plaintiff is entitled to a sum of money, receipt of money totaling that sum brings the plaintiff the very thing to which it is entitled. Fungible money does not “substitute” for other money. Money is money. .
2. Circuit cases
To support its view that the source of the funds matters for purposes of sovereign immunity, the majority turns to two out-of-circuit cases. As detailed below, however, the results in thesé cases rested on mootness and the. Appropriations Clause, Their discussion of § 702 .and sovereign immunity is cursory and cannot be squared with Bowen.
a. City of Houston
In City of Houston v. HUD, 24 F.3d 1421 (D.C. Cir. 1994), HUD awarded Houston a grant' of approximately $20 million out of 1986 appropriations. Id, at 1424. Four - months later, HUD reduced the grant by $2.6 million and reallocated that moiiey to other grant recipients. Id. Houston sued, but not before the congressional act appropriating the disputed money had lapsed. Id.- Relying on -the “well-settled” constitutional principle “that when an appropriation has lapsed or has been fully obligated, federal courts cannot order the expenditure of funds that were covered by that appropriation,” the D.C. Circuit held the city’s claim for monetary relief was moot because the appropriation was both lapsed and fully obligated. Id.; see also id, at 1427. The court explained the mootness problem stemmed from the Appropriations Clause. See id. at 1428 (discussing Appropriations Clause); see also id. (“Nothing in Bowen ... even obliquely addresses the question of expired or fully obligated appropriations .... ”).
■ Although the D.C. Circuit grounded its holding in the Appropriations Clause, see id. at 1424, 1427, it tacked on a paragraph responding to Houston’s “suggestion]” that HUD could pay the city using funds other than the 1986 grant funds, id. at 1428. The court said this would “run afoul” of § 702 because .relief can be “specific” only when it is paid out of “a specific res.” Id. Without further explanation or legal citation, ■ the court announced: “An award of monetary relief from any source of funds other than the 1986 .,. appropriation would constitute money damages rather than specific relief,'and so would not be authorized by APA section 702.” Id.
But whether the government has particular funds, to pay a given claim is unrelated to whether the plaintiff is seeking damages. In a more recent case, the D.C. Circuit has said that Bowen requires courts to “focus on the nature of the relief sought, not on whether the agency still has the precise funds paid,” and that “[w]here a plaintiff seeks an award of' funds to which it claims entitlement under a* statute, the plaintiff seeks specific relief, not damages.” Am.'s Cmty. Bankers v. FDIC, 200 F.3d 822, 829 (D.C. Cir. 2000); see also id. at 830 (“[The plaintiffs] claim represents specific relief within the scope of-5 *1234U.S.C. § 702, not consequential damages compensating for an injury. That the [defendant] no longer possesses the precise funds collected is not determinative of this analysis.”). The court went on to distinguish City of Houston, where “[t]he principal issue ... was mootness, not the question of allowable specific relief as opposed to unavailable money damages.” Id,
b. County of Suffolk
The majority also relies on County of Suffolk v. Sebelius, 605 F.3d 135 (2d Cir. 2010). The county claimed the Department of Health and Human Services had shortchanged it in awarding grant funds for an HIV/AIDS program in fiscal years 2007 and 2008. Id. at 137. Because those funds were exhausted, the Second Circuit held the Appropriations Clause made the case moot. Id. at 137-38. The court added, like the D.C. Circuit in City of Houston, that a plaintiff seeking to enforce a statutory mandate is limited to “the congressional appropriation that authorized the agency’s challenged expenditure”; otherwise the suit becomes one for damages because no other “res” could provide “the specific property the plaintiff aims to recover.” Id. at 141. And, again like City of Houston, the Second Circuit offered no explanation for why the source of the money matters for purposes of sovereign immunity.
Relying on these cases, the majority defines “the very thing” the Tribes are entitled to as the money for the particular NAHASDA grant years at issue. See maj. op. at 1226-27. But as discussed below, the annual appropriations point concerns whether HUD possesses properly appropriated funds to pay the Tribes, not whether the relief is specific or substitutionary. Instead of following the majority’s cases,5 we should follow Bowen,
D. NAHASDA Funding
Even if the majority is correct that the Tribes must extract their relief from a specific res to fit within § 702’s sovereign immunity waiver, the majority has not explained why we should reject the Tribes’ argument that NAHASDA funding generally, not particular yearly appropriations, is the relevant res.6 The Tribes argue that *1235appropriations under NAHASDA are “no-year” funds because they can be used across years until fully expended. Aplee. Br. at 73-78. Distinguishing the time-limited appropriations in City of Houston and County of Suffolk, the Tribes argue that the relevant “res” is all NAHASDA appropriations because the funds remain available for the NAHASDA program until exhausted. Id. at 78.
In response, the majority cites City of Houston, where the D.C. Circuit, after holding the relevant appropriation had lapsed and was fully obligated, rejected the City’s attempt to look to other funds that it claimed were “no-year” appropriations. Maj. op. at 1228-29; see City of Houston, 24 F.3d at 1428. The Tribes, however, do not seek to recover from other funds. They wish to recover from the NA-HASDA funds themselves.
⅜ ⅜ ⅜ ⅜
Under Bowen, the Tribes’ suit is not for “money damages.” Section 702 applies because they are seeking specific relief— enforcement of the statutory mandate. Sovereign immunity does not bar this suit.
Whether HUD has sufficient funds to satisfy the Tribes’ claims is still an important question, but it has nothing to do with whether they are seeking “money damages” under § 702. Rather, the source-of-funds issue concerns the availability of properly appropriated funds.
E. The Appropriations Clause
Although sovereign immunity should not block the Tribes from seeking monetary relief for wrongfully withheld or retained NAHASDA funds, the Appropriations Clause may pose a separate problem. The Constitution provides that money can be withdrawn from the Treasury pursuant only to a congressional appropriation. See U.S. Const., art. I, § 9, cl. 7. As the Supreme Court has explained, the Appropriations Clause assures “that public funds will be spent according to the letter of the difficult judgments reached by Congress as to the common good and not according to the individual favor of Government agents or the individual pleas of litigants.” Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 427-28, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990). When Congress appropriates funds to an agency, the text of the appropriation limits the agency’s discretion to spend. See Salazar v. Ramah Navajo Chapter, 567 U.S. 182, 132 S.Ct. 2181, 2194-95, 183 L.Ed.2d 186 (2012). As applied here, HUD can pay NAHASDA funds to the Tribes only to the extent Congress has authorized HUD to do so.
The district court resolved the sovereign immunity issue in the Tribes’ favor and awarded “funds from all available sources.” See, e.g., Aplt. Addm. at A-l (judgment for Fort Peck Housing Authority). It did not address the appropriations issue, which concerns what funds are “available.”
The Tribes contend HUD has never argued that the Appropriations Clause constrains its ability to pay. See Aplee. Br. at 77. But HUD, although framing its position in terms of sovereign immunity, has said it “no longer has the funds” from the past grant years because they “have been fully obligated.” Aplt. Br. at 66, 68. As discussed above, the availability of funds concerns the appropriations question, not sovereign immunity. The Tribes also contend remaining NAHASDA funds are available to satisfy their entitlement because past NAHASDA appropriations do not limit spending by year. If the Tribes are correct on that point, a dispute remains over whether there are sufficient funds to cover the Tribes’ entitlements.
I would remand for the district court to analyze these appropriations questions.
*1236F. Conclusion
Section 702 has waived HUD’s sovereign immunity. The Tribes are not seeking money damages because they are seeking fulfillment of a specific statutory mandate. But because the parties dispute whether Congress has appropriated funds that HUD can. use to satisfy the Tribes’ entitlements under NAHASDA and -because the district court did not address the appropriations issue, I concur in the majority’s decision to vacate the judgments. I would, however, remand for further proceedings on the appropriations issue.

. Because Judge Bacharach joins Part II.C. of Judge Moritz’s opinion regarding sovereign immunity, I will refer to it as the "majority.”

. The Appropriations Clause provides: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,.,.. ” U.S. Const., art. I, § 9, cl. 7.

. The majority states that “whether an order to pay a grant recipient from a source of funds other than the relevant fiscal year appropriation constitutes an award of money damages ... simply didn't arise in Bowen." Maj. op. at 1227 n.10. But the cases are closer than this statement suggests. Massachusetts, similar to the Tribes here, was a recipient of a “grant-in-aid program.” Bowen, 487 U.S. at 882 n.1, 898, 908, 108 S.Ct. 2722, and both Medicaid and NAHASDA are statutory mandates for the payment of money to certain beneficiaries. The alleged disallowances in Bowen are similar to the alleged "administrative offset[s]” here. Maj. op. at 1216. Apart from the differences between these funding programs, Bowen established that whether § 702 applies turns on the nature of the requested relief; the case did not hinge on a particular fiscal year appropriation. As I discuss below, the majority’s appropriations concern is properly couched as an issue under *1232the Appropriations Clause, not sovereign immunity.

. As the majority notes, Maj. op. at 1227-28 n.10, it was not clear to the Court in Bowen whether the Medicaid funds that Massachusetts claimed were in the state’s or the federal government’s possession: "The record does not tell us whether the State .,. elected to retain the amount in dispute.” 487 U.S. at 887 n.8, 108 S.Ct. 2722. In the face-of that uncertainty, the Court still held the case , was "within the District Court’s jurisdiction under § 702’s waiver of sovereign immunity.’,’ Id. at 910, 108 S.Ct. 2722, The Court did not limit its holding to the majority’s view that only a claim to recover the precise funds taken, or withheld can qualify for § 702’s sovereign immunity waiver. Rather, ,it adopted a specific-versus-substitutionary approach to relief under- § 702, We should follow the Supreme Court’s approach because Bowen is binding, The majority’s cases from our sibling circuits are not .

, The majority also cites cases decided under Federal Rule of Criminal Procedure 41(g). See Maj. op. at 1226-27. Such cases are inapt.
The rule provides: “A person aggrieved by an unlawful search and seizure of property or by the deprivation of property may move for the property's return.” The majority cites Clymore v. United States, 415 F.3d 1113 (10th Cir. 2005), where we held, without distinguishing between cash and other property, that a person cannot recover property under the rule if "the government no longer possesses the property.” Id. at 1120. The majority also looks to Diaz v. United States, 517 F.3d 608 (2d Cir. 2008), where the Second Circuit concluded the government enjoys sovereign immunity when it has wrongfully seized a defendant’s money but also has disbursed it because, lacking the defendant's particular cash, the government could only pay back "the cash equivalent.” Id. at 611.
These cases arose under a different legal provision. Transplanting them to the § 702 context is unwarranted. As one scholar has observed, Rule 41(g) by its terms "requires the existence of ‘property’ that is capable of return.” Colleen P. Murphy, “Money as a 'Specific' Remedy,” 58 Ala. L. Rev, 119, 151 (2006). By contrast, § 702, as Bowen explained, turns on whether the relief is specific or substitutionary. See 487 U.S. at 893, 108 S.Ct. 2722; see also Murphy, supra, at 142 (explaining the Bowen “majority construed ‘damages’ in section 702 of the APA to connote substitutionary monetary relief”), "Thus, an even stronger argument can be made under section 702 than under Rule 41(g) that the defendant need not possess the monetary res.” Murphy, supra, at 151.

. The majority’s year-specific approach leads it to conclude that some Tribes may be able to recover wrongfully withheld grant funds from 2008 because the district court ordered a portion of the 2008 NAHASDA funds to be set aside. See Maj. op. at 1226 n.9.1 agree.