Court Opinion

ID: 8890259
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:03:27.8053+00
Date Added: 2024-06-11T17:07:10.246058
License: Public Domain

STEPHENSON, Circuit Judge
(dissenting) .
I respectfully dissent. It is my view that the district court erred in holding *1119that the Executive Branch has no diseretion to control the rate of obligation of funds apportioned under the Federal-Aid Highway Act. The language of the statute and its historical interpretation clearly demonstrate a deliberate choice by Congress to grant to the Executive discretion in determining the extent to which apportioned funds will be made available for obligation.
The expenditure of funds pursuant to the Federal-Aid Highway Act of 1956 (23 U.S.C. § 101 et seq.) is a step-by-step process. The program involves successive, and distinct, stages of authorizations, apportionments, programs, projects and appropriations. The basic authorization for appropriations for the Interstate Highway system is found in section 108(b) of the Federal-Aid Highway Act of 1956. The funds expected to be available with respect to each fiscal year included in these authorizations are then apportioned among the states on or before the first day of January preceding the fiscal year for which they are authorized to be appropriated. 23 U.S. C. § 104(a). Funds so apportioned remain available for obligation at any time prior to the close of the second fiscal year after the fiscal year for which they are authorized. 23 U.S.C. § 118(a), (b). After apportionment, however, the states must submit programs for proposed highway projects for approval by the Secretary of Transportation (appellant here) before they may obligate apportioned funds. 23 U.S.C. § 105.1 Approval of a specific program by the Secretary results in a contractual obligation of the Federal Government. 23 U.S.C. § 106(a). Payments to the states are made pursuant to appropriation acts for reimbursement for work performed. The amount appropriated each year may not exceed the amounts provided for in the authorization act, nor may it exceed the funds available in the Highway Trust Fund, jn ^he instant case, the Secretary has withheld its approval of proposed proj-eets after authorization and apportionment but before any appropriation has been made by Congress.
While an appropriation act, as contrasted to authorization acts, would seem to be mandatory in its effect, the courts have held that even appropriation acts are permissive in nature and do not in themselves impose an affirmative duty to expend the funds. McKay v. Central Electric Power Cooperative, 96 U.S. App.D.C. 158, 223 F.2d 623, 625 (1955). Historically, there has been considerable support for this construction. For instance, then Senator Truman said in 1943,
“When the Congress appropriates funds it gives the executive branch an authority to incur obligations. Certainly none of us hold that we give a mandate to expend the funds appropriated. We expect the funds to be used only where needed, and not in excess of the amount appropriated, to carry out some phase of the law.” 89 Cong.Ree. 10362 (emphasis added).
The legislative branch itself pointed out in a Committee Report concerning the 1951 Appropriations Bill, an “appropriation of a given amount for a particular activity constitutes only a ceiling upon the amount which should be expended for that activity.” H.Rep. 1797, 81st Cong., 2d Sess., p. 9. As early as 1943 Congress recognized that authorizing legislation does not compel the executive *1120branch to obligate or expend highway funds. See House Conf.Rep. 677, 78th Cong., 1st Sess., p. 4 (1943) in regard to § 9 of the Rural Post Roads Act of 1943. The fact is that the presidential practice of withholding authorized and appropriated funds runs at least as far back as 1942. Presidents Roosevelt, Truman, Eisenhower, Kennedy, Johnson, and now Nixon have all practiced it to varying degrees. Miller, Presidential Power to Impound Appropriated Funds: An Exercise in Constitutional Decision Making, 43 North Carolina Law Rev. 502, 513 (1965). Although this practice is not without its critics,2 it appears to be an established practice. Id., and as Judge Cardozo once stated, “not lightly [to be] vacated is. the verdict of quiescent years.” Coler v. Corn Exchange Bk., 250 N.Y. 136, 164 N.E. 882, 884 (1928). Cf. Contractors Ass’n of Eastern Pa. v. Secretary of Labor, 442 F.2d 159, 171 (CA3 1971). By implication the practice has received frequent statutory recognition. An example is the Anti-Deficiency Act, 31 U.S.C. § 665(c)(1) which provides that “authorizations to create obligations by contract in advance of appropriations shall be so apportioned as to achieve the most effective and economical use thereof.” (Emphasis added). And 31 U.S.C. § 701(a)(2) of the same Act provides for reversion of unobligated appropriated funds to the fund from which they originally were derived. If Congress expected full expenditure of funds, it obviously would appear unnecessary to include such a provision. It is, therefore, my view that in the absence of specific statutory language to the contrary, Congress has given the Executive branch the power to withhold authorized but unobligated funds from expenditure.3
I now turn to the specific statutory language of the Federal-Aid Highway Act to determine whether Congress has provided a specific mandate to spend authorized but unobligated funds, 23 U.S.C. § 101(c) provides:
“It is the sense of Congress that under existing law no part of any sums authorized to be appropriated for expenditure upon any Federal-Aid system . . . shall be impounded or withheld from obligation, for purposes and projects as provided in this title, by any officer or employee in the executive branch of the Federal Government, . . . . ” (Emphasis added.)
23 U.S.C. § 101(d) provides in clear mandatory terms:
“No funds authorized to be appropriated from the Highway trust fund shall be expended by or on behalf of any Federal department, agency, or instrumentality other than the Federal Highway Administration unless . . . specifically authorized . . . from the Highway Trust Fund by Federal-aid highway legislation.” (Emphasis added.)
Sections (c) and (d) were added to the Federal-Aid Highway Act in 1968. Pub.L. 90-495, § 15.4 It is interesting *1121to note that section, (d) as originally enacted in 1968 started with the “It is the sense of Congress” phrase also found in section (e). However, when 23 U.S.C. § 101 was amended to its present form in 1970, the phrase “No funds authorized to be appropriated” was substituted for the “sense of Congress” phrase in section (d) but not in section (c). Pub.L. 91-605, § 107. By reenacting § 101(c) without pertinent modification but amending'101(d) Congress implicitly accepted the non-mandatory construction placed on § 101(c) by the Secretary after receiving Attorney General Clark’s opinion5 in 1967.
*1122Cf. National Labor Relations Board, v. Gullett Gin Co., 340 U.S. 361, 366, 71 S. Ct. 337, 95 L.Ed. 337 (1951). In a similar vein the Circuit Court of Appeals for the District of Columbia said in 1961:
“Approval of an administrative interpretation is not lightly to be laid at the door of Congress; but the evidence of awareness by Congress of the . interpretation over a very considerable period, during which Congress considered the legislation several times with no change . as administratively interpreted cannot be altogether ignored.”
Empire State Highway Transp. Ass’n v. Federal Maritime Bd., 110 U.S.App.D.C. 208, 291 F.2d 336, 340 (1961). Accord, Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 313, 53 S. Ct. 350, 77 L.Ed. 796 (1933).
If Congress intends to mandate to the Executive branch, this should be unambiguously stated in the legislation so the President understands clearly when he has been directed and when he has been given discretionary powers. In this regard, I submit that the phrase “sense of Congress” is only precatory in its effect. The phrase has been the subject of interpretation in two opinions of the United States Attorney General, both construing 15 U.S.C. § 616a. The latest, 42 Op.Att’y Gen. 20 (1965) stated:
“This section, by expressing the ‘sense of Congress’ that government agencies ‘shall’ require the exports to be carried exclusively in United States vessels, is not mandatory and does not preclude the Maritime Administration from permitting 50 per cent of the cargoes to be earriéd in vessels of the recipient country . . . . ”
In 1934 the Attorney General found that the “sense of Congress” language indicated that the statutory requirement of 15 U.S.C. 616a was to be carried out “only if feasible to do so.” 37 Op.Att’y Gen. 546 (1934).
In view of the legislative history of this and other statutes and because the expression “sense of Congress” conno-tates a policy rather than a directory statement, it is my view that the Secretary of Transportation has the power to defer the availability to the states of those ‘funds authorized and apportioned for highway construction which have not become the subject of a contractual obligation on the part of the Federal Government in favor of a state.
I must therefore dissent.
ON PETITION FOR REHEARING AND SUGGESTION FOR REHEARING EN BANC
PER CURIAM.
The petition for rehearing en banc is denied pursuant to Rule 35(b), Fed.R. App.P. •
On motion for rehearing the Secretary of Transportation and the Director of the Office of Management and Budget urge, inter alia, that the case before us is moot. This issue was raised in their original briefs. At oral argument the following colloquy took place between the court and their counsel:
“Q. (by the court) I am a little troubled by your lengthy discussion *1123as to the fact that all of this money that has been deferred has now been allocated such that Missouri can — has obligated all of the funds available. Are you suggesting that there is an issue here of mootness or justiciability.
“A. (Mr. Appier) No, Your Hon- or, we are not. We gave a great deal of thought to arguing mootness in this particular case, but we ultimately decided perhaps this is the time to get this case finally decided. .. .
“Q. (by the court) As I recall, part of the prayer here was in the form of a declaratory action. Is that right?
“A. (Mr. Appier) That’s right. I presume that it cannot be done in the future. To that extent I would suppose there is still some controversy between the parties. It may be that those controls would not be imposed in the future, but presumably they have been in the past and economic conditions being what they were, I think we can fairly assume they will be — will be imposed in the future.”
The government also suggests that relief should be denied plaintiffs by reason of sovereign immunity. This allegation is raised for the first time on appeal in the government’s petition for rehearing (via a footnote) and consequently has not been fully addressed by either of the parties. Notwithstanding, because of its serious implications, we have given careful consideration to the issue. We nevertheless reject this claim. In Larson v. Domestic & Foreign Corp., 337 U.S. 682, 689, 69 S.Ct. 1457, 93 L. Ed. 1628 (1949), it was held that suits against governmental officers are not barred by sovereign immunity where the officer being sued is alleged to have acted beyond his statutory powers. See also Dugan v. Rank, 372 U.S, 609, 621, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963). This, of course, is the thrust of plaintiff’s complaint and the basis of this court’s opinion wherein we hold that the Secretary and the Director have no implied or express authority to impound funds under the Federal-Aid Highway Act for purposes not directly related to the Act itself.
However, a caveat was raised in Larson by the controversial1 dictum which reads:
“Of course, a suit may fail, as one against the sovereign, even if it is claimed that the officer being sued has acted unconstitutionally or beyond his statutory powers, if the relief requested cannot be granted by merely ordering the cessation of the conduct complained of but will require affirmative action by the sovereign or the disposition of unquestionably sovereign property. North Carolina v. Temple, 134 U.S. 22, 10 S.Ct. 509, 33 L.Ed. 849 (1890).” 337 U.S. at 691 n. 11, 69 S.Ct. at 1462.
Notwithstanding, we do not consider the court’s decree in the instant case as being affirmative in nature. It requires only that the defendant officers cease unauthorized action. Cf. Rockbridge v. Lincoln, 449 F.2d 567, 573 (9 Cir. 1971). The resultant release of funds is only to the extent that Congress has already authorized them to be appropriated and expended. See Local 2677, The American Federation of Government Em*1124ployees v. Phillips, 358 F.Supp. 60 (D.D. C.1973); City of New York v. Ruckelshaus, 358 F.Supp. 669 (D.D.C.1973).
As has been observed, “[a]n agency may not finally decide the limits of its statutory power. That is a judicial function.” Social Security Board v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 643, 90 L.Ed. 718 (1946). See also Stark v. Wickard, 321 U.S. 288, 309-310, 64 S.Ct. 559, 88 L.Ed. 733 (1944).
The petition for rehearing is denied.

. In an attempt to curtail the Executive’s practice of withholding apportioned funds under the Federal-Aid Highway Act, the Senate in 1972 approved a bill S. 3939, 92nd Cong., 2d Sess. (1972), which would eliminate the project-by-project review of the Secretary. It would, in effect, have created a contractual obligation on the Government immediately after funds were apportioned. The Secretary would not then be able to withhold funds by simply not approving proposed projects. See H. Rep. 92-1081, 92nd Cong., 2d Sess. The corresponding House bill contained no such provision. H.Rep. 92-1443, 92nd Cong., 2d Sess. The Conference Committee accepted the House version without the proposed Senate provision. Congress then adjourned prior to final action on the 1972 Federal-Aid Highway Act.

. See generally Boggs, Executive Impoundment of Congressionally appropriated Funds, 24 U.Fla.L.Rev. 221 (1972); Church, Impoundment of Appropriated Funds: The Decline of Congressional Control over Executive Discretion, 22 Stanford L.Rev. 1240 (1970).

. Other legislative history supports this conclusion. On several occasions Bills have been introduced into Congress which would have made it unlawful to withhold moneys appropriated by Congress from being promptly applied for the purpose designated in the Federal-Aid Highway Act. H.R. 11441, 85th Cong. 2d Sess. (1958), H.R. 11541, 85th Cong., 2d Sess. (1958), H.R. 11682, 85th Cong., 2d Sess. (1958), S. 3578, 85th Cong., 2d Sess. (1958), H.R. 1254, 86th Cong., 1st Sess. (1960), S. 4049, 90th Cong. 2d Sess. (1968) (an attempt to exempt the Federal-Aid Highway Act from the 1968 inflationary cuts imposed by Congress), H.R. 1214, 91st Cong., 1st Sess. (1969), S. 3877, 92nd Cong., 2d Sess. (1972). See footnote 1 supra for the most recent action by Congress in this respect.

. An examination of the legislative history of §§ (c) and (d) reveals a concern by Congress over the practice of the Executive of impounding or withholding apportioned funds. Apparently in response to a *11211967 Attorney General opinion, 42 Op. Att’y Gen. 32 (1967), the House passed a bill which would have amended 23 U.S. G. § 104 to include a mandatory spending provision. H.Rep.No.1584, 90th Cong., 2nd Sess., p. 11-12. Conf.Rep.No.1799, 90th Cong., 2nd Sess., (1968), U.S.Code Cong. & Admin.News at p. 3537. The Senate did not recommend a specific amendment but did state its opposition to reductions in funds made available for obligation under the Federal-aid highway program which relate directly to the “planning and design of highway projects, the acquisition of rights-of-way necessary for such projects, and the assistance to those who are dislocated or displaced by highway construction projects.” S.Rep.No. 1340, 90th Cong., 2nd Sess., (1968), U.S. Code Cong. & Admin.News at p. 3501. The Conference Committee failed to accept the mandatory House language and instead adopted the Senate bill which included the “sense of Congress” phrase. H.Rep. 1799, 90th Cong., 2nd Sess., (1968), U.S. Code Cong. & Admin.News at p. 3537. This resulted in amendments (c) and (d) to 23 U.S.C. § 101. The Conference Report, Id., describes 23 U.S.C. § 101 as the “general declaration of policy” (emphasis added) applicable to Title 23. It is now well established that statements of policy do not add to or alter specific operative provisions of a statute. Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 202, 82 S. Ct. 1328, 8 L.Ed.2d 440 (1962) ; 42 Op. Att’y Gen. 32 (1967). Since no provision of the Act gives any state a vested right to the apportioned funds prior to approval by the Secretary, and there is no express mandate to the Secretary to approve proposed projects, it is reasonable to conclude that the Secretary has, in his discretion, the authority to withhold unobligated funds.

. “DEAR MR. SECRETARY : This is in reply to your letter of February 21, 1967, requesting my opinion as to the legality of a reduction in the amount of Federal aid highway funds which may be obligated during the Fiscal Year ending June 30, 1967.
5k :¡! sk ¡!¡
An appropriation act thus places an upper and not a lower limit on expenditures. The duty of the President to see that the laws are faithfully executed, under Article II, section 3 of the Constitution, does not require that funds made available must be fully expended. This principle has received statutory recognition in the Anti-Deficiency Act, February 27, 1906, c. 510, sec. 3, 34 Stat. 49 (31 U.S.C. 665(c)), which authorized the executive branch to effectuate savings of appropriated funds, and in 31 U.S.C. § 701, which provides that unexpended appropriated funds shall revert to the Treasury.
Many factors must be weighed by the Executive in determining the extent to which funds should be expended. Consideration must be given not only to legislative authorizations and appropriations but also to such factors as the effect of the authorized expenditures on the national economy and their relation to other programs important to the national welfare.
A situation analogous to the present one arose in the early 1940’s when the economy of the United States shifted first to defense and later to war production. At that time President Franklin Delano Roosevelt directed that projects having a lower priority would have to be postponed or even cancelled in spite of the availability of appropriated funds. In response to complaints about the curtailment by the Bureau of the Budget of certain programs of the Agricultural Marketing Administration, President Roosevelt set forth the powers and responsibilities of the executive branch in this area :
‘It should, of course, be clearly understood that what you refer to as “the practice of the Bureau [of the Budget] of impounding funds duly appropriated by the Congress” is in fact action by the Chief Executive, and has two purposes. The first purpose is compliance with the Anti-Deficiency Act, which requires that appropriated funds be so apportioned over the fiscal year as to insure against deficiency spending. * * ® Secondly, the apportionment procedure is used as a positive means of reducing expenditures and saving money wherever and whenever such savings appear possible.
*1122‘While our statutory system of fund apportionment is not a substitute for item or blanket veto power, and should not be used to set aside or nullify the expressed will of Congress, I cannot believe that you or Congress as a whole would take exception to either of these purposes which are common to sound business management everywhere. In other words, the mere fact that Congress, by the appropriation process, has made available specified sums for the various programs and functions of the Government is not a mandate that such funds must be fully expended. Such a premise would take from the Chief Executive every incentive for good management and the practice of commonsense economy. This is particularly true in times of rapid change in general economic conditions and with respect to programs and activities in which exact standards or levels of operation are not and cannot well be prescribed by statute.” ’ 42 Op. Att’y Gen 32 (1967).

. Compare State of Washington v. Udall, 417 F.2d 1310 (9 Cir. 1969) and Penn v. United States, 350 F.Supp. 752, 755 (M.D.Ala.1972) with Knight v. State of New York, 443 F.2d 415, 420-421 (2 Cir. 1971). See also Davis, Administrative Law Treatise, § 27.00-2 (1970 Supp.); Jaffe, Judicial Control of Administrative Action 226-227 (1965); Byse, Proposed Reforms in Federal “Non-statutory” Judicial Review: Sovereign Immunity, Indispensable Parties, Mandamus, 75 Harv.L.Rev. 1479, 1484 (1962); Oramton Nonstatutory Review of Federal Administrative Action: The Need for Statutory Reform of Sovereign Immunity, Subject Matter Jurisdiction, and Parties Defendant, 68 Mich.L.Rev. 387, 404 (1970).