Court Opinion

ID: 9480202
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:41:08.574529+00
Date Added: 2024-06-11T17:47:32.656533
License: Public Domain

RALPH B. GUY, Jr., Circuit Judge,
concurring.
I agree with the result reached by the majority, but I would proceed from a single, precise conceptualization of the “property” at issue in analyzing the constitutional and contractual claims raised in this case. The court appears to view this dispute as a direct contest for the Ohio Student Loan Commission (OSLC) reserve fund. While I concede that the reserve fund balance plays an important role in this dispute, it seems to me that the reinsurance payments withheld by the Secretary, rather than the OSLC’s cash reserves, constitute the “property” underlying this contest. The OSLC has not argued, nor could it argue, that the Secretary has raided its reserve fund. The language chosen by Congress constrains the Secretary’s encroachment by instructing the Secretary merely to “direct the agency to eliminate such excess by any one or more of the [specified] methods, as selected by the guarantee agency[.]” 20 U.S.C.A. § 1072(e)(2) (Supp.1989). Only after the *903OSLC refused to comply with such a directive did the Secretary refuse to provide the OSLC with reimbursement payments. In this action subsequently filed to obtain reinstatement of the payments on constitutional and contractual grounds, the OSLC could only contend that, because the Higher Education Act as amended contains a “clear indication that the legislature intended] to bind itself contractually” to reinsure guarantee agencies, see National R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry., 470 U.S. 451, 465-66, 105 S.Ct. 1441, 1451-52, 84 L.Ed.2d 432 (1985), state guarantee agencies have a property right in reimbursement for payments made to satisfy guarantees on loans in default. Although the OSLC might prefer to debate the Secretary’s authority (or lack thereof) to raid the agency’s reserve fund, this case turns exclusively on the Secretary’s authority (or lack thereof) to withhold reimbursement payments. Thus, I would focus solely upon the propriety of the Secretary’s refusal to reimburse the OSLC for guarantee payments made by the state agency.
As of 1986, Congress had statutorily pronounced that guarantee agencies such as the OSLC possessed “a contractual right against the United States” to reimbursement for guarantee payments and to administrative cost allowances. On December 22, 1987, however, a statutory qualification was engrafted upon these two previously unqualified rights. Specifically, both rights were made “subject to” the contemporaneously enacted provision concerning the reduction of excess cash reserves. See Omnibus Budget Reconciliation Act of 1987, Pub.L. No. 100-203, Title III, § 3001(b), 101 Stat. 1330-38 (conforming amendments to 20 U.S.C. §§ 1078(c)(1)(A) & 1078(f)(1)(B)). Under these conditions added by Congress, the OSLC’s continued receipt of reinsurance payments depended upon the OSLC’s compliance with the Secretary’s directives regarding reduction of the guarantee agency’s reserve fund. See 20 U.S.C.A. § 1078(c)(1)(A) (Supp.1989). Even assuming that the OSLC possessed a property interest in reinsurance payments, cf. Lynch v. United States, 292 U.S. 571, 579, 54 S.Ct. 840, 843, 78 L.Ed. 1434 (1934) (“Valid contracts are property, whether the obligor be a private individual, a municipality, a State, or the United States.”), I do not believe that either Congress or the Secretary has disavowed or abrogated any obligation to furnish the OSLC with reinsurance. The imposition of additional conditions “[e]ven with respect to vested property rights” is well within the power of Congress. See, e.g., United States v. Locke, 471 U.S. 84, 104, 105 S.Ct. 1785, 1797, 85 L.Ed.2d 64 (1985). Here the Secretary has simply conditioned payment of reinsurance to the OSLC upon compliance with new conditions concerning reduction of the OSLC’s reserve fund. This action neither works an impermissible taking of property nor constitutes a breach of contractual obligations.