East Oakland-Fruitvale Planning Council v. Rumsfeld, 25964.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation471 F.2d 524
Docket NumberNo. 25964.,25964.
PartiesEAST OAKLAND-FRUITVALE PLANNING COUNCIL, a nonprofit California corporation, Plaintiff-Appellant, v. Donald RUMSFELD, Director, Office of Economic Opportunity, Defendant-Appellee.
Decision Date08 December 1972

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Denis Clifford (argued), Lawrence Baskin, Stephen Ronfeldt, Ronald J. Watts, Thomas L. Fike, Oakland, Cal., for plaintiff-appellant.

Alan S. Rosenthal, Atty. (argued), Robert V. Zenner, Atty., William D. Ruckelshaus, Asst. Atty. Gen., Washington, D.C., James L. Browning, Jr., U.S. Atty., San Francisco, Cal., for defendant-appellee.

Before HAMLEY, BROWNING and WRIGHT, Circuit Judges.

BROWNING, Circuit Judge:

East Oakland-Fruitvale Planning Council sued the Director of the Office of Economic Opportunity for declaratory judgment and injunctive relief. The district court dismissed the action on the ground that the complaint failed to state a claim upon which relief could be granted. East Oakland-Fruitvale Planning Council v. Rumsfeld, 310 F.Supp. 546 (N.D.Calif.1970).1 We vacate the judgment and remand.

I

The factual allegations of the complaint, to be accepted as true for the purposes of the motion to dismiss, are as follows:

The Council is a nonprofit corporation. It received a grant from OEO under section 232 of the Economic Opportunity Act, 42 U.S.C. § 2825, to conduct a research and pilot program in "advocacy planning." The goal of the program was to organize community groups in the East Oakland and Fruitvale areas of the City of Oakland, California, into a "single policy-making and priority setting body which directs its attention to the multiplicity of problems and concerns of that community."

The Council operated successfully during its first year. Evaluations of its program by independent evaluators pursuant to section 233 of the Act, 42 U.S.C. § 2826, were favorable, and established that the program "was fully consistent with the provisions and in furtherance of the purposes" of the Act.

The Council applied to OEO for a grant of funds for a second year. The application was approved by the Director of OEO. It was then submitted to the Governor of the State of California pursuant to section 242 of the Act, 42 U.S.C. § 2834.2 The Governor disapproved the grant. The Council entered into negotiations with representatives of the Governor's office to determine whether the Governor's objections could be satisfied. The Council "learned that the Governor's basis of disapproval was `philosophical objections' to the very nature of the Council's program, i. e., advocacy planning for dealing with problems and concerns of the East Oakland-Fruitvale community." Ultimately negotiations were terminated by the Governor's representatives; the Governor's disapproval was not withdrawn.

The Director's representative at the negotiations reported to the Director, and recommended that he exercise his power under section 242 of the Act to override the Governor's disapproval.

The Council asked the Director to hold a hearing on the matter of his reconsideration of the Council's program in light of the Governor's disapproval, to specify the issues presented, and to give the Council an opportunity to participate. These requests were denied.

Without conducting a hearing and without making a finding as to whether the Council's program was consistent with the provisions and in furtherance of the purposes of the Economic Opportunity Act, the Director informed the Council that he would not override the Governor's disapproval.

As the legal basis of its claim, the Council alleges that section 242 of the Act, 42 U.S.C. § 2834, requires the Director to reconsider a vetoed grant and either make a finding that it is not "fully consistent with the provisions and in furtherance of the purposes" of the Act, or override the Governor's disapproval. The Council contends that its program is "fully consistent with the provisions and in furtherance of the purposes" of the Act, and that it has been informed by the Director that its program conforms in all respects to the Director's overall plan established pursuant to section 232(b) of the Act, 42 U.S.C. § 2825(b). The Council concludes that the Director's failure to make a favorable finding and override the Governor's disapproval is arbitrary and unlawful. It also concludes that the Director's denial of a hearing, specification of issues, and opportunity to participate is arbitrary and unlawful.

A declaratory judgment and injunctive relief are sought.

II

The Director moved to dismiss the complaint on the grounds, among others, that "Congress has vested in him unreviewable discretion with respect to whether or not to reconsider a Governor's disapproval and, where he does reconsider the disapproval, unreviewable discretion as to refusing to override the disapproval."

The district court assumed that the Director had failed to take any action at all following the Governor's disapproval, and that the complaint therefore presented the first and most extreme issue. 310 F.Supp. at 547.3 Agreeing with the Director, the district court held that he need do nothing at all once the Governor exercised his veto — that he had unreviewable discretion to decide whether he would or would not consider overriding the Governor's disapproval. 310 F.Supp. at 549.

Whether the Director has such discretion is a question for the courts to decide. The statute does not bar judicial review, and there is no reason to suppose that Congress intended resolution of this threshold question of statutory construction to be "committed to agency discretion." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Courts are as expert as administrators in matters of statutory construction. See Barlow v. Collins, 397 U.S. 159, 166, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970). We see no reason to decline to decide whether this statute imposes a duty upon the Director to re-examine any program vetoed by a governor, even if it would not be proper for a court to review a decision made by the Director in the discharge of such a duty. United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 268, 74 S.Ct. 499, 98 L.Ed. 681 (1954); Rockbridge v. Lincoln, 449 F.2d 567, 571 (9th Cir.1971). The question is one of law — the daily grist of the judicial mill. We turn to the merits.

The Director concedes that before he may override a governor's veto of a proposed grant, he "must review that grant in light of the veto, and must give careful consideration to his understanding of the reasons for it." He argues, however, that he may choose to accept a governor's veto without giving the proposed grant any further consideration whatever.

The language of section 242 of the Act is essentially neutral. See note 2. It would permit the Director's interpretation, but does not require it. The interpretation given the language by the Director in administering the statute would be entitled to great weight, but it has never been explicitly stated and the acts from which it might be inferred are few and ambiguous.

The legislative history of the statute, however, strongly suggests that Congress intended the Director to reconsider every vetoed grant for a community action program in light of the provisions and purposes of the Act before deciding whether or not to override.

The Economic Opportunity Act of 1964 gave state governors the absolute right to bar grants for community action programs within their states; there was no provision that the Director might review and override a governor's veto. See section 209(c), P.L. 88-452, 78 Stat. 508. When Congress was asked to extend the Act in 1965, strong objections were raised to the governors' absolute power to veto grants for community action programs. To meet these objections, the power of the Director to reconsider a vetoed grant and override a governor's disapproval was added to the statute.

The objections to the governor's absolute power to veto grants for community action programs are summarized in the report of the Committee on Education and Labor of the House of Representatives proposing the addition of the Director's override provision. See H.R. Rep.No. 428, 89th Cong., 1st Sess. 12-14 (1965), quoted in Sen.Rep.No. 582, 89th Cong., 1st Sess. 11-13 (1965). They fall into three broad categories. First, community action programs are local programs planned and developed by local agencies, and the absolute veto gave the governor, a state official, a power over local affairs that he did not have under state law. A veto at the state level was also considered to be inconsistent with the theory of the Economic Opportunity Act that local agencies could best manage programs designed to end local poverty. Second, the unreviewable veto lacked any parallel in state executive-legislative relationships under the constitution of any state, or in any federal legislation directly benefiting local communities. Finally, since no criteria were established for the exercise of the veto by the governors, and since the exercise of the veto was not reviewable, the governors' power was unfettered — it could be exercised for any reason or for no reason, arbitrarily, coercively, and in such a way as to defeat the policy and purposes of the Act. And such abuses, in the opinion of some congressmen, had in fact occurred.4

To meet these objections, Congress, while retaining the governors' right to disapprove community action grants within their respective states, shifted the ultimate power to allow or disallow such grants from the governors to the Director, and provided as a statutory standard for its exercise that the grant be consistent with the provisions and in furtherance of the purposes of the Act.

This statutory change would not accomplish its purpose if the Director were free to exercise the transferred power or not as he saw fit. Whenever the...

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