City of Alexandria v. U.S.

Citation737 F.2d 1022
Decision Date21 June 1984
Docket NumberNo. 84-713,84-713
PartiesCITY OF ALEXANDRIA, Appellee, v. The UNITED STATES, Appellant. Appeal
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Judith E. Schaeffer, Washington, D.C., argued for appellee. With her on the brief were Kenneth L. Adams, Washington, D.C., and Cyril D. Calley, Alexandria, Va., of counsel.

Donald T. Hornstein, Washington, D.C., argued for appellant. With him on the brief were F. Henry Habicht, II, Asst. Atty. Gen., and Dirk D. Snel, Washington, D.C. Also on the brief was Terry Hart Lee, Washington, D.C., of counsel.

Steven R. Ross and Michael L. Murray, Washington, D.C. were on the brief for amici curiae.

Before KASHIWA, Circuit Judge, NICHOLS, Senior Circuit Judge, and SMITH, Circuit Judge.

NICHOLS, Senior Circuit Judge.

In this appeal from a decision of the United States Claims Court * on a Tucker Act claim, 28 U.S.C. Sec. 1491, the issues are whether the United States entered into an implied contract to sell land, or became estopped to deny the existence of an express one. In holding for the City of Alexandria (City), the judge relied on her view that 40 U.S.C. Sec. 484(e)(3) is unconstitutional on its face or as applied in this case. The challenged statute authorizes disposal of surplus government land by negotiation if the grantee is a state or its political subdivision and if the estimated fair market value is obtained, and it also requires, in subsection (6) that an explanation of the circumstances of such disposal by negotiation shall be prepared and transmitted to the appropriate committees of the Congress in advance of such disposal. We read her as conceding that if the statute is not void, the government has a good defense. Other prerequisites to government liability having in her view been met, she eliminated the above notice provision because of its invalidity. We differ with this reasoning and therefore reverse.

Facts

The case was decided on summary judgment. The court had before it a government motion for summary judgment on the existence of an express contract which was granted but held moot. Plaintiff's motion for summary judgment on estoppel was denied and defendant's granted, but declared moot. Plaintiff also made an oral motion for summary judgment based on a contract implied in fact and this was granted and the clerk was directed to enter judgment for plaintiff in the amount of $575,000. This was on October 20, 1983. Earlier that year, the Supreme Court's one-house veto decision, Immigration and Naturalization Service v. Chadha, --- U.S. ----, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983) (familiarity with which is assumed), had come down. Upon perusing the opinion in that case, the Claims Court judge formed the view that Chadha might require a holding for the City on a different ground than any of those urged in the written motions. Four days before the date set for hearing on the written motions, she notified counsel to be prepared to discuss the Chadha issue also. The parties had fully documented the facts relating to their motions pending but had no opportunity to submit any further documentation for or against the oral motion. This could be important if the actual relations of the committees and the General Services Administration (GSA) might have a bearing on whether the statute is unconstitutional as applied. Among the questions we must determine, therefore, is whether a remand for further fact finding should be part of our decision.

The facts of the negotiation in question are set forth in great detail in the trial court opinion. For understanding of our present opinion it suffices to say that the surplus real property involved had been the site of a government warehouse in Old Town Alexandria, Virginia. At times relevant to the litigation, it was in use as a parking lot. Title 40 U.S.C. Sec. 484(a) empowers the Administrator of the GSA to supervise and direct sales of real property when surplus. His power is redelegated to regional administrators. The City, on November 17, 1978, notified GSA it wished to acquire the lot by negotiation under the statute already mentioned. On May 16, 1979, the regional office was authorized to negotiate a sale at a price not under the appraised value of $790,000. Regional Administrator Kallaur asked the City to submit an offer, but warned about the necessity of submitting a statement to Congress and stated the offer probably would not be accepted by the government until after the proposed disposal has been considered by such committee. The notice stated that the City had already offered $925,000, which exceeded the appraisal value, but by the GSA Handbook the appraisal had to be updated if over 9 months old at the date of submissal of the explanatory statement. At the end of a meeting August 6, Mr. Kallaur stated they had a deal and confirmed it by letter August 7, in which he said he would proceed with the sale if the City so wished. The City Council passed an enabling resolution September 11. On October 9 the City submitted a formal "offer" with an earnest money deposit of $92,500 and Mr. Brooks, another GSA official, assured the City that it had done everything required of it and the property would be conveyed to the City for $925,000.

By some unaccountable error nothing was done until November 1980 to submit the sale to Congress. City officials were, however, reassured that the sale was "being processed," which was not true. On November 19, 1980, a new appraisal showed a value of $1,375,000 and the City was invited to submit an offer at that price. On the City's protest, Mr. Kallaur decided there had been "an administrative error, a grotesque error," and GSA was obligated to sell at the original agreed price. However, he lacked authority to do this himself and asked for the administrator's approval which was never forthcoming. He would have had to violate GSA regulations by supporting the sale with an outdated appraisal but was prepared to do so if Congress approved. Mr. Kline, the Acting Administrator, talked informally to the Chairman of the House Committee and one of his staff, but refused to go through with a formal submission which, he thought, would "be shot down."

It seems clear enough from the judge's recitals that neither the acting administrator nor the committee chairman were willing to take sole responsibility for selling on an outdated appraisal.

Meanwhile, the next appraisal went up to $1,500,000 and the City purchased the lot at that price, under protest and reserving its rights.

There was considerable evidence, believed by the trial judge, that the GSA never consummated a sale that the committee disapproved nor did its own regulations contemplate that this was possible, she says. 41 C.F.R. Sec. 101-47.304-12 (1982). This regulation says that on committee approval the sale will proceed. It does not reveal what happens if a committee disapproves. The defendant calls attention, however, to an official report of 1976 revealing that one such sale was consummated.

Applicable Statute

Pertinent parts of the statute held unconstitutional (40 U.S.C. Sec. 484), are as follows:

Sec. 484. Disposal of surplus property

(a) Supervision and direction

Except as otherwise provided in this section, the Administrator shall have supervision and direction over the disposition of surplus property. Such property shall be disposed of to such extent, at such time, in such areas, by such agencies, at such terms and conditions, and in such manner, as may be prescribed in or pursuant to this Act.

* * *

* * *

(e) Bids for disposal; advertising; procedure; disposal by negotiation; explanatory statement

(1) All disposals or contracts for disposal of surplus property * * * shall be made after publicly advertising for bids * * * except as provided in paragraphs (3) * * * of this subsection.

* * *

* * *

(3) Disposals and contracts for disposal may be negotiated, * * * if--

* * *

* * *

(H) the disposal will be to States, Territories, possessions, political subdivisions thereof, or tax-supported agencies therein, and the estimated fair market value of the property and other satisfactory terms of disposal are obtained by negotiation; * * *

* * *

* * *

(6) Except as otherwise provided by this paragraph, an explanatory statement of the circumstances of each disposal by negotiation of any real or personal property having a fair market value in excess of $1,000 shall be prepared. Each such statement shall be transmitted to the appropriate committees of the Congress in advance of such disposal, and a copy thereof shall be preserved in the files of the executive agency making such disposal. * * *

Discussion
A No Express Contract

The judge holds that under the facts recited, no express contract of sale came into being, citing Kellerblock v. United States, 219 Ct.Cl. 608, 618 F.2d 119 (1979), Russell Corp. v. United States, 210 Ct.Cl. 596, 537 F.2d 474 (Ct.Cl.1976), cert. denied, 429 U.S. 1073, 97 S.Ct. 811, 50 L.Ed.2d 791 (1977). We need not explore this conclusion since the City does not challenge it in this appeal.

B No Implied Contract
1. The statute is valid.

We turn to constitutionality of the statute, the issue which is decisive. That the statute, 40 U.S.C. Sec. 484(e)(6), is unconstitutional, on its face, is an untenable proposition which the judge probably did not wish to be understood as uttering, and which at any rate is abandoned in the appellee's brief in this appeal. The Chadha case, supra, strikes down the currently familiar legislative device of the one-house veto. After its surgery under the Supreme Court knife, the Immigration Act still includes a "report and wait" provision indistinguishable on principle from the one at bar in this court. This provision is held, under the portion of Chief Justice Burger's opinion entitled "Severability," to remain in effect. See also --- U.S. ----, 103 S.Ct. at 2776, n. 9; 77 L.Ed.2d 317; 103 S.Ct. at 2786 n. 19. Clearly in the Supreme Court...

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