Clark v. Richardson

• Decision Date: 24 February 1977
• Docket Number: Civ. No. 76-2460.
• Citation: 431 F. Supp. 105
• Parties: Edward F. CLARK, Jr., County Executive of the County of Hudson, et al., Plaintiffs, v. Elliot RICHARDSON, Secretary of the Department of Commerce, et al., Defendants, The Board of Chosen Freeholders of the County of Middlesex, et al., Plaintiff-Intervenors.
• Court: U.S. District Court — District of New Jersey

431 F. Supp. 105

Edward F. CLARK, Jr., County Executive of the County of Hudson, et al., Plaintiffs, v. Elliot RICHARDSON, Secretary of the Department of Commerce, et al., Defendants The Board of Chosen Freeholders of the County of Middlesex, et al., Plaintiff-Intervenors.

Civ. No. 76-2460.

United States District Court, D. New Jersey.

February 24, 1977.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Harold J. Ruvoldt, Jr., Hudson County Counsel, Jersey City, N. J., for plaintiffs.

Cafiero & Balliette, Wildwood, N. J., Andrew M. Higgins, Asst. U. S. Atty., Newark, N. J., Dennis L. McGill, Corp. Counsel, Jersey City, N. J., Hayman, Gorelick & Groon, Wildwood, N. J., Jerome Krueger, Linden, N. J., Julius R. Pollatschek, Kein & Pollatschek, Union, N. J., DeLorenzo & DeLorenzo, Hackensack, N. J., Wm. F. Hyland, Atty. Gen. State of New Jersey, by Herbert K. Glickman, Deputy Atty. Gen., Trenton, N. J., Henry E. Rzemieniewski, Manville, N. J., Milton A. Buck, Newark, N. J., Henry Ramer, Law Dept., Paterson, N. J., William Goddard Lashman, City Sol., Atlantic City, N. J., George M. James, Wildwood, N. J., Francis J. Dooley, Orange, N. J., Dietz, Allen, Radcliffe & Sweeney, Mount Holly, N. J., Martin F. McKernan, Jr., Camden, N. J., Steinberg & Steele, Lakewood, N. J., for defendants.

OPINION

LACEY, District Judge.

This matter is before the court on plaintiffs' application for preliminary injunctive relief pursuant to Fed.R.Civ.P. 65(a).

Plaintiffs, the Hudson County Executive, the Hudson County Board of Freeholders, and the County itself, filed a verified complaint and Order to Show Cause on December 29, 1976. Named as defendants were the then Secretary of Commerce, Elliot Richardson; the Assistant Secretary of Commerce for Economic Development, John W. Eden; the Regional Director of the Economic Development Administration, John E. Corrigan; the Department of Commerce; and the Economic Development Administration E.D.A.. Named as well were 21 state and local governments and governmental bodies of the State of New Jersey. The complaint sought injunctive relief preventing the federal defendants from disbursing, and preventing the state defendants from receiving, funds allocated to the state defendants rather than to plaintiffs, under the Local Public Works Capital Development and Investment Act of 1976, Pub.L.No. 94-369, 90 Stat. 999 codified at 42 U.S.C. §§ 6701 et seq. (1976) Local Public Works Act or Act. Plaintiffs further demanded that the six applications for awards submitted by Hudson County, but rejected by the several defendants, be reconsidered and that the applications be granted.¹

A hearing was held before this court on December 30, 1976 upon plaintiffs' application for a temporary restraining order. The application was denied for the reasons set forth at the hearing. On January 10, 1977 plaintiffs filed an amended complaint dropping as defendants any state defendants who were classified in the 30% category, which definition is explained infra, under the Local Public Works Act, see Section 108(d) of the Act, 42 U.S.C. § 6707(d), and adding as defendants all state or local governments for which preliminary approval of grants had been made as of December 30, 1976. See 41 Fed.Reg. 46420, et seq. (1976).

On January 13, 1977 a further amended complaint was filed substituting the Board of Education of Little Ferry for that of the City of Passaic. A hearing on the application for preliminary injunction was held on January 26, 1977.

Plaintiffs' complaint contains three Counts. In Count One plaintiffs charge federal defendants with "indifference to and violation of statutory standards set forth in 42 U.S.C. 6706 and 42 U.S.C. 6707" and "abuse of discretion" when Hudson County's six grant applications for construction projects were not approved.

In Count Two plaintiffs allege that federal defendants approved the grant applications of certain unnamed state and local defendants whose approved projects require the further approval of the Environmental Protection Agency which is allegedly "not scheduled to meet within ninety (90) days next following the approval of the aforesaid grant applications by the Department of Commerce." Because the Act requires that grants may only be awarded to projects whose on-site labor can begin within 90 days of the project approval, federal defendants, plaintiffs charge, have violated Section 106(d), 42 U.S.C. § 6705(d), and abused their discretion.

Count Three charges the federal defendants with "arbitrary, unreasonable and capricious" actions in their alleged decision to return one of plaintiffs' applications for a grant, which application was procedurally deficient and needed revision, by United Parcel Service. Said application was sent to plaintiffs by the federal defendants on November 11, 1976 but allegedly not received until December 13, 1976, four days after the deadline date for filing established by the federal defendants for all applications. Plaintiffs resubmitted their application; however, because it was not received by December 9, 1976, it was rejected.

THE ACT

The Local Public Works Act was passed by Congress July 22, 1976. It provides for the authorization by the Secretary of Commerce of grants to state and local governments for local public works projects. Section 103(a), 42 U.S.C. § 6702(a). The Secretary is to act through the Economic Development Administration. Section 102(1), 42 U.S.C. § 6701(1). On August 19, 1976 the Secretary delegated to the Assistant Secretary for Economic Development, who is the chief executive officer of the E.D.A., the functions, powers, duties and authorities vested in the Secretary by the Act. Affidavit of George Karras, Director of the E.D.A., at 3 and Exhibit 2, attached thereto.

Projects chosen under the Act were required to meet one proviso. Section 106(d), 42 U.S.C. § 6705(d), provides:

Grants made by the Secretary under this Act shall be made only for projects for which the applicant gives satisfactory assurances, in such manner and form as may be required by the Secretary and in accordance with such terms and conditions as the Secretary may prescribe, that, if funds are available, on-site labor can begin within ninety days of project approval.

(emphasis added).

The Act provides that the Secretary shall, not later than 30 days after enactment of the Act, prescribe rules, regulations and procedures necessary to carry out the Act. Section 107, 42 U.S.C. § 6706. These rules and regulations, the Act further states, shall "assure that adequate consideration is given to the relative needs of various sections of the country." Id.

The Secretary must consider, among others, the following factors:

(1) the severity and duration of unemployment in proposed project areas, (2) the income levels and extent of underemployment in proposed project area, and (3) the extent to which proposed projects will contribute to the reduction of unemployment.

Id.

The Secretary, according to the Act, must reach a final determination with respect to each grant application "not later than the sixtieth day after the date he receives such application." Id. Failure to make such final determination within the prescribed period "shall be deemed to be an approval by the Secretary of the grant requested." Id.

Section 108(a) of the Act, 42 U.S.C. § 6707(a), provides for minimum and maximum amounts of grants for each state. Subsection (b) requires the Secretary to give priority to applications of local governments, defined in Section 102(3), 42 U.S.C. § 6701(3), as "any city, county, town, parish, or other political subdivision of a State, and any Indian tribe."

Of the two billion dollars appropriated to carry out the program, 70% of the money was granted to state or local governments having unemployment rates for the three most recent consecutive months which are in excess of the national unemployment rate. Section 108(d), 42 U.S.C. § 6707(d). The remaining 30% was to be available for projects of state or local governments whose unemployment rates for the same three-month period were at or below the national rate. Id. This breakdown is what is referred to later as the 70-30 structure.

The federal defendants established state planning ceilings whereby the various states were allocated funds appropriated under the Act in accordance with a formula based on the share of unemployed workers residing in a state relative to the total national unemployed and the relative 70% of unemployment for each state above the composite unemployment rate for all states. Accordingly, the 70% and 30% priority categories were established within each state planning ceiling. The total allocations for the 70% and 30% priority category areas of the State of New Jersey were $70,026,599 and $30,011,400, respectively.

Subsections (e) and (f) of Section 108, 42 U.S.C. § 6707, provide that the unemployment rates of applicants may at the request of the applicants be based on a community or neighborhood within their jurisdiction, or may be based on those adjoining areas from which the labor force may be drawn. Subsection (g) of the same section provides that applicants should (1) relate their requests to existing approved plans and programs and (2), where feasible, submit requests which will promote or advance long range plans.

Regulations governing requirements and procedures under which applicants could apply and be considered for grants under the Act were published at 41 Fed.Reg. at 46420 et seq.

On September 9, 1976, the public was advised of the availability of project application forms and where they could be obtained. Affidavit of George T. Karras, Director of Public Works of the E.D.A. at 4 and Exhibit 6 attached thereto. On October 18, 1976, notice was given to the public that the E.D.A. would begin accepting applications for grants on October 26, 1976. Karras Affidavit at 5 and Exhibit 10 attached thereto. On November 19, 1976, the E.D.A. advised the public...