Com. of Pa., by Shapp v. Kleppe, No. 74-1960

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtWILKEY; LUMBARD
Citation174 U.S.App.D.C. 441,533 F.2d 668
Docket NumberNo. 74-1960
Decision Date03 May 1976
Parties, 174 U.S.App.D.C. 441 COMMONWEALTH OF PENNSYLVANIA, By Milton J. SHAPP, its Governor, et al., Appellants, v. Thomas S. KLEPPE, as Administrator of the Small Business Administration, et al.

Page 668

533 F.2d 668
42 A.L.R.Fed. 1, 174 U.S.App.D.C. 441
COMMONWEALTH OF PENNSYLVANIA, By Milton J. SHAPP, its
Governor, et al., Appellants,
v.
Thomas S. KLEPPE, as Administrator of the Small Business
Administration, et al.
No. 74-1960.
United States Court of Appeals,
District of Columbia Circuit.
Argued 30 Oct. 1975.
Decided 4 March 1976.
Rehearing Denied May 3, 1976.

Norman J. Watkins, Deputy Atty. Gen., Harrisburg, Pa., with whom Israel Packel, Atty. Gen., and Lawrence Silver, Deputy Atty. Gen., Harrisburg, Pa., were on the brief for appellants.

Mary Elizabeth Medaglia, Asst. U. S. Atty., Washington, D. C., with whom Earl J. Silbert, U. S. Atty., John A. Terry and Thomas G. Corcoran, Asst. U. S. Attys., Washington, D. C., were on the brief for appellees.

Before LUMBARD, * Senior Circuit Judge for the Second Circuit, and TAMM and WILKEY, Circuit Judges.

Page 670

Opinion for the Court filed by Circuit Judge WILKEY.

Dissenting opinion filed by Senior Circuit Judge LUMBARD.

WILKEY, Circuit Judge:

In late June of 1972 the mid-Atlantic coastal region was battered by the winds and inundated by the rains of Hurricane Agnes. The states of Pennsylvania, Maryland, and Virginia were designated major disaster areas 1 and thereby became eligible for special assistance from the Small Business Administration. 2 On 27 June 1972 the SBA announced that disaster relief would be made available to the devastated areas, and for administrative purposes 3 classified the three affected states as Class B disaster areas.

Dissatisfied with the program of relief offered by the SBA, and in part to enjoin discontinuance of the relief effort, the State of Pennsylvania 4 brought the present action in the District Court in early 1974. The complaint alleged that the state had standing to sue (1) on its own behalf, (2) as parens patriae for all its citizens allegedly injured, and (3) as parens patriae upon the relation of four named individuals. Respondent filed a motion to dismiss which, after oral argument, was granted by Chief Judge Jones, on the ground that plaintiff lacked standing to sue. Petitioner appeals from the written order of 12 August 1974 dismissing the suit. 5

In presenting the problem of state standing, this case beckons us into one of the least well-illuminated corners of a legal area of which it has been said that "generalizations . . . are largely worthless as such," 6 and outcomes are "more or less determined by the specific circumstances." 7 Of standing doctrine in general, little can be said with certainty except that recent years have seen an expansion of the classes of persons eligible to bring suit. 8 The question of state standing embodies the basic standing question "of the nature and sufficiency of the litigant's concern with the subject matter of the litigation," 9 but is further confused by a variety of issues contingent upon the capacity in which the state brings suit and the parties against whom it is brought. The relatively few recent Supreme Court opinions discussing the issue of state standing to sue 10 are of some help in

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ameliorating the resulting uncertainty. However, to a great extent we are left to make our way by the light of opinions written decades ago, whose continuing authority is at least colored by the recent trend toward liberalized standing.

At the outset, we can say with certainty that petitioners have set forth two theories of standing which, in some contexts, will support prosecution of an action by a state. First, they have asserted that the state itself is a party injured by wrongful acts of the respondent. It is well settled that a state, like any institution, may sue for legal injuries to its proprietary interests. 11 Second, in bringing the action also on behalf of all injured citizens of the state, and upon the relation of four named individuals, Pennsylvania invokes a parens patriae theory of standing. At least in some instances a state may thus sue to vindicate the interests of its citizens. 12 We now turn to a consideration of whether the circumstances of this case are such as will support action by the state on either theory.

I. Proprietary Interest Basis for Standing

The disaster loan program whose operation is the subject of the suit is limited to direct loans for the assistance of small business concerns. 13 Thus there could be, and is, no allegation that aid was illegally denied, either to the state or to some program administered by it. Rather petitioners appear to assert that the state suffered harm by injury to the economy, health, safety, and welfare of its people, by impairment of its ability to look after the well-being of its citizens, and by reduction of state tax revenues. 14

The alleged injuries to the state's economy and the health, safety, and welfare of its people clearly implicate the parens patriae rather than the proprietary interest of the state. They involve no harm to the state beyond the individualized harms to her citizens, and thus if relief is to be granted it must be on the theory of the state as representative of those private interests. 15

The allegations as to the state's duty to look after the well-being of its citizens, and the reduction of its tax revenues, come closer to stating a legitimate interest in the state itself. The alleged injuries are not directly attributable to individual citizens of the state, and insofar as they are cognizable by the court, appear to involve the interests of the state as an independent entity. However, invoking the test of Data Processing Service v. Camp, 16 we conclude that the alleged injuries do not satisfy the requirement of being arguably within the zone of interests protected by the Small Business Act.

The Small Business Act, 17 under whose authorization the controverted activities were carried on, was enacted for the narrow purpose of assisting small business in a number of ways. The Act itself expresses no broader purpose than the actual provision

Page 672

of aid to small business concerns, except to recognize that such small concerns are essential to the preservation of a freely competitive economy. 18 The substantive sections of the Act provide for various forms of assistance running directly from the SBA to the business concerns themselves. Unlike many federal assistance programs, 19 no aid is authorized to be channelled through state agencies or coordinated with state programs. Nor do we find anything in the legislative history of the Act 20 to indicate any concern for the well-being of the states as distinct political units.

We also find it highly questionable that petitioners have made sufficient allegation of injury in fact. While it is clear that cognizable injuries need not be economic in nature, 21 we have great difficulty conceptualizing in any coherent way the asserted injury to the state per se through the alleged impairment of its ability to fulfill duties owed to its citizens. One might draw from petitioner's language an implication of injury to the state's reputation for fulfilling its moral undertaking to care for its citizens. However, even if this type of injury to reputation is substantial enough under the liberal Data Processing standard, which we doubt, it is doubtful that the injury could be said to be caused by the alleged wrongful acts. If the state did, in some sense, commit itself to maintain a certain level of security against the consequences of natural disasters, any injury to its reputation for failure to meet that commitment would appear to proximately result from the action or inaction of the state itself. This appears necessarily to be true, at least in cases like the present one where there is no assertion of active disruption of state relief efforts.

The allegation that tax revenues were reduced embodies a comprehensible harm to the economic interests of the state government. However, it appears to us likely that this is the sort of generalized grievance about the conduct of government, so distantly related to the wrong for which relief is sought, as not to be cognizable for purposes of standing. 22 The parallel to the cases imposing very strict limits on taxpayer standing is imperfect, since it can not be said of the state that its economic interest is no different than those of many others. Still, the unavoidable economic repercussions of virtually all federal policies, and the nature of the federal union as embodying a division of national and state powers, suggest to us that impairment of state tax revenues should not, in general, be recognized as sufficient injury in fact to support state standing. By analogy to the taxpayer standing cases, it seems appropriate to require some fairly direct link between the state's status as a collector and recipient of revenues and the legislative or administrative action being challenged. This would prevent state standing in cases like the present one, where diminution of tax receipts is largely an incidental result of the challenged action. 23

We therefore conclude that neither the impairment of the state's ability to look after its citizens nor the diminution of its tax revenues constitutes sufficient injury to

Page 673

state proprietary interests to confer standing.

II. Parens Patriae Basis for Standing

The standing of states to bring parens patriae actions on behalf of their citizens has undergone substantial expansion beyond the traditional common law representation of "persons under legal disabilities to act for themselves." 24 In particular circumstances, courts have relied on parens patriae reasoning to uphold state representation of a variety of interests, in actions against other states, 25 against private entities, 26 and, in a few instances, against agencies of the Federal Government. 27

However, there are also a significant number of cases in which states have been refused the right to serve in such a representative capacity, and the reasons for the divergent holdings...

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67 practice notes
  • Texas v. United States, CIVIL NO. B-14-254
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • February 16, 2015
    ...In these cases, the plaintiffs broadly alleged general harm to state revenue or state spending. See Commonwealth of Pa. v. Kleppe, 533 F.2d 668, 672 (D.C.C. 1976) (Pennsylvania's "diminution of tax receipts [was] largely an incidental result of the challenged action" and was not sufficient ......
  • American Motorcyclist Ass'n v. Watt, No. CV 80-5561-AWT
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • December 1, 1981
    ...it should not be considered harm to 534 F. Supp. 932 the County's "proprietary interests." Pennsylvania ex rel. Shapp v. Kleppe, 533 F.2d 668, 672-73 (D.C.Cir.1976), cert. denied sub nom. Pennsylvania v. Kobelinski, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 584 (1976); Puerto Rico v. Alfred L.......
  • State of New York v. Thomas, Civ. A. No. 84-0853.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • July 26, 1985
    ...patriae criteria); Phillips Petroleum Company v. Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 98 L.Ed. 1035 (1954); Pennsylvania v. Kleppe, 533 F.2d 668 (D.C.Cir.1976) cert. denied, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 584; see also Hancock v. Train, 426 U.S. 167, 196, 96 S.Ct. 2006, 2020, 48 L......
  • California ex rel. Imperial Cnty. Air Pollution Control Dist. v. United States Dep't of Interior, Civil No. 09cv2233 AJB (PCL)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • April 6, 2012
    ...interests, Plaintiffs' allegations form an insufficient basis for standing against the federal government. See Pennsylvania v. Kleppe, 533 F.2d 668, 671 (D.C. Cir. 1976); see also City of Sausalito, 386 F.3d at 1197 ("As a municipality, Sausalito may not simply assert the particularized inj......
  • Request a trial to view additional results
67 cases
  • Texas v. United States, CIVIL NO. B-14-254
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • February 16, 2015
    ...In these cases, the plaintiffs broadly alleged general harm to state revenue or state spending. See Commonwealth of Pa. v. Kleppe, 533 F.2d 668, 672 (D.C.C. 1976) (Pennsylvania's "diminution of tax receipts [was] largely an incidental result of the challenged action" and was not sufficient ......
  • American Motorcyclist Ass'n v. Watt, No. CV 80-5561-AWT
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • December 1, 1981
    ...it should not be considered harm to 534 F. Supp. 932 the County's "proprietary interests." Pennsylvania ex rel. Shapp v. Kleppe, 533 F.2d 668, 672-73 (D.C.Cir.1976), cert. denied sub nom. Pennsylvania v. Kobelinski, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 584 (1976); Puerto Rico v. Alfred L.......
  • State of New York v. Thomas, Civ. A. No. 84-0853.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • July 26, 1985
    ...patriae criteria); Phillips Petroleum Company v. Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 98 L.Ed. 1035 (1954); Pennsylvania v. Kleppe, 533 F.2d 668 (D.C.Cir.1976) cert. denied, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 584; see also Hancock v. Train, 426 U.S. 167, 196, 96 S.Ct. 2006, 2020, 48 L......
  • California ex rel. Imperial Cnty. Air Pollution Control Dist. v. United States Dep't of Interior, Civil No. 09cv2233 AJB (PCL)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • April 6, 2012
    ...interests, Plaintiffs' allegations form an insufficient basis for standing against the federal government. See Pennsylvania v. Kleppe, 533 F.2d 668, 671 (D.C. Cir. 1976); see also City of Sausalito, 386 F.3d at 1197 ("As a municipality, Sausalito may not simply assert the particularized inj......
  • Request a trial to view additional results

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