Dubose v. Hills
Decision Date | 27 September 1976 |
Docket Number | H-75-346.,H-75-345,Civ. No. H-75-303 |
Citation | 420 F. Supp. 399 |
Parties | Vernice DUBOSE, et al. v. Carla HILLS et al. Claudia WALTER et al. v. Carla HILLS, et al. Janette LITTLE et al. v. Carla HILLS et al. |
Court | U.S. District Court — District of Connecticut |
Dennis J. O'Brien, Norman K. Janes, Willimantic, Conn., for Vernice Dubose et al.
John A. Dziamba, Willimantic, Conn., James C. Sturdevant, Rockville, Conn., for Claudia Walter et al.
Joan E. Pilver, Raymond Norko, Hartford, Conn., for Janette Little et al.
Peter Dorsey, U. S. Atty., Raymond Sweigart, Asst. U. S. Atty., New Haven, Conn., Robert Greenspan, Richard C. Livermore, Dept. of HUD, Washington, D.C., Rolland Castleman, West Hartford, Conn., Paul Michael, Civ. Div., Dept. of Justice, Washington, D.C., Guy DeFrances, Meriden, Conn., James H. Shulman, Hartford, Conn., for Carla Hills et al.
RULING ON MOTION TO VACATE ORDER AND DISSOLVE PRELIMINARY INJUNCTION
These lawsuits, consolidated for trial, concern the refusal of the Department of Housing and Urban Development ("HUD") and its Secretary, Carla Hills, to implement an operating cost subsidy program, enacted as Section 212 of the Housing and Community Development Act of 1974.1 On December 15, 1975, this court entered a preliminary injunction ordering the implementation of the program.2 On May 27, 1976, the December order was expanded by a ruling converting plaintiffs' original individual classes, which were certified by project, into a statewide class.3 The original compliance date of June 1, 1976, has been extended until September 15, 1976, by several orders of this court.
On August 9, 1976, Congress enacted the "Housing and Urban Development and Independent Agencies Appropriation Act," Public Law 94-378.4 Arguing that the proviso contained in this legislation sheds new light on the issues in this case, the defendants now move to vacate the December and May orders and to dissolve the preliminary injunction. Oral argument was heard on this motion on September 13, 1976.
The Section 236 operating subsidies program is established by 12 U.S.C. § 1715z-1(f)(3) (1970) (Supp. IV).5 A source of funds for these operating subsidies is provided by subsection (g) of the same statute which establishes a "reserve fund" comprised of "excess rentals" collected by the Section 236 project owners.6 The central issue throughout this litigation has been the nature and scope of the Secretary's discretion with respect to the implementation of the operating subsidies program and the expenditure of the reserve fund. The issuance of the preliminary injunction was premised upon this court's conclusion that the implementation of the program and the expenditure of the reserve fund for operating subsidies was mandated by the statute.
The defendants now contend that Public Law 94-378 affects my earlier determinations in two ways. First, they argue that this statute "makes it plain that contract authority is required before any of the amounts contained in the reserve fund may be utilized."7 Secondly, the defendants assert that the recent act entirely transforms the function of the reserve fund by making it available for a variety of programs other than operating subsidies. The essence of both arguments is that the proviso indicates that the Secretary has discretion to refrain from implementing the operating subsidies program and hence affords a basis for vacating the December and May orders and dissolving the preliminary injunction.
The defendants' first contention is a renewal of an argument presented at the time of the December ruling. The Secretary's position is that she requires "contract authority" before she may implement the operating subsidies program; that the existing contract authority is limited in amount and is insufficient to fund all the programs established by Section 236; that she possesses the discretion to allocate the existing contract authority among the several 236 housing programs; and that she has reasonably concluded to allocate the existing contract authority to other 236 programs instead of the operating subsidies program.8
The premise of this argument is that the reserve fund can be spent only pursuant to contract. In my earlier consideration of this issue, I reviewed the statutory language and the legislative history and concluded that "direct payments can be made out of the reserve fund, not pursuant to any contract and, hence, without reducing the Secretary's available contract authority."9 However, the defendants now argue that the proviso of Public Law 94-378, which states that the reserve fund shall be available "for the payments on contracts entered into pursuant to the authorities enumerated above," supports their position that the reserve fund can only be spent pursuant to contract authority.
The defendants place too much weight upon the proviso's reference to contracts. The language merely recognizes that many of the programs enumerated in Public Law 94-378, including interest reduction payments under the Section 236 program, do require the obligation of contract authority prior to the expenditure of appropriations. However, I conclude that the proviso does not indicate that the reserve fund can only be spent pursuant to contract.
There is a second response to the defendants' contract authority argument. In Part IV of the December opinion, I dealt with the possibility that the reserve fund can be spent only pursuant to contract and that the disbursements are subject to the Secretary's allocation of contract authority. While I recognized that such a construction would give the Secretary some discretion, I held that a decision not to implement the program would be contrary to Congressional intent and would constitute an unreasonable exercise of that discretion.10 Thus, even if the proviso did indicate that the reserve fund can only be spent pursuant to contract, this would not provide a basis for vacating the earlier orders or for dissolving the preliminary injunction.
An important factor underlying the December ruling was the special funding method for the operating subsidies program. At that time, the reserve fund established by subsection (g) was to be used solely for additional assistance payments under the program. The defendants now argue that the proviso in Public Law 94-378 transforms the function of this reserve fund by giving the Secretary authority to utilize it for a variety of enumerated programs. The contention is that Congress' failure to establish priorities concerning the expenditure of the fund indicates that the Secretary has discretion over its allocation and, therefore, that she is no longer under a mandatory duty to make additional assistance payments directly from the reserve fund. This argument necessitates a study of the legislative intent behind the proviso.
In June 1976, the House Appropriations Committee proposed an appropriation of $2,975,000,000 for payments for subsidized housing programs. This sum was $95,000,000 less than the budget request. The reduction was based in part on the making available of the money in the reserve fund for a variety of programs other than the operating subsidies program of Section 236.11 This intent was manifested in the proviso of Public Law 94-378.
In the Senate, Senator Sparkman introduced an amendment which deleted the proviso. In support of this deletion, he stated:
Senator Proxmire, floor manager for the bill, concurred with Senator Sparkman.
Following these comments, the Senate passed the amendment deleting the proviso. However, the final bill reported by the Conference Committee of the House and the Senate contained the House's proviso. The Conference Report explained the Committee's action as follows:
The legislative history makes it clear that the proviso enables the Secretary to use the 236(g) reserve fund for other than Section 236 programs. However, it also makes clear that Congress did not intend to allow the Secretary to fail to implement the operating subsidies program. The statements of Senators Sparkman and Proxmire are to this effect, as is the statement in the Conference Report that its action "shall not prejudice any suit . . . in this area." Therefore, I conclude that there is no...
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Dubose v. Pierce, s. 581
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