Globe, Inc. v. Fed. Home Loan Bank Bd.

• Citation: 471 F. Supp. 1103
• Decision Date: 21 March 1979
• Docket Number: Civ. A. No. 78-1632.
• Parties: GLOBE, INC., T/A Globe Book Shops et al., Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD et al., Defendants.
• Court: U.S. District Court — District of Columbia

471 F. Supp. 1103

GLOBE, INC., T/A Globe Book Shops et al., Plaintiffs, v. FEDERAL HOME LOAN BANK BOARD et al., Defendants.

Civ. A. No. 78-1632.

United States District Court, District of Columbia.

February 9, 1979.

Judgment Entered March 21, 1979.

William E. Nelson, Washington, D. C., for plaintiffs.

Charles R. Donnenfeld, Philip D. Green, Schwalb, Donnenfeld & Bray, Washington, D. C., for Crown Books.

Harold B. Shore, Associate Gen. Counsel, Matthew G. Ash, Patricia M. Eanet, Trial Attys., Federal Home Loan Bank Bd., Washington, D. C., for defendants the Federal Home Loan Bank Bd. and Robert H. McKinney.

MEMORANDUM

OBERDORFER, District Judge:

This case is before the Court on cross-motions for summary judgment. For the reasons set out in this Memorandum, the Court grants in part and denies in part plaintiffs' motion for summary judgment and denies defendants' motion for summary judgment.

I. Findings of Fact

1. Globe, Inc. (Globe) is a corporation engaged in the business of selling books at retail in the Metropolitan Washington area. It operates stores at, among other places, 1700 Pennsylvania Avenue, N.W., and 888 17th Street, N.W. in the District of Columbia.

2. Crown Book Corporation (Crown) is a wholly-owned subsidiary of Dart Drug, Inc., and is also engaged in the business of selling books, magazines, and related items at retail in this area.

3. The Federal Home Loan Bank Board (FHLBB) is an independent agency in the Executive Branch of the United States Government, with quarters at 1700 G Street, N.W. FHLBB was created by and operates under the authority of the Federal Home Loan Bank Act of 1932, as amended directly by statute and indirectly, from time to time, by riders in appropriations, e. g., Public Law 93-414, 88 Stat. 1095, 1107, September 6, 1974.

4. Congress created FHLBB in 1932

"both as a present emergency relief of and as a permanent aid to . . . home-building, home-improving, and home-financing organizations of our country."

Statement of Representative John H. Overton, 75 Cong.Rec. 12603, 72d Cong., 1st Sess. (1932). See also, Association of Data Processing, Etc. v. Federal Home Loan Bank Board of Cincinnati, 421 F.Supp. 384, 389-390 (S.D.Ohio, 1976).

5. General Services Administration is an agency in the Executive Branch of the United States Government headed by an Administrator. 40 U.S.C. § 751(a) and (b). Congress has provided generally that:

"No public building shall be constructed except by the Administrator, who shall construct such public building in accordance with this chapter." 40 U.S.C. § 601.

6. The Administrator's authority to construct or acquire buildings is subject to prior approval by the Committee on Public Works of the Senate and House of Representatives. 40 U.S.C. § 606(a). As a requisite to such approval, the Administrator is required to:

"transmit to Congress a prospectus of the proposed project . . ."

7. With respect to construction or alteration of buildings in the District of Columbia, Congress has directed the Administrator to proceed

"as nearly as may be practicable in harmony with the plan of Peter Charles L'Enfant and such buildings shall be so constructed as to combine architectural beauty with practical utility."

40 U.S.C. § 607(a).

8. Congress has authorized the Administrator to delegate to executive agencies, as that term is defined,

"The performance, in accordance with standards established by the Administrator . . . of the responsibilities and authorities vested in him . . . where the Administrator determines that such delegation will promote efficiency and economy."

40 U.S.C. § 614.

9. FHLBB has not offered any evidence that the Administrator has delegated any of his powers to FHLBB pursuant to 40 U.S.C. § 614.

10. In 1976, Congress amended the laws governing the Administrator's responsibility for public buildings to require him to encourage the location of commercial, cultural, educational and recreational facilities and activities within public buildings. Public Buildings Cooperative Use Act of 1976 (Public Law 94-541). Section 104 of the 1976 Act specifically authorized him to lease certain space in public buildings to tenants who would use it for those purposes. The 1976 law limited this authorization to the Administrator. It did not refer to FHLBB or authorize it to lease out its space commercially. Nor did it authorize "concession agreements."

11. The Federal Home Loan Bank Act of 1932 did not authorize the FHLBB to own or lease real property for its quarters. Nor did it authorize FHLBB to grant or otherwise operate "concessions."

12. In 1966, Congress enacted a new subsection to the 1932 Act relating to quarters and facilities for FHLBB itself. Pub.L. 89-754, § 1016(b)(2), 80 Stat. 1293, 12 U.S.C. § 1438(c). That legislation provided that

"The board, utilizing the services of the Administrator of General Services (hereinafter referred to as the "Administrator"), and subject to any limitation hereon which may hereafter be imposed in appropriation Acts, is hereby authorized —

(A) to acquire, in the name of the United States, real property in the District of Columbia, for the purposes set forth in this subsection;

(B) to construct, develop, furnish, and equip such buildings thereon and such facilities as in its judgment may be appropriate to provide, to such extent as the board may deem advisable, suitable and adequate quarters and facilities for the board and the agencies under its administration or supervision;

(C) to enlarge, remodel or reconstruct any of the same; and

(D) to make or enter into contracts for any of the foregoing." (emphasis added)

12 U.S.C. § 1438(c)(1).

Paragraph (2) of the 1966 subsection authorized FHLBB to require of its constituent banks "advances of funds for the purposes set out in paragraph (1)." 12 U.S.C. § 1438(c)(2).

Paragraph (3) made the plans and design of any building to be constructed pursuant to paragraph (1) subject to the approval of the Chairman of FHLBB to such extent as he might request. 12 U.S.C. § 1438(c)(3).

13. In the context of the foregoing, paragraph (4) of the 1966 subsection provided that:

"Upon the making of arrangements mutually agreeable to the board and the Administrator, which arrangements may be modified from time to time by mutual agreement between them . . ., the custody, management, and control of such buildings and facilities and of such real property shall be vested in the Administrator in accordance therewith. Until the making of such arrangements such custody, management, and control, including the assignment and allotment . . . of building and other space, shall be vested in the board." (emphasis added)

12 U.S.C. § 1438(c)(4).

14. The 1966 Act makes no explicit provision for third parties to lease any of the properties acquired by FHLBB for its quarters. Nor does the 1966 Act provide for the granting of "concessions" to anyone.

15. Public Law 93-414, appropriating funds for fiscal year 1975, amended 12 U.S.C. § 1438(c) to authorize FHLBB to require additional assessments from its constituent banks for purposes "which shall include related commercial facilities." This rider made no reference to the division of responsibility for FHLBB quarters as between FHLBB and GSA.

16. In 1976, GSA and FHLBB entered into a "Memorandum of Agreement on New Federal Home Loan Bank Building." The stated purpose of the Memorandum of Agreement was to set forth the respective obligations of GSA and FHLBB concerning construction of the building. The Memorandum of Agreement recited that, pursuant to the authority of 12 U.S.C. § 1438(c),

"The services of GSA have been utilized to acquire real estate for construction thereon of the building . . .. The services of GSA shall continue to be utilized to manage the FHLBB building project in accordance with this Memorandum of Agreement.

* * * * * * The first floor (street level) will consist of commercial shops with Government office space and rental office space on upper floors.

* * * * * *

. . . Except as may be requested by FHLBB, the GSA shall manage the project in accordance with the policies, procedures, data, standards, specifications, criteria and financial accounting of the G.S.A."

17. On September 9, 1977, Jay Solomon, Administrator of GSA, wrote to Robert H. McKinney, Chairman of FHLBB, about matters of mutual concern, including, "the operation and management of the building (the latter being a function which will need to be initiated within the near future)." With respect to the matter of

"Arrangements for GSA's assumption of the function of managing the building for the Board,"

Administrator Solomon wrote that he had earlier indicated that

"the General Counsel of GSA has advised me that, in enacting 12 U.S.C. 1438(c)(4), Congress contemplated that, once the building was constructed, GSA was to assume the custody, management, and control of the building, on the Board's behalf, leaving the details of the arrangement to be worked out between the two organizations. There have been intimations by officials of the Board that mutually acceptable terms could not be arrived at, and that the Board would therefore manage the building itself.

We are prepared to initiate immediately the discussion of terms of a management and operation agreement. In conformity with 12 U.S.C. 1438(c)(4), and to expedite all the preliminaries, the execution of the agreement, and the commencement of services that are mutually satisfactory.

Please let me hear from you as soon as possible, and if I can be of further help, feel free to call on me."

18. On October 13, 1977, FHLBB member Garth Marston, designated by the Chairman for the task, wrote to James B. Shea, Public Building Commissioner at GSA, among other things, the following:

"3. Building Operation as summarized by a portion of Chairman McKinney's letter of September 19: `The Board . . . determined that however desirable it might appear to have GSA expertise manage our new building, that this

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