Graham v. Federal Emergency Management Agency, 97-15590

Citation149 F.3d 997
Decision Date15 July 1998
Docket NumberNo. 97-15590,97-15590
Parties98 Cal. Daily Op. Serv. 5539, 98 Daily Journal D.A.R. 7729 Chineina GRAHAM, on behalf of themselves and all other persons similarly situated; Masaichy Stephen, on behalf of themselves and all other persons similarly situated; Kether Uruno, on behalf of themselves and all other persons similarly situated; Asi Auputiw, on behalf of themselves and all other persons similarly situated; Nameuo Pillias, on behalf of themselves and all other persons similarly situated; Sanres Katuo, on behalf of themselves and all other persons similarly situated; Tionis Rechy, on behalf of themselves and all other persons similarly situated; Saimon Casiano, on behalf of themselves and all other persons similarly situated; Chikiwo Asenis, on behalf of themselves and all other persons similarly situated; Achie Engichy, on behalf of themselves and all other persons similarly situated; Sandy Nedlec, on behalf of themselves and all other persons similarly situated; After Ludwig; Anna Joseph Liwis; Dita Welle; Obtena Kelep; Sincer Meitou, on behalf of the Estate of Nor Meitou; Janice Iro, on behalf of Rinner Simiron; Remigio Welle; Charles Rialong; Jonathan Achimi; Norenty Sikemen; Naieko Eis; Care Achime, on behalf of the Estate of Achimi Onochi; Funumi Otto; Tingo Ham; Airin Saner, on behalf of the Estate of Machuko Sanger; Itosy Achanto; Frank Fernando; Sesi Salle; Messy Achanto; Misa Sewen; Manner Namelo; Iowanes Ukaw; Menisio Fritz; Takesy Simirai; Sanokin Namelo; Seker Afin; Immaculate Antonin; Francis Nethon; Nariano Taro; Ines Munich; Reichiro Reus; Nisie Chutaro; Mino Rudolph; Sanchy Louis; Eto Sykap; Hanry Benry; Natis Ekichy; Sarae Atter; Sisei Saltfish; Ariok Kaori; Kachume Aniwin; Sikichi Epineisar; Dakos Telep; Tokiko Ar; Alouis Antonious; Masaichy Simi; Sik Muritok; Petiri Fred; Apenis Murano; Umoumoch James; Fumie Opokunong; Finoen Chaine; Spancer Opokunong; Onger Fine; Kaichiro Alaphen; Kenrita Ephini; Dickson Joywell; Marcy Willy; Sino Shiro; Tachuo Rongeni; Kafoto Two; Sinori
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Charles Greenfield, Micronesian Legal Services Corporation, Pohnpei, The Federated States of Micronesia, for plaintiffs-appellants.

Frank W. Hunger, Assistant Attorney General, Michael J. Yamaguchi, United States Attorney, Barbara L. Herwig, Attorney, Appellate Staff, and Jacob M. Lewis, Attorney, Appellate Staff, United States Department of Justice, Civil Division, Washington, DC, for defendants-appellees.

Appeal from the United States District Court for the Northern District of California; D. Lowell Jensen, District Judge, Presiding. D.C. No. C-95-4635 DLJ.

Before: D.W. NELSON, BOOCHEVER, and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

This case presents the issue whether individuals may sue the Federal Emergency Management Agency ("FEMA") and its officials for allegedly unlawful withdrawing of disaster relief funds while the individuals' appeals of their applications for federal "individual and family grants" were still either pending or approved but unpaid. The district court ruled that standing and sovereign immunity doctrines barred such suits. We affirm in part and reverse in part. We hold that applicants who had not established at the time of the withdrawal that their applications were meritorious lack standing to sue. At the same time, we conclude that applicants whose applications had been approved have standing to file suit under § 10(a) of the Administrative Procedure Act. We also hold that these individuals' claims are not subject to dismissal under Fed.R.Civ.P. 12(b)(6) on the ground of sovereign immunity.

I. BACKGROUND

In November of 1990, Typhoon Owen struck the Federated States of Micronesia ("FSM"), devastating its Chuuk and Yap states. Then-President Bush declared the states major disaster areas, thus invoking the Stafford Disaster Relief and Emergency Assistance Act of 1974 ("Stafford Act"), 42 U.S.C. §§ 5121-5204c. The FSM, by compact with the United States, is eligible (like any other U.S. state) for disaster relief funds under the Stafford Act, through programs administered by the U.S. government's Federal Emergency Management Agency ("FEMA"). See 42 U.S.C. § 5122; Compact of Free Association, Pub.L. No. 99-239, 99 Stat. 1800, 1816, at § 221(a)(2) (1985), reprinted at 48 U.S.C. § 1901. On February 12, 1991, the FSM submitted to FEMA an "administrative plan" by which it proposed to administer an "individual and family grant program" to provide disaster relief funds to its eligible citizens. FEMA approved the plan the next day and agreed to provide such funds.

The Stafford Act's individual and family grant program enables the President, through FEMA, "to make a grant to a State for the purpose of making grants to individuals or families adversely affected by a major disaster." 42 U.S.C. § 5178(a). The federal share of a grant to an individual or family under this section "shall be equal to 75 percent of the actual cost incurred"; the state must pay the remaining 25 percent. 42 U.S.C. § 5178(b). As indicated by the statute's text, the program itself is administered by the recipient-state. FEMA provides money to the state, and the state pays funds to its citizens who it determines are eligible under FEMA's rules for disaster relief. In addition, in administering its plan, the FSM--as is required by regulations, see 44 C.F.R. § 206.131(e)(1)(ii)(H)--agreed to allow appeals by unsuccessful applicants and to grant meritorious appeals that were supported by documentation.

The program is limited by regulation to 180 days, but FEMA may grant as many 90-day extensions as it deems appropriate. See 44 C.F.R. §§ 206.131(j)(1)(iii) and (j)(2). From February to September of 1991, the FSM administered its individual and family grant program for 270 days. The defendants contend that during this time FEMA discovered that the FSM's Chuuk State Appeals Board was approving claims without requiring proper documentation. The plaintiffs assert that the Appeals Board acted consistent with the administrative plan and regulations and that any deficiencies in its procedures were promptly cured. Nonetheless, when the FSM requested a second 90-day extension of the program, FEMA denied the request and ended the program with a number of claims approved by the Appeals Board still unpaid and with a number of others still pending before the Board. FEMA thereafter audited the program and confirmed its refusal to provide funds for any of the pending or approved appeals in light of its complaints regarding the procedures followed by the Chuuk State Appeals Board. Volland Aff. at p 15.

On December 26, 1995, eighty-three individuals, all residents of Chuuk State who either had their appeals approved by the FSM or whose appeals were never decided, filed the present action against FEMA, James Lee Witt, its Director, and Shirley Mattingly, its Regional Director in charge of the territory that includes the FSM. The plaintiffs allege that the defendants violated § 10(a) of the Administrative Procedure Act (APA), the Stafford Act, and the Due Process Clause of the Fifth Amendment by terminating the individual and family grant program without paying them funds to which they are entitled. They seek declaratory and injunctive relief that would require FEMA (1) to provide its share of funds for their approved appeals; and (2) to ensure the completion of the pending appeals, and then to issue the federal share of all awards to which they become entitled.

On February 11, 1997, the district court dismissed all of the plaintiffs' claims with prejudice on the ground that the plaintiffs lacked standing to sue FEMA and its officers. Alternatively, the court held that the defendants were immune from suit because FEMA's decisions to withhold funds and to deny the FSM's request for an extension of the program fell within the agency's unreviewable discretion. This timely appeal followed.

II. STANDING

We first consider whether any or all of the plaintiffs have standing to bring this suit. Since the Stafford Act does not provide for a private right of action upon which the plaintiffs may rely, 1 and since the protections of the Due Process Clause in this case extend only as far as the plaintiffs' statutory rights, 2 the only real question is whether the plaintiffs may bring suit under § 10(a) of the APA. As with any statute, there are both constitutional and prudential dimensions to standing under the APA. Article III's "case or controversy" requirement dictates an "irreducible constitutional minimum" to bring suit in federal court, which consists of three elements: (1) an injury in fact that is concrete and particularized; (2) a causal connection between the injury and the defendant's conduct; and (3) a likelihood that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). There also is a significant prudential component of the APA's standing inquiry. Plaintiffs must show that they fall within the "zone of interests" to be protected or regulated by the underlying statute in question. National Credit Union Admin. v. First Nat'l Bank & Trust Co., --- U.S. ----, ----, 118 S.Ct. 927, 933, 140 L.Ed.2d 1 (1998). "For purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party." Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)...

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