Jacksonville Port Authority v. Adams, No. 76-1542

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: Before WRIGHT, TAMM and LEVENTHAL; LEVENTHAL
• Citation: 181 U.S.App.D.C. 175,556 F.2d 52
• Parties: JACKSONVILLE PORT AUTHORITY, a body politic and corporate of the State of Florida, Appellant, v. Brock ADAMS, as Secretary of Transportation of the United States, et al.
• Docket Number: No. 76-1542
• Decision Date: 30 March 1977

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556 F.2d 52 181 U.S.App.D.C. 175 JACKSONVILLE PORT AUTHORITY, a body politic and corporate of
the State of Florida, Appellant,
v.
Brock ADAMS, as Secretary of Transportation of the United
States, et al. No. 76-1542. United States Court of Appeals,
District of Columbia Circuit. Argued Jan. 13, 1977.
Decided March 30, 1977.

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Synopsis by the Court

Jacksonville Port Authority (Jacksonville) filed suit for $292,187 allocated to it for fiscal year 1975 under the Airport and Airway Development Program, 49 U.S.C. § 1715(a)(1)(B). Jacksonville's application was acceptable on its own merits but was denied by FAA on application of its "priority system." Jacksonville filed suit four days after the district court held that system invalid, and shortly prior to the close of fiscal year 1975. The district court denied a temporary restraining order (TRO), and thereafter held that the FAA's authorization to obligate funds had expired with the fiscal year, rendering the case moot. On appeal of the dismissal, held:

1. Where application for allotted funds was timely made and suit filed prior to the expiration of the agency's authorization to grant funds, if denial of a TRO was an abuse of discretion, the case is not moot. On remand, the district court may order the FAA to grant Jacksonville the money due under the statute. The expiration of the FAA's authorization prohibits it from initiating a grant, but not from complying with a judicial mandate. The appellate court's authority to enter such an order in the interest of justice, 28 U.S.C. § 2106, is supported by the public interest in the FAA's following the congressional mandated allocation formula, and the subsequent congressional extension of the program.

2. It was an abuse of discretion to have denied an order holding the matter in status quo, where: the court had ruled against the FAA's position on the merits; Jacksonville was in danger of losing the money by lapse of the FAA's authority; and preliminary relief would hold open the grant without actual payment, subject to later modification.

3. The district court's "equitable" grounds for withholding relief are not accepted. Uncertainty as to which project to apply allocated funds was no barrier to a TRO in light of the conditional nature of the grant sought. Jacksonville's entitlement to its fiscal year 1975 funds was not undercut by prior grants.

4. The case is remanded to order the FAA to grant Jacksonville the amount due under the companion opinion, No. 75-1965, City of Los Angeles v. Adams, 181 U.S.App.D.C. ----, 556 F.2d 40.

Appeal from the United States District Court for the District of Columbia.

Charles S. Rhyne, Washington, D. C., with whom William S. Rhyne and Donald A. Carr, Washington, D. C., were on the brief, for appellant.

David M. Cohen, Atty., Dept. of Justice, Washington, D. C., for appellees. Rex E. Lee, Asst. Atty. Gen., Earl J. Silbert, U. S. Atty., Robert E. Kopp and John M. Rogers, Attys., Dept. of Justice, Washington, D. C., were on the brief for appellees. John A. Terry, Tobey W. Kaczensky, Asst. U. S. Attys., and Thomas G. Wilson, Atty., Dept. of Justice, Washington, D. C., also entered appearances for appellees.

Before WRIGHT, TAMM and LEVENTHAL, Circuit Judges.

Opinion for the Court filed by Circuit Judge LEVENTHAL.

LEVENTHAL, Circuit Judge:

The Jacksonville Port Authority sought a temporary restraining order (TRO) shortly after District Judge Parker had invalidated the FAA's priority system and ruled that airport sponsors are entitled to their full allotment of airport development funds under the enplanement formula in 49 U.S.C. § 1715(a)(1)(B). ¹ Plaintiff's application for the TRO was filed shortly before the cutoff date of the authority of the Federal Aviation Administration (FAA) to make funding obligations. The application was denied. After passage of the cutoff date, Judge Parker dismissed the complaint for injunctive relief as moot, on the grounds that the FAA was unequivocally prohibited by 49

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U.S.C. § 1714(b) (now, § 1714(b)(1)) from taking action after June 30, 1975 to obligate Trust Fund money.

I. MOOTNESS

Some of the impoundment cases ² faced a similar argument raised by the federal defendants that even if funds were wrongfully impounded, they could not be disbursed after the end of the fiscal year for which they had been appropriated by virtue of the lapse provision of 31 U.S.C. § 701(a)(2). In most cases, preliminary injunctive relief was granted by the district court to prevent lapse and hold the situation in status quo for determination on the merits. ³ Relief has been granted in two impoundment cases: where suit was brought after the end of the fiscal year for which funds were due, Commonwealth of Pennsylvania v. Weinberger, 367 F.Supp. 1378 (D.D.C.1973), and where class certification was sought thereafter, State of Louisiana v. Weinberger, 369 F.Supp. 856 (E.D.La.1973). The courts held that the suits were not blocked by 31 U.S.C. § 701(a)(2).

This court does not agree with defendants that (§ 701(a)(2)) can, or should, be used to provide a defense to the Executive Branch against suits to compel the payment of funds appropriated by Congress and impounded by the Executive Branch during and through the applicable fiscal year. ⁴

We are presented with an easier case, as Jacksonville sued for grant of its application and sought preliminary relief before the statutory deadline. Relief at this time would unquestionably be available if the district had issued a preservation decree such as it did in Los Angeles requiring the FAA to make a provisional grant that would be subject to reflection on the merits. Before we examine whether it was an abuse of discretion to deny this relief in a TRO, we must decide whether the case is moot, i. e., whether the FAA can now be ordered to make grants of entitlements from fiscal year 1975.

In Stone v. White, 301 U.S. 532, 57 S.Ct. 851, 81 L.Ed. 1265 (1937), trustees sued for refund of a tax which should have been collected from the beneficiary of the trust. Collection from the beneficiary was barred by the statute of limitations. Applying equitable principles, the Court took account of the reality of the sole beneficiary's identity of interest with the trustees and allowed the government to retain the tax due, in spite of a statutory prohibition against using a time barred deficiency as an offset to a refund. ⁵ Similar equitable considerations prevent an agency from raising a statutory prohibition on it in reality, a command to meet a deadline as a defense to a suit brought prior to that deadline for money withheld by the agency's arrogation of unauthorized discretion.

In our view, the prohibition in § 1714(b) operates as a ban on initiation of a grant by the FAA on its own after June 30, 1975. Congress imposed a deadline on the FAA, to avoid procrastination and the dangers of an agency discretion to dip into old unused authorizations. Here, Jacksonville

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has made timely application and brought suit within the time the agency is authorized to act, seeking judicial determination and vindication of its entitlement to the funds.

A congressional deadline on an agency's ability to take action on its own motion does not preclude an agency's authority to take later action on direction of a court exercising judicial review. ⁶ Appellate courts have been given authority to enter such remedies as may be appropriate in the interest of justice. 28 U.S.C. § 2106. If the district court abused its discretion in failing to preserve plaintiff's rights unequivocally with a TRO, the appellate court may, in the interest of equity and justice, make the plaintiff whole by ordering the FAA and the district court to act as if there had been a conditional grant prior to June 30, 1975.

This judicial approach is not unlike the equitable doctrines of constructive trust or equitable lien, where an equity court deems a trust or lien to have arisen at a prior time from the actions and relationship of the parties. In the interest of justice, the court may proceed as if action that should have been taken in...