Local 2677, American Fed. of Gov. Emp. v. Phillips

• Decision Date: 11 April 1973
• Docket Number: 375-73 and 379-73.,Civ. A. No. 371-73
• Citation: 358 F. Supp. 60
• Parties: LOCAL 2677, the AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, et al., Plaintiffs, v. Howard J. PHILLIPS, both Individually and in his capacity as Acting Director, Office of Economic Opportunity, Defendant. WEST CENTRAL MISSOURI RURAL DEVELOPMENT CORP. et al., Plaintiffs, v. Howard PHILLIPS, Individually and as Acting Director, Office of Economic Opportunity, Defendant. NATIONAL COUNCIL OF O.E.O. LOCALS, A.F.G.E., AFL-CIO, et al., Plaintiffs, v. Howard J. PHILLIPS, Acting Director of the Office of Economic Opportunity, et al., Defendants.
• Court: U.S. District Court — District of Columbia

358 F. Supp. 60

LOCAL 2677, the AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, et al., Plaintiffs, v. Howard J. PHILLIPS, both Individually and in his capacity as Acting Director, Office of Economic Opportunity, Defendant.

WEST CENTRAL MISSOURI RURAL DEVELOPMENT CORP. et al., Plaintiffs, v. Howard PHILLIPS, Individually and as Acting Director, Office of Economic Opportunity, Defendant.

NATIONAL COUNCIL OF O.E.O. LOCALS, A.F.G.E., AFL-CIO, et al., Plaintiffs, v. Howard J. PHILLIPS, Acting Director of the Office of Economic Opportunity, et al., Defendants.

Civ. A. Nos. 371-73, 375-73 and 379-73.

United States District Court, District of Columbia.

April 11, 1973.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Glenn R. Graves, John W. Karr, Washington, D. C., for plaintiffs in Local 2677.

John M. Ferren, Allen R. Snyder, Henry Polmer, Washington, D. C., Sarah C. Carey, Harold Himmelman, National Lawyers' Committee for Civil Rights Under Law, Washington, D. C., for plaintiffs in West Central.

Thomas P. Powers, Washington, D. C., Davis, Miner, Barnhill & Bronner, Philip B. Kurland, Chicago, Ill., for plaintiffs in National Council.

Harlington Wood, Jr., Asst. Atty. Gen., Harland F. Leathers, Robert E. Washburn, John M. Kelson, Attys. Dept. of Justice, Harold H. Titus, Jr., U. S. Atty., Arnold F. Aikens, Robert S. Rankin, Jr., Asst. U. S. Attys., Washington, D. C., for defendants.

OPINION

WILLIAM B. JONES, District Judge.

These three consolidated actions have been brought to declare unlawful and enjoin what the plaintiffs alleged to be the unlawful dismantlement of the Office of Economic Opportunity (OEO) by the defendant, Howard J. Phillips, Acting Director of OEO. The plaintiffs in Local 2677, American Federation of Government Employees, et al. v. Phillips, Civil Action No. 371-73 (hereinafter Local 2677), by an amended complaint, are the labor organization-bargaining agent for the Washington, D. C. headquarters employees of OEO, and two individual OEO headquarters employees. Suit is brought on behalf of all OEO employees throughout the country who have been or are about to be adversely affected by the alleged unlawful acts of the defendant. The plaintiffs in West Central Missouri Rural Development Corp., et al. v. Phillips, Civil Action No. 375-73 (hereinafter West Central), are four Community Action Agencies (CAAs) as designated pursuant to 42 U.S.C. § 2790 (1970), which bring their suit on behalf of all 930 CAAs receiving funds from OEO under section 221 of the Economic Opportunity Act of 1964, as amended, 42 U.S.C. § 2808 (1970). In the third suit, National Council of O.E.O. Locals, A.F. G.E., AFL-CIO, et al. v. Phillips, et al., Civil Action No. 379-73 (hereinafter National Council), the plaintiffs are the exclusive agency-wide representative for all nonsupervisory OEO employees, an association of CAA executive directors, three CAAs, two headquarters employees of OEO, several CAA employees, and several beneficiaries of programs funded by OEO through CAAs. National Council is likewise brought as a class action on behalf of all OEO employees, all CAAs and their employees, and all beneficiaries of CAA programs.¹ Jurisdiction is based on 28 U.S.C. §§ 1331, 1343, 1361 and 2201-2202 (1970), as well as for review of administrative action under 5 U.S.C. §§ 701-706 (1970).

At a hearing on March 2, 1973, the Court granted the defendant's uncontested motion for consolidation and allowed the plaintiffs certain limited expedited discovery of Phillips by interrogatories and set a timetable for the filing of motions. At that time the defendant filed an affidavit indicating his intention not to take any action, prior to March 15, 1973, relating to transferring or discontinuing any OEO program which would finally and irrevocably adversely affect the rights of OEO employees. The terms of that affidavit were extended to March 23, 1973, at the Court's request. Subsequently, on March 7, 1973, the application for a temporary restraining order in Local 2677 was argued and denied. The case is now before the Court on the plaintiffs'² motions for preliminary injunction, the defendant's motion to dismiss or in the alternative for summary judgment, and the plaintiffs' cross-motions for summary judgment, which supercede and incorporate the prior motions for preliminary injunction.

The plaintiffs' statements of material facts as to which there is no genuine dispute, filed in accordance with Local Rule 9(h), have not been controverted by the defendant, except as they may contain legal conclusions. Those material facts in turn are merely an elaboration of the Rule 9(h) statement submitted by the defendant, and thus the Court finds that there are no material facts in dispute and the case is ripe for summary judgment.

On March 20, 1973, two days before the oral hearing in this case, the plaintiffs in National Council moved to voluntarily dismiss their suit under Fed.R.Civ.P. 41(a) so that they could join in a similar suit brought by other parties in the United States District Court for the Northern District of Illinois. Dismissal under Rule 41(a)(1) would not be proper because of the class nature of the suit and the filing of a motion for summary judgment by the defendant. The Court, in the exercise of its discretion under Rule 41(a)(2), will refuse to grant the voluntary dismissal. Although the Court is aware of the alleged financial burden of pursuing this action further, the motion for dismissal was not filed until the case was ready for final disposition by summary judgment. Dismissal at this time, especially of a class action, would not best facilitate the orderly and swift administration of justice.³

Consideration was also given at oral argument to transferring National Council to the Northern District of Illinois for possible consolidation with the suit plaintiffs sought to join there. The defendant's counsel objected, noting that argument was scheduled for four days later on the motion for preliminary injunction in that suit. In view of that circumstance, the Court decided that a transfer would be untimely.

Statement of the Case

The plaintiffs assert that the defendant has been acting illegally for several reasons. It is sufficient for the disposition of these cases to consider only three of their contentions. First, the plaintiffs claim that the Economic Opportunity Amendments of 1972 (hereinafter 1972 Amendments), Pub.L. No. 92-424, 86 Stat. 688 (1972), in particular sections 2(a), 3(c)(2), and 28, forbid the defendant from taking the actions he has to terminate OEO funding of CAAs. Second, the claim is made that the activities of the defendant regarding the alleged termination of CAA functions is an illegal reorganization because the terms of the Reorganization Act, 5 U.S. C. §§ 901-913 (1970) have not been complied with. Finally, the plaintiffs contend that the defendant's directives are illegal and of no effect because he failed to publish them in the Federal Register as required by section 22 of the 1972 Amendments, 42 U.S.C.A. § 2971b. The defendant has raised several technical defenses in addition to his defenses on the merits. The Court finds against the defendant on these points for reasons set forth below.

The Court finds for the plaintiffs on all three of these basic substantive theories.

Case or Controversy

The defendant argues that these cases are brought prematurely and thus fail to present a justiciable case or controversy. An examination of the uncontroverted facts reveals that this contention is totally unfounded and that the present cases present a justiciable case or controversy.

On January 29, 1973, President Nixon submitted his 1974 Budget Message to Congress. That budget message set forth the administration's plan to transfer responsibility for certain OEO functions to other agencies. The message specifically notes that

No funds are requested for . . . OEO for 1974. Effective July 1, 1973, new funding for . . . CAAs will be at the discretion of local communities. . . . With Community Action concepts now incorporated into ongoing programs and local agencies if the budget proposals are approved, the continued existence of OEO as a separate Federal agency is no longer necessary.⁴

The defendant has attached this excerpt from the budget message to his affidavit filed in support of his motion for summary judgment as an indication of the plan he is pursing as Acting Director of OEO.

On January 29, 1973, the defendant issued a memorandum to all OEO regional offices, attached as Exhibit A to the complaint in West Central, regarding the "termination of section 221 CAA funding." That memorandum, at page two, further noted that the cessation of funding would rescind individual designations as CAAs. OEO Instruction 6730-3, issued March 15, 1973, at page two, repeats the same instruction of the defendant that CAA funding will cease and further warns that use of funds by a CAA for any purpose except phasing out its activity or the failure of a CAA to submit an "acceptable" phaseout plan 120 days prior to the termination of section 221 funding will result in summary suspension of OEO funds. The same Instruction 6730-3 sets out 21 pages of guidelines for CAAs to follow in shutting down their section 221 operations, with various deadlines to be met throughout that process.

Thus, as stated in the uncontroverted West Central statement of material facts not in issue, all program evaluations and processing of CAA applications for purposes other than phasing out CAA activities have stopped. CAAs have been instructed to stop purchasing or repairing essential equipment. The day-to-day business operations of CAAs have been hindered if not halted by the unwillingness of third parties to deal with CAAs because of the announcement by the defendant of the termination of funding. The orderly continuation of CAA functions, discussed in more detail infra, has been halted or severely disrupted by the requirements...