McKay v. Central Electric Power Cooperative, 12307.

• Decision Date: 07 April 1955
• Docket Number: No. 12307.,12307.
• Citation: 223 F.2d 623
• Parties: Douglas McKAY, Secretary of the Interior, and Douglas G. Wright, Administrator of the Southwestern Power Administration, Appellants, v. CENTRAL ELECTRIC POWER COOPERATIVE, a corporation, Linn, Missouri, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

223 F.2d 623 (1955)

Douglas McKAY, Secretary of the Interior, and Douglas G. Wright, Administrator of the Southwestern Power Administration, Appellants, v. CENTRAL ELECTRIC POWER COOPERATIVE, a corporation, Linn, Missouri, Appellee.

No. 12307.

United States Court of Appeals District of Columbia Circuit.

Argued February 8, 1955.

Decided April 7, 1955.

Mr. Melvin Richter, Atty., Department of Justice, of the bar of the Supreme Court of Massachusetts, pro hac vice, by special leave of Court, with whom Messrs. Leo A. Rover, U. S. Atty., Paul A. Sweeney and Theodore H. Haas, Attys., Department of Justice, were on the brief, for appellants.

Mr. Gregory C. Stockard, Jefferson, Mo., of the bar of the Supreme Court of Missouri, pro hac vice, by special leave of Court, with whom Mr. Lawrence Potamkin, Washington, D. C., was on the brief, for appellee.

Before EDGERTON, BAZELON and BASTIAN, Circuit Judges.

BAZELON, Circuit Judge.

In 1950, the appellee, Central Electric Power Cooperative (a rural electrification cooperative),¹ entered into two contracts with the Government acting through the Southwestern Power Administration.² The first contract provided that Central construct an electric transmission system and lease it for forty years to S.P.A. which would maintain and operate it. The second provided that S.P.A. buy the entire output of a steam electric-generating plant (to be constructed by Central) and sell electric energy to Central for forty years for the use of its members. Both contracts contained the following provisions:

"(a) This agreement is and all rights and obligations hereunder, and the expenditure of funds by the Government under any provisions hereof, are expressly conditioned and contingent on the Congress making the necessary appropriations to enable the Government to carry out the provisions of the agreement, and in case the Congress fails to make such appropriations, the Cooperative hereby releases the Government from all liability due to the inability of the Government to perform this agreement on that account.

"(b) No obligation contained herein for the future payment of money by the Government, or liability on the part of the Government for breach of any of the provisions contained herein, shall be binding upon or enforceable against the Government unless and until the Congress first appropriates funds out of which such obligations or liability can be legally paid."

The transmission system, completed prior to June 30, 1953, was delivered to S.P.A., and Central commenced purchasing electric power from S.P.A.

The Interior Department appropriation for the fiscal year beginning July 1, 1953,³ provided:

"Continuing Fund, Southwestern Power Administration

"Not to exceed $1,200,000 shall be available during the current fiscal year from the continuing fund for all costs in connection with the purchase of electric power and energy, and rentals for the use of transmission facilities."

The Statement of the House Managers contained the following:

"None of the funds allowed are to be used for the purpose of implementing existing contracts with REA cooperatives which provide for the lease-purchase of transmission or generating facilities. The funds may be used only for the purchase of electric power and energy and the payment of wheeling service charges at rates and in amounts comparable to those paid in the Southwestern Power Administration area under existing contracts based only on use value received with no additional allowance for purchase or lease of facilities. Such arrangements may be made with REA Cooperatives in the area but no funds for this purpose are to be available after February 28, 1954."⁴

Appellants viewed this Statement as a bar to allocating funds from the appropriation for the performance of the aforementioned contracts. Accordingly, they declared the contracts suspended by their own terms. Central brought this suit.

The amended complaint prayed for (1) judicial review of agency action; (2) a declaration that appellants' actions are illegal and lacking in due process; (3) a determination of the rights, status and legal relations of the parties; and (4) a judgment directing that appellants not refuse to perform the contracts on the ground that Congress failed to appropriate funds. Appellants moved to dismiss on the ground, among others, that this was an unconsented suit against the Government, or, in the alternative, for summary judgment. The District Court denied this motion and granted Central's motion for summary judgment. The order decreed that the congressional appropriation was available to carry out the contracts; that appellants acted illegally and beyond the scope of their authority in refusing to carry out the contracts on "the alleged grounds that no appropriation of funds had been made by Congress"; and that "to the extent that funds are available" from the Interior Department Appropriation Act appellants "are authorized to carry out the provisions of said contracts with Central." This appeal followed.

We think the suit must...