NOAA Finds ImplicitAuthority to Assist Intervenors Despite Second Circuit's Reversal of Greene County

On August 11, 1977 the National Oceanic and Atmospheric Administration (NOAA) of the Department of Commerce joined¹ the growing number of federal agencies that have taken steps toward the initation of programs for providing financial assistance to indigent intervenors in administrative proceedings.² NOAA concluded that it possesses the implicit power to undertake an assistance program in the absence of express statutory authorization on the basis of a series of Comptroller General opinions³ upon which the other agencies currently implementing or proposing to establish such programs without explicit authority have also relied. NOAA's conclusion is noteworthy because it followed by less than two months a decision by the Second Circuit Court of Appeals, sitting en banc, that the Federal Power Commission (FPC) has no such assistance authority.⁴ A sharply divided court decided that this series of Comptroller General opinions did not necessitate a judicial judgment that the FPC had the legal authority to grant intervenor assistance awards without explicit congressional approval.

NOAA's continued reliance on the Comptroller General's opinions despite the Second Circuit's ruling may simply mean that the agency is climbing out on a shaky limb. NOAA's conclusion may, on the other hand, reflect a judgment that the Second Circuit's decision does not foreclose an agency's inherent discretionary power to institute such a program under general appropriations statutes which provide funds for "necessary" agency expenses.

Greene County

In 1972, a panel of the Second Circuit declined, in an opinion written by Judge Kaufman,⁵ to order the FPC or the Power Authority of the State of New York to pay the fees and expenses incurred by intervenors in a proceeding concerning the construction of an electrical power transmission line. Such an order would be inappropriate, the court said, without a "clearer congressional mandate" than it could find in the Federal Power Act.⁶

On December 8, 1976, Judge Lumbard, writing for a different panel of the court, remanded⁷ the Commission's subsequent denial of the intervenors' petition for reimbursement in light of a line of recent Comptroller General opinions⁸ stating that nine federal agencies, including the FPC, did have inherent discretionary authority under their enabling laws and appropriations statutes to grant such assistance. The court viewed these opinions as authoritative and ruled that because there was a good chance the intervenors could meet the standards for reimbursement set forth by the Comptroller General, the FPC should reconsider its prior determination that it lacked the authority to make such payments. A dissent by Judge Van Graafeiland took issue with what he saw as the majority's implicit assumption that the Comptroller General's opinions were entitled to the precedential weight given Supreme Court rulings. The dissent argued further that FPC reconsideration of the issue would be fruitless in any event since the reimbursement power posited by the Comptroller General was discretionary and the Commission had already indicated that it believed an assistance award would be unwarranted even if it possessed the power to make one.

Petitions for rehearing en banc were filed and granted, and on June 30, 1977, the full court, in an opinion written by Judge Van Graafeiland in which only three of the other seven participating judges joined, reversed the panel decision.⁹ Judge Van Graafeiland framed the issue for decision as whether the court's interpretation of the Federal Power Act, rather than that of the Comptroller General, was legally controlling. Not surprisingly, he gave an affirmative answer to this question, ruling that the Comptroller General's power under 31 U.S.C. § 74 to make advance commitments that the General Accounting Office will not question the validity of a specific disbursement does not extend to deciding questions of law regarding the permissible limits of agency action under particular statutes. A Comptroller General opinion is therefore not a "binding legal opinion" which the court must follow in determining if an agency has the power to engage in a particular activity.

[7 ELR 10211]

The plurality opinion passed over the argument that an appropriations statute providing funds for "necessary" agency expenses gives the agency implicit authority to reimburse intervenors by simply observing that all federal agency expenditures must be authorized by Congress and holding that the FPC has no statutory authority to make disbursements to assist indigent intervenors. In Judge Van Graafeiland's view, the court could not find that the FPC has such power to pay the legal expenses incurred by intervenors until Congress enacts legislation specifically authorizing an FPC intervenor assistance program.

Lumbard's Dissent

In contrast, a dissent by Judge Lumbard in which Judges Mansfield and Oakes joined saw the issue as whether the FPC has discretionary authority to pay for intervenors' expenses under a statute¹⁰ providing a general appropriation for "expenses necessary for the work of the Commission" if it considers such reimbursement to be necessary or desirable as a means to allow public participation in hearings held under the Federal Power Act.¹¹ The dissenters argued that the Comptroller General's opinions on expenditure issues are entitled to at least as much judicial deference as are an executive agency's statutory interpretations. Conceding that an express statutory authorization is required before one litigant in an administrative proceeding can be ordered to pay another's legal expenses,¹² Judge Lumbard nevertheless contended that the requested fee reimbursement from the agency to the Greene County intervenors was readily distinguishable from fee shifting from one private party to another because it involves no direct compulsion against a private party. Given this distinction and the general language of the appropriation statute and Federal Power Act provision relating to the importance of public participation in hearings, "it was altogether reasonable for the Comptroller General to find that agency reimbursement of intervenors attorneys' fees need not await further legislation from Congress." Characterizing the majority's decision as an "unfortunate step backwards," the dissenters stated their conviction that "[p]ublic funding for public interest intervenors has become necessary to the optimal functioning of the administrative process."

Chief Judge Kaufman, the author of the 1972 opinion in Greene County declining to order a reimbursement award, provided the decisive vote by concurring with Judge Van Graafeiland's ruling in a separate opinion. Judge Kaufman asserted that "expanded participation by advocates of a variety of public interests before agencies would tend to decrease the number of appeals taken to the federal courts and also the number of cases remanded to agencies because the record failed to reflect adequate consideration of the concerns of all affected parties." He also agreed with the dissenters that expanded public funding of such participation has become necessary to the optimal functioning of the administrative process. Nevertheless, he concluded that the sensitive issues surrounding the intervenor assistance question require congressional rather than judicial resolution and that deferring to Congress was necessary to avoid the "inevitable pitfalls of judicial lawmaking."

The plurality and dissenting opinions in Greene County seem to be talking past each other, a confusion which may be partially explained by the different vantage points from which they viewed the case. Judge Van Graafeiland saw the reimbursement petition as a request that the court overrule a prior agency determination not to award assistance on the basis of the Comptroller General's more recent interpretation that the agency has inherent reimbursement authority. The dissent, on the other hand, viewed it as an opportunity to clarify the state of the law as it has evolved since the agency's initial reimbursement denial. The panel's remand thus gave the FPC another chance to exercise its discretionary assistance power if it determined, upon reexamination in light of the changed legal circumstances, that an award to the intervenor was warranted.

In failing to discuss the dissenters' argument that reimbursement authority is implicitly bestowed by the statute providing appropriations for "necessary" expenses in conjunction with the Federal Power Act hearing provision, Judge Van Graafeiland left a loophole in his seemingly absolute requirement for more explicit congressional authorization than currently appears in the Federal Power Act alone. In fact it was largely this failure that allowed NOAA to disregard the Second Circuit's broad requirement of further congressional authorization and find existing administrative authority to establish an intervenor assistance program.

The NOAA Assistance Proposal

In proposing rulemaking for financial compensation of participants in administrative proceedings, NOAA announced its determination that "there is a legal basis for providing financial assistance, under appropriate circumstances, to participants for costs incurred…."¹³ In the agency's view, this basis derives specifically from two sources: (1) the Comptroller General's decision¹⁴ that a congressional appropriation made for a particular purpose is available to finance expenses reasonably necessary and proper or incidental to the execution of that purpose and (2) a statute authorizing appropriations for "expenses necessary" for NOAA.¹⁵ The agency also pointed to the reasoning in the line of Comptroller General decisions¹⁶ on the subject as generally affirming the authority of federal agencies to reimburse participants and provide guidelines for the exercise of that authority.

NOAA acknowledged its awareness of the Second Circuit's most recent Greene County decision, but dismissed the ruling as not dispositive on the question of whether the agency can grant assistance. Instead, the agency stated that the ruling must simply "be weighed in determining the extent to which NOAA will provide financial assistance…." The proposed regulations themselves set forth specific eligibility criteria, application procedures, and award limitations. These [7 ELR 10212] standards would serve to temper the Administrator's broad authority to provide compensation whenever he determines that public participation in an adjudication, enforcement, or rule-making proceeding involving a public hearing promotes or can reasonably be expected to promote a full and fair determination of the issues involved. The criteria, procedures, and limitations generally parallel those suggested by the Comptroller General and incorporated in the financial assistance proposals of other agencies.¹⁷

NOAA clearly could not have reached its conclusion with as little apparent effort had Judge Van Graafeiland come to grips with the "necessary" expenses argument raised by the dissenters in Greene County. An explicit rejection in that decision of the contention that appropriations for "necessary" agency expenses taken together with a statutory provision for the admission of parties to public hearings before the agency constitutes implicit congressional authorization for discretionary intervenor assistance awards would have necessitated the use of some alternative legal rationale for NOAA's conclusion. This would have presented the agency with a serious problem since no alternative is readily apparent other than a bald refusal to recognize Greene County as controlling because it involved a different agency and separate statutes.

The two situations can be distinguished as a practical matter, however. In Greene County, the FPC had both interpreted its statutory authorities as not providing the power to assist intervenors and clearly indicated that even if it had the discretionary power to make assistance awards, it would choose not to do so in that case. The court viewed the intervenors' claims for relief as essentially a request to upset these determinations, which were entitled to judicial deference, on the basis of a series of Comptroller General opinions that were not, a remedy the court was understandably reluctant to grant. NOAA's decision to go ahead with an assistance program, on the other hand, will be the beneficiary of the judicial deference accorded executive agency interpretation of authorizing statutes. In practice then, it may be that an agency reimbursement decision will be upheld by the courts no matter which way it goes. This prognosis indicates that agency initiative may well be the determining factor on the question of intervenor assistance in each particular instance.¹⁸

Conclusion

The issue of inherent agency authority to grant intervenor assistance awards has divided the executive agencies that have considered the question and most recently has fragmented the Second Circuit Court of Appeals. In this sense, Chief Judge Kaufman may be right in predicting that the important and often conflicting considerations surrounding the issue will ultimately require legislative resolution. Both NOAA and the plurality and dissenting opinions in Greene County noted several bills dealing with reimbursement of intervenors that Congress is currently considering.¹⁹ While consideration of these measures drags on, the tide among the federal agencies which public hearing responsibilities is now running strongly in favor of establishing assistance programs on the basis of inherent discretionary authority.²⁰ The twin problems of possibly divergent standards for making awards and the legal uncertainty engendered by the Second Circuit's finding that the Comptroller General's opinions upon which this trend is based are not authoritative reiterate the need for definitive legislative guidance on the intervenor assistance issue.

1. 42 Fed. Reg. 40711 (Aug. 11, 1977).

2. The Federal Trade Commission began such a program in 1975, 16 C.F.R. § 1.11-1.20, 40 Fed. Reg. 33966 (Aug. 13, 1975), in response to a provision in the Federal Trade Commission Improvement Act, 15 U.S.C. § 57a(h)(1), explicitly authorizing the agency to do so. The Food and Drug Administration issued an Advance Notice of Proposed Rulemaking (ANPR) on the subject of establishing an assistance program without explicit statutory authority on August 25, 1976, 41 Fed. Reg. 35855, and the Environmental Protection Agency published such a notice five months later, 42 Fed. Reg. 1492 (Jan. 7, 1977). The National Highway Traffic Safety Administration of the Department of Transportation established a demonstration assistance program on January 13, 1977, 42 Fed. Reg. 2864, and the Civil Aeronautics Board published in ANPR on the subject on February 11, 1977, 42 Fed. Reg. 8663. The Federal Energy Administration granted an ad hoc assistance award to an intervenor on March 17, 1977. In re Consumers Union, No. FEX-0129 (FEA Office of Exceptions and Appeals). The Consumer Product Safety Commission proposed regulations for providing financial compensation to intervenors on March 23, 1977, 42 Fed. Reg. 15711, 16 C.F.R. pt. 1050 (proposed). See also Comment, Agency Funding of Indigent Public Interest Intervenors in Administrative Proceedings, 6 ELR 10052 (Mar. 1976); Comment, DOT Establishes Demonstration Assistance Program for Indigent Participants in Agency Proceedings, 7 ELR 10043 (Mar. 1977).

3. Opinion B-180224 (May 10, 1976); Opinion B-92288 (Feb. 19, 1976); Opinion B-139703 (July 24, 1972), (Feb. 28, 1974), (Sept. 22, 1976), (Dec. 3, 1976).

4. __ F.2d __, 7 ELR 20552 (2d Cir. June 30, 1977).

5. 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972).

6. 16 U.S.C. §§ 825h, 825m(c).

7. __ F.2d __, 7 ELR 20101 (2d Cir. 1976).

8. Supra note 3.

9. __ F.2d __, 7 ELR 20552 (2d Cir. June 30, 1977).

10. 90 Stat. 889, 898.

11. 16 U.S.C. § 825g. This provision was not considered by the court which rendered the original decision in 1972.

12. Turner v. FCC, 514 F.2d 1354 (D.C. Cir. 1975).

13. 42 Fed. Reg. 40712 (Aug. 11, 1977).

14. Opinion B-92288 (Feb. 19, 1976).

15. Pub. L. 94-362, 90 Stat. 949 (1976).

16. Supra note 3.

17. These standards are derived generally from those adopted by the Federal Trade Commission, 16 C.F.R. § 1.11-1.20, 40 Fed. Reg. 33966 (Aug. 13, 1975).

18. It is interesting to note that before leaving a position on the staff of the Center for Law and Social Policy, a frequent public interest litigant and participant in administrative proceedings, Richard A. Frank, the new NOAA Administrator prepared a report which strongly recommended the establishment of intervenor assistance programs by federal agencies. Frank, Onek & Steinberg, Public Participation in the Policy Formation Process (Jan. 1977), reprinted in Hearings on S. 270 Before the Subcomm. on Administrative Practice and Procedure of the Senate Comm. on the Judiciary, 95th Cong., 1st Sess. 555 (1977).

19. See, e.g, S. 270, 95th Cong., 1st Sess. (1977).

20. See note 2, supra. Only the Nuclear Regulatory Commission has formally refused to institute an assistance program after considering the issue in light of the Comptroller General's opinions. Nuclear Regulatory Commission, Financial Assistance to Participants in Commission Proceedings — Statement of Considerations Terminating Rulemaking (Nov. 12, 1976). For an analysis of the agency's decision, see Comment, NRC Declines to Fund Indigent Participants in Agency Proceedings, 7 ELR 10010 (Jan. 1977).