COUNCIL OF THE DISTRICT OF COLUMBIA, Plaintiff, v. Vincent C. GRAY, in his official capacity as Mayor of the District of Columbia, and Jeffrey S. DeWitt, in his official capacity as Chief Financial Officer for the District of Columbia Defendants.
Civ. Action No. 14-655 (EGS)
United States District Court, District of Columbia.
Signed May 19, 2014
EMMET G. SULLIVAN, United States District Judge
Nicholas Alan Bush, Andrew J. Saindon, D.C. Office of Attorney General, Washington, DC, for Defendants.
MEMORANDUM OPINION
EMMET G. SULLIVAN, United States District Judge
In 2012, the Local Budget Autonomy Act of 2012 (hereinafter “Budget Autonomy Act“), D.C. Law 19-321, 60 DCR 1724, was enacted by the Council of the District of Columbia (hereinafter “Council“), signed by Mayor Vincent C. Gray, and ratified by voters of the District of Columbia (hereinafter “District“) in an April 2013 referendum. The law, if upheld, would grant the District the right to spend its local tax and fee revenue without seeking an annual appropriation from Congress. Mayor Gray and Jeffrey S. DeWitt, Chief Financial Officer for the District of Columbia (hereinafter “CFO“), both passionate advocates for budget autonomy, have refused to implement the Budget Autonomy Act. Although they wholeheartedly agree with the Council as a matter of policy, they do not agree that the Budget Autonomy Act is valid as a matter of law. On the basis of this refusal, the Council has sued the Mayor and the CFO in their official capacities. The Council seeks a declaration that the Budget Autonomy Act is valid, and an injunction compelling the Mayor and the CFO to comply with the law.
The fight for budget autonomy in the District is not new. The District has had a measure of control over its own affairs since the enactment of the Home Rule Act in 1973, and has been fighting—unsuccessfully—for budget autonomy ever since. In 1981, Congressional Delegate Walter Fauntroy introduced the District of Columbia Budget Autonomy Act, which would, if passed, have ended the congressional appropriation requirement for locally derived funds. Similar bills have been introduced in nearly every Congress thereafter. As recently as 2011 and 2012, bills were introduced in the House and the Senate that would have provided for local control of the local portion of the District‘s budget.1 These efforts have continued even after the Budget Autonomy Act purportedly became effective. The President has included budget autonomy for the District in his fiscal year 2013, 2014, and proposed 2015 budgets, and yet another
Despite this long history of seeking budget autonomy through Congress, the Council now argues that since the Home Rule Act was enacted in 1973, it has possessed the authority to grant itself control over its own local spending. This argument, which the Council advances for the first time in this litigation, simply cannot withstand judicial scrutiny. As more fully set forth below, it is contrary to the plain language of the Home Rule Act, which prohibits the Council from changing the role of the federal government in the appropriation of the total budget of the District. It cannot be reconciled with the legislative history of the Home Rule Act, during which Congress explicitly considered, and rejected, budget autonomy for the District. And it violates a separate federal statute, the Anti-Deficiency Act, which prohibits District employees from spending public money unless it has been appropriated by Congress.
This case presents a unique situation in which all involved strongly support the policy of budget autonomy for the District of Columbia. Indeed, the policy arguments advanced by the Council are extraordinarily powerful. As all District residents know, the budget procedure in the Home Rule Act makes for extremely difficult governance in the District. First, Congress habitually fails to enact a budget by the start of the October 1 fiscal year; it has done so on only three occasions in the last 25 years. In the remaining 22 years, Congress has either passed a continuing resolution or no budget at all, leading to a shutdown. Second, because of the lengthy congressional appropriations process, the District budget is necessarily outdated by the time it is enacted by Congress. Finally, the uncertainty in the congressional appropriations process often negatively impacts assessment of the District‘s finances by bond rating agencies. Notwithstanding these challenges, the District has demonstrated an unprecedented track record of fiscal responsibility in recent years, including seventeen balanced budgets, sixteen years of clean financial audits, and a reduction in the federal portion of the District‘s budget from over 40 percent to only one percent. The Council makes a compelling argument that the time has come for budget autonomy.
As a native Washingtonian, the Court is deeply moved by Plaintiff‘s argument that the people of the District are entitled to the right to spend their own, local funds. Nevertheless, the Court is powerless to provide a legal remedy and cannot implement budget autonomy for the District. Notwithstanding the sound policy preferences of conscientious District lawmakers, members of Congress, and the President, the Court must interpret and apply the law as enacted. Both Congress and the President have expressed their support for budget autonomy for the District, but have failed to act to achieve that goal. Congress has plenary authority over the District, and it is the only entity that can provide budget autonomy.
In sum, having carefully considered the parties’ cross motions for summary judgment, the responses and replies thereto, the submissions by amici, the supplemental briefing requested by the Court, the applicable law, the oral argument, and the record as a whole, Plaintiff‘s motion for summary judgment is DENIED and Defendants’ cross motion for summary judgment is GRANTED. Mayor Vincent C. Gray, CFO Jeffrey S. DeWitt, the Council of the District of Columbia, its officers, agents, servants, employees, and all persons in active concert or participation with them who receive actual notice of the injunction, are hereby permanently EN-
I. Factual and Procedural Background
A. Local Autonomy in the District of Columbia and the Home Rule Act
The District of Columbia is “an exceptional community ... established under the Constitution as the seat of the National Government.” District of Columbia v. Murphy, 314 U.S. 441, 452 (1941). The Constitution grants Congress the power to “exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square), as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States.”
This continued until 1973, when Congress enacted the District of Columbia Self-Government and Governmental Reorganization Act, Pub. L. No. 93-198, 87 Stat. 774 (1973) (codified as amended at
Title IV of the Home Rule Act sets forth the District of Columbia Charter, which established the “means of governance of the District” upon ratification by District voters.
ry, and “the basic governmental structure within which [those entities] operate.” Id. at 576.
The Charter sets forth the process for the enactment of local legislation. Most legislation becomes law after it is approved by a majority of the Council after two readings 13 days apart, signed by the Mayor (or approved over his or her veto), and sent to Congress for passive review. If, after 30 days (or 60 days for changes to criminal laws), Congress does not affirmatively disapprove of the legislation, it becomes law.
The District budget, by contrast, requires the active review of Congress. The process for the enactment of the budget is set forth in Section 446 of the Act, which is included in the District Charter. Section 446 provides that the Mayor must present a budget, which includes both locally derived and federal funds, to the Council. The Council must hold a hearing and adopt a budget within 56 days of the transmittal from the Mayor. The Mayor must sign the budget, or it must be approved over his or her veto, within 30 days. The Mayor then transmits this budget, called the Budget Request Act, to the President to submit to Congress as part of the national budget. Congress must enact affirmative legislation to appropriate expenditures in the District.
The District Charter also created the General Fund of the District of Columbia in Section 450 of the Home Rule Act.
Like a state constitution, the Charter can be amended subject to a three-prong process delineated in Section 303 of the Home Rule Act.
B. The Local Budget Autonomy Act of 2012
The Council of the District passed the Local Budget Autonomy Act of 2012, which amends “the District of Columbia Home Rule Act to provide for local budget autonomy.” D.C. Law 19-321. This Act purports to amend Section 446 of the Home Rule Act, which sets forth the procedure for appropriation of the District‘s budget by Congress. The amended section changes the procedure for locally derived funds; it does not alter the process for the federal portion of the District‘s budget. Compl. 50. Pursuant to the Budget Autonomy Act, the budget process for the local portion of the District‘s budget has been modified so that it is similar to that for most other District legislation—i.e., it is subject to passive review by Congress after approval by the Council. Pl.‘s MSJ at 8. If Congress does not pass a joint resolution disapproving of the budget within 30 days, it becomes law. The Budget Autonomy Act writes the President and the Mayor out of the local budget process, providing that “the local portion of the annual budget shall be submitted by
The Budget Autonomy Act also alters the timeline in which the Council must pass the budget. The Council is required to adopt the budget for the District “within 70 calendar days ... after receipt of the budget proposal from the mayor.” Budget Autonomy Act § 2(e). There are to be two readings of the proposed budget, and those readings must be at least 13 days apart. Pl.‘s MSJ at 8. The Act also amends Section 441(a) of the Home Rule Act to authorize the Council to change the fiscal year of the District so that it runs from July to June rather than October to September. Budget Autonomy Act § 2(d).
The Budget Autonomy Act was unanimously passed by the Council and was signed into law by Mayor Gray on February 15, 2013. Pl.‘s MSJ at 9; Defs.’ Mem. of Points and Authorities in Support of Their Motion for Summary Judgment and in Opposition to Plaintiff‘s Motion for Summary Judgment (hereinafter “Defs.’ MSJ“) at 5. In a letter sent to the Council prior to signing the Budget Autonomy Act, Mayor Gray stated that while he “fully and passionately support[ed] the goal of securing budget autonomy for the District of Columbia as soon as possible[,]” he believed that the Budget Autonomy Act as written would violate the Home Rule Act. Defs.’ MSJ, Ex. 1 at 1. He reiterated these concerns in a signing statement that accompanied the Budget Autonomy Act. Defs.’ MSJ, Ex. 1, Signing Statement. The Budget Autonomy Act was then submitted to the D.C. Board of Elections and Ethics for inclusion on the April 2013 ballot and the Council filed a Notice of Public Hearing on the ballot language. District of Columbia Attorney General Irvin Nathan responded to the notice with a letter expressing his “serious reservations about the legality of the amendment” and recommended that it be excluded from the April 2013 ballot. Pl.‘s MSJ, Declaration of V. David Zvenyach (hereinafter “Zvenyach Decl.“), Exhibit A, January 4, 2013 Letter from Irvin B. Nathan, at 1. At the conclusion of the public hearings and after considering the arguments presented, the Board of Elections found no basis to reject the Budget Autonomy Act and included it on the ballot. Pl.‘s MSJ at 9. The Budget Autonomy Act was ratified by 83% of voters in a special election in April 2013 (approximately 9% of the District electorate of 505,698 registered voters). Defs.’ Answer 5. Congress took no action to affirmatively disapprove of the Budget Autonomy Act, thus it became law on July 25, 2013 and became effective on January 1, 2014. See Pl.‘s MSJ at 9.
After the Budget Autonomy Act became effective, Congressman Ander Crenshaw (R-FL), asked the Government Accountability Office (hereinafter the “GAO“) to opine on its validity. Pl.‘s MSJ at 9. On January 30, 2014, the GAO returned its opinion, concluding “that provisions of the Budget Autonomy Act that attempt to change the federal government‘s role in the District‘s budget process have no legal effect.” Defs.’ MSJ, Ex. 2, January 30, 2014 GAO Opinion, at 2.
C. The Instant Dispute
On April 8, 2014, the Attorney General issued a formal opinion advising the Mayor that he should not implement the Budget Autonomy Act and “advise Executive Branch officials and employees not to do so absent a binding judicial decision to the contrary.” Pl.‘s MSJ, Zvenyach Decl., Ex. B, Opinion of the D.C. Attorney General, at 9. On April 11, 2014, both the Mayor and the CFO advised the Council in separate letters that they would decline to implement the Budget Autonomy Act. Pl.‘s
First, I will direct all subordinate agency District officials not to implement or take actions pursuant to the Act, which contravenes our Home Rule Charter and other federal law. Second, I will veto any FY 15 budget transmitted by the Council that is not inclusive of both the local and federal portions of the budget, as required under the Home Rule Act. Third, as noted, to achieve compliance to the extent I am able with the Home Rule Act, I will transmit to the Congress and President the full District budget as it stands after the 56th day following transmission to you of the budget, whether or not the Council has taken a second vote.
Compl., Ex. C, April 11, 2014 Letter of Mayor Vincent Gray, at 3. The CFO mirrored the Mayor‘s statements in his letter to the Council, noting that he would not enforce the Budget Autonomy Act absent a judicial determination of its validity:
Absent such [determination], I will not make or authorize any payment pursuant to a budget that was approved in conformance with the Act. I will also direct OCFO employees not to certify contracts or make payments under this budget given the potential civil and criminal penalties to which they, as individuals, would be subject under the federal Anti-Deficiency Act.
Compl., Ex. D, April 11, 2014 Letter of CFO Jeffrey S. DeWitt, at 2.
In response to these letters announcing the Mayor and CFO‘s intention not to enforce the Budget Autonomy Act, the Council brought suit in the Superior Court of the District of Columbia on April 17, 2014. It filed a Motion for a Preliminary Injunction on that same date. Defendants immediately removed the action to this Court. Plaintiff filed a motion to remand the action to the Superior Court, arguing that jurisdiction was lacking in this Court. At a preliminary status hearing on April 22, 2014, with the consent of the parties, the Court consolidated the motion for preliminary injunction with a determination on the merits, including jurisdictional arguments, pursuant to
II. Standard of Review
Summary judgment is appropriate in situations where the moving party has shown that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See
All parties to the instant dispute concur that there are no genuine issues of material fact before the Court. Summary judgment is particularly appropriate in situations where, as here, a pure question of law that is ripe for decision is before the Court. See Wyoming Outdoor Council v. Dombeck, 148 F. Supp. 2d 1, 7 (D.D.C. 2001); see also Swan v. Clinton, 100 F.3d 973, 976 (D.C. Cir. 1996).
III. Discussion
A. This Court has Jurisdiction
Federal courts are courts of limited jurisdiction, Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), and a case must be remanded to state court “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.”
Federal courts also lack jurisdiction over claims that pertain only to the District of Columbia. “[F]or the purposes of [
Plaintiff argues that this case should be remanded to the Superior Court for the District of Columbia because this Court lacks jurisdiction over its claims, which it describes as exclusively local. Pl.‘s MSJ at 40. Because Plaintiff contends that the Charter is applicable only in the District, it claims “federal question jurisdiction is unavailable.” Id. at 41. Moreover, Plaintiff contends that the only bases for federal jurisdiction presented by Defendants are defenses, which further counsels in favor of remand.
The Court is persuaded by Defendants’ arguments that this case unequivocally presents a federal question—whether the Council can unilaterally amend the District Charter to fundamentally alter the roles of the President and Congress with respect to the locally funded portion of the Dis-
Plaintiff argues that this case is distinguishable from Thomas, because its “claim to relief is premised on the local obligations of local officials, as triggered by the budget process for local funds in the District Charter.”3 Pl.‘s MSJ at 43. However, the budget process for the District necessarily includes federal entities, namely the President and Congress, the latter of which has an active role in appropriating the District budget. The Budget Autonomy Act is thus far from the type of purely local legislation that the D.C. Circuit has found does not confer federal jurisdiction. See, e.g., Decatur Liquors, Inc. v. District of Columbia, 478 F.3d 360 (D.C. Cir. 2007) (finding that the District Court could not exercise supplemental jurisdiction over a claim that all parties agreed was local, whether the legislation was invalid because the Council failed to read it twice before voting on it, as required by the Home Rule Act); Dimond v. District of Columbia, 792 F.2d 179, 187-88 (D.C. Cir. 1986) (holding that a challenge to the District‘s No Fault Insurance Law on the grounds that it changed the jurisdiction of the District of Columbia Courts and thus violated the Home Rule Act did “not fall within the traditional federal question jurisdiction” because the relevant sections of the Home Rule Act dealing with the District of Columbia Courts applied “exclusively to the District of Columbia“). Accordingly, the Court concludes that federal question jurisdiction exists over Plaintiff‘s claims.4
Plaintiff contends that the Budget Autonomy Act is a valid exercise of its authority to amend the District Charter by the procedure outlined in the Home Rule Act. Defendants argue to the contrary that the Budget Autonomy Act is an unlawful exercise of the Council‘s Charter amendment authority pursuant to Section 303(d) of the Home Rule Act, which provides that the “amending procedure [in Section 303(a)] may not be used to enact any law or affect any law with respect to which the Council may not enact any act, resolution, or rule under the limitations specified in sections 601, 602, and 603.”
conclusion in Bliley “mandates the conclusion that the Council‘s claim of authority” to change the respective roles of Congress and the President with respect to the locally funded portion of the District budget “is likewise one of federal law.” Defs.’ Reply in Support of Their Cross-Motion for Summary Judgment (hereinafter “Defs.’ Reply“) at 5.
sively in or to the District.”
The Court is again persuaded by Defendants’ arguments. Although the Home Rule Act grants authority to the Council to amend the District Charter, that authority is subject to the limitations in Sections 601, 602, and 603. Plaintiff concedes that its ability to amend the District Charter is subject to the limitations in those sections; however, it argues that only some portions of Sections 601, 602, and 603 are limitations. Sections 603(a) and (e), according to the Council‘s theory, are instead rules of construction that were intended to guide the interpretation of the Home Rule Act as enacted in 1973. This argument is contrary to the plain language of Section 303(d); the legislative history of Sections 601, 602, and 603; the experience of almost 40 years of Home Rule; and common sense. Plaintiff also argues that Section 450 of the Home Rule Act is a permanent appropriation that meets the requirements of the Anti-Deficiency Act without requiring an appropriation from Congress. This argument is likewise contrary to the plain language of Sections 450 and 446 and federal appropriations law. Because the amendments to Section 446 in the Budget Autonomy Act independently violate sections 603(a), 603(e), and 602(a)(3), they are unlawful and must be enjoined.
1. Section 603(a)
Defendants argue that the Budget Autonomy Act is unlawful because it violates the limitations in Section 303(d), which prevent the Council from amending the District Charter to conflict with Section 603(a). Section 603(a) provides:
Nothing in this act shall be construed as making any change in existing law, regulation, or basic procedure and practice relating to the respective roles of the Congress, the President, the federal Office of Management and Budget, and the Comptroller General of the United States in the preparation, review, submission, examination, authorization, and appropriation of the total budget of the District of Columbia government.
“Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purposes.” Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985). Here, the text of both Sections 303(d) and 603(a) is clear—Section 603(a) is intended to be a limitation on the Council‘s amendment authority. The word “limitation” is generally defined to mean “something that controls how much of something is possible or allowed” or “the act of controlling the size or extent of something: the act of limiting something.” Merriam-Webster Dictionary, available at http://www.merriam-webster.com/dictionary/limitation (last visited May 18, 2014); see also Limitation, CONCISE OXFORD AM. DICTIONARY at 516 (2006 Ed.) (“a limiting rule or circumstance; a restriction“). The text is also clear that Section 603(a) does not make a distinction between the locally and federally funded portions of the District‘s budget, but instead refers to the “total” budget of the District, which is comprised of both components. Accordingly, “the most logical reading of the phrase ‘limitations specified in sections 601, 602, and 603’ in § 303(d) is that it treats the sections as a whole as limitations on the Council‘s authority, not just to the extent that they explicitly state they are ‘limitations.‘” Defs.’ MSJ at 15-16 (emphasis in original). And the most logical reading of Section 603(a) is that it prevents changes to the role of Congress and the President with respect to six areas related to the District‘s budget—preparation, review, submission, examination, authorization, and appropriation.
Where, as here, the statutory text is clear, there is no need for the Court to resort to legislative history. See, e.g., Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994); Barnhill v. Johnson, 503 U.S. 393, 401 (1992). However, the legislative history of the Home Rule Act confirms the plain meaning of Section 603(a) and demonstrates the flaw in Plaintiff‘s interpretation of the statute. See Hessey v. District of Columbia Bd. of Elections and Ethics, 601 A.2d 3, 8 n. 6 (1991) (en banc) (“The legislative history of the Self-Government Act makes clear that the Self-Government Act left in place the preexisting Congressional appropriations process for the District government.“). Though the Senate had passed several home rule bills in the years leading up to the enactment of the Home Rule Act, the House did not seriously consider such legislation until 1973. DePuy Amicus at 7. The initial bill drafted by the House District of Columbia Committee (hereinafter “Committee Bill“) included budget autonomy for the District; however, the Committee Bill faced considerable resistance, especially from Congressmen on the
The Committee substitute contains six important changes which were made after numerous conversations and sessions with Members of Congress and other interested parties. These changes clarify the intent of [the bill] and accommodate major reservations expressed since the bill was reported out.
Letter from Charles C. Diggs, et al. to Members of the House of Representatives (reprinted in 119 Cong. Rec. 33353 (Oct. 9, 1973)).
The main concession in the Committee Substitute Bill was the first change listed in the letter: “1. Budgetary process. Return to the Existing Line Item Congressional Appropriation Role.” Id. It was understood by home rule supporters in Congress that this concession was a necessary condition for the passage of any bill. DePuy Amicus at 9-10; see also id. Ex. A (Docket No. 28-1), Jack Kneece, Ford Insists Hill Run D.C. Budget, WASHINGTON STAR-NEWS, Oct. 16, 1973, at B-2 (quoting the Vice President—designate as saying that “[i]n my view, this particular provision of the bill is non-negotiable in the House-Senate Conference“); id., Ex. B (Docket No. 28-1), Jack Kneece, Diggs Ready to Deal on Home Rule Bill, WASHINGTON STAR-NEWS, Oct. 5, 1973, at B-1 (noting that Congressman Diggs was “prepared to continue detailed congressional oversight and control over the D.C. budget as a means of ‘reaching an accommodation’ with home rule foes“); id., Ex. C (Docket No. 28-1), Editorial, Home Rule at Last, WASHINGTON STAR-NEWS Oct. 11, 1973, at A-18 (describing the process required to get powerful Congressmen on the District Appropriations subcommittee to sign off on the Committee Substitute Bill and stating that “high price was ultimate congressional control over the city‘s budget“); id., Ex. F (Docket No. 28-1), Editorial, Home Rule: One More Step to Go!, WASHINGTON STAR-NEWS, Dec. 2, 1973, at G-1 (explaining the changes made by the Diggs Compromise, and stating that the Committee Substitute Bill “falls far short of what ... home rule advocates had sought” but struck “a balance between the conflicting desires of Congress to give District residents a meaningful further measure of control over their own affairs while at the same time retaining strong measures of congressional oversight“).5 As Congressman Thomas Rees explained during the floor debate on the bill, the budget process in the Committee Substitute Bill would not change the existing budget process for the District:
Really the relationship, if this legislation is passed, will be the same relationship that Congress now has with the District
of Columbia budget, that no money can be spent by the District of Columbia. ... This was the major compromise ... so that we have no change at all on budgetary control when we are discussing who will run the budget of the District of Columbia.
119 Cong. Rec. 33390 (Oct. 9, 1973).
The Committee Substitute Bill was eventually approved in the House after extensive debate. DePuy Amicus at 10. In addition to the reservation of active congressional authority over the District‘s budget, the Committee Substitute Bill also added Sections 603(a) and (e). These sections are entitled “Budget Process; limitations on borrowing and spending” and, critically, appear in a portion of the Home Rule Act that cannot be amended by a Charter Amendment. Id. at 11-12.
The introductory language of Section 603(a) mirrors the language of Section 602(b), which also begins with “[n]othing in this Act shall be construed as....”
The legislative history of Section 602 makes clear that Congress intended for the entire section, not just the enumerated limitations in Section 602(a), to serve as a prohibition on Council action. See H.R. REP. NO. 93-482 at 36-37 (Sept. 11, 1973). In describing the specific areas listed in Section 602(a) in which the Council could not legislate, the Report notes that “[t]his section lists specific prohibitions against the District Council‘s legislative authority, which include prohibitions against [the listed activities].” Id. at 36-37 (emphasis added). The Report further describes Section 602(b) as follows: “Subsection (b) prohibits the Council from exceeding its present authority over the National Zoological Park, the District National Guard, the Washington Aqueduct, the National Capital Planning Commission, or any other Federal agency.” Id. at 37 (emphasis added). Congress used the word “prohibition” to describe both sections despite the fact that Section 602(b) begins with the phrase “[n]othing in this Act shall be construed as,” and the legislative history leaves no doubt that the limitations in the section are intended to be prospective. Thus, the identical language in Section 603(a) must also be read as a prospective prohibition on the Council‘s authority. It is a well-known canon of statutory construction that the same phrase “appearing in several places in a statutory text is generally read the same way each time it appears.” Ratzlaf, 510 U.S. at 143. The legislative history of the Home Rule Act provides no basis for the Court to depart from this well-established canon of statutory construction.
Despite the very clear language of Section 603(a) and the legislative history that
The Council‘s argument, put simply, is not persuasive. Plaintiff‘s own counsel, V. David Zvenyach, has referred to Section 603(a) as a limitation, stating during testi-
mony before the Committee of the Whole on November 9, 2012, that of the ”limitations [in Section 303(d)], the most difficult hurdle is Section 603(a).” Docket No. 38-1, November 9, 2012 Testimony of V. David Zvenyach, Public Hearing on Bill 19-993, at 3 (emphasis added). He noted that there were two possible interpretations of Section 603(a):
It could be read as a bright-line prohibition of the ability of the Council to affect the budget process. Or it could be read as a declaration that Congress maintains ultimate authority with respect to the budget, and that the Home Rule Act as originally approved meant to leave the budget process intact. In my view, the latter reading is preferable and consistent with both the plain language and the overall purposes of the Home Rule Act.
Id. (emphasis in original). While the Council‘s reading of Section 603(a) may indeed be “preferable” from a policy perspective, it is inconsistent with the plain language of the statute, the rules of statutory construction, and the legislative history of the Home Rule Act. Section 603(a) is a limitation that prohibits the very change the Budget Autonomy Act purports to make.7
Defendants also argue that the Budget Autonomy Act violates Section 603(e) of the Home Rule Act and thus contravenes the limitations to its Charter amendment authority in Section 303(d). Section 603(e) provides that “[n]othing in this Act shall be construed as affecting the applicability to the District government of the provisions of ... the [ ] Anti-Deficiency Act.”
For the reasons set forth in Section III.B.1 supra, Section 603(e) is also a prospective limitation on the Council‘s authority to amend the District Charter pursuant to Section 303(d). Like Section 603(a), Section 603(e) is not included in the District Charter and cannot be amended. Though the Budget Autonomy Act only explicitly amends Section 446, it also effectively amends Section 603(e) by reading
cial review. See, e.g., Brown v. Gardner, 513 U.S. 115, 121 (1994) (noting that in the context of congressional approval of administrative regulations, “congressional silence lacks persuasive significance, particularly where administrative regulations are inconsistent with the controlling statute“) (internal quotation marks and citations omitted). Plaintiff points to dicta in the Supreme Court‘s denial of a stay in Jackson v. D.C. Bd. of Elections and Ethics, 559 U.S. 1301 (2010), as evidence of a contrary position. However, in Jackson the Court stated that while congressional inaction counseled in favor of denying a stay, those “considerations are of course not determinative of the legal issues.” Id. at 1302-03.
compliance with the Anti-Deficiency Act, which was previously included in Section 446, out of the Home Rule Act entirely.
Defendants argue that the Budget Autonomy Act can only be valid if the Court accepts Plaintiff‘s argument that Section 450 of the Home Rule Act, which establishes the D.C. General Fund, is an appropriation that satisfies the requirements of the Anti-Deficiency Act. Defendants urge the Court not to accept that interpretation because it is contrary to both the plain meaning of Section 450 and federal appropriations law. Defendants contend that Section 450 does nothing more than move funds from the Treasury to the D.C. General Fund subject to requirements in Sections 446 and 603(e) that those funds be appropriated and comply with the Anti-Deficiency Act. Thus, Defendants argue that the Budget Autonomy Act is unlawful.
All public funds are subject to the appropriations process. See Am. Fed. of Gov‘t Empls., AFL-CIO, Local 1647 v. Fed. Labor Relations Auth., 388 F.3d 405, 409 (3d Cir. 2004) (hereinafter “AFGE“). An appropriation has been made only “[i]f the statute contains a specific direction to pay and a designation of the funds to be used.” 1 Office of General Counsel, United States General Accounting Office, Principles of Federal Appropriations Law (3d ed. 2004) (hereinafter “Principles of Appropriations Law“) at 2-16.8 While there are
Congress can make exemptions to the appropriations requirement through various means. See AFGE, 388 F.3d at 409. Congress can establish a revolving fund, which is “replenished by moneys from the public [and] constitutes an on-going appropriation which does not have to be renewed each year.” United Biscuit Co. v. Wirtz, 359 F.2d 206, 212 (D.C. Cir. 1965) (internal citations omitted). Examples of such funds are a “stock fund” in the Treasury to fund military commissary purchases, id. and the Postal Service Fund, which establishes a revolving fund in the Treasury that “shall be available to the Postal Service without fiscal-year limitation to carry out the purposes, functions, and powers [of the Postal Service],”
Moreover, Congress may create a nonappropriated fund instrumentality (hereinafter “NAFI“), through which it makes the decision “not to finance a federal entity with appropriations.” See AFGE, 388 F.3d at 409. A NAFI is instead funded “primarily from [its] own activities, services, and product sales.” Id. (quoting
in the field of government appropriations.” Nevada v. Dep‘t of Energy, 400 F.3d 9, 16 (D.C. Cir. 2005) (internal quotation marks and citations omitted).
Cosme Nieves v. Deshler, 786 F.2d 445, 446 (1st Cir. 1986). The fact that an organization receives money from its own activities is not sufficient for designation as a NAFI; as “long as ‘under the [ ] authorizing legislation Congress could appropriate funds if necessary,’ appropriations are still required. Id. at 409-10 (quoting L‘Enfant Plaza Props., Inc. v. United States, 668 F.2d 1211, 1212 (Ct. Cl. 1982)). In determining whether a fund or entity is a NAFI, the Federal Circuit “has adopted a clear statement test,” pursuant to which funds should be treated as requiring an appropriation unless there is “a clear expression by Congress” to the contrary. Id. at 410 (internal quotation marks omitted).
Plaintiff argues that the Budget Autonomy Act is lawful because Section 450 is a permanent or continuing appropriation that meets the requirements of the Anti-Deficiency Act. Alternatively, the Council suggests that the creation of the D.C. General Fund took District generated revenues out of the public fisc, thereby obviating the need for appropriation. Pl.‘s MSJ at 20. Though Congress maintained what Plaintiff refers to as a “second-level requirement” that “expenditures out of the D.C. General Fund be affirmatively approved by Congress,” that requirement was located in the District Charter and, according to Plaintiff, was subject to amendment. Id. at 16.
The Council offers no statutory, legal, or other support for this novel theory, nor can the Court find any. While Section 450 “gave the District authority to collect and deposit local revenues, it did not give the District the ability to obligate or expend those funds.” Defs.’ Supp.
The D.C. General Fund also cannot be considered a NAFI or revolving fund that would constitute an appropriation for the purposes of the Anti-Deficiency Act. While Section 450 takes District generated revenues out of the Treasury and deposits them into the D.C. General Fund, nothing in that section (or elsewhere in the Home Rule Act) is a clear expression by Congress that the D.C. General Fund was not subject to appropriations. See L‘Enfant Plaza, 668 F.2d at 1212. Nor is there any indication in the Home Rule Act that Congress could not appropriate funds for the District if necessary. See id. The Home Rule Act in fact suggests the opposite. It is a clear statement that Congress intended the D.C. General
Fund to be appropriated. See
This Circuit‘s decision in Nevada v. Dep‘t of Energy, 400 F.3d 9 (D.C. Cir. 2005), mandates the conclusion that Section 450 does not constitute an appropriation. The Court considered whether Section 116 of the Nuclear Waste Policy Act,
an appropriation. Id. at 13. The Court held that the Nuclear Waste Fund did not constitute a continuing appropriation because another section of the statute made “expenditures from the Waste Fund, including [ ] grants, ‘subject to appropriations.‘” Id. In making this determination, the Court explained that it had found no authority to suggest that “a statute creating a funding source and ordering payment ‘subject to appropriations’ amounts to a continuing appropriation.” Id. at 14; see also id. (“[N]either Nevada nor we have identified any authority suggesting that a continuing appropriation exists when Congress creates a special fund but makes spending from it ‘subject to appropriations.’ “).
The Council argues that Nevada is inapposite because it involved a special fund in the Treasury of the United States and because the case did not arise under the Anti-Deficiency Act. Pl.‘s Reply at 6 n. 3. However, Plaintiff‘s attempts to distinguish Nevada fail. The Circuit held that a permanent appropriation is not statutorily created when another provision in the same statute makes funds subject to appropriations. The location of the fund is irrelevant. The D.C. General Fund, like the fund at issue in Nevada, has not been permanently appropriated because another section of the Home Rule Act, Section 446, requires that the Fund be appropriated. It still is, therefore, subject to the requirements of the Anti-Deficiency Act. Such a reading of Sections 450 and 446 also comports with the “broader principle that one should not lightly presume that Congress meant to surrender its control over public expenditures by authorizing an entity to be ... outside the appropriations process.” AFGE, 388 F.3d at 410. The Budget Autonomy Act, which removes the provisions in Section 446 that provide for compliance with the Anti-Deficiency Act, thus runs afoul of the limitations in Section 603(e) and the Anti-Deficiency Act.
3. Section 602(a)(3)
Defendants argue that the Budget Autonomy Act is invalid for the additional reason that it violates Section 602(a)(3) of the Home Rule Act, which places another limitation on the Council‘s amendment authority under Section 303(d). Section 602(a)(3) provides that the Council has no authority to “enact any act, or enact any act to amend or repeal any Act of Congress, which concerns the functions or property of the United States or which is not restricted in its application exclusively in or to the District.”
For the reasons explained in Section III.B.2 supra, the Budget Autonomy Act does not comply with the requirements of the Anti-Deficiency Act, and the Council‘s attempts to characterize the D.C. General Fund as a permanent appropriation fail. Because the Council cannot amend the District Charter to exempt the local portion of the District‘s budget from the Anti-Deficiency Act pursuant to the limitations in Sections 602(a)(3) and 603(e), the Budget Autonomy Act is unlawful by its terms
IV. Conclusion
Although the Council of the District of Columbia, the Mayor, and this Court are powerless to grant to the residents of the District of Columbia the full budget autonomy that they have demanded for almost forty years to spend their revenue collected from their local taxes and fees, the United States Congress and the President of the United States are—without a doubt—empowered to do so.
In view of the foregoing, the Court concludes that the Budget Autonomy Act is unlawful. Plaintiff‘s Motion for Summary Judgment is hereby DENIED and Defendants’ Cross Motion for Summary Judgment is hereby GRANTED.11 Mayor Vincent C. Gray, CFO Jeffrey S. DeWitt, the Council of the District of Columbia, its officers, agents, servants, employees, and all persons in active concert or participation with them who receive actual notice
SO ORDERED.
Derrick CARRINGTON, Plaintiff, v. UNITED STATES of America, National Association of Letter Carriers, AFL-CIO, Defendants.
Civil Action No. 12-1360 (ESH)
United States District Court, District of Columbia.
Signed May 19, 2014
Notes
The Council argues that this reading of Section 603(a)(2) would “gut [its] legislative authority” because it encompasses “any District law with a non-ministerial federal effect.” Pl.‘s Reply at 21. Plaintiff contends it would be prevented from cutting taxes or amending the criminal code, and that even the Initiative, Referendum, and Recall Charter Amendment Act of 1977 would be unlawful. Id. However, Plaintiff‘s dramatic reading of Section 602(a)(3) has no basis in law or fact. Cutting taxes would impact the total amount of District funds available for Congress to appropriate, but it would not alter its function in appropriating those funds. Nor would changing the criminal code alter the function of the U.S. Attorney in prosecuting crimes. Indeed, the District Charter already provides that the Council can amend the District‘s substantive and procedural criminal law subject to a 60-day, as opposed to 30-day, passive review period by Congress. See
The District of Columbia Court of Appeals came to the same conclusion in In re Crawley. There, the Court considered whether the Procurement Reform Amendment Act of 1998 (the District‘s false claims act) impermissibly transferred prosecutorial authority from the U.S. Attorney to the Office of the Attorney General. 978 A.2d at 609-10. The Court considered the legislative history of the Home Rule Act and determined that any law passed by the Council concerning the jurisdiction of the U.S. Attorney was to be understood as one that concerned the functions of the United States, and thus subject to Section 602(a)(3). Id. at 615. Likewise, the Budget Autonomy Act impermissibly affects a function of the United States.