East Oakland-Fruitvale Planning Council sued the Director of the Office of Economic Opportunity for declaratory judgment and injunctive relief. The district court dismissed the action on the ground that the complaint failed to state a claim upon which relief could be granted. East Oakland-Fruitvale Planning Council v. Rumsfeld,
I
The factual allegations of the complaint, to be accepted as true for the purposes of the motion to dismiss, are as follows:
The Council is a nonprofit corporation. It received a grant from OEO under section 232 of the Economic Opportunity Act, 42 U.S.C. § 2825, to conduct a research and pilot program in “advocacy planning.” The goal of the program was to organize community groups in the East Oakland and Fruitvale areas of the City of Oakland, California, into a
The Council operated successfully during its first year. Evaluations of its program by independent evaluators pursuant to section 233 of the Act, 42 U.S. C. § 2826, were favorable, and established that the program “was fully consistent with the provisions and in furtherance of the purposes” of the Act.
The Council applied to OEO for a grant of funds for a second year. The application was approved by the Director of OEO. It was then submitted to the Governor of the State of California pursuant to section 242 of the Act, 42 U.S.C. § 2834. 2 The Governor disapproved the grant. The Council entered into negotiations with representatives of the Governor’s office to determine whether the Governor’s objections could be satisfied. The Council “learned that the Governor’s basis of disapproval was ‘philosophical objections’ to the very nature of [the Council’s] program, i. e., advocacy planning for dealing with problems and concerns of the East Oakland-Fruitvale community.” Ultimately negotiations were terminated by the Governor’s representatives; the Governor’s disapproval was not withdrawn.
The Director’s representative at the negotiations reported to the Director, and recommended that he exercise his power under section 242 of the Act to override the Governor’s disapproval.
The Council asked the Director to hold a hearing on the matter of his reconsideration of the Council’s program in light of the Governor’s disapproval, to specify the issues presented, and to give the Council an opportunity to participate. These requests were denied.
Without conducting a hearing and without making a finding as to whether the Council’s program was consistent with the provisions and in furtherance of the purposes of the Economic Opportunity Act, the Director informed the Council that he would not override the Governor’s disapproval.
As the legal basis of its claim, the Council alleges that section 242 of the Act, 42 U.S.C. § 2834, requires the Director to reconsider a vetoed grant and either make a finding that it is not “fully consistent with the provisions and in furtherance of the purposes” of the Act, or override the Governor’s disapproval. The Council contends that its program is “fully consistent with the provisions and in furtherance of the purposes” of the Act, and that it has been informed by the Director that its program conforms in all respects to the Director’s overall plan established pursuant to section 232(b) of the Act, 42 U.S.C. § 2825(b). The Council concludes that the Director’s failure to make a favorable finding and override the Governor’s disapproval is arbitrary and unlawful. It also concludes that the Director’s denial of a hearing, specification of issues, and opportunity to participate is arbitrary and unlawful.
A declaratory judgment and injunctive relief are sought.
II
The Director moved to dismiss the complaint on the grounds, among others, that “Congress has vested in [him] unreviewable discretion with respect to whether or not to reconsider a Gover
The district court assumed that the Director had failed to take any action at all following the Governor’s disapproval, and that the complaint therefore presented the first and most extreme issue.
Whether the Director has such discretion is a question for the courts to decide. The statute does not bar judicial review, and there is no reason to suppose that Congress intended resolution of this threshold question of statutory construction to be “committed to agency discretion.” Citizens to Preserve Overton Park, Inc. v. Volpe,
The Director concedes that before he may override a governor’s veto of a proposed grant, he “must review that grant in light of the veto, and must give careful consideration to his understanding of the reasons for it.” He argues, however, that he may choose to accept a governor’s veto without giving the proposed grant any further consideration whatever.
The language of section 242 of the Act is essentially neutral. See note 2. It would permit the Director’s interpretation, but does not require it. The interpretation given the language by the Director in administering the 1 statute would be entitled to great weight, but it has never been explicitly stated and the acts from which it might be inferred are few and ambiguous.
The legislative history of the statute, however, strongly suggests that Congress intended the Director to reconsider every vetoed grant for a community action program in light of the provisions and purposes of the Act before deciding whether or not to override.
The Economic Opportunity Act of 1964 gave state governors the absolute right to bar grants for community action programs within their states; there was no provision that the Director might review and override a governor’s veto. See section 209(c), P.L. 88-452, 78 Stat. 508. When Congress was asked to extend the Act in 1965, strong objections were raised to the governors’ absolute power to veto grants for community action programs. To meet these objections, the power of the Director to reconsider a vetoed grant and override a governor’s disapproval was added to the statute.
The objections to the governor’s absolute power to veto grants for community action programs are summarized in the report of the Committee on Education and Labor of the House of Representa
To meet these objections, Congress, while retaining the governors’ right to disapprove community action grants within their respective states, shifted the ultimate power to allow or disallow such grants from the governors to the Director, and provided as a statutory standard for its exercise that the grant be consistent with the provisions and in furtherance of the purposes of the Act.
This statutory change would not accomplish its purpose if the Director were free to exercise the transferred power or not as he saw fit. Whenever the Director failed to perform his function of review, a governor would possess, in fact, the power Congress intended to deny him; and the means Congress adopted to assure that the ultimate power to disapprove community action programs would be exercised in accordance with the statutory standard, and not arbitrarily, coercively, or to defeat the policy and purposes of the Act, would be thwarted. 5
Consistent with this view, the House Report uses mandatory language in de
It is true that the next sentence of the report uses permissive language: “Where, however, after review of the facts the Director of the OEO makes the determination that the application is in fact fully consistent with the law, and with the purposes and policies of the act, these projects and programs
may
be permitted to go forward in spite of the Governor’s disapproval” (emphasis added). A Conference Committee report contains similar language, stating that when a program is disapproved by a governor, “the Director
could
reconsider it, and if he found it fully consistent with the provisions and in furtherance of the purposes of this act,
could
override the Governor’s disapproval.” H.R.Rep.No. 1061, 89th Cong., 1st Sess. 10 (1965) (emphasis added). The latter language led the district court to conclude that the Director is free to accept a governor’s veto without further consideration.
It must be remembered, however, that under the 1964 Act the governor’s veto power had been absolute: the Director could not review a vetoed program, the veto could not be overridden, the vetoed program could not go forward. The quoted language simply points out that under the amended statute these things now could occur, where before they could not.
Accordingly, we reject the Director’s view that a governor is free to veto a community action grant for any reason or for no reason at all, and that the Director is free to make an equally standardless decision to allow a governor’s veto to stand. We conclude that, under the amended statute, whenever a governor disapproves a community action grant, the Director is required to undertake an independent review of the grant against the statutory standard.
The contrary holding of the district court does not require reversal, however. In this court the Council no longer contends that the Director failed to reconsider the grant in light of the Governor’s veto. The Council now asserts only that the Director erred in his decision not to override the veto. 6
We therefore turn to the second ground upon which the Director moved to dismiss; that is, that he had “unreviewable discretion as to refusing to override the disapproval.”
III
This ground of the Director’s motion invokes the provision of the Administrative Procedures Act excluding agency action from judicial review “to the extent that” the agency action is “committed to agency discretion by law.” 5 U.S.C. § 701(a)(2). This “very narrow” exception to the general rule of reviewability is “applicable in those rare instances where ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’ ” Citizens to
Section 242 of the Economic Opportunity Act provides that the Director shall consider whether the vetoed program is “fully consistent with the provisions and in furtherance of the purposes” of the Act. See note 2.
This standard is hardly confining. On its face it would appear to leave a large area for the exercise of the Director’s judgment in allocating the agency’s resources.
When the Director establishes an overall plan for community action demonstration programs, as required by section 232(b) of the Act, and when he makes his initial selection of specific projects to implement this overall plan, he must act in a manner consistent with the provisions and in furtherance of the purposes of the Act. Yet the Council concedes that in performing these functions the Director exercises a discretion that is so wide as to be unreviewable.
The Council’s argument must be that, as applied to the reconsideration of a vetoed program under section 242 of the Act, this generalized standard somehow takes on a definite and precise meaning that narrowly confines the discretion of the Director.
The legislative history is to the contrary. Congress did not intend, as the Council seems to imply, that the Director was to be confined to a re-examination of the correctness of his initial decision to fund the vetoed project, on the basis of the information then available to him. Congress intended that a governor should be free to raise a wide range of objections to specific community action programs, based on such “knowledge, information, and insights on the wisdom or desirability of particular projects” as the governor might possess. H.R.Rep.No. 428, 89th Cong., 1st Sess. 14 (1965). 8 And the Director, in turn, was expected to give consideration to the governor’s views. 9
It does not follow, however, that no aspect of the Director’s action can be reviewed. Agency action is made unreviewable by 5 U.S.C. § 701(a)(2) only “to the extent” that it is committed to agency discretion. “Even under the committed-to-agency-discretion doctrine, partial review may be available for separable issues, as to which discretion or expertise is insignificant.” Saferstein, Nonreviewability: A Functional Analysis of “Committed to Agency Discretion,” 82 Harv.L.Rev. 367, 372 (1968). “When, after considering the relevant factors and balancing the institutional and individual interests, a court initially decides that an agency action is not reviewable in totof it should next inquire whether partial review is possible if limited to separable issues so structured that the balance between institutional and individual interests is more favorable to review. A factor which prevents overall review may not bar review of particular issues.” Id. at 395. See also Davis, Administrative Law (1970 Supp.) § 28.16 pp. 977-78.
An “all or nothing” approach to reviewability would, in specific cases, either be unfair to persons aggrieved by agency action, or impose an unwise burden upon the agency or the courts. Accordingly, separable issues appropriate for judicial determination are to be reviewed, though other aspects of the agency action may be committed to the agency’s expertise and discretion. 10
In the present case, the Director’s ultimate decision is not reviewable because the standard governing that decision includes elements of such breadth and vagueness that they are legally unenforceable. However, the statute imposes a number of limitations upon the scope of the Director’s discretion and the manner in which it is to be exercised that may be effectively enforced through judicial review without undue interference with the administrative process.
For example, as we have already ruled, the courts may hold the Director to his statutory obligation to reconsider a vetoed program even though the merits of the Director’s decision upon reconsideration are unreviewable. Similarly, the Council’s claim of entitlement to a specification of issues, a hearing, and formal findings in conjunction with the Director’s reconsideration raises procedural issues that are clear, specific, and separable from the merits and that are therefore judicially determinable. 11
Finally, we think the statute and its legislative history reveal a clear and specific limitation upon the scope of the Director’s discretion that may be judicially enforceable even though it may require limited inquiry into the substance of the Director’s decision-making.
The legislative history of section 242 indicates that Congress intended to confine the Director’s review of a vetoed program to a consideration of the merits of the specific program as a means of advancing the purposes and policies of the Act, and to exclude other considerations.
Congress provided the override power in part “to prevent Governors from using their veto power over antipoverty projects in such a way as to defeat the policy and purpose of the act.” H.R.Rep.No. 428, 89th Cong., 1st Sess. 14 (1965). The Director may sustain a governor’s veto “[w]here the Director finds reason, upon sound program grounds, for supporting a Governor’s disapproval.” Id. (emphasis added). Proponents in both Houses expressed the view that the override provision guaranteed that a project would be disapproved only on the basis of considerations relating to the wisdom and efficacy of the project in light of the purposes of the Act. 12
In view of this legislative history, the Director could not, as he suggests, sustain a governor’s veto on a ground wholly unrelated to the merits of the vetoed project — for example, in ex
There is no apparent reason why • a court could not, or should not, enforce such a clear and specific statutory limitation upon the scope of the Director’s discretion without entrenching upon the broad area reserved by the statute to the Director’s judgment and expertise. 13
The Council has failed, however, to plead an infringement of this specific limitation upon the Director’s discretion.
The nearest approach to such a charge is the Council’s allegation that the Governor based his veto on “ ‘philosophical objections’ to the very nature of the Council’s program, i. e., advocacy planning for dealing with the problems and concerns of the East Oakland-Fruitvale community.”
This is not an allegation that the Governor based his objections, or that the Director based his decision not to override, upon considerations extraneous to the Council’s program.
Perhaps it is the Council’s position that the Governor cannot challenge the Director’s choice of a type of program. We find nothing in the statute’s language or legislative history to support such a limitation. The Director may choose among broad approaches to the problem of organizing the poor, as well as among specific projects. Neither the language nor legislative history of the statute suggests a rule that the Governor may not base his veto upon objection to the “philosophy” underlying a project, or that the Director, may not weigh such a consideration in deciding whether to override. Such objections may have an important bearing upon the “wisdom or desirability” of a project, particularly if the project is an experimental one, involving a high potential for disruption and dispute within a community.
The Council’s general allegation that the Director acted arbitrarily, capriciously, and contrary to law adds nothing to the complaint. Schilling v. Rogers,
IV
Although the Council’s allegations of procedural deficiencies pleads a reviewable issue, it has no merit.
There is no requirement in the statute that a hearing be held or that other procedural safeguards be afforded. The Senate defeated a proposal that a gover
Of course, formal findings by the Director reflecting his reasons for overriding or sustaining a veto would be helpful, but the statute itself imposes no obligation upon the Director to make such findings; and if a court is to require findings, or a less formal explanation of the basis for the Director’s decision, as an aid to review
(see
Citizens to Preserve Overton Park, Inc. v. Volpe,
supra,
V
The parties and the trial court acted without the benefit of the Supreme Court’s decision in Citizens to Preserve Overton Park, Inc. v. Volpe, supra, and upon assumptions as to the scope of the Director’s discretion under section 242 that are contrary to our interpretation of the statute. We therefore vacate the judgment and remand to the district court to permit the Council to amend its complaint, if it desires to do so, and for such further proceedings, if any, as may then be appropriate.
Notes
. By an earlier order, the district court denied the Council’s motion for preliminary injunction on the ground that the Council had not “made a sufficient showing of irreparable injury.” The Council has not challenged this conclusion on appeal.
. 42 U.S.C. § 2834 (1970 ed.) provides:
In carrying out the provisions of this subchaptcr, no contract, agreement, grant, loan, or other assistance shall be made with, or provided to, any State or local public agency or any private institution or organization for the purpose of carrying-out any program, project, or other activity within a State unless a plan setting forth such proposed contract, agreement, grant, lonn, or other assistance 1ms been submitted to the Governor of the State, and such plan 1ms not been disapproved by the Governor within thirty days of such submission, or, if so disapproved, 1ms been reconsidered by the Director and found by him to be fully consistent with the provisions and in furtherance of the purposes of this subchapter.
. Appellant's counsel indicated to the trial court that this was the issue. In the course of the hearing below, the court said to appellant's counsel, “I think I understand that argument, and that’s a pretty telling argument, that he has done nothing. lie’s just let the Governor’s veto lie there, so that it stops the program, and he doesn’t do anything .... That’s your point, as I understand it.” Appellant’s counsel replied: “Yes, it is” (Tr. at 25).
. Sea also Sen.Rep.No. 582, 89th Cong., 1st Sess. 11-13 (1965). The same objections run through the floor discussion in both Houses. See, e. g., 111 Cong.Rec. 17626-27, 17923-24, 17927-29, 20558, 20655, 20660-62, 20667, 20881-82, 25128.
.
Compare
this court’s recent decision in Rockbridge v. Lincoln,
Two statutes were invoked. One provides that the Commissioner “shall have the sole power and authority” to appoint Indian traders and “to make such rules and regulations ns he may deem just and proper” regarding the kind, quantity, and price of goods to be sold. 25 U.S.C. § 261. The second states that persons trading with the Indians on any reservation should do so “under such rules and regulations ns the Commissioner of Indian Affairs may prescribe for the protection of said Indians.” 25 U.S.C. § 262.
The Commissioner contender!, and the district court held, that under these statutes whether to issue regulations, and what the regulations should provide, were matters committed to the Commissioner’s discretion, and hence not reviewable under the Administrative Procedures Act.
Examining the legislative history, the court noted that much of the congressional debate related to abuses and injustices that bad occurred because of unregulated monopolies in the Indian trading post system. The court concluded that Congress had authorized the Commissioner to issue regulations in order to end these abuses, and therefore intended that the Commissioner should exercise the authority given to him. Although the task of determining the specific content of the regulations was delegated to the Commissioner, the court held, “ [t] his does not mean that the Commissioner has unbridled discretion to refuse to regulate, but rather that he shall exercise discretion in deciding what regulations to promulgate . . . . ”
. In its opening brief on appeal, the Council states: “The Director can abuse his discretion in one of two ways: First, if he fails to make any review at all. Secondly, where there is no rational nexus between the information provided the administrator and his ultimate decision. It is the latter type of arbitrary action that the Director committed here.” Compare note 3.
. The Director’s contention that, under Ferry v. Udall,
. H.R.Rep.No.428 states that the provision establishing the governors’ power to veto and the Director’s power to override is an apt compromise. It permits the legitimate exercise of power by the Governor witli respect to programs going on within his State. It recognizes that Governors may have knowledge, information, and insights on the wisdom or desirability of particular projects. It recognizes that they should be in a position to address themselves to any problems those projects may raise under State law. It recognizes that Governors are especially competent to speak for the State as a whole so far as related State plans and programs are concerned. And it provides a method by which all of the knowledge, competence, and prestige a Governor may have can be effectively brought to bear.
. It is clear that a governor was expected to bring his objections to the attention of the Director, and that the Director’s review was to be “in the light of the comments by the governor, if any.” H.R.Rep.No.428, 89th Cong., 1st Sess. 14 (1965). The congressional debates likewise reflect a general understanding that, through exercise of the veto, an exchange of views would occur between the Director and the governor. See, e. g., 111 Cong.Rec. 20655 (1965) (remarks of Senator Javits). In addition, the final Conference report states that it was expected that regulations issued by the Director under § 242 would “include provision for informal hearings held by the Director at the request of the Governor of a State or other interested parties.” H.R.Rep.No.1061, 89th Cong., 1st Sess. 10 (1965).
. Scanwell Laboratories, Inc. v. Shaffer,
The decision in Rockbridge v. Lincoln,
supra,
Although the court recognized that the pertinent statutes, 25 U.S.C. §§ 261 and 262, invested the Commissioner of Indian Affairs with discretion to determine the specific content of regulations governing trading on Indian reservations, the court nonetheless held that the court could review the separable questions (1) whether the Commissioner had discretion to refuse to issue any regulations at all, and (2) whether the regulations issued satisfied the statutory requirement that they be “for the protection of said Indians.” The court said:
In sum, the legislative history does not support the contention that the regulations promised under §§ 261, 262 are wholly within the discretion of the Commissioner and thus immune from judicial review. The history demonstrates that the statutes in question were passed with a specific set of legislative objectives in mind and that the lawfulness of the Commissioner’s exercise of discretion— his decisions to regulate or not to regulate in any particular instance, as well as the particular mode of regulation chosen — is to be determined by reference to these objectives. [449 F.2d at 572 .]
. Moore-McCormack Lines, Inc. v. United States,
. Congressman Roosevelt stated that the language of the override provision made sure “that the veto must be within the concept of the hill and the rightness of the project.” 111 Cong.Rec. 17923 (1905). Senator Javits emphasized that the Director would be expected to override or not depending upon his convictions “about the program.” 111 Cong.Rec. 20655 (1965). Senator Yarborough, a member of the Conference Committee, said, “[T]he bill as finally agreed upon effectively curtails the power of Governors to frustrate the purposes of the war on poverty. If [a Governor] vetoes a project, the Director of the Office of Economic Opportunity will reconsider the application, and if he finds it to be consistent with the provisions and in furtherance of the purposes of the war on property, he shall override the Governor’s veto and the project will go forward.” 111 Cong.Rev. 25127 (1965).
. Policy reasons for not reviewing the merits of an agency’s discretionary decision
(see
Hi-Ridge Lumber Co. v. United States,
The element of discretion itself is absent, since, the Director is absolutely barred from considering factors’unrelated to the merits of the vetoed program.
The standard of review of the separable issue is easily applied. In most instances it would be sufficient to require the Director to state the reasons for his decision. The court could readily determine whether any of the factors upon which the Director relied were irrelevant to the merits of the project. Courts are experienced in determining relevance in a wide range of contexts. The technical agency expertise involved would be minimal.
Since the governor's veto is rarely exercised (15 times in the first three fiscal years of the program, see Sen.Rep.No.563, 90th Cong., 1st Sess. 8 (1967)), the number of cases likely to be brought to court, and the consequent drain on judicial resources, would be small. These few appeals would not appreciably hinder the overall administration of the poverty program.
There is no administrative review of the Director’s decision, and hence no review at all if judicial review is denied.
In sum, the burden imposed upon the Director and the courts by judicial review of the separable issue would be slight, and the rejected applicant’s need for review is great.
