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February 24, 1977

Edward F. CLARK, Jr., County Executive of the County of Hudson, et al., Plaintiffs,
Elliot RICHARDSON, Secretary of the Department of Commerce, et al., Defendants, The Board of Chosen Freeholders of the County of Middlesex, et al., Plaintiff-Intervenors

Lacey, District Judge.

The opinion of the court was delivered by: LACEY

This matter is before the court on plaintiffs' application for preliminary injunctive relief pursuant to Fed.R.Civ.P. 65(a).

 Plaintiffs, the Hudson County Executive, the Hudson County Board of Freeholders, and the County itself, filed a verified complaint and Order to Show Cause on December 29, 1976. Named as defendants were the then Secretary of Commerce, Elliot Richardson; the Assistant Secretary of Commerce for Economic Development, John W. Eden; the Regional Director of the Economic Development Administration, John E. Corrigan; the Department of Commerce; and the Economic Development Administration [E.D.A.]. Named as well were 21 state and local governments and governmental bodies of the State of New Jersey. The complaint sought injunctive relief preventing the federal defendants from disbursing, and preventing the state defendants from receiving, funds allocated to the state defendants rather than to plaintiffs, under the Local Public Works Capital Development and Investment Act of 1976, Pub.L.No. 94-369, 90 Stat. 999 [codified at 42 U.S.C. §§ 6701 et seq. (1976)] [Local Public Works Act or Act]. Plaintiffs further demanded that the six applications for awards submitted by Hudson County, but rejected by the several defendants, be reconsidered and that the applications be granted. *fn1"

 A hearing was held before this court on December 30, 1976 upon plaintiffs' application for a temporary restraining order. The application was denied for the reasons set forth at the hearing. On January 10, 1977 plaintiffs filed an amended complaint dropping as defendants any state defendants who were classified in the 30% category, which definition is explained infra, under the Local Public Works Act, see Section 108(d) of the Act, 42 U.S.C. § 6707(d), and adding as defendants all state or local governments for which preliminary approval of grants had been made as of December 30, 1976. See 41 Fed.Reg. 46420, et seq. (1976).

 On January 13, 1977 a further amended complaint was filed substituting the Board of Education of Little Ferry for that of the City of Passaic. A hearing on the application for preliminary injunction was held on January 26, 1977.

 Plaintiffs' complaint contains three Counts. In Count One plaintiffs charge federal defendants with "indifference to and violation of statutory standards set forth in 42 U.S.C. 6706 [and] 42 U.S.C. 6707" and "abuse of discretion" when Hudson County's six grant applications for construction projects were not approved.

 In Count Two plaintiffs allege that federal defendants approved the grant applications of certain unnamed state and local defendants whose approved projects require the further approval of the Environmental Protection Agency which is allegedly "not scheduled to meet within ninety (90) days next following the approval of the aforesaid grant applications by the Department of Commerce." Because the Act requires that grants may only be awarded to projects whose on-site labor can begin within 90 days of the project approval, federal defendants, plaintiffs charge, have violated Section 106(d), 42 U.S.C. § 6705(d), and abused their discretion.


 The Local Public Works Act was passed by Congress July 22, 1976. It provides for the authorization by the Secretary of Commerce of grants to state and local governments for local public works projects. Section 103(a), 42 U.S.C. § 6702(a). The Secretary is to act through the Economic Development Administration. Section 102(1), 42 U.S.C. § 6701(1). On August 19, 1976 the Secretary delegated to the Assistant Secretary for Economic Development, who is the chief executive officer of the E.D.A., the functions, powers, duties and authorities vested in the Secretary by the Act. Affidavit of George Karras, Director of the E.D.A., at 3 and Exhibit 2, attached thereto.

 Projects chosen under the Act were required to meet one proviso. Section 106(d), 42 U.S.C. § 6705(d), provides:

Grants made by the Secretary under this Act shall be made only for projects for which the applicant gives satisfactory assurances, in such manner and form as may be required by the Secretary and in accordance with such terms and conditions as the Secretary may prescribe, that, if funds are available, on-site labor can begin within ninety days of project approval.

 (emphasis added).

 The Act provides that the Secretary shall, not later than 30 days after enactment of the Act, prescribe rules, regulations and procedures necessary to carry out the Act. Section 107, 42 U.S.C. § 6706. These rules and regulations, the Act further states, shall "assure that adequate consideration is given to the relative needs of various sections of the country." Id.

 The Secretary must consider, among others, the following factors:

(1) the severity and duration of unemployment in proposed project areas, (2) the income levels and extent of underemployment in proposed project area, and (3) the extent to which proposed projects will contribute to the reduction of unemployment.


 The Secretary, according to the Act, must reach a final determination with respect to each grant application "not later than the sixtieth day after the date he receives such application." Id. Failure to make such final determination within the prescribed period "shall be deemed to be an approval by the Secretary of the grant requested." Id.

 Section 108(a) of the Act, 42 U.S.C. § 6707(a), provides for minimum and maximum amounts of grants for each state. Subsection (b) requires the Secretary to give priority to applications of local governments, defined in Section 102(3), 42 U.S.C. § 6701(3), as "any city, county, town, parish, or other political subdivision of a State, and any Indian tribe."

 Of the two billion dollars appropriated to carry out the program, 70% of the money was granted to state or local governments having unemployment rates for the three most recent consecutive months which are in excess of the national unemployment rate. Section 108(d), 42 U.S.C. § 6707(d). The remaining 30% was to be available for projects of state or local governments whose unemployment rates for the same three-month period were at or below the national rate. Id. This breakdown is what is referred to later as the 70-30 structure.

 Subsections (e) and (f) of Section 108, 42 U.S.C. § 6707, provide that the unemployment rates of applicants may at the request of the applicants be based on a community or neighborhood within their jurisdiction, or may be based on those adjoining areas from which the labor force may be drawn. Subsection (g) of the same section provides that applicants should (1) relate their requests to existing approved plans and programs and (2), where feasible, submit requests which will promote or advance long range plans.

 Regulations governing requirements and procedures under which applicants could apply and be considered for grants under the Act were published at 41 Fed.Reg. at 46420 et seq.

 On September 9, 1976, the public was advised of the availability of project application forms and where they could be obtained. Affidavit of George T. Karras, Director of Public Works of the E.D.A. at 4 and Exhibit 6 attached thereto. On October 18, 1976, notice was given to the public that the E.D.A. would begin accepting applications for grants on October 26, 1976. Karras Affidavit at 5 and Exhibit 10 attached thereto. On November 19, 1976, the E.D.A. advised the public that December 3, 1976, was the deadline for submitting applications and December 9, 1976, was the deadline for resubmitting applications which had initially been rejected. Karras Affidavit at 7 and Exhibit 11 attached thereto.

 By December 3, 1976, the E.D.A. had received nationally over 25,000 applications for the two billion dollars appropriated to carry out the Act. The applications sought grants totalling over 23 billion dollars. Over 1,338 applications were received from New Jersey alone, seeking over 1.46 billion dollars in grants. Karras Affidavit at 7.

 The State of New Jersey was allocated approximately $100,000,000, of which approximately $70,000,000 was earmarked for applicants in the 70% category. Of that $70,000,000, grants totalling $12,437,970 were tentatively proposed for final approval to three communities within Hudson County: Jersey City, Hoboken and Secaucus; 41 Fed.Reg. 56146 (1976).


 The Amended Complaint alleges jurisdiction under 42 U.S.C. § 6701 et seq., 5 U.S.C. § 701 et seq., 28 U.S.C. § 1331 and the Fifth Amendment of the Constitution.

 The Act does not, by its terms, confer, or, for that matter, restrict jurisdiction.

 While the circuits are divided on the question of whether Chapter 7 of the Administrative Procedure Act, 5 U.S.C. §§ 701-06, as amended by Pub.L. 94-574, 90 Stat. 2721, contains an independent grant of subject matter jurisdiction, [ see Sanders v. Weinberger, 522 F.2d 1167, 1169 and n.6 (7th Cir. 1975)], the Court of Appeals for the Third Circuit has held that it does not. See, e.g., Grant v. Hogan, 505 F.2d 1220, 1225 (3d Cir. 1974); Chaudoin v. Atkinson, 494 F.2d 1323, 1328-29 (3d Cir. 1974); Zimmerman v. United States, 422 F.2d 326, 330-31 (3d Cir.), cert. denied, 399 U.S. 911, 90 S. Ct. 2200, 26 L. Ed. 2d 565 (1970). This view was recently announced by the Supreme Court in Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977).

 Because there is no clear and convincing evidence of a legislative intent to preclude judicial review, this court will note that a presumption of reviewability of agency action exists. See Abbott Laboratories v. Gardner, 387 U.S. 136, 140-41, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967).

 Jurisdiction exists, pursuant to 28 U.S.C. § 1331 (1966), as amended by Pub.L. 94-574, 90 Stat. 2721 (1976), to review agency action adversely affecting a person regardless of the amount in controversy. Jurisdiction is, therefore, properly predicated upon this statute.

 Plaintiffs, in addition to seeking to enjoin federal defendants from disbursing grant funds and state defendants from accepting said funds, also seek an order directing the federal defendants to approve plaintiffs' grant applications. Plaintiffs' request, though not specifically stated, is in the nature of mandamus relief pursuant to 28 U.S.C. § 1361.

 Section 1361 provides that:

The district courts have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.

 It is well established by the courts that, in order for jurisdiction to lie in mandamus, a plaintiff must allege that the defendant owes him or her "a clear, ministerial and nondiscretionary duty." Mattern v. Weinberger, 519 F.2d 150, 156 (3d Cir. 1975), vacated, 425 U.S. 987, 96 S. Ct. 2196, 48 L. Ed. 2d 812 (1976); Richardson v. United States, 465 F.2d 844, 849 (3d Cir. 1972), rev'd on other grounds, 418 U.S. 166, 94 S. Ct. 2940, 41 L. Ed. 2d 678 (1974) (emphasis added). That rule was further defined by this circuit in Mattern, 519 F.2d at 156.

In order for mandamus to issue, a plaintiff must allege that an officer of the Government owes him a legal duty which is a specific, plain ministerial act "devoid of the exercise of judgment or discretion" [citations omitted]. An act is ministerial only when its performance is positively commanded and so plainly prescribed as to be free from doubt.

 (quoting Richardson v. United States, supra; see also Commonwealth of Pennsylvania v. National Association of Flood Insurers, 520 F.2d 11, 25-26 (3d Cir. 1975); Davis v. Shultz, 453 F.2d 497, 502 (3d Cir. 1971); Huntt v. Government of Virgin Islands, 382 F.2d 38, 45 and n. 3 (3d Cir. 1967).

 Plaintiffs, citing Mattern v. Weinberger, supra, assert that federal defendants owed them a legal duty under the Act and therefore Section 1361 is applicable. In Mattern, plaintiff, a recipient of disabled widow's benefits, brought a class action for a declaration that the procedure for recoupment of overpayments of benefits without a provision for a hearing until after the recoupment process had begun was unconstitutional. She alleged that the due process clause imposed an obligation upon the Secretary of Health, Education and Welfare to provide her with an oral hearing before adjusting her benefits. The court found that the duty alleged involved no element of discretion or room for judgment on the part of the Secretary.

 Under the same theory, plaintiffs here, as their demand in the complaint indicates, allege that the federal defendants owed them the duty of approving their applications for grants and no element of discretion was involved. This court would be hardpressed to find that assertion true under the circumstances of this case. Section 111 of the Act appropriates the sum of two billion dollars to carry out the purposes of the Act. One hundred million dollars is provided for distribution in New Jersey. Plaintiffs do not challenge or dispute this. The Secretary of Commerce was designated as the authorized federal executive official, acting through the E.D.A. to make grants under the Act. Congress did not provide the E.D.A. with specific instructions as to the distribution of the monies on the statewide level. If it had done so, then no discretion would have been involved and mandamus jurisdiction would exist. It did not, however. It provided the Secretary and the E.D.A. with three factors to consider in making their determination and left the actual method to them. With respect to whether the monies would be distributed based on these three factors alone or on a 70-30 scale (see discussion, supra), as Congress had specifically provided for on the national level, the statute is silent. The E.D.A. used within the states the 70-30 scale, presumably based on the same rationale used by Congress for the national level. It could have chosen an 80-20 scale, or a 90-10 or even a 100% reliance on unemployment rates above the national average.

 How the three factors together would be used in the evaluation method was also left to the Secretary. Plaintiffs may argue that the scale could have been otherwise formulated to better accomplish the purposes of the Act, that the application of the scale was erroneous, or that the valuation of the factors, such as the logarithm formula or benchmark system, should have been different; but such arguments go to the merits of the case. At this point it seems that those determinations on the part of the Secretary and the E.D.A. were within the defendants' discretion. Congress, through its omissions and its grant of authority, placed these decisions squarely within the discretion of the Secretary of Commerce. Section 107, 42 U.S.C. § 6706, provides that "[the] Secretary shall . . . prescribe those rules, regulations, and procedures (including application forms) necessary to carry out this Act."

 Plaintiffs then assert that

the fact that discretion may exist in certain areas does not permit disobedience to the initial and mandatory directives of the Public Works Employment Act, nor does it prohibit the court to order mandatory relief to require the federal defendants to exercise permissible discretion within the confines of the Act.

 Plaintiffs' Brief at 21. Plaintiffs rely on the holding in Pennsylvania v. National Association of Flood Insurers, supra, in their argument as to permissible discretion. There the state, on its own behalf and on behalf of its citizens, brought an action against the Secretary of Housing and Urban Development, among others, for mandamus and injunctive relief and for damages for its failure to publicize the availability of flood insurance prior to the occurrence of the 1972 and 1973 floods. The statute under which plaintiffs sued, 42 U.S.C. § 4020, stated that "[the] Secretary shall from time to time take such action as may be necessary in order to make information and data available to the public, and to any State or local agency or official, with regard to -- (1) the flood insurance program, its coverage and objectives." The court found that, while Section 4020 did contain language of discretion, the discretion pertained only to the time and manner of acting. 520 F.2d at 26-27. The first step, that of evaluating the necessity of disseminating information, called for exercising discretion and, the court held, mandamus may issue to require its exercise. The court cautioned, however, that the "manner in which the discretionary act is to be performed is not to be directed by the court." Id. at 27; see also McQueary v. Laird, 449 F.2d 608, 611 (10th Cir. 1971).

 In the case at bar, plaintiffs, I find, are essentially requesting that the manner in which the federal defendants perform their discretionary acts is to be directed. I have already found that much of the decision-making as to the evaluation of the applications is within the discretion of the Secretary. This discretion is more than just permissible and cannot be considered ministerial. It is plain that Congress authorized the Secretary of Commerce and the E.D.A. to determine the method of testing applications and to make the ultimate determination of approving the grants on the basis of the tests. Each application had to be separately screened and evaluated ...

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