The opinion of the court was delivered by: BROTMAN
This is an action by three local school boards to compel the United States Department of Agriculture and the New Jersey Department of Education to reimburse their schools under the National School Lunch Act for nutritionally adequate lunches provided by the schools but consumed by the students at their homes. Defendants contend they cannot subsidize the schools because the Act allows reimbursement only for lunches consumed on school grounds.
I. Factual and Procedural Background
The district of the plaintiff Riverton School Board is one square mile in size with a single school situated in the center of the district. All students have always walked to and from school, and have always gone home for lunch. There are no funds budgeted to add a cafeteria or kitchen to the school, which was built around 1890. The take-home lunch program, in which meals are brought in from another kitchen, was initiated in September 1976 after parents indicated they wished their children to continue to come home for lunch as they always had done. Twice a year the District's Administrative Principal personally contacts the parents of children receiving free or reduced price lunches to insure that these children arrive home and consume the lunches themselves.
At the two elementary schools in the Audubon District, pupils have also traditionally gone home for lunch as the schools have no cafeteria or kitchen facilities. The students live no more than three-quarters of a mile from their schools. The take-home program began in January 1978.
The Haddon District began its take-home program in February 1977, and was in fact reimbursed by the Department of Education for seven months. Take-home lunches prepared elsewhere are provided for all children in four elementary schools; in the fifth elementary school about half of the children are allowed to remain in school to eat their noon meal since they are bussed in from a remote area of the township. No school has a cafeteria or kitchen, and students at the fifth school eat lunch in that building's multipurpose room.
Neither the state nor federal government contends that these take-home lunches fail to meet applicable nutrition standards.
Under the National School Lunch Act, 42 U.S.C. § 1751 Et seq., federal financial assistance is given to states to help schools defray the costs of serving lunches to school pupils. States participating in the program enter into written agreements with the United States Department of Agriculture (USDA), and match each federal dollar with three state dollars. The states are funded by a formula which depends, in part, on the number of school children provided lunches. The combined funds are distributed by the states to local school boards. Children from needy families are eligible for free or reduced price lunches under the program.
Federal money is available for purchase of food service equipment. 42 U.S.C. § 1754. However, under USDA regulations, income from a lunch program may not be used to purchase land, construct new buildings or alter existing ones. 7 C.F.R. § 210.7(b) (1978).
While each plaintiff entered into agreements with the New Jersey Department of Education, which administers the School Lunch Act for the state, the Department has refused to reimburse the districts. It has also asked the Haddon Township Board to repay the state funds paid to the Board for lunches served between February and October 1977.
By letter dated August 12, 1977, Lewis B. Straus, the Administrator of the Food and Nutrition Service, the USDA agency administering the Lunch Act, requested a legal opinion on the Riverton program from Sarah C. Weddington, USDA General Counsel. On December 7, 1977, John A. Harris, Assistant General Counsel, sent Straus a two-page opinion letter briefly analyzing the legal issue and concluding: "In our opinion, there is no authority in the National School Lunch Act for payment of claims for reimbursement for take-home lunches." This letter was forwarded to the USDA regional office on December 21, and apparently then brought to the attention of state officials.
Plaintiffs have sued the USDA, state Department of Education and the agencies' respective officers for monetary, declaratory and injunctive relief. Plaintiffs ask the court to hold that the School Lunch Act does not require in-school consumption of meals, that the two agencies cannot so require, and accordingly to order the state to reimburse the plaintiffs for meals previously served and those which will be served in the future.
Jurisdiction is asserted under 28 U.S.C. § 1331 because of the presence of questions of federal statutory interpretation.
Plaintiffs' cause of action against the USDA and Secretary Bergland is based on review of final agency action under § 10(a) of the Administrative Procedure Act (APA), 5 U.S.C. § 702. The cause of action against the Department of Education and Commissioner Burke is based on common law breach of the written agreements between the state and school boards, and also their failure to adhere to the terms of the Act.
As no material facts are at issue, all parties have moved for summary judgment, Fed.R.Civ.P. 56. Defendants' primary argument is that the School Lunch Act prohibits reimbursement for take-home meals. Plaintiffs contend that the Act requires funding of such meals. Alternatively, the school boards argue that § 4 of the APA, 5 U.S.C. § 553, required the federal agency to provide notice of the proposed rule in the Federal Register and an opportunity for interested persons to comment, and that the agency failed to follow these rulemaking procedures before the December 1977 opinion letter was issued. Defendants counter that this ruling was interpretative, and therefore exempt from the § 553 requirements. See § 553(b)(A).
The federal defendants also contend that the agency decision is not ripe for review, and the state defendants further argue, in a motion to dismiss, Fed.R.Civ.P. 12(h)(3), that plaintiffs have failed to meet the $ 10,000 jurisdictional amount. The court will first consider the jurisdiction and ripeness issues before turning to the questions of agency procedure and statutory interpretation.
The state defendants, noting that the complaint fails to allege jurisdictional amount, maintain that the suit against them must be dismissed for lack of subject matter jurisdiction. Under a 1976 amendment to 28 U.S.C. § 1331(a), the $ 10,000 jurisdictional amount is no longer required for actions brought against an agency of the United States or an officer thereof. Pub.L. No. 94-574, § 2, 90 Stat. 2721 (1976). But jurisdictional amount is still required for claims against state officials and agencies.
Plaintiffs have not sought to amend their complaint to allege a jurisdictional amount, nor is there evidence in the record conclusively demonstrating that more than $ 10,000 is at stake for each plaintiff. However, the complaint will not be dismissed for failure to plead amount in controversy, Schlesinger v. Councilman, 420 U.S. 738, 744 n. 9, 95 S. Ct. 1300, 43 L. Ed. 2d 591 (1975), because the court finds that the claims against the state can be heard under the doctrine of pendent party jurisdiction.
The doctrine of pendent jurisdiction allows a federal court to hear a claim lacking an independent jurisdictional basis where it is brought in conjunction with a significant claim that is properly based, and the two claims "derive from a common nucleus of operative fact" and "are such that (a court) . . . would ordinarily be expected to try them . . . in one judicial proceeding . . . ." United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966). The instant litigation clearly meets this test.
The Gibbs court was concerned with constitutional power
to hear a pendent claim between the same parties. But in a more recent case involving an additional claim against an additional party a pendent party the Supreme Court held that even where there is constitutional power to hear the additional claim, a trial court must also determine that the pendent party claim is within the statutory jurisdiction of the court. Aldinger v. Howard, 427 U.S. 1, 96 S. Ct. 2413, 49 L. Ed. 2d 276 (1976).
In Aldinger, the plaintiff asserted a claim based on 42 U.S.C. § 1983, with jurisdiction pursuant to 28 U.S.C. § 1343(3), against county officials. She also asserted a similar claim against the county itself, which was wholly grounded on state law as the county could not be sued under § 1983.
The Court held that even if the Gibbs test could be met, pendent jurisdiction over the county would be beyond the statutory grant of § 1343(3). See also Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365, 98 S. Ct. 2396, 57 L. Ed. 2d 274 (1978).
While declining to extend jurisdiction in the case before it, the Court limited its holding:
There are, of course, many variations in the language which Congress has employed to confer jurisdiction upon the federal courts, and we decide here only the issue of so-called "pendent party" jurisdiction with respect to a claim brought under §§ 1343(3) and 1983. Other statutory grants and other alignments of parties and claims might call for a different result. When the grant of jurisdiction to a federal court is exclusive, for example, as in the prosecution of tort claims against the United States under 28 U.S.C. § 1346, the argument of judicial economy and convenience can by coupled with the additional argument that Only in a federal court may all of the claims be tried together. 427 U.S. at 18, 96 S. Ct. at 2422.
The legislative history of the 1976 amendment to § 1331, allowing suits against the federal government for less than $ 10,000, indicates that pendant party jurisdiction in this case would be consistent with the intent of the statute. The House Report accompanying S. 800, which became Pub.L.No.94-574, states:
The factors relevant to the question whether a Federal court should be available to a litigant seeking protection of a Federal right have little, if any, correlation with the minimum jurisdictional amount.
Thus, as Assistant Attorney General Scalia in his comment in behalf of the Justice Department concluded:
. . . the existence of monetary damages in cases involving agency action is an erratic factor to begin with, not necessarily related to either the private or public importance of the issue involved . . . the "amount in controversy" provision of section 1331 is seen to have a very limited and virtually irrational application, at least as applied to judicial review of administrative action.
H.R.Rep. No. 94-1656, 94th Cong., 2d Sess. 15, Reprinted in 1976 U.S.Code Cong. & Admin.News, pp. 6121, 6135.
This statement indicates that the amendment was intended to extend a federal forum to cases where a non-federal defendant is needed to fully adjudicate the consequences of federal agency action. This would be particularly appropriate where, as here, the claim against the non-federal party presents similar federal questions.
This result is further supported by § 3 of Pub.L. No. 94-574, which amended 28 U.S.C. § 1391(e) to provide venue in a single district for a suit against both federal officials and private parties. It would appear that "Congress wanted to grant this sort of jurisdiction to federal courts." Aldinger, 427 U.S. at 17, 96 S. Ct. at 2421.
In an analogous case, Judge Coolahan of this district found that Congress' grant of admiralty jurisdiction, 28 U.S.C. § 1333(1), extended to pendent party state law claims involving the same nucleus of fact. He noted that since admiralty jurisdiction is exclusively in federal court, only in that forum could all claims be tried together. Morse Electro Products Corp. v. S. S. Great Peace, 437 F. Supp. 474, 485 (D.N.J.1977).
This court is also guided by two cases decided before Aldinger but involving similar facts as the instant case. In Jacobson v. Atlantic City Hospital, 392 F.2d 149 (3rd Cir. 1968), the Court of Appeals allowed a plaintiff to join his diversity claims against three defendants in one action though one claim did not involve more than $ 10,000, as required by 28 U.S.C. § 1332(a).
Of particular relevance is the case of Almenares v. Wyman, 453 F.2d 1075 (2nd Cir. 1971), Cert. denied, 405 U.S. 944, 92 S. Ct. 962, 30 L. Ed. 2d 815 (1972). There plaintiffs sued state and local officials alleging that welfare termination procedures violated the due process clause and federal regulations. The damages sought by each plaintiff did not exceed $ 10,000. However, the constitutional claim, asserted against the state official only, could be brought under 28 U.S.C. § 1343(3), and the plaintiffs relied on pendent party jurisdiction to assert the claim of breach of federal regulations against the local official. Judge Friendly, writing for the panel, indicated that § 1343(3) vested the court with authority over the pendent as well as the constitutional claim.
In his treatise, Professor Moore states that Almenares is still "eminently sound" after the Aldinger case. 3A J. Moore, Federal Practice P 20.07(5.-1) at 20-80 (1978). He adds that a congressional intention to force plaintiffs to split claims based on federal law between state and federal courts because ...