Federal Circuits, D.C. Cir. (September 12, 1977)
Docket number: 75-2088
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US Code - Title 22: Foreign Relations and Intercourse - 22 USC 1623 - Sec. 1623. Claims
US Code - Title 28: Judiciary and Judicial Procedure - 28 USC 1331 - Sec. 1331. Federal question
US Code - Title 29: Labor - 29 USC 159 - Sec. 159. Representatives and elections
U.S. Code - Title 5: Government Organization and Employees - 5 USC 706 - Sec. 706. Scope of review
U.S. Supreme Court - Andrus v. Charlestone Stone Products Co., 436 U.S. 604 (1978)
U.S. Supreme Court - Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986)
Jack Lipson, Washington, D.C., with whom Rosalind C. Cohen, Washington, D.C., was on the brief for appellant.
Barbara L. Herwig, Atty., Civ. Div., Dept. of Justice, Washington, D.C., with whom Rex E. Lee, Asst. Atty. Gen., Earl J. Silbert, U.S. Atty., and Ronald R. Glancz, Atty., Civ. Div., Dept. of Justice, Washington, D.C., were on the brief, for appellees.Before McGOWAN, ROBINSON and WILKEY, Circuit Judges.Opinion for the Court by SPOTTSWOOD W. ROBINSON, III, Circuit Judge.SPOTTSWOOD W. ROBINSON, III, Circuit Judge:This deceptively difficult case, like Melong v. Micronesian Claims Commission,1 decided today, arises under the Micronesian Claims Act of 1971,2 which sets up a fund for compensation of losses incurred by Micronesians during World War II and establishes the Commission as the agency to administer the fund. Appellant Ralpho, a claimant, brought suit in the District Court alleging that his right to a fair hearing was abridged by the Commission's reliance upon "secret" extra-record evidence in determining the amount to be awarded him.3 Ralpho sought mandatory, injunctive and declaratory relief for himself and on behalf of those similarly situated.Without passing on the propriety of class litigation,4 the District Court dismissed Ralpho's action for lack of subject matter jurisdiction. The sole basis for the ruling was a provision5 of the Act advanced as a prohibition on judicial review of any action the Commission might take. Because we conclude that this provision does not foreclose review6 of the constitutional issue appellant presents,7 or narrowly limited consideration of the statutory transgression he alleges,8 we reverse the judgment of dismissal and remand the case to the District Court with instructions on further procedures.I. FACTS AND PRIOR PROCEEDINGSMicronesia is the generic term covering a large number of small islands scattered over vast stretches of the South Pacific. During World War II, Japanese9 fortifications in Micronesia were targets of a major American offensive. Squarely in the path of the onslaught, on the island of Jaluit, was Ralpho's house. A few years previously Ralpho, who had been a carpenter for a Japanese firm operating in the islands, had built the house himself with the aid of his family, using materials purchased at a discount from his employer. The house and the personalty in it were totally destroyed by American bombardment of the island.10American forces ultimately secured Micronesia and used the islands as staging areas for subsequent operations against Japan. Much land and some personal property were expropriated for American military use. The islands continued de facto in American possession until 1947, when the United Nations designated Micronesia as a Trust Territory and the United States as its administrator.11 In accepting trusteeship, the United States agreed to discharge certain responsibilities to the Micronesian populace12 and to abide by Chapter XII of the United Nations Charter,13 which established the International Trusteeship System.In their final treaty of peace, the United States and Japan undertook another "duty," binding themselves in principle to compensate those Micronesians who, like Ralpho, had suffered as a result of the hostilities.14 More than a decade of diplomatic intractability, however, prevented principle from becoming practice.15 The truculence of the two powers obscured the equities of the Micronesian claims to compensation, and negotiations broke off until the Trusteeship Council of the United Nations issued a strongly worded suggestion that the United States and Japan resume them to fulfill their commitment to the islanders.16 Finally, in 1969, the two countries effected a compromise by an exchange of diplomatic notes.17 Each disclaimed legal liability for injuries visited upon the Micronesians during the war,18 but agreed to contribute ex gratia the equivalent19 of $5 million to a fund, to be administered by the United States as trustee, for the satisfaction of all Micronesian "presecure" claims those arising before the islands were secured to the United States.20Two more years of waiting followed while Congress considered various plans for administering the fund. After several false starts, Congress enacted the Micronesian Claims Act of 1971.21 The Act established a five-member Micronesian Claims Commission22 to distribute both the presecure fund under Title I and, under Title II, a fund of $20 million for the satisfaction of certain "post-secure" claims against the United States.23 The Act also imposed a strict timetable: All claims were to be filed within one year24 and the Commission was to wind up its affairs no later than three years after the filing deadline.25 To promote this degree of expedition, the Commission was required to give extensive publicity to its activities26 and to provide assistance to Micronesians in preparing claims.27 Initial decisions were to be made on the basis of the claimant's filing,28 and a hearing was to become available only upon request of a claimant dissatisfied with the initial award.29 Since the $5 million fund was intended to satisfy all presecure claims, if necessary by proration30, payment might be delayed in the discretion of the Secretary of the Interior,31 and no one would receive payment who had not executed a full release to the United States and Japan for any alleged liability on the claim.32 Section 2020 of the Act provided additionally thatany such settlements made by such Commission and any such payments made by the Secretary (of the Interior) under the authority of title I or title II . . . shall be final and conclusive for all purposes, notwithstanding any other provision of law to the contrary and not subject to review.33During its early work in Micronesia, the Commission was alerted to the difficulty of determining the value that Micronesian properties had in the early 1940's. This difficulty was partly attributable to the lamentable passage of time between the war and the creation of the Commission, but it was also a consequence of the primitive economy of Micronesia under Japanese mandate,34 much of which was conducted on a nonmonetary barter basis. To facilitate disposition of claims, then, the Commission conducted interviews and examined records of various sorts in order to get a composite picture of the average wartime values of goods and services in Micronesia.35 The results of this survey were assembled in a guide about 40 pages in length, resembling a price list, which was frequently updated and expanded as the need arose.36 In its 1973 annual report, the Commission explained that the study was consulted "in the absence of better evidence" on the issue of value and that sparse presentations by claimants often made such consultation necessary.37With the assistance of an English-speaking representative, Ralpho filed a claim for the destruction of his house. The only information in the filing that could have given the Commission a clue to its value was Ralpho's estimate of $234.40 as the amount of damage38 and his statement that the structure was 32 by 34 feet in size.39 The Commission's August 15, 1973, award, set out in pertinent part in the margin,40 declared that the Commission had made the study and that, "upon consideration of the record, including the Commission's study," Ralpho was entitled to $370. In the study, the value of a "Trukese" style house was listed as 34 cents per square foot,41 and at that rate Ralpho's house was worth $369.92.Ralpho requested a hearing and thereafter, on January 7, 1974, his counsel42 asked that the value study be made available for inspection and copying under the Freedom of Information Act.43 This request the Commission's chief counsel refused.44 At the hearing on January 17, Ralpho testified that the materials with which the house was constructed, which he purchased from his employer for $210.96, would have cost $234.40 if bought elsewhere. He estimated the value of the family labor used at $86.73. Another witness by stipulation an expert carpenter, testified that in 1940 Ralpho's house would have cost $656.32 to build.45 The Commission's post-hearing award merely recited the evidence and gave Ralpho $298 for the house.46 Thereafter, the value study was released to Ralpho's counsel47 and Ralpho moved for reconsideration, but that request was denied.48This litigation then commenced. The gravamen of Ralpho's complaint is that the Commission's reliance on the "secret evidence"49 in the value study without affording Ralpho the opportunity to examine and rebut it is a violation of due process, of the Commission's own regulations, of the law of the Trust Territory, and of the United States' obligation under the United Nations Charter and the Trusteeship Agreement.The District Court dismissed the action, evidently for lack of subject matter jurisdiction since it construed Section 2020, the aforementioned finality provision of the Micronesian Claims Act,50 to preclude review. Thus the primary issue on appeal is whether judicial relief is available to Ralpho and, if so, on what basis it may be afforded. We need not address the hydra-like array of possibilities51 that he suggests, for we find that Section 2020 does not "extend"52 to preclude review53 of all the theories he advances.II. REVIEWABILITYNeither party contests characterization of the Micronesian Claims Commission as an "agency" within the coverage of the Administrative Procedure Act, and we think that characterization is correct.54 The Commission's main contention is that the legislation of which it is a creature precludes any judicial review of its actions, no matter how offensive to the statute or to the Constitution. This position must be evaluated by the Administrative Procedure Act, which, in general, invites judicial scrutiny of the broadest gauge.55 That invitation is qualified only "to the extent that . . . statutes preclude judicial review,"56 thus requiring courts to ascertain the degree to which Congress may fairly be said to have contemplated that the sole check on bureaucratic activity would be "the self-restraint of the executive branch."57 In this task, as in others involving divination of congressional intent, we must avail ourselves of the full arsenal of aids to construction, for "what is implicit is as much a part of a statute as what is explicit."58Recourse to canons of construction, statutory history and common sense is no less necessary when a statute's terms appear superficially to preclude review than when they are silent on that subject.59 As the Supreme Court has noted in this context, "(e)xamples are legion where literalness is out of harmony either with constitutional requirements . . . or with the Act taken as an organic whole."60 Interpretation of finality language should be guided not only by the "interplay of policy, statute, and regulation,"61 but also by the recognition that unreviewability gives the executive "a standing invitation to disregard . . . statutory requirements and to exceed the powers conferred";62 put another way, we ought not lightly to infer that Congress desired such a result.63 This lesson learned, we must inquire as to the extent that Section 2020 of the Micronesian Claims Act64 affects judicial review of the Commission's actions in Ralpho's case.A. Reviewability of Constitutional QuestionsRalpho claims, inter alia, that the Commission's putative reliance on evidence to which he had neither access nor opportunity to address violates the Due Process Clause of the Fifth Amendment. At the outset, we note that whatever the merit of this position, that constitutional provision binds the Commission and Ralpho is entitled to demand its protections.65 We are mindful that Article IV of the Constitution confers upon Congress broad power66 to "make all needful Rules and Regulations respecting the Territory . . . belonging to the United States,"67 and that the extent to which that power may be used to deny constitutional safeguards to those not within the United States but under its dominion is a matter of some controversy.68 We need not in this case choose among the conflicting interpretations of Congress' Article IV powers, however, because even under the most restrictive standard69 it is settled that "there cannot exist under the American flag any governmental authority untrammeled by the requirements of due process of law . . . ."70 Of course, the United States does not hold the Trust Territory in fee simple, as it were, but rather as a trustee;71 yet this is irrelevant to the question. That the United States is answerable to the United Nations for its treatment of the Micronesians does not give Congress greater leeway to disregard the fundamental rights and liberties of a people as much American subjects as those in other American territories.72 We thus find the actions of the United States in the Trust Territories constrained by due process.The question, then, is whether the Micronesian Claims Act suffers a court to hearken to Ralpho's due process complaint. Important tenets adjure needless determination of constitutional issues73 and, as a corollary, command interpretation of legislation to avoid constitutional doubts as well as constitutional encounters if it is fairly susceptible of such a construction.74 These admonitions are to be observed when a statute is advanced to outlaw judicial review of action trenching on constitutional rights, as the Supreme Court's holding in Johnson v. Robison75 demonstrates. There challenge was made to the facial validity of a veterans' benefit statute, and the Government urged that judicial consideration of the statute's constitutionality was barred by a provision76 purporting to render all administrative decisions under the statute final and unreviewable. The Court noted that a construction of the finality provision that foreclosed inquiry into the constitutionality of the challenged legislation would raise serious question as to the constitutionality of the finality provision itself.77 Consequently, the Court looked to see whether Congress intended an interpretation of such dubious validity. Finding no " 'clear and convincing' evidence of congressional intent (as is) required by this Court before a statute will be construed to restrict access to judicial review" of constitutional questions,78 the Court construed the statute to permit judicial inquiry into its consonance with the Constitution.79In our case, Ralpho claims not that the Micronesian Claims Act is unconstitutional, but that the Commission's action under it denied him due process of law. This difference is urged by the Commission as a distinction.80 But if legislation by Congress purporting to prevent judicial review of the constitutionality of its own actions is itself constitutionally suspect, legislation that frees an administrative agency from judicial scrutiny of its adherence to the dictates of the Constitution must pose grave constitutional questions as well. Not only is it daring to suggest that Congress, though subject to the checks and balances of the Constitution, may create a subordinate body free from those constraints; it also beggars the imagination to suggest that judicial review might be less crucial to assuring the integrity of administrative action than it is to make certain that Congress will operate within its proper sphere.81 If the courts are disabled from requiring administrative officials to act constitutionally, it is difficult to see who would perform that function. We say that a statute purporting to foreclose judicial redress of constitutional violations allegedly perpetrated by an administrative agency must be construed in accordance with the standards articulated in Johnson v. Robison.82We must, then, ascertain whether Congress intended the finality provision of the Micronesian Claims Act to cut off judicial review of constitutional claims. A reading of the legislative history of the Act discloses that if Congress took such a drastic step, it did so with marked silence as to its purpose. The first several bills introduced to implement the 1969 Japanese-American agreement to compensate the Micronesians dealt only with presecure claims. These bills tracked previous foreign-claims legislation,83 in most particulars, but contained no language restricting review.84 Two later versions appended to the presecure-claims provisions a second title empowering the Commission to settle and pay post-secure claims arising up to July 1, 1951. That title contained a proviso that "any such settlements . . . and any such payments . . . under the authority of this title " shall be final.85 Only in the very last version of the bill was that language, still appearing in Title II, extended to cover Title I presecure claims.86 The extension was mentioned only once in several days of hearings;87 it was recited but not explained in the House committee report;88 and it was never mentioned during the floor debates.89The only expressions that might suggest a legislative preference for administrative finality were those directed to a fear that the Commission might create posh sinecures by drawing out its work in perpetuum.90 This was addressed, however, by another provision of the statute instructing the Commission to wind up its affairs within three years.91 We will not assume that Congress courted a constitutional confrontation merely to facilitate Commission adherence to its timetable, which is, as we note elsewhere, directory in any event.92 Our position is the more solidly buttressed by clear evidence of congressional concern for the due process rights of claimants under the Act.93 Consistently with our duty to avoid a reading of the statute that brings it into potential conflict with the Constitution,94 we hold that challenges of constitutional stature impugning action by the Micronesian Claims Commission are cognizable in the federal courts.B. Reviewability for Alleged Nonconstitutional ErrorThe Micronesian Claims Act provides that the Commission "shall have authority to . . . adjudicate, and render final decisions, in accordance with the laws of the Trust Territory of the Pacific Islands and international law."95 Since the Code of the Trust Territory,96 promulgated by the Territory's American-appointed High Commissioner, specifically guarantees to its inhabitants the protections of due process, and since fair procedure in the administration of justice is equally important in the contemplation of international law97 which is a part of our law98 Ralpho urges that the Commission's action in this case contravenes the Act as well as the Constitution. Although the fate of this contention might well match that of Ralpho's constitutional claim, the duty of a federal court is to rest its decision on nonconstitutional rather than constitutional grounds if dispositive of the litigation.99 Thus we are obliged to consider the extent to which alleged Commission errors of nonconstitutional magnitude may be redressed "in the teeth of"100 the finality language of Section 2020.Administrative agencies like the Micronesian Claims Commission derive their powers from and are bounded by statute. As such, they are subjected to the many commands, explicit and otherwise, recumbent in the legislation of which they are creatures. That Congress has imposed strictures does not, of course, prevent it from shielding even the most patent deviation from the statutory scheme from judicial redress where the Constitution is in no wise implicated.101 Yet courts have assumed it less likely that Congress intended to prohibit review of a claim that the activities of an agency are facially invalid than of "the numerous discretionary, factual, and mixed law-fact determinations"102 normally underlying an agency's decisionmaking process.103 This assumption reflects not only reluctance to license "free-wheeling agencies meting out their own brand of justice,"104 but also a nice appreciation, presumably shared by Congress, that courts of law possess peculiar expertise in statutory interpretation.105 So judges have generally looked past the language of finality provisions to see how far Congress desired to muzzle the courts and unleash the agency,106 and will normally disregard "basically lawless"107 agency action only when clearly instructed to do so.108Two lines of cases, interpreting two different preclusion statutes, illustrate this judicial disinclination to infer that Congress wished to insulate plain statutory violations from review. One concerns Section 9 of the National Labor Relations Act,109 which renders unreviewable except in the context of unfair labor practice proceedings administrative determinations that a unit is "appropriate" for collective bargaining purposes.110 In Leedom v. Kyne111 and Boire v. Greyhound Corporation,112 a narrow exception to this general rule of unreviewability was described. Kyne held that where the National Labor Relations Board had certified a unit as appropriate in direct contravention of a "clear and mandatory"113 statutory provision,114 review of the certification was available.115 Boire explained that the Kyne exception was limited to actions "to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act,"116 and did not permit general review of appropriateness findings. Since the defect alleged in Boire was "essentially a factual issue, unlike the situation in Kyne, which depended solely upon construction of the statute,"117 it fell within the congressional proscription on judicial scrutiny.118A similar line has been drawn in cases construing the statute forbidding preinduction review of selective service classifications.119 When, for instance, a divinity student was reclassified and ordered to report for induction in the face of a statute specifically exempting divinity students, the Supreme Court refused to allow the preclusion statute to do violence to the congressional mandate to the agency.120 Challenges to dispositions of conscientious-objector applications, on the other hand, "inescapably (involve) a determination of fact and an exercise of judgment,"121 and are not resolvable "on the basis of objectivity established and conceded" facts.122 Such dispositions have been held unreviewable on the basis of the same preclusion statute123 so long as the Board has "used its discretion and judgment in determining facts and arriving at a classification."124In neither of these instances, which are by no means unique, was the demarcation of reviewability set by the Court expressly adumbrated by Congress. Rather, Congress had expressed an unqualified intent to shut off review, to which exception was made on grounds that the legislature would not be deemed to have barred judicial comparison of agency action with plain statutory commands unless such a ban was clearly articulated. That is not to say that the legislature must, to ensure preclusion, spell out the boundaries of its intention with excruciating particularity; most provisions for review of agency action contain some limitation on judicial examination.125 It merely supposes that Congress would have imposed such a drastic restraint on judicial inquiry and given such free rein to the administrator only after deliberation that made its intentions plain.Judging Section 2020 of the Micronesian Claims Act by these lights, we find no such reflection and no indication of such a purpose.126 Absent more, we would be inclined to find in Section 2020 an implied exception of the sort found in Kyne and other cases.127 The Commission, however, seeks support for its position of absolute unreviewability not in the declarations of Congress, but in our decisions interpreting other laws providing for satisfaction of war claims. In DeVegvar v. Gillilland128 and American and European Agencies v. Gillilland129 this court held that awards of the Foreign Claims Settlement Commission were rendered unreviewable even for readily apparent statutory violations.130 For this conclusion the court relied upon legislative history leaving no doubt that "(t)hose (finality) provisions mean precisely what they say"131 in specifying that there shall be no judicial review. Substantial congressional attention had been directed to the issue of reviewability,132 and both proponents and opponents had acknowledged that the "doors of the courts" were closed by the statute,133 leaving the Commission as the "court of last resort."134 Indeed, an amendment to strike the finality clause as inconsistent with both the spirit and the letter of the then-new Administrative Procedure Act had been offered and defeated.135Without drawing into question our decisions in DeVegvar and American and European Agencies, we point out that the parameters within which the Foreign Claims Settlement Act was necessarily to be construed are far different from those facing interpretation of the Micronesian Claims Act. Here we are confronted with no clear congressional directive to withhold consideration of Ralpho's contention that the Commission disregarded the plain letter of the law; in fact, we have no evidence at all of the scope that Congress contemplated for the finality provision.136 Consequently, we do not regard DeVegvar and American and European Agencies as controlling here. Instead, guided by the Supreme Court's handling of similar statutory schemes,137 we hold that Section 2020 of the Act, though it prohibits review in the usual case, does not forestall judicial cognizance of plaints that the Commission has disregarded unambiguous statutory directives or, as detailed above, constitutional commands.138This holding is consistent not only with logic and judicial precedent, but also with the Nation's commitment to the Micronesian people and to the United Nations. In the Trusteeship Agreement, whence Congress' power in the Trust Territory flows, we bound ourselves to "encourage respect for human rights and fundamental freedoms for all" in our dealings in Micronesia.139 Whether or not that pledge amounts to a legally enforceable guaranty of substantive rights to the inhabitants of the Trust Territory,140 it must be taken as an expression of moral principle not lightly to be disregarded. Were Congress effectively to frustrate Ralpho's ability to obtain judicial redress for an allegedly serious violation of his "fundamental freedoms," it would to that extent call into question the seriousness of our devotion to that principle. This we will not do without a clearer mandate from Congress.141III. EFFECT OF STATUTORY WIND-UP PROVISIONSince we find jurisdiction in the District Court to review actions of the Micronesian Claims Commission allegedly in contravention of either the Constitution or plain statutory imperatives, we must remand this case to afford a further opportunity to exercise that jurisdiction. To ease the District Court's considerable task on remand, we now proceed to address several issues that are bound to arise therein. In this part of our opinion we will consider the effect of the three-year windup provision142 on further prosecution of Ralpho's claim. In Part IV we will set forth the legal parameters within which Ralpho's due process contention must be assessed.Section 2019b(e) of the Micronesian Claims Act provides that the Commission "shall wind up its affairs as expeditiously as possible, and in any event not later than three years after the expiration of the time for filing claims under this Act."143 That filing deadline was October 15, 1973,144 and so the windup date has passed during the pendency of this litigation. The Commission now insists that this statutory specification is mandatory rather than directory, and that it has divested the Commission of any legal power even to redress its own malfeasance.145 It perceives the statute as having, like Lachesis, measured out the duration of its obligations of procedural fairness and, inflexible as Atropos, cut it off at October 15, 1976.This position unduly exalts the importance of the windup provision in derogation of the Act's overriding goals. Most congressional mentions of Section 2019b(e) itself stemmed from fear that the bureaucracy created by the Act might unduly prolong its life at public expense.146 These apprehensions elicited assurances from supporters of the Act that Section 2019b(e) protected against such waste.147 This solicitude for the federal fisc, however, does not eclipse the purpose of the Act swift justice for long-standing Micronesian claims. Nor should it obscure the fundamental motivations for the congressional action fulfillment of international commitments and elimination of disgruntlement in the Trust Territory.148 Nowhere have we encountered the slightest indication that justice was to be sacrificed on the altar of speed. Had the Commission's activities been concluded without incident, no conflict between promptitude and justice would have arisen. But as things are, we seriously doubt that the will of Congress would be served by letting haste limit and even obliterate fairness.In determining the effect of the windup provision, we must cleave as nearly as we can to the congressional design.149 That design, as evidenced by "the mischief to be remedied" as well as "contemporaneous discussion,"150 convinces us that justice to the Micronesians is not to be renounced simply to avoid even a brief additional lease on life for the Commission. Statutes that, for guidance of a governmental official's discharge of duties, propose "to secure order, system, and dispatch in proceedings" are usually construed as directory, whether or not worded in the imperative,151 especially when the alternative is harshness or absurdity.152 Though phrased in "the language of command,"153 the windup provision would, if construed as mandatory, allow the Commission to walk away from what Ralpho asserts was unconstitutionally shoddy treatment. We prefer a construction that bestows the benefits of the Act on those for whom it was chiefly intended,154 and hold that, in the event the District Court should find merit in Ralpho's allegations, it must direct the Commission to give such relief as is appropriate.155IV. PARAMETERS OF RALPHO'S DUE PROCESS CLAIMRalpho's basic claim, from which we have been so long distracted by questions in limine, is that the value study upon which the Commission ostensibly relied in assessing his damages was not made available in time to enable him to challenge it. An opportunity to meet and rebut evidence utilized by an administrative agency has long been regarded as a primary requisite of due process.156 The more difficult question has been whether due process is implicated in a given case. To this effect we are directed to our 20-year-old decision in American and European Agencies,157 on facts nearly identical to those here. A claimant was refused access to a staff memorandum to which the agency resorted in determining the value of his claim.158 After construing the finality provision there in question,159 the court assumed arguendo that review of constitutional questions was permissible and addressed the merits of the claimant's due process argument. The court acknowledged that if the claim for monetary relief amounted to the assertion of a "right," the refusal to allow inspection of evidence crucial to the administrative decision would have been constitutionally impermissible,160 and with so much of its logic we agree.161 The court went on to find, however, that in its quest for war claims compensation the claimant sought a privilege, not a right; and thus it did not find all the trappings of due process to obtain.162While, as a panel, we have no general license to undercut prior holdings of this circuit, we obviously cannot blindly follow prior rulings in the face of clearly contradictory doctrine later enunciated by the Supreme Court. And as we have recognized,163 the distinction drawn 20 years ago in American and European Agencies between a "right" and a "privilege" has given way to a far different definition of property interests under the Fifth Amendment.164 The import of Goldberg v. Kelly165 and its progeny166 is unmistakable: a statute that bestows an "entitlement" must do so in accordance with the dictates of the due process clause. Goldberg itself dealt with the right to a hearing prior to termination of welfare benefits, and the Supreme Court held that the putative beneficiary must be given a fair opportunity to be heard before he is deprived of their enjoyment.167Here there is no question but that Ralpho is entitled to something under the Micronesian Claims Act; indeed, the Commission admits this much. We think he should have been given an opportunity to meet evidence which the Commission intended to consider in making its decision. To this extent, the holding of American and European Agencies must be seen as a victim of the shifting stands of due process adjudication.V. CONCLUSIONThis protracted lawsuit, like many another, could have been averted if only the administrative agency involved had shown a modicum of consideration for an individual who must deal with it. The Commission's development of valuation guidelines may well have been salutary,168 but its refusal to let Ralpho study and address those guidelines seems merely perverse. We can discern from the record no public policy that was perceptibly furthered by the Commission's reticence,169 and surely mystery without purpose has no place in government. In any event, we hold that the result of its apparently aimless obduracy Ralpho's complaint that a statutory directive was disregarded, and possibly even a constitutional imperative is subject to judicial review. So, we reverse the judgment of the District Court and remand the case to it for further proceedings not inconsistent with this opinion.So ordered. 1 186 U.S.App.D.C. ----, 569 F.2d 630 2 Act of July 1, 1971, Pub. L. No. 92-39, 85 Stat. 92, as amended, 50 U.S.C.App. §§ 2018 et seq. (Supp. II 1972) 3 The Commission itself is not a party to this action; appellees are the various Commissioners and several subordinates who have been sued here in their official capacity 4 Since the District Court did not address it, we must leave the matter of class treatment for consideration on remand. Board of School Comm'rs v. Jacobs, 420 U.S. 128, 130, 95 S.Ct. 848, 850, 43 L.Ed.2d 74, 78 (1975). Cf. Baxter v. Palmigiano, 425 U.S. 309, 311 n.1, 96 S.Ct. 1551, 1554 n.1, 47 L.Ed.2d 810, 817 n.1 (1976) 5 50 U.S.C.App. § 2020 (Supp. II 1972), set out in text infra at note 33 6 See 5 U.S.C. § 701(a)(1) (1970) 7 See Part II-A infra, and Part IV infra 8 See Part II-B infra 9 The Micronesian islands were governed by Japan under a League of Nations mandate between the World Wars. This mandate they violated by conducting extensive military operations in the mandated territory. See Preamble, Trusteeship Agreement for the Former Japanese Mandated Islands, July 18, 1947, 61 Stat. 3301, T.I.A.S. No. 1665 ("Trusteeship Agreement") 10 These facts are not in issue here 11 Trusteeship Agreement, supra note 9, art. 2, 61 Stat. 3301 12 Id. at 3302-3303 13 Act of June 26, 1945, 59 Stat. 1033, 1048-1050, T.S. No. 993, incorporated by reference into the Trusteeship Agreement, supra note 9, 61 Stat. 3302 14 Multilateral Treaty of Peace with Japan, Sept. 8, 1951, 3 U.S.T. 3169, 3173, art. 4(a), T.I.A.S. No. 2490 15 The United States took the position that all war-related damage, by whomever inflicted, was the responsibility of the Japanese and ought to be redressed by them. Japan not only disclaimed responsibility for war damage caused by the United States, but also demanded compensation for all property left behind by the 100,000 Japanese nationals deported from Micronesia to Japan by the United States. Japan contended that their claims would aggregate far more than those of the Micronesians; it reasoned, therefore, that on balance Japan owed nothing and that the onus of paying the Micronesian claims should fall entirely upon the United States. See Micronesian Claims, Hearings on H.R. J. Res. 1161 Before the Subcomm. on Int'l Orgs. and Movements of the House Comm. on Foreign Affairs, 91st Cong., 2d Sess. 20-22 et passim (1970) (statement of Stephen M. Schwebel) ("1970 House Hearings "); Micronesian Claims Act of 1971, Hearings on H.R. J. Res. 521 Before the Subcomm. on Int'l Orgs. and Movements of the House Comm. on Foreign Affairs, 92d Cong., 1st Sess. 37-46 et passim (1971) (statement of Stephen M. Schwebel) ("1971 House Hearings ") 16 31 U.N. TCOR Supp. (No. 2) (1964); see also 34 U.N. TCOR Supp. (No. 2) 33-37, U.N. Doc. T/1668 (1968) 17 Agreement on the Trust Territory of the Pacific Islands, Apr. 18, 1969, United States-Japan, 20 U.S.T. 2654, T.I.A.S. No. 6724 ("Agreement on Trust Territory") 18 Id.; see 1970 House Hearings, supra note 15, at 24 et passim 19 Japan's contribution was to be made in the form of goods and services, while that of the United States was to be in specie. Agreement on Trust Territory, art. I, supra note 17, 20 U.S.T. at 2654-2655 20 See 50 U.S.C.App. § 2019c(a)(1) (Supp. II 1972) 21 85 Stat. 92 (July 1, 1971), codified as 50 U.S.C.App. §§ 2018-2020b (Supp. II 1972) 22 50 U.S.C.App. § 2019b(a) 23 50 U.S.C.App. § 2020a 24 Id. at § 2019b(d) 25 Id. § 2019b(e). See Part III infra 26 Id. § 2019b(d) 27 Id 28 Id. § 2019c(a). Cf. the Commission's Regulations § 592.8, 1973 Foreign Claims Settlement Comm'n Annual Report, at 62 ("1973 FCSC Ann.Rep.") 29 50 U.S.C.App. § 2019c(a). See the Commission's Regulations §§ 593.1-593.2, 593.4, 1973 FCSC Ann.Rep., supra note 28, at 63 30 50 U.S.C.App. § 2019c(c) 31 As originally adopted, the Act provided that "(w)hen all claims have been adjudicated, the Commission shall certify them to the Secretary (of the Interior) for payment," except that some portion of death claims could be paid immediately. Micronesian Claims Act of 1971, § 104(a), 85 Stat. 95. In 1973, this section was amended to provide that "(a)s claims are adjudicated, the Commission shall certify them to the Secretary for payment in such manner as he may direct." 87 Stat. 461 (Oct. 19, 1973) 32 50 U.S.C.App. § 2019c(d) 33 50 U.S.C.App. § 2020 34 See 1973 FCSC Ann.Rep., supra note 28, at 43 35 Id. at 43-44 36 App. 111-143 et passim 37 1973 FCSC Ann.Rep., supra note 28, at 44 38 App. 73. Ralpho's estimate was made in yen, the currency in use during the Japanese regime. For purposes of clarity, we convert all value figures to dollars where necessary, using the parties' conversion rate of 100 yen to $23.44. See Mr. Ralpho, Claim No. 2055-J, Dec. No. 90 (final decision Apr. 12, 1974) (unreported) App. 109 39 App. 76 40 Mr. Ralpho, Claim No. 2055-J, Dec. No. 90 (initial decision Aug. 15, 1973) (unreported) App. 19-20Based on the entire record, . . . the Commission finds that claimant, MISTER RALPHO, was the owner of a dwelling; and the dwelling was destroyed . . . as a result of the hostilities between the Governments of Japan and the United States. . .In determining the value of property, the Commission has made a study concerning the value of property during World War II in Micronesia.Upon consideration of the record, including the Commission's study, the Commission finds that claimant's dwelling at the time of loss had a value of Three Hundred Seventy Dollars ($370.00).Apparently similar notice of the existence and recourse to the study was routinely inserted in each Commission opinion dealing with property loss. See, e. g., Lomo Jib, Claim No. 2754-J, Dec. No. 26 (July 6, 1973); FSCS Ann.Rep., supra note 28, Exhibit J-7, at 98; Katib Jili, Claim No. 3634-J, Dec. No. 154 (Oct. 10, 1973), in id., Exhibit J-12 at 105. 41 App. 112 42 Not his counsel on appeal 43 5 U.S.C. § 552 (1970). See letter from Donald Juneau to Robert Bowles (chief counsel of the Commission), Jan. 7, 1974, App. 21-22 44 Letter from Bowles to Juneau, Jan. 8, 1974, App. 23-24 45 Mister Ralpho, Claim No. 2055-J, Dec. No. 90 (resume of oral hearing Feb. 11, 1974 (unreported), App. 28. His cost figures, unlike those of Ralpho, were based not on Ralpho's out-of-pocket expenditure, but on the cost that would have been incurred by a contractor constructing a similar house in 1940 46 Mister Ralpho (final decision), supra note 38, App.108-110 47 See Plaintiff's Complaint, App. 11; Defendants' Motion to Dismiss at 6 48 Plaintiff's Complaint, App. 11. The Commission's brief states that though it does not dispute that allegation, it has no proof that such a request was made or denied. Brief for Appellees at 6 n.2 49 Plaintiff's Complaint, App. 11. In the posture of this case we must take as true their allegation that the Commission's final decision was predicated upon the value study. It is beyond peradventure that the initial award derived entirely from that guide. See text and notes supra at notes 38-41. Although the final award deviates somewhat from a strict mathematical application of guideline values, see text and note supra at note 46, it is possible that the Commission used those values as "ball-park" estimates and credited the testimony of Ralpho and his expert only to the degree it was consistent therewith. We note, moreover, that the Commission has never denied that it made use of the value study in determining Ralpho's award, but rather the affidavit submitted by the Commission's general counsel to the District Court implicitly suggested that it served just the purpose described above. Affidavit of Wayland D. McCellan at 2 (November 13, 1974) 50 See text supra at note 33 51 Ralpho's complaint refers us to 28 U.S.C. §§ 1331 (federal question), 1332 (diversity of citizenship), 1350 (Torts against aliens), 1361 (mandamus) and 2201-2202 (declaratory judgment). He also alleges jurisdiction under the review provisions of the Administrative Procedure Act, 5 U.S.C. §§ 701-706 (1970), which this court has accepted as a font of federal-question jurisdiction independent of that bestowed by § 1331. That view has now been rejected by the Supreme Court, in Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 985, 51 L.Ed.2d 192, 200-201 (1977), thus raising the question whether § 1331 supports jurisdiction here. We conclude that it doesRalpho's case obviously arises under the Constitution and federal laws, and he alleged that the amount in controversy is greater than $10,000. Since his underlying claim involves less than $1,000, it is difficult to see how his allegation might be substantiated, and if it appears to a "legal certainty that the claim is really for less" than $10,000, § 1331 as constituted when this case was submitted would not provide jurisdiction. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845, 848-849 (1938). But § 1331 was amended by the Act of October 21, 1976, Pub.L. No. 94-574, 90 Stat. 2721, to provide that "no such sum or value shall be required in any (federal question) action against the United States, any agency thereof, or any officer or employee thereof in his official capacity." This amendment clearly extended § 1331 to encompass actions such as Ralpho's, as the House Report explained:In some . . . cases the jurisdictional amount requirement cannot be met because it is impossible to place a monetary value on the right asserted by the plaintiff.In other cases, the plaintiff's claim that he is entitled to a Federal grant or benefit . . . may be assigned a monetary value, but the amount in controversy may be $10,000 or less.The denial of a federal forum (for federal claims) for lack of the jurisdictional amount may therefore be denial of any remedy whatsoever. Justice clearly requires elimination of this deficiency.H.R.Rep. No. 1656, 94th Cong., 2d Sess. 14-15, U.S.Code Cong. & Admin.News, pp. 6121, 6134 (1976) (footnotes omitted). Accord : S.Rep. No. 996, 94th Cong., 2d Sess. 13-14 (1976). Thus, assuming arguendo that Ralpho's controversy is to be valued below $10,000, we may entertain it only if the Act of October 21, 1976, applies to pending cases. Bereft as we are of any congressional specification in this regard, we must look to implicit indicia of legislative intent. Swinton v. Kelly, 180 U.S.App.D.C. 216, 220, 554 F.2d 1075, 1079 (1976), cert. denied,Try vLex for FREE for 3 days
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