Opinion
Case No.: A2-99-180
September 19, 2000
MEMORANDUM AND ORDER
Before the Court is defendants' Federal Rule of Civil Procedure 12(b) motion to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. (doc. #4). Plaintiff resists dismissal. The Court heard oral argument on August 25, 2000, and thereafter took the matter under advisement. As explained below, the Court hereby GRANTS the motion in part and DENIES the motion in part.
I. INTRODUCTION
Briefly stated this case involves plaintiff's application for assistance and denial of the same by the Federal Emergency Management Agency (FEMA). United Power Association (UPA), a private, non-profit corporation, is an electric cooperative utility which provides wholesale power to certain distribution cooperatives in Minnesota and Wisconsin. UPA owns and operates a 192 megawatt plant, the Stanton Station, located in Mercer County, North Dakota. This plant is connected by a 255 mile 230 kilovolt transmission line to several distribution points in North Dakota. A portion of these lines runs in the Devils Lake, North Dakota area. As originally constructed, the lines ran north of Devils Lake (the body of water) and traversed dry land.
For some time now, water in the Devils Lake area has been rising. Specifically between March and July 1995, rainfall and melting snow caused Devils Lake to rise approximately four feet. During this time, parts of UPA's line stood in 4-12 feet of water. On May 16, 1995, President William J. Clinton issued a disaster declaration which included the area flooded by Devils Lake. Consequently, FEMA, the agency charged with administering and implementing federal disaster relief assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the "Stafford Act"), 42 U.S.C. § 5121 et.seq., became involved in administering assistance to the Devils Lake area. In June of 1995, UPA submitted an application for disaster relief to FEMA in order to obtain assistance for repairs done to its transmission lines. FEMA denied assistance to UPA because it determined that the flooding had not caused any actual direct damage to UPA structures.
By letter dated December 19, 1996, FEMA officially notified UPA that its claim was denied. UPA appealed the denial following the then existing FEMA procedures. FEMA denied the first appeal because: 1) the facilities did not sustain any damage as a result of the flooding; 2) the work was not required as a result of the declared disaster event; 3) the National Electric Safety Code and the Rural Utility Service did not mandate that UPA's electrical transmission systems be elevated; and 4) the existing elevation of the lines did not pose an immediate threat to life, health and safety. UPA filed a second appeal which was mostly denied for the same reasons as the first. A third appeal was submitted which was treated as a request for reevaluation of the second appeal denial; this was also denied. Thereafter, UPA brought suit in this Court claiming that FEMA violated the Stafford Act in denying its claim and denied UPA the equal protection of the law in violation of the Fifth Amendment of the Constitution.
FEMA did determine that UPA was eligible for limited assistance, involving about $23,281, for the cost of installing a static line with warning signs across the area in question.
II. DISCUSSION
FEMA claims that it is entitled to a dismissal based on lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(1) (2). FEMA asserts that Congress has not waived the federal government's sovereign immunity for violations of the Stafford Act and that UPA fails to present a legitimate equal protection claim.
1. Sovereign Immunity
A party, like UPA, bringing an action against the United States bears the burden of demonstrating that the United States, as sovereign, has unequivocally waived its immunity. See Graham v. Federal Emergency Management Agency, 149 F.3d 997, 1005 (9th Cir. 1998). This Court must, however, begin with the presumption that Congress intends judicial review of administrative action. Id. UPA asserts that Congress has waived sovereign immunity through the Administrative Procedure Act, 5 U.S.C. § 701-702. Section 702 does provide for a limited waiver of sovereign immunity in that "a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." 5 U.S.C. § 702. This waiver, however, is inapplicable where: (1) the statute precludes judicial review; or (2) the agency action is committed to agency discretion by law. Id. § 701(a).
FEMA relies on both exceptions in asserting that the United States has not waived its sovereign immunity. The Court focuses solely on whether the applicable statute precludes judicial review. In this regard, the Stafford Act contains a section providing:
The Federal Government shall not be liable for any claim based upon the exercise or performance of or the failure to exercise or perform a discretionary function or duty on the part of a Federal agency or an employee of the Federal Government in carrying out the provisions of this chapter.42 U.S.C. § 5148. This section immunizes the federal government from liability arising out of its performance of a "discretionary function." Dureiko v. United States, 209 F.3d 1345, 1351 (Fed. Cir. 2000). The question the Court must resolve is whether FEMA's decision to deny assistance to UPA is the exercise of a "discretionary function" within section 5148. This issue involves a question of law. See Cohen v. United States, 151 F.3d 1338, 1340 (11th Cir. 1998) (discussing the discretionary function exception of the Federal Tort Claims Act). Importantly, if the discretionary function exception applies, the United States has not waived its sovereign immunity and; consequently, the Court lacks subject matter jurisdiction. See Dykstra v. U.S. Bureau of Prisons, 140 F.3d 791, 795 (8th Cir. 1998).
While the statute appears clear on its face, the Court pauses to note that the legislative history supports a Congressional intent to immunize discretionary acts performed pursuant to the Stafford Act:
We have further provided that if the agencies of the Government make a mistake in the administration of the Disaster Relief Act that the Government may not be sued. Strange as it may seem, there are many suits pending in the Court of Claims today against the Government because of alleged mistakes made in the administration of other relief acts, suits aggregating millions of dollars because citizens have averred that the agencies and employees of Government made mistakes. We have put a stipulation in here that there shall be no liability on the part of the Government.
96 Cong. Rec. 11895, 11912 (1950) (statement of Rep. Whittington, Chairman of the House Public Works Committee).
The parties have referred to and the Court has found only a handful of cases discussing the discretionary function exception under the Stafford Act. See Dureiko v. United States, 209 F.3d 1345 (Fed. Cir. 2000); Graham v. Federal Emergency Management Agency, 149 F.3d 997 (9th Cir. 1998); Rosas v. Brock, 826 F.2d 1004 (11th Cir. 1987); Torres v. Government of the United States, 979 F. Supp. 1054 (D.V.I. 1997); Lockett v. Federal Emergency Management Agency, 836 F. Supp. 847 (S.D.Fla. 1993). These cases have consistently used the "discretionary function" exception analysis as set out by the Supreme Court for the Federal Tort Claims Act, see Berkovitz v. United States, 486 U.S. 531, 536 (1988), for guidance. See, e.g., Dureiko, 209 F.3d at 1351. Accordingly, so will this Court. Whether the discretionary function exception applies involves a two part analysis: (1) whether the act involves an element of judgment or choice; and (2) if so, whether that judgment is of the kind the discretionary function exception was designed to shield. Id. (citing United States v. Gaubert, 499 U.S. 315, 322 (1991); Berkovitz v. United States, 486 U.S. 531, 536 (1988)).
FEMA determined that UPA was not eligible for assistance pursuant to 42 U.S.C. § 5172(a), 44 C.F.R. § 206.223. The "Repair, restoration and replacement of damaged facilities" provisions of the Stafford Act provides that "a person who owns or operates a private nonprofit facility damaged or destroyed by a major disaster" may receive assistance for the expenses incurred in repairing, restoring or replacing such facility. See 42 U.S.C. § 5172 (a)(2). In order to receive assistance, the applicant must be both an eligible applicant and the applicant must have performed eligible work. See 44 C.F.R. § 206.222; 206.223. The parties do not dispute that UPA is an eligible applicant; instead, the parties dispute whether UPA has performed eligible work.
Eligible work is defined as that which is: (1) required as a result of a major disaster event; (2) located within the designated disaster area; and (3) the legal responsibility of the eligible applicant. Id. § 206.223. As to these, the parties also do not dispute that UPA meets requirements two and three. The crux of the dispute is whether the work UPA performed was required as a result of a major disaster event. After an inspection team reviewed UPA's property and prepared a Disaster Survey Report pursuant to 44 C.F.R. § 206.202(d), FEMA made the decision that there was no actual direct damage to UPA structures due to the 1995 disaster which prompted the presidential disaster declaration. In other words, FEMA determined that the 1995 disaster did not cause the damage for which UPA sought assistance. This decision squarely qualifies as an exercise of a discretionary function within the exemption of 42 U.S.C. § 5148.
Under the first prong of the "discretionary function" test the activity at issue must involve an element of judgment or choice.Durieko, 209 F.3d at 1351. Mandatory acts, or in other words, acts that a governmental employee is obligated to perform, are not discretionary. Id. UPA does not dispute that FEMA has the right to establish the conditions of eligibility that must be satisfied but argues that FEMA has no discretion to deny relief to applicants who meet the conditions, i.e., those who are eligible. Assuming that UPA is correct in its assertion that FEMA has no discretion to deny relief to eligible applicants, UPA's analysis skips a critical step. FEMA decides who is and who is not eligible. UPA attempts to characterize this eligibility determination as simply following a prescribed course of action as set out by the regulations. The Court disagrees.
The determination of eligibility, including the decision of whether an item of work is required as the result of a major disaster event, necessarily involves the judgment of the decision-maker. See generally, Pierce v. United States, 804 F.2d 101, 102 (8th Cir. 1986) (holding that governmental employees undertaking medical review to determine continued eligibility for social security benefits are engaged in the exercise of professional judgment). This type of decision-making requires more than the mere rote application of quantitative standards; rather, it involves the qualitative analysis of cause and effect. Consequently, FEMA's eligibility determination requires the use of judgment and, thus, meets the first prong of the discretionary function exception test.
The next consideration for the Court is whether this is the type of decision that the discretionary function exception was meant to protect. "Under the second prong, because the discretionary function exception serves to `prevent judicial "second-guessing" of legislative and administrative decisions grounded in social, economic, and political policy . . .' the exception `protects only governmental actions and decisions based on considerations of public policy.'" Durieko, 209 F.3d at 1351 (citations omitted). FEMA's duty is to administer the federal disaster relief program. The agency has the concomitant responsibility of providing disaster assistance to those who are eligible and not squandering taxpayer funds on those who are not. "[D]ecisions involving the allocation and deployment of limited governmental resources are the type of administrative judgments that the discretionary function exception was designed to immunize from suit." Graham, 149 F.3d at 1006 (citations omitted). Thus, the second prong is also met and as a result, FEMA's decision falls within the discretionary function exception of 42 U.S.C. § 5148. Consequently, this Court lacks jurisdiction over UPA's claimed violation of the Stafford Act.
Given this determination, the Court need not address FEMA's argument on UPA's lack of standing in count one.
2. Constitutional Claim
In count two, UPA has alleged a denial of equal protection of the law in violation of the Fifth Amendment of the United States Constitution. Essentially, UPA claims that it was treated differently than other similarly situated persons seeking federal disaster relief assistance and that the different treatment had no rational basis. Allegations of constitutional violations are not precluded by section 5148 since the statute only prohibits judicial review of discretionary actions. Adherence to constitutional guidelines is not discretionary; it is mandatory.Rosas v. Brock, 826 F.2d 1004, 1008 (11th Cir. 1987). Consequently, the Court is not precluded from reviewing this claim.FEMA contends that UPA has not adequately pled the equal protection claim. The Court rather agrees that UPA's claim could be better pled but disagrees that UPA must come forward with evidence at this stage of the proceedings. In any event the Court would allow UPA to amend the complaint rather than dismiss the claim. In its response brief, UPA has alerted FEMA and the Court to at least one other allegedly similarly situated public facility that received different treatment by FEMA. With these factual assertions, the Court is satisfied with UPA's complaint. The motion to dismiss UPA's equal protection claim is DENIED. III CONCLUSION
For the reasons given herein, IT IS ORDERED that defendants' motion to dismiss, (doc. #4), is GRANTED as it relates to Count One and DENIED as it relates to Count Two.