B-198352 L/M, APR 18, 1980

B-198352 L/M, APR 18, 1980

PRECIS-UNAVAILABLE

JAMES R. SASSER, UNITED STATES SENATE:

WE HAVE REVIEWED THE MATERIAL SENT TO YOU BY PAUL S. QUINN OF WILKINSON, CRAGUN & BARKER CONCERNING THE JUDGMENT IN UNITED STATES V. UNITED STATES NATIONAL BANK OF OREGON AND KLAMATH TRIBE OF INDIANS. WE HAVE DETERMINED THAT THE PORTION OF THE JUDGMENT IN EXCESS OF THE AMOUNT PREVIOUSLY DEPOSITED IN THE REGISTRY OF THE COURT WILL NOT REQUIRE A SPECIFIC APPROPRIATION BUT MAY BE CERTIFIED FOR PAYMENT FROM THE PERMANENT INDEFINITE APPROPRIATION ESTABLISHED BY 31 U.S.C. SEC. 724A. HOWEVER, CERTAIN STATEMENTS IN MR. QUINN'S LETTER TO YOU MAY BE MISLEADING, AND WE THEREFORE BELIEVE A FULLER STATEMENT IS WARRANTED.

THE KLAMATH JUDGMENT - BACKGROUND

IN 1973, CONGRESS DIRECTED THE SECRETARY OF AGRICULTURE "TO ACQUIRE BY CONDEMNATION ALL OF THE KLAMATH INDIAN FOREST LANDS WHICH THE TRUSTEE FOR THE KLAMATH INDIAN TRIBE IS REQUIRED TO SELL BY THE TERMS OF THE TRUST AGREEMENT, AND THE LANDS SO ACQUIRED SHALL BECOME A PART OF THE WINEMA NATIONAL FOREST." PUB. L. NO. 93-102 (AUGUST 16, 1973), 87 STAT. 349. THE LAW FURTHER AUTHORIZED THE APPROPRIATION OF NOT TO EXCEED $70 MILLION FOR THE CONDEMNATION. ACCORDING TO THE LEGISLATIVE HISTORY, THE TRUSTEE HAD OFFERED THE LAND TO THE SECRETARY IN 1971 FOR $51.37 MILLION, BUT THE SECRETARY DID NOT EXERCISE THE OPTION TO PURCHASE AT THAT TIME. THE TRUSTEE REOFFERED THE LANDS IN EARLY 1973 FOR NOT LESS THAN $57.45 MILLION. THE $70 MILLION FIGURE WAS INSERTED IN THE AUTHORIZATION TO ASSURE SUFFICIENT FUNDS FOR THE ACQUISITION.

IN 1974, CONGRESS APPROPRIATED $49 MILLION FOR THE ACQUISITION OF THE TRIBAL LANDS. PUB. L. NO. 93-404 (AUGUST 31, 1974), 88 STAT. 803, 816. THE AMOUNT APPROPRIATED WAS THE AMOUNT REQUESTED BY THE DEPARTMENT OF AGRICULTURE, WHICH WAS BASED ON AN EARLIER DEPARTMENT APPRAISAL. IT IS NOT CLEAR WHY THE DEPARTMENT REQUESTED ONLY $49 MILLION WHEN IT SHOULD HAVE BEEN APPARENT EVEN IN 1974 THAT THE JUDICIAL DETERMINATION OF JUST COMPENSATION WOULD BE CONSIDERABLY IN EXCESS OF THAT AMOUNT.

ON NOVEMBER 15, 1974, THE UNITED STATES FILED ITS COMPLAINT IN CONDEMNATION IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON UNDER THE DECLARATION OF TAKING ACT, 40 U.S.C. SEC. 258A. THE $49 MILLION APPROPRIATED WAS DEPOSITED IN THE REGISTRY OF THE COURT, AND TITLE TO THE CONDEMNED LANDS VESTED IN THE UNITED STATES.

BASED ON THE STIPULATION OF THE PARTIES, THE COURT ENTERED JUDGMENT ON MARCH 3, 1980. THE PERTINENT PROVISIONS ARE PARAGRAPHS 5 AND 6, SET FORTH BELOW:

"5. THE JUST COMPENSATION WHICH PLAINTIFF SHALL PAY FOR THE TAKING OF THAT ESTATE SHALL BE THE AMOUNTS SPECIFIED IN PARAGRAPHS 5 AND 6 HEREOF AND SHALL BE DEPOSITED IN THE REGISTRY OF THIS COURT. SUCH AMOUNT SHALL BE $130,540,000, INCLUSIVE OF INTEREST, IF PAYMENT IS MADE ON OR BEFORE NOVEMBER 15, 1980. SINCE THE SUM OF $49,000,000 WAS PREVIOUSLY DEPOSITED IN THE REGISTRY OF THIS COURT, PLAINTIFF SHALL PAY THE SUM OF $81,540,000 IF PAYMENT IS MADE ON OR BEFORE NOVEMBER 15, 1980.

"6. IF PAYMENT IS MADE ON OR AFTER NOVEMBER 16, 1980, THEN PLAINTIFF SHALL PAY THE SUM OF $81,540,000, TOGETHER WITH INTEREST THEREON AT A RATE EQUAL TO THE AVERAGE YIELD ON 90-DAY UNITED STATES TREASURY BILLS FROM NOVEMBER 16, 1980, UNTIL THE DATE FULL PAYMENT IS DEPOSITED IN THE REGISTRY OF THIS COURT."

WE UNDERSTAND, ALTHOUGH WE HAVE NOT YET RECEIVED WRITTEN VERIFICATION FROM THE JUSTICE DEPARTMENT, THAT NEITHER PARTY WILL SEEK ANY FURTHER REVIEW OF THE JUDGMENT.

THE PERMANENT JUDGMENT APPROPRIATION AND CONDEMNATION JUDGMENTS IN GENERAL

PRIOR TO 1956, JUDGMENTS AGAINST THE UNITED STATES, WITH CERTAIN EXCEPTIONS, REQUIRED SPECIFIC CONGRESSIONAL APPROPRIATIONS FOR PAYMENT. THERE WERE, HOWEVER, CERTAIN RELATIVELY LIMITED SITUATIONS IN WHICH, BY STATUTE, JUDGMENTS COULD BE PAID FROM AGENCY APPROPRIATIONS. IN 1956, CONGRESS ESTABLISHED A PERMANENT INDEFINITE APPROPRIATION, 31 U.S.C. SEC. 724A, FOR THE PAYMENT OF JUDGMENTS AGAINST THE UNITED STATES NOT IN EXCESS OF $100,000. THE PURPOSE OF THIS WAS TO ELIMINATE THE NEED FOR SPECIFIC APPROPRIATIONS WHICH WERE MADE AS A MATTER OF ROUTINE. THE LAW RECOGNIZED THAT CERTAIN TYPES OF JUDGMENTS WERE ALREADY PAYABLE FROM AGENCY FUNDS. SO AS NOT TO INTERFERE WITH THESE SITUATIONS AND OTHERS THAT MIGHT BE ENACTED IN THE FUTURE, THE PERMANENT APPROPRIATION WAS MADE AVAILABLE ONLY FOR THOSE JUDGMENTS THE PAYMENT OF WHICH WAS "NOT OTHERWISE PROVIDED FOR." IN MAY, 1977, THE $100,000 LIMITATION WAS REMOVED BY PUB. L. NO. 95 -26, 91 STAT. 61, 96. JUDGMENTS MAY BE PAID FROM THE PERMANENT APPROPRIATION ONLY UPON CERTIFICATION OF THE COMPTROLLER GENERAL.

LAND CONDEMNATION JUDGMENTS HAVE TRADITIONALLY BEEN TREATED DIFFERENTLY FROM OTHER TYPES OF JUDGMENTS AGAINST THE UNITED STATES. EVEN PRIOR TO 1956, WHEN MOST JUDGMENTS REQUIRED SPECIFIC APPROPRIATIONS, CONDEMNATION JUDGMENTS COULD BE PAID IMMEDIATELY FROM FUNDS APPROPRIATED TO THE CONDEMNING AGENCY FOR LAND ACQUISITION. THIS WAS RECOGNIZED IN A NUMBER OF EARLY DECISIONS. 5 COMP.GEN. 737 (1926); A-12979, FEBRUARY 10, 1926; A-25484, JANUARY 11, 1929.

THE ENACTMENT OF THE PERMANENT APPROPRIATION WAS VIEWED AS NOT AFFECTING THE STATUS OF CONDEMNATION JUDGMENTS. THE TREATMENT OF THESE JUDGMENTS WAS SUMMARIZED IN A 1964 DECISION TO THE SECRETARY OF THE INTERIOR AS FOLLOWS:

"WHILE THE APPROPRIATIONS FOR GENERAL LAND ACQUISITION PURPOSES IS NOT EXPRESSLY AVAILABLE FOR THE PAYMENT OF JUDGMENTS, IT IS *** SPECIFICALLY AVAILABLE FOR ACQUISITION OF LAND BY PURCHASE OR BY CONDEMNATION AND SINCE CONDEMNATION NECESSARILY CONTEMPLATES LITIGATION IT SEEMS OBVIOUS THAT THE APPROPRIATION FOR LAND ACQUISITION IS PROPERLY CHARGEABLE WITH THE PAYMENT OF JUDGMENTS RESULTING FROM SUCH LIMITATION. THUS, JUDGMENTS SUCH AS THE ONE NOW IN QUESTION NORMALLY WOULD BE PAID THEREFROM. THE FACT THAT PAYMENT OF THIS OR SIMILAR JUDGMENTS CANNOT NOW BE MADE FROM SUCH FUNDS BECAUSE THEY ARE EXHAUSTED DOES NOT, IN OUR OPINION, MEET THE REQUIREMENT OF 31 U.S.C. SEC. 724A THAT THE PAYMENT OF JUDGMENTS FROM THE PERMANENT INDEFINITE APPROPRIATION BE NOT OTHERWISE PROVIDED FOR." B-154988, AUGUST 21, 1964.

WE BELIEVE THE TRADITIONAL TREATMENT OF CONDEMNATION JUDGMENTS IS BASED ON SOUND POLICY. THE GOVERNMENT MAY BE SUED FOR A VARIETY OF REASONS; FOR EXAMPLE, NEGLIGENCE UNDER THE FEDERAL TORT CLAIMS ACT OR EMPLOYMENT DISCRIMINATION UNDER TITLE VII OF THE CIVIL RIGHTS ACT. AN ADVERSE JUDGMENT IN THE TYPICAL SUIT AGAINST THE UNITED STATES REFLECTS A DETERMINATION THAT THE GOVERNMENT HAS DONE SOMETHING IT SHOULD NOT HAVE DONE. THE HISTORICAL APPROACH TO PAYING JUDGMENTS AGAINST THE UNITED STATES - FORMERLY THE REQUIREMENT FOR SPECIFIC APPROPRIATIONS AND NOW 31 U.S.C. SEC. 724A - HAS RECOGNIZED THAT IT IS IMPOSSIBLE TO BUDGET FOR SUCH CONTINGENCIES. CONDEMNATION JUDGMENTS, ON THE OTHER HAND, ARE VERY DIFFERENT. LAND ACQUISITION IS A NORMAL ACTIVITY FOR A NUMBER OF AGENCIES. CONGRESS AUTHORIZES IT AND SETS THE DESIRED PROGRAM LEVELS THROUGH THE APPROPRIATION PROCESS. TO MAKE THE PERMANENT APPROPRIATION AVAILABLE FOR CONDEMNATION JUDGMENTS AS A GENERAL PROPOSITION WOULD, WE BELIEVE, SERIOUSLY WEAKEN CONGRESSIONAL CONTROL OVER LAND ACQUISITION BY GOVERNMENT AGENCIES.

IN ADDITION, CONGRESS HAS RECOGNIZED IN VARIOUS WAYS THAT CONDEMNATION JUDGMENTS ARE "DIFFERENT" FROM MOST OTHER MONEY JUDGMENTS AGAINST THE UNITED STATES. FOR EXAMPLE, SECTION 304(B) OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, 42 U.S.C. SEC. 4654(B), PROVIDES THAT AN AWARD OF COSTS AND EXPENSES AGAINST THE UNITED STATES IN A CASE WHERE THE GOVERNMENT ABANDONS THE PROCEEDINGS OR THE COURT CONCLUDES THAT THE FEDERAL AGENCY CANNOT ACQUIRE THE PROPERTY BY CONDEMNATION, "SHALL BE PAID BY THE HEAD OF THE FEDERAL AGENCY FOR WHOSE BENEFIT THE CONDEMNATION PROCEEDING WAS INSTITUTED." ALSO, ONE OF THE CRITERIA FOR RECORDING OBLIGATIONS UNDER 31 U.S.C. SEC. 200(A) IS SUBSECTION (6), "A LIABILITY WHICH MAY RESULT FROM PENDING LITIGATION BROUGHT UNDER AUTHORITY OF LAW." THERE WOULD BE NEITHER NEED NOR REASON FOR AN AGENCY TO RECORD AN OBLIGATION BASED ON PENDING LITIGATION IF THE RESULTING JUDGMENT WOULD HAVE NO FINANCIAL IMPACT ON THAT AGENCY'S APPROPRIATIONS. THE LEGISLATIVE HISTORY OF 31 U.S.C. SEC. 200(A)(6) SHOWS THAT IT WAS ENACTED TO PERMIT THE RECORDING OF OBLIGATIONS IN LAND CONDEMNATION PROCEEDINGS UNDER THE DECLARATION OF TAKING ACT. 35 COMP. GEN. 185, 187 (1955).

THE KLAMATH JUDGMENT - PAYMENT

THE PRECEDING DISCUSSION TENDS TO AFFIRM THE PRESENT TREATMENT OF CONDEMNATION JUDGMENTS - THAT IS, THAT THEY SHOULD NOT BE PAID FROM THE PERMANENT APPROPRIATION EVEN WHERE THE AGENCY'S APPROPRIATION HAS BEEN EXHAUSTED. 54 COMP.GEN. 799 (1975). THERE IS ONE LIMITED SITUATION, HOWEVER, - REFLECTED IN THE KLAMATH JUDGMENT - WHERE THE REASONS FOR THE TRADITIONAL POSITION DO NOT APPLY.

THE STATUTE UNDER WHICH THE KLAMATH LANDS WERE CONDEMNED, PUB. L. NO. 93-102, DID NOT MERELY AUTHORIZE THE ACQUISITION OF LAND IN GENERAL TO CARRY OUT A PROGRAM. IT EXPRESSLY DIRECTED THE SECRETARY OF AGRICULTURE TO "ACQUIRE BY CONDEMNATION" SPECIFICALLY KNOWN AND IDENTIFIED LANDS - "ALL OF THE KLAMATH INDIAN FOREST LANDS WHICH THE TRUSTEE FOR THE KLAMATH INDIAN TRIBE IS REQUIRED TO SELL BY THE TERMS OF ITS TRUST AGREEMENT." THE EXACT ACREAGE WAS KNOWN WHEN THIS WAS ENACTED. THE STATUTE GAVE THE SECRETARY NO DISCRETION TO DETERMINE HOW MUCH LAND OR WHICH TRACTS TO INCLUDE. SIMILARLY, PUB. L. NO. 93-404 APPROPRIATED $49 MILLION SPECIFICALLY AND SOLELY FOR THE CONDEMNATION MANDATED BY PUB. L. NO. 93-102. THE FUNDS COULD NOT HAVE BEEN APPLIED TO ACQUISITION OF ANY OTHER LAND NOR COULD THE APPROPRIATION HAVE BEEN EXHAUSTED BY ANYTHING BUT THE CONDEMNATION OF THE KLAMATH FOREST LANDS. THE LEGISLATIVE HISTORY INDICATES THAT CONGRESS RECOGNIZED THAT THE $49 MILLION WOULD NOT BE ENOUGH TO COVER THE FINAL JUDGMENT. FOR EXAMPLE, THE HOUSE HEARINGS ON THE BILL WHICH BECAME PUB. L. NO. 93-404 CONTAINED THE FOLLOWING EXCHANGE BETWEEN CONGRESSMEN ULLMAN AND WYATT:

"MR. ULLMAN. WHAT IS YOUR FEELING ABOUT FUNDING?

"MR. WYATT. I THINK WE ARE GOING TO DO IT. I THINK THEY ARE GOING TO COME IN WITH A BUDGET AMENDMENT.

"MR. ULLMAN. WITH A BUDGET AMENDMENT?

"MR. WYATT. I THINK THEY ARE.

"MR. ULLMAN. THE 49 MILLION WOULDN'T COVER IT, THOUGH, AS YOU KNOW.

"MR. WYATT. WELL, IT COVERS THE APPRAISAL.

"MR. ULLMAN. EXCEPT THE COURTS WILL DECIDE THE ACTUAL TAKING PROCESS.

"MR. WYATT. RIGHT. WELL, IT IS IMMATERIAL WHETHER THE 49 MILLION COVERS IT OR NOT BECAUSE THEY ARE GOING TO HAVE TO PAY WHATEVER THE AWARDS ARE."

HEARINGS ON H.R. 16027 BEFORE THE SUBCOMMITTEE ON THE DEPARTMENT OF INTERIOR AND RELATED AGENCIES OF THE HOUSE COMMITTEE ON APPROPRIATIONS, 93RD CONG., 2ND SESS., PT. 5, AT 106 (1974).

IN THIS SITUATION, THERE IS NO PURPOSE TO BE SERVED BY REQUIRING A SPECIFIC APPROPRIATION FOR THE "DEFICIENCY" PORTION OF THE JUDGMENT. ACCORDINGLY, THE $81,540,000 NOT PREVIOUSLY DEPOSITED IN THE REGISTRY OF THE COURT MAY BE CERTIFIED FOR PAYMENT UNDER 31 U.S.C. SEC. 724A.

MR. QUINN'S LETTER SUGGESTS THAT THE REMOVAL IN 1977 OF THE $100,000 LIMITATION ON THE AVAILABILITY OF THE PERMANENT APPROPRIATION RENDERS OUR DECISIONS ON CONDEMNATION JUDGMENTS, ESPECIALLY 54 COMP.GEN. 799, SUPRA, NO LONGER VALID. IF THAT ASSERTION IS INTENDED TO APPLY TO ALL CONDEMNATION JUDGMENTS, WE DO NOT AGREE. THE AMENDMENT MADE BY PUB. L. NO. 95-26 MERELY REMOVED THE LIMIT WITH RESPECT TO JUDGMENTS WHICH WOULD OTHERWISE BE PAYABLE FROM THE PERMANENT APPROPRIATION. WHILE THERE IS NO RELEVANT LEGISLATIVE HISTORY FOR PUB. L. NO. 95-26, A 1978 AMENDMENT, PUB. L. NO. 95-240, EXPANDED 31 U.S.C. SEC. 724A TO COVER CERTAIN TYPES OF CLAIMS. THE SENATE REPORT ON THE LATTER ACT, REFERRING SPECIFICALLY TO PUB. L. NO. 95-26, STATED THAT "THE OBJECTIVE WAS TO CONVERT TO A PERMANENT, INDEFINITE APPROPRIATION ALL CLAIMS, JUDGMENTS AND SETTLEMENTS NOT NORMALLY PAID OUT OF AGENCY APPROPRIATIONS BUT THAT ARE AUTHORITATIVELY CERTIFIED FOR PAYMENT BY THE AGENCIES, THE COURTS IN APPROPRIATE CASES, AND THE COMPTROLLER GENERAL." S. REP. NO. 95-564, 95TH CONG., 1ST SESS. 76 (1977). THUS, THE 1977 AMENDMENT WOULD HAVE INVALIDATED OUR CONDEMNATION DECISIONS ONLY IF CONDEMNATION JUDGMENTS WERE "NOT NORMALLY PAID OUT OF AGENCY APPROPRIATIONS." AS SHOWN ABOVE, THIS HAS TRADITIONALLY NOT BEEN THE CASE. THUS, WE STILL BELIEVE THAT 54 COMP. GEN. 799, WHICH INVOLVED A SITUATION QUITE SIMILAR TO THE PRESENT CASE, WAS CORRECT WHEN IT WAS ISSUED. HOWEVER, THE 1977 AMENDMENT IS RELEVANT TO THE EXTENT THAT IT INDICATES A CONGRESSIONAL DESIRE TO AVOID THE NECESSITY TO APPROPRIATE SUPPLEMENTAL FUNDS FOR THE PAYMENT OF LARGE JUDGMENTS. IN THIS LIGHT, WE HAVE REEVALUATED THE CONTINUING APPLICABILITY OF 54 COMP.GEN. 799 AND CONCLUDE THAT, IN CASES WHERE AN APPROPRIATION HAS BEEN MADE FOR ACQUISITION OR CONDEMNATION OF A SPECIFIC PARCEL OF LAND BUT IS INSUFFICIENT FOR THAT PURPOSE, THE EXCESS OF AN AMOUNT AWARDED IN A FINAL JUDGMENT OVER THE APPROPRIATION IS "NOT OTHERWISE PROVIDED FOR" AND SUCH EXCESS MAY BE PAID FROM THE PERMANENT INDEFINITE APPROPRIATION UNDER 31 U.S.C. SEC. 724A. TO THE EXTENT THAT 54 COMP.GEN. 799 IS INCONSISTENT WITH THE CONSIDERATIONS SET FORTH IN THIS LETTER, IT WILL NO LONGER BE FOLLOWED. THE FINAL ISSUE TO ADDRESS IS THE TIMING OF THE PAYMENT OF THE KLAMATH JUDGMENT. AS QUOTED ABOVE, THE JUDGMENT PROVIDES FOR PAYMENT OF A LUMP SUM INCLUSIVE OF INTEREST IF PAYMENT IS MADE ON OR BEFORE NOVEMBER 15, 1980. INTEREST WILL BEGIN TO ACCRUE ONLY IF PAYMENT IS MADE ON OR AFTER NOVEMBER 16, 1980. IT SEEMS APPARENT THAT THE JUDGMENT WAS WRITTEN THIS WAY IN ANTICIPATION OF THE POSSIBLE NEED TO AWAIT A SPECIFIC APPROPRIATION, AND THAT A DELAY FACTOR WAS REFLECTED IN THE STIPULATED SUM. SINCE THE CONDEMNEE IS NOT ENTITLED TO MORE THAN JUST COMPENSATION, THE "DEFICIENCY" PORTION OF THE JUDGMENT IS NOT DUE UNTIL THE DATE SPECIFIED IN THE JUDGMENT, NOVEMBER 15, 1980.

ACCORDINGLY, WE WILL CERTIFY THE $81,540,000 FOR PAYMENT UNDER 31 U.S.C. SEC. 724A SO THAT PAYMENT WILL BE MADE NO LATER THAN NOVEMBER 15, 1980.