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Davis v. Shultz

decided: December 27, 1971.


Van Dusen and Rosen, Circuit Judges, and Layton, District Judge.

Author: Van Dusen


VAN DUSEN, Circuit Judge.

This is an appeal from a district court order of July 9, 1970, dismissing the complaint "with prejudice" after making a finding of lack of subject matter jurisdiction. The dispute arose out of the dismissal of Michael Davis, the named plaintiff, and 178 other economically disadvantaged youths from a Neighborhood Youth Corps Program*fn1 in the summer of 1969. The program, which provided summer employment and training for disadvantaged youths pursuant to the Economic Opportunity Act of 1964, 42 U.S.C. § 2737, et seq., was administered by defendant, Atlantic Human Resources, Inc. (Atlantic). Atlantic is a local non-profit Community Action Agency*fn2 which administered the program under a contract from the United States Department of Labor.*fn3 Plaintiff filed a class action in two counts, on behalf of himself and all those similarly situated, seeking money damages, mandamus, injunctive relief, and a declaratory judgment. Count I of the complaint seeks relief for the alleged improper administration of the program based on the failure to implement the incidents of prime sponsorship, while Count II alleges injury resulting from the denial of the opportunity to participate in the work training program by virtue of the above-mentioned dismissal of the youths.

The basis of the claim in Count I is that Atlantic should have been named as a prime sponsor and, as such, should have implemented the incidents of prime sponsorship. 42 U.S.C. § 2739(a) provides that the director of OEO ". . . shall recognize a public or private nonprofit agency which shall serve as the prime sponsor to receive funds . . ." and administer community programs under Title I-B.*fn4 The director of OEO has delegated his duties under the above section to the Department of Labor.*fn5 Paragraph 5 of the delegation agreement, which is binding on both the Secretary of Labor and the OEO director, provides that "in communities served by community action agencies, the community action agency shall be the prime sponsor. . . ."*fn6 Plaintiffs argue that Atlantic, as a Community Action Agency, becomes a prime sponsor by operation of law and that the Secretary of Labor had no discretion permitting it to operate a Title I-B program without a prime sponsor and is obliged to see that the duties of the prime sponsor are carried out.*fn7 Plaintiff's argument is rebutted by the language of the statute which grants discretion to the director in naming prime sponsors. The program here involved is a "comprehensive work and training program" pursuant to 42 U.S.C. § 2740. That section includes a clause which permits the funding of such programs to be through "a public agency or private organization other than a prime sponsor." 42 U.S.C. § 2740(c). The section goes on to provide that such funding is to occur only after considering the comments of the prime sponsor "if any." It is thus clear that the director*fn8 has broad discretion and can elect not to appoint a prime sponsor.*fn9 Also a Community Action Agency does not automatically become a prime sponsor by operation of law. In the Conference Committee Report on Title I-B, a Senate provision which would have required that Community Action Agencies be appointed as prime sponsors absent compelling circumstances was deleted.*fn10 Plaintiffs also cite paragraph 5 of the delegation agreement for the proposition that a Community Action Agency becomes a prime sponsor by operation of law. This interpretation of paragraph 5 is controverted by the second sentence of that paragraph, which grants exceptions to the policy for compelling program reasons.*fn11 The restrictive reading of this exception which plaintiffs' position necessitates is not consistent with the legislative history of the statute outlined above. The delegation agreement must be interpreted consistently with the statute which authorizes it. For the foregoing reasons, we conclude that Atlantic was not a de jure prime sponsor, there was no statutory duty to name Atlantic as a prime sponsor, and it was not a de facto prime sponsor. There is correspondingly no merit to plaintiff's claim that he has been injured by the failure to implement the incidents of prime sponsorship.

Count II of the complaint deals with the dismissals from the program in mid-summer and claims that they were the result of mismanagement and incompetency. Also, it alleges that defendants have interfered with the named plaintiff's attempts to redress the wrongful dismissals. Count II is brought as a class action, and damages are claimed for the loss of the benefits of the work training program by Davis and the 178 other youths who were dismissed. The record demonstrates that the named plaintiff has suffered no deprivation of rights and he should not be permitted to bring a suit on behalf of a class of persons who may have suffered interference with their personal rights.*fn12 On August 6, 1969, budget limitations forced the reduction of the number of enrollees in the work training program. In order to minimize the effect of this reduction, some of the employers with whom enrollees had been working under the program agreed to continue the employment and to pay wages directly. Plaintiff Michael Davis was reemployed by the Atlantic City Board of Education soon after his displacement from the program.*fn13 He cannot now claim that the denial of the benefits of the work training program for this brief period of time amounted to a deprivation of his rights.

For the above-stated reasons, we find that neither of the counts of the complaint states a claim on which relief can be granted, so that the jurisdiction of the district court may be assumed. However, we also note that the district court was apparently correct in its finding that the complaint had no jurisdictional basis. Plaintiff claimed that jurisdiction was based on 28 U.S.C. § 1361 and 28 U.S.C. § 1331.*fn14

Plaintiff has failed to meet the $10,000. jurisdictional minimum of § 1331. A party asserting § 1331 jurisdiction has the burden of establishing by competent and preponderate evidence that his claims exceed $10,000.*fn15 Normally an allegation of $10,000. damages made in good faith is sufficient, but if it appears to a legal certainty that the plaintiff cannot recover the jurisdictional amount, the case will be dismissed for want of jurisdiction.*fn16 Plaintiff has the burden of proving that the legal impossibility of recovering $10,000. is not so certain as to negative his good faith in asserting the claim. In the instant case, plaintiffs have failed to meet that burden. As was set out above, the named plaintiff was deprived of employment for a brief period of two weeks or less. His actual damages are clearly far less than the jurisdictional minimum.*fn17 Named plaintiff, in addition, claims indirect damages for the effect that the short displacement will have on his future development. We feel that while such a claim might have some merit if raised in a different context, it has none when based on such a brief deprivation of the benefits of the Act. In any event, even if plaintiff suffered compensable harm, his damages are speculative*fn18 and incapable of monetary valuation, and thus cannot serve as a basis for § 1331 jurisdiction.*fn19

Plaintiff's claim of jurisdiction based upon 28 U.S.C. § 1361 to consider the claim for mandamus relief was properly dismissed by the district court. Section 1361 grants original jurisdiction to district courts to consider "actions in the nature of mandamus" directed against officers and employees of the Federal Government.*fn20 The question of the proper scope of an "action in the nature of mandamus" under § 1361 has been the subject of varying interpretations. The majority of the Circuit Courts of Appeals which have considered this question have adopted the position of former Chief Judge Hastie of this Circuit, speaking for the First Circuit, in Ashe v. McNamara, 355 F.2d 277 (1st Cir. 1965).*fn21 This position is that § 1361 and its accompanying venue amendments were designed to eliminate obstacles to bringing mandamus actions outside of the District of Columbia and were not meant to alter the traditionally limited nature of the writ. Under this view, mandamus will lie only to compel the performance of a plain duty and will not lie to compel the discharge of an action committed to discretion.*fn22 In the instant action, plaintiff seeks to compel Secretary Shultz to perform an act which has been committed to his discretion, i.e., the naming of a prime sponsor. Under the majority view, mandamus will not lie.

The majority view is that in certain limited cases a § 1361 action may be used to compel the performance of an act committed to discretion. As the District of Columbia Circuit stated in Peoples v. United States Department of Agriculture, 138 U.S.App.D.C. 291, 427 F.2d 561 (1970), jurisdiction can be based on § 1361 to ". . . issue appropriate corrective orders where Federal officials are not acting within the zone of their permissible discretion but are abusing their discretion or otherwise acting contrary to law. . . ." In the instant action, plaintiff has claimed no such variance from the permissible scope of discretion granted to Secretary Shultz but rather has relied on the theory that the Secretary has disregarded a mandatory duty to appoint a prime sponsor.*fn23 Since we have concluded that no such mandatory duty exists, § 1361 relief will not lie under this view.

For the foregoing reasons, we affirm the July 9, 1970, order of ...

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