Effect of a Judicial Stay on Administrative Fund Termination Proceedings

• Court: Department of Justice Office of Legal Counsel
• Decided: March 14, 1980
• Status: Published

Opinion

Effect of a Judicial Stay on Administrative Fund Termination Proceedings

U n d e r th e n o n d iscrim in atio n p ro v isio n s o f th e O m nibus C rim e C o n tro l and Safe S tre ets A ct o f 1972, th e ad m in istrativ e p ro cess by w h ic h funds are su sp en d ed o r term in a te d is in d ep en d en t o f an y c o n tem p o ran eo u s ju d icial p ro c e e d in g , an d a stay e n te re d in the ju d icial p ro ceed in g th u s has no effect on an ad m in istrativ e decision to suspend or term in a te funds.

T h e L aw E n fo rcem en t A ssistance A d m in istratio n is free to d efer a d m in istra tiv e fund suspension o r term in atio n p ro ceed in g s d u rin g th e p en d en cy o f a ju d icial stay, b ut is fo reclo sed from re sto rin g funds th at h av e a lre a d y b een su sp en d ed o r term in a te d ex cep t in a c c o rd a n c e w ith th e p ro c e d u re s set fo rth in th e O m nibus C rim e C o n tro l an d Safe S treets A ct.

U n d e r th e n o n d isc rim in atio n p ro v isio n s o f th e R e v en u e S h arin g A c t, th e O ffice o f R e v en u e S h arin g is req u ired to suspend ad m in istrativ e en fo rc em en t p ro ceed in g s, an d to resto re funds a lread y su sp ended o r term in a te d , w h e n e v e r a stay is issued in th e ju d icial p ro ceed in g th at trig g e re d th e ad m in istrativ e en fo rc em en t action.

M a r c h 14, 1980

MEMORANDUM OPINION FOR TH E ASSISTANT ATTORNEY G EN ERA L, CIVIL RIGHTS DIVISION

This responds to your request for our opinion on the effect of a stay pending appeal upon fund termination proceedings of the Office of Revenue Sharing (ORS) in the Department of the Treasury under the civil rights provisions of the State and Local Fiscal Assistance Act of 1972, as amended (Revenue Sharing Act), 31 U.S.C. § 1242, and upon the Law Enforcement Assistance Administration (LEAA) under the analogous provisions of the Omnibus Crime Control and Safe Streets Act of 1972, as amended (Crime Control Act), 42 U.S.C. § 3789d(c).* Both statutes include provisions that require the agencies to institute their own enforcement proceedings whenever they learn of a judicial or administrative determination that a recipient has discriminated in viola­ tion of federal law, and both provide for automatic suspension of funds to a recipient within a fixed time thereafter. The question has arisen whether a stay pending appeal of a lower court order vacates or defers administrative fund suspension.

•N o t e : U nder § 815(c) o f th e Justice Systems Im provem ent A ct o f 1979, Pub. L. N o. 97-157, 93 Stat. 1167, 1206-09, the O ffice o f Justice Assistance, Research and Statistics replaced L E A A as the entity responsible for adm inistrative enforcem ent o f the nondiscrim ination provisions o f the C rim e C ontrol A ct. Ed.

487 Your division takes the position that a stay has the legal effect of vacating or deferring such suspension. Both the Department of the Treasury and LEA A disagree. The two agencies maintain that the administrative process by which funds are terminated under the two acts is independent of any contemporaneous judicial proceeding, whether or not the same issues of discrimination are involved, and whether or not their administrative process has been triggered in the first instance by a determination in the judicial proceeding. Therefore, in their view a stay entered in the judicial proceeding has no effect on an administrative decision to suspend funds. The Civil Rights Division memorandum takes the position that the administrative role under both statutes is merely “ancillary and supportive” of the judicial process, and that the agencies are therefore obliged “to honor” a judicial stay by suspending their administrative procedures or, if necessary, restoring the flow of federal funds. For reasons stated hereafter, we agree with your Division's position on the effect of a stay on administrative fund suspension under the Revenue Sharing Act, but find merit in the position advanced by LEA A in interpreting its responsibilities under the Crime Control Act. We believe the law requires ORS, whose actions are triggered by and are to some extent dependent on a judicial determination, to conform its actions to those of a court granting a stay. And we think that Congress intended this administrative conformity to extend to the restoration of funds already suspended or terminated. Although neither the terms nor the legislative history of the relevant provisions of the Revenue Sharing Act deal with the effect of a stay on ORS proceedings, we believe that Congress intended to assure recipients of federal funds under that Act an opportunity to contest a preliminary determination of discrimination, and to avoid fund suspension by showing a likelihood of ultimate success on the merits. Because in federal court one of the grounds for granting a stay pending appeal in this context is precisely this likelihood of success on the merits,1 we believe that Congress, had it considered

1 T h e Federal Rules o f C ivil P rocedure p ro v id e that an interlocutory o r final o rd er in an action for an injunction will not be stayed except pursuant to the provisions o f Rule 62(c). This provides in pertinent part that: w hen an appeal is taken from an in terlo cu to ry o r final judgm ent granting, dissolving, o r denying an injunction, the c o u rt in its discretion may suspend, modify, restore, o r grant an injunction d uring the pendency o f the appeal upon such term s as to bond or otherw ise as it considers p ro p er for the security o f th e adverse party. R ule 8(a) o f the Federal Rules o f A ppellate P ro ced u re provides that a stay pending appeal ought in the first instance to be sought in the district co u rt, but that a m otion for relief may be m ade in the cou rt o f appeals w h ere such a course is not practicable o r w here the district c ourt has denied an application. Because a stay itself has the effect o f an injunction o r restraining order, the requirem ent in R ule 65(d) that it be accom panied by a statem ent o f reasons has been held to apply. See M oore's F ederal P ractice § 62.05 at 62-21 through 22 (1979 ed.). A n applicant for a stay pending appeal under F R C P R ule 62(c) o r F R A P R ule 8(a) must make a “stro n g show ing” that he will succeed on the merits o f his appeal. See Belcher v. Birm ingham Trust N a t. Bank, 395 F.2d 685 (Sth Cir. 1968); Virginia Petroleum Jobbers Ass'n v. FPC. 259 F.2d 921, 925 (D .C . Cir. 1958); M onde! v. H E W , 417 F. Supp. 57 Continued

488 the issue, would not have approved the continuance of administrative procedures leading to fund termination in the face of a federal judicial stay and in disregard of it. The analogous provisions of the Crime Control Act differ signifi­ cantly from those of the Revenue Sharing Act, however, and in our view these differences make persuasive LEA A ’s argument that its own administrative process was intended by Congress to be independent of any concurrent litigation involving the same issues of discrimination. At the same time, we believe that LEAA is free under its statute to defer administrative fund suspension in the event of a judicial stay, and that sound policy may in some cases dictate such deferral. Unlike ORS, however, LEAA is probably foreclosed from restoring funds that have already been suspended or terminated except in accordance with the procedures set forth in its statute. Because the relevant provisions of the two statutes differ markedly, and because our conclusions with respect to their import for the two agencies differ correspondingly, we discuss them separately.

I. The Crime Control Act

Section 518(c)(1) of the Crime Control Act, 42 U.S.C. § 3789d(c)(l), prohibits discrimination on grounds of race, color, religion, national origin or sex, by a state or local government, in a program or activity receiving funds under a grant administered by LEAA. Section 518(c)(2), 42 U.S.C. § 3789d(c)(2), which was added to the Act in 1976 by Pub. L. No. 94-503, 90 Stat. 2418, sets out the administrative procedures by which the nondiscrimination provisions in the preceding paragraph are enforced. In relevant part these require LEAA, upon receiving notice of a “finding” by a federal or state court or administra­ tive agency to the effect that there has been a “pattern or practice” of discrimination in violation of subsection (c)(1), to set in motion an administrative procedure leading to suspension and, ultimately, termina­ tion of funds. Under this procedure LEA A must notify the chief execu­ tive of the affected governmental unit that a program or activity has been found not to be in compliance, and must request that officer to secure compliance. 42 U.S.C. §§ 3789d(c)(2)(A)(i) and (ii). If after 90 days compliance has not been secured, and if an administrative law judge has not “made a determination under subparagraph (F) that it is likely the state government or unit of local government will prevail on the merits,” LEAA “shall notify” the Attorney General that compli­ ance has not been secured “and caused [sic] to have suspended further payment of any funds under this chapter to that program or activity.”

(D . Md. 1976). Professor M oore states that w here a c o u rt o f appeals grants a stay o f an interlocutory order, “the grant o f such a stay seems tantam ount to deciding that the interlocutory injunction was im properly g ran ted ." M oore's Federal Practice, § 62.05 at 62-26.

489 42 U.S.C. § 3789d(c)(2)(C). The “determination under subparagraph (F)” is explained in that section as follows: Prior to the suspension of funds under subparagraph (C), but within the ninety day period after notification under subparagraph (C), the State government or unit of local government may request an expedited preliminary hearing on the record in accordance with section 554 of title 5, in order to determine whether it is likely that the State government or unit of local government would, at a full hearing under subparagraph (G), prevail on the merits of the issues of alleged noncompliance. A finding under this subparagraph by the administrative law judge in favor of the State government or unit of local government shall defer the suspension of funds under subparagraph (C) pending a finding of noncompliance at the conclusion of the hearing on the merits under subparagraph (G).

At the “full hearing” under subparagraph (G) referred to in this sec­ tion, the issues of discrimination are heard on the merits, and LEAA must make “a finding of compliance or noncompliance.” If LEAA makes a finding of “noncompliance,” the Attorney General “may” terminate the payment of funds. 42 U.S.C. § 3789d(c)(2)(G)(ii). Once funds have been suspended by LEAA there are only four circumstances, set out in subparagraph (D), under which payment may be resumed: (1) if the recipient enters into a compliance agreement approved by LEA A and the Attorney General; (2) if the recipient “complies fully with the final order or judgment” of a court or adminis­ trative agency, if that order or judgment covers all the matters raised in L EA A ’s original notice of noncompliance; (3) if the recipient “is found to be in compliance with subsection (c)(i) by such court”;2 and (4) if after a hearing LEA A finds “that noncompliance has not been demon­ strated.” 3 42 U.S.C. §§ 3789d(cX2)(D)(i) through (ii). . This statutory scheme suggests an intention on the part of Congress to limit agency discretion in certain respects (e.g., mandatory com­ mencement of proceedings upon notice of a “finding,” and mandatory suspension of funds 90 days thereafter); at the same time, it permits LEA A to reach its own independent conclusions on the issues of discrimination raised, and ultimately to make an independent decision to lift or continue a suspension pending a full administrative hearing on

2 T h e statute inexplicably fails to give the same effect to a similar finding o f an adm inistrative agency. 9 Subparagraph (D ) makes reference to a hearing “ pursuant to subparagraph (F ).” But subparagraph (F ) describes the “expedited prelim inary hearing*’ before an adm inistrative law judge. It is subpara­ graph (G ) w hich describes the full hearing in w hich L E A A determ ines the issue o f com pliance on the merits. W e think the reference in subparagraph (D ) to subparagraph (F ) is mistaken, and that it should instead be read as a reference to the hearing described in subparagraph (G).

490 the merits of the discrimination charge, by showing a likelihood of success at a preliminary hearing. But the statute does not spell out what relationship if any Congress intended there to be between L E A A ’s enforcement procedures once they have been set in motion, and any ongoing judicial or administrative proceedings which may have trig­ gered them in the first place. The legislative history of the 1976 amendments to the Crime Control Act does little to clarify this relationship. It manifests congressional dissatisfaction with the lack of initiative shown by LEAA in enforcing the nondiscrimination provisions of the Act, and an intent to remedy this by forcing the agency into action whenever a court or another agency “finds” the recipient to have engaged in a “pattern or practice” of discrimination. Thereafter, however, it would appear that LEA A was perceived as having an enforcement role independent of contempo­ raries and related court proceedings. The House report states that “the Committee bill will require the Administration to honor the discrimina­ tion findings of State and Federal courts and State and Federal agencies by then beginning its own enforcement process with the sending out of noncompliance notices to recipients found by others to have discrimi­ nated.” H.R. Rep. No. 1155, 94th Cong., 2d Sess. 26 (1976) (emphasis added).4 The more important evidence of LEA A ’s independence comes from a reading of the statute itself, and from a comparison of its provisions with the analogous provisions of the Revenue Sharing Act. Unlike the Revenue Sharing Act, the Crime Control Act contains no provisions requiring deference on the merits to the triggering “finding” in any part of the administrative process. Rather, it would seem that this “finding” operates on the agency only to spur it into “beginning its own enforce­ ment process.” 5 As will be discussed in greater detail below, the analogous sections of the Revenue Sharing Act are considerably more explicit with respect to the further substantive effect that should be given the triggering judicial determination.

4 T he Senate bill had made no changes in the nondiscrim ination provisions o f the C rim e C ontrol A ct, and the conference com m ittee reported out provisions that w ere in all pertinent respects identical to those in the H ouse bill. See H .R. Rep. No. 1723, 94th Cong., 2d Sess. 32 (1976). 5 O ne o f the difficulties in construing L E A A 's obligations under these provisions o f the statute is C ongress' failure to define w hat it meant by a ‘‘finding.” It is not clear in the statute o r its legislative history w h eth er this term was meant to include prelim inary o r interlocutory “ findings,” o r w hether it should be limited to formal findings after a full hearing. L E A A 's ow n regulations do not define the term, but that agency has apparently interpreted it to include the findings em bodied in a prelim inary injunction order. If the “ finding" is view ed solely as a triggering m echanism, then w e w ould have no basis on w hich to quarrel w ith L E A A 's expansive definition o f the term. If, on the o th e r hand, a “ finding’' w ere to be considered m ore o r less determ inative o f the agency's ow n actions on the m erits in connection w ith fund suspension, as it appears to be under the R evenue Sharing A ct, w e w ould be less com fortable w ith the notion that C ongress intended to include in the term “finding" any statem ent or action o f a court w ith respect to a com plaint b rought before it. See note 8 infra. It is precisely because under the C rim e C ontrol A ct a c o u rt's “ findings" are not substantively binding on L E A A that we are constrained to agree w ith that agency on the legal effect o f a stay.

491 To be sure, the Crime Control Act provides that payment of sus­ pended funds should be resumed if the recipient “complies fully with the final order or judgment” of a court. But, by implication, any court action short of a “final order or judgment” would in itself permit no such resumption. Therefore, when funds have already been suspended by LEAA, a stay in the related judicial proceeding does not, in our opinion, have any effect on the suspension. On the other hand, where funds have not yet been suspended and the agency inquiry is still under way, the statute does not appear to compel any particular agency response to developments in litigation involving the same issues. The opportunity provided the recipient in subparagraph (F) to defer suspen­ sion by demonstrating a likelihood of success on the merits before an administrative law judge suggests a general congressional policy under­ lying the Act which we think would permit LEAA to defer its own suspension proceedings where a stay has been granted by the court whose “findings” triggered those proceedings in the first place. This is, however, a matter of policy and not a matter of law. In sum, based on our reading of § 518(c)(2) of the Crime Control Act and its legislative history, we agree with LEA A that its administrative process is independent of the triggering judicial or administrative pro­ ceedings; that suspended funds may be resumed only upon the happen­ ing of one of the events specified in subparagraph (D); and in particular that it is not required under the statute to bring its own administrative process to a halt in the event a stay is obtained in a contemporaneous and related judicial proceeding. On the other hand, we do not think LEAA is precluded from taking into account the implications of a stay order in the course of its own pre-suspension proceedings. The congres­ sional policy reflected in subparagraph (F) would fully support a deci­ sion by LEAA to honor such a stay, and defer suspension pending a full administrative hearing on the merits. Indeed, we think in some circumstances LEAA would not be remiss in its responsibilities under the statute in deferring all administrative action pending a resolution of the issues raised in the court proceeding.6

II. The Revenue Sharing Act

The 1976 amendments to the Revenue Sharing and Crime Control Acts were passed on October 13 and 15 of that year, respectively. In both cases Congress was seeking to strengthen the nondiscrimination

8 L E A A 's ow n regulations appear to recognize the desirability o f coordinating its enforcem ent efforts w ith contem poraneous litigation involving the same issues. F o r exam ple, the regulations provide that if an L E A A com plainant has also filed suit in federal o r state court, and if the trial o f the suit w ould be in progress during the L E A A investigation, L E A A “ will suspend its investigation and m onitor the litigation through the co u rt docket and co n tacts w ith the com plainant." 28 C .F .R . § 42.205(c)(5). In addition, w hen a triggering “ finding" has been m ade m ore than 120 days before L E A A learns o f it, notification o f noncom pliance will be deferred pending an inquiry into the current status o f the case. 28 C .F .R . § 42.210(c).

492 enforcement provisions of prior law, and to provide mechanisms to compel the two agencies to commence proceedings looking toward termination of federal funds in the event a recipient state or local government were found by a court or agency to have discriminated in violation of federal law. The provisions intended to accomplish this objective in the two Acts turned out quite differently, however, primar­ ily because the Senate took an active role in amending the Revenue Sharing Act and displayed little or no interest in the nondiscrimination provisions in the Crime Control Act. The House bills amending both Acts contained essentially identical enforcement provisions. These were enacted without substantive change into the Crime Control Act amend­ ments, and without any separate contribution from the Senate. See note 4 supra. But the Senate had its own proposals to make with respect to the Revenue Sharing Act, proposals that were quite different from those of the House, and that were in the main accepted by the Confer­ ence Committee. The “compromise” 7 reached in conference between the House and Senate on the nondiscrimination enforcement programs of the Revenue Sharing Act was enacted into § 122 of the Act by Pub. L. 94-448, 90 Stat. 2350, and is codified in § 1242 of title 31. A brief review of its pertinent provisions shows how the Senate’s approach differed from that of the House in the Crime Control Act. Like the analogous provisions of the Crime Control Act, § 122(b)(1) contains a triggering mechanism for the commencement of administrative enforcement pro­ ceedings leading to fund termination. This triggering mechanism is described in § 122(c)(1) as a “holding” by a federal or state court, or federal administrative law judge, that the recipient state government has discriminated in violation of federal law.8 Once the Secretary of the Treasury has received notice of a “holding,” a notice of noncompli­ ance must be sent the recipient, and the fund termination procedure set in motion.9 Subsections (b)(2) and (b)(3) describe a hearing procedure

7 122 Cong. Rec. 34,099 (Sept. 30, 1976) (rem arks o f Rep. D rinan, a sponsor o f the bill in the House). 8 Unlike the triggering events in § 518(c)(2) o f the C rim e C ontrol A ct, the triggering events under the R evenue Sharing A ct are not restricted to a “ pattern o r practice” determ ination, and no effect is given determ inations o f a State adm inistrative agency. 9 A lthough you have not asked o ur opinion on the issue o f w h eth er a “ holding" under the Revenue Sharing A ct includes an interlocutory o rder, we note the position o f O R S that it does include such orders in reaching o u r ultim ate conclusions on the effect o f a stay o f such an order. In its regulations, O R S defines a “ holding" as “any finding o f fact o r conclusion o f law . . . w hich has been litigated . . .“ 31 C .F .R . § 51.67(a). O R S has taken the position that a prelim inary injunction constitutes a “ holding" for purposes o f triggering its adm inistrative fund suspension procedure, a position w hich we do not understand your Division to dispute. L E A A appears to take the sam e position w ith respect to a “ finding" under the Crim e C ontrol A ct. See note 5 supra. W e also note here that w e d o not think C ongress intended to attach any particular significance to the use o f the term “holding" in the Revenue Sharing A ct, as opposed to the term “ finding" used by the Crim e C ontrol A ct. N o difference betw een the tw o term s w as asserted in Congress, and none has been claim ed by either L E A A o r O RS. A s it happened, the term “ holding" was the one em ployed by the Senate in its revenue sharing bill, and the term “ finding" was em ployed by the H ouse in both its crim e control bill and its revenue sharing bill. T he term s “ holding" and “ finding" are used inter* Continued

493 before the Secretary of the Treasury and, if requested subsequently, an administrative law judge. It is at this point that the two statutes part ways. Where the two-step hearing procedure under the Revenue Shar­ ing Act has been triggered by a “holding” on the issues of discrimina­ tion, the substance of this “holding” may not be collaterally attacked before either the Secretary or the administrative law judge. That is, the recipient may present evidence to the Secretary only on the issue of whether the program or activity in which discrimination is charged has been federally funded, and not on the merits of the discrimination charge itself. If the Secretary determines that federal funds are in­ volved, and if the recipient then requests a further hearing before an administrative law judge, that officer too is precluded from addressing the discrimination issue on the merits. In case there remains any doubt, subsection (c)(2) restates the restrictions on the administrative process as follows: If there has been a holding described in paragraph [(c)(1)] with respect to a State government or a unit of local government, then, in the case of proceedings by the Sec­ retary pursuant to subsection (b)(2) of this section or a hearing pursuant to subsection (b)(3) of this section with respect to such government, such proceedings or such hearings shall relate only to the question of whether the program or activity in which the exclusion, denial, dis­ crimination, or violation occurred is funded in whole or in part with funds made available under subchapter I of this chapter. In such proceedings or hearing, the holding described in paragraph [(c)(1)] . . . shall be treated as con­ clusive. 31 U.S.C. § 1242(c)(2) (emphasis added). Unless the Secretary or admin­ istrative law judge finds that the program in which discrimination is charged is not federally funded, the Secretary “shall” suspend payment of funds. Subsection (e) of the statute sets out the five grounds on which suspended payments may be resumed where a “holding” has triggered the suspensions: 1) if the recipient government enters into a compliance agreement with the government agency or office responsible for pros­ ecuting the claim or complaint which is the basis for the holding, if the agreement has been approved by the Secretary;10 2) if the recipient government “complies fully with the holding,” if that holding covers all matters raised in the Secretary’s notice of noncompliance; 3) if the

changeably in both the Senate rep o rt and the conference report on the revenue sharing bill, suggesting that that body did not focus at ail on the difference, if any. betw een them. See S. Rep. No. 1207, 94th C ong., 2d Sess. 32 (1976); H .R. Rep. No. 1720, 94th C ong., 2d Sess. 35-36 (1976). Indeed, in discussing the conditions for resum ption o f funds both reports speak o f com pliance w ith an “o rd e r’* o f a federal court, w here the statute uses the term “ holding.” Id. See 31 U.S.C. 1242(e)(2). 10 T h e com pliance agreem ent is described in subsection (d)(1).

494 recipient is found to be in compliance by the court or agency that issued the holding; 4) if the administrative law judge determines that the recipient is in compliance under subsection (b)(3)—a determination which may be based only on the presence or absence o f federal funds, not the merits of the discrimination claim; and 5) if the body that has issued the triggering holding is reversed by an appellate tribunal. This final condition of lifting the suspension is also dealt with in subsection (c)(3): If a holding described in paragraph [(c)(1)] is reversed by an appellate tribunal, then proceedings under subsection (b) o f this section which are dependent upon such holding shall be discontinued; any suspension or termination of pay­ ments resulting from such proceedings shall also be dis­ continued. 31 U.S.C. § 1242(c)(3) (emphasis added). The acknowledgment in subsection (c)(3) that the administrative pro­ ceedings are “dependent” on the proceedings in the triggering body is reflected generally in the grounds for resumption of suspended pay­ ments described above. Three of the five grounds are for all practical purposes beyond the control of the Secretary: the first, a compliance agreement, is grounds for resumption of payment only where it is entered into by the parties to the triggering lawsuit or complaint. The third ground depends on the recipient’s compliance as determined by the triggering body. And the fifth ground depends entirely on the action of an appellate tribunal in reversing the triggering holding. Although there is some independent role reserved to the agency with respect to the first, second, and fourth grounds, the agency is always bound to follow the lead of the triggering body whenever the merits of the discrimination issue are involved. The congressional concern to limit the independent enforcement au­ thority of the Secretary of the Treasury where there has been a prior holding of discrimination is reflected in the legislative history of the 1976 amendments to the Revenue Sharing Act. As with the Crime Control Act, Congress was aware of widespread dissatisfaction with the agency’s failure to use its suspension power even where the recipient agency had been adjudged by a federal court to be in violation of the law. See Hearings before the Subcomm ittee on Revenue Sharing o f the Senate Finance Committee, 94th Cong., 1st Sess. 173, 197, 214 (1975). See also United States v. City o f Chicago, 395 F. Supp. 329 (N.D. 111. 1975), a f f d 525 F.2d 695 (7th Cir. 1976). However, the Senate’s contri­ bution to the provisions that emerged in 1976 as the Conference “com­ promise” reflected equally strong concerns to minimize the burden of enforcement on ORS staff, and “to safeguard the due process rights of the recipient.” S. Rep. No. 1207, 94th Cong., 2d Sess. 29 (1976). These concerns resulted in the development of provisions limiting the discre­

495 tion of ORS where a court or federal agency proceeding was in progress. The hearings in the Senate Finance Committee in August of 1976 took place after the House had reported out its bill amending the Revenue Sharing Act. That House bill contained nondiscrimination enforcement provisions virtually identical to those ultimately enacted in the Crime Control Act. The Senate committee was not satisfied with these provisions on two grounds: first, they placed too heavy an en­ forcement responsibility on the staff of the Office of Revenue Sharing, whose officers testified that they did not wish to assume a larger role in civil rights enforcement; and second, they failed to afford a recipient government adequate protection against administrative arbitrariness and duplicative hearings. The General Counsel of the Treasury Department testified that the elaborate procedures set forth in the House bill “would really require a multiplication of the staff with very little effect overall,” and that “the mechanics set up in the House-passed bill would create tremendous administrative burdens.” Hearings before the Senate C om m ittee on Finance on H .R. 13367, 94th Cong., 2d Sess. 48-49 (1976). He recommended that more reliance be placed on the ability of a court to monitor compliance, and less on the independent ability of ORS to enforce the law. The committee also heard testimony from a number of state and local government officials. The comments of Patrick Lucey, G overnor of Wisconsin, are typical: An ideal system of anti-discrimination enforcement would emphasize both due process and simplicity to preclude the federal government from arbitrarily suspending revenue sharing funds in any jurisdiction. Deadlines should be short, and findings of discrimination should be based on the administrative and judicial process which does not rely solely on the judgment of the Secretary of the T reasury.

Id. at 89. Kenneth Gibson, Mayor of Newark, New Jersey, complained that “federal civil rights enforcement requirements are oftimes duplica­ tive and contradictory in nature.” He recommended that “a strategy be developed to consolidate and coordinate federal civil rights enforce­ ment in general and that due process be observed in any withholding of funds from local government.” Id. at 92-93. In a colloquy with Senator Packwood, Mr. Gibson and John Poelker, Mayor of St. Louis, dis­ cussed the due process problems inherent in simultaneous and poten­ tially contradictory administrative and judicial proceedings. Senator Packwood asked how to construct “a fair section” that would not “unduly penalize” a recipient during the pendency o f a court suit. Poelker recommended that “[i]t should be left up to the decision o f the court, not the Secretary. . . . As long as the suit is pending, and the 496 locality has not been found in violation until that time,” funds should not be suspended. Both Mayors Poelker and Gibson emphasized that in their opinion the inequity of terminating funds prior to “the end of the suit” outweighed the possibility of undesirable continuance of funds during its pendency. Id. at 77-78. The general criticism of. the House bill in the Senate committee led to the drafting of the provisions that eventually were enacted as § 122. The problems of delay, unfairness, and duplication that witnesses per-, ceived to be inherent in the House approach were sought to be re­ solved by provisions linking the ORS administrative role more closely with proceedings brought before courts and other agencies. The Con­ ference Committee accepted the Senate bill in all pertinent respects. H.R. Rep. No. 1720, supra, at 34. From the foregoing discussion it is clear that the terms of the civil rights enforcement provisions of the Revenue Sharing Act and their legislative history are substantially different from those of the Crime Control Act. We believe these differences warrant a different conclu­ sion with respect to the effect a stay on administrative fund suspension proceedings under the two acts. Under the Crime Control Act, once the administrative enforcement proceeding has been triggered by a “finding,” LEAA operates independently of the finding. Under the Revenue Sharing Act, ORS proceedings are “dependent” from begin­ ning to end on the concurrent judicial or federal agency proceedings. Since ORS is barred from making its own determination on the issue of discrimination once there has been a court determination, we think it must also respect the court’s subsequent decision to stay the effect of that determination. This is consistent with the Senate’s concern not to burden ORS staff with massive civil rights enforcement responsibilities, and to ensure recipient governments due process of law. In the case of LEAA, however, to the extent that that agency remains free to reach its own decision on the merits of the discrimination issues prior to' suspending funds, we do not believe the law requires it to honor a judicial stay—although we also think that it may do so in its discretion.

L a r r y L . S im m s D eputy Assistant Attorney General Office o f Legal Counsel