WILLIAM E. BROCK, SECRETARY OF LABOR, PETITIONER V. PIERCE COUNTY No. 85-385 In the Supreme Court of the United States October Term, 1985 On Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit Brief for the Petitioner TABLE OF CONTENTS Opinions below Jurisdiction Statute involved Questions Presented Statement Summary of argument Argument: The Secretary of Labor may recover CETA funds unlawfully expended by a grant recipient even though the Secretary did not issue a final determination within the 120-day period prescribed by Section 106(b) A. A violation of the time limit in Section 106(b) does not bar the recovery of misused CETA funds because Congress did not expressly condition the Secretary's recoupment authority upon compliance with Section 106(b) B. The legislative history of Section 106(b) demonstrates that Congress did not intend to bar the Secretary from recovering misspent CETA funds when he failed to issue a final determination within 120 days Conclusion OPINIONS BELOW The opinion of the court of appeals (Pet. App. 1a-6a) is reported at 759 F.2d 1398. The opinions of the administrative law judge (Pet. App. 7a-19a, 20a-30a) are unreported. JURISDICTION The judgment of the court of appeals (Pet. App. 31a) was entered on May 7, 1985. On July 26, 1985, Justice Rehnquist extended the time within which to file a petition for a writ of certiorari to and including September 4, 1985. The petition was filed on that date and was granted on November 4, 1985. The jurisdiction of this Court rests upon 28 U.S.C. 1254(1). STATUTE INVOLVED Section 106(b) of the Comprehensive Employment and Training Act, 29 U.S.C. (Supp. V 1981) 816(b), provides in pertinent part: Whenever the Secretary receives a complaint from any interested person or organization * * * which alleges, or whenever the Secretary has reason to believe (because of an audit, report, on-site review, or otherwise) that a recipient of financial assistance under this chapter is failing to comply with the requirements of this chapter, the regulations under this chapter or the terms of the comprehensive employment and training plan, the Secretary shall investigate the matter. The Secretary shall conduct such investigation, and make the final determination required by the following sentence regarding the truth of the allegation or belief involved, not later than 120 days after receiving the complaint. If, after such investigation, the Secretary determines that there is substantial evidence to support such allegation or belief that such a recipient is failing to comply with such requirements, the Secretary shall, after due notice and opportunity for a hearing to such recipient, determine whether such allegation or belief is true. QUESTION PRESENTED Whether Section 106(b) of the Comprehensive Employment and Training Act (CETA), 29 U.S.C. (Supp. V 1981) 816(b), which states that the Secretary of Labor "shall" issue a final determination within 120 days of the receipt of a complaint alleging the unlawful use of CETA funds by a grant recipient, bars the Secretary from recovering misused grant funds when he fails to issue a final determination within the 120-day period. STATEMENT 1. The Comprehensive Employment and Training Act (CETA), 29 U.S.C. (Supp. V 1981) 801 et seq., authorized the Secretary of Labor to grant federal funds to qualified entities, principally states or local government units, for programs "provid(ing) job training and employment opportunities for economically disadvantaged, unemployed, or underemployed persons." 29 U.S.C. (Supp. V 1981) 801; see also S. Rep. 95-891, 95th Cong., 2d Sess. 4, 42-43 (1978); H.R. Rep. 93-659, 93d Cong., 1st Sess. 1-3 (1973). /1/ The statutory scheme was carefully constructed to ensure that programs financed with CETA funds would further the purposes of the Act. Thus, the statute prescribes detailed eligibility standards for participants in CETA programs and sets forth the terms and conditions governing the employment of such program participants. See 29 U.S.C. (Supp. V 1981) 823-827; see also 20 C.F.R. 675.5, 676.21 to 676.30a, 676.51 to 676.76. Each grant recipient is required to submit assurances that its program will comply with all applicable statutory and regulatory requirements (29 U.S.C. (Supp. V 1981) 813(a)(21)). The Act authorizes the Secretary of Labor to conduct audits of CETA grant recipients "(i)n order to assure that funds provided under (the CETA) are used in accordance with its provisions" (29 U.S.C. (Supp. V 1981) 835(a)). In addition, any interested person, such as a program participant, may file a complaint with the Secretary alleging that a grant recipient failed to comply with CETA standards. 29 U.S.C. (Supp. V 1981) 816; 20 C.F.R. 676.86(b). The audit report or complaint is forwarded to the Department of Labor grant officer responsible for the particular grant. The grant officer provides the grant recipient with an opportunity to comment on the matter and then issues an initial determination in which he independently assesses the relevant issues. Following the issuance of the initial determination, the grant officer must offer to attempt to resolve the dispute informally; when informal resolution is not successful, the grant officer issues a final determination. 20 C.F.R. 676.86(c) and (d), 676.88 to 676.92. If the grant officer finds that the grant recipient violated the CETA's requirements, the grant officer may order the grant recipient to repay any misspent funds to the United States. 29 U.S.C. (Supp. V 1981) 816(b) and (d). /2/ The provision of the Act at issue in this case, Section 106(b), 29 U.S.C. (Supp. V 1981) 816(b), states that if the Secretary obtains information -- either as the result of an audit or through the receipt of a complaint -- concerning a grant recipient's failure to adhere to the Act's requirements, the Secretary must investigate the matter. The same provision then states that "not later than 120 days after receiving the complaint," the Secretary "shall" make a "final determination" regarding the allegations (ibid.). 2. a. Respondent, a county in the State of Washington, received CETA grants from the federal government during the years 1974-1977. On September 19, 1978, the Labor Department's Office of Special Investigations filed an audit report with the Labor Department official who administered respondent's grant (Pet. App. 2a, 21a). The grant officer issued a final determination on February 13, 1981, approximately 29 months after receipt of the audit, disallowing approximately $110,000 in costs claimed by respondent relating to the hiring of ineligible CETA participants (ibid.). Respondent sought review of the grant officer's determination before an administrative law judge (ALJ). The ALJ concluded that respondent had incurred more than $108,000 in costs in violation of CETA regulations, finding that the grant officer had correctly determined that the challenged participants had been unemployed for less than 15 days, the minimum period of unemployment required for CETA eligibility (id. at 22a-25a). He ordered respondent to repay these funds to the United States (id. at 30a). Respondent argued that the length of time between the filing of the audit report and the grant officer's issuance of the final determination barred the repayment order. It "(c)onced(ed) that (the) delay (did) not affect the Grant Officer's jurisdiction," but contended that it had been prejudiced because of the delay (Pet. App. 26a). The ALJ rejected this claim, finding that "(n)o specific instances of prejudice are shown and from all the evidence available it does not appear that any claimed prejudice did result" (ibid.). b. On December 11, 1978, the Department's Office of Inspector General filed a second audit report with respondent's grant officer questioning costs relating to respondent's hiring of another group of ineligible CETA participants (Pet. App. 3a, 7a). The grant officer issued a final determination on April 22, 1981, approximately 28 months after the filing of the audit report. He subsequently issued a corrected final determination on May 22, 1981, disallowing costs of approximately $373,000. Id. at 3a, 8a-9a. The administrative law judge disallowed almost $265,000 in costs claimed by respondent and required the repayment of these funds to the United States (id. at 7a-19a). He found that these costs were incurred in paying participants who were not eligible for benefits under the CETA program (id. at 10a-16a). The ALJ again rejected respondent's claim that the grant officer's delay violated Section 106(b), noting that "there were several attempts at informal resolution of the dispute" between the filing of the audit report and the issuance of the final determination and that respondent could not "show any specific instances of prejudice inuring due to this technical delay" (Pet. App. 10a). The decision of the administrative law judge in each case became the final decision of the Secretary (see 20 C.F.R. 676.91(f)), and respondent sought judicial review in the court of appeals pursuant to 29 U.S.C. (Supp. V 1981) 817. 3. The court of appeals reversed the Secretary's determinations (Pet. App. 1a-6a). Relying upon its prior decision in City of Edmonds v. Department of Labor, 749 F.2d 1419 (9th Cir. 1984), the court held that the Secretary "had no authority" to make a final determination more than 120 days after the filing of the audits, and therefore could not recover any funds unlawfully spent by respondent (Pet. App. 6a). The court in City of Edmonds had held that the 120-day time limit contained in Section 106(b) of the CETA is "mandatory" and "jurisdictional" and stated that "Congress intended to preclude any action on a complaint if the Secretary failed to make a final determination within 120 days" (749 F.2d at 1422). It relied upon Congress's use of the term "shall" in the statute; this Court's construction of a limitations provision containing the term "shall" in Mohasco Corp. v. Silver, 447 U.S. 807 (1980); and the Third Circuit's similar interpretation of Section 106(b) in Lehigh Valley Manpower Program v. Donovan, 718 F.2d 99 (1983). The court below characterized City of Edmonds as a case concerning an investigation based upon a formal complaint, but it concluded that the 120-day limit set forth in Section 106(b) also applies which, as in the present case, the investigation is based upon the results of an audit (Pet. App. 4a). The court found that the term "complaint" in Section 106(b) is not limited to a "formal accusatory pleading" (Pet. App. 4a), observing that "the triggering event which starts the 120 (day) investigation period is the awareness by the Secretary of an alleged violation by means of a citizen's complaint, audit, report, onsite review 'or otherwise'" (id. at 5a). Accordingly, the court concluded that the Secretary was barred from recovering the approximately $373,000 in funds found to have been misspent by respondent. /3/ SUMMARY OF ARGUMENT When Congress grants enforcement power to a government agency or endows an agency with responsibility for particular regulatory determinations, it often prescribes procedural rules governing the agency's exercise of that authority, such as the 120-day period for the issuance of a final determination established by Section 106(b). An agency may, for a variety of reasons, fail in some cases to comply with a procedural requirement set forth in its statute. Thus, Congress may establish a time limit for agency action that is impractical because it is based on a misconception of the time needed to accommodate the agency's decisionmaking process; the time period alternatively may be reasonable in the generality of cases but may not be long enough to permit the agency to act in particularly complex cases. In addition, insufficient resources, the negligence of government employees, or both, may prevent an agency from satisfying a procedural rule. The question presented in this case is whether an agency forfeits its authority when it commits such a procedural error, in the absence of any indication that Congress intended that result. In the vast majority of cases, Congress's intent clearly would best be served by interpreting a statute so that the agency is not divested of its authority to act in the public interest. Congress endowed the agency with authority in the first place because it viewed the agency's exercise of that authority as necessary to the success of the particular federal program. Unless Congress has specified that its grant of authority is contingent upon the agency's compliance with specified procedural rules, elimination of the agency's authority would jeopardize the goals to be served by the federal program administered by the agency. Settled rules of statutory interpretation confirm that an agency's failure to comply with a procedural rule does not divest it of authority unless Congress so specifies. This Court consistently has applied the "great principle of public policy" that "the public interests should (not) be prejudiced by the negligence of the officers or agents to whose care they are confided" (United States v. Nashville, C. & St. L. Ry., 118 U.S. 120, 125 (1886)). The policy underlying this rule of construction is especially applicable in the case of statutory time limits upon agency action, because interpreting a time limit to divest the agency of jurisdiction would seriously restrict the agency's effectiveness, forever barring the agency from acting in a case in which the time period has expired. Statutory time limits are not rendered meaningless by this rule; they may provide the basis for an order directing a tardy agency to act with expedition. Here, because Section 106(b) does not expressly state that the Secretary's authority to recover unlawfully expended CETA funds depends upon the issuance of a final determination within the 120-day period prescribed by that provision, the Secretary's failure to issue such a determination within the statutory period does not bar him from recovering misused CETA funds. The result dictated by the statutory language is confirmed by the legislative history of Section 106(b), which demonstrates conclusively that Congress did not intend the provision to act as a limitation upon the Secretary's enforcement authority. First, statements by key legislators unequivocally declared that the Secretary's failure to act within the 120-day period would not terminate his authority to recover misspent funds. Second, the purpose of Section 106(b) was to expedite administrative action with regard to complaints by CETA participants charging grant recipients with misuse of federal funds. Applying Section 106(b) as a jurisdictional bar when the Secretary does not act with sufficient dispatch would extinguish these claims, harming the very persons for whose benefit the provision was enacted. Finally, one of Congress's principal concerns in enacting the 1978 CETA amendments, which included Section 106(b), was to prevent fraud and abuse in the CETA program. Congress sought to strengthen the Secretary's enforcement powers so as to increase the likelihood that misspent funds would be recovered. The court of appeals' interpretation of Section 106(b) thwarts the accomplishment of this legislative goal; it transforms a provision designed to foster the detection of unlawful expenditures of CETA funds into a source of immunity for grant recipients. Since Congress was aware that the Secretary in many instances would not be able to act within the time period specified by Section 106(b), it is inconceivable that Congress would have intended the provision to allow grant recipients to escape their obligation to refund misused CETA grants to the United States. ARGUMENT THE SECRETARY OF LABOR MAY RECOVER CETA FUNDS UNLAWFULLY EXPENDED BY A GRANT RECIPIENT EVEN THOUGH THE SECRETARY DID NOT ISSUE A FINAL DETERMINATION WITHIN THE 120-DAY PERIOD PRESCRIBED BY SECTION 106(b) Section 106(b) of the Comprehensive Employment and Training Act, 29 U.S.C. (Supp. V 1981) 816(b), states that within 120 days of receiving a complaint alleging that a grant recipient expended CETA funds in a manner contrary to law, the Secretary of Labor "shall" issue a final determination regarding the allegations set forth in the complaint. The court of appeals held that when the Secretary fails to comply with this deadline he is forever barred from recovering illegally-spent CETA funds from the grant recipient, despite the fact that the statute by its terms imposes no such limitation upon the Secretary's authority to require the repayment of misspent CETA funds to the United States. This surprising interpretation of Section 106(b) violates the settled principle that statutory time limits governing agency action do not divest an agency of its authority to protect the public interest unless Congress expressly specifies that result. Moreover, the interpretation of Section 106(b) adopted by the court below is contrary to the provision's express legislative history and plainly frustrates both the particular purpose underlying Section 106(b) and Congress's general objectives in enacting the 1978 CETA amendments, which included Section 106(b). A. A Violation Of The Time Limit In Section 106(b) Does Not Bar The Recovery Of Misused CETA Funds Because Congress Did Not Expressly Condition The Secretary's Recoupment Authority Upon Compliance With Section 106(b) The court of appeals concluded that Section 106(b) restricts the Secretary of Labor's enforcement authority because it believed that whenever a government agency fails to comply with a mandatory time limit relating to the exercise of its statutory authority, the agency loses its power to act in that case. This Court's decisions made clear, however, that the presumption to be employed in construing statutory time limits such as Section 106(b) is the precise opposite of the rule announced by the court of appeals. An agency does not forfeit its statutory authority to act in the public interest when it fails to act within the period prescribed by statute unless Congress itself clearly specifies that result. Since Section 106(b) contains no express language indicating that Congress enacted the 120-day rule as a substantive limitation upon the Secretary's authority to recover misused CETA funds, the Secretary should not be prohibited from recovering such funds simply because he fails to act within the time limit set forth in that provision. This Court explained over 100 years ago that statutes often contain "regulations designed to secure order, system, and dispatch in proceedings, * * * (the) disregard of which (cannot injuriously affect) the rights of parties interested (in the proceedings) * * *. Provisions of this character are not usually regarded as mandatory unless accompanied by negative words importing that the acts required shall not be done in any other manner or time than that designated. French v. Edwards, 80 U.S. (13 Wall.) 506, 511 (1871). Accordingly, a procedural provison should not be construed in a manner that would "disarm the Government of a power which has been confided to it to be used for the general good * * * unless plain and express words indicated that such was the intent of the Legislature." Brown v. Duchesne, 60 U.S. (19 How.) 183, 195 (1856). Important policy considerations support this rule of statutory interpretation. When Congress establishes a federal program -- such as a regulatory scheme or a system of federal grants -- and endows a government agency with enforcement authority or decisionmaking responsibility in connection with that program, it obviously does so because it deems the agency's exercise of that authority necessary to achieve the public purpose the statute is designed to serve. Here, for example, Congress authorized the Secretary to audit the records of CETA grantees and recover misused grant funds because it believed that such authority was essential to ensure that CETA funds would be used in a manner that furthered the goals of the CETA program (see pages 23-24, infra). The invalidation of agency action in circumstances in which Congress did not intend that result might well disrupt the program by delaying or preventing enforcement measures or regulatory actions that Congress deemed crucial to the program's success. An agency's failure to comply with a procedural rule might be a product of the peculiar factual circumstances of a particularly complex case or stem from the fact that the rule is incompatible with the practical realities of administering the program. Alternatively, an agency's failure to comply with a procedural rule might be attributable to inadequate resources or the negligence of government officials. Whatever the reason, since the default will almost never reflect an intentional decision to ignore the particular procedural rule, courts properly are reluctant to construe statutory procedural requirements in a manner that divests an agency of its authority to act in the public interest. /4/ A procedural requirement of this type often included in federal statutes is a provision stating that agency action "shall" be completed within a specified number of days. Such a time limit is subject to several possible interpretations. It could be construed as simply precatory, expressing Congress's preference that the agency attempt to act within the specified time period; or as mandatory, establishing a binding time limit for agency action. If the provision is mandatory, it could give rise to one of two remedies in the event the agency fails to comply with the statutory requirement. An injured party could have a right to an order directing the agency to act expeditiously, or, alternatively, the provision could be interpreted as establishing a jurisdictional requirement, depriving the agency of authority if it fails to act within the required time period. The policies discussed above are strongly implicated in construing a statutory time limit of this sort. An agency would be deprived forever of its authority to act in a particular case if such a statute were construed as jurisdictional. The presumption that procedural provisions do not operate to divest an agency of its authority to act in the public interest therefore should apply with greatest force in this context, and such time limitations accordingly should be presumed not to be jurisdictional. /5/ This Court's decisions confirm that a statutory provision establishing a time limit for agency action should not be interpreted to invalidate untimely agency action absent an express statement by Congress that the statute is intended to have that effect. Frequently invoking the "great principle of public policy" that "the public interests should (not) be prejudiced by the negligence of the officers or agents to whose care they are confided," the Court consistently has rejected claims that statutory time limits restrict the government's authority. United States v. Nashville, C. & St. L. Ry., 118 U.S. 120, 125 (1886); see also Chesapeake & Delaware Canal Co. v. United States, 250 U.S. 123, 125-127 (1919); United States v. Thompson, 98 U.S. 486, 489 (1878) ("It was deemed important that, while the sovereign was engrossed by the cares and duties of his office, the public should not suffer by the negligence of his servants."). Thus, it is settled that the United States is not bound by a statute of limitations unless Congress clearly manifests its intention that the statute applies to the government. Guaranty Trust Co. v. United States, 304 U.S. 126, 132 (1938); United States v. Wurts, 303 U.S. 414, 415-416 (1938); E.I. duPont de Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924); United States v. St. Paul, M. & M. Ry., 247 U.S. 310, 314 (1918); United States v. Whited & Wheless, Ltd., 246 U.S. 552, 561-562 (1918); United States v. Nashville, C. & St. L. Ry., 118 U.S. at 125. /6/ This rule had its origins in the prerogatives of the Crown, but the source of its "continuing vitality" is the "great public policy of preserving the public rights, revenues, and property from injury and loss, by the negligence of public officers." Guaranty Trust Co. v. United States, 304 U.S. at 132, quoting United States v. Hoar, 26 F. Cas. 329, 330 (C.C.D. Mass. 1821) (No. 15, 373) (Story, J.). The rule thus serves to protect rights vested in the government for the benefit of the public at large. The same policy supports the application of the presumption in construing statutes such as Section 106(b) that establish specific time limits for agency action. In the case of general statutes of limitations the effect of the statute is clear -- it bars an untimely claim -- but the scope of the limitations provision is uncertain. The rule of statutory construction is to apply the presumption that the statute does not encompass actions commenced by the government. Here, the scope of the time limit is clear -- it applies to a particular agency action -- but the effect of the provision is uncertain. It is logical to apply the same rule of construction, and to presume that the statute does not divest the agency of its authority, because the same policy is implicated -- the principle that public rights should not be extinguished as a result of delay by government officials. This result is further supported by NLRB v. J.H. Rutter-Rex Manufacturing Co., 369 U.S. 258 (1969), in which the Court concluded that agency action was not invalid simply because the agency acted in an untimely manner. The National Labor Relations Board "after considerable delay" (369 U.S. at 259) ordered an employer to provide backpay to employees whom the Board previously had found entitled to reinstatement; the NLRB did not issue the backpay order until more than nine years after its initial finding of liability. The court of appeals reduced the award of backpay on the ground that the Board violated its obligation under the Administrative Procedure Act to "'proceed with reasonable dispatch to conclude any matter presented to it'" (id. at 264 (citation omitted)). This Court assumed that the Board's tardiness violated the APA, but held that the court of appeals erred by reducing the backpay award. The Court stated that "the Board is not required to place the consequences of its own delay, even if inordinate, upon wronged employees to the benefit of wrongdoing employers." Id. at 265; accord NLRB v. International Association of Bridge, Structural & Ornamental Ironworkers, No. 83-1202 (May 14, 1984), slip op. 5. The courts of appeals consistently have applied this presumption against restricting the government's authority to act in the public interest when interpreting statutory time limits upon agency action. They have held in a variety of statutory contexts that an agency's failure to comply with a statute specifying that agency action "shall" take place within a specified period of time does not bar subsequent action by the government unless the statute itself "'both expressly requires an agency or public official to act within a particular time period and specifies a consequence for failure to comply with the provision.'" St. Regis Mohawk Tribe v. Brock, 769 F.2d 37, 41 (2d Cir. 1985) (emphasis in original), petition for cert. pending, No. 85-949, quoting Fort Worth National Corp. v. FSLIC, 469 F.2d 47, 58 (5th Cir. 1972). /7/ These statutory time limits are not drained of all effect if they do not operate to divest the government of its authority, because another remedy may be availabe for the agency's failure to act within the time prescribed by statute. As noted above (see page 15, supra), an interested party injured by an agency's failure to act in a timely manner may be able to obtain an order directing the agency to act promptly. NLRB v. International Association of Bridge, Structural & Ornamental Ironworkers, slip op. 5 n.7; Heckler v. Day, No. 82-1371 (May 22, 1984), slip op. 15 n.33; 5 U.S.C. 555, 706(1); cf. EEOC v. Shell Oil Co., slip op. 12-13 (O'Connor, J., concurring in part and dissenting in part). Furthermore, this rule of statutory interpretation does not in any way restrict Congress's ability to impose a statute of limitations upon agency action; all Congress need do is specify that the agency's authority is conditioned on its taking action within the statutory time period. See, e.g., 12 U.S.C. 1842(b) (time limit in Bank Holding Company Act stating that certain applications "shall be deemed to have been granted" if not ruled on within 91 days); 28 U.S.C. 2415(a) and (b) (civil actions shall be "barred" unless timely filed); 28 U.S.C. 2462 (civil action shall "not be entertained" unless timely filed). The rule of construction long applied by the courts simply ensures that an agency's authority to act in the public interest will not be limited in the absence of a congressional determination that such a restriction is appropriate. /8/ This rule of statutory construction is conclusive in interpreting Section 106(b). The provision expressly requires the Secretary to issue a final determination within 120 days, but it does not specify any adverse consequence of the Secretary's failure to do so. Thus, although a party complaining of delay in the processing of an audit or complaint may be entitled to an order compelling the Secretary to act after 120 days have passed, the Secretary's failure to issue a final determination within 120 days does not bar him from recovering misused CETA funds. Mayor's Office of Employment & Training v. United States Department of Labor, 775 F.2d 196, 201-202 (7th Cir. 1985); Milwaukee County v. Donovan, 771 F.2d 983, 988, 989 (7th Cir. 1985), petition for cert. pending, No. 85-1109; St. Regis Mohawk Tribe, 769 F.2d at 41-42. B. The Legislative History Of Section 106(b) Demonstrates That Congress Did Not Intend To Bar The Secretary From Recovering Misspent CETA Funds When He Failed To Issue A Final Determination Within 120 Days The legislative history of Section 106(b) independently demonstrates that Congress did not intend to condition the Secretary's authority to recover misspent funds upon his issuance of a final determination within the 120-day period established by Section 106(b). In amending the CETA statute in 1978, one of Congress's principal goals was to strengthen the program's enforcement mechanisms in order to prevent fraud and abuse by grant recipients. See Mayor's Office, 775 F.2d at 199, 200; Milwaukee County, 771 F.2d at 986; St. Regis Mohawk Tribe, 769 F.2d at 42-43; Atlantic County v. United States Department of Labor, 715 F.2d 834, 836 (3d Cir. 1983); S. Rep. 95-891, 95th Cong., 2d Sess. 21, 42-43 (1978); H.R. Rep. 95-1124, 95th Cong., 2d Sess. 3, 5-6, 13 (1978). Congress intended to endow the Secretary with "maximum authority to protect the integrity of the (CETA) program" (S. Rep. 95-891, supra, at 21). /9/ The statute accordingly included a number of anti-abuse provisions, including criminal and administrative sanctions (18 U.S.C. 665(a); 29 U.S.C. (Supp. V 1981) 816), administrative authority to promulgate regulations to prohibit nepotism, kickbacks, inadequate recordkeeping, and commingling of funds (29 U.S.C. (Supp. V. 1981) 825(g)), and bonding requirements for fund recipients (29 U.S.C. (Supp. V 1981) 836). As the Senate Report noted (S. Rep. 95-891, supra, at 43): The committee believes that all of these provisions, taken together, will work to insure that program abuses are deterred, exposed, and corrected. The committee considers it a serious matter for persons to spend these funds, or to allow these funds to be spent in ways not authorized by Congress, thus impairing the Nation's effort to effectively help those intended to be assisted under this act. The committee expects the Secretary and the Attorney General to take prompt and decisive steps to remedy abuses whenever and at whatever level and place they occur. A particular problem identified in the committee hearings was the difficulty experienced by participants, subgrantees, contractors and other interested persons in having complaints about prime sponsors' failures to meet CETA grant conditions resolved within a reasonable time. See Mayor's Office, 775 F.2d at 200; St. Regis Mohawk Tribe, 769 F.2d at 43. The result, as the Senate Committee observed, was that "(i)n some cases grievances have been either ignored, or there has been interminable delay in their resolution." S. Rep. 95-891, supra, at 42. Section 106(b) was included in the statute to alleviate this concern. As the Second Circuit concluded, Section 106(b) was designed to "insure an expeditious remedy for CETA program beneficiaries who had been denied CETA benefits due to misuse of funds by prime sponsors." St. Regis Mohawk Tribe, 769 F.2d at 46 (emphasis in original); see also Milwaukee County, 771 F.2d at 989; S. Rep. 95-891, supra, at 15-16, 42-43, 80. /10/ The House bill, like the Senate bill, required the Secretary to investigate and act upon complaints that a recipient of financial assistance was failing to comply with the requirements of the Act, but it did not contain a fixed deadline for making these determinations (see H.R. Rep. 95-1124, supra, at 144). The 120-day provision was added as a floor amendment by Representative Obey, who engaged in the following colloquy with Representative Hawkins, the floor manager for the bill (124 Cong. Rec. 25230-25231 (1978) (emphasis added): Mr. OBEY. Mr. Chairman, I understand this amendment will be accepted by the committee. It is a very simple amendment. All it does is to put a specific period of time in the bill during which the prime sponsor must answer a complaint lodged against it for violations of the conditions under which the CETA program exists in the first place, and also it establishes a 120-day time limit on the time during which the Labor Department can consider a complaint before it has to proceed. * * * * * Mr. HAWKINS. Mr. Chairman, we have seen the amendment. We accept the amendment. If the gentlemen would further yield, do I understand from the gentleman from Wisconsin (Mr. OBEY) that if the determination is not made in a specified time it shall not affect the Secretary's jurisdiction in the matter? Mr. OBEY. That is correct. Mr. HAWKINS. With that understanding we do accept the amendment. These statements by key legislators are "an authoritative guide to the statute's construction" (Grove City College v. Bell, 465 U.S. 555, 567 (1984); see also Simpson v. United States, 435 U.S. 6, 13-14 (1978)); they strongly support the conclusion that further action by the Secretary is not barred when he fails to render a final determination within 120 days. Mayor's Office 775 F.2d at 200; Milwaukee County, 771 F.2d at 987; St. Regis Mohawk Tribe, 769 F.2d at 44-45. This is especially true because "no contrary view of the jurisdictional effect of the amendment was expressed, no objection was voiced, and nothing in the record indicates that Congress may have had an intent different from that expressed in this exchange." Milwaukee County, 771 F.2d at 987. It is therefore "unmistakably clear" that "the running of the deadline was not intended to let noncomplying (grant recipients) escape the consequences of their non-compliance" (St. Regis Mohawk Tribe, 769 F.2d at 44). /11/ This construction of Section 106(b) comports fully with the purpose of that provision. As we have discussed (see page 24, supra), Section 106(b) was included in the statute in order to remedy the perceived problem of delay in the processing of complaints seeking redress for CETA violations. Interpreting the statute in this manner effectuates Congress's intent by enabling a complainant to maintain an action to compel the Secretary to act when the Secretary fails to issue a final determination within 120 days. Milwaukee County, 771 F.2d at 985 (ALJ ordered grant officer to issue final determination in response to request by one of the parties); see pages 20-21, supra. The court of appeals' interpretation of Section 106(b), on the other hand, would extinguish the claims of the complainants who were the intended beneficiaries of the 120-day rule "even though they were in no way untimely or at fault in initiating the action" (Milwaukee County, 771 F.2d at 989). Given Congress's plain intent to provide a timely remedy for CETA participants asserting grievances against grant recipients, "'(i)t would be ironic indeed,' to hold that Congress' concern for speedy resolution of complaints was to be at the expense of the persons for whose benefit Section 106(b) was enacted." St. Regis Mohawk Tribe, 769 F.2d at 46 (citation and footnote omitted; brackets in original); see also Milwaukee County, 771 F.2d at 989 ("(i)f jurisdictional, the limit would impose a paradoxical hardship on claimants by destroying their claims if the Secretary does not act expeditiously") (emphasis in original); cf. Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) (state violates due process by terminating a complainant's cause of action on the basis of a state official's failure to comply with statutory time limit. /12/ The court of appeals' construction of Section 106(b) is flawed for the additional reason that it leads to a result that is completely inconsistent with one of the basic purposes of the 1978 statute. See Watt v. Western Nuclear, Inc., 462 U.S. 36, 56 (1983) (statute should not be interpreted "to produce a result at odds with the purposes underlying the statute"); Rose v. Lundy, 455 U.S. 509, 517 (1982); Chapman v. Houston Welfare Rights Org., 441 U.S. 600, 608 (1979). Interpreting Section 106(b) to bar untimely action by the Secretary has the perverse effect of immunizing wrongdoers and absolving them of liability despite Congress's clear intent to strengthen the government's enforcement authority and to increase the likelihood that misspent grant funds would be recovered. Congress could not have intended to permit those who misused CETA grant funds -- the targets of the 1978 amendments -- "to obtain good title to funds otherwise owing to the Federal Government" (Bell v. New Jersey, 461 U.S. 773, 788 n.15 (1983)), simply because the Secretary did not resolve an audit in a timely manner. Such a result is completely contrary to Congress's objective of an aggressive campaign to detect and act against fraud and abuse in the CETA program. Mayor's Office, 775 F.2d at 200-201, 202; Milwaukee County, 771 F.2d 988. It is especially unlikely that Congress intended Section 106(b) to impose a jurisdictional limit on the Secretary's enforcement authority because in many cases it simply is impossible for the grant officer to complete his duties within 120 days. First, disputes over CETA program expenditures often are extremely complicated. Mayor's Office, 775 F.2d at 200-201; Milwaukee County, 771 F.2d at 988-989. The Seventh Circuit observed in Mayor's Office that one of the audits at issue in that case "involved * * * some 152 million dollars of CETA funds and concerned millions of dollars of contested costs. Under these circumstances, it would be foolhardy to assume that a single grant officer could properly and thoroughly examine and digest the audit report of an accounting firm which employed a number of people and spent considerable hours analyzing the City's complex records, and make his recommendation with 120 days, unless one assumes that the grant officer is to merely cast aside his responsibility and mandates of his oath of office and rubber stamp the audit report's recommendation." 775 F.2d at 200 (footnote omitted)); see also Milwaukee County, 771 F.2d at 988 & n.4 (complaint investigated by grant officer contained over 70 counts and grant officer's investigation included approximately 67 interviews; requirement of a final determination within 120 days "would be a practical impossibility at best"). Since Congress plainly wanted the Secretary to continue "to apply proper business investigative and evaluation techniques" (Mayor's Office, 775 F.2d at 202), the effect of the interpretation of Section 106(b) adopted by the court below "would be to remove * * * (complex) disputes * * * from the Secretary's jurisdiction" (Milwaukee County, 771 F.2d at 989). Second, even in a less complex case it may be difficult for a grant officer to act within the 120-day time period because of the procedural protections afforded grant recipients. The regulations require the grant officer to obtain the grant recipient's response to the audit, issue an initial determination, attempt to conciliate any dispute, and only then issue a final determination (see page 4, supra). Since the grant recipient must be allowed time to prepare its case, the grant officer must analyze the relevant data, and an opportunity for informal resolution of the dispute is mandatory (20 C.F.R. 676.88(d)), a grant officer might well be unable to resolve even a relatively simple case within 120 days. See Mayor's Office, 775 F.2d at 200 ("more often than not more than 120 days is required for the Secretary to undertake a thorough and complete investigation of the facts, figures and data involved in a matter submitted for review"). /13/ Moreover, Congress was well aware at the time it enacted the statute that the Secretary would not be able to process every complaint and audit with the speed required by Section 106(b). The legislative history contains repeated references to the Labor Department's inability to monitor compliance with CETA requirements. H.R. Rep. 95-1124, supra, at 3, 5-6; 124 Cong. Rec. 27244 (1978) (remarks of Sen. Brooke); id. at 31021 (remarks of Rep. Maguire); id. at 31026 (remarks of Rep. Collins); see also Mayor's Office, 775 F.2d at 199; Milwaukee County, 771 F.2d at 987-988. Indeed, during congressional oversight hearings concerning the CETA program held while the 1978 amendments were pending before Congress, the Director of the Labor Department's Office of Special Investigations testified that a substantial percentage of the CETA costs questioned in fiscal years 1976 and 1977 had yet to be resolved. Department of Labor Monitoring of Manpower Programs for the Hard to Employ: Hearings Before the Subcomm. of the House Comm. on Government Operations, 95th Cong., 2d Sess. 755 (1978). One Congressman observed that the Department of Labor took an average of 26 months to resolve questioned CETA expenditures (id. at 764-765, 776). For these reasons, Congress must have realized that the Secretary frequently would not be able to act within the 120 days specified in Section 106(b), especially because Congress in 1978 actually "add(ed) to (the Secretary's) burdensome workload by increasing his responsibility as well as his investigative and enforcement power to detect and remedy abuses in the CETA program" (Mayor's Office, 775 F.2d at 199). Since Congress plainly could not have intended to enact a statute that increased the Secretary's enforcement authority in order to prevent abuse of the CETA program but at the same time established conditions that Congress knew would render those powers ineffective, the only possible conclusion is that Section 106(b) was intended as a spur to more expeditious administrative action, not as a limitation upon the Secretary's enforcement powers. See Milwaukee County, 771 F.2d at 987-988; St. Regis Mohawk Tribe, 769 F.2d at 42; cf. Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 370-371 (1977) (it would "hardly be reasonable" for Congress, "aware of the severe time problems * * * facing the EEOC," to subject the agency's enforcement actions to strict state statutes of limitations). CONCLUSION The judgment of the court of appeals should be reversed. Respectfully submitted. CHARLES FRIED Solicitor General KENNETH S. GELLER Deputy Solicitor General ANDREW J. PINCUS Assistant to the Solicitor General GEORGE R. SALEM Deputy Solicitor of Labor ALLEN H. FELDMAN Acting Associate Solicitor MARY-HELEN MAUTNER Counsel for Appellate Litigation STEVEN J. MANDEL Attorney Department of Labor JANUARY 1986 /1/ The statute originally was enacted in 1973 (Pub. L. No. 93-203, 87 Stat. 839 et seq.) and was amended substantially in 1978 (Pub. L. No. 95-524, 92 Stat. 1909 et seq.). The CETA was repealed effective October 13, 1982, and replaced by the Job Training Partnership Act, 29 U.S.C. 1501 et seq. (see Pub. L. No. 97-300, Section 184(a)(1), 96 Stat. 1357). However, the CETA continues to govern administrative or judicial proceedings pending on October 13, 1982, or begun between October 13, 1982, and September 30, 1984 (29 U.S.C. 1591(e)). /2/ The grant recipient, complainant or any other interested person is entitled to a hearing before an administrative law judge (ALJ) with respect to the grant officer's final determination. The ALJ then renders a decision that, if not modified or vacated within 30 days, becomes the final decision of the Secretary. A decision adverse to the grant recipient or another interested person is subject to judicial review in a court of appeals. 29 U.S.C. (Supp. V 1981) 816(b), 817(a); 20 C.F.R. 676.88 to 676.92. /3/ Respondent also argued that the statute did not authorize the Secretary to seek repayment of disallowed CETA funds and that the Secretary's ineligibility determinations were not supported by substantial evidence. The court of appeals did not address these contentions. /4/ The Court applied this general principle of statutory construction in United States v. Morgan, 222 U.S. 274 (1911). At issue in that case was a section of the Pure Food and Drug Act providing that when a food or drug was found to be adulterated or misbranded after examination by the Bureau of Chemistry of the Department of Agriculture, "'notice shall be given to the party from whom the sample was obtained. Any party so notified shall be given an opportunity to be heard'" (id. at 280, quoting Act of June 30, 1906, ch. 3915, Section 4, 34 Stat. 769). If it appeared that the statute had been violated, the Secretary of Agriculture was directed to certify that fact to the district attorney (the predecessor of today's United States Attorney), who would institute appropriate proceedings. The defendants in Morgan argued that their indictment alleging violations of the Act was invalid because they had received neither notice nor a hearing before the Department of Agriculture. This Court held that the statute did not bar the district attorney from obtaining an indictment from the grand jury even though the case had not been referred by the Department of Agriculture. The Court stated that "there certainly is no presumption that a law passed in the interest of the public health was to hamper district attorneys, curtail the powers of grand juries or make them, with evidence in hand, halt their investigation and await the action of the Department (of Agriculture). To graft such an exception upon the criminal law would require a clear and unambiguous expression of the legislative will." 222 U.S. at 281-282; accord United States v. Dotterweich, 320 U.S. 277, 279 (1943). The Morgan Court thus refused to construe the statute in a manner that would have divested the government of its authority to act in the public interest because there was no indication that Congress intended that result. See also EEOC v. Shell Oil Co., No. 82-825 (Apr. 2, 1984), slip op. 10-11 & n.16, in which the Court evidenced the same approach in stating that there is "substantial reason to doubt" whether an employer may resist a subpoena issued by the Equal Employment Opportunity Commission on the ground that he did not receive a notice describing the charge of unlawful employment practices that the statute required the Commission to serve upon the employer; id. at 12 (O'Connor, J., concurring in part and dissenting in part) (concluding that the failure to comply with the notice requirement did not invalidate the subpoena). /5/ The discussion of time limits upon agency action in a Senate committee report concerning delay in the regulatory process supports this conclusion. The committee recommended that "legislation should be adopted to require agencies to methodically establish deadlines for conclusion of agency business," noting that such deadlines would assist courts in determining whether it is appropriate to issue an order directing the agency to act on the ground that agency action has been unreasonably delayed. 4 Senate Comm. on Governmental Affairs, Study on Federal Regulation: Delay in the Regulatory Process, S. Doc. 95-72, 95th Cong., 1st Sess. 140 (1977). The committee cautioned, however, that (id. at 142 (footnote omitted)): In evaluating an agency's failure to meet its deadlines * * * a court must understand the purposes for which the deadlines were established. Agencies should set deadlines that, to be effective management tools, are too short to be met in every case. In order to challenge agency staff to improve its performance, and to identify those cases that need attention of agency management, deadlines should be designed to be exceeded a certain percentage of the time. Indeed, if such deadlines are always met, they should be tightened. Thus, a missed deadline would indicate only that "the agency proceeding has taken longer than the norm established by agency management" and that an explanation is warranted (ibid.). The agency would not be divested of authority to act in such cases. See also House Comm. on Government Operations, Failure Of Government Department and Agencies to Follow up and Resolve Audit Findings, H.R. Rep. 96-279, 96th Cong., 1st Sess. 24-25 (1979) (reaching same conclusion regarding time limits for completion of audits). /6/ It also is settled that a statute of limitations that does apply to the government must be strictly construed in favor of the government. Badaracco v. Commissioner, 464 U.S. 386, 391 (1984); E.I. duPont de Nemours & Co. v. Davis, 264 U.S. at 462. /7/ See, e.g., National Cable Television Association, Inc. v. Copyright Royalty Tribunal, 724 F.2d 176, 189 n.23 (D.C. Cir. 1983) (failure to comply with Copyright Act provision stating that Tribunal "shall" render its decision within one year does not render decision void); Marshall v. N.L. Industries, Inc., 618 F.2d 1220, 1224-1225 (7th Cir. 1980) (Occupational Safety and Health Act provision stating that Secretary "shall" make determination within 90 days does not bar enforcement action where Secretary failed to act within 90-day period); Ralpho v. Bell, 569 F.2d 607, 626-628 (D.C. Cir. 1977) (statute stating that Micronesian Claims Commission "shall" wind up its affairs within specified period does not bar Commission from acting after statutory deadline); Marshall v. Local Union 1374, International Association of Machinists, 558 F.2d 1354 (9th Cir. 1977) (provision of Labor-Management Reporting and Disclosure Act of 1959 stating that Secretary "shall" act upon complaint within 60 days does not bar enforcement action if Secretary fails to act within the 60-day period); Usery v. Whitin Machine Works, Inc., 554 F.2d 498, 501 (1st Cir. 1977) (Trade Act of 1974 provision stating that Secretary "shall" act upon petition for assistance within 60 days does not bar subpoena enforcement action where Secretary did not act upon petition within 60-day period); Fort Worth National Corp. v. FSLIC, 469 F.2d at 58 (provision of Savings and Loan Holding Company Act stating that Corporation "shall" render a decision within 90 days does not divest Corporation of jurisdiction if it fails to act within the statutory time period); United States v. Morris, 252 F.2d 643, 648-649 (5th Cir. 1958) (provision of Migrant Labor Agreement stating that disposition of minimum wage complaints "shall be completed" within 10 days does not bar further action upon a complaint that is not disposed of within this time period); cf. In re Grand Jury Proceedings, 757 F.2d 108, 110-112 n.1 (7th Cir. 1984), cert. denied, No. 84-1405 (Apr. 15, 1985) (statute stating that appeals of orders of confinement for civil contempt "shall" be decided within 30 days does not divest a court of jurisdiction if 30-day period is exceeded). /8/ The Ninth Circuit acknowledged in City of Edmonds, 749 F.2d at 1422-1423, that it previously has applied the rule that a statutory time period is not jurisdictional unless the statute specifies otherwise (see Marshall v. Local Union 1374, International Association of Machinists, 558 F.2d 1354 (9th Cir. 1977)), but the court believed that this rule had been rejected sub silentio by Mohasco Corp. v. Silver, 447 U.S. 807 (1980). Mohasco concerned the 300-day limitation period applicable to claims filed with the EEOC by private parties under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-5(e). The Court adopted a literal reading of the provision, which had the effect of barring the plaintiff's claim. However, Mohasco plainly is inapposite here because it addressed a time limit governing the filing of claims by private parties, not a provision relating to government action. Thus, "the principle that disfavors sacrificing the public interest because of the negligence of public officers * * * was not applicable" in Mohasco. St. Regis Mohawk Tribe, 769 F.2d at 46; accord Mayor's Office of Employment & Training v. United States Department of Labor, 775 F.2d 196, 201 (7th Cir. 1985); Milwaukee County v. Donovan, 771 F.2d 983, 990 (7th Cir. 1985), petition for cert. pending, No. 85-1109. /9/ Legislators' statements during the floor debate stressed the importance of strengthening enforcement of CETA standards in order to prevent abuse by grant recipients. 124 Cong. Rec. 27825 (1978) (remarks of Sen. McClure); id. at 27803-27804 (remarks of Sen. Schweiker); id. at 27789 (remarks of Sen. Bellmon); id. at 27243-27244 (remarks of Sen. Domenici); id. at 27239, 27240 (remarks of Sen. Williams); id. at 27223 (remarks of Sen. Nelson); id. at 25243 (remarks of Rep. Maguire); id. at 25238 (remarks of Rep. Anderson); id. at 25221-25222 (remarks of Rep. Cornell); id. at 25188 (remarks of Rep. Edgar); id. at 25182 (remarks of Rep. Lehman); id. at 25168 (remarks of Rep. Hawkins). /10/ This conclusion is supported by the fact that, contrary to the conclusion of the court below, Section 106(b) applies only to investigations initiated by the filing of a complaint, and not to investigations intiated by audits. The sentence in Section 106(b) concerning the 120-day time limit refers only to "complaints," and Congress discussed the limitation only with respect to "complaints." See H.R. Conf. Rep. 95-1765, 95th Cong., 2d Sess. 123 (1978); S. Rep. 95-891, supra, at 15-18, 42-43, 80; 124 Cong. Rec. 27772 (1978) (remarks of Sen. Nelson); id. at 25230 (remarks of Rep. Obey). Moreover, the final version of Section 106(b) does not include the broader language of the Senate provision (compare S. Rep. 95-891, supra, at 194). Since the provision applies only to investigations triggered by complaints, its purpose obviously was to require the expeditious resolution of the grievances of persons involved in CETA programs. The Second Circuit agreed that "the language of Section 106(b), as illuminated by the legislative history" supports the view that the provision applies only to complaints, but concluded that the Secretary's regulation setting a 120-day deadline for investigations based upon audit results indicated that the Secretary had interpreted the statute to apply in both situations. St. Regis Mohawk Tribe, 769 F.2d at 46 n.9. However, the regulation applicable to investigations intiated by complaints specifically refers to the statutory requirement while the regulation concerning audits does not. Compare 20 C.F.R. 676.86(a)(1) with 20 C.F.R. 676.88(e). This distinction indicates that the Secretary adopted the time limit in the audit context as a matter of administrative convenience, not because that rule was compelled by Section 106(b). /11/ The Ninth Circuit stated that it was "not persuaded" by this legislative history and that it would "give plain mandatory language its ordinary meaning." City of Edmonds, 749 F.2d at 1422. It relied instead upon several passages of the legislative history that simply paraphrase the statutory language (id. at 1421-1422 & n.3). In fact, by failing to distinguish between the mandatory nature of Section 106(b) and the appropriate remedy for a violation of that provision, and by rejecting settled rules of statutory construction and the "authoritative" colloquy between Representatives Obey and Hawkins, the court of appeals adopted an extraordinary interpretation of Section 106(b). /12/ Respondent asserts (Br. in Opp. 12) that the interpretation of Section 106(b) adopted by the court below is correct because prompt resolution of challenges to grantees' expenditures of CETA funds was required so that a grant recipient charged with misuse of CETA funds could "'clear its name' or remove the stigma often attached with such allegations as expeditiously as possible." However, respondent cites no legislative history indicating that Congress enacted Section 106(b) to protect the reputations of grant recipients. In addition, it is inconceivable that Congress could have intended this purported interest of grant recipients to prevail over the interest of the complainants that Section 106(b) plainly was designed to protect or the interest of the public at large in ensuring that CETA funds are expended in a lawful manner. Finally, respondent's interest in expeditious action appears to be of somewhat recent vintage; the record does not indicate that respondent sought to accelerate proceedings before the grant officer. /13/ The grant officer is dependent on the cooperation of the grant recipient in order to expedite these procedures. It is most unlikely that Congress intended that the Secretary's jurisdiction might turn upon the degree of cooperation provided by the target of the Secretary's investigation.