JOHN R. BLOCK, SECRETARY OF AGRICULTURE, ET AL PETITIONERS V. RONALD E. PAYNE, ET AL. No. 84-1948 In the Supreme Court of the United States October Term, 1985 On Petition for a Writ of Certiorari to the United States Court of Appeals for the Eleventh Circuit Reply Brief for the Petitioners 1. Respondents contend (Br. in Opp. I, 16-18, 23-25) that the decision of the court of appeals does not rest upon equitable estoppel and that it instead finds an independent basis in the Administrative Procedure Act, 5 U.S.C. 702, 706, and the associated doctrine that federal agencies must abide by their own regulations. These assertions are incorrect. To begin with, respondents' claims are inconsistent with the court of appeals' initial opinion, which it reinstated following this Court's remand for further consideration in light of Heckler v. Community Health Services, No. 83-56 (May 21, 1984). As we have explained in our petition (at 19-20), the court of appeals purported to rely upon the APA and the obligation of government agencies to follow their regulations. Unlike respondents, however, the court of appeals also acknowledged -- at least nominally -- the relevance of this Court's decisions rejecting the application of equitable estoppel to limit the government's ability to enforce the law. Thus, the court of appeals addressed the government's argument that Schweiker v. Hansen v. Hansen, 450 U.S. 785 (1981), is controlling here, seeking to distinguish that case on several factual grounds (Pet. App. 19a-21a). /1/ Those purported distinctions are untenable for the reasons stated in our petition (at 14-16 & n.11). Respondents' conclusory reference to Hansen (Br. in Opp. 22-23) entirely fails to address this argument. The decision below plainly cannot be reconciled with Hansen. /2/ The court of appeals' suggestion in its opinion on remand that its decision did not rest on equitable estoppel (Pet. App. 2a) cannot be dispositive. In the first place, the court of appeals reinstated its earlier decision (id. at 3a) which, as we have shown, considered (but erroneously distinguished) this Court's estoppel decisions. More fundamentally, the Court's teaching that the United States "may not be estopped on the same terms as any other litigant" (Heckler v. Community Health Services, slip op. 8 (footnote omited) cannot be circumvented by the exercise in semantics in which respondents and the court of appeals engage. As we explained in our petition (at 23), whatever the label, the relief awarded by the courts below -- reopening an expired emergency loan program in contravention of an explicit deadline having the force of law, because of the responsible acency's failure sufficiently to publicize the program -- entails application of equitable estoppel as this Court has most recently defined that term: "(w)hen the Government is unable to enforce the law because (of) the conduct of its agents" (Community Health Services, slip op. 8). As the Eleventh Circuit recognized in another case affirming an estoppel against the government, "equitable estoppel precludes a litigant from asserting a claim or defense that might otherwise be available." FDIC v. Harrison, 735 F.2d 408, 410 (1984). The court of appeals' judgment undeniably estops FmHA from rejecting respondents' loan applications on the ground that they are more than a decade out of time. Respondents offer nothing to rebut this conclusion. 2. In any event, the relief awarded in this case is not authorized by the APA or the principles of administrative law upon which respondents rely. Scarcely pausing to address our arguments (Pet. 20-22), /3/ respondents assert (Br. in Opp. 16-18, 23-25) that overriding of the applicable deadline for filing a loan application with FmHA constitutes "comp(ulsion of) agency action unlawfully withheld" within the meaning of 5 U.S.C. 706(1). They thus ignore the fact that the only agency action the court of appeals determined to have been improperly withheld here was the dissemination of a sufficiently informative press release. /4/ The reopening of an entire expired loan program in violation of the application deadline established by law cannot accurately be characterized as simply compelling the agency to remedy a publicity defect. Respondents rely (Br. in Opp. 23-25 & n.32) on this Court's decisions recognizing that agency action taken in disregard of an agency's own procedural regulations may be set aside upon judicial review. But -- again ignoring our argument (Pet. 20-22) -- respondents do not even attempt to show that any of these decisions irrevocably conferred upon a private party substantive benefits for which that person was ineligible as a matter of law. /5/ Of course, that is precisely what the court of appeals did in this case. The court of appeals' decision thus finds no support in the administrative law doctrines invoked by respondents. Indeed, that is the necessary implication of Hansen itself, a suit for judicial review of administrative action. See 450 U.S. at 787 & n.3. /6/ Again, in INS v. Miranda, 459 U.S. 14, 16 (1982), this Court enforced its strictures against application of equitable estoppel in a case involving agency action subject to judicial review. Most recently, this Court's decision in Community Health Services confirms that the estoppel rulings upon which we rely may not be circumvented by casting a claim as one for judicial review of administrative action. See slip op. 6. 3. Finally, respondents contend that estoppel of the government is appropriate in this case (Br. in Opp. 26-28). Their argument that the court of appeals' decision would not impose an unwarranted burden on the Treasury is answered in our petition (at 14-15). /7/ In arguing that their failure to apply for loans or to seek further information was reasonable and that the agency engaged in affirmative misconduct, respondents ignore the court of appeals' decision. The court of appeals expressly declined to decide whether the agency had made any misrepresentations or had engaged in affirmative misconduct (Pet. App. 21a n.29), and it relied only on a single press release that it deemed insufficiently informative (id. at 24a). As we showed in our petition (at 18-19), the press release was ample to require a reasonable person to make further inquiries. Moreover, Community Health Services makes clear (slip op. 11-14) that any claim of entitlement to public benefits that is at variance with published agency regulations is an unreasonable one. Here, FmHA's Federal Register notice set forth all of the terms of the loan program and unambiguously fixed the loan application deadline. Any belief that ardy applications would be accepted or that the terms of the loans were less favorable than as described in the notice was unreasonable. Respondents, who failed to make appropriate inquiries and instead bided their time and filed this suit after the loan program expired, plainly are in no position to estop the government. For the foregoing reasons and those stated in the petition, the petition for a writ of certiorari should be granted. Respectfully submitted. CHARLES FRIED Acting Solicitor General SEPTEMBER 1985 /1/ Respondents' suggestion (Br. in Opp. 26) that the government did not argue and that the court of appeals did not consider the estoppel issue raised here is frivolous. The court of appeals expressly acknowledged (Pet. App. 19a) the government's reliance on Hansen, and it also undertook to distinguish (albeit on insubstantial factual grounds) INS v. Miranda, 459 U.S. 14 (1982), another of this Court's estoppel decisions (Pet. App. 20a n.27). See also Gov't C.A. Br. 17-23. /2/ Contrary to respondents' contention (Br. in Opp. 22), the decision here does indeed require the government to provide benefits to persons who are not entitled to receive them, since they did not file applications within the time period mandated by law. If respondents' argument is that the government may be estopped from enforcing procedural, but not substantive, eligibility requirements, this argument is flatly inconsistent with Hansen. There, the Court held that a person who was substantively eligible for benefits could not estop the government from raising her failure to adhere to required procedures as a ground for denying those benefits. 450 U.S. at 790. /3/ Respondents take issue with our demonstration that the absence of reviewable agency action in this case makes APA review unavailable (Pet. 20 n.13) merely by relying on the allegations in their complaint (Br. in Opp. 18 n.28), which, of course, are hardly dispositive. /4/ Respondents' contention (Br. in Opp. 3-4 & n.4) that FmHA's liability rests on violations separate from the content of the press release disregards the court of appeals' express refusal to decide whether other notice requirements were violated (Pet. App. 25a). Similarly, their assertion (Br. in Opp. 3 n.3) that we ignored a crucial regulation, 7 C.F.R.1832.3(a)(1)(1973), is wrong on two counts. First, we did cite the regulation (Pet. 7); second, the court of appeals concluded that the regulation was "only peripheral()" (Pet. App. 24a) and did not decide whether it had been violated (see Pet. 8 n.9). /5/ Respondents' reliance (Br. in Opp. 19) on "the context" of the benefit program is unavailing. Contrary to their argument (id. at 16-17), nothing in the relevant statutes indicates a congressional intent that the application deadline was conditional on the agency's compliance with its publicity regulations or that the deadline would otherwise be rendered a legal nullity if the agency failed to comply with those regulations. /6/ If, as respondents urge, the APA (or analogous statutory provisions for judicial review of administrative action) renders inapplicable this Court's decisions rejecting application of equitable estoppel against the United States, Hansen itself should have been decided differently. On respondents' theory, Hansen should have been granted unlimited retroactive Social Security benefits, notwithstanding the statutory limit on the reach of such benefits, as a means of "compel(ing) agency action unlawfully withheld: (5 U.S.C. 706(1)) -- i.e., to fulfill the requirement of the Social Security Claims Manual that its employees advise applicants to file a written application for benefits even if their eligibility is doubted. See Pet. 22. Respondents do not answer this argument. /7/ To the extent that respondents appear to suggest that the financial burden is justified because Congress intended farmers to receive loans under the program, they ignore the more than ten years that have elapsed since the April 1973 flooding. As we explained in our petition (at 24-25), there is no reason to suppose that Congress intended these emergency loans to be available as a windfall long after the emergency had passed. Although respondents note this argument (Br. in Opp. 27 n.34), they make no attempt to answer it.