Item Q6C ounty of M onroe
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BOARD OF COUNTY COMMISSIONERS
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Mayor David Rice, District 4
The FlOnda Key
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Mayor Pro Tem Sylvia J. Murphy, District 5
Danny L. Kolhage, District 1
George Neugent, District 2
Heather Carruthers, District 3
County Commission Meeting
August 15, 2018
Agenda Item Number: Q.6
Agenda Item Summary #4562
BULK ITEM: No DEPARTMENT: County Attorney's Office
TIME APPROXIMATE: STAFF CONTACT: Cynthia Hall (305) 292 -3470
No
AGENDA ITEM WORDING: Approval to opt in to class action lawsuit for recovery of Payments
in Lieu of Taxes (PILT) for fiscal years 2015, 2016 and 2017; authorization for the County Attorney
or designee to execute all necessary documents.
ITEM BACKGROUND: The Payment in Lieu of Taxes (PILT) Act was enacted to compensate
local governments for the loss of tax revenues resulting from the tax - immune status of federal lands
located within their jurisdictions, and for the cost of providing services related to those lands. The
law is codified in 31 U.S.C. § 6902 et seq. Federal entitlement lands include lands within the
National Forest and the National Park Systems, lands managed by the Bureau of Land Management
(BLM), those affected by U.S. Army Corps of Engineers and Bureau of Reclamation water resources
development projects, and certain other Federal lands.
Under PILT, the federal Secretary of the Interior is required to make annual payments to each unit of
general local government in which federal entitlement land is located. The annual PILT payments to
local governments are computed based on the number of acres of federal entitlement lands.
Individual county payments may increase or decrease from the prior year as a result of changes to
computation variables such as acreage data, which is updated annually by the Federal agency
administering the land, and population updated from Census Bureau data. By statute, the per acre
and population variables used in the formula to compute payment amounts are subject to annual
inflationary adjustments using the Consumer Price Index.
In 2017, Kane County, Utah (home to Bryce Canyon National Park, Zion National Park, Grand
Staircase- Escalante National Monument and Glen Canyon National Recreation Area) filed suit
against the federal government, alleging that the Secretary of the Interior violated federal law when
he failed to pay eligible units of local governments the full payments to which they were entitled
under the PILT program for fiscal years 2015 and 2016. Kane County later filed a separate suit for
FY 2017; the cases were consolidated and are now pending in the U.S. Court of Federal Claims.
Kane County filed both suits as class actions. In March 2018, the Court of Federal Claims granted
summary judgment in favor of Kern County, holding that the federal government was obligated to
make full PILT payments for the years in question.
In April 2018, the Court certified the action as a class action. Monroe County is potentially a
member of the class. Local governments must opt in to the class by no later than September 14,
2018. Based on the formula used to calculate the underpayment, Monroe County staff estimates that
the amount of the underpayment (i.e., potential recovery) for the County for the three fiscal years
cumulatively is approximately $47,000, less a pro rata share of attorneys' fees and expenses. The
amount of attorneys' fees and costs will be decided by the Court, but will likely be approximately
30% of recovery. Monroe County's three options are (a) join the class; (b) litigate separately; or (c)
forego the incremental PIL,T payments. Regarding the first two, the County could litigate its own
case, but given the size of the potential recovery, participation in the class is more cost - effective.
PREVIOUS RELEVANT BOCC ACTION: None.
CONTRACT /AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION: Approval to opt in to class action lawsuit.
DOCUMENTATION:
Official Notice, Opt In
PIL,T Opinion- and - Order -on- Motion - for - Class- Certification
Kane County v United States, Order Granting SJ
FINANCIAL IMPACT:
Effective Date: N/A
Expiration Date:
Total Dollar Value of Contract: N/A
Total Cost to County:
Current Year Portion:
Budgeted:
Source of Funds:
CPI:
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
Revenue Producing: If yes, amount:
Grant:
County Match:
Insurance Required:
Additional Details:
No outflow to County. Potential recovery in the approximate amount of $47K less attorneys fees
and costs.
REVIEWED BY:
Cynthia Hall
Completed
07/30/2018 10:15 AM
Bob Shillinger
Completed
07/30/2018 10:30 AM
Budget and Finance
Completed
07/30/2018 12:43 PM
Maria Slavik
Completed
07/30/2018 1:02 PM
Kathy Peters
Completed
07/30/2018 2:00 PM
Board of County Commissioners
Pending
08/15/2018 9:00 AM
United States Court of Federal Claims
Washington, D.C.
OFFICIAL NOTICE
The United States Court of Federal Claims has certified a CLASS ACTION lawsuit regarding your right to
recover additional sums under the PAYMENTS IN LIEU OF TAXES ACT [PILT Act] for fiscal years 2015,
2016, and 2017.
This is not a solicitation from a lawyer.
The Court of Federal Claims, in the case of Kane County, Utah v. United States, Case Nos. 17 -739C and
17 -199IC (Consolidated) (the Lawsuit], has directed sending this notice to a Class made up of "All `unit[s] of
general local government,' as defined in 31 U.S.C. § 6901(2), that received payment under 31 U.S.C.
§ 6902(a) of the Payment in Lieu of Taxes Act [PILT Actl in fiscal years 2015, 2016 and/or 2017."
You are receiving this notice because you are a unit of local government believed (1) to be a member of
that Class, and (2) to have been underpaid in those years.
The Lawsuit seeks to recover monies that the Court has determined that the federal government owes each
Class Member for the underpayment of its respective PILT Act entitlement in fiscal years 2015, 2016, and/or 2017.
To obtain the money that the federal government owes you, without having to file your own lawsuit, you
must submit a Class Action Opt -In Notice Form which can be done quickly and securely online at
www.PILTPgMents.co You may also complete and return the enclosed copy of the Class Action Opt -In Notice
Form by first class mail or pre -paid delivery service.
To participate in the Lawsuit, you must submit your completed Class Action Opt -In Notice no later
than September 14, 2018.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS LAWSUIT
• This Notice has been sent to you by order of a federal court. Please read this Notice carefully and fully. It
explains the opportunity you now have to join a Class Action Lawsuit currently pending before the Court.
The Court is neither encouraging nor discouraging you to join the Lawsuit. You have the right to
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participate in the Lawsuit as a Class Member, or to do nothing and be excluded from the Lawsuit.
• Please Note: This particular Class Action differs from many other class actions in the United States
because,
o if you do nothing, you will not be able to participate in the Lawsuit, and
o the Court has already ruled that the federal government owes each Class Member for
underpayments in fiscal years 2015, 2016, and/or 2017.
SUMMARY OF YOUR RIGHTS AND OPTIONS IN THIS LAWSUIT 1 1
In order to join the Lawsuit, you must submit a completed Class Action Opt-in
Notice Form online, by first class mail, or by pre-paid delivery service. The
Class Action Opt-In Notice Form must be submitted, postmarked, or
delivered no later than September 14, 2018.
Do NOTHING
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sue the federal government for any alleged PILT Act underpayments in fiscal
� years 2015 through 2017, • your own and at your own expense.
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By submitting a Class Action Opt-in Notice Form you are asking to be
included in the Lawsuit, receive any PILT Act underpayments recovered in the
Lawsuit, and be bound by its results.
ASK To BE INCLUDED (OPT
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INTO THE CLASS ACTION
• You acquire rights to any money that the Court determines that you
LAWSUIT)
are due as a result of underpayment, in fiscal years 2015 through 2017,
of your entitlement under Section 6902 of the PILT Act.
• You will be bound by the outcome of the case, whether favorable or
.2
unfavorable to you.
You will also give up the right to sue the federal government on your own, and
at your own expense, for the same legal claims made in the lawsuit.
In order to join the Lawsuit, you must submit a completed Class Action Opt-in
Notice Form online, by first class mail, or by pre-paid delivery service. The
Class Action Opt-In Notice Form must be submitted, postmarked, or
delivered no later than September 14, 2018.
Do NOTHING
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aypil-m 1
sue the federal government for any alleged PILT Act underpayments in fiscal
� years 2015 through 2017, • your own and at your own expense.
9
BASIC INFORMATION
1. Why did I get this Notice?
The federal government's records show that you are a unit of local government that received a payment pursuant to
Section 6902 of the PILT Act in fiscal years 2015, 2016, and/or 2017. This Notice advises you that:
a. The Court has allowed, or "certified," a Class Action Lawsuit against the United States to recover amounts
which the Court has determined that the government was required to pay units of local government under
31 U.S.C. § 6902, but did not pay in full in fiscal years 2015, 2016 and 2017.
b. You are eligible to participate in the Lawsuit by completing and timely submitting a Class Action Opt -In
Notice Form. The Form may be completed and submitted online at www.PILTPayMents.COM.
Alternatively, you may complete the enclosed copy of that CIass Action Opt -In Notice Form and submit it
by first class mail or by pre -paid delivery service.
2. What is this Lawsuit about?
This Lawsuit is about whether the federal government was required to pay in full the amounts due to units of local
government under Section 6902 of the PELT Act in fiscal years 2015, 2016, and 2017. The Class Representative
(Kane County, Utah) contended that the federal government underpaid units of local government in those years,
and that all CIass Members are entitled to recover the underpayment amounts. The government denied that any
units of local government were entitled to any additional PILT payments beyond the amounts already paid for those
years.
3. What has the Court decided?
The Court has ruled that provisions of Section 6902 of the PELT Act obligated the federal government to pay
eligible units of local government the full amounts calculated by a formula set forth in the Act even though
Congress failed to appropriate sufficient funds to do so in fiscal years 2015 through 2017 (noting that Kane County
had not challenged (and the decision did not therefore extend to) the portion the government's reduction of its fiscal
year 2015 PELT payments caused by the sequestration of part of the funds appropriated to make FY 2015 PELT
payments). The Court granted summary judgment, in favor of the Class, as to the government's liability for
underpaying Class Members in those years. The Court has not yet determined the amount by which the Class as a
whole, or any individual Class Member, was underpaid in those years. As of the date of this notice, Class Counsel
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and counsel for the government have agreed on the amount of the underpayment in fiscal years 2015 and 2016, and
anticipate reaching agreement on the amount of the underpayment in fiscal year 2017. The Court's decision is
subject to appeal.
4. What is a Class Action and who is involved?
In a class action, one or more CIass Representatives (in this case, Kane County, Utah) sues on behalf of all CIass
Members (in this case, units of local government that receive PILT payments) who have the same or similar claims.
Kane County and all other Class Members who choose to participate in the Lawsuit are the "Plaintiffs." The United
States is the "Defendant." In a class action at the United States Court of Federal Claims, the Court resolves all
issues for all Class Members who choose to participate in the Lawsuit. Here, that includes the Court's decision that
CL
the government is liable, described in paragraph 3 above.
5. Why is this lawsuit a Class Action? _
The Court has decided that this Lawsuit meets the requirements of Rule 23 of the Rules of the United States Court
of Federal Claims, which governs class actions in that Court. Specifically, the Court has ruled that:
• The potential Class is so numerous that joinder of all Class Members is impractical; _
• There are legal questions and facts common to each Class Member's claim;
• The Class Representative's claim is typical of the claims of other Class Members;
• The Class Representative, Kane County, Utah, and Class Counsel, Alan I. Saltman, a partner in the
Washington, D.C. office of Smith, Currie & Hancock LLP, will fairly and adequately represent the interests
of the Class;
• The common legal and factual questions predominate over questions affecting only individual Class
Members; and
• This Class Action will be more efficient than having many individual lawsuits.
6. What is requested in this Lawsuit?
The Class Representative seeks, for itself and for all other Class Members who choose to participate in the Lawsuit,
payment of the amounts by which each was underpaid in fiscal years 2015 through 2017. Class Counsel will also
ask the Court for an award of attorney's fees and expenses.
9
WHO MAY PARTICIPATE IN THE CLASS ACTION
7. Am I part of this Class Action Lawsuit?
You must decide whether you wish to participate in the Lawsuit. You cannot participate unless and until you fill
out and submit —online, by first class mail, or by pre -paid delivery service —the Class Action Opt -In Notice
Form found on the website www.PELTPayoents.c A copy of the Form is also enclosed. The Rules of the
United States Court of Federal Claims require that Class Members choose whether to "opt into" the lawsuit. If you
fit the description in the next question —and the government's records indicate that you do—you may opt into and
participate in this Lawsuit. If you do nothing, you will be excluded from the Lawsuit and will forfeit your right to
receive any monies recovered in the Lawsuit.
8. Who can participate in the Lawsuit?
The Court has decided that the CIass consists of:
"All `unit[s] of local government,' as defined in 31 U.S.C. § 6901(2), that received
payment under 31 U.S.C. § 6902(a) of the Payment in Lieu of Taxes Act in fiscal years
2015, 2016, and/or 2017."
Any unit of local government meeting this definition may participate in this Lawsuit by timely submitting
a completed Class Action Opt -In Notice Form.
9. Does participating in the Lawsuit cost any money?
No.
YOUR OPTIONS
10. How can I participate in this Lawsuit?
You can complete and submit your Class Action Opt-in Notice Form online at www.PU-TPayments .co
Alternatively, you can complete the enclosed Class Action Opt -In Notice Form and send it by first class mail to:
PILT Payments Class Action, P.O. Box 65876, Washington, D.C. 20035 -5876; or by pre -paid delivery service to:
PILT Payments Class Action, 1025 Connecticut Avenue NW, Suite 600, Washington, D.C. 20036. However you
transmit it, you must submit your completed Form no later than September 14, 2018 if you wish to participate in
the Lawsuit. Do not delay.
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Q.6.a
11, What happens once I choose to participate in this Lawsuit?
As a Class Member who chooses to participate in the lawsuit, you will be represented by Class Counsel, who will
take all actions necessary to protect your rights. You will receive the benefit of, and be bound by, all rulings, orders,
judgments entered, or settlements approved by the Court, whether favorable or unfavorable. You will not, however,
be asked to make any out -of- pocket payment of attorney's fees or expenses in the case.
12. If I choose to participate in the Lawsuit, what will I be required to do?
After timely submitting a completed Class Action Opt-In Notice Form, the parties currently do not anticipate that
you will have to do anything else.
13. What happens if I choose not to participate in the Lawsuit?
If you do not submit a completed Class Action Opt -In Notice Form online on or before September 14, 2018; by
first class mail postmarked on or before September 14, 2018; or by pre -paid delivery service delivered no later _
than September 14, 2018, you will be barred from participating in the Lawsuit and will not be entitled to any
portion of any monetary recovery by judgment or settlement of the Lawsuit. You will retain the right to sue the
federal government on your own about the same legal claims made in the Lawsuit, and will not be bound by the
Court's judgment in the Lawsuit. If you decide to pursue your claim independently, outside of this Lawsuit, you
should consult an attorney and do so promptly because certain statutes of limitation may bar or limit your claim. If
you choose to hire your own attorney, you will be responsible for paying the full cost of that attorney.
14. If I choose to participate in the Lawsuit, do I have to hire a lawyer to represent me?
No The Court has decided that Alan I. Saltman and the firm of Smith, Currie & Hancock LLP are qualified to
represent you and all other Class Members who choose to participate. They are called "Class Counsel."
Mr, Saltman is experienced in handling similar cases against the federal government, If you choose to file a Class
Action Opt -In Notice Form, you agree to legal representation by Mr. Saltman and his firm.
15o Should I hire my own lawyer?
If you decide to participate in the Lawsuit, you do not need to hire a lawyer because Class Counsel is and will
continue working on your behalf: But you are permitted to hire your own lawyer if you would like to do so. For
;1
example, you may have your own lawyer appear in Court if you want someone other than Class Counsel to speak
for you. Of course, if you choose to hire your own lawyer, you will be responsible for paying the full cost of that
lawyer.
16. How will Class Counsel be paid?
Class Counsel will submit a request for its fees and expenses to the Court. You will not have to nay any fees or
expenses directly The fees and expenses that the Court determines should be paid to Class Counsel, if any, might
be deducted from the money obtained for the Class and might reduce the amount available for distribution to Class
Members, and therefore reduce the amount of money you receive.
LITIGATION INFORMATION
17. How and when will the Court decide the amount of the underpayments?
Class Counsel and counsel for the government have already agreed on the amount of the underpayments in fiscal
years 2015 and 2016, and anticipate that they will also reach agreement on the amount of the underpayment in
fiscal year 2017. Should that not occur, Class Counsel will have to prove the amount of the underpayments in fiscal
year 2017 at trial. No trial date has been set. The Court has not yet entered judgment in any amounts for any of the
years involved in the Lawsuit.
18. If there is a trial on damages, must I attend?
If there is a trial on damages, you do not need to attend. Class Counsel will present the case on behalf of all CIass
Members participating in the Lawsuit. You and/or your own lawyer are welcome, and entitled, to attend at your
own expense.
19. When will I get any money from the lawsuit?
After the Court has determined (a) which Class Members have chosen to participate in the lawsuit, (b) the
underpayment amounts, and (c) the fees and expenses that should be paid to Class Counsel, you will be notified
about how and when you will receive your payment. At this time, the parties do not know how long that will take,
or whether there will be any appeal from the Court's decisions that could impact the entitlement, timing, or amount
of any payments.
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Q.6.a
GETTING MORE INFORMATION
20, Is more information available from the Covert?
The pleadings and other records in the Lawsuit may be examined during regular business hours at the Office of the
Clerk of the United States Court of Federal Claims.. The Court's address is:
United States Court of Federal Claims
717 Madison Place, N.W.
Washington, D.C. 20005
THE COURT HAS INSTRUCTED THAT YOU SHOULD NOT CONTACT THE CLERK'S OFFICE BY
TELEPHONE, E -MAIL, OR MAIL FOR INFORMATION ABOUT THIS CASE. Please do not contact the
United States Court of Federal Claims with questions or reauests_for info P
Any questions you have can be submitted at www.Smithcurrie.com/PILTPayMentshifo and Class Counsel will
respond. The answers to Frequently Asked Questions, and to submitted questions of general interest, will also be
posted there.
M
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 1 of 6
In t�r uuttrb �§tateq Court of f Orral Clauuq
Nos. 17 -739C; 17 -1991C (Consolidated)
(Filed: April 26, 2018)
KANE COUNTY, UTAH, individually and
on behalf of all others similarly situated,
Plaintiffs,
V.
THE UNITED STATES OF AMERICA,
Defendant.
Keywords: PILT Act; Class Action; Class
Certification; RCFC 23.
Alan I Saltman, Smith, Currie & Hancock LLP, Washington, DC, for Plaintiffs. Robert O.
Fleming, Smith, Currie & Hancock LLP, Atlanta, GA, Of Counsel.
Mark E. Porada, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice, Washington, DC, with whom were Claudia Burke, Assistant Director, Robert E.
Kirschman, Jr., Director, and Chad A. Readler, Acting Assistant Attorney General, for
Defendant. Tony Irish, Division of General Law, Office of the Solicitor, Department of the
Interior, Of Counsel.
OPINION AND ORDER
KAPLAN, Judge.
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I.,
Kane County, Utah is one of a number of units of local government entitled to certain ca
payments from the federal government known as Payments in Lieu of Taxes (PILT). The PILT
Act, 31 U.S.C. §§ 6901 -07, provides that the Secretary of the Interior must make a payment to
each eligible local government each fiscal year, in an amount determined by the statute's O
formulas. In FYs 2015 through 2017, Congress did not appropriate enough funds to make full
payments according to the PILT Act's formulas, and the Secretary therefore reduced each C.
eligible government's payment proportionally. Kane County then brought these consolidated
cases, alleging that the federal government's failure to pay the full formula amounts was a breach E
of the statute's money- mandating obligation. It moved for summary judgment as to liability in
both cases and the Court granted its motions. Kane Cty. v. United States ( Kane Cty. 11 ), No. 17-
1991C, 2018 WL 1391872 (Fed. Cl. Mar. 20, 2018); Kane Cty. v. United States ( Kane Cty. I ),
135 Fed. Cl. 632 (2017). Kane County has now moved for class certification. The government
does not oppose its motion. For the reasons set forth below, Kane County's motion is
GRANTED.
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 2 of 6
BACKGROUND
As described in greater detail in this Court's prior opinions, the PILT Act is a federal
statute that is designed to "compensate[] local governments for the loss of tax revenues resulting
from the tax - immune status of federal lands located in their jurisdictions, and for the cost of
providing services related to these lands." Lawrence Cty. v. Lead - Deadwood Sch. Dist. No. 40 -1
469 U.S. 256, 258 (1985). Section 6902 of the Act requires the Secretary of the Interior to make
a payment every year to "each unit of general local government in which entitlement land is
located." 31 U.S.C. § 6902(a)(1). The amount of the payment is determined by certain formulas a.
set out in § 6903. Kane Cty. I , 135 Fed. Cl. at 634, 635; see also 31 U.S.C. § 6903(b)(1). In Kane
County I and Kane County II , the Court found that these sections created a statutory obligation
for the government to pay the eligible counties their full formula amounts, notwithstanding
Congress' insufficient appropriation of funds in FYs 2015 through FY 2017. It thus granted
summary judgment as to liability in Kane County's favor.' Kane Cty. II , 2018 WL 1391872, at
*7 (FY 2017); Kane Cty. I , 135 Fed. Cl. at 635 (FY 2015 and FY 2016). Kane County has now
moved for class certification in both cases. The government does not oppose class certification
and the parties have agreed upon a proposed class definition.
DISCUSSION
I. Standards
Pursuant to Rule 23 of the Rules of the Court of Federal Claims (RCFC), the Court may
certify a class action if:
(1) [T]he class is so numerous that joinder of all members is
impracticable;
(2) [T]here are questions of law or fact common to the class;
(3) [T]he claims or defenses of the representative parties are typical
of the claims or defenses of the class; and
(4) [T]he representative parties will fairly and adequately protect the
interests of the class.
RCFC 23(a). Additionally, the Court must find that "the United States has acted or refused to act
on grounds generally applicable to the class," that "the questions of law or fact common to class CL
members predominate over any questions affecting only individual members," and "that a class
action is superior to other available methods for fairly and efficiently adjudicating the E
controversy." RCFC 23(b).
Courts have tended to classify these requirements into five categories: 1) numerosity;
2) commonality; 3) typicality; 4) adequacy; and 5) superiority. Common Ground Healthcare
' The Court's holding did not extend to the amount of funds withheld due to sequestration during
FY 2015. Kane Cty. I , 135 Fed Cl. at 634 n.3 & 636 n.4.
2
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 3 of 6
Coop. v. United States No. 17 -877C, 2018 WL 1833427, at *4 (Fed. Cl. Apr. 17, 2018); Barnes
v. United States 68 Fed. Cl. 492, 494 (2005). These requirements are "conjunctive," and thus all
of them must be satisfied for the court to certify the class. Common Ground Healthcare Coop.
2018 WL 1833427, at *4; Barnes 68 Fed. Cl. at 494. The plaintiff bears the burden of
establishing these requirements. Fisher v. United States 69 Fed. Cl. 193, 197 (2006).
II. Application
J
A. Numerosity
It is clear in this case that the numerosity requirement is met. RCFC 23(a)(1) requires that
the potential class be so numerous that joinder is impractical. Courts have found that potential
classes exceeding forty satisfy this requirement. Haggart v. United States 89 Fed. Cl. 523, 530
(2009) (noting this general rule and finding that potential class of at least 750 plaintiffs satisfied
requirement). Some courts have also considered geographic dispersion in considering
numerosity, noting that "[i]f plaintiffs are dispersed geographically, then a court is more likely to
certify a class action." Id. at 532 (quoting King v. United States 84 Fed. Cl. 120, 124 -25 (2008))
(alteration in original). .0
Here, the potential class includes "approximately 1,900 local government entities across
the United States." See U.S. Dep't of Interior, Fiscal Year 2015 Payments in Lieu of Taxes
National Summary 3 (2015), https: / /www.doi.gov /pilt /resources /annual- reports. These entities
include counties in all fifty states, as well as governmental units in the District of Columbia,
Guam, Puerto Rico, and the Virgin Islands. See id. at 15 -16. The Court finds that this nationwide
potential class of nearly 2,000 plaintiffs renders joinder impractical and satisfies RCFC 23's
numerosity requirement.
B. Commonality
The second requirement for class certification, commonality, is also met in this case. W
RCFC 23(a)(2) requires that there be "questions of law or fact common to the class." And RCFC 0
23(b) reinforces this focus by requiring a finding that "the United States has acted or refused to
act on grounds generally applicable to the class" and that "the questions of law or fact common
to class members predominate over any questions affecting only individual members." Here, a •0
single, common question of law predominates over all other issues in this case: whether the
federal government was required to pay each eligible unit of local government its full formula
amount in FYs 2015 through 2017, notwithstanding Congress' insufficient appropriations.
0.
Moreover, the government acted uniformly as to all eligible units of local government in each of u
those fiscal years by proportionally reducing each unit's formula amount based on the a
insufficient appropriations. That individual calculations will be required to determine the precise
amount owed to each potential class member does not undermine commonality in this case,
particularly because the government reduced its PILT payments by a uniform percentage each
fiscal year. See King 84 Fed. Cl. at 126 ( "[T]he fact that the eventual award `will ultimately
require individualized fact determinations is insufficient, by itself to defeat a class action. "'
(quoting Curry v. United States 81 Fed. Cl. 328, 334 (2008))). Accordingly, commonality is
satisfied in this case.
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 4 of 6
C. Typicality
Kane County's claims in these cases also satisfy the typicality requirement. For this
factor, RCFC 23(a)(3) requires that "the claims or defenses of the representative parties [be]
typical of the claims or defenses of the class." This "modest" standard is met where "the named
representatives' claims share the same essential characteristics of the claims of the class at
large." Cam 81 Fed. Cl. at 335 (quoting Fisher 69 Fed. Cl. at 200). It is not defeated "even if
some factual differences exist between the claims of the named representatives and the claims of
the class." Id. (quoting Fisher 69 Fed. Cl. at 200).
Kane County's claims share the same essential characteristics of the class at large. It
asserts that the federal government failed to pay it the full amounts it was owed under the PILT
formulas in FYs 2015, 2016, and 2017. Each potential class member's claim is identical, other
than the specific dollar amount involved, as the government proportionally reduced every
eligible unit of local government's PILT payment in FYs 2015, 2016, and 2017 based on
insufficient appropriations. Accordingly, the Court concludes that Kane County's claims
demonstrate sufficient typicality.
D. Adeguacy
The fourth factor for class certification requires a finding that "the representative parties
will fairly and adequately protect the interests of the class." RCFC 23(a)(4). This includes
consideration of whether class counsel will fairly and adequately represent the class and whether
the class members have interests that conflict. See King 84 Fed. Cl. at 127; Cu , 81 Fed. Cl. at
336; Barnes 68 Fed. Cl. at 499. Here, the parties do not appear to have any antagonistic interests
and the government does not point to any. Each eligible unit of local government has the same
legal claim, unaffected by the claims of other potential class members. And as to class counsel,
Kane County asserts that Smith, Currie & Hancock LLP have experience in handling class
actions and litigating before this court. Pl.'s Mot. for Class Certification & Supp. Mem. at 10 -11,
ECF No. 35. The government does not dispute these assertions. Moreover, Kane County's lead
attorney, Mr. Saltman, has been handling PILT litigation since at least 2005. See Greenlee Cty.
v. United States 68 Fed. Cl. 482, 482 (2005), aff d , 487 F.3d 871 (Fed. Cir. 2007). Further, Kane
County's counsel have already achieved successful results in both consolidated cases, as they
have prevailed on Kane County's motions for summary judgment as to liability. Therefore, the
Court finds adequate representation of the interests of the class.
E. Superiority
Finally, the rules require that a class action be "superior to other available methods for
fairly and efficiently adjudicating the controversy" in order to certify a class. RCFC 23(b)(3).
This factor is satisfied when "a class action would achieve economi[e]s of time, effort, and
expenses, and promote uniformity" while not "sacrificing procedural fairness or bringing about
other undesirable results." King 84 Fed. Cl. at 128 (quotation omitted); see also Cur , 81 Fed.
Cl. at 337; Barnes 68 Fed. Cl. at 499. The court may consider individual members' interests in
individually controlling separate actions, the extent of litigation already begun by other class
members, and any difficulties in managing the class action. RCFC 23(b)(3).
t
I.,
M
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 5 of 6
Here, a common question of law predominates over all other questions in this case,
reducing the remainder to essentially mathematical calculations. Therefore, a class action would
certainly achieve economies of time, effort and expenses while promoting uniformity. In the
absence of class action certification, the Court of Federal Claims could be inundated with nearly
2,000 separate cases presenting the same question of law. Moreover, lack of class action status
would require any county interested in pursuing its claim to retain counsel and file separate suits
to achieve a result which Kane County has already pursued. But at the same time the amounts at
issue are small enough such that individual counties may not be able or willing to do so. See
Kane Cty. II , 2018 WL 1391872, at *2 (noting that Kane County was paid $3,162 less than its
full formula amount in FY 2017).
Finally, no party points to any particular difficulties in managing this class action, and the
Court does not foresee any, particularly as all that remains in the case is for the parties to make
mathematical calculations with respect to damages. Accordingly, because of the predominance
of the legal question, the number of potential plaintiffs, and the relatively small amounts
involved with respect to each potential class member, the Court concludes that a class action is a
superior method of adjudication here.
Based on the foregoing, Kane County's motion for class certification in these
consolidated cases is GRANTED. The Court hereby certifies a class for the consolidated cases
That class is defined as follows:
All `unit[s] of general local government,' as defined in 31 U.S.C.
§ 6901(2), that received payment under 31 U.S.C. § 6902(a) of the
Payment in Lieu of Taxes Act in fiscal years 2015, 2016 and /or
2017.
The class claim is for the amounts the federal government owes to each class member for
the underpayment of their PILT entitlements. Pursuant to RCFC 23(g), and for the reasons
discussed above in section ILD, the Court hereby appoints Alan L Saltman, of Smith, Currie &
Hancock LLP as class counsel.
CONCLUSION
For the foregoing reasons, Kane County's motion for class certification in these
consolidated cases is GRANTED. The parties shall file a joint proposed notice for purposes of
RCFC 23(c)(2) on or before May 24, 2018.
2 The parties' proposed class definition used the phrase "units of local government," but the
Court has modified the definition to reflect the phrase used in the PILT Act, "unit of general
local government."
I.,
3 On December 20, 2017, prior to the Court's decision in Kane County II , Kane County filed a
motion for class certification as to case number 17 -739C. ECF No. 22. As part of its current
motion for class certification in both of the consolidated cases, it has moved to withdraw that
Case 1:17 -cv- 00739 -EDK Document 38 Filed 04/26/18 Page 6 of 6
IT IS SO ORDERED.
s/ Elaine D. Kaplan
ELAINE D. KAPLAN
Judge
i s
original class certification motion. See ECF No. 35 -1. That motion is hereby GRANTED and
Kane County's original motion for class certification is WITHDRAWN.
0
Kane County v. United States, 136 Fed.Cl. 644 (2016)
[4] United States
�
[Holding:] The Court of Federal Claims, Kaplan, J., In general;necessity
held that government was obligated to make full, not The mere failure of Congress to appropriate
proportional, PILT payments. funds, without further words modifying or
repealing, expressly or by clear implication,
the substantive law, does not in and of itself
Plaintiffs motion granted; defendant's motion denied. defeat an obligation of the federal government
by statute.
Cases that cite this headnote
West Headnotes (9)
[5] United States
[1] United States In general;necessity
Particular Subjects and Programs Because amending substantive legislation
The Payments in Lieu of Taxes (PILT) Act is a in an appropriations act is considered
federal statute that is designed to compensate undesirable, Congress must clearly manifest
local governments for the loss of tax revenues an intent to do so in the appropriations act.
resulting from the tax - immune status of
federal lands located in their jurisdictions and Cases that cite this headnote
for the cost of providing services related to
these lands. 31 U.S.C.A. § 6902(a)(1). [6] United States
In general;necessity
1 Cases that cite this headnote
Language in appropriations acts stating that
the amount appropriated is "in full" or "in
[2] United States full compensation" for a federal obligation
., Claims against United States in general
136 Fed.Cl. 644
The Tucker Act serves as a waiver of sovereign
United States Court of Federal Claims.
immunity for the federal government and
as a jurisdictional grant, but it does not
KANE COUNTY, Utah, individually and on
create a substantive cause of action; therefore,
behalf of all others similarly situated, Plaintiffs,
plaintiff must establish that a separate source
V.
of substantive law creates the right to money
The UNITED STATES of America, Defendant.
damages from the United States. 28 U.S.C.A.
§ 1491(a)(1).
Nos. 17 -739C, 17 -1991C (Consolidated)
Cases that cite this headnote
(Filed: March 20, 2o18)
C-
Synopsis
[3] United States
Particular Claims, Jurisdiction
Background: County filed putative class action against
—
United States, claiming that Secretary of Department of
The Payments in Lieu of Taxes (PILT) Act
Interior (DOI) violated Payments in Lieu of Taxes (PILT)
is amoney- mandating source sufficient to
W
Act by failing to pay eligible units of local government
confer Tucker Act j urisdiction on the Court of
0
full payments to which they allegedly were entitled under
Federal Claims. 28 U.S.C.A. § 1491(a)(1); 31
PILT program for one fiscal year. County moved for
U.S.C.A. § 6901 et seq.
summary judgment, and government cross -moved to
Cases that cite this headnote
dismiss for failure to state claim.
[4] United States
�
[Holding:] The Court of Federal Claims, Kaplan, J., In general;necessity
held that government was obligated to make full, not The mere failure of Congress to appropriate
proportional, PILT payments. funds, without further words modifying or
repealing, expressly or by clear implication,
the substantive law, does not in and of itself
Plaintiffs motion granted; defendant's motion denied. defeat an obligation of the federal government
by statute.
Cases that cite this headnote
West Headnotes (9)
[5] United States
[1] United States In general;necessity
Particular Subjects and Programs Because amending substantive legislation
The Payments in Lieu of Taxes (PILT) Act is a in an appropriations act is considered
federal statute that is designed to compensate undesirable, Congress must clearly manifest
local governments for the loss of tax revenues an intent to do so in the appropriations act.
resulting from the tax - immune status of
federal lands located in their jurisdictions and Cases that cite this headnote
for the cost of providing services related to
these lands. 31 U.S.C.A. § 6902(a)(1). [6] United States
In general;necessity
1 Cases that cite this headnote
Language in appropriations acts stating that
the amount appropriated is "in full" or "in
[2] United States full compensation" for a federal obligation
Kane County v. United States, 136 Fed.C1. 644 (2018)
eliminates any further obligation beyond the
amount appropriated for that fiscal year. Cases that cite this headnote
Cases that cite this headnote
[7] United States
Attorneys and Law Firms
= Particular subjects and programs
*645 Alan L Saltman, Smith, Currie & Hancock LLP,
Statutory language making a federal
Washington, DC, for Plaintiffs. Robert O. Fleming, Jr.,
government obligation subject to the
Smith, Currie & Hancock LLP, Atlanta, GA, of Counsel.
availability of appropriations may have the
effect of limiting statutory obligations under
Mark E. Porada, Trial Attorney, Commercial Litigation
benefits programs like the Payments in Lieu
Branch, Civil Division, U.S. Department of Justice,
of Taxes (PILT) Act program. 31 U.S.C.A. §
Washington, DC, with whom were Claudia Burke,
6902(a)(1).
Assistant Director, Robert E. Kirschman, Jr., Director,
and Chad A. Readler, Acting Assistant Attorney General,
Cases that cite this headnote
for Defendant. Tony Irish, Division of General Law,
Office of the Solicitor, Department of the Interior, of
[8] United States
Counsel.
Particular subjects and programs
Federal government's obligation to fully
compensate county, under Payments in
Keywords: PILT Act; Appropriations Acts;
Lieu of Taxes (PILT) Act, for loss of
Government Obligations; Underfunding.
tax revenues resulting from tax - immune
status of federal lands located in county's
OPINION AND ORDER
jurisdiction, was not expressly or impliedly
capped, modified, or partially repealed by
KAPLAN, Judge.
Consolidated Appropriations Act, providing
that if sums appropriated for any fiscal year
In these consolidated cases, Plaintiff Kane County, Utah
for PILT Act payments were less than full
alleges that the Secretary of the Interior violated federal
payments to all units of local government,
law when, during three fiscal years, he failed to pay
then payment to each local government was
eligible units of local government the full payments to
required to be made proportionally; statutory
which they were entitled under the Payments *646 in
provisions could be harmonized in that
Lieu of Taxes (PILT) program, 31 U.S.C. §§ 69017. On
Consolidated Appropriations Act addressed
December 21, 2017, this Court entered summary j udgment
administering PILT program in event of
for Kane County in case number 17 -739C, which concerns
unintentional shortfall in appropriations,
underpayments for fiscal years 2015 and 2016. Kane
which did not conflict with county's
Cty. v. United States ( Kane Cty. I , No. 17 -739C, 2017
entitlement to full statutory formula PILT
WL 6603446 (Fed. Cl. Dec. 21, 2017). It held that §§
payment. 31 U.S.C.A. §§ 6902(a)(1), 6903(b)
6902 and 6903 of the PILT Act created an obligation
(1)
for the Department of the Interior to pay Kane County
and other similarly- situated units of local government
I Cases that cite this headnote
the full payments to which the PILT Act entitled them
for FYs 2015 and 2016, irrespective of a shortfall in the
appropriations funding those payments.
[9] Statutes
Conflict
Shortly after this Court entered summary judgment in
It is the duty of the court to reconcile
No. 17 -739C, Kane County filed a complaint in No.
apparently conflicting statutory provisions.
17- 1991C, challenging the Secretary's failure to provide
full PILT payments for FY 2017. Currently before the
u
Kane County v. United States, 136 Fed.C1. 644 (2016)
Court are Kane County's motion for summary judgment
and the government's cross - motion to dismiss for failure
to state a claim in that case. The cross - motions raise a
single legal issue: whether the government's obligations
under the PILT Act were modified as a result of language
in the Consolidated Appropriations Act, 2017, Pub. L.
No. 115 -31, 131 Stat. 135 (2017) (hereinafter the 2017
Appropriations Act), stating that "in the event the sums
appropriated for any fiscal year for payments pursuant
to [the PILT Act] are less than the full payments to all
units of local government, then the payment to each local
government shall be made proportionally." 131 Stat. at
452.
payments to eligible local governments were to be reduced
proportionally pursuant to 43 C.F.I. § 44.51(b), which
provides that "[i]f Congress appropriates insufficient
monies to provide full payment to each local government
during any fiscal year, the Department will reduce
proportionally all payments in that fiscal year."
Section 6906 was amended in 2008. Based on that
amendment, and two subsequent extensions, § 6906
directly appropriated the amount necessary to make full
PILT payments each fiscal year for FYs 2008 through
2014. See Kane Cty 2017 WL 6603446, at *2; see also
31 U.S.C. § 6906.
For the reasons set forth below, the Court concludes that
the relevant language in the 2017 Appropriations Act
did not relieve the federal government of its obligation
to provide Kane County with the full payment to which
it is entitled under the PILT Act. Accordingly, Kane
County's motion for summary judgment as to liability is
GRANTED and the government's motion to dismiss is
DENIED.
BACKGROUND
I. The PILT Act
[I] As described in greater detail in Kane County I ,
the PILT Act is a federal statute that is designed to
"compensate[ ] local governments for the loss of tax
revenues resulting from the tax - immune status of federal
lands located in their jurisdictions, and for the cost
of providing services related to these lands." Lawrence
Cty. v. Lead — Deadwood Sch. Dist. No. 40 -1 469 U.S.
256, 258, 105 S.Ct. 695, 83 L.Ed.2d 635 (1985). Section
6902 of the Act requires the Secretary of the Interior
to make a payment every year to "each unit of general
local government in which entitlement land is located."
31 U.S.C. § 6902(a)(1). The amount of the payment is
determined by certain formulas set out in § 6903. Kane
Ctv. I , 2017 WL 6603446, at *2, *4; see also 31 U.S.C. §
6903(b)(1).
Before FY 2008, § 6906 capped the government's PILT
obligations at the amount appropriated each year by
Congress, notwithstanding the formulas in § 6903. Kane
Ctv. I , 2017 WL 6603446, at *4 (citing Greenlee Ctv.
v. United States 487 F.3d 871, 877 -81 (Fed. Cir. 2007)
). Where appropriations fell short during this period,
Since FY 2015, the PILT program has again been funded
through the regular appropriations process. And in Kane
County I , the Court held that "[t]he plain meaning of
[ §§ 6902(a)(1) and 6903(b)(1) ] read together is that the
Secretary of the Interior has an obligation to make
payments to each eligible unit of local government in an
amount determined through the methodology prescribed
in the statute." 2017 WL 6603446, at *4. It further
found that there was no language either in the current
version of the PILT Act or in the appropriations acts
for FY 2015 or FY 2016 that modified the government's
obligation to make full PILT payments. See *647 id. at
*6. Accordingly, the Court held that the current version
of the statute mandated that the government pay eligible
units of local government their full formula amounts,
notwithstanding a shortfall in appropriations in FYs 2015
and 2016. Id. at *8.
II. The Impact of the 2017 Appropriations Act on PILT
Beneficiaries
For FY 2017, Congress appropriated $465,000,000 to
fund PILT payments. 131 Stat. at 457. Additionally,
in a section of the 2017 Appropriations Act entitled
"Administrative Provisions," Congress designated
$400,000 of that amount for administrative expenses,
barred all payments for formula amounts less than $100,
and authorized and appropriated amounts necessary to
correct calculation errors from the previous fiscal year.
Id. at 451 -52. Finally, and as pertinent here, the 2017
Appropriations Act's administrative provision provides
that "in the event the sums appropriated for any fiscal
year for payments pursuant to [the PILT Act] are less
than the full payments to all units of local government,
then the payment to each local government shall be made
proportionally." Id. at 452.
u
Kane County v. United States, 136 Fed.C1. 644 (2018)
The Department of the Interior calculated that under
the § 6903 formulas, eligible local governments were
entitled to receive a total of $465,351,037 in § 6902 PILT
payments for FY 2017. Compl. ¶ 22, ECF No. 1; see
also U.S. Dep't of Interior, Fiscal Year 2017 Payments
in Lieu of Taxes National Summary 8 (2017). Therefore,
there was a slight shortfall in the amount of money
Congress appropriated to fund the PILT program for FY
2017. The Secretary of the Interior accordingly reduced
eligible recipients' payments on a proportional basis, as
required by the 2017 Appropriations Act, so that each
received approximately 99.7% of its formula entitlement.
See Compl. ¶¶ 23 -26; Fiscal Year 2017 Payments in Lieu
of Taxes National Summary 8. As a result, Kane County
was paid $1,102,628, i.e., $3,162 less than the $1,105,790
it was entitled to receive under the statutory formulas.
Compl. ¶ 25; Fiscal Year 2017 Payments in Lieu of Taxes
National Summary 102.
III. This Action
On December 20, 2017, Kane County filed its complaint
in case number 17- 1991C. ECF No. 1. Shortly afterwards,
on December 29, 2017, it filed its motion for summary
judgment as to liability. ECF No. 5. The Court
consolidated case number 17 -1991 C with case number 17-
739C on January 3, 2018. ECF No. 7. On January 26,
2018, the government filed its response and cross - motion
to dismiss. ECF No. 10. The parties subsequently filed
reply briefs and oral argument was held on the cross -
motions on March 15, 2018.
DISCUSSION
I. Subject Matter Jurisdiction
[2] [3] Pursuant to the Tucker Act, the United States
Court of Federal Claims has jurisdiction to "render
judgment upon any claim against the United States
founded either upon the Constitution, or any Act of
Congress or any regulation of an executive department,
or upon any express or implied contract with the United
States, or for liquidated or unliquidated damages in cases
not sounding in tort." 28 U.S.C. § 1491(a)(1) (2012). The
Tucker Act serves as a waiver of sovereign immunity and
a jurisdictional grant, but it does not create a substantive
cause of action. Jan's Helicopter Serv., Inc. v. Fed.
Aviation Admin. 525 F.3d 1299, 1306 (Fed. Cir. 2008).
A plaintiff, therefore, must establish that "a separate
source of substantive law ... creates the right to money
damages." Id. (quoting Fisher v. United States, 402 F.3d
1167, 1172 (Fed. Cir. 2005) (en banc in relevant part) ). In
Greenlee County the court of appeals held that the PILT
Act, 31 U.S.C. §§ 6901 -07, is "a money- mandating source
sufficient to confer jurisdiction on the Court of Federal
Claims." 487 F.3d at 877. Accordingly, the Court has
subject matter jurisdiction over Kane County's complaint.
II. The Merits
As noted above, the issue currently before the Court
is whether the 2017 Appropriations Act modified the
Secretary's obligation in FY 2017 to make PILT payments
at the statutory formula amounts. For the reasons set
*648 forth below, the Court finds that it did not, and that
Kane County is therefore entitled to recoup the amount
by which it was underpaid in this Court. See id (stating
that "[r]ather than limiting the government's obligation,
a `failure [of Congress] to appropriate funds to meet
statutory obligations prevents the accounting officers
of the Government from making disbursements, but
such rights [remain] enforceable in the Court of Claims'
" (second and third alterations in original) (quoting N.Y.
Airways, Inc. v. United States 369 F.2d 743, 748 (Ct. Cl.
1966)) ).
[4] [5] As the Court noted in Kane County I , it is
"a `long ... established' rule that `the mere failure of
Congress to appropriate funds, without further words
modifying or repealing, expressly or by clear implication,
the substantive law, does not in and of itself defeat a
Government obligation by statute.' " 2017 WL 6603446,
at *5 (omission in original) (quoting Greenlee Cty. 487
F.3d at 877). Further, because amending substantive
legislation in an appropriations act is "considered
undesirable," Congress must "clearly manifest" an intent
to do so in the appropriations act. N.Y. Airways, Inc.
369 F.2d at 749; see also United States v. Will 449
U.S. 200, 221 -22, 101 S.Ct. 471, 66 L.Ed.2d 392 (1980)
(observing that " `repeals by implication are not favored'
" and that "[t]his rule applies with especial force when
the provision advanced as the repealing measure was
enacted in an appropriations bill" (first quoting Posadas
v. Nat'l City Bank 296 U.S. 497, 503, 56 S.Ct. 349,
80 L.Ed. 351 (1936), and then citing TVA v. Hill 437
U.S. 153, 190, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978)
) ); Greenlee Ctv. 487 F.3d at 877 (holding that "an
unqualified right to compensation `should not be deemed
u
Kane County v. United States, 136 Fed.C1. 644 (2018)
abrogated or suspended by subsequent enactments which
merely appropriated a less amount ... for particular fiscal
years, and which contained no words that expressly or
by clear implication modified or repealed the previous
law' " (omission in original) (quoting United States v.
Langston 118 U.S. 389, 394, 6 S.Ct. 1185, 30 L. Ed. 164
(1886)) ).
[6] [7] Applying these principles, the Supreme Court
has found that language in appropriations acts stating
that the amount appropriated is "in full" or "in full
compensation" for a federal obligation eliminates any
further obligation beyond the amount appropriated for
that fiscal year. See Langston 118 U.S. at 390 -92, 6 S.Ct.
1185. And, as the court of appeals noted in Greenlee
County language making an obligation "subject to the
availability of appropriations" may also have the effect of
limiting statutory obligations under benefits programs like
the PILT program. 487 F.3d at 878.
181 The 2017 Appropriations Act does not contain
language that expressly modifies the entitlements created
by the PILT Act. It does not provide that the Secretary's
obligation to make payments is "subject to the availability
of appropriations" or that "amounts are available only as
provided in appropriations laws." Nor does it state that
the amount appropriated shall be in full payment of the
obligations imposed by the PILT Act. Instead, the 2017
Appropriations Act, in a section entitled "Administrative
Provisions," contains language similar to that contained
in the Secretary's regulations, which concern how to
administer the funds appropriated in the event that they
are insufficient to meet the obligations imposed by the
PILT Act. Compare 131 Stat. at 452 (stating that "in
the event the sums appropriated for any fiscal year for
payments pursuant to [the PILT Act] are less than the
full payments to all units of local government, then
the payment to each local government shall be made
proportionally ") with 43 C.F.I. § 44.51(b) (providing
that "[i]f Congress appropriates insufficient monies to
provide full payment to each local government during any
fiscal year, the Department will reduce proportionally all
payments in that fiscal year ").
Nor does the legislative language modify the PILT Act's
entitlements by clear implication because it is entirely
possible to harmonize §§ 6902 and 6903 with the relevant
language in the 2017 Appropriations Act. See Langston
118 U.S. at 394, 6 S.Ct. 1185 (finding that a modification
of the underlying obligation would clearly be implied
"by such provisions as would compel the courts to
say that harmony between the old and new statutes
is impossible" and rejecting any such modification in
that case because, inter alia "there [was no] positive
repugnancy between the old and the new statutes ").
The provisions here are reconciled by recognizing that
*649 the Administrative Provisions section of the 2017
Appropriations Act addresses the potential problem in
administering the PILT program where there is an
unintentional shortfall in appropriations.
Thus, when Congress makes its appropriations decisions,
it must necessarily rely upon estimates which may
ultimately differ from the Secretary's calculation of
the actual final payments that are due to eligible
local governments for that fiscal year. See Explanatory
Statement Submitted by Mr. Frelinghuysen of New
Jersey, Chairman of the House Committee on
Appropriations 163 Cong. Rec. H3327 -01, H3882 (daily
ed. May 3, 2017) (noting the Department's provision of
a PILT estimate during the formulation of the FY 2017
budget); see also Dane Cty�I 2017 WL 6603446, at *6
n.6. It is thus to be expected that the amount initially
appropriated may fall short of the amount needed for
full funding of the obligations to at least some degree.
Indeed, the Secretary's estimates have fallen slightly short
of the actual full formula amounts in each of the last
three fiscal years since the expiration of the direct funding
mechanism of § 6906. See Fiscal Year 2017 Payments in
Lieu of Taxes National Summary 8; U.S. Dep't of Interior,
Fiscal Year 2016 Payments in Lieu of Taxes National
Summary 8 (2016); U.S. Dep't of Interior, October 2015
Addendum to Fiscal Year 2015 Payments in Lieu of Taxes
National Summary 15 (2015). The requirement that
in such circumstances the Secretary make proportional
reductions in PILT payments addresses this fact of doing
business.
Moreover, there is nothing at all in the legislative
history surrounding the 2017 Appropriations Act that
suggests that Congress intended to modify the federal
government's substantive obligation to provide eligible
local governments with PILT payments at the formula
amounts. See Thompson v. Cherokee Nation of Okla. 334
F.3d 1075, 1085 (Fed. Cir. 2003) (stating that "legislative
history can be used as an interpretive guide to determine
whether language in an appropriations act constitutes
a statutory cap "), affd 543 U.S. 631, 125 S.Ct. 1172,
u
Kane County v. United States, 136 Fed.C1. 644 (2016)
161 L.Ed.2d 66 (2005); see also Will, 449 U.S. at 222-
24, 101 S.Ct. 471 (citing legislative history supporting
congressional intent to rescind raises through language
in appropriations act); United States v. Dickerson 310
U.S. 554, 561, 60 S.Ct. 1034, 84 L.Ed. 1356 (1940) (relying
upon legislative history of appropriations acts to show
Congress's intent to suspend payment of reenlistment
allowance). To the contrary, to the extent that it speaks
to the issue at all, the legislative history suggests that
Congress intended the payments to be fully funded.
Thus, in the act's explanatory statement, the Chairman
of the House Committee on Appropriations explained
that the amount appropriated, $465 million, was
"determined by the most recent Department of the
Interior calculation." l 163 Cong. Rec. at H3882. He
also stated his understanding that "[f]ull funding for
the Payments in Lieu of Taxes (PILT) program for
fiscal year 2017 is included." Id. Further, the Chairman
stated that House Report 114 -632 and Senate Report
114 -281 "provid[ed] specific guidance ... regarding the
administration of appropriated funds" and should carry
"the same emphasis as the language included in this
explanatory statement." Id. at H3874. That House Report
stated that "[t]he [Appropriations] Committee includes
bill language providing full PILT funding for fiscal year
2017." H.R. Rep. No. 114 -632, at 5 (2016); see also id.
at 49 (recommending "$480,000,000 to fully fund the
Payments in Lieu of Taxes (PILT) program for fiscal
year 2017); id. (stating again that "[t]he Committee
has included bill language providing full funding for the
Payments in Lieu of Taxes (PILT) program for fiscal
year 2017'). The referenced Senate Report also reflected
that same intent: it noted that the proposed appropriation
act "provide[d] a total appropriation of $480,000,000
for Payments in Lieu of Taxes [PILT]," which was
"$28,000,000 above the enacted level and sufficient to fully
fund estimated *650 payments for the fiscal year." S.
Rep. No. 114 281, at 56 (2016).
Similar views are reflected in the floor debate. When
an amendment was offered to reduce PILT funding by
approximately $13 million for FY 2017, Representative
Calvert noted his opposition, stating that "PILT is
fully funded in this bill." See 162 Cong. Rec. H4750-
02, H4752 (daily ed. July 12, 2016). The House then
defeated the amendment. Id. Thus, this legislative history
reflects Congress's belief that it was fully funding the
PILT program. It contains no evidence that Congress
intended to provide less than full funding or to limit
the government's obligation to the amount appropriated
based on the Secretary's preliminary estimate.
The cases cited by the government in support of its
argument that the 2017 Appropriations Act modified the
obligations contained in the PILT Act are distinguishable.
In Dickerson for example, the underlying statute
provided that service members who reenlisted within
ninety days of their discharges would be paid an
enlistment allowance. 310 U.S. at 554 -55, 60 S.Ct. 1034.
In 1937, Congress passed an appropriations statute which
stated that "no part of any appropriation contained in
this or any other Act for the fiscal year [at issue] shall
be available for the payment of [an] enlistment allowance
to enlisted men for reenlistment ... notwithstanding
the applicable provisions [of the act establishing the
reenlistment allowance]." Id. at 556 -57, 60 S.Ct. 1034.
The Court concluded that this language, coupled with
clear and consistent legislative history, "suspend[ed] the
enlistment allowance authorized" by statute for the fiscal
year at issue. See id. at 561, 60 S.Ct. 1034.
To state the obvious, the language of the 2017
Appropriations Act bears no resemblance to the clear
and express language of the statute at issue in Dickerson
As noted, the latter specified that "no part of any
appropriation contained in this or any other Act for
the fiscal year [at issue] shall be available" to fund the
allowance. It contained a "notwithstanding" clause that
explicitly referenced the enlistment allowance statute.
And it was also coupled with clear, supportive legislative
history that expressly reflected Congress's intent to
continue a suspension of the enlistment allowance
entitlement that had been in place for the preceding several
years.
Similarly clear legislative intent was revealed by the
language at issue in United States v. Will That case
concerned the effect of an appropriations act that
provided that "[n]o part of the funds appropriated in this
Act or any other Act shall be used to pay the salary of
an individual in a position or office referred to in section
225(f) of the Federal Salary Act of 1967 ... at a rate which
exceeds the salary rate in effect on September 30, 1976,
for such position or office ...." See 449 U.S. at 205 -06,
101 S.Ct. 471 (omission in original) (quoting Legislative
Branch Appropriation Act, Pub. L. No. 94 -440, 90 Stat.
1439 (1976) ). The clear import of this language was
u
Kane County v. United States, 136 Fed.C1. 644 (2016)
supported by legislative history that contained passages
that "indicate[d] clearly that Congress intended to rescind
these raises entirely, not simply to consign them to the
fiscal limbo of an account due but not payable." Id. at 224,
101 S.Ct. 471. No such clear language or legislative history
exists here with respect to the PILT Act.
Finally, Highland Falls —Fort Montgomery Central
School District v. United States, 48 F.3d 1166 (Fed. Cir.
1995), which the government contends "should control the
outcome of this case," ECF No. 10 at 20, is also unhelpful
to the government's argument. At issue in Highland Falls
was the interplay between § 240(c) of the Impact Aid
Act and certain appropriations laws. See id. at 1168 -69.
Section 237 of the Impact Aid Act gave the Secretary of
Education the authority to provide payments to school
districts where he found that the federal government's
acquisition of property had "placed a substantial and
continuing financial burden" on the district and that the
district was "not being substantially compensated for
the loss in revenue from such acquisition." Id. at 1168
(quotation omitted). The Impact Aid Act also set forth
two additional entitlements at §§ 238 and 239. Id. And
most pertinent to the issues *651 before the court of
appeals in Highland Falls was § 240(c), which contained
the methodology for determining the effect of a failure
by Congress to appropriate sufficient moneys to fully
fund the three entitlements. It provided that if any lump
sum appropriation made to fund the entitlements was
insufficient to pay all three during any fiscal year, then the
Secretary was to allocate the appropriation to prioritize §
237 entitlements so that they would receive full funding.
See id (noting that "§ 240(c) specifies that § 237 shall
be funded at 100% of entitlements in those fiscal years
in which the total amount appropriated by Congress is
insufficient to fund all entitlements under the Act ").
The complaint in Highland Falls arose out of Congress's
decision for FY 1989 through FY 1993 to earmark funds
for each of the three entitlement programs, rather than
making single lump sum appropriations for all three. Id.
at 1169. During those years, § 237 recipients did not
receive their full entitlement amounts. See id. Instead,
the Secretary of Education funded each entitlement at
the level specified in the earmarks, limiting the recipients'
payments accordingly. Id.
The plaintiff in Highland Falls a school district
that did not receive its full entitlement under § 237,
brought suit seeking compensation based on the alleged
underpayment. Id. The issue before the Federal Circuit
was "whether, in the face of underfunding by Congress,
DOE erred in allocating funds for § 237 entitlements
based upon the amounts earmarked for that section in the
respective appropriations laws, instead of funding § 237
entitlements at 100% in accordance with § 240(c)" of the
Impact Aid Act. Id. at 1170.
The court of appeals concluded that the Department
of Education did not err in not fully funding § 237
entitlements where Congress earmarked specific amounts
for §§ 237, 238 and 239 during the years at issue. See
id. at 117071. It observed that it had "great difficulty
imagining a more direct statement of congressional intent
[regarding the funding of § 237 entitlements] than the
instructions in the appropriations statute at issue here."
Id. at 1170. Moreover, its conclusion that § 237 payments
would be limited by the amount earmarked for those
payments by Congress was compelled by two other
statutory provisions, which restrict agency authority with
respect to the allocation of appropriated funds, 31 U.S.C.
§§ 1341(a)(1)(A) and 1532. Id. at 1171.
The court stated that, if possible, § 240(c) of the Impact
Aid Act should be read as being consistent with the FY
1989 through FY 1993 appropriations acts and with Title
31. Id. (observing that "when two statutes are capable
of co- existence, it is the duty of the courts, absent a
clearly expressed congressional intention to the contrary,
to regard each as effective" (quoting Morton v. Mancari
417 U.S. 535, 551, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974)
) ). Thus, it found that the Secretary of Education's
approach was consistent with this principle because it
"gave effect to § 240(c) by applying that provision when an
appropriations law provided a lump -sum appropriation
not specifically earmarked for various sections of the Act"
and also "gave effect to the funding decisions of Congress,
which earmarked specific amounts for § 237 entitlements."
Id. It "also harmonized the requirements of the Act and
the appropriations statutes with the requirements of 31
U.S.C. §§ 1341(a)(1)(A) and 1532." Id.
[9] Highland Falls does not assist the government's
position here; in fact, the case is inapposite. In Highland
Falls the court of appeals did not rule that the earmarks
in the appropriations acts modified the Secretary of
Education's payment obligations under § 240(c) (or
under the entitlement itself, § 237) as the government
u
Kane County v. United States, 136 Fed.Cl. 644 (2018)
contends occurred here with respect to the Secretary of
the Interior's obligations under the PILT Act. To the
contrary, cognizant of the principle that it is the duty
of the court to reconcile apparently conflicting statutory
provisions, the court concluded that the priority funding
mechanism for § 237 entitlements that was set forth in §
240(c) was not applicable in *652 years when Congress
earmarked funds for the entitlement programs. See id. It
held that § 240(c) only applied where Congress used a
lump sum appropriation that covered all three programs.
See id. Here, there is no alternative allocation method,
like § 240(c), upon which Kane County relies. And more
importantly, the court's command that provisions of law
not be read to conflict whenever possible dictates that
the language in the 2017 Appropriations Act be read
only as administrative guidance for the Department and
not in conflict with the clear entitlement to full formula
payments under §§ 6902 -03.
FY 2017, nor does it clearly imply or manifest such an
intent. Accordingly, as in Kane County I , the government
was obligated to pay Kane County its full statutory
formula amount under the PILT program for FY 2017. It
failed to do so, and Kane County is entitled to judgment
as a matter of law.
CONCLUSION
For the foregoing reasons, the government's motion
to dismiss is DENIED and Kane County's motion for
summary judgment as to liability is GRANTED. The
parties shall file a joint status report within fourteen days
proposing a schedule for further proceedings in these
consolidated cases.
IT IS SO ORDERED.
In short, the cases the government cites in support of
its arguments are either distinguishable or inapposite.
The 2017 Appropriations Act does not explicitly cap or
partially repeal the government's PILT Act obligations for
All Citations
136 Fed.Cl. 644
Footnotes
1 The Chairman, Rep. Frelinghuysen, also noted that this more recent estimate from the Department was less than the
Department's initial budget proposal (and earlier drafts of the PILT appropriation) because of the length of time that had
passed since that initial calculation, which allowed for a more accurate consideration of factors such as inflation. 163
Cong. Rec. at H3882.
Section 238 provided an entitlement for districts that educate children of persons who reside and work on federal property
and § 239 provided for payments to districts that incur a sudden and substantial increase in attendance by school children.
Highland Falls —Ft. Montgomery Cent. Sch. Dist. 48 F.3d at 1168.
3 Section 1341(a)(1)(A) prohibits an officer or employee of the federal government from making or authorizing an
expenditure in excess of the amount available for such an expenditure in an appropriations act. Section 1532 precludes an
agency from withdrawing funds from one appropriation account and crediting them to another, unless authorized by law.
u
End of Document (,--, 2018 Thomson Reuters. No claim to original U.S. Government Works