REINHARDT, Circuit Judge:
This case presents the issue whether individuals may sue the Federal Emergency Management Agency ("FEMA") and its officials for allegedly unlawful withdrawing of disaster relief funds while the individuals' appeals of their applications for federal "individual and family grants" were still either pending or approved but unpaid. The district court ruled that standing and sovereign immunity doctrines barred such suits. We affirm in part and reverse in part. We hold that applicants who had not established at the time of the withdrawal that their applications were meritorious lack standing to sue. At the same time, we conclude that applicants whose applications had been approved have standing to file suit under § 10(a) of the Administrative Procedure Act. We also hold that these individuals' claims are not subject to dismissal under Fed.R.Civ.P. 12(b)(6) on the ground of sovereign immunity.
In November of 1990, Typhoon Owen struck the Federated States of Micronesia ("FSM"), devastating its Chuuk and Yap states. Then-President Bush declared the states major disaster areas, thus invoking the Stafford Disaster Relief and Emergency Assistance Act of 1974 ("Stafford Act"), 42 U.S.C. §§ 5121-5204c. The FSM, by compact with the United States, is eligible (like any other U.S. state) for disaster relief funds under the Stafford Act, through programs administered by the U.S. government's Federal Emergency Management Agency ("FEMA"). See 42 U.S.C. § 5122; Compact of Free Association, Pub.L. No. 99-239, 99 Stat. 1800, 1816, at § 221(a)(2) (1985), reprinted at 48 U.S.C. § 1901. On February 12, 1991, the FSM submitted to FEMA an "administrative plan" by which it proposed to administer an "individual and family grant program" to provide disaster relief funds to its eligible citizens. FEMA approved the plan the next day and agreed to provide such funds.
The Stafford Act's individual and family grant program enables the President, through FEMA, "to make a grant to a State for the purpose of making grants to individuals or families adversely affected by a major disaster." 42 U.S.C. § 5178(a). The federal share of a grant to an individual or family under this section "shall be equal to 75 percent of the actual cost incurred"; the state must pay the remaining 25 percent. 42 U.S.C. § 5178(b). As indicated by the statute's text, the program itself is administered by the recipient-state. FEMA provides money to the state, and the state pays funds to its citizens who it determines are eligible under FEMA's rules for disaster relief. In addition, in administering its plan, the FSM — as is required by regulations, see 44 C.F.R. § 206.131(e)(1)(ii)(H) — agreed to allow appeals by unsuccessful applicants and to grant meritorious appeals that were supported by documentation.
The program is limited by regulation to 180 days, but FEMA may grant as many 90-day extensions as it deems appropriate. See 44 C.F.R. §§ 206.131(j)(1)(iii) and (j)(2). From February to September of 1991, the FSM administered its individual and family grant program for 270 days. The defendants contend that during this time FEMA discovered that the FSM's Chuuk State Appeals Board was approving claims without requiring proper documentation. The plaintiffs assert that the Appeals Board acted consistent with the administrative plan and regulations and that any deficiencies in its procedures were promptly cured. Nonetheless, when the FSM requested a second 90-day extension of the program, FEMA denied the request and ended the program with a number of claims approved by the Appeals Board still unpaid and with a number of others still pending before the Board. FEMA thereafter audited the program and confirmed its refusal to provide funds for any of the pending or approved appeals in light of its complaints regarding the procedures followed by
On December 26, 1995, eighty-three individuals, all residents of Chuuk State who either had their appeals approved by the FSM or whose appeals were never decided, filed the present action against FEMA, James Lee Witt, its Director, and Shirley Mattingly, its Regional Director in charge of the territory that includes the FSM. The plaintiffs allege that the defendants violated § 10(a) of the Administrative Procedure Act (APA), the Stafford Act, and the Due Process Clause of the Fifth Amendment by terminating the individual and family grant program without paying them funds to which they are entitled. They seek declaratory and injunctive relief that would require FEMA (1) to provide its share of funds for their approved appeals; and (2) to ensure the completion of the pending appeals, and then to issue the federal share of all awards to which they become entitled.
On February 11, 1997, the district court dismissed all of the plaintiffs' claims with prejudice on the ground that the plaintiffs lacked standing to sue FEMA and its officers. Alternatively, the court held that the defendants were immune from suit because FEMA's decisions to withhold funds and to deny the FSM's request for an extension of the program fell within the agency's unreviewable discretion. This timely appeal followed.
We first consider whether any or all of the plaintiffs have standing to bring this suit. Since the Stafford Act does not provide for a private right of action upon which the plaintiffs may rely,
At the outset, we separate the plaintiffs into two categories: (A) those who never had
A. Plaintiffs Whose Appeals Have Never Been Decided
The district court held that "for those plaintiffs whose appeals have never been decided, the Court finds that their loss is too speculative to satisfy the injury requirement of Article III." We agree.
A plaintiff's asserted injury must be "actual or imminent." Lujan, 504 U.S. at 564, 112 S.Ct. 2130. In suits against the government, therefore, when plaintiffs have not already suffered a tangible loss at the government's hands, they must establish a substantial likelihood that they "personally" will be injured in the future by the government's policy. See City of Los Angeles v. Lyons, 461 U.S. 95, 101-03, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). Insofar as the injury of plaintiffs whose appeals have never been decided is that they did not receive disaster relief funds from FEMA, these plaintiffs cannot establish a substantial likelihood that, absent FEMA's allegedly improper withdrawal of funds, they would have received such funds. Any right to such funds depends entirely on whether the FSM, which is not a party to this suit,
These plaintiffs might also define their injury in procedural terms: The court could construe their claim as arguing that they were injured by not having their appeals decided. See Complaint at ¶ 100 (alleging that the defendants' "actions in failing to ... insure completion, of plaintiffs' IFG administrative appeals" was unlawful). That injury, however, is not "fairly traceable" to FEMA's conduct. See Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). The FSM's own plan guidelines required it to decide all appeals within 60 days, and the Stafford Act's regulations required the FSM to "complete all award activity ... within the 180 days [and subsequent 90-day extension]." 44 C.F.R. § 206.131(j)(1)(iii).
B. Plaintiffs Whose Appeals Were Decided Favorably
The plaintiffs who already have had their appeals favorably decided by the FSM are in a decidedly different position than the other plaintiffs. The district court nonetheless held that these plaintiffs also lacked standing under the Constitution's redressability prong and under the prudential "zone of interests" test. We reverse this determination and hold that these plaintiffs have standing to sue under § 10(a) of the APA.
1. Constitutional Dimension
While the district court found that these plaintiffs had satisfied Article III's injury-in-fact and causation requirements,
Plaintiffs need not demonstrate that there is a "guarantee" that their injuries will be redressed by a favorable decision. In fact, we recently emphasized that plaintiffs "must show only that a favorable decision is likely to redress [their injuries], not that a favorable decision will inevitably redress [their injuries]." Beno v. Shalala, 30 F.3d 1057, 1065 (9th Cir.1994) (citing Lujan, 504 U.S. at 561, 112 S.Ct. 2130). The plaintiffs who already have had their appeals favorably decided by the FSM satisfy this standard. In cases similar to the one before us, the Supreme Court has stated that plaintiffs lack standing primarily when the funding agency is not before the court, Lujan, 504 U.S. at 568-71, 112 S.Ct. 2130 (plurality opinion), or when redressability "depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or predict." ASARCO, Inc. v. Kadish, 490 U.S. 605, 615, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989) (plurality opinion). See also Beno, 30 F.3d at 1065 (citing with approval these plurality holdings). Neither of these problems is present in this case. First, the funding agency (FEMA) is before the court. Second, the FSM's decision whether to pass on to these plaintiffs any funds received from FEMA is not "unfettered." To the contrary, the agreement it signed with FEMA, which is mandatory and binding under the regulations, requires it "[i]mmediately upon receipt of funds, [to make] disbursements ... to applicants." FEMA-FSM Agreement of Jan. 8, 1991, Exhibit A at 2.
Under these circumstances, the fact that FEMA is required by law to give the funds to the plaintiffs through the conduit of the FSM, an entity which is beyond the court's reach, does not adversely affect these plaintiffs' ability to seek relief in federal court. To paraphrase the Seventh Circuit's analysis of a comparable case, "briefly put," the plaintiffs argue that FEMA "has deprived it of money to which it otherwise would have been entitled." Family & Children's Center, Inc. v. School City of Mishawaka, 13 F.3d 1052, 1059 (7th Cir.1994) (holding that Children's Center could assert right of disabled children to receive money under the IDEA even though Act requires defendant to provide money only "to children"). The defendants' speculation that the FSM "might conspire to evade th[e] mandatory language" of the regulations and its agreement "does not defeat plaintiffs' standing." Beno, 30 F.3d at 1066; see also Banks, 997 F.2d at 241 (rejecting argument that plaintiffs' injuries were not redressable because the Secretary "lacks adequate means to insure a state's compliance with the Medicaid Act"). There is, certainly,
2. Prudential Dimension
The plaintiffs bring suit under § 10(a) of the APA, which entitles persons aggrieved by final agency action to seek judicial review. See 5 U.S.C. § 702. Article VII § 172(b) of the Compact of Free Association specifically provides:
The Supreme Court has interpreted that statute
National Credit Union Admin. v. First Nat'l Bank & Trust Co., ___ U.S. ___, ___, 118 S.Ct. 927, 933, 140 L.Ed.2d 1 (1998) (quoting Association of Data Processing Serv. Org. v. Camp, 397 U.S. 150, 152-53, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) (brackets and ellipsis in original)). The district court held that the plaintiffs failed to satisfy this prudential requirement because the "mechanism" that the Stafford Act employs to disburse funds is "by granting funds to the States, and not to individuals directly." Thus, the district court concluded, "it appears that the [individual and family grant] program was really designed to help States, rather than individuals, in dealing with major disasters within their borders." We disagree with this highly formalistic reasoning. The plaintiffs in this case — the victims of a natural disaster — most certainly fall within the Stafford Disaster Relief Act's zone of interests.
The Supreme Court has explained the zone-of-interests inquiry as follows:
Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 399-400, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987); see also United States v. Mindel, 80 F.3d 394, 397 (9th Cir.1996). The Court, in fact, recently clarified this rule, holding that APA plaintiffs need only show that their interests fall within the "general policy" of the underlying statute, such that interpretations of the statute's provisions or scope could directly affect them. National Credit Union Admin., ___ U.S. at ___, 118 S.Ct. at 933 (quoting Data Processing, 397 U.S. at 157, 90 S.Ct. 827).
The plaintiffs' interests in this case are in no way "marginally related to or inconsistent with the purposes implicit in the statute." Clarke, 479 U.S. at 399, 107 S.Ct. 750. To the contrary, the Stafford Act expressly authorizes FEMA "to make a grant to a State for the purpose of making grants to individuals or families adversely affected by a major disaster." 42 U.S.C. § 5178(a) (emphasis added). The regulations state that "[t]he [individual and family] grant program is intended to provide funds to individuals or families to permit them to meet those disaster-related expenses or serious needs for which assistance from other means is either unavailable or inadequate." 44 C.F.R. § 206.131(b). It is therefore clear that the Stafford Act was primarily designed to help individuals, not states, obtain disaster relief. Even if states that receive disaster assistance are also within the Act's zone of interests, the Act's real beneficiaries, the individuals
III. SOVEREIGN IMMUNITY
A party bringing an action against the United States "bears the burden of demonstrating an unequivocal waiver of immunity." Mitchell v. United States, 787 F.2d 466, 467 (9th Cir.1986). Courts, however, must start with "a strong presumption that Congress intends judicial review of administrative action." Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670, 106 S.Ct. 2133, 90 L.Ed.2d 623 (1986). After considering these seemingly contradictory principles, the district court concluded that FEMA and its officials were immune from suit in this case because their actions constituted unreviewable acts of agency discretion. On appeal, the plaintiffs assert that the district court erred because the APA unequivocally waives sovereign immunity with respect to their claims for injunctive and declaratory relief. We conclude that the district court erred in granting the defendants' 12(b)(6) motion on the basis of agency discretion.
Subject to other prerequisites not contested here, § 10(a) of the APA expressly provides for the judicial review of agency actions unless the underlying statute at issue precludes such review or the agency action is committed to agency discretion by law. See 5 U.S.C. §§ 701-02.
42 U.S.C. § 5148 (emphasis added). This provision "preclude[s] judicial review of all disaster relief claims based upon the discretionary actions of federal employees." Rosas v. Brock, 826 F.2d 1004, 1008 (11th Cir.1987).
Here, the Stafford Act's regulations provide that FEMA may withdraw funds if the state-grantee (here, the FSM) "has failed to comply with grant award conditions." 44 C.F.R. § 13.21(g)(1)(i); see also 44 C.F.R. § 206.131(h) (permitting FEMA to suspend approval of state's voucher for individual and family grant funds "until deficiencies are corrected").
We agree with the plaintiffs. We cannot accept the defendants' argument at this stage of the proceedings because it would require us to resolve a disputed issue of material fact against the remaining plaintiffs. The Stafford Act's regulations grant FEMA the discretion to withhold individual and family grant funds only if the grantee-state has not complied with the award conditions. While we think it plain that under the Stafford Act, just as under the more well-known Federal Tort Claims Act, see 28 U.S.C. § 2680(a), "decisions involving the allocation and deployment of limited governmental resources are the type of administrative judgment that the discretionary function exception was designed to immunize from suit," Fang v. United States, 140 F.3d 1238, 1241-42 (9th Cir. 1998), the "exception will not apply when a federal statute, regulation, or policy specifically prescribes a course of action for an employee to follow." Berkovitz v. United States, 486 U.S. 531, 536, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988). In that event, the employee and the agency have "no rightful option but to adhere to the directive." Id.
Here, the duty of FEMA is clearly prescribed by the Stafford Act's applicable regulations. If the state has complied with the award conditions, and has satisfied other criteria not contested here, "[FEMA] shall not withhold payments." 44 C.F.R. § 13.21(g)(1) (emphasis added). To put it affirmatively, because all eligibility determinations by the state appeals board are final, 44 C.F.R. § 206.131(e)(1)(ii)(H), FEMA must make the grant payments sought by the remaining plaintiffs unless the FSM has violated the award conditions. The regulations further mandate that "[c]ash withheld for failure to comply with grant award condition, but without suspension of the grant, shall be released to the grantee upon ... compliance." 44 C.F.R. § 13.21(g)(2) (emphasis added). Even if FEMA suspends or terminates a grant program, it must still release funds for noncancellable costs "properly incurred by [the state] before the effective date of the suspension or termination, and not in anticipation of it." 44 C.F.R. § 13.43(c)(1). Nothing in the regulations reserves to FEMA the unreviewable right to determine whether a state has complied with the objective requirements of the award conditions. Rather, by their silence, they indicate that the determination is subject to review in the same manner as other administrative decisions.
At this stage of the proceedings, we must assume the plaintiffs' contentions regarding these contested facts to be the truth. See, e.g., Love v. United States, 915 F.2d 1242, 1245 (9th Cir.1989); see also Lujan v. National Wildlife Fed'n, 497 U.S. 871, 889, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) (stating that in 12(b)(6) motions, courts must "presume that general allegations embrace those specific facts necessary to support the claim"). We, therefore, must assume for purposes of this appeal that FEMA was obligated by its own regulations to process and to release to the FSM the appropriate funds for disbursement to the plaintiffs whose appeals have been finally decided in their favor. Accordingly, we must reverse the district court's order granting the motion to dismiss on the ground of sovereign immunity. If, however, the defendants can establish on remand that their determination that the Chuuk State Appeals Board violated the conditions of the plan was not arbitrary or capricious, then their decision not to make the payments sought by the remaining plaintiffs will be shielded by the discretionary function exception. See 5 U.S.C. § 706(2)(A); see also Rhode Island Higher Educ. Assistance Auth. v. Secretary of Educ., 929 F.2d 844, 847, 855 (1st Cir.1991) (reviewing Secretary's justifications for withdrawing funds under arbitrary and capricious standard when Secretary had authority to withhold funds for failure to comply with conditions of agreement); Education Assistance Corp. v. Cavazos, 902 F.2d 617, 619-22 (8th Cir.1990) (same); Dressman v. Costle, 759 F.2d 548, 555-56 (6th Cir.1985) (same).
IV. INTERNATIONAL LAW ISSUES
The defendants also assert that, even if the plaintiffs may otherwise invoke this court's jurisdiction, the Compact of Free Association, through which the services of FEMA are made available to the FSM, precludes judicial review of the plaintiffs' claims. In doing so, they make a somewhat different argument than they made below. In the district court, the defendants maintained that this case presented a non-justiciable "political question" because relief from a federal court "would constitute impermissible judicial interference with the executive function of foreign policy." Because the district court dismissed the suit on other grounds, it declined to reach this argument. On appeal, the defendants have changed course somewhat, and now contend that specific provisions in the Compact and its corollary agreement, the Federal Programs and Service Agreement Concluded Pursuant to Sections 221, 224, 225 and 232 of the Compact of Free Association, deprive the federal courts of jurisdiction to adjudicate the plaintiffs' claims. In light of the complexity of this issue, the fact that the district court did not address it, and the defendants' shifting position, we do not decide it here. Instead, we prefer that the district court consider it in the first instance, after fuller briefing. Accordingly, on remand the district court shall decide, inter alia, the question whether the remaining plaintiffs' attempt to obtain federal judicial relief under the APA is inconsistent with the terms of the Compact, including §§ 172(b), 221, 423, and 463(a), and the Federal Programs and Service Agreement.
The district court's decision to dismiss the claims of the plaintiffs whose appeals were never decided by the FSM is AFFIRMED. Its decision to dismiss the claims under the APA of the plaintiffs whose appeals were decided favorably by the FSM is REVERSED. The case is REMANDED for further proceedings consistent with this opinion. Each party shall bear its own costs.
5 U.S.C. § 702 (emphasis added). It is worth adding that the plaintiffs' request for an injunction that would require FEMA to pay its share of funds is not considered a claim for "money damages," and, therefore, is not barred by sovereign immunity. See Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988) (holding that suits seeking actual funds owed to claimants are suits for "injunctive" relief under APA § 702); Blue Fox Inc. v. Small Bus. Admin., 121 F.3d 1357, 1361 (9th Cir.1997) (same).