The opinion of the court was delivered by: POLLACK
The issue on the merits presented by this lawsuit is whether in 1971 the President of the United States and the Council of Economic Advisors complied with the mandate of the Employment Act of 1946, 15 U.S.C. §§ 1021-1023, which requires that the Council advise and the President include in his Annual Economic Report to Congress a program implementing the policy declared in that Act. The plaintiffs contend that the President's 1971 Economic Report contained no such program;
they seek declaratory and injunctive relief against the President, the members of the Council of Economic Advisors and the Secretary of Labor.
The plaintiffs are a labor organization and certain individuals who allege representation of several classes of Americans who, the plaintiffs say, are adversely affected by the challenged Executive action or inaction. These classes are workers generally, veterans, blacks and young people, both employed and unemployed.
On this motion to dismiss, the defendants raise questions regarding jurisdiction, justiciability and sovereign immunity; they also reserve the question of whether class actions as alleged are maintainable under Rule 23(a)(4), Fed. R. Civ. P.
The Court holds that jurisdiction is conferred by 28 U.S.C. § 1337. See Murphy v. Colonial Savings and Loan Association, 388 F.2d 609, 614 (2d Cir. 1967) (Friendly, J.); see also Cupo v. Community National Bank & Trust Company of New York, 438 F.2d 108 (2d Cir. 1971); Post v. Payton, 323 F. Supp. 799 (E.D.N.Y. 1971). The other questions mentioned above are bound up with the general question of reviewability of a matter assigned to the discretion of the Executive, except for the Rule 23 problem. Accordingly, the merits of plaintiffs' claims will be considered.
Plaintiffs rely heavily on the general rule that under a Rule 12 motion to dismiss the material allegations of the complaint must be taken as admitted. But plaintiffs invite inquiry of the 1971 Economic Report, nevertheless. In any event, that Economic Report may be judicially noticed for the purpose of determining whether any issues of material fact remain for trial or whether the Court may dispose of the case by summary judgment.
Plaintiffs also assert that since issues of legislative history are involved, the disposition of this case on a Rule 12 motion is inappropriate. They contend that this motion does not provide the proper time or place to argue such issues "for such argument necessarily involves fact determination which cannot be disputed on a Rule 12 motion." However, the pertinent legislative history is substantial and accessible. The Court heard oral argument of significant duration on February 2, 1972, in which counsel turned quickly to the merits.
Economic conditions at the end of World War II combined with a legacy of fear conferred by the Great Depression to produce the Employment Act of 1946; that combination is responsible for the breadth and ambiguity of the Act.
The country had not escaped overt inflation during the war. By the end of 1945 consumer prices were 31 percent, and wholesale prices 30 percent above their levels of six years earlier. Moreover, the inflationary pressures which had been repressed by wartime controls were very strong as the war ended; the private sectors had accumulated a huge volume of liquid assets. L. Chandler, The Economics of Money and Banking 486 (5th Ed. 1969).
On the other hand, many feared that the decrease of government spending at the end of the war would bring disaster; this fear reflected forecasts of deep depression and widespread unemployment rather than inflation for the post-war period. Id.
In response to fears of mass unemployment, President Roosevelt set forth the necessity for "full employment" after the war in his Annual Message to Congress on January 6, 1945, indicating what a program of full employment would require. 91 Cong. Rec. 67 at 72-73 (1945). On January 22nd of that year, there was introduced in the Senate a bill, S. 380, to develop plans for such a program. The final version, entitled the "Employment Act of 1946", was approved by President Truman over a year later, February 20, 1946, amid protracted controversy.
A "Declaration of Policy" is set out in Section 2 of the Act, 15 U.S.C. § 1021:
The Congress declares that it is the continuing policy and responsibility of the Federal Government to use all practicable means consistent with its needs and obligations and other essential considerations of national policy, with the assistance and cooperation of industry, agriculture, labor, and State and local governments, to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining, in a manner calculated to foster and promote free competitive enterprise and the general welfare, conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production, and purchasing power.
Section 3 of the Act, 15 U.S.C. § 1022, provides for the annual Economic Report of the President in part as follows:
(a) The President shall transmit to the Congress not later than January 20 of each year an economic report (hereinafter called the "Economic Report") setting forth (1) the levels of employment, production, and purchasing power obtaining in the United States and such levels needed to carry out the policy declared in section 1021 of this title; (2) current and foreseeable trends in the levels of employment, production, and purchasing power; (3) a review of the economic program of the Federal Government and a review of economic conditions affecting employment in the United States or any considerable portion thereof during the preceding year and of their effect upon employment, production, and purchasing power; and (4) a program for carrying out the policy declared in section 1021 of this title, together with such recommendations for legislation as he may deem necessary or desirable.
(b) The President may transmit from time to time to the Congress reports supplementary to the Economic Report, each of which shall include such supplementary or revised recommendations as he may deem necessary or desirable to achieve the policy declared in section 1021 of this title.
Section 4 of the Act created a Council of Economic Advisors to be made up of experts in the field of economics. Subsection (c) of Section 4 is of immediate concern to the issues herein:
(c) It shall be the duty and function of the Council --
(1) to assist and advise the President in the preparation of the ...