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COMMUNITY ACTION ORG. OF ERIE CTY., INC. v. ACTION

September 8, 1982

COMMUNITY ACTION ORGANIZATION OF ERIE COUNTY, INCORPORATED, Plaintiff,
v.
ACTION, et al., Defendants



The opinion of the court was delivered by: ELFVIN

MEMORANDUM and ORDER

 Elfvin, District Judge.

 On March 16, 1982 ACTION, the federal agency charged with administering the Domestic Volunteer Services Act of 1973, 42 U.S.C. § 5001 et seq. ("the Act"), rejected the 1982 grant application of plaintiff, the Community Action Organization of Erie County, Inc. ("the CAO") for continued funding as the sponsor of ACTION's Senior Companion Program ("SCP") within Erie County. On March 31, 1982, the scheduled expiration date of the 1981 grant, plaintiff filed its Complaint in this action claiming that the manner in which the nonrenewal decision had been reached had deprived the CAO of its procedural rights under the Act and accompanying regulations.

 I denied plaintiff's request for a temporary restraining order staying the expiration of the grant and the functions and funding of the SCP in Erie County were transferred to a new sponsor April 1, 1981. Now before me are plaintiff's motion for a preliminary injunction and defendants' motion for summary judgment.

 The gravamen of plaintiff's case is that it was denied a meaningful opportunity to know and rebut the bases upon which ACTION determined to not renew its grant. It does not seek review of the merits of the defendants' decision.

 The Act provides that an application for refunding shall not be denied "unless the recipient has been given reasonable notice and opportunity to show cause why such action should not be taken." See, 42 U.S.C. § 5052. The implementing regulations detail the steps to be taken prior to nonrenewal. See, 45 C.F.R. § 1206.2-1 et seq. They require that

 
"whenever possible ACTION shall make a tentative decision at the time of its field preview as to the level of refunding which it intends to furnish a recipient for the recipient's next program year. An ACTION official shall notify the recipient of his tentative decision normally in the letter of understanding and as soon as possible following the field preview.
 
* * *
 
"Before rejecting an application of a recipient for refunding * * * ACTION shall notify the recipient of its intention and shall offer the recipient an opportunity to submit written material and to meet informally with an ACTION official to show cause why its application for refunding should not be rejected or reduced. Written notification of ACTION's decision shall be sent to the recipient as far in advance of the end of the recipient's current program year as possible * * *. The notice shall also state the reasons for the tentative decision to which the applicant shall address himself if he wishes to make a presentation.
 
* * *
 
"The official who shall conduct the meeting shall be an ACTION official who is authorized to make the grant in question, or his designee.
 
* * *
 
"An ACTION official who participated in the tentative decision to reject or reduce the application for new assistance shall whenever possible attend the meeting."

 The obvious intent of section 5052 of the Act and these regulations is to reserve to ACTION officials broad discretion in determining whether to renew grants. The recipient is accorded only the minimal courtesy, prior to nonrenewal, of knowing the reasons for denial or reduction and having the ...


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