Like a number of other pending actions,1 this suit, brought by an environmental group concerned with water quality in Virginia, in volves the discretionary power, if any, of the defendant Administrator, Environmental Protection Agency, to allot appropriation authority for fiscal 1973 and 1974, particularly as those allotments relate to Virginia, under the provisions of Section 205 of the Federal Water Pollution Control Act Amendments of 1972.2 The Act sets forth a comprehensive legislative program for controlling and abating water pollution.3 In Subchapter II of that Act, provision is made for federal financial assistance to states and localities in planning and constructing sewage treatment plants, designed to assist in assuring the prompt attainment of specified standards of water quality.4 Under Section 207 of that Subchapter,5 grant authorizations6 are made 'for the fiscal year ending June 30, 1973, not to exceed $5,000,000,000, for the fiscal year ending June 30, 1974, not to exceed $6,000,000,000, * * *.' The grant authorizations in Section 207 are supplemented by Section 205 which provides for the allotment by the Administrator of such authorizations as approved among the States on a statutorily stated formula 'not later than the January 1st immediately preceding the beginning of the fiscal year for which authorized, except that the allotment for fiscal year 1973 shall be made not later than 30 days after October 18, 1972.'

On November 22, 1972, the President wrote the Administrator directing the latter not to 'allot among the States the maximum amounts provided by section 207'; specifically, he directed that, 'No more than $2 billion of the amount authorized for the fiscal year 1973, and no more than $3 billion of the amount authorized for the fiscal year 1974 should be allotted.' In directing such action, the President referred to the fact that the Act 'permits a significant increase over our programs to fund the construction of wastewater treatment facilities' and stated that budget requests for funding such construction under the earlier programs in fiscal 1973 amounted to '$2 billion'. In fixing the allotments to be made under Section 205, the President observed that, 'These amounts will provide for improving water quality and yet give proper recognition to competing national priorities for our tax dollars, the resources now available for this program and the projected condition of the Federal treasury under existing tax laws and the statutory limit on the national debt'

The plaintiff brought this action for both declaratory and injunctive relief in connection with the administration of the Act. By way of declaratory relief, it asked judgment that '(a) the defendant (Administrator) lacks the discretion to refuse to allot among the states the full sums authorized by Congress; or, alternatively, (b) the defendant abused whatever limited discretion he possesses by withholding a greater amount of funds than contemplated by the Congress under the Act.' It, also, requested injunctive relief, 'directing the defendant to allot among the states the full sums of $5 billion and $6 billion authorized to be appropriated by section 207 of the Act for fiscal years 1973 and 1974.' Without answering, the defendant Administrator moved to dismiss on the grounds 'that the Court lacks jurisdiction over the subject matter of this suit and that the Complaint fails to state a claim upon which relief can be granted.' At the same time, the plaintiff moved for summary judgment 'on the grounds that there is no genuine issue as to any material fact and that, * * * plaintiff is entitled to judgment as a matter of law.' After a hearing, the District Court denied the motion of the defendant to dismiss and granted in part the motion of the plaintiff for summary judgment.7 From that decision, the defendant Administrator appeals. We remand for further proceedings.

The defendant Administrator at the outset raised a number of procedural barriers to the maintenance of this action. He put in issue the standing of the plaintiff to maintain this action, the justiciability of the issues, the prematureness of the proceedings, and finally. the bar of sovereign immunity. These claims were carefully considered in the thoughtful opinion of the District Court and were found meritless. For the reasons assigned by the District Court and for the reasons hereafter developed, we agree.

Turning to the substantive controversy: The plaintiff concedes the Congress intended to give the executive certain discretion in making allotments under Section 205; the defendant Administrator asserts the existence of such discretion; and the District Court found that there was such discretion.8 The existence of discretion, therefore, is not in issue on this appeal. The point of controversy is the extent of that discretion and the power of the Court to review. The plaintiff, in the District Court, contended that the discretion granted by Congress to the Administrator was not 'unbridled'; that specifically it was not broad enough 'to give the Administrator the discretion to gut the Act.' In developing this contention, it emphasized the purposes and goals of the Act and argued that the Administrator's discretion may not be exercised in a manner and to an extent that the purposes of the Act are frustrated and nullified and that Courts have both the power and the duty to prevent such nullification. The defendant, on the other hand, took the position that, while the Administrator had not by his limited allotments frustrated the legislative purposes reflected in the Act, he has absolute discretion in making such allotments, and that his exercise of discretion is immune from judicial review. In resolving these conflicting positions, the District Court found that, on its face, an 'impoundment policy,9 by which 55% of the allocated funds will be withheld, is a violation of the spirit, intent and letter of the Act and a flagrant abuse of executive discretion.'10 It found authority to declare judgment 'that that policy is null and void'.11 Though it thus found the allotments as fixed by the Administrator invalid, it denied injunctive relief on the ground the Court was not equipped to 'supervise the Administrator in the administration of the Act', partially because of 'the expert discretion designed for the appropriations stage.'12 And, finally, in limited the application of its judgment 'to those interests in Virginia represented by the plaintiff organization.'13

As we have already stated, the right of the defendant to exercise discretion in making the allotment under Section 205 is not challenged by this appeal: that right is conceded. We are not concerned with the question whether an appropriation, either by its very nature14 or under the terms of the Antideficiency Act,15 even in the absence of any expressed grant of executive discretion in its use, involves some element of discretion in the executive. We are dealing here with a legislative provision which it has been held (and from this holding there is no appeal) does vest the executive with discretion. In short, the issues on this appeal are whether, accepting the holding that there was discretion in this case, its exercise is judicially reviewable, and, if reviewable, what standards or criteria are to be used in assessing the validity of its exercise. Those are the only issues posed by the appeal.

It is the defendant's position that, by conceding executive discretion in the fixing of the allotments under Section 205, the plaintiff has admitted a want of judicial power to review his exercise of that discretion. He rests this argument upon Section 10 of the Administrative Procedure Act,16 which provides that administrative action, the exercise of which is 'committed to agency discretion' is not judicially reviewable. Cf., Davis, Administrative Law Treatise, 1970 Supp., 28.16, p. 964. What the defendant urges is similar to the administrator's argument in Overseas Media Corporation v. McNamara (1967) 128 U.S.App.D.C. 48, 385 F.2d 308, 316, n. 14, i.e., that we should 'adopt the view that the (legislative) act of committing a matter to an agency's discretion forecloses court consideration of an alleged abuse of that discretion' under any circumstances. To that argument, the Court in Overseas replied firmly, 'The Legislative History of the Administrative Procedure Act belies this position.'17 And this conclusion in Overseas was confirmed in Citizens to Preserve Overton Park v. Volpe (1971)401 U.S. 402, 410, 91 S. Ct. 814, 820, 28 L. Ed. 2d 136, where, speaking of this exception, the Court characterized it as 'a very narrow exception', whose application, according to 'The legislative history of the Administrative Procedure Act' is limited to 'those rare instances where 'statutes are drawn in such broad terms that in a given case there is no law to apply." In resolving whether the matter falls within that 'rare' instance in which the executive action is non-reviewable, the problem is 'that of determining when the agency action is 'committed to agency discretion' within the meaning of section 10 of the madministrative Procedure Act, and when it merely 'involves' discretion which is nevertheless reviewable.' Ferry v. Udall (9th Cir. 1964)336 F.2d 706, 711, cert. denied 381 U.S. 904, 85 S. Ct. 1449, 14 L. Ed. 2d 286. Unquestionably, whether an agency, in exercising its asserted discretionary power under a legislative authorization, is acting in a manner consistent with the legislative purpose and with proper regard for the constitutional principle of separation of powers between the executive and legislative is an issue that Section 10 did not intend to make non-reviewable; it patently is not an issue 'committed to agency discretion'. See, Note, Protecting the Fisc: Executive Impoundment and Congressional Power, 82 Yale L.J. 1636, at P 1647; DeVito v. Shultz (D.C.D.C.1969) 300 F. Supp. 381, 383; Hamel v. Nelson (D.C.Cal.1963) 226 F. Supp. 96, 98. The power to spend rests primarily with Congress under the Constitution;18 the executive, on the other hand, has the constitutional duty to execute the law in accordance with the legislative purpose so expressed.19 When the executive exercises its responsibility under appropriation legislation in such a manner as to frustrate the Congressional purpose, either by absolute refusal to spend or by a withholding of so substantial an amount of the appropriation as to make impossible the attainment of the legislative goals,20 the executive trespasses beyond the range of its lagal discretion and presents an issue of constitutional dimensions which is obviously open to judicial review. And it was this issur and this issue alone to which the District Court carefully restricted itself in this case. It specifically denied any power on its part to review or supervise the defendant's discretion so far as it was exercised in a manner that was not so arbitrary or drastic as to represent a nullification of legislative purpose.21 We agree generally with this construction of its power by the District Court.22

Our only difficulty with the decision of the District Court relates to its conclusion on the issue of arbitrary frustration of legislative policy by the executive action taken. The district Court found that an allotment under Section 205 in the amount of 45% of the authorization under Section 207, established such a drastic and arbitrary administrative reduction in the contract authorization as, on its face, without any other evidentiary support, to require a finding of executive nullification of the purposes of the Act. With this factual finding, we are unable to agree. The statement of the President must be read in conjunction with the explanation given by the Administrator both in his presentation to this Court and in his Congressional appearances, for his allotments as made. In his presentation to this Court, the Administrator has disclaimed any purpose of evading the responsibilities given him under the Act. In his appearance before the Senate ad hoc Subcommittee on Impoundment of Funds on February 6, 1973,23 where he defended the allotments made for the years in question here, he forcefully expressed his commitment to the goals intended by the Act24 and affirmed that the reductions in the contract authorizations, as represented by the allotments made by him under Section 205 for fiscal years 1973 and 1974, were arrived at on the basis of an administrative judgment that greate authorizations could not be spent 'in a wise or expeditious manner'25 in achieving such goals during those years. This judgment was based, in turn, he testified, on a conclusion that 'there was not sufficient technical capacity, technical capability, I think it was, or contractual capacity' to carry our a greater or more extensive program.26 In reaching that conclusion, he had taken note, according to his testimony, that there were already available other contract authorizations for the same purposes as that authorized under the Act, which, when added to the authorizations actually allotted by the Administrator, meant that 'there was $7.25 billion released on the 27th of November (1973) to be spent over the next 18 months' in meeting the goals of the program.27 He argued that to attempt a more rapid rate of spending would inordinately inflate the cost of the program without appreciably accelerating the attainment of its goals. He pointed out in partial confirmation of this opinion that 'the construction industry had inflated the cost of the building of the project at the rate of 120 percent', while at the same time 'the cost of living has gone up at the rate of 40 percent.'28

The Administrator, also, asserted in his brief, without contradiction by the plaintiff, that as of August 31, 1973, all of the States had utilized but 73 percent of their 1973 allotments and 8 percent of their 1974 allotments. There is no way for us at this juncture to venture an opinion whether the Administrator had been 'dragging his feet' in approving projects or whether these figures indicate that the allotments made represented reasonable goals for the two fiscal years in controversy. The experience in the use of the allotments so far in fiscal 1973 and 1974 is, though, a matter that might well be considered in determining whether the Administrator, in exercising his discretion under Section 205, acted so arbitrarily as to frustrate the attainment of the legislative goals.

Moreover, it must not be overlooked that the Administrator claims the power to increase allotments during a fiscal year and has declared in this Court that, should it appear that the allotments made for fiscal years 1973 and 1974 are not sufficient to support the applications made and qualifying under the standards established, he will give consideration to making additional allotments out of the maximum authorizations provided by Section 207.29 The Act itself grants contract authorizations for the fiscla years 1973-1974-1975 in the overall amount of $18 billion. It provides for reallotment of unused allotments. The defendant asserts that, considered as a whole, the Act gives the defendant the power to add to allotments for any fiscal year, within, of course, the legislative maximums, as the need demonstrates. Because he claims there has been no denial of any qualified project in either fiscal year 1973 or fiscal year 1974, there is no demonstrable need for an increase in the allotments heretofore made. Moreover, he avers without contradiction by the plaintiff that no qualified project for the Commonwealth of Virginia has been denied contract authorization during fiscal 1973 or 1974. He goes further and asserts that if there are qualifying projects from Virginia in the fiscal years in question that exceed the allotments already made, the plaintiff has suffered no prejudice or injury unless he (the Administrator) refuses to make additional allotments to cover qualifying projects in Virginia in the two fiscal years in question. It is true, as the plaintiff argues, that Section 205 declares that allotments are to be made no 'later than the January 1st immediately preceding the begining of the fiscal year for which authorized' but the defendant presses the point that this provision simply establishes a date for initial allotments and was not intended and does not represent a restriction on the defendant's right, if the need develops, to add to or to increase the allotments as initially made.30 Whether this construction is sound-- and we are strongly persuaded that it is-- it would seem unlikely that any party would have standing successfully to challenge any increase made by the Administrator in the initial allotment. In any event, this is an issue that should be given consideration in determining whether the action of the Administrator was arbitrary.

These observations do not establish that the District Court's conclusion was incorrect; they do indicate, though, that the issue in controversy here is not one to be resolved by any per se rule but is one that requires inquiry into the basis for the Administrator's action. After all, there is a presumption of legality that attaches ordinarily to an administrator's action and the burden of establishing impropriety rests on him who challenges. Even if the District Court had concluded, as some other courts have, that the Administrator was without discretion in making allotments under Section 205, he would still have been empowered under the terms of the Antideficiency Act 'to withhold funds for reasons of efficiency and economy'; and, if the plaintiff wished to challenge an impounding of funds made under the authorization of the Antideficiency Act, it would have had the burden of showing 'that the impoundment was in fact not warranted by efficiencies or other new developments', and pari passu, it would seem to follow that 'a plaintiff challenging an assertion that the executive has discretion to impound under a particular spending bill must show that the discretion granted was less than that claimed'. Note, Impoundment of Funds, 86 Harv.L.Rev. 1505, 1529 (1973). Beyond the bare assumption that an expenditure of approximately half the authorized appropriation establishes a frustration of legislative purpose the plaintiff has done nothing to satisfy its burden. Such an assumption, in the face of other circumstances to which we have adverted, and recognizing that the District Court has found at least some discretion in the Administrator to fix the allotment, is insufficient to support the conclusion reached by the District Court that the allotments made were 'a violation of the spirit, intent and letter of the Act and a flagrant abuse of executive discretion', or involved a use of irrelevant factors in arriving at his action. That issue should not have been resolved on the pleadings but a record should have been made that would support the conclusion reached by the District Court.31 We accordingly remand to the District Court for further proceedings in order to determine, on the basis of such evidence as may be submitted by the parties, whether as a fact the amount of allotments made by the Administrator under Section 205 were 'a violation of the spirit, intent and letter of the Act and a flagrant abuse of executive discretion', or involved irrelevant or improper standards in fixing such amount. In connection with that inquiry, it will be appropriate for the District Court to consider whether the factors used by the defendant in fixing the allotments were the ones that were 'relevant' under a proper construction of the discretionary power found to exist in the executive.32

Remanded with directions.