did not constitute law to apply to allow the court to review a rent increase decision made by the Secretary of Housing and Urban Development. The court distinguished Overton Park where the Secretary had statutory guidelines to follow from the absence of statutory guidelines for rent increases.
"In order for a regulation to have the "force and effect of law,' it must have certain substantive characteristics and be the product of certain procedural requisites." Chrysler Corp. v. Brown, 441 U.S. 281, 301, 99 S. Ct. 1705, 1717, 60 L. Ed. 2d 208 (1979). These directives contained in the VA Manual and Circulars do not possess the necessary characteristics of binding agency law. They were not officially promulgated pursuant to publication and comment requirements of APA 5 U.S.C. § 552(a)(1)(D) and they reflect no more than VA policy pronouncements on refunding to assist VA employees in the servicing of guaranteed loans. Fitzgerald v. Cleland, 498 F. Supp. 341 (D.Me.1980).
In Concerned Residents of Buck Hill Falls v. Grant, 537 F.2d 29 (3d Cir. 1976), similar guidelines were held nonbinding. The Court reasoned that "since the Guide and the Handbook are merely internal operating procedures, rather than regulations promulgated under the APA or otherwise, they do not prescribe any rule of law binding on the agency." 537 F.2d at 38. The VA Manual and Circulars do not set forth statutory criteria which can be applied to permit judicial review. Congress did not mandate them, but rather placed the decision to refund entirely within the Administrator's discretion. Moreover, there is no legislative history suggesting standards to govern the Administrator's option to take an assignment. The permissive language of § 1816(a) and VA Regulation 4318 pull in the direction of nonreviewability. This pull is even more pronounced by the fact that Congress in § 1816(a) specifically limited the Administrator's discretion by use of the mandatory work "shall" in requiring the Administrator to pay the holder of the obligation. Clearly, this change from mandatory to permissive language in the same statute regarding the evinces Congress' intent to make refunding a discretionary decision. Therefore, under the Local 2855 criteria, § 1816(a) vests broad discretion in the VA regarding refunding decisions and therefore satisfies the first criteria for unreviewability. It also satisfies the second and third criteria, because any refunding decision would necessarily involve economic and managerial considerations that would be best left to the skill and expertise of the VA. Local 2855, supra at 479-80, Pullman Incorp. v. Volpe, 337 F. Supp. 432, 436-37 (E.D.Pa.1971). Because such choices would be prudently left within the discretion of the VA, we hold that the decision to implement a formal refunding program is one that squarely falls within the committed to agency discretion exception and is not subject to judicial review.
Although we conclude that the VA's non-implementation of a refunding program falls within the committed to agency discretion exception, we are obligated to determine whether any specific constitutional, statutory, or regulatory commands have been violated. Local 2855, AFGE (AFL-CIO) v. United States, 602 F.2d 574, 580 (3d Cir. 1979). Plaintiffs contend that the statute (§ 1816a) and the regulatory scheme demonstrate that plaintiffs' have a protected property interest to fair access to the VA home loan assignment program that blossoms into a constitutionally protected property interest when a defaulting borrower meets the established VA criteria for refunding.
Whatever legitimate claim of entitlement the class members may have, its "substantive dimensions are defined by the law that created it." Local 2855, supra at 584. As we have already stated, nothing in 38 U.S.C. § 1816(a) or VA Regulation 38 C.F.R. § 36.4318 mandates that the VA set up a refunding program. In fact both the statute and the regulation vest the VA Administrator with unfettered discretion to determine whether in any given case to confer the benefit of VA refunding on a defaulting veteran. Moreover, DVB Circular 26-78-21 (July 17, 1978) upon which plaintiffs base their claim of entitlement specifically states that a factor to be considered in making a determination regarding refunding is that it "be in the best interests of the VA." For these reasons, we find that plaintiffs do not possess a property interest sufficient to allow judicial review of the VA's nonimplementation of a formal refunding program.
Accordingly, we grant defendants' motion for summary judgment.