Dismiss for Failure to State a Claim, State of Arizona v. Yellen, No. 2:21-cv-00514 (D. Ariz.), Doc. 86 (November 4, 2022)
Summary
Defendants' motion to dismiss and opposition to Arizona's injunction motion in State of Arizona v. Yellen, Case No. 2:21-cv-00514-ROS, Document 86, U.S. District Court, District of Arizona, filed November 4, 2022. It argues that Arizona cannot succeed on the merits because the offset provision of the American Rescue Plan Act is not unconstitutionally ambiguous, the Act is not coercive or commandeering, and the offset provision relates to the Act's purposes. The conclusion asks the Court to dismiss the case or enter judgment for Defendants, and the filing is signed /s/ Stephen Ehrlich. It states that the Act provided nearly $200 billion in grants to States and that Arizona received about $4.7 billion.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Dismiss for Failure to State a Claim, State of Arizona v. Yellen, No. 2:21-cv-00514 (D. Ariz.), Doc. 86 (November 4, 2022).”
Original at storage.courtlistener.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/dismiss-for-failure-to-state-a-claim-state-of-arizona-v-yellen-no-2-21-a68dc4dc46/
, SHA-256 4bb327fce307ce8ce30a690de96ca85b6d6730a32888baa422ceb43081e741ad.Full text
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 1 of 25
1 BRIAN M. BOYNTON
Principal Deputy Assistant Attorney General
2 ALEXANDER K. HAAS
3 Director, Federal Programs Branch
BRIGHAM J. BOWEN
4
Assistant Director, Federal Programs Branch
5 MICHAEL P. CLENDENEN
6 STEPHEN EHRLICH
Trial Attorneys
7
U.S. Department of Justice
8 Civil Division, Federal Programs Branch
9
100 L Street, NW
Washington, DC 20005
10 Tel.: (202) 305-9803
11 Email: stephen.ehrlich@usdoj.gov
12 Counsel for Defendants
13
14 UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
15
16 Case No. 2:21-cv-00514-ROS
State of Arizona,
17
18 Plaintiff, DEFENDANTS’ MOTION TO
19
DISMISS AND OPPOSITION TO
v. ARIZONA’S INJUNCTION
20 MOTION
21 Janet Yellen, in her official capacity as
Secretary of the Treasury, et al.,
22
23 Defendants.
24
25
26
27
28
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 2 of 25
1
TABLE OF CONTENTS
2
3
Introduction ......................................................................................... 1
4
Background .......................................................................................... 1
5
6 Legal Standard ..................................................................................... 4
7 Argument ............................................................................................. 4
8
I. Arizona cannot succeed on the merits. ................................... 4
9
10
A. The offset provision is not unconstitutionally
ambiguous. ..................................................................... 4
11
B. ARPA is not coercive or commandeering. ................ 12
12
13 C. The offset provision relates to ARPA’s
purposes........................................................................ 15
14
15 II. Arizona has not satisfied the remaining three
requirements for obtaining a permanent injunction. .......... 17
16
17 Conclusion ......................................................................................... 17
18
19
20
21
22
23
24
25
26
27
28
Defs.’ Mot. & Opp’n|i
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 3 of 25
1 TABLE OF AUTHORITES
2 Cases
3
Air Line Pilots Ass’n v. Alaska Airlines, Inc.,
4 898 F.2d 1393 (9th Cir. 1990) .............................................................................. 17
5
Ass'n of Priv. Sector Colleges & Univs. v. Duncan,
6
681 F.3d 427 (D.C. Cir. 2012) .............................................................................. 10
7
8
Ariz. Dream Act Coal. v. Brewer,
757 F.3d 1053 (9th Cir. 2014) .............................................................................. 17
9
10 Arizona v. Yellen,
34 F.4th 841 (9th Cir. 2022) .......................................................................... passim
11
12 Arizona v. Yellen,
13
550 F. Supp. 3d 791 (D. Ariz. 2021) ............................................................ passim
14 Arlington Cent. Sch. Dist Bd. of Educ. v. Murphy,
15 548 U.S. 291 (2006) ...................................................................................... 5, 9, 11
16
Bell v. New Jersey,
17 461 U.S. 773 (1983) .............................................................................................. 15
18
Bennett v. Ky. Dep’t of Educ.,
19 470 U.S. 656 (1985) ...................................................................................... 7, 8, 11
20
Benning v. Georgia,
21
391 F.3d 1299 (11th Cir. 2004) ........................................................................ 6, 16
22
23
Biden v. Missouri,
142 S. Ct. 647 (2022) .............................................................................................. 7
24
25 Bucklew v. Precythe,
139 S. Ct. 1112 (2019) ............................................................................................ 4
26
27 Charles v. Verhagen,
28 348 F.3d 601 (7th Cir. 2003) ........................................................................ 6, 8, 12
Defs.’ Mot. & Opp’n|ii
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 4 of 25
1 Children’s Hosp. Ass’n of Tex. v. Azar,
933 F.3d 764 (D.C. Cir. 2019) .............................................................................. 11
2
3 City of Los Angeles v. Barr,
929 F.3d 1163 (9th Cir. 2019) ........................................................................ 11, 17
4
5 City of Philadelphia v. Sessions,
6 280 F. Supp. 3d 579 (E.D. Pa. 2017) .................................................................... 17
7 Coll. Sav. Bank v. Fl. Prepaid Postsecondary Educ. Expense Bd.,
8 527 U.S. 666 (1999)............................................................................................... 15
9
Cutter v. Wilkinson,
10 423 F.3d 579 (6th Cir. 2005) .............................................................................. 6, 9
11
Davis ex rel. Lashonda D. v. Monroe Cnty. Bd. of Educ.,
12 526 U.S. 629 (1999)............................................................................................. 6, 8
13
Ducey v. Yellen,
14
--- F. Supp. 3d ---, 2022 WL 2817710 (D. Ariz. July 19, 2022)................. 6, 7, 8, 9
15
16 eBay v. MercExchange, LLC,
547 U.S. 388 (2006)................................................................................................. 4
17
18 Edmo v. Corizon, Inc.,
935 F.3d 757 (9th Cir. 2019) .................................................................................. 4
19
20 Gruver v. La. Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll.,
21 959 F.3d 178 (5th Cir. 2020) ................................................................................ 13
22 Irving Indep. Sch. Dist. v. Tatro,
23 468 U.S. 883 (1984)............................................................................................... 11
24
Jackson v. Birmingham Bd. of Educ.,
25 544 U.S. 167 (2005)............................................................................................. 6, 8
26
LA All. for Hum. Rts. v. Cnty. of Los Angeles,
27 14 F.4th 947 (9th Cir. 2021) ........................................................................... 12, 16
28
Defs.’ Mot. & Opp’n|iii
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 5 of 25
1 Maryland v. King,
567 U.S. 1301 (2012) ............................................................................................ 17
2
3 Mayweathers v. Newland,
314 F.3d 1062 (9th Cir. 2002) ....................................................................... passim
4
5 Miss. Comm’n on Env’t Quality v. EPA,
6 790 F.3d 138 (D.C. Cir. 2015) .............................................................................. 13
7 Missouri v. Yellen,
8 39 F.4th 1063 (8th Cir. 2022) ........................................................................ passim
9
Munn v. Illinois,
10 94 U.S. 113 (1876) ................................................................................................ 17
11
New York v. United States,
12 505 U.S. 144 (1992) ........................................................................................ 15, 16
13
NFIB v. Sebelius,
14
567 U.S. 519 (2012) ....................................................................................... passim
15
16 Oklahoma v. U.S. Civ. Serv. Comm’n,
330 U.S. 127 (1947) .............................................................................................. 16
17
18 Pac. Radiation Oncology, LLC v. Queen’s Med. Ctr.,
810 F.3d 631 (9th Cir. 2015) .......................................................................... 12, 16
19
20 Pennhurst State Sch. & Hosp. v. Halderman,
21 451 U.S. 1 (1981) ............................................................................................ 4, 5, 8
22 Petit v. U.S. Dep’t of Educ.,
23 675 F.3d 769 (D.C. Cir. 2012) .............................................................................. 11
24
Religious Sisters of Mercy v. Azar,
25 513 F. Supp. 3d 1113 (D.N.D. Jan. 19, 2021)...................................................... 13
26
Rostker v. Goldberg,
27 453 U.S. 57 (1981) .................................................................................................. 4
28
Defs.’ Mot. & Opp’n|iv
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 6 of 25
1
Rust v. Sullivan,
2 500 U.S. 173 (1991) .......................................................................................... 16, 17
3
Sabri v. United States,
4
541 U.S. 600 (2004) .......................................................................................... 10, 16
5
6 School Dist. of City of Pontiac v. Sec’y of U.S. Dep’t of Educ.,
584 F.3d 253 (6th Cir. 2009) ............................................................................ 11, 15
7
8 Smith v. Berryhill,
139 S. Ct. 1765 (2019) ............................................................................................ 11
9
10 South Dakota v. Dole,
11 483 U.S. 203 (1987) .................................................................................... 14, 15, 16
12 Texas Education Agency v. U.S. Dep’t of Education,
13 992 F.3d 350 (5th Cir. 2021) .................................................................................... 7
14
United States v. Butler,
15 297 U.S. 1 (1936) .............................................................................................. 14, 15
16
United States v. Miami Univ.,
17 294 F.3d 797 (6th Cir. 2002) .................................................................................. 11
18
United States v. Morrison,
19
529 U.S. 598 (2000) ............................................................................................ 4, 12
20
21 Va. Dep’t of Educ. v. Riley,
106 F.3d 559 (4th Cir. 1997) .................................................................................... 8
22
23 Van Wyhe v. Reisch,
581 F.3d 639 (8th Cir. 2009) .................................................................................... 8
24
25 W. Va. Dep’t of Health & Hum. Res. v. Sebelius,
26 649 F.3d 217 (4th Cir. 2011) .................................................................................... 8
27
28
Defs.’ Mot. & Opp’n|v
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 7 of 25
1 Statutes
2 28 U.S.C. § 2201 ........................................................................................................ 4
3
42 U.S.C. § 802 ................................................................................................. passim
4
5 42 U.S.C. § 1395x ...................................................................................................... 7
6
Rules
7
8 Fed. R. Civ. P. 56(a) .................................................................................................. 4
9 Regulations
10
86 Fed. Reg. 26,786 (May 17, 2021).......................................................................... 3
11
12 87 Fed. Reg. 4338 (Jan. 27, 2022) ........................................................................ 3, 10
13 Other Authorities
14
Directly, Oxford English Dictionary Online,
15
https://www.oed.com/view/Entry/53307 .................................................... 10
16
Indirectly, Oxford English Dictionary Online,
17
https://www.oed.com/view/Entry/94534 .................................................... 10
18
19
20
21
22
23
24
25
26
27
28
Defs.’ Mot. & Opp’n|vi
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 8 of 25
1 INTRODUCTION
2 There is nothing new about Arizona’s challenge to the American Rescue
3 Plan Act, Congress’s nearly $200 billion appropriation for state governments to
4 respond to the COVID-19 pandemic and its economic effects. In fact, Judge Hu-
5 metewa’s prior decision resolved nearly every issue necessary to dispose of this
6 case. When the Court previously dismissed the State’s complaint, it correctly
7 held that ARPA’s offset provision—which prohibits States from using the federal
8 funds to offset a net-tax-revenue reduction resulting from changes in state law—
9 is not unconstitutionally ambiguous. “[N]obody questions the [offset provision]
10 exists as a condition to [States] accepting the ARPA funds,” and “[i]n that regard,
11 Congress fulfilled its duty under” the Spending Clause. Arizona v. Yellen, 550 F.
12 Supp. 3d 791, 796 (D. Ariz. 2021). The Court also correctly held that ARPA is not
13 coercive because the statute “will not revoke any federal funding Arizona en-
14 joyed prior to accepting.” Id. at 799. “The downside to declining the ARPA funds
15 is just that—Arizona would not have received ARPA funds.” Id.
16 While Judge Humetewa reached these conclusions in the context of stand-
17 ing, the Ninth Circuit viewed them as merits determinations. See Arizona v. Yellen,
18 34 F.4th 841, 852–53 (9th Cir. 2022). So in evaluating the merits here, the Court
19 need only reiterate those prior well-reasoned holdings and dismiss these claims.
20 The same is true for Arizona’s claim that the offset provision fails the Spending
21 Clause “relatedness requirement.” Pl.’s Mot. at 15–16, ECF No. 78. Although the
22 relatedness requirement is minimal, it is far exceeded here because the offset pro-
23 vision merely specifies how States may use the newly appropriated federal funds
24 to ensure that they are used for the public-health and economic-recovery pur-
25 poses of the Act. So the Court should dismiss this claim too.
26 BACKGROUND
27 In the American Rescue Plan Act of 2021, Congress provided nearly
28 $200 billion in new grants to help States mitigate the fiscal effects of the COVID-
Defs.’ Mot. & Opp’n | 1
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 9 of 25
1 19 pandemic. 42 U.S.C. § 802(a)(1); see id. § 802(b)(3)(A). States may use ARPA
2 funds for certain broad categories of costs, including to aid households, busi-
3 nesses, and industries affected by the pandemic; to give premium pay to workers
4 performing essential work during the pandemic; to pay for state government ser-
5 vices to the extent of pandemic-related revenue losses; and to make necessary
6 investments in water, sewer, or broadband infrastructure. Id. § 802(c)(1). But
7 ARPA also places two “[f]urther restriction[s]” on the use of the funds. 42 U.S.C.
8 § 802(c)(2). One is that a State may not deposit ARPA funds into a pension fund.
9 Id. § 802(c)(2)(B). The other, at issue here, is that a State “shall not use the
10 funds provided under this section . . . to either directly or indirectly offset a re-
11 duction in the net tax revenue of such State” resulting from a change in state law
12 during the covered period.1 Id. § 802(c)(2)(A); see also Arizona, 550 F. Supp. 3d at
13 794–95; Defs.’ PI Opp’n at 1–4, ECF No. 31 (further background). Despite receiv-
14 ing about $4.7 billion under ARPA, Arizona brought this suit alleging that the
15 offset provision is unconstitutional. Compl. ¶ 1, ECF No. 1.
16 Judge Humetewa previously dismissed this case for lack of standing, hold-
17 ing (among other things) that Arizona did not suffer a sovereign injury because
18 Congress “made the existence of the condition upon which Arizona could accept
19 funds ‘explicitly obvious,’” and that the State did not suffer any coercive pressure
20 because ARPA “will not revoke any federal funding Arizona enjoyed prior to
21 accepting.” Arizona, 550 F. Supp. 3d at 797, 799 (quoting Mayweathers v. Newland,
22 314 F.3d 1062, 1067 (9th Cir. 2002) and NFIB v. Sebelius, 567 U.S. 519, 582 (2012)).
23 Since the Court’s decision, there have been two developments.
24 First, through the Treasury Secretary’s authority “to issue such regulations
25 as may be necessary or appropriate to carry out” ARPA, 42 U.S.C. § 802(f), Treas-
26 ury issued a final rule implementing ARPA’s statutory conditions, including the
27
1 The covered period began on March 3, 2021 and ends on the last day of
28
the state fiscal year “in which all funds received by the State . . . have been ex-
pended or returned to, or recovered by” Treasury. 42 U.S.C. § 802(g)(1).
Defs.’ Mot. & Opp’n | 2
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 10 of 25
1 offset provision. See Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg.
2 26,786 (May 17, 2021); Coronavirus State and Local Fiscal Recovery Funds, 87 Fed.
3 Reg. 4338 (Jan. 27, 2022). As with the interim final rule,2 the final rule implements
4 ARPA by “simply prohibit[ing] [S]tates from cutting taxes in a way that reduces
5 net revenue more than a de minimis amount and then failing to account for that
6 reduction through non-ARPA sources, such as through organic economic
7 growth, increases in revenue from other sources, or spending cuts in sectors not
8 related to ARPA.” Missouri v. Yellen, 39 F.4th 1063, 1070 (8th Cir. 2022).
9 Second, the Ninth Circuit reversed Judge Humetewa’s decision that Ari-
10 zona lacked standing and remanded for this Court to hear the merits of Arizona’s
11 case. See Arizona, 34 F.4th at 853. But in doing so, the Ninth Circuit explained
12 that it viewed Judge Humetewa’s standing ruling as a premature ruling on the
13 merits. Id. at 852 (noting that this Court’s ambiguity “analysis examine[d]
14 whether the condition is ambiguous, and not whether being offered ambiguous
15 terms is a cognizable injury”); id. at 853 (explaining that this Court’s coercion
16 analysis “evaluate[d] the merits of whether ARPA is coercive instead of evaluat-
17 ing whether being coerced is a cognizable injury”). As the court put it, “differ-
18 ences in what the Offset Provision means and how it may be enforced go to the
19 merits of Arizona’s claims, and not to whether a court has jurisdiction to hear
20 these claims.” Id. But the Ninth Circuit made abundantly clear that its reversal
21 “should not be construed as commenting in any way on the merits of Arizona’s
22 case.” Id.
23 Arizona now again asks for an injunction, asserting largely the same claims
24 Judge Humetewa previously rejected in her standing analysis. Compare Pl.’s PI
25 Mot. at 7–17, ECF No. 11 with Pl.’s Mot. at 5–16.
26
27
28 2 Arizona cites only the interim final rule, but never mentions that it was
superseded by Treasury’s final rule in January 2022. See Pl.’s Mot. at 3–4, 8–11.
Defs.’ Mot. & Opp’n | 3
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 11 of 25
1 LEGAL STANDARD
2 Plaintiffs seek a permanent injunction. Such relief is only appropriate “if
3 the movant shows that there is no genuine dispute as to any material fact and the
4 movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A per-
5 manent injunction requires not only success on the merits, but also a demonstra-
6 tion that (1) the movant has suffered an irreparable injury; (2) remedies available
7 at law, such as monetary damages, are inadequate to compensate for that injury;
8 (3) an equity remedy is warranted after balancing the hardships; and (4) the pub-
9 lic interest would not be disserved by a permanent injunction. eBay Inc. v. Mer-
10 cExchange, LLC, 547 U.S. 388, 391 (2006).
11 ARGUMENT
12 An injunction is an “extraordinary remedy never awarded as of right.”
13 Edmo v. Corizon, Inc., 935 F.3d 757, 784 (9th Cir. 2019). And invalidating an Act
14 of Congress is “the gravest and most delicate duty that” federal courts are “called
15 upon to perform.” Rostker v. Goldberg, 453 U.S. 57, 64 (1981) (quotation marks
16 omitted). Here, Arizona cannot meet its heavy burden to show that the offset
17 provision is “unconstitutional in all its applications.” Bucklew v. Precythe, 139 S.
18 Ct. 1112, 1127 (2019); United States v. Morrison, 529 U.S. 598, 607 (2000).
19 I. ARIZONA CANNOT SUCCEED ON THE MERITS.
20 A. The offset provision is not unconstitutionally ambiguous.
21 Arizona first contends that the offset provision is unconstitutionally ambig-
22 uous. Pl.’s Mot. at 6–11. But the State’s arguments misunderstand the constitu-
23 tional inquiry. To comply with the unambiguity requirement, Congress must
24 simply make clear that acceptance of federal funds obligates States to comply
25 with a condition. Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17 (1981).
26 That’s exactly what ARPA does: “a state official who is engaged in the process of
27 deciding whether the State should accept [ARPA] funds and the obligations that
28 go with those funds” would “clearly understand that one of the obligations of
Defs.’ Mot. & Opp’n | 4
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 12 of 25
1 the Act is the obligation” not to use ARPA funds to offset a net-tax-revenue re-
2 duction resulting from changes in state law. Arlington Cent. Sch. Dist Bd. of Educ.
3 v. Murphy, 548 U.S. 291, 296 (2006). In other words, as Judge Humetewa recog-
4 nized, because “nobody questions the [offset provision] exists as a condition to
5 Arizona accepting the funds,” Congress fulfilled its duty under the Spending
6 Clause. Arizona, 550 F. Supp. 3d at 796. Judge Humetewa was correct before and
7 this Court be correct if it applied that same holding to the merits.
8 As Judge Humetewa rightly recognized, precedent on Spending Clause un-
9 ambiguity establishes that Congress must only make clear the existence of a con-
10 dition. In Pennhurst—the origin of the Spending Clause unambiguity
11 requirement—the issue was “whether there existed a condition that imposed an
12 obligation on the States.” Id. (quoting Pennhurst, 451 U.S. at 18). The Pennhurst
13 Court even explicitly recognized that a State’s obligations may be “largely inde-
14 terminate,” so long as Congress gives “clear notice to the States that they, by ac-
15 cepting funds under the Act, would indeed be obligated to comply with” the
16 condition. Pennhurst, 451 U.S. at 24–25. “Similarly, in Arlington Central, the issue
17 was whether the Individuals with Disabilities Education Act ‘furnishes clear no-
18 tice regarding’ the existence of a condition whereby the States were required to
19 pay for expert testimony fees incurred through bringing claims under the Act.”
20 Arizona, 550 F. Supp. 3d at 796 (quoting Arlington Central, 548 U.S. at 296).
21 Numerous Spending Clause cases all confirm that States make an “in-
22 formed choice” when Congress simply makes clear that acceptance of federal
23 money obligates the States to comply with a condition. Pennhurst, 451 U.S. at 25.
24 The Supreme Court itself has repeatedly affirmed that “there [i]s sufficient notice
25 under Pennhurst where a statute ma[kes] clear that some conditions [a]re placed
26 on the receipt of federal funds.” Jackson v. Birmingham Bd. of Educ., 544 U.S. 167,
27 183 (2005); Davis ex rel. Lashonda D. v. Monroe Cnty. Bd. of Educ., 526 U.S. 629, 650
28 (1999). And the Circuits—especially the Ninth Circuit—have done the same,
Defs.’ Mot. & Opp’n | 5
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 13 of 25
1 holding that the Spending Clause is satisfied where a “statute’s intention to impose
2 a condition is expressed clearly,” even though the operation of a funding condi-
3 tion “is perhaps unpredictable.” Mayweathers, 314 F.3d at 1067; Cutter v. Wil-
4 kinson, 423 F.3d 579, 586 (6th Cir. 2005) (“Nothing more is required under
5 Pennhurst, which held that Congress need provide no more than ‘clear notice’ to
6 the states that funding is conditioned upon compliance with certain standards.”);
7 Charles v. Verhagen, 348 F.3d 601, 607–08 (7th Cir. 2003) (“[T]he exact nature of
8 the conditions may be ‘largely indeterminate,’ provided that the existence of the
9 conditions is clear . . . .”); Benning v. Georgia, 391 F.3d 1299, 1307 (11th Cir. 2004).
10 Congress must only “make the existence of the condition itself—in exchange for
11 the receipt of federal funds—explicitly obvious.” Mayweathers, 314 F.3d at 1067.
12 The judges in this District have correctly applied this binding precedent to
13 ARPA. First, Judge Humetewa did so in this case, following Mayweathers (and
14 many other Spending Clause cases) to conclude that “the existence of the condi-
15 tion upon which Arizona could accept funds” need only be “explicitly obvious.”
16 Arizona, 550 F. Supp. 3d at 797 (quoting Mayweathers, 314 F.3d at 1067). Judge
17 Logan did the same, holding that ARPA passes constitutional muster if it “un-
18 ambiguously set[s] forth the condition.” Ducey v. Yellen, --- F. Supp. 3d ---, 2022
19 WL 2817710, at *8 (D. Ariz. July 19, 2022) (Logan, J.) (citing Mayweathers, 314 F.3d
20 at 1067). And in addressing an even broader ARPA provision, the court there
21 found no Spending Clause violation where “ARPA clearly provides that states
22 ‘shall only use [ARPA] funds’ for specific purposes,” and “Congress delegated
23 to the Secretary the authority to issue ‘such regulations as may be necessary or
24 appropriate to carry out this section’—which would certainly include greater
25 specificity as to permissible uses.” Id. (citing 42 U.S.C. §§ 802(c)(1), (f)).
26 “Here, nobody questions the [offset provision] exists as a condition to Ari-
27 zona accepting the funds.” Arizona, 550 F. Supp. 3d at 796. “In that regard,”
28 Judge Humetewa correctly held, “Congress fulfilled its duty under [the Supreme
Defs.’ Mot. & Opp’n | 6
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 14 of 25
1 Court’s decisions in] Pennhurst and Arlington Central” and the Ninth Circuit’s
2 decision in Mayweathers. Id. at 796–97 (citing Mayweathers, 314 F.3d at 1067)).
3 Indeed, because “ARPA gives the Secretary authority to determine how the
4 statute should apply to more specific facts rather than leaving it to the courts, as
5 in Mayweathers,” the statute is actually “better aligned with the judiciary’s role
6 and provides greater predictability for regulated parties in advance of litigation.”
7 Ducey, 2022 WL 2817710, at *8. This is not unusual. Agencies frequently exercise
8 their authority under Spending Clause statutes to explain permissible uses of
9 federal funds and even attach more conditions to the receipt of those funds. See
10 Bennett v. Ky. Dep’t of Educ., 470 U.S. 656, 669–72 (1985). The Supreme Court just
11 recently cited and applied “such a broad and indefinite grant of authority” with-
12 out questioning its constitutionality. Ducey, 2022 WL 2817710, at *8 (citing Biden
13 v. Missouri, 142 S. Ct. 647, 652 (2022) (per curiam)); see Biden, 142 S. Ct. at 652
14 (noting that “Congress has authorized the Secretary [of Health and Human Ser-
15 vices] to impose conditions on the receipt of Medicaid and Medicare funds that
16 ‘the Secretary finds necessary in the interest of the health and safety of individu-
17 als who are furnished services’” (quoting 42 U.S.C. § 1395x(e)(9))).
18 But when Pennhurst (and the legion of other cases) are properly applied,
19 agency regulations have no bearing on the Spending Clause analysis. 3 If a stat-
20 utory funding condition exists, the implementing agency could regulate the de-
21 tails of the condition subject to the Administrative Procedure Act and the other
22 typical constraints; if not, any agency regulation imposing funding conditions
23 would be unauthorized by the statute. That’s the upshot of the Riley case cited
24 by Arizona. Pl.’s Mot. at 9; Va. Dep’t of Educ. v. Riley, 106 F.3d 559, 568 (4th Cir.
25
3 For this reason, it is not necessary for the Court to consider Texas Education
26
Agency v. U.S. Dep’t of Education, 992 F.3d 350 (5th Cir. 2021). Because ARPA
27 clearly establishes that a condition exists, the Spending Clause inquiry is satisfied
and there is no need to look to the regulation. In any event, that case concerned
28 a condition that a State waive its sovereign immunity to receive federal funds,
which the Fifth Circuit held must clearly require a waiver. Id. at 361–62. But this
case does not involve a condition that a State waive sovereign immunity.
Defs.’ Mot. & Opp’n | 7
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 15 of 25
1 1997) (en banc) (reasoning that an agency could not, by regulation, act ultra vires
2 by imposing spending conditions that did not exist as part of the statute). And
3 that’s what Pennhurst requires: Congress must provide only “clear notice to the
4 States that they, by accepting funds under the Act, would indeed be obligated to
5 comply with” a condition. Pennhurst, 451 U.S. at 25. The idea is simply to keep
6 Congress from “surprising participating States with post-acceptance or retroac-
7 tive conditions.” NFIB, 567 U.S. at 584.
8 “That Arizona was unsure of ‘every factual instance’ of possible noncom-
9 pliance does not amount to a violation of Congress’ duty.” Arizona, 550 F. Supp.
10 3d at 797 (quoting Mayweathers, 314 F.3d at 1067); Ducey, 2022 WL 2817710, at *8
11 (“Even though the ARPA’s language is broad and undoubtedly does not specify
12 every use that would violate the condition, Congress is not required to provide
13 such specificity.”); W. Va. Dep’t of Health & Hum. Res. v. Sebelius, 649 F.3d 217, 223
14 (4th Cir. 2011) (“Congress need not spell out every condition with flawless pre-
15 cision for a provision to be enforceable.”); Van Wyhe v. Reisch, 581 F.3d 639, 650
16 (8th Cir. 2009) (“[S]etting forth every conceivable variation in the statute is nei-
17 ther feasible nor required.”). The Supreme Court itself has said so. See Bennett v.
18 Ky. Dep’t of Educ., 470 U.S. at 666 (“every improper expenditure” need not be
19 “specifically identified and proscribed” in the statute); Jackson, 544 U.S. 167 at 183
20 (reiterating Bennett); Davis, 526 U.S. at 650 (same). That’s because “it is simply
21 impossible” for Congress to “delineate every instance in which a State may or
22 may not comply with” the offset provision. Charles, 348 F.3d at 608; Mayweathers,
23 314 F.3d at 1067; Arizona, 550 F. Supp. 3d at 797.
24 Were it otherwise, numerous statutes would be arguably unconstitutional.
25 That includes the Religious Land Use and Institutionalized Persons Act
26 (“RLUIPA”), which was upheld by every circuit to address it, despite repeated
27 acknowledgments that the operation of its funding condition is “unpredictable.”
28 Mayweathers, 314 F.3d at 1067; see also Cutter, 423 F.3d at 586. So Arizona is wrong
Defs.’ Mot. & Opp’n | 8
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 16 of 25
1 to demand codification of minute details in ARPA when, as Judge Humetewa
2 rightly recognized, Congress in ARPA “has done at least as much as it did in
3 RLUIPA.” Arizona, 550 F. Supp. 3d at 797; Ducey, 2022 WL 2817710, at *8.
4 There is no reason for the Court to deviate from binding precedent and
5 Judge Humetewa’s prior conclusion to hold that the Spending Clause requires
6 more. Although Arizona strenuously argues to the contrary, even the State is
7 confused about what standard would apply. At one point Arizona concedes that
8 a funding condition must only be “unambiguously clear as to [its] fundamental
9 mandate.” Pl.’s Mot. at 11 n.7. That standard is easily met here because the “fun-
10 damental mandate” of the offset provision is that state officials cannot use ARPA
11 funds to offset a net-tax-revenue reduction. See Arlington Central, 548 U.S. at 296.
12 But at other points, Arizona quibbles with the offset provision’s minute details,
13 like whether certain money must come from the same “fund” where “ARPA
14 grant money is directly utilized.” Pl.’s Mot. at 8. Beyond that, the State musters
15 only conclusory statements that the offset provision supposedly “provides no
16 guidance on critical interpretive questions.” Id. (citation omitted).
17 But even if the Spending Clause required more than the existence of a con-
18 dition, Congress did much more, explaining both the nature and scope of the
19 condition. By its plain terms, the offset provision only applies when a State uses
20 ARPA funds to “offset” a reduction in “net” tax revenue. 42 U.S.C.
21 § 802(c)(2)(A); see Defs.’ PI Opp’n at 8–9. Taken together, the statutory text
22 simply says that States cannot “use ARPA funds as part of [their budget] balanc-
23 ing process.” Missouri, 39 F.4th at 1070 n.6.
24 Arizona tries to inject ambiguity into the offset provision by pointing to the
25 word “indirectly.” See Pl.’s Mot. at 8. But Defendants have already explained
26 both direct and indirect offsets. See Defs.’ PI Opp’n at 9. For example, assuming
27 no other changes, a State could not receive $2 billion in ARPA funds, cut its in-
28 come tax by an amount equal to $2 billion, and use the ARPA funds to offset the
Defs.’ Mot. & Opp’n | 9
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 17 of 25
1 revenue loss. That would be using ARPA funds to “directly” offset a net-tax-
2 revenue reduction. 42 U.S.C. § 802(c)(2)(A); see Directly, Oxford English Diction-
3 ary Online, available here (last visited Nov. 4, 2022) (defining “directly” as “[i]n
4 a direct manner or way”). Similarly, again assuming no other changes, a State
5 could not use ARPA funds to replace $2 billion in planned state expenditures on
6 COVID-19 testing and then use the $2 billion it had originally budgeted for that
7 purpose to offset a $2 billion reduction in state income tax. That would be using
8 ARPA funds to “indirectly” offset a net-tax-revenue reduction. 42 U.S.C.
9 § 802(c)(2)(A); see Indirectly, Oxford English Dictionary Online, available here
10 (last visited Nov. 4, 2022) (defining “indirectly” as “through some intervening
11 person or thing”); see also 87 Fed. Reg. at 4423-4429 (further details on how Treas-
12 ury will determine “direct[] or indirect[]” offsets).
13 Put simply, the phrase “directly or indirectly” merely underscores that a
14 State cannot circumvent the offset provision by using ARPA funds not to directly
15 pay for a tax cut, but to pay for other expenditures while using state funds usu-
16 ally used for those other expenditures to cover the tax cut. Congress routinely
17 uses the phrase “directly or indirectly” in that fashion to emphasize that a statu-
18 tory dictate cannot be circumvented by formalities. See, e.g., Ass’n of Priv. Sector
19 Colleges & Univs. v. Duncan, 681 F.3d 427, 444 (D.C. Cir. 2012) (“Congress phrased
20 the relevant provision broadly—employing words and phrases like ‘any’ and
21 ‘directly or indirectly.’”). And it is Congress’s prerogative to codify the offset
22 provision in such a way as to prevent not only direct offsets of tax cuts, but also
23 to prevent accounting tricks that have the same effect. After all, “[t]he power to
24 keep a watchful eye on expenditures . . . is bound up with congressional author-
25 ity to spend in the first place.” Sabri v. United States, 541 U.S. 600, 608 (2004).
26 If more were demanded of Congress, numerous other funding regimes (like
27 Medicaid and education statutes) could also be called into question, even though
28 courts have deferred to regulations implementing such statutes for decades. See,
Defs.’ Mot. & Opp’n | 10
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 18 of 25
1 e.g., Irving Indep. Sch. Dist. v. Tatro, 468 U.S. 883, 891–92 (1984) (Education of the
2 Handicapped Act); Children’s Hosp. Ass’n of Tex. v. Azar, 933 F.3d 764, 770 (D.C.
3 Cir. 2019) (Medicaid); Petit v. U.S. Dep’t of Educ., 675 F.3d 769, 778 (D.C. Cir. 2012)
4 (IDEA); United States v. Miami Univ., 294 F.3d 797, 811-15 (6th Cir. 2002) (Family
5 Educational Rights and Privacy Act). In all those cases, the details of the statu-
6 tory spending condition must have been ambiguous because otherwise there
7 would be nothing for the agency to interpret or courts to defer to. See Smith v.
8 Berryhill, 139 S. Ct. 1765, 1778 (2019) (“Chevron deference ‘is premised on the the-
9 ory that a statute’s ambiguity constitutes an implicit delegation from Congress
10 to the agency to fill in the statutory gaps.’”). But none of those cases then de-
11 clared the spending conditions unconstitutional, as Arizona now demands. See,
12 e.g., City of Los Angeles v. Barr, 929 F.3d 1163 (9th Cir. 2019) (applying Chevron
13 deference while simultaneously finding no Spending Clause violation).
14 Beyond ARPA, Defendants are aware of no case holding that a statutory
15 funding condition is “unconstitutionally ambiguous” on its face. That’s unsur-
16 prising: even though the unambiguity requirement “has constitutional roots, it
17 remains a rule of statutory interpretation” to be used in concrete disputes about
18 whether a particular funding condition exists. See, e.g., School Dist. of City of Pon-
19 tiac v. Sec’y of U.S. Dep’t of Educ., 584 F.3d 253, 283 (6th Cir. 2009) (en banc) (Sut-
20 ton, J., concurring). In practice, the Supreme Court has applied Pennhurst’s
21 unambiguity rule, along with other canons of interpretation, to interpret statu-
22 tory conditions in particular circumstances. See Arlington Central, 548 U.S. at 291.
23 And States are not without recourse if they dislike the offset provision or have
24 ambiguity concerns: they may decline ARPA funds, seek a better bargain in the
25 halls of Congress, or work cooperatively with Treasury. See Bennett, 470 U.S. at
26 669 (describing a grant program as “an ongoing, cooperative program” in which
27 “grant recipients ha[ve] an opportunity to seek clarification of the program re-
28
Defs.’ Mot. & Opp’n | 11
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 19 of 25
1 quirements”); Charles, 348 F.3d at 608 (explaining that States who dislike the am-
2 biguity of an imposed condition “certainly could have refused federal funding”).
3 But “[d]ue respect for the decisions of a coordinate branch of Government de-
4 mands that [courts] invalidate a congressional enactment only upon a plain
5 showing that Congress has exceeded its constitutional bounds.” Morrison, 529
6 U.S. at 607. Arizona has not come close to making such a showing here.
7 B. ARPA is not coercive or commandeering.
8 Arizona fares no better in arguing that the offset provision violates the
9 Tenth Amendment and unconstitutionally coerces States into accepting ARPA
10 funds with the attendant conditions. Compl. ¶¶ 62–70, 123–28; Pl.’s Mot. at 11–
11 15; see id. at 11 (agreeing that the inquiry under both the Spending Clause and
12 the Tenth Amendment is the same). Most glaringly, this claim is absent from
13 Arizona’s complaint, which only alleges coercion if the offset provision “prohib-
14 its the States from cutting taxes in essentially any manner.” Compl. ¶¶ 65–66;
15 Arizona, 550 F. Supp. 3d at 795 (noting that Arizona’s claim arises only “under
16 the problematic interpretation”). But “a tax cut, on its own, does not fall within
17 the Offset Provision’s ambit.” Arizona, 34 F.4th at 856 (R. Nelson, J., concurring).
18 “What [States] cannot do is use ARPA funds as part of [their budget] balancing
19 process.” Missouri, 39 F.4th at 1070 n.6. So this Court should reject Arizona’s
20 claim because the Court has no “authority to issue an injunction based on claims
21 not pled in the complaint.” LA All. for Hum. Rts. v. Cnty. of Los Angeles, 14 F.4th
22 947, 957 (9th Cir. 2021) (citation omitted); Pac. Radiation Oncology, LLC v. Queen’s
23 Med. Ctr., 810 F.3d 631, 633 (9th Cir. 2015) (same).
24 In any event, the offset provision is, by any measure, a modest restriction
25 on an otherwise generous outlay of federal funds. It simply ensures that Con-
26 gress’s substantial monetary outlay will be used as intended for the public-health
27
28
Defs.’ Mot. & Opp’n | 12
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 20 of 25
1 and economic-recovery purposes. And if Arizona disliked the offset provision,
2 it was free to simply decline the federal money. 4
3 In arguing otherwise, Arizona misconstrues governing law. For starters,
4 Congress has full “authority to condition the receipt of funds on the States’ com-
5 plying with restrictions on the use of those funds, because that is the means by
6 which Congress ensures that the funds are spent according to its view of the
7 ‘general Welfare.’” NFIB, 567 U.S. at 580. That is exactly what Congress has done
8 here: titled “[f]urther restriction on the use of funds,” the offset provision only
9 applies to a State’s “use [of] the funds provided under this section.” 42 U.S.C.
10 § 802(c)(2) (emphasis added). So a coercion analysis is inapplicable because Con-
11 gress here is not “pressuring the States to accept policy changes” independent of
12 the new federal funds. NFIB, 567 U.S. at 580; Gruver v. La. Bd. of Supervisors for
13 La. State Univ. Agric. & Mech. Coll., 959 F.3d 178, 183–84 (5th Cir. 2020); Miss.
14 Comm’n on Env’t Quality v. EPA, 790 F.3d 138, 179 (D.C. Cir. 2015); Religious Sisters
15 of Mercy v. Azar, 513 F. Supp. 3d 1113 (D.N.D. Jan. 19, 2021), appeal pending on
16 other grounds, No. 21-1890 (8th Cir. Apr. 21, 2021). The State is free to do what it
17 wants with its own money or tax scheme, including cutting taxes, providing re-
18 bates, increasing spending, or cutting expenditures. See Arizona, 34 F.4th at 856
19 (R. Nelson, J., concurring) (“A tax cut, on its own, does not fall within the Offset
20 Provision’s ambit.”). Arizona must simply refrain from using the federal money
21 to “directly or indirectly offset a reduction in net tax revenue.” 42 U.S.C.
22 § 802(c)(2)(A). In other words, “[w]hat [States] cannot do is use ARPA funds as
23 part of [their budget] balancing process.” Missouri, 39 F.4th at 1070 n.6.
24 Even if the coercion analysis applied here, Arizona would lose under NFIB.
25 The key aspect of the Medicaid expansion that NFIB found to be coercive was
26
27
28 See Pl.’s Mot.
4 Arizona cites two district court cases that held the opposite.
at 12–13. But those cases are currently pending on appeal and were wrongly de-
cided for the reasons explained below.
Defs.’ Mot. & Opp’n | 13
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 21 of 25
1 that Congress “penalize[d] States that choose not to participate in that new pro-
2 gram by taking away their existing Medicaid funding.” NFIB, 567 U.S. at 585
3 (emphasis added). Here, in stark contrast, there are no monetary consequences
4 if a State chooses to decline ARPA funds. As Judge Humetewa succinctly put it,
5 the Act “will not revoke any federal funding Arizona enjoyed prior to accepting.
6 The downside to declining the ARPA funds is just that—Arizona would not have
7 received ARPA funds.” Arizona, 550 F. Supp. 3d at 799.
8 Contrary to Plaintiffs’ contention, Pl.’s Mot. at 12–13, the amount of fund-
9 ing at issue in NFIB was only relevant to the preexisting funding that would be
10 withdrawn if States declined the Medicaid expansion. Compare NFIB, 567 U.S. at
11 582 (finding that a threatened loss of preexisting Medicaid funds—ten percent of
12 States’ overall budgets—was coercive) with South Dakota v. Dole, 483 U.S. 203, 211
13 (1987) (finding that a threatened five-percent loss of preexisting highway funds
14 was not coercive). After all, “[t]hreat of loss, not hope of gain, is the essence of
15 economic coercion.” United States v. Butler, 297 U.S. 1, 81 (1936) (Stone, J., dis-
16 senting). And all Justices in NFIB agreed that, despite the amount of funding at
17 issue, “Congress could have made just the new funding provided under the ACA
18 contingent on acceptance of the terms of the Medicaid Expansion.” NFIB, 567
19 U.S. at 687–88 (joint dissent); id. at 576, 585 (plurality) (same); id. at 624–46 (Gins-
20 burg, J., concurring in part) (finding no coercion). That holding defeats Arizona’s
21 claim that the sheer amount of offered funding—which Arizona says is “compa-
22 rable” to the “amount of funds at stake in this case,” Pl.’s Mot. at 13—is disposi-
23 tive, regardless of whether it is being newly provided or eliminated. Notably,
24 ARPA is more modest than the prospective funding condition that all Justices in
25 NFIB indicated was permissible: a State does not lose all of its ARPA funding,
26 but only the amount it uses as an improper offset. See 42 U.S.C. § 802(e)(1).
27 Perhaps recognizing these fatal flaws, Arizona attempts to put a Tenth
28 Amendment spin on their coercion argument, arguing that ARPA intrudes on
Defs.’ Mot. & Opp’n | 14
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 22 of 25
1 States’ sovereign authority to tax and “undermines political accountability.”
2 Pl.’s Mot. at 13–15. But, again, the offset provision does not regulate States’ abil-
3 ity to cut taxes; it simply precludes States from using federal funds to offset net-
4 tax-revenue reductions. See Missouri, 39 F.4th at 1070 n.6 (“What [States] cannot
5 do is use ARPA funds as part of [their budget] balancing process.”); Arizona, 34
6 F.4th at 856 (R. Nelson, J., concurring) (“A tax cut, on its own, does not fall within
7 the Offset Provision’s ambit.”). More fundamentally, though, Arizona continues
8 to misunderstand both the Spending Clause and the Tenth Amendment, despite
9 agreeing that the coercion and Tenth Amendment arguments are subject to the
10 same analysis. Compare Pl.’s Mot. at 11 with id. at 13–15. It has long been estab-
11 lished that “Congress can use [its Spending Clause] power to implement federal
12 policy it could not impose directly under its enumerated powers.” NFIB, 567
13 U.S. at 578; Coll. Sav. Bank v. Fl. Prepaid Postsecondary Educ. Expense Bd., 527 U.S.
14 666, 686 (1999) (same); Dole, 483 U.S. at 207 (same); Butler, 297 U.S. at 66 (same).
15 And “[r]equiring States to honor the obligations voluntarily assumed as a condi-
16 tion of federal funding before recognizing their ownership of funds simply does
17 not intrude on their sovereignty.” Bell v. New Jersey, 461 U.S. 773, 790 (1983); City
18 of Pontiac, 584 F.3d at 283 (Sutton, J., concurring) (“[T]he Tenth Amendment, the
19 Eleventh Amendment and the Constitution’s other structural limitations on con-
20 gressional authority do not limit properly enacted spending-clause legislation.”).
21 Because Arizona had “a legitimate choice whether to accept the federal con-
22 ditions in exchange for federal funds,” NFIB, 567 U.S. at 578, its coercion and
23 Tenth Amendment arguments should be rejected. The State was free to take or
24 decline the federal money and state officials “can fairly be held politically ac-
25 countable for choosing to accept or refuse the federal offer.” Id.; New York v.
26 United States, 505 U.S. 144, 168 (1992).
27 C. The offset provision relates to ARPA’s purposes.
28 Arizona also incorrectly argues that the offset provision is not sufficiently
Defs.’ Mot. & Opp’n | 15
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 23 of 25
1 related to ARPA’s purposes. Pl.’s Mot. at 15–16. Again, this claim is absent from
2 Arizona’s complaint, which only alleges a lack of relatedness if the offset provi-
3 sion “prohibits the States from cutting taxes in essentially any manner.” Compl.
4 ¶¶ 65–66; Arizona, 550 F. Supp. 3d at 795 (noting that Arizona’s claim arises only
5 “under the problematic interpretation”). But, again, “a tax cut, on its own, does
6 not fall within the Offset Provision’s ambit.” Arizona, 34 F.4th at 856 (R. Nelson,
7 J., concurring). “What [States] cannot do is use ARPA funds as part of [their
8 budget] balancing process.” Missouri, 39 F.4th at 1070 n.6. So this Court should
9 reject Arizona’s relatedness claim because the Court has no “authority to issue
10 an injunction based on claims not pled in the complaint.” LA All. for Hum. Rts.,
11 14 F.4th at 957 (citation omitted); Pac. Radiation, 810 F.3d at 633 (same).
12 Regardless, the paragon of a condition that is related to the purposes of
13 federal spending is one that ensures “that public funds [are] spent for the pur-
14 poses for which they were authorized.” Rust v. Sullivan, 500 U.S. 173, 196 (1991).
15 And that’s exactly what the offset provision does: it merely specifies how States
16 may use the newly appropriated federal funds to ensure that they are used for
17 the public-health and economic-recovery purposes of the Act. See Sabri, 541 U.S.
18 at 608; Oklahoma v. U.S. Civ. Serv. Comm’n, 330 U.S. 127, 143 (1947); Section II.B.,
19 supra. Congress did not provide ARPA funds to replace purposeful decreases in
20 net tax revenue; it provided the money to help States economically recover from
21 the pandemic in ways they otherwise could not.
22 This is far more than sufficient to meet the “minimal standard of rational-
23 ity” required of Spending Clause legislation. Benning, 391 F.3d at 1308; May-
24 weathers, 314 F.3d at 1067 (conditions need only “bear some relationship to the
25 purpose of the federal spending”); see New York, 505 U.S. at 172 (finding sufficient
26 relation where “both the conditions and the payments embody Congress’ efforts
27 to address the pressing problem of radioactive waste disposal”); Dole, 483 U.S. at
28
Defs.’ Mot. & Opp’n | 16
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 24 of 25
1 208–09 (finding that the federal interest in a uniform drinking age was suffi-
2 ciently related to States’ receipt of highway funds). In fact, Arizona points to no
3 appellate case, and Defendants are aware of none, in which a court has struck
4 down a funding condition on relatedness grounds. 5 See City of Los Angeles, 929
5 F.3d at 1175 (recognizing that the relatedness standard “is not demanding” and
6 that “the Court has never struck down a condition on federal grants based on
7 this relatedness prong”). Arizona’s relatedness argument should be rejected.
8 II. ARIZONA HAS NOT SATISFIED THE REMAINING THREE REQUIREMENTS FOR
OBTAINING A PERMANENT INJUNCTION.
9
10 As Defendants have explained, Arizona also cannot meet the other injunc-
11 tion factors. Defs.’ PI Opp’n at 16–17. Arizona will suffer no irreparable harm if
12 its motion is denied because the State will have “an adequate remedy” if recoup-
13 ment proceedings ever materialize. Ariz. Dream Act Coal. v. Brewer, 757 F.3d 1053,
14 1068 (9th Cir. 2014); 42 U.S.C. § 802(e). In contrast, an injunction would irrepa-
15 rably harm the United States because “[a]ny time a [government] is enjoined by
16 a court from effectuating statutes enacted by representatives of its people, it suf-
17 fers a form of irreparable injury.” Maryland v. King, 567 U.S. 1301, 1303 (2012)
18 (Roberts, C.J., in chambers). And “[i]f there is doubt, the expressed will of the
19 legislature should be sustained.” Munn v. Illinois, 94 U.S. 113 (1876).
20 CONCLUSION
21 The Court should dismiss this case or enter judgment for Defendants. See
22 Air Line Pilots Ass’n v. Alaska Airlines, Inc., 898 F.2d 1393, 1397 n.4 (9th Cir. 1990).
23
24
25
5 The State cites only one district court case in passing. See Pl.’s Mot. at 16
(citing City of Philadelphia v. Sessions, 280 F. Supp. 3d 579, 640-43 (E.D. Pa. 2017)).
26 But that case found a lack of relatedness only because it applied Third Circuit
precedent and drew a distinction between Congress’s interest in the funding stat-
27 ute and an agency’s interest in administering the program. See City of Philadelphia,
280 F. Supp. 3d at 643. The City of Philadelphia court’s reasoning is inapplicable
28 here, both because this Court is not bound by Third Circuit law and because,
through ARPA, Congress has expressed its paramount interest that funds are
“spent for the purposes for which they were authorized.” Rust, 500 U.S. at 196.
Defs.’ Mot. & Opp’n | 17
2:21-cv-00514-ROS
Case 2:21-cv-00514-ROS Document 86 Filed 11/04/22 Page 25 of 25
1 DATED: November 4, 2022 Respectfully submitted,
2 BRIAN M. BOYNTON
3 Principal Deputy Assistant Attorney General
4
ALEXANDER K. HAAS
5 Director, Federal Programs Branch
6
BRIGHAM J. BOWEN
7
Assistant Director, Federal Programs Branch
8
9
/s/ Stephen Ehrlich
MICHAEL P. CLENDENEN
10 STEPHEN EHRLICH
11 Trial Attorneys
Civil Division, Federal Programs Branch
12
U.S. Department of Justice
13 1100 L Street, NW
14 Washington, DC 20005
Phone: (202) 305-9803
15 Email: stephen.ehrlich@usdoj.gov
16
Counsel for Defendants
17
18
19
20
21
22
23
24
25
26
27
28
Defs.’ Mot. & Opp’n | 18
2:21-cv-00514-ROS
File and source
- File
- 86-dismiss-for-failure-to-state-a-claim.pdf
- Size
- 273,217 bytes
- SHA-256
- 4bb327fce307ce8ce30a690de96ca85b6d6730a32888baa422ceb43081e741ad
- Original
- storage.courtlistener.com