Dismiss/Lack of Jurisdiction AND Dismiss for Failure to State a Claim, Ducey v. Yellen, No. 2:22-cv-00112 (D. Ariz.), Doc. 19 (March 22, 2022)
Summary
Defendants' motion to dismiss in Ducey v. Yellen, Case No. 2:22-cv-00112-SPL, U.S. District Court, District of Arizona, Document 19, filed March 22, 2022. The suit was brought by Douglas A. Ducey, Governor of the State of Arizona, against Janet Yellen, Secretary of the Treasury. The brief states that Arizona allocated $163 million in Rescue Plan funds to school districts and charter schools on the condition that they not require face masks, and $10 million to families who move children out of schools that require masks. It states that the Secretary issued a Final Rule and that Treasury sent two letters to Arizona. The defendants argue for dismissal for lack of jurisdiction and for failure to state a claim, including under the Spending Clause and the nondelegation doctrine.
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/Lack of Jurisdiction AND Dismiss for Failure to State a Claim, Ducey v. Yellen, No. 2:22-cv-00112 (D. Ariz.), Doc. 19 (March 22, 2022).”
Original at storage.courtlistener.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/dismiss-lack-of-jurisdiction-and-dismiss-for-failure-to-state-a-claim-33bc421a5f/
, SHA-256 0e800278b89655b3e60388e800f394afe24c8591598fc08ece3575f1874afa57.Full text
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 1 of 25
1 BRIAN M. BOYNTON
Principal Deputy Assistant Attorney General
2 BRIAN D. NETTER
3 Deputy Assistant Attorney General
ALEXANDER K. HAAS
4
Director, Federal Programs Branch
5 BRIGHAM J. BOWEN
6 Assistant Director, Federal Programs Branch
MICHAEL P. CLENDENEN
7
STEPHEN EHRLICH
8 Trial Attorneys
9
U.S. Department of Justice
Civil Division, Federal Programs Branch
10 100 L Street, NW
11 Washington, DC 20005
Tel.: (202) 305-0693
12
Email: michael.p.clendenen@usdoj.gov
13
Counsel for Defendants
14
15 UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
16
17 Case No. 2:22-cv-00112-SPL
Douglas A. Ducey, Governor of the
18
State of Arizona, in his official capac- Related case: 2:21-cv-00514-DJH
19 ity,
20
Plaintiff, DEFENDANTS’ MOTION TO
21 DISMISS
22 v.
23
Janet Yellen, Secretary of the Treasury,
24 in her official capacity, et al.,
25
Defendants.
26
27
28
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 2 of 25
1
TABLE OF CONTENTS
2 INTRODUCTION .................................................................................................. 1
3 BACKGROUND ..................................................................................................... 2
4
LEGAL STANDARDS ........................................................................................... 6
5
6 ARGUMENT ...........................................................................................................6
7 I. The Governor’s claims are not justiciable. ...................................6
8
A. The Governor lacks Article III standing and the case is
9 unripe. ............................................................................................... 6
10 B. The January 14 letter is not a final agency action. ................ 10
11
II. The Governor fails to state a claim on the merits...................... 11
12
13 A. The Final Rule is “necessary or appropriate” to carry
out the purposes of the Rescue Plan. ........................................11
14
15 B. The Governor’s Spending Clause claim should be
dismissed. ........................................................................................ 15
16
17 C. The Rescue Plan does not violate the nondelegation
doctrine. ........................................................................................... 16
18
19
CONCLUSION .....................................................................................................17
20
21
22
23
24
25
26
27
28
Defs.’ Mot. to Dismiss|i
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 3 of 25
1 TABLE OF AUTHORITIES
2 Cases
3 Ala. Ass’n of Realtors v. Dep’t of Health & Human Servs.,
4 141 S. Ct. 2485 (2021) ...................................................................................................14
5 Alcoa, Inc. v. Bonneville Power Admin.,
6 698 F.3d 774 (9th Cir. 2012) ..........................................................................................9
7 Arizona v. Yellen,
8 550 F. Supp. 3d 791 (D. Ariz. 2021), appeal filed, No. 21-16227
(9th Cir. 2021). ......................................................................................................2, 9, 16
9
10 Arkansas v. Oklahoma,
503 U.S. 91 (1992) .........................................................................................................12
11
12 Ashcroft v. Iqbal,
556 U.S. 662 (2009) .........................................................................................................6
13
14 Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) .........................................................................................................6
15
16 Bennett v. Dep’t of Educ.,
470 U.S. 656 (1985) .............................................................................................9, 15, 16
17
18 Bennett v. New Jersey,
470 U.S. 632 (1985) .........................................................................................................9
19
20 Bennett v. Spear,
520 U.S. 154 (1997) .......................................................................................................10
21
22 Benning v. Georgia,
391 F.3d 1299 (11th Cir. 2004) ....................................................................................16
23
24 Bishop Paiute Tribe v. Inyo Cnty.,
863 F.3d 1144 (9th Cir. 2017) ........................................................................................9
25
26 Chandler v. State Farm Mut. Auto Ins. Co.,
598 F.3d 1115 (9th Cir. 2010) ........................................................................................6
27
28 Charles v. Verhagen,
348 F.3d 601 (7th Cir. 2003) ........................................................................................16
Defs.’ Mot. to Dismiss|ii
2:22-cv-00112-JZB
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 4 of 25
1 City of Los Angeles v. Barr,
929 F.3d 1163 (9th Cir. 2019) ......................................................................................15
2
3 Darby v. Cisneros,
509 U.S. 137, 144 (1993) ................................................................................................9
4
5 Davis ex rel. Lashonda D. v. Monroe Cnty. Bd. of Educ.,
526 U.S. 629 (1999) .......................................................................................................16
6
7
Env’t Info. Ctr. v. Stone-Manning,
766 F.3d 1184 (9th Cir. 2014) ........................................................................................9
8
Fairbanks N. Star Borough v. U.S. Army Corps of Eng’rs,
9
543 F.3d 586 (9th Cir. 2008) ........................................................................................10
10
FDA v. Brown & Williamson Tobacco Corp.,
11
529 U.S. 120 (2000) .......................................................................................................14
12
13 GEO Grp., Inc. v. Newsom,
15 F. 4th 919, 930 (9th Cir. 2021) ...............................................................................12
14
15 Gonzales v. Oregon,
546 U.S. 243 (2006) .......................................................................................................14
16
17 Gundy v. United States,
139 S. Ct. 2116 (2019), cert. denied, 142 S. Ct. 813 (2022) .........................................16
18
19 Idaho Wool Growers Ass’n v. Vilsack,
816 F.3d 1095, 1102 (9th Cir. 2016) ...........................................................................13
20
21 Jackson v. Birmingham Bd. of Educ.,
544 U.S. 167 (2005) .......................................................................................................15
22
23 Kentucky v. Graham,
473 U.S. 159 (1985) .........................................................................................................6
24
25 King v. Burwell,
576 U.S. 473 (2015) .......................................................................................................14
26
27
Lujan v. Defs. of Wildlife,
504 U.S. 555 (1992) .........................................................................................................6
28
Defs.’ Mot. to Dismiss|iii
2:22-cv-00112-JZB
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 5 of 25
1 Mayweathers v. Newland,
314 F.3d 1062 (9th Cir. 2002) ................................................................................15, 16
2
3 Biden v. Missouri,
142 S. Ct. 647 (2022) .....................................................................................................16
4
5 Mourning v. Family Publ’ns Serv., Inc.,
411 U.S. 356 (1973) ...........................................................................................11, 12, 13
6
7
Nat’l Broadcasting Co. v. United States,
319 U.S. 190 (1943) .......................................................................................................17
8
Nat’l Fed’n of Indep. Bus. v. Dep’t of Labor (“NFIB”),
9
142 S. Ct. 661 (2022) .....................................................................................................14
10
Nat’l Fed’n of Indep. Bus. v. Sebelius (“NFIB”),
11
567 U.S. 519 (2012) ................................................................................................14, 15
12
Nat’l Park Hosp. Ass’n v. Dep’t of Interior,
13
538 U.S. 803 (2003) ........................................................................................................ 9
14
Oklahoma v. U.S. Civ. Serv. Comm’n,
15
330 U.S. 127 (1947) .......................................................................................................14
16
Pennhurst State School & Hospital v. Halderman,
17
451 U.S. 1 (1981) ...........................................................................................................15
18
Pub. Serv. Comm’n of Utah v. Wycoff Cnty.,
19
344 U.S. 237 (1952) .........................................................................................................7
20
Sabri v. United States,
21
541 U.S. 600 (2004) .......................................................................................................14
22
Sackett v. EPA,
23
566 U.S. 120 (2012) .......................................................................................................10
24
Skyline Wesleyan Church v. Cal. Dep’t of Managed Health Care,
25
968 F.3d 738 (9th Cir. 2020) ..........................................................................................7
26
Soundboard Ass’n v. FTC,
27 888 F.3d 1261 (D.C. Cir. 2018) ....................................................................................10
28
Defs.’ Mot. to Dismiss|iv
2:22-cv-00112-JZB
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 6 of 25
1 Thomas v. Anchorage Equal Rts. Comm’n,
220 F.3d 1134 (9th Cir. 2000) ........................................................................................7
2
3 Thorpe v. Hous. Auth. of Durham,
393 U.S. 268 (1969) ......................................................................................................12
4
5
United States ex rel. Solis v. Millennium Pharms. Inc.,
885 F.3d 623 (9th Cir. 2018) ..........................................................................................6
6
United States v. Melgar-Diaz,
7
2 F.4th 1263 (9th Cir. 2021) ..................................................................................16, 17
8
United States v. Motamedi,
9
Civ. A. No. 20-10364, 2022 WL 101951 (9th Cir. Jan. 11, 2022)..............................17
10
Utility Air Regul. Grp. v. EPA,
11
573 U.S. 302 (2014) .......................................................................................................14
12
Van Wyhe v. Reisch,
13
581 F.3d 639 (8th Cir. 2009) ........................................................................................16
14
Whitman v. Am. Trucking Ass’ns,
15
531 U.S. 457 (2001) .......................................................................................................17
16
17
18 Statutes
19 5 U.S.C. § 704 ......................................................................................................................9
20
42 U.S.C. § 802 .......................................................................................................... passim
21
22 42 U.S.C. § 803 .................................................................................................................. 2
23 42 U.S.C. § 804 ................................................................................................................... 2
24
42 U.S.C. § 805 ................................................................................................................... 2
25
26
27
42 U.S.C. § 4332 ...............................................................................................................13
28
Ariz. Rev. Stat. Ann. § 41-193 ..........................................................................................6
Defs.’ Mot. to Dismiss|v
2:22-cv-00112-JZB
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 7 of 25
1 American Rescue Plan Act,
Pub. L. No. 117-2, 135 Stat. 4 (2021) (codified at 42 U.S.C. §§ 802–805).............1, 2
2
3 Federal Regulations
4 31 C.F.R. § 35.6 .................................................................................................................. 4
5 31 C.F.R. § 35.10 ...................................................................................................... passim
6
Coronavirus State and Local Fiscal Recovery Funds,
7 86 Fed. Reg. 26,786 (May 17, 2021). .............................................................................2
8
Coronavirus State and Local Fiscal Recovery Funds,
9 87 Fed. Reg. 4,338 (Jan. 27, 2022) ....................................................................... passim
10
11 Other Authorities
12
U.S. Dep’t of the Treasury, Treasury Issues Final Rule for State and Local Fiscal
13
Recovery Funds Program to Support the Ongoing COVID Response (Jan. 6, 2022),
14 https://home.treasury.gov/news/press-releases/jy0550 .................................. 3, 4
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Defs.’ Mot. to Dismiss|vi
2:22-cv-00112-JZB
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 8 of 25
1 INTRODUCTION
2 As part of the American Rescue Plan Act, Pub. L. No. 117-2, 135 Stat. 4
3 (2021) (“Rescue Plan” or “Act”), Congress appropriated nearly $200 billion in
4 new funding for state governments. 42 U.S.C. § 802. States may use these new
5 federal funds to mitigate the public health emergency caused by COVID-19 or its
6 negative economic impacts, among other permissible uses. Id. § 802(c)(1). In con-
7 travention of these purposes, however, Arizona has created a program that with-
8 holds federal funds from local school districts that choose to implement a mask
9 policy designed to slow the spread of the coronavirus. The State also provides
10 federal funds to families who transfer their children out of a school that requires
11 masks. These programs are either intended to discourage or have the effect of
12 discouraging local school districts from implementing COVID-19 safety proto-
13 cols in line with Centers for Disease Control and Prevention (“CDC”) guidance.
14 The Rescue Plan provides the Secretary of the Treasury with “the authority
15 to issue such regulations as may be necessary or appropriate to carry out this
16 section.” Id. § 802(f). Under this broad grant of authority, the Secretary issued a
17 Final Rule clarifying that states may not use Rescue Plan funds for programs that
18 undermine efforts to stop the COVID-19 pandemic. The Department of the Treas-
19 ury has also sent two letters informing Arizona that its school funding policies
20 are inconsistent with Treasury’s interpretation of the Act.
21 The Complaint should be dismissed for lack of jurisdiction and for failure
22 to state a claim. Because Treasury has not initiated any enforcement proceedings,
23 Governor Ducey (“Governor”) cannot establish that any alleged injury is immi-
24 nent. And to the extent the Governor challenges one of Treasury’s letters, that
25 letter is not a final agency action subject to judicial review. The Final Rule is also
26 within the Secretary’s broad power to issue appropriate regulations under the
27 Rescue Plan, and neither the Final Rule nor the Rescue Plan violates the Spending
28 Clause or the nondelegation doctrine.
Defs.’ Mot. to Dismiss| 1
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 9 of 25
1 BACKGROUND
2
On March 11, 2021, Congress enacted the American Rescue Plan Act. See
3
Pub. L. No. 117-2, § 9901(a) (codified at 42 U.S.C. §§ 802–805). The Rescue Plan
4
establishes a “Coronavirus State Fiscal Recovery Fund,” allocating $220 billion to
5
“mitigate the fiscal effects” of the pandemic on States, territories, and Tribal gov-
6
ernments through 2024. 42 U.S.C. § 802(a)(1); see id. § 803(a) (additional $130 bil-
7
lion for localities). Nearly $200 billion is allocated for the States and the District of
8
Columbia. Id. § 802(b)(3)(A).
The Rescue Plan provides that States may use the funds for pandemic-re-
9
10
lated purposes. Through 2024, a State may use the funds “to cover costs incurred”
11
“to respond to the public health emergency with respect to the Coronavirus Dis-
ease 2019 (COVID–19) or its negative economic impacts, including assistance to
12
13
households, small businesses, and nonprofits, or aid to impacted industries such
as tourism, travel, and hospitality,” among other uses. Id. § 802(c)(1)(A). The Res-
14
15
cue Plan also includes two “further restriction[s]” on the use of funds, id.
§ 802(c)(2), one of which is the subject of a related case in this Court, see generally
16
Arizona v. Yellen, 550 F. Supp. 3d 791 (D. Ariz. 2021) (Humetewa, J.), appeal filed,
17
18
No. 21-16227 (9th Cir.).1 If a recipient misuses Rescue Plan funds, the Act provides
that Treasury may recoup the amount of any misuse. 42 U.S.C. § 802(e). And the
19
Rescue Plan authorizes the Secretary “to issue such regulations as may be neces-
20
sary or appropriate to carry out” the applicable statutory provisions. 42 U.S.C.
21
§ 802(f). On May 10, 2021, Treasury posted an Interim Final Rule implementing
22
the Rescue Plan, which was published in the Federal Register the following week.
23
See Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg. 26,786
24
(May 17, 2021). The Interim Final Rule sets forth a specific, multi-step procedure
25
for recoupment of any misused funds under the Rescue Plan. Id. at 26,811–12.
26
27
28 1 Defendants have filed a motion to transfer related case, see Notice, ECF No. 11,
on which briefing is complete.
Defs.’ Mot. to Dismiss| 2
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 10 of 25
1 On August 17, 2021, the Governor announced the “Education Plus-Up
2 Grant Program.” Compl. ¶ 38, ECF No. 1. Through this program, Arizona allo-
3 cated $163 million in Rescue Plan funds to school districts and charter schools on
4 the condition that the schools do not require students to use face masks during
5 instructional hours. Id. ¶¶ 38, 41. The Governor also announced the “Educational
6 Recovery Benefit Program,” which provides $10 million in Rescue Plan funds to
7 families of children who are in school districts that do require masks to be spent
8 on tuition and other expenses associated with sending children to a different
9 school that does not require masks. Id. ¶¶ 42–43.
10 On October 5, 2021, Treasury sent a letter to the Governor stating that the
11 agency was “concerned that” these two programs “undermine evidence-based ef-
12 forts to stop the spread of COVID-19.” Letter from Adewale O. Adeyemo, Deputy
13 Secretary of the Treasury, to Douglas Ducey, Governor of Arizona, at 1 (Oct. 5,
14 2021) (“Oct. 5 letter”), ECF No. 1-4. “The purpose of” the Rescue Plan funds “is to
15 mitigate the fiscal effects stemming from the COVID-19 public health emergency,
16 including by supporting efforts to stop the spread of the virus,” the letter ex-
17 plained. Id. at 2. As such, Treasury stated, “[a] program or service that imposes
18 conditions on participation or acceptance of the service that would undermine ef-
19 forts to stop the spread of COVID-19 or discourage compliance with evidence-
20 based solutions for stopping the spread of COVID-19 is not a permissible use of”
21 Rescue Plan funds. Id. Treasury “request[ed]” that Arizona “describ[e] how the
22 State will remediate the issues identified” with these programs, and noted that
23 “[f]ailure to respond or remediate may result in administrative or other action.”
24 Id. Arizona responded by letter on November 4, 2021, providing the State’s expla-
25 nation of the intended purpose of the two programs. See Letter from Jason Mistle-
26 bauer to Jacob Leibenluft (Nov. 4, 2021) (“Nov. 4 letter”), ECF No. 1-5.
27 On January 6, 2022, Treasury issued a Final Rule that “adopt[ed] as final the
28
Defs.’ Mot. to Dismiss| 3
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 11 of 25
1 interim final rule . . . with amendments.” Coronavirus State and Local Fiscal Re-
2 covery Funds, 87 Fed. Reg. 4,338, 4,338 (Jan. 27, 2022); see also U.S. Dep’t of the
3 Treasury, Treasury Issues Final Rule for State and Local Fiscal Recovery Funds Program
4 to Support the Ongoing COVID Response (Jan. 6, 2022), https://home.treas-
5 ury.gov/news/press-releases/jy0550. The text of the Final Rule explains when a
6 use of funds is deemed permissible, including for programs or services that “re-
7 spond[] to” a “harm or impact to a beneficiary or class of beneficiaries caused or
8 exacerbated by the public health emergency or its negative economic impacts.” Id.
9 at 4,448 (to be codified at 31 C.F.R. § 35.6(b)(1)). The Final Rule preamble further
10 explains that “[a] program or service that imposes conditions on participation or
11 acceptance of the service that would undermine efforts to stop the spread of
12 COVID-19 or discourage compliance with recommendations and guidelines in
13 CDC guidance for stopping the spread of COVID-19 is not a permissible use of”
14 Rescue Plan funds. Id. at 4,431. “In other words, recipients may not use funds for
15 a program that undermines practices included in the CDC’s guidelines and rec-
16 ommendations for stopping the spread of COVID-19.” Id. Examples of programs
17 that would not be a permissible use of funds for this reason include “paying off
18 fines to business incurred for violation of” COVID-19 safety protocols and “re-
19 quiring that businesses” and other entities “abstain from requiring mask use . . .
20 as a condition of receiving” Rescue Plan funds. Id.
21 The Final Rule contains the requisite procedures for any recoupment action.
22 As a preliminary matter, the Final Rule provides that, prior to seeking recoup-
23 ment, the Secretary may notify recipients of potential violations and provide op-
24 portunities for informal consultation and remediation. 31 C.F.R. § 35.10(g) (2022).
25 If Treasury decides to initiate recoupment, it must first “provide the recipient an
26 initial written notice of the amount subject to recoupment along with an explana-
27
28
Defs.’ Mot. to Dismiss| 4
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 12 of 25
1 tion of such amounts.” Id. § 35.10(c). Then, if the recipient wants to request con-
2 sideration, it must submit a request a within 60 days. 2 Id. § 35.10(d). The Secretary
3 then has 60 days to affirm, withdraw, or modify the notice of recoupment. Id.
4 § 35.10(e). Recipients have 120 days from the Secretary’s final decision to repay
5 amounts owed. Id. § 35.10(f). Further, the Final Rule requires recipients to “invoke
6 and exhaust the procedures available under this subpart prior to seeking judicial
7 review.” Id. § 35.10(e).
8 On January 14, 2022, Treasury sent a second letter to Arizona stating that,
9 “[b]y discouraging families and school districts from following [the CDC’s] guid-
10 ance, the conditions” attached with these programs “undermine efforts to stop the
11 spread of COVID-19,” and that the programs as currently structured were thus
12 “ineligible uses” of Rescue Plan funds. Letter from Kathleen B. Victorino to Jason
13 Mistlebauer, at 2 (Jan. 14, 2022) (“Jan. 14 letter”), ECF No. 1-7. The letter requested
14 that Arizona either redirect Rescue Plan funds to eligible uses or restructure its
15 educational programs to eliminate the conditions identified, and noted that failure
16 to do so “may result in Treasury initiating an action to recoup” Rescue Plan funds
17 or withholding funds from Arizona’s “second tranche installment” of Rescue Plan
18 funds. Id. Treasury also stated that its “compliance program would welcome the
19 opportunity to discuss [its] concerns” and that it “is committed to working with
20 recipients to take advantage of the many eligible uses and great flexibility availa-
21 ble under” the Rescue Plan. Id.
22 On January 21, 2022, the Governor brought this suit challenging the Final
23 Rule and the January 14 letter. Compl. ¶¶ 74–75, 86–87. The Governor asserts that
24 both the Final Rule and the January 14 letter exceed Treasury’s authority under
25 the Rescue Plan. Id. ¶ 77, 88. The Governor also claims that the Final Rule is un-
26
27
28 2 The Final Rule permits the Secretary to extend or shorten the time periods set
forth in 31 C.F.R. § 35.10 (2022).
Defs.’ Mot. to Dismiss| 5
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 13 of 25
1 constitutionally ambiguous under the Spending Clause, id. ¶ 97, and that the Res-
2 cue Plan violates the nondelegation doctrine, id. ¶ 103. This motion follows.
3 LEGAL STANDARDS
4 The plaintiff bears the burden of establishing jurisdiction by a preponder-
5 ance of the evidence. United States ex rel. Solis v. Millennium Pharms., Inc., 885 F.3d
6 623, 625 (9th Cir. 2018). In order for the Court to have jurisdiction over a challenge
7 to agency action, the plaintiff must have standing to sue and the claims must be
8 ripe for adjudication. See, e.g., Chandler v. State Farm Mut. Auto Ins. Co., 598 F.3d
9 1115, 1122 (9th Cir. 2010). Under Rule 12(b)(6), “a complaint must contain suffi-
10 cient factual matter, accepted as true, to ‘state a claim to relief that is plausible on
11 its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
12 Twombly, 550 U.S. 544, 570 (2007)).
13 ARGUMENT
14 I. THE GOVERNOR’S CLAIMS ARE NOT JUSTICIABLE.
15 A. The Governor lacks Article III standing and the case is unripe.
16 To satisfy the “irreducible constitutional minimum” of Article III standing—
17 as required to invoke this Court’s jurisdiction—the Governor must first demon-
18 strate “a concrete and particularized” injury in fact that is “actual or imminent.”
19 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992).
20 As an initial matter, any conceivable harm arising out of the allegations in
21 the Complaint runs to the State of Arizona, which is not named as a plaintiff in
22 this lawsuit.3 If, at some point, Treasury seeks recoupment or withholds future
23 funds, the State of Arizona would incur a pocketbook injury to its treasury. See 42
24 U.S.C. § 802(b)(3)(A) (directing that Rescue Plan funds be available to the
25 “States”). In general, an official named in his or her “official capacity” is to be
26 treated the same as the entity he or she represents. Kentucky v. Graham, 473 U.S.
27 3 Notably, the Arizona “department of law,” the agency charged with “[r]epre-
28 sent[ing] th[e] state in any action in a federal court,” Ariz. Rev. Stat. Ann. § 41-193,
is not involved in this action.
Defs.’ Mot. to Dismiss| 6
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 14 of 25
1 159, 166 (1985). Here, however, the Governor has disavowed that any harm to the
2 State is attributable to him. See Pls.’ Response in Opp’n to Mot. to Transfer, at 6,
3 ECF No. 16. Instead, the Governor asserts that because he instituted the educa-
4 tional programs at issue, he has been harmed, separate from any fiscal conse-
5 quence to the State. See id. at 5; see also Compl. ¶¶ 75, 87. Such an injury is not
6 cognizable.
7 In any event, no injury to the Governor—or the State—is imminent. The
8 Governor’s pre-enforcement claims are thus hypothetical and speculative. See Pub.
9 Serv. Comm’n of Utah v. Wycoff Cnty., 344 U.S. 237 (1952). “For there to be jurisdic-
10 tion over a preenforcement challenge, ‘there must be a genuine threat of imminent
11 prosecution.’” Skyline Wesleyan Church v. Cal. Dep’t of Managed Health Care, 968 F.3d
12 738, 747–48 (9th Cir. 2020) (quoting Thomas v. Anchorage Equal Rts. Comm’n, 220
13 F.3d 1134, 1139 (9th Cir. 2000)). “[N]either the mere existence of a proscriptive
14 statute nor a generalized threat of prosecution satisfies the ‘case or controversy’
15 requirement.’” Thomas, 220 F.3d at 1139.
16 The Governor lacks pre-enforcement standing to seek a judicial resolution
17 of the disagreement between Treasury and the State concerning the permissibility
18 of the State’s grant programs because Treasury has not initiated recoupment pro-
19 ceedings or even stated unequivocally that it would do so. The October 5 letter
20 says only that a failure to comply with Treasury’s request “may result in admin-
21 istrative or other action.” Oct. 5 letter, at 2 (emphasis added). The January 14 let-
22 ter likewise states only that a failure to remediate “may result in Treasury
23 initiating an action to recoup” Rescue Plan funds or that “Treasury may . . . with-
24 hold funds from the State of Arizona’s second tranche installment.” Jan. 14 letter,
25 at 2 (emphasis added). Further, Treasury’s January 14 letter invited Arizona to
26 engage constructively to find allowable uses for the funds. See Jan. 14 letter, at 2.
27 Such “informal consultation” and alternate resolution processes, which are con-
28 templated in the Final Rule, are distinct from the recoupment procedures, which
Defs.’ Mot. to Dismiss| 7
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 15 of 25
1 Treasury has not initiated. See 31 C.F.R. § 35.10(g) (2022); 87 Fed. Reg. at 4,439
2 (“Treasury may pursue other forms of remediation and monitoring in conjunc-
3 tion with, or as an alternative to, recoupment.”). Given the broad nature of Treas-
4 ury’s statements, the absence of Treasury action initiating its administrative
5 recoupment process, and Treasury’s stated “commit[ment] to working with
6 [State and Local Fiscal Recovery Fund] recipients,” Treasury may exercise its en-
7 forcement discretion not to seek recoupment.4
8 The speculative nature of the Governor’s pre-enforcement claims is high-
9 lighted by the fact that questions remain about what enforcement might look like.
10 The January 14 letter does not state whether Treasury might recoup funds based
11 on past misuse of funds, or only with respect to further expenditures under these
12 programs. As noted above, a necessary first step for Treasury to seek recoupment
13 is for Treasury to calculate the amount subject to recoupment and send a notice
14 with an explanation of such amounts. See 31 C.F.R. § 35.10(c) (2022). Treasury has
15 done neither of these things.
16 Because Treasury may decide not to initiate enforcement proceedings
17 against Arizona, and because the contours of such proceedings, should they oc-
18 cur, remain unclear, the Governor’s effort to seek a pre-enforcement judicial res-
19 olution of the dispute between Treasury and the State is improper. These claims
20
21
22 4 Treasury’s decision may be impacted by, among other things, its review of infor-
23 mation provided by Arizona in its report filed for the period March 3, 2021 to De-
cember 31, 2021. Arizona’s submission provided additional information regarding
24
the education programs at issue, including Arizona’s identification of its expend-
25 itures for these programs as eligible under 42 U.S.C. § 802(c)(1)(A). Treasury may
26 seek additional information from recipients to clarify information provided in
these reports, including, in the case of Arizona’s education programs, more infor-
27
mation regarding how these programs aim to achieve the cited eligible uses of
28 funds to respond to the disproportionate impacts experienced by certain popula-
tions as a result of the public health emergency.
Defs.’ Mot. to Dismiss| 8
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 16 of 25
1 should be adjudicated, if at all, after Treasury has taken enforcement action. In-
2 deed, courts routinely review agency decisions requiring the repayment of fed-
3 eral funds after they occur. See, e.g., Bennett v. Dep’t of Educ., 470 U.S. 656, 658
4 (1985) (explaining that “the dispute is whether the Secretary correctly demanded
5 repayment based on a determination that Kentucky violated requirements that
6 Title I funds be used to supplement, and not to supplant, state and local expend-
7 itures for education”); Bennett v. New Jersey, 470 U.S. 632, 637 (1985) (explaining
8 that the dispute arose out of the Secretary’s final decision ordering repayment of
9 specified federal education funds). That is exactly the path the Court should take
10 here by dismissing this case for lack of jurisdiction.
11 For similar reasons, this challenge to the Final Rule and the January 14 letter
12 is not ripe. Nat’l Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803, 807–08 (2003); see
13 also Bishop Paiute Tribe v. Inyo Cnty., 863 F.3d 1144, 1153 (9th Cir. 2017) (discussing
14 the overlap between standing and ripeness). The Governor’s claimed harm here
15 rests on the potential recoupment or withholding of some funds. Alcoa, Inc. v.
16 Bonneville Power Admin., 698 F.3d 774, 793 (9th Cir. 2012). But recoupment or with-
17 holding may never come to pass. See Arizona, 550 F. Supp. 3d at 798 (finding that
18 Arizona lacked standing because enforcement was not certain). And even if Treas-
19 ury does institute enforcement proceedings, the amount that may be subject to
20 recoupment is not yet known. So there has not been any “concrete action applying
21 [Treasury’s] regulation to [the Governor’s] situation in a fashion that harms or
22 threatens to harm him.” Nat’l Park Hosp. Ass’n, 538 U.S. at 808; see Mont. Env’t Info.
23 Ctr. v. Stone-Manning, 766 F.3d 1184, 1190 (9th Cir. 2014).
24 Finally, the Final Rule provides extensive notice and process in advance of
25 any payment coming due. Consistent with providing such notice and process, the
26 Final Rule requires that recipients exhaust its procedures before seeking judicial
27 review. 31 C.F.R. § 35.10(e) (2022). The Governor has not exhausted the available
28 administrative remedies. See Darby v. Cisneros, 509 U.S. 137, 144 (1993) (noting that
Defs.’ Mot. to Dismiss| 9
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 17 of 25
1 an agency may impose an exhaustion requirement through regulation).
2 B. The January 14 letter is not a final agency action.
3 To the extent the Governor challenges the January 14 letter itself, see Compl.
4 ¶¶ 85–93, his claim is unreviewable because the January 14 letter is not a “final
5 agency action.” 5 U.S.C. § 704.5 An agency action is “final” only if two conditions
6 are met. “First, the action must mark the consummation of the agency’s deci-
7 sionmaking process—it must not be of a merely tentative or interlocutory nature.
8 And second, the action must be one by which rights or obligations have been
9 determined, or from which legal consequences will flow.” Fairbanks N. Star Bor-
10 ough v. U.S. Army Corps of Eng’rs, 543 F.3d 586, 591 (9th Cir. 2008) (quoting Bennett
11 v. Spear, 520 U.S. 154, 177–78 (1997)); see also Sackett v. EPA, 566 U.S. 120, 127
12 (2012) (explaining that “consummation” means that an agency action is “not sub-
13 ject to further Agency review”). Thus, “Bennett directs courts to look at finality
14 from the agency’s perspective (whether the action represents the culmination of
15 the agency’s decisionmaking) and from the regulated parties’ perspective
16 (whether rights or obligations have been determined, and legal consequences
17 flow).” Soundboard Ass’n v. FTC, 888 F.3d 1261, 1271 (D.C. Cir. 2018). The Janu-
18 ary 14 letter fails both prongs.
19 First, the January 14 letter is not the culmination of Treasury’s deci-
20 sionmaking process. Rather, it represents one step in a multi-step process. As
21 discussed above, the letter states only that Treasury “may” take certain actions
22 to recover misused funds. Treasury has not yet initiated any such proceedings,
23 and it maintains enforcement discretion to choose not to initiate proceedings. In-
24 deed, Treasury previously sent a different letter, on October 5, similarly inform-
25 ing the State that certain consequences may flow from its misuse of Rescue Plan
26 funds, suggesting that each of these letters is just one communication in a back-
27 and-forth between the State and Treasury. More communications between the
28
5 The Final Rule, on the other hand, is a final agency action.
Defs.’ Mot. to Dismiss| 10
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 18 of 25
1 parties may follow before Treasury’s ultimate determination on whether and
2 how to recover funds, so these intermediate communications do not represent a
3 consummation of the decisionmaking process.
4 Second, no legal consequences flow from the January 14 letter. As dis-
5 cussed above, Treasury has not definitively stated that it will seek to recover any
6 misused funds. Nor has Treasury decided what specific amounts it would seek
7 to recover, a necessary precursor to seeking recoupment. Because the January 14
8 letter does not determine any legal consequences for Arizona—much less specify
9 the remedial actions to be taken or the timeframe for which misused funds will
10 be recovered—the “legal consequences” prong is not satisfied. There is currently
11 no final agency action arising from the letter for this Court to review.
12 II. THE GOVERNOR FAILS TO STATE A CLAIM ON THE MERITS.
13 The Governor puts forth three arguments on the merits. First, he claims that
14 the Final Rule exceeds the Secretary’s authority under the Rescue Plan. Second,
15 he argues that the Final Rule violates the Spending Clause because it is unconsti-
16 tutionally ambiguous. Third, he claims that, if the Final Rule is authorized by
17 statute, then the Rescue Plan is an unconstitutional delegation of legislative au-
18 thority. None of these claims has merit.
19 A. The Final Rule is “necessary or appropriate” to carry out the pur-
poses of the funds appropriated by the Rescue Plan.
20
The Final Rule falls well within the Secretary’s authority to issue regula-
21
tions. The statute expressly states that “[t]he Secretary shall have the authority to
22
issue such regulations as may be necessary or appropriate to carry out this sec-
23
tion.” 42 U.S.C. § 802(f). The Final Rule is “appropriate” to carry out Congress’s
24
provision of funds to the States under Section 802.
25
Addressing similar enabling language in other statutes, the Supreme Court
26
has concluded that this language grants the agency “broad authority.” Mourning
27
v. Family Publ’ns Serv., Inc., 411 U.S. 356, 365 (1973) (quotation marks omitted).
28
More specifically, “[w]here the empowering provision of a statute states simply
Defs.’ Mot. to Dismiss| 11
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 19 of 25
1 that the agency may ‘make . . . such rules and regulations as may be necessary to
2 carry out the provisions of this Act,’” the Court held that “the validity of a regu-
3 lation promulgated thereunder will be sustained so long as it is ‘reasonably re-
4 lated to the purposes of the enabling legislation.’” Id. at 369 (quoting Thorpe v.
5 Hous. Auth. of Durham, 393 U.S. 268, 280–81(1969)). The same is true of statutes
6 that authorize regulations as the Secretary finds to be “appropriate.” See, e.g., Ar-
7 kansas v. Oklahoma, 503 U.S. 91, 105 (1992); GEO Grp., Inc. v. Newsom, 15 F.4th 919,
8 930 (9th Cir. 2021) (noting that “statutory language—‘appropriate’ and ‘neces-
9 sary and proper’—is a hallmark of vast discretion” (footnote omitted)). Notably,
10 § 802(f) uses the disjunctive “or.” The Final Rule does not need to be both “nec-
11 essary” and “appropriate”; it is authorized so long as it satisfies the broader “ap-
12 propriate” standard.
13 The Rescue Plan is generally intended to mitigate the negative effects of the
14 COVID-19 crisis. See 42 U.S.C. § 802(a)(1). The Act provides states with funds
15 that may be used “to respond to the public health emergency with respect to
16 [COVID-19] or its negative economic impacts,” among other permissible uses. Id.
17 § 802(c)(1). Consistent with the statute, the Final Rule says that States may use
18 Rescue Plan funds to “respond[] to . . . harms” that are “caused or exacerbated
19 by the public health emergency,” or to “mitigat[e] and prevent[]” COVID-19 “in
20 a manner that is consistent with recommendations and guidance from the
21 [CDC],” among other permissible uses. 87 Fed. Reg. 4,448–49. And the Final Rule
22 further clarifies that States may not use Rescue Plan funds “for a program that
23 undermines practices included in the CDC’s guidelines and recommendations
24 for stopping the spread of COVID-19.” Id. at 4,431. These restrictions are “rea-
25 sonably related to the purpose of” the funds appropriated by the Rescue Plan.
26 Mourning, 411 U.S. at 369. Programs that have the opposite effect, i.e., that per-
27 petuate the pandemic by “undermin[ing]” recommended CDC practices, do not
28 help “to respond to the public health emergency.” It was therefore appropriate
Defs.’ Mot. to Dismiss| 12
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 20 of 25
1 for Treasury to explain that such uses of Rescue Plan funds are inconsistent with
2 the Act.
3 The Governor argues that the Final Rule is not authorized by § 802(f) be-
4 cause each of the two permissible uses of funds in § 802(c)(1)(A)—“respond[ing]
5 to the public health emergency” and “respond[ing] to . . . its negative economic
6 impacts”—are distinct options for recipients. See Compl. ¶ 79. Because Arizona’s
7 educational programs fall under the latter (economic impacts), the Governor
8 says, Treasury has no authority to impose a condition that promotes the former
9 (the public health emergency itself). See id. This argument ignores Treasury’s
10 “broad authority” under § 802(f). Mourning, 411 U.S. at 365. Because one of the
11 purposes of the Rescue Plan is to mitigate the public health crisis, it is appropriate
12 for Treasury to prohibit uses of funds that have the opposite effect. Were it oth-
13 erwise, States could disregard the CDC’s evidence-based guidelines, prolonging
14 the pandemic while using the federal government’s money to respond to the (un-
15 necessarily prolonged) pandemic’s “negative economic impacts.” 42 U.S.C.
16 § 802(c)(1)(A). It is irrelevant that the State believes it is pursuing a different goal
17 of the Act. The Final Rule tells States that they may not undermine one purpose
18 of the Act while claiming to advance another purpose. And the Secretary’s broad
19 authority clearly encompasses this common-sense conclusion.6
20 Finally, the Governor contends that the Final Rule violates the so-called
21 “major questions doctrine” because Congress has not spoken clearly enough to
22
23 6 The Governor also complains that Treasury does not have “expertise in matters
of public health,” and the Final Rule therefore goes beyond the Secretary’s author-
24
ity. Compl. ¶ 82. But the CDC does, and the Final Rule sensibly refers to “CDC’s
25 guidelines and recommendations for stopping the spread of COVID-19.” 87 Fed.
26 Reg. at 4,431. This is no oddity; agencies often must assess a variety of topics,
sometimes in consultation with other agencies and outside experts, see, e.g., Idaho
27
Wool Growers Ass’n v. Vilsack, 816 F.3d 1095, 1102 (9th Cir. 2016) (discussing the
28 requirements of 42 U.S.C. § 4332(2)(C)), and a rule siloing an agency’s authority
only to a narrow field in which it operates would be unworkable.
Defs.’ Mot. to Dismiss| 13
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 21 of 25
1 delegate to Treasury the authority to determine that Rescue Plan funds may not
2 be used to undermine COVID-19 mitigation protocols. Compl. ¶ 81 (citing Ala.
3 Ass’n of Realtors v. Dep’t of Health & Human Servs., 141 S. Ct. 2485, 2489 (2021);
4 Nat’l Fed’n of Indep. Bus. v. Dep’t of Labor (“NFIB”), 142 S. Ct. 661 (2022) (per cu-
5 riam)). The “major question” canon of construction only applies when an admin-
6 istrative action represents an “enormous and transformative expansion in [an
7 agency’s] regulatory authority.” Utility Air Regul. Grp. v. EPA, 573 U.S. 302, 324
8 (2014); accord NFIB, 142 S. Ct. at 665 (“Permitting OSHA to regulate the hazards
9 of daily life . . . would significantly expand OSHA’s regulatory authority . . . .”);
10 see also, e.g., Ala. Ass’n of Realtors, 141 S. Ct. at 2489; King v. Burwell, 576 U.S. 473
11 (2015); Gonzales v. Oregon, 546 U.S. 243 (2006); FDA v. Brown & Williamson Tobacco
12 Corp., 529 U.S. 120, 160 (2000). The Final Rule does not have any such “transform-
13 ative” effect. It merely provides Treasury with the authority to oversee a one-
14 time outlay of federal funds granted to the States.
15 For the same reason, the Governor is incorrect to suggest that the Final Rule
16 “intrude[s] into areas that are the particular domain of state law.” Compl. ¶ 83
17 (alterations and omissions omitted) (quoting Ala. Ass’n of Realtors, 141 S. Ct. at
18 2489). Quite the opposite: Congress has a sovereign interest in conditioning the
19 receipt of federal funds “on the States’ complying with restrictions on the use of
20 those funds, because that is the means by which Congress ensures that the funds
21 are spent according to its view of the ‘general Welfare.’” Nat’l Fed’n of Indep. Bus.
22 v. Sebelius (“NFIB”), 567 U.S. 519, 58 (2012); see Sabri v. United States, 541 U.S. 600,
23 608 (2004) (“The power to keep a watchful eye on expenditures . . . is bound up
24 with congressional authority to spend in the first place.”); Oklahoma v. U.S. Civ.
25 Serv. Comm’n, 330 U.S. 127, 143 (1947) (explaining that Congress has the “power
26 to fix the terms upon which its money allotments to [S]tates shall be disbursed”).
27 And here, Congress not only provided its own conditions but unequivocally au-
28 thorized the Secretary to set other conditions by “issu[ing] such regulations as
Defs.’ Mot. to Dismiss| 14
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 22 of 25
1 may be necessary or appropriate to carry out this section.” 42 U.S.C. § 802(f). So
2 the “major questions doctrine” does not apply.7
3 B. The Governor’s Spending Clause claim should be dismissed.
4 The Governor next claims that the Final Rule violates the Spending Clause
5 of the Constitution because the underlying statute “is ambiguous in the strings it
6 attaches to the use of” Rescue Plan funds. Compl. ¶ 97. The Governor is wrong.
7 In Pennhurst State School & Hospital v. Halderman, the Supreme Court de-
8 clared that “if Congress intends to impose a condition on the grant of federal mon-
9 eys, it must do so unambiguously.” 451 U.S. 1, 17, 24 (1981). But that is not an
10 onerous requirement: Congress must provide only “clear notice to the States that
11 they, by accepting funds under the Act, would indeed be obligated to comply
12 with” certain conditions. Id. at 25. The idea is simply to keep Congress from “sur-
13 prising participating States with post-acceptance or retroactive conditions.” NFIB,
14 567 U.S. at 584 (quoting Pennhurst, 451 U.S. at 25); see City of Los Angeles v. Barr,
15 929 F.3d 1163, 1174–75 (9th Cir. 2019).
16 When Congress makes clear that a State’s acceptance of federal funds re-
17 quires agreement to certain conditions, it can leave further details for an agency
18 to explain by regulation. Bennett, 470 U.S. at 669–72. As the Ninth Circuit has ex-
19 plained, “Congress is not required to list every factual instance in which a [S]tate
20 will fail to comply with a condition,” which would be potentially “impossible.”
21 Mayweathers v. Newland, 314 F.3d 1062, 1067 (9th Cir. 2002); see Bennett, 470 U.S. at
22 666 (explaining that “every improper expenditure” need not be “specifically iden-
23 tified and proscribed” in the statute); Jackson v. Birmingham Bd. of Educ., 544 U.S.
24
25 7 Even if the major questions doctrine does apply, it is satisfied because Congress
26 did “speak clearly.” It gave the Secretary the power to issue “necessary or appro-
priate” regulations, including for the purpose of “respond[ing] to the public health
27
emergency.” 42 U.S.C. § 802(c)(1), (f). This language clearly encompasses the au-
28 thority to prohibit recipients from using federal funds in ways that unnecessarily
prolong the pandemic.
Defs.’ Mot. to Dismiss| 15
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 23 of 25
1 167, 183 (2005) (same); Davis ex rel. Lashonda D. v. Monroe Cnty. Bd. of Educ., 526
2 U.S. 629, 650 (1999) (same); Van Wyhe v. Reisch, 581 F.3d 639, 650 (8th Cir. 2009)
3 (similar). Congress must simply “make the existence of the condition itself—in
4 exchange for the receipt of federal funds—explicitly obvious.” Mayweathers, 314
5 F.3d at 1067; see also Benning v. Georgia, 391 F.3d 1299, 1307 (11th Cir. 2004) (distin-
6 guishing statutes where it is “unclear [] whether the [S]tates incurred any obliga-
7 tions . . . by accepting federal funds”); Charles v. Verhagen, 348 F.3d 601, 607 (7th
8 Cir. 2003) (“[T]he existence of the conditions [must be] clear, such that States have
9 notice that compliance with the conditions is required.” (citations omitted)). One
10 court in this district recently held exactly that. Arizona, 550 F. Supp. 3d at 797.
11 Here, the statute appropriates Rescue Plan funds to alleviate the pandemic’s
12 harms and authorizes the Secretary to issue all “necessary or appropriate” regula-
13 tions. See supra Section II.A.; 42 U.S.C. § 802(f). The Final Rule then sensibly ex-
14 plains that States may not use Rescue Plan funds in ways that disincentive
15 compliance with public-health measures. This process of legislation and subse-
16 quent regulatory explication is nothing new and bears no infirmity. See Biden v.
17 Missouri, 142 S. Ct. 647, 652 (2022) (noting that “Congress has authorized the Sec-
18 retary [of Health and Human Services] to impose conditions on the receipt of Med-
19 icaid and Medicare funds that ‘the Secretary finds necessary in the interest of the
20 health and safety of individuals who are furnished services’” (quoting 42 U. S. C.
21 § 1395x(e)(9)); see Bennett, 470 U.S. at 669–72.
22 C. The Rescue Plan does not violate the nondelegation doctrine.
23 Finally, Plaintiffs contend that, if the Rescue Plan authorizes the Secretary
24 to issue the Final Rule, then the Rescue Plan must be an unconstitutional delega-
25 tion of legislative authority. Compl. ¶¶ 100–05. “[A] statutory delegation is con-
26 stitutional as long as Congress lays down by legislative act an intelligible
27 principle to which the person or body authorized to exercise the delegated au-
28 thority is directed to conform.” United States v. Melgar-Diaz, 2 F.4th 1263, 1266–
67 (9th Cir. 2021) (internal quotation marks omitted) (quoting Gundy v. United
Defs.’ Mot. to Dismiss| 16
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 24 of 25
1 States, 139 S. Ct. 2116, 2123 (2019)), cert. denied, 142 S. Ct. 813 (2022). “Under mod-
2 ern precedent, the intelligible principle test imposes ‘an exceedingly modest lim-
3 itation.’” United States v. Motamedi, No. 20-10364, 2022 WL 101951, at *1 (9th Cir.
4 Jan. 11, 2022) (quoting Melgar-Diaz, 2 F.4th at 1266). This requirement is satisfied
5 here. The statute gives the Secretary the authority to issue regulations that are
6 “necessary or appropriate” to carry out the purpose of the Act, including “re-
7 spond[ing] to the public health emergency.” 42 U.S.C. § 802(c)(1), (f). The Su-
8 preme Court has previously upheld statutory authority directing agencies to
9 protect the “public health” through regulations. Whitman v. Am. Trucking Ass’ns,
10 531 U.S. 457, 473 (2001). And even directives to regulate in the “public interest”
11 have been found to articulate an intelligible principle. Id. (quoting Nat’l Broad-
12 casting Co. v. United States, 319 U.S. 190, 225–26 (1943)). Given that the Rescue
13 Plan provides even more guidance for the Secretary than the delegations upheld
14 by the Supreme Court—authorizing the Secretary “to issue such regulations as
15 may be necessary or appropriate to carry out this section”—the Rescue Plan does
16 not run afoul of the nondelegation doctrine. 42 U.S.C. § 802(f) (emphasis added).
17 CONCLUSION
18 The Court should dismiss the Complaint for lack of jurisdiction or failure
19 to state a claim.
20 DATED: March 22, 2022 Respectfully submitted,
21
22
23
24
25
26
27
28
Defs.’ Mot. to Dismiss| 17
2:22-cv-00112-SPL
Case 2:22-cv-00112-SPL Document 19 Filed 03/22/22 Page 25 of 25
1 BRIAN M. BOYNTON
Principal Deputy Assistant Attorney General
2
3 BRIAN D. NETTER
Deputy Assistant Attorney General
4
5 ALEXANDER K. HAAS
6 Director, Federal Programs Branch
7
BRIGHAM J. BOWEN
8 Assistant Director, Federal Programs Branch
9
/s/ Michael P. Clendenen
10 MICHAEL P. CLENDENEN
11 STEPHEN EHRLICH
Trial Attorneys
12
Civil Division, Federal Programs Branch
13 U.S. Department of Justice
14 1100 L Street, NW
Washington, DC 20005
15 Phone: (202) 305-0693
16 Email: michael.p.clendenen@usdoj.gov
17
Counsel for Defendants
18
19
20
21
22
23
24
25
26
27
28
Defs.’ Mot. to Dismiss| 18
2:22-cv-00112-SPL
File and source
- File
- 19-dismiss-lack-of-jurisdiction-and-dismiss-for-failure-to-stat.pdf
- Size
- 401,158 bytes
- SHA-256
- 0e800278b89655b3e60388e800f394afe24c8591598fc08ece3575f1874afa57
- Original
- storage.courtlistener.com