Motion to Transfer Related Case, Ducey v. Yellen, No. 2:22-cv-00112 (D. Ariz.), Doc. 13 (February 1, 2022)

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Motion to Transfer in State of Arizona v. Janet Yellen, in her official capacity as Secretary of the Treasury, et al., filed 02/01/22 with the related case number 2:22-cv-00112-SPL listed in the caption. Defendants ask the Court to enter an order transferring Ducey v. Yellen, 2:22-cv-00112, to Diane J. Humetewa under Local Rule 42.1, because it is related to the previously filed Arizona v. Yellen, 2:21-cv-00514-DJH, which also arises under the American Rescue Plan Act. The motion states that the Act allocates nearly $200 billion for the States and the District of Columbia. Stephen Ehrlich signs for Defendants.

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          Case 2:22-cv-00112-SPL Document 13 Filed 02/01/22 Page 1 of 5




 1 BRIAN M. BOYNTON
     Acting 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) 305-9803
12
     Email: stephen.ehrlich@usdoj.gov
13
     Counsel for Defendants
14
15
                          UNITED STATES DISTRICT COURT
16                            DISTRICT OF ARIZONA
17
                                              Case No. 2:21-cv-00514-DJH
18   State of Arizona,
19                                                 Related case: 2:22-cv-00112-SPL
                         Plaintiff,
20
21                v.                          MOTION TO TRANSFER
22
     Janet Yellen, in her official capacity
23   as Secretary of the Treasury, et al.,
24
                         Defendants.
25
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27
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         Case 2:22-cv-00112-SPL Document 13 Filed 02/01/22 Page 2 of 5




 1        Defendants Janet Yellen (in her official capacity Secretary of the Treasury),
 2   Richard K. Delmar (in his official capacity as Acting Inspector General of the De-
 3   partment of Treasury), and the U.S. Department of Treasury respectfully request
 4   the Court enter an order transferring Ducey v. Yellen, 2:22-cv-00112, to the Hon-
 5   orable Diane J. Humetewa under Local Rule 42.1 because it is related to a previ-
 6   ously filed case (Arizona v. Yellen, 2:21-cv-00514-DJH) also arising under the
 7   American Rescue Plan Act (“Rescue Plan” or “Act”).
 8       On March 11, 2021, Congress enacted the Rescue Plan. See Pub. L. No. 117-
 9 2, § 9901(a) (codified at 42 U.S.C. §§ 802–805). The Act establishes a “Coronavirus
10 State Fiscal Recovery Fund,” allocating nearly $200 billion for the States and the
11 District of Columbia to “mitigate the fiscal effects” of the pandemic. 42 U.S.C.
12 § 802(a)(1); id. § 802(b)(3)(A). Congress gave States considerable flexibility to use
13 these new federal funds, which may be directed to a broad variety of state efforts
14 to respond to the pandemic and to its economic effects, including by funding state-
15 level government services and by providing assistance to households, small busi-
16 nesses, and industries. Id. § 802(c). To ensure that the new federal funds would
17 be used for the broad categories of state expenditures it identified, Congress spec-
18 ified that States cannot use the federal funds to offset a reduction in net tax reve-
19 nue resulting from changes in state law. Id. § 802(c)(2)(A) (the “offset provision”).
20        Both Ducey v. Yellen and Arizona v. Yellen should be related and Ducey v.
21   Yellen should be transferred to Judge Humetewa under Local Rule 42.1. That rule
22   provides for case transfer when two or more cases “(1) arise from substantially
23   the same transaction or event”; “(2) involve substantially the same parties or
24   property”; “(3) involve the same patent, trademark, or copyright”; “(4) call for
25   determination of substantially the same questions of law”; or “(5) for any other
26   reason would entail substantial duplication of labor if heard by different Judges.”
27   LRCiv 42.1(a). Here, both cases involve substantially the same parties, arise from
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                                                                        Mot. to Transfer| 1
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 1   the Rescue Plan, call for a determination of similar legal issues, and would ad-
 2   vance judicial economy if they were related.
 3         For starters, both Ducey v. Yellen and Arizona v. Yellen “involve substantially
 4   the same parties.” LRCiv 42.1(a). The defendants in both cases—the Secretary of
 5   the Treasury, the Acting Inspector General of the Treasury Department, and the
 6   Treasury Department itself—are identical. See Ex. 1, Arizona Compl. ¶¶ 15–17;
 7   Ex. 2, Ducey Compl. ¶¶ 12–14. And while the plaintiff in both cases is not iden-
 8   tical—the State of Arizona and the Governor of Arizona—they both represent
 9   Arizona in an official and sovereign capacity. See Grand Canyon Skywalk Dev., LLC
10   v. Sa Nyu Wa, Inc., 2012 WL 6101901, at *3 (D. Ariz. Nov. 21, 2012) (finding sub-
11   stantially the same parties, despite an additional twelve Tribal Council defend-
12   ants in one case, because “the pleadings largely treat the council members as
13   surrogates for the Tribe or Tribal Council”). So the two cases “involve substan-
14   tially the same parties” and should be related for that reason alone. 1
15         But the overlap does not stop there. Both cases stem from the Rescue Plan
16   and involve similar legal issues, so they both “arise from substantially the same
17   transaction or event” and “call for determination of substantially the same ques-
18   tions of law.” LRCiv 42.1(a). The previously filed case, Arizona v. Yellen, asked
19   the Court to interpret the Rescue Plan’s permissible and impermissible uses in 42
20   U.S.C. § 802(c) and determine whether (a) Arizona had standing to raise a chal-
21   lenge to that section, and (b) if so, whether the offset provision violated the
22   Spending Clause. See Arizona v. Yellen, --- F. Supp. 3d ---, 2021 WL 3089103 (D.
23
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25        1 Because the triggering conditions in Local Rule 42.1(a) are enumerated in
   a list where   the last condition is preceded by an “or,” the conditions are consid-
26 ered disjunctive    and the satisfaction of any one condition would be enough to
27 relate two  cases.  See United States v. Woods, 571 U.S. 31, 45 (2013) (explaining that
   when “the operative terms are connected by the conjunction ‘or,’” as in Local Rule
28 42.1, “its ordinary use is almost always disjunctive”); cf. Rose v. U.S. Postal Service,
   774 F.2d 1355, 1360–61 n. 14 (9th Cir. 1984) (finding disjunctive a statute contain-
   ing a list of offenses whose last two items are separated by an “or”).

                                                                           Mot. to Transfer| 2
                                                                           2:21-cv-00514-DJH
         Case 2:22-cv-00112-SPL Document 13 Filed 02/01/22 Page 4 of 5




 1   Ariz. July 22, 2021). Similarly, Ducey v. Yellen asks the Court to interpret the Res-
 2   cue Plan’s permissible and impermissible uses in 42 U.S.C. § 802(c) and determine
 3   whether (a) the Governor has standing to raise a challenge under that section, and
 4   (b) if so, whether Treasury had the authority to issue, and potentially enforce,
 5   regulations about those uses, including under the Spending Clause. See Ex. 2,
 6   Ducey Compl. ¶¶ 72–105. So both cases “arise from substantially the same . . .
 7   event”—the Rescue Plan—and “call for determination of substantially the same
 8   questions of law.” LRCiv 42.1(a).
 9        With such a substantial overlap in parties and legal issues, there can be little
10   doubt that relating these two cases under Arizona v. Yellen will advance judicial
11   economy. Judge Humetewa is intimately familiar with the Rescue Plan, Treas-
12   ury’s authority under that statutory scheme, and attendant standing and Spend-
13   ing Clause issues in this context. See, e.g., Arizona v. Yellen, 2021 WL 3089103, at
14   *2–6; id. at *4 (analyzing whether “it is within the Secretary’s power, under ARPA,
15   to request that Arizona identify funds used to offset tax changes, which is one of
16   ARPA’s conditions”). There is no reason for Judge Logan to engage in a “dupli-
17   cation of labor” to do the same. LRCiv 42.1(a)(5); Garcia v. Army, 2015 WL
18   5646640, at *2 (D. Ariz. Sept. 25, 2015) (granting motion to transfer where the
19   judge “ha[d] developed familiarity with the issues involved in the cases”). Nor
20   is there any reason to risk inconsistent rulings between the two cases. See Caron
21   v. Caesars Ent. Corp., 2020 WL 1323105, at *2 (D. Ariz. Mar. 20, 2020) (granting
22   motion to transfer where “transfer and consolidation will avoid the potential of
23   inconsistent outcomes”). Defendants therefore respectfully request that Ducey v.
24   Yellen be transferred to Judge Humetewa as a related case to Arizona v. Yellen.
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                                                                         Mot. to Transfer| 3
                                                                         2:21-cv-00514-DJH
         Case 2:22-cv-00112-SPL Document 13 Filed 02/01/22 Page 5 of 5




 1   DATED: February 1, 2022          Respectfully submitted,

 2                                    BRIAN M. BOYNTON
 3                                    Acting Assistant Attorney General
 4
                                      BRIAN D. NETTER
 5                                    Deputy Assistant Attorney General
 6
                                      ALEXANDER K. HAAS
 7
                                      Director, Federal Programs Branch
 8
 9
                                      BRIGHAM J. BOWEN
                                      Assistant Director, Federal Programs Branch
10
11                                    /s/ Stephen Ehrlich
                                      MICHAEL P. CLENDENEN
12
                                      STEPHEN EHRLICH
13                                    Trial Attorneys
14                                    Civil Division, Federal Programs Branch
                                      U.S. Department of Justice
15                                    1100 L Street, NW
16                                    Washington, DC 20005
                                      Phone: (202) 305-9803
17
                                      Email: stephen.ehrlich@usdoj.gov
18
19                                    Counsel for Defendants

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                                                                  Mot. to Transfer| 4
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