Response in Opposition to Motion, State of West Virginia et al. v. U.S. Department of the Treasury, No. 7:21-cv-00465 (N.D. Ala.), Doc. 67 (May 28, 2021)
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Defendants' opposition to the Wisconsin Legislature's motion to intervene in State of West Virginia, et al. v. U.S. Department of the Treasury, Case No. 7:21-cv-00465-LSC, in the U.S. District Court for the Northern District of Alabama, Western Division, filed May 28, 2021 (Doc. 67). Defendants argue that the Wisconsin Legislature is not authorized to represent the State of Wisconsin in this case, lacks Article III standing, and cannot intervene as of right or by permission. In the alternative, they ask the Court to hold the motion in abeyance until it decides whether the Plaintiff States have standing. The conclusion asks the Court to deny the motion to intervene. The signature block names Michael P. Clendenen, with /s/ Michael P. Clendenen.
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“Response in Opposition to Motion, State of West Virginia et al. v. U.S. Department of the Treasury, No. 7:21-cv-00465 (N.D. Ala.), Doc. 67 (May 28, 2021).”
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Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 1 of 28 FILED
2021 May-28 PM 04:06
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
STATE OF WEST VIRGINIA, et al., Case No. 7:21-cv-00465-LSC
Plaintiffs,
v.
U.S. DEPARTMENT OF THE
TREASURY, et al.,
Defendants.
DEFENDANTS’ OPPOSITION TO WISCONSIN LEGISLATURE’S
MOTION TO INTERVENE
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 2 of 28
TABLE OF CONTENTS
INTRODUCTION ...................................................................................................1
BACKGROUND ......................................................................................................3
Statutory Background..............................................................3
Factual and Procedural Background .....................................7
LEGAL STANDARDS FOR INTERVENTION...................................................8
ARGUMENT..........................................................................................................10
I. THE WISCONSIN LEGISLATURE IS NOT AUTHORIZED TO
REPRESENT THE STATE OF WISCONSIN IN THIS CASE. ..............10
II. THE WISCONSIN LEGISLATURE LACKS ARTICLE III STANDING
TO BRING THIS ACTION. .............................................................12
III. THE WISCONSIN LEGISLATURE CANNOT INTERVENE AS OF
RIGHT UNDER RULE 24(a). ........................................................16
IV. THE COURT SHOULD DENY PERMISSIVE INTERVENTION. .........19
V. IN THE ALTERNATIVE, THE COURT SHOULD HOLD THIS MOTION
IN ABEYANCE UNTIL IT DECIDES WHETHER THE PLAINTIFF
STATES HAVE STANDING. ..........................................................20
CONCLUSION ......................................................................................................21
i
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 3 of 28
TABLE OF AUTHORITIES
Cases
Arizona State Legislature v. Arizona Independent Redistricting Commission,
576 U.S. 787 (2015) ...................................................................................... 14, 15
Arizona v. Evans,
514 U.S. 1 (1995) .................................................................................................20
Babbitt v. Farm Workers,
442 U.S. 289 (1979) .............................................................................................13
Burke v. Ocwen Fin. Corp.,
833 F. App’x 288 (11th Cir. 2020) ....................................................... 17, 18, 19
Califano v. Yamasaki,
442 U.S. 682 (1979) .............................................................................................20
Chiles v. Thornburgh,
865 F.2d 1197 (11th Cir. 1989) ..........................................................................18
Clark v. Putnam County,
168 F.3d 458 (11th Cir. 1999) ............................................................................17
Democratic Nat’l Comm. v. Bostelmann,
949 N.W.2d 423 (Wis. 2020) .............................................................................11
DHS v. New York,
140 S. Ct. 599 (2020) ...........................................................................................21
Dillard v. Chilton Cnty. Comm'n,
495 F.3d 1324 (11th Cir. 2007) ............................................................................8
ii
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 4 of 28
Flat Creek Transp., LLC v. Fed. Motor Carrier Safety Admin.,
923 F.3d 1295 (11th Cir. 2019) ............................................................................8
Georgia v. U.S. Army Corps of Engineers,
302 F.3d 1242 (11th Cir. 2002) ......................................................................9, 10
Gill v. Whitford,
138 S. Ct. 1916 (2018) .........................................................................................21
Hollingsworth v. Perry,
570 U.S. 693 (2013) .............................................................................................10
Huff v. Commissioner,
743 F.3d 790 (11th Cir. 2014) ............................................................................16
In re W. Caribbean Airways Crew Members,
No. 07 22015 CIV, 2010 WL 11601239 (S.D. Fla. Jan. 8, 2010) .....................19
Kerr v. Hickenlooper,
824 F.3d 1207 (10th Cir. 2016) ..........................................................................15
Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania,
140 S. Ct. 2367 (2020) .....................................................................................8, 12
Lujan v. Defs. of Wildlife,
504 U.S. 555 (1992) .............................................................................................12
Missouri v. Yellen,
No. 4:21-cv-376, 2021 WL 1889867 (E.D. Mo. May 11, 2021) ..................2, 14
Mt. Hawley Ins. Co. v. Sandy Lake Properties, Inc.,
425 F.3d 1308 (11th Cir. 2005) ......................................................................9, 16
iii
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 5 of 28
Planned Parenthood of Wis., Inc. v. Kaul,
942 F.3d 793 (7th Cir. 2019) ..............................................................................12
Powers v. Ohio,
499 U.S. 400 (1991) .............................................................................................10
Purcell v. BankAtlantic Fin. Corp.,
85 F.3d 1508 (11th Cir. 1996) ............................................................................10
Raines v. Byrd,
521 U.S. 811 (1997) .............................................................................................15
Sierra Club, Inc. v. Leavitt,
488 F.3d 904 (11th Cir. 2007) ........................................................................9, 17
Stone v. First Union Corp.,
371 F.3d 1305 (11th Cir. 2004) ................................................................... 18, 19
Susan B. Anthony List v. Driehaus,
573 U.S. 149 (2014) .............................................................................................13
Town of Chester v. Laroe Ests., Inc.,
137 S. Ct. 1645 (2017) ................................................................................ 8, 9, 12
Trump v. Hawaii,
138 S. Ct. 2392 (2018) .........................................................................................20
United States v. S. Fla. Water Mgmt. Dist.,
922 F.2d 704 (11th Cir. 1991) ..................................................................... 10, 16
Va. House of Delegates v. Bethune-Hill,
139 S. Ct. 1945 (2019) .................................................................................. 10, 14
iv
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 6 of 28
Worlds v. Dep’t of Health & Rehab. Servs., State of Fla.,
929 F.2d 591 (11th Cir. 1991) ............................................................................18
Statutes
42 U.S.C. § 801................................................................................................. 3, 4, 8
42 U.S.C. § 802............................................................................................. 4, 5, 6, 7
42 U.S.C. § 803 .........................................................................................................4
42 U.S.C. § 804..........................................................................................................4
42 U.S.C. § 805..........................................................................................................4
American Rescue Plan Act, Pub. L. No. 117-2, 135 Stat. 4 (2021).................1, 4
Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-137,
134 Stat. 281, 501 (2020) ......................................................................................3
Wis. Stat. § 165.25(1m) ..........................................................................................11
Wis. Stat. § 803.09(2m) ..........................................................................................11
Rules
Federal Rule of Civil Procedure 24(a) ............................................................9, 16
Federal Rule of Civil Procedure 24(b) ................................................................10
v
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 7 of 28
INTRODUCTION
The Wisconsin Legislature seeks to join this lawsuit brought by thir-
teen States against the U.S. Department of the Treasury, Secretary of the
Treasury Janet Yellen, and Acting Inspector General for the Department of
the Treasury Richard K. Delmar. The Wisconsin Legislature is not the State
of Wisconsin. Yet like the Plaintiff States, the Wisconsin Legislature seeks a
Court order and preliminary injunction declaring as unconstitutional a pro-
vision of the American Rescue Plan Act, Pub. L. No. 117-2, 135 Stat. 4
(2021) (“Rescue Plan” or “Act”). The Court should reject the Wisconsin Leg-
islature’s intervention motion for a number of reasons.
As a threshold matter, the Wisconsin Legislature incorrectly claims
that it can represent the interests of the State of Wisconsin in this case. Under
Wisconsin law, the Wisconsin Legislature can only represent the State in
court to defend the validity of Wisconsin laws. This case is an affirmative
challenge to a federal statute, so the proper party to represent the State of
Wisconsin would be the Wisconsin department of justice, not the Legisla-
ture.
Furthermore, the Wisconsin Legislature lacks standing to raise the
claims asserted in their proposed complaint. Like the Plaintiff States, the
State of Wisconsin has not enacted any tax cut, nor has the Wisconsin
1
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 8 of 28
Legislature alleged that any hypothetical tax cut under consideration
would decrease net tax revenue, nor has it alleged that it plans or intends
to use Rescue Plan funds to offset that theoretical reduction. Because the
Wisconsin Legislature has not alleged any intention to use federal funds
in a way not permitted under the Act, it lacks standing to challenge the
offset provision. But because the Wisconsin Legislature represents a legisla-
tive body and not a State, it uniquely lacks standing because it cannot estab-
lish an institutional injury. The Legislature remains free to pass legislation
affecting tax policy in the State of Wisconsin, so there is no injury to the Leg-
islature under the Rescue Plan.
Additionally, even if the Wisconsin Legislature had standing, it cannot
meet the standards for intervention as of right. It has not identified a legal
right that will necessarily be impaired by the outcome of this lawsuit, given
its ability to file suit separately, in its home state. This Court should not allow
the Wisconsin Legislature to nonetheless intervene as a permissive matter.
While the Wisconsin Legislature may have identified a common issue of law,
its attempt to join a suit by thirteen States already in progress—one of six1
1 See Ohio v. Yellen, No. 1:21-cv-181 (S.D. Ohio); Missouri v. Yellen, 4:21-cv-376 (E.D.
Mo.); Arizona v. Yellen, No. 2:21-cv-514 (D. Ariz.); Kentucky v. Yellen, No. 3:21-cv-17 (E.D.
Ky.); Texas v. Yellen, No. 2:21-cv-79 (N.D. Tex.). The Court in Missouri dismissed the Com-
plaint on May 12, 2021. See Missouri v. Yellen, No. 4:21-cv-376, 2021 WL 1889867, at *1
(E.D. Mo. May 11, 2021).
2
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 9 of 28
similar lawsuits already underway in different courts throughout the coun-
try—raises an appearance of forum shopping that should not be rewarded.
The public interest is not served by focusing Spending Clause litigation na-
tionwide in one district court. And denying intervention would not prevent
the Wisconsin Legislature from suing in a more appropriate forum, or from
presenting its own views as amicus in this matter.
In the alternative to denying intervention, the Court should defer res-
olution of the motion until it decides whether the Plaintiff States have stand-
ing. The Court could not permit the Wisconsin Legislature to intervene in a
matter in which the Court lacks jurisdiction over the original Plaintiffs’
claims.
BACKGROUND
Statutory Background
In March 2020, Congress enacted the Coronavirus Aid, Relief, and Eco-
nomic Security Act (“CARES Act”). See Pub. L. No. 116-137, § 5001, 134 Stat.
281, 501 (2020) (codified at 42 U.S.C. § 801). The CARES Act established a
$150 billion “Coronavirus Relief Fund” for States, tribal governments, and
localities for 2020. See 42 U.S.C. § 801(a). That fund covers costs that are “nec-
essary expenditures incurred due to the public health emergency” that
“were not accounted for in the budget[s]” of those governments. Id. § 801(d).
If recipients do not use the funds for the permitted purposes, the Act permits
3
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the Treasury Department to recoup the amount of any misused funds. Id.
§ 801(e).
On March 11, 2021, Congress enacted the American Rescue Plan Act.
See Pub. L. No. 117-2, § 9901(a) (codified at 42 U.S.C. §§ 802–805). The Rescue
Plan establishes an additional “Coronavirus State Fiscal Recovery Fund,” al-
locating another $220 billion to broadly “mitigate the fiscal effects” of the
pandemic on States, territories, and Tribal governments through 2024. 42
U.S.C. § 802(a)(1); see id. § 803(a) (additional $130 billion for localities).
Nearly $200 billion is allocated for the States and the District of Columbia.
Id. § 802(b)(2)(A).
The Rescue Plan provides States with considerable latitude, in scope
and duration, to use the funds for pandemic-related purposes. Through
2024, a State may use the funds “to cover costs incurred”:
(A) to respond to the public health emergency with respect to the
Coronavirus Disease 2019 (COVID–19) or its negative economic
impacts, including assistance to households, small businesses,
and nonprofits, or aid to impacted industries such as tourism,
travel, and hospitality;
(B) to respond to workers performing essential work during the
COVID–19 public health emergency by providing premium pay
to eligible workers of the State, territory, or Tribal government
that are performing such essential work, or by providing grants
to eligible employers that have eligible workers who perform es-
sential work;
4
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(C) for the provision of government services to the extent of the
reduction in revenue of such State, territory, or Tribal govern-
ment due to the COVID–19 public health emergency relative to
revenues collected in the most recent full fiscal year of the State,
territory, or Tribal government prior to the emergency; or
(D) to make necessary investments in water, sewer, or broad-
band infrastructure.
Id. § 802(c)(1). While CARES Act funds were limited to covering previously
unbudgeted costs of necessary expenditures incurred due to the public
health emergency, the Rescue Plan allows States to use the funds for “gov-
ernment services” to the extent the pandemic has resulted in a “reduction in
revenue.” Id. § 802(c)(1)(C). The Rescue Plan also permits recipients to use
the funds to respond broadly to the public-health emergency and its nega-
tive economic effects, to support essential workers during the pandemic, and
to invest in certain infrastructure areas. Id. § 802(c)(1)(A), (B), (D).
The Rescue Plan includes two “further restrictions” to ensure that the
broad outlay of funds is used for the identified purposes while funds are
available. 42 U.S.C. § 802(c)(2). One limitation (not challenged here) provides
that a State may not “deposit” Rescue Plan funds “into any pension fund.”
Id. § 802(c)(2)(B). The other limitation (at issue here) provides in relevant part
that a State:
shall not use the funds provided under [§ 802] . . . to either di-
rectly or indirectly offset a reduction in the net tax revenue of
such State or territory resulting from a change in law, regulation,
or administrative interpretation during the covered period that
5
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reduces any tax (by providing for a reduction in a rate, a rebate,
a deduction, a credit, or otherwise) or delays the imposition of
any tax or tax increase.
Id. § 802(c)(2)(A).2
By its terms, this funding condition applies only to reductions in “net”
tax revenue. Id. This limitation on the use of federal funds is not implicated
at all by a State’s choice to modify its tax code—including by cutting taxes—
if the changes, taken together, do not result in a reduction of net tax revenue.
If a State chooses to reduce its net tax revenue, it may not use the Rescue
Plan funds to “offset” that reduction. If a State chooses to do so, the State
will be required to repay only the amount of funds used to offset the “reduc-
tion to net tax revenue” or “the amount of funds received,” whichever is less.
42 U.S.C. § 802(e).
A State may receive federal funds after providing a certification (in a
form provided by the agency) indicating that it needs the funds to carry out
the activities specified in § 802(c) and that it will use the funds in compliance
with that provision. See 42 U.S.C. § 802(d)(1). States that receive funds must
then provide periodic reports and other information as the Secretary may
require to administer the Act. Id. § 802(d)(2). The Rescue Plan further author-
2 The “covered period” began on March 3, 2021 and “ends on the last day of the
fiscal year of such State . . . in which all funds received by the State . . . have been ex-
pended or returned to, or recovered by, the Secretary.” 42 U.S.C. § 802(g)(1).
6
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 13 of 28
izes the Secretary of the Treasury “to issue such regulations as may be nec-
essary or appropriate to carry out this section.” 42 U.S.C. § 802(f). The Treas-
ury Department recently issued an Interim Final Rule (“IFR”) implementing
the relevant portions of the Rescue Plan. See generally Notice of IFR, ECF
Nos. 55, 55-1.
Factual and Procedural Background
On March 31, 2021, thirteen States brought this suit alleging that the
offset provision of § 802(c)(2)(A) is unconstitutional. Compl. ¶¶ 1–5, ECF
No. 1. Plaintiffs nowhere alleged that they have enacted changes in state law
during the covered period that would reduce net tax revenue, or that they
intend to use Rescue Plan funds to offset any hypothetical reduction in net
tax revenue. See generally id. ¶¶ 1–131. Plaintiffs nonetheless moved for a pre-
liminary injunction (“PI”) against “enforcement of” the offset provision. See
PI Mot. at 30, ECF No. 21. Defendants filed their opposition to the PI motion
on May 7, 2021. See generally Defs.’ PI Opp’n, ECF No. 54.
On May 13, 2021, the Wisconsin Legislature moved to intervene as
a Plaintiff and to join in the pending PI motion. See ECF Nos. 58, 58-2.
Like the Plaintiff States, the Wisconsin Legislature points to no tax cuts
in the State of Wisconsin or any plans to offset a reduction in net tax
revenue with Rescue Plan funds. See generally Mot. to Intervene, ECF
7
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 14 of 28
No. 58. Wisconsin has already certified to the Department of the Treas-
ury its intent to use Rescue Plan funds on permissible uses under 42
U.S.C. § 801(d)(1), and the Department of the Treasury has issued Wis-
consin its first tranche payment of $1,266,58,313.25.
LEGAL STANDARDS FOR INTERVENTION
“Any party, whether original or intervening, that seeks relief from a
federal court must have standing to pursue its claims.” Dillard v. Chilton
Cnty. Comm'n, 495 F.3d 1324, 1330 (11th Cir. 2007). “The doctrine of standing
is an essential and unchanging part of the case-or-controversy requirement
embodied in Article III of the Constitution.” Flat Creek Transp., LLC v. Fed.
Motor Carrier Safety Admin., 923 F.3d 1295, 1300 (11th Cir. 2019). In the Elev-
enth Circuit, if there is an ongoing Article III case or controversy, intervenors
“may in some cases be permitted to ‘piggyback’ upon the standing of origi-
nal parties to satisfy the standing requirement.” Dillard, 495 F.3d at 1330.
This “piggyback” theory, of course, can apply only if the original Plaintiff
has standing. Id. The Supreme Court has placed an additional strict limit on
that “piggyback” theory: “[A]t the least, an intervenor of right must demon-
strate Article III standing when it seeks additional relief beyond that which
the plaintiff requests.” Town of Chester v. Laroe Ests., Inc., 137 S. Ct. 1645, 1651
(2017) (emphasis added); see also Little Sisters of the Poor Saints Peter & Paul
Home v. Pennsylvania, 140 S. Ct. 2367, 2379 n.6 (2020) (“An intervenor of right
8
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 15 of 28
must independently demonstrate Article III standing if it pursues relief that
is broader than or different from the party invoking a court’s jurisdiction.”).3
Under Federal Rule of Civil Procedure 24(a)(2), a party may intervene
as a matter of right if:
(1) the application to intervene is timely; (2) the applicant
has an interest relating to the property or transaction which
is the subject of the action; (3) the applicant is so situated
that the disposition of the action, as a practical matter, may
impede or impair his ability to protect that interest; and (4)
the applicant’s interest will not be represented adequately
by the existing parties to the suit.
Sierra Club, Inc. v. Leavitt, 488 F.3d 904, 910 (11th Cir. 2007). The party’s in-
terest must be “direct, substantial and legally protectable.” Georgia v. U.S.
Army Corps of Engineers, 302 F.3d 1242, 1249 (11th Cir. 2002). It must derive
from a “legal right” and not be merely “an economic interest.” Mt. Hawley
Ins. Co. v. Sandy Lake Properties, Inc., 425 F.3d 1308, 1311 (11th Cir. 2005).
Federal Rule of Civil Procedure 24(b) provides for permissive inter-
vention when an applicant’s claim or defense and the main action have a
3 Although the Supreme Court has not addressed permissive intervention, the
Court in Laroe Estates reasoned that the standing requirements are “deeply rooted” in our
constitutional structure, and that it is always true that “[a]t least one plaintiff must have
standing to seek each form of relief requested.” Town of Chester, 137 S. Ct. at 1650-51.
Those constitutional requirements apply regardless of the form of intervention sought.
9
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 16 of 28
question of law or fact in common and the intervention will not unduly prej-
udice or delay the adjudication of the rights of the original parties. Fed. R.
Civ. P. 24(b); Georgia, 302 F.3d at 1249–50. Ultimately, the decision whether
a party should be allowed to permissively intervene is left to the district
court’s “full discretionary powers.” United States v. S. Fla. Water Mgmt. Dist.,
922 F.2d 704, 712 (11th Cir. 1991); see also Purcell v. BankAtlantic Fin. Corp., 85
F.3d 1508, 1513 (11th Cir. 1996) (holding that permissive intervention is
“wholly discretionary” and may be denied even if all standards are met).
ARGUMENT
I. THE WISCONSIN LEGISLATURE IS NOT AUTHORIZED TO REPRESENT THE
STATE OF WISCONSIN IN THIS CASE.
In its motion, the Wisconsin Legislature asserts that it seeks “to protect
the interests of the State of Wisconsin and its Legislature.” Mot. to Intervene,
at 1. But the Wisconsin Legislature cannot represent the interests of the State
of Wisconsin in this context.
“[I]n the ordinary course, a litigant must assert his or her own legal
rights and interests, and cannot rest a claim to relief on the legal rights or
interests of third parties.” Hollingsworth v. Perry, 570 U.S. 693, 708 (2013)
(quoting Powers v. Ohio, 499 U.S. 400, 410 (1991)). A party who lacks standing
in their own right may represent the State only if State law authorizes that
party “to speak for the State in federal court.” Id. at 710; see also Va. House of
Delegates v. Bethune-Hill, 139 S. Ct. 1945, 1952 (2019).
10
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 17 of 28
Wisconsin law provides:
The [Wisconsin] department of justice shall . . . appear for and
represent the state . . . and prosecute or defend in any court or
before any officer, any cause or matter, civil or criminal in which
the state or the people of this state may be interested. The joint
committee on legislative organization may intervene as permit-
ted under § 803.09(2m) at any time.
Wis. Stat. § 165.25(1m). Thus, the proper entity to represent the interests of
the State of Wisconsin is the Wisconsin department of justice in all cases un-
less the exception under § 803.09(2m) applies. That section states:
When a party to an action challenges in state or federal court the
constitutionality of a statute, facially or as applied, challenges a
statute as violating or preempted by federal law, or otherwise
challenges the construction or validity of a statute, as part of a
claim or affirmative defense, the assembly, the senate, and the
legislature may intervene . . . .
Id. § 803.09(2m).
Under § 803.09(2m), the Wisconsin Legislature may intervene to rep-
resent the State’s interests in court only in order to defend the validity of a
state law. As the Wisconsin Supreme Court recently stated, “the statutory
text [of § 803.09(2m)] unmistakably grants the Legislature an interest in de-
fending the validity of state law when challenged in court.” Democratic Nat’l
Comm. v. Bostelmann, 949 N.W.2d 423, 426 (Wis. 2020) (emphasis added); see
also Mot. to Intervene, at 3 (recognizing that the Legislature may intervene
11
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 18 of 28
“in a lawsuit in defense of state law”); Planned Parenthood of Wis., Inc. v. Kaul,
942 F.3d 793, 795 (7th Cir. 2019) (“The State of Wisconsin has chosen to have
an attorney general as its representative, but it also has recently provided a
mechanism by which its legislature . . . can intervene to defend the State’s
interest in the constitutionality of its statutes.”). But that is not the case here.
Here, the Wisconsin Legislature seeks to bring an affirmative challenge to a
federal statute. There is no question about the validity of any Wisconsin stat-
ute at issue in this case, particularly as the Rescue Plan does not purport to
invalidate any state law. Thus, the default rule under § 165.25(1m) applies,
and the Wisconsin department of justice retains exclusive authority to rep-
resent the State.
II. THE WISCONSIN LEGISLATURE LACKS ARTICLE III STANDING TO BRING
THIS ACTION.
The Wisconsin Legislature cannot establish Article III standing to seek
relief with respect to the State of Wisconsin. Because the Wisconsin Legisla-
ture seeks a remedy not specifically sought by the Plaintiff States—a Court
order that applies to the State of Wisconsin—the Wisconsin Legislature must
establish its own standing. See Little Sisters of the Poor, 140 S. Ct. at 2379; Town
of Chester, 137 S. Ct. at 1651. To satisfy the “irreducible constitutional mini-
mum” of standing, a plaintiff must demonstrate “a concrete and particular-
ized” injury in fact that is “actual or imminent.” Lujan v. Defs. of Wildlife, 504
12
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 19 of 28
U.S. 555, 560–61 (1992) (citation omitted). When a plaintiff seeks to enjoin the
future enforcement of a statute, “the injury-in-fact requirement” demands
that the plaintiff “allege[] ‘an intention to engage in a course of conduct ar-
guably affected with a constitutional interest, but proscribed by a statute,
and [that] there exists a credible threat of [enforcement] thereunder.’” Susan
B. Anthony List v. Driehaus, 573 U.S. 149, 159 (2014) (quoting Babbitt v. Farm
Workers, 442 U.S. 289, 298 (1979)); see id. at 161–67 (analyzing the three ele-
ments separately). In other words, the prospect of enforcement must be “suf-
ficiently imminent” to create a concrete injury. Id. at 159.
Even if the Wisconsin Legislature could represent State of Wisconsin,
the State could not establish standing on this record for all of the same rea-
sons as the other Plaintiff States. Defs.’ PI Opp’n, at 9-15. The Motion to In-
tervene and the Proposed Complaint are silent as to how Wisconsin (the Leg-
islature or any other part of the State government) intends to use Rescue Plan
funds. See generally Mot. to Intervene; Proposed Complaint, ECF No. 58-1.
Nowhere does the Wisconsin Legislature even suggest that the State plans
to use Rescue Plan funds in a manner inconsistent with the offset provision
or the IFR,4 or even that the State has enacted any tax cuts. And unlike some
of the Plaintiff States, see Compl. ¶¶ 76–83, the Wisconsin Legislature does
4 The Wisconsin Legislature does not challenge or even mention the IFR in its Mo-
tion or Proposed Complaint, despite filing their motion after the Department of the Treas-
ury issued the IFR.
13
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 20 of 28
not even point to tax changes that are under consideration in the State of Wis-
consin. Under these circumstances, any injury to the State of Wisconsin from
the offset provision is hypothetical and speculative. See Missouri v. Yellen,
No. 4:21-cv-376, 2021 WL 1889867, at *4 (E.D. Mo. May 11, 2021) (dismissing
a nearly identical case for lack of standing and ripeness).
Here, however, the Wisconsin Legislature cannot represent the inter-
ests of the State, so it has the further problem that it is limited to asserting an
injury to itself as an institution. Cf. Bethune-Hill, 139 S. Ct. at 1953. The Wis-
consin Legislature claims that “the Legislature’s constitutional authority to
enact legislation on tax matters is directly implicated by” the offset provision
because the provision does not “properly advis[e] the Legislature what laws
it can and cannot enact.” Mot. to Intervene, at 8.5 That alleged injury is insuf-
ficient to establish institutional standing.
The Supreme Court addressed standing of legislative bodies in Arizona
State Legislature v. Arizona Independent Redistricting Commission, 576 U.S. 787
(2015). In that case, the Court held that the Arizona legislature had ade-
quately alleged an “institutional injury” because a ballot initiative giving re-
districting powers to an independent commission “would ‘completely nul-
lify’ any vote by the Legislature, now or in the future, purporting to adopt a
5 The Legislature also claims that the offset provision “harms the sovereign dignity
of the State of Wisconsin and its Legislature,” id. at 7, but the sovereign is the State, not
its Legislature. In any event, the alleged injury to a State’s “sovereign interests” should
be rejected. See Defs.’ PI Opp’n, at 11–12.
14
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redistricting plan.” Id. at 802-04 (quoting Raines v. Byrd, 521 U.S. 811, 823-24
(1997)). Echoing its earlier decision in Raines, the Court made clear that its
decision was based on an alleged complete loss―not mere dilution―of legis-
lative power. See id.; see also Kerr v. Hickenlooper, 824 F.3d 1207, 1215 (10th Cir.
2016).
Here, the offset provision has not stripped the Wisconsin Legislature
of any power. The Rescue Plan does not prevent the Wisconsin Legislature
from passing any tax law it wants; the Act simply prohibits the State from
using Rescue Plan funds to offset a reduction in net tax revenue resulting
from those changes. But even if the Rescue Plan did “implicate” tax legisla-
tion, the theoretical injury—recoupment of misused funds—would be to the
State, and would occur after the Legislature passes legislation changing State
tax laws that result in Rescue Plan funds being used to offset a reduction in
net tax revenue. The Legislature is still free to pass such legislation, even
with the (hypothetical) attendant consequences.6 So the Wisconsin Legisla-
ture has at most alleged an “abstract dilution of institutional legislative
power,” rather than a cognizable institutional injury. Raines, 521 U.S. at 826.
It therefore lacks standing.
6 Moreover, the only consequence to a State for misusing Rescue Plan funds is re-
coupment of the misused funds. But a recoupment action would be directed at a State’s
treasury, not its legislature. Thus, to the extent that recoupment is a cognizable injury for
prospective relief at all, it is an injury to the State and not to its legislative body.
15
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III. THE WISCONSIN LEGISLATURE CANNOT INTERVENE AS OF RIGHT UNDER
RULE 24(a).
In addition to being improper due to lack of standing, the Wisconsin
Legislature’s motion to intervene fails on the second and third prongs for
intervention as of right.7 With respect to the second prong—an interest relat-
ing to the property or transaction which is the subject of the action—the Wis-
consin Legislature lacks the requisite interest in the outcome of this lawsuit
because it has not described a cognizable injury, as discussed above. Its al-
leged injuries do not suffice to support intervention as of right because they
are not based on any cognizable interest of the Legislature as an institution.
See Mt. Hawley Ins. Co., 425 F.3d at 1311; S. Fla. Water Mgmt. Dist., 922 F.2d at
710-11 (intervenors injured by alleged actions lacked legal rights).8
With respect to the third prong—disposition of the action impeding or
impairing the intervenor’s ability to protect a cognizable interest—the out-
come of this suit does not impair the Wisconsin Legislature’s ability to pro-
tect any interest it may have because it is equally capable of challenging the
7 As to the first prong—timeliness—the Wisconsin Legislature is correct that De-
fendants have not answered the Complaint. However, the Wisconsin Legislature filed its
motion to intervene after the completion of the PI briefing, thereby denying Defendants
the opportunity to address the specific problems with the Wisconsin Legislature’s stand-
ing in their opposition to the PI motion.
8 The Wisconsin Legislature cites Huff v. Commissioner, 743 F.3d 790, 799 (11th Cir.
2014), for the proposition that a sovereign has a legally protectable interest in the “integ-
rity of its tax system” under this prong of Rule 24(a). Mot. to Intervene, at 7. As discussed
above, the Wisconsin Legislature cannot represent the interests of the sovereign here un-
der Wisconsin law.
16
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offset provision in federal court in Wisconsin. Burke v. Ocwen Fin. Corp., 833
F. App’x 288, 292 (11th Cir. 2020) (“[T]he ability to separately litigate defeats
the impairment element.”). Even assuming that the Wisconsin Legislature
has an interest in challenging the offset provision as applied to Wisconsin,
that interest would not be implicated by a decision in this case absent inter-
vention. As the Wisconsin Legislature recognizes, the Court “may choose . . .
to limit relief only to those States who are party to the litigation” should the
Court rule that the offset provision is unconstitutional. Mot. to Intervene, at
10. Defendants have so argued, see Defs.’ PI Opp’n, at 32-33, and the Plain-
tiff States do not purport to seek a nationwide injunction, see Compl.
Prayer for Relief ¶ C. See generally PI Mot.9 So if the Court denies inter-
vention, the Wisconsin Legislature’s rights will not be affected regardless
of whether the Court grants the Plaintiff States’ requested relief.
In circumstances where a proposed intervenor could bring a separate
lawsuit in the same Circuit or district, some courts have held that the stare
9 Assuming to the contrary that Plaintiff States seek a nationwide injunction in this
lawsuit, the Wisconsin Legislature cannot satisfy the fourth prong required for interven-
tion as of right. In this scenario, the Wisconsin Legislature would have the same interest
as the Plaintiff States in seeking the same relief. The Court will “presume adequate rep-
resentation when an existing party seeks the same objectives as the would-be interven-
ers.” Clark v. Putnam County, 168 F.3d 458, 461 (11th Cir. 1999); Sierra Club, Inc. v. Leavitt,
488 F.3d 904, 910 (11th Cir. 2007). This “weak” presumption “imposes upon the applicant
for intervention “the burden of coming forward with some evidence to the contrary.” Id.
The Wisconsin Legislature has not explained how the thirteen Plaintiff States would not
be able to advocate adequately for a position in favor of nationwide injunctive relief
against an allegedly unconstitutional federal statute.
17
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 24 of 28
decisis effect of a decision may be sufficient to warrant intervention under
this third element, particularly because judges in that district are likely to
persuade one another. See Chiles v. Thornburgh, 865 F.2d 1197, 1214 (11th Cir.
1989) (finding that detainees at a facility that was properly the subject of an
action by the County could intervene in the County’s lawsuit rather than
bring a separate lawsuit); Stone v. First Union Corp., 371 F.3d 1305, 1310 (11th
Cir. 2004) (employees suing the same Florida employer on related theories
could intervene in suit by other employee after class decertification). But the
Eleventh Circuit has emphasized that intervention in such matters is motion-
specific, and “the potential for negative stare decisis effects does not auto-
matically grant plaintiffs the right to intervene.” Stone, 371 F.3d at 1310; see
also Worlds v. Dep’t of Health & Rehab. Servs., State of Fla., 929 F.2d 591, 594
(11th Cir. 1991) (holding that a separate suit would actually assist the pro-
posed intervenor in proving his claims); Burke, 833 F. App’x at 292. And in
any event, the Wisconsin Legislature would bring suit in the Seventh Circuit,
not in the Eleventh Circuit where this case is pending. So the Wisconsin Leg-
islature cannot rely on this theory for intervention. Moreover, the Wisconsin
Legislature may be in a different position from the Plaintiff States, both with
regards to its status as a non-sovereign entity and to the particular tax laws
18
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 25 of 28
in the State of Wisconsin. Thus, the “potential for negative stare decisis ef-
fects” would be limited. Stone, 371 F.3d at 1310. The Court should therefore
deny the motion to intervene as of right.
IV. THE COURT SHOULD DENY PERMISSIVE INTERVENTION.
The Court should deny permissive intervention as well. Even if the
standards were met, permissive intervention remains wholly at the Court’s
discretion, and the Court should deny the motion.
First, the adequacy of a separate lawsuit is a sufficient reason to deny
permissive intervention, see Burke, 833 F. App’x at 294, and the Wisconsin
Legislature is free to file suit in its home state.
Second, the public interest would be better served if the Wisconsin
Legislature were to pursue its claims, if any, in a different forum. There were
originally six lawsuits in six different district courts addressing the same fed-
eral statute. One such lawsuit was been dismissed; in another lawsuit, the
motion for a preliminary injunction was denied. The Wisconsin Legislature’s
effort to join this lawsuit, particularly after the developments in other related
cases, raises at least the appearance of forum shopping. Cf. In re W. Caribbean
Airways Crew Members, No. 07 22015 CIV, 2010 WL 11601239, at *10 (S.D. Fla.
Jan. 8, 2010) (disfavoring intervention where intervenor was forum shop-
ping). Nor can the Wisconsin Legislature claim that it would be somehow
efficient to bundle its claims with those of the Plaintiff States. In the context
19
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 26 of 28
of considering nationwide injunctions, the Supreme Court has repeatedly
emphasized the benefits of percolating important questions of law in multi-
ple forums. See Califano v. Yamasaki, 442 U.S. 682, 702 (1979) (highlighting
that nationwide injunctions “have a detrimental effect by foreclosing adju-
dication by a number of different courts and judges”); see also Trump v. Ha-
waii, 138 S. Ct. 2392, 2425 (2018) (Thomas, J., concurring) (explaining that
universal injunctions “take a toll on the federal court system—preventing
legal questions from percolating through the federal courts, encouraging fo-
rum shopping, and making every case a national emergency for the courts
and for the Executive Branch”); Arizona v. Evans, 514 U.S. 1, 23 n.1 (1995)
(Ginsburg, J., dissenting) (recognizing “that when frontier legal problems
are presented, periods of ‘percolation’ in, and diverse opinions from, state
and federal appellate courts may yield a better informed and more enduring
final pronouncement by this Court”).
V. IN THE ALTERNATIVE, THE COURT SHOULD HOLD THIS MOTION IN
ABEYANCE UNTIL IT DECIDES WHETHER THE PLAINTIFF STATES HAVE
STANDING.
The Wisconsin Legislature, like the Plaintiff States, seeks injunctive re-
lief from implementation of the offset provision. As Defendants have ar-
gued, the Plaintiff States lack standing to bring similar claims. Defs.’ PI
20
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 27 of 28
Opp’n at 9-15.10 And in any event, Plaintiff States lack standing to seek relief
beyond their own States. See id. at 32-33; see also DHS v. New York, 140 S. Ct.
599, 600 (2020) (Gorsuch, J., concurring) (explaining that party lacks standing
to “direct how the defendant[s] must act toward persons who are not parties
to the case.”); Gill v. Whitford, 138 S. Ct. 1916, 1931, 1933-34 (2018) (“[a] plain-
tiff’s remedy must be tailored to redress the plaintiff’s particular injury”).
The Court should at least determine whether Plaintiff States have standing
to bring this suit in the first place before deciding whether the Wisconsin
Legislature may join it. The Court should therefore, as an alternative to deny-
ing the motion to intervene, hold this motion in abeyance.
CONCLUSION
For the foregoing reasons, the Court should deny the Wisconsin Leg-
islature’s motion to intervene.
10 Defendants relatedly argued that the Plaintiff States’ claims are not ripe. Id. at
13-14.
21
Case 7:21-cv-00465-LSC Document 67 Filed 05/28/21 Page 28 of 28
DATED: May 28, 2021 Respectfully submitted,
BRIAN M. BOYNTON
Acting Assistant Attorney General
BRIAN D. NETTER
Deputy Assistant Attorney General
ALEXANDER K. HAAS
Director, Federal Programs Branch
BRIGHAM J. BOWEN
Assistant Director, Federal Programs Branch
/s/ Michael P. Clendenen
MICHAEL P. CLENDENEN
STEPHEN EHRLICH
CHARLES E.T. ROBERTS
Trial Attorneys
Civil Division, Federal Programs Branch
U.S. Department of Justice
1100 L Street, NW
Washington, DC 20005
Phone: (202) 305-0693
Email: michael.p.clendenen@usdoj.gov
Counsel for Defendants
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