Notice & Comment

Ninth Circuit Review-Reviewed: CA9 Gets Lost in Weeds of APA §§ 702 & 704, by William Yeatman

Welcome back to Ninth Circuit Review-Reviewed, your monthly recap of administrative law before arguably “the second most important court in the land.” Let’s get straight to business. 

Border Wall Panel Makes Doctrinal Hash of APA Review 

One of the 1946 APA’s achievements was to simplify suits against the government. To this end, the Act provides a waiver of sovereign immunity (§ 702) and a cause of action (§ 704).

Digging a little deeper, § 702 provides a waiver of sovereign immunity for challenges to “agency action” brought by anyone “aggrieved . . . within the meaning of a relevant statute.” In interpreting the phrase “aggrieved . . . within the meaning of a relevant statute,” the Supreme Court developed the “zone of interests” test. Basically, your complaint must bear a rational connection with the interests that are protected by the statute in question.

Section 704’s cause of action has a distinct limitation: namely, it extends to challenges only of “final agency action.” In discerning finality, the Supreme Court asks two questions. First, is the agency’s action “the consummation of the agency’s decision-making process”? Second, do “legal consequences . . .  flow” from the action? 

If you pass both §§ 702 & 704’s doctrinal tests, then you have recourse to APA’s scope of review provision (§ 706), also known as “hard look” review. 

What am I talking about? In practice, courts get confused by these concepts, which is what happened last month with the Ninth Circuit’s split-panel opinion in California v. Trump, a high-profile controversy over the border wall. 

Recall that in late 2018, we experienced the longest ever government shutdown due to an impasse between the political branches over funding for a border wall. Ultimately, the president caved. Having been denied direct spending, President Trump soon achieved the same result by exercising statutory authority to “reprogram” funds—that is, to move money within and among agencies. To cobble together enough money—about $6 billion—the president tapped multiple delegations, only one of which was contested in California v. Trump

What follows is a simplification of the statutory scheme at issue. Under § 8005 of the Defense Appropriations Act of 2019, the Defense Department is authorized to shuffle funds within the agency (under certain conditions). And under 10 U.S.C. § 284, the Department of Defense may transfer funds to a different agency for construction projects to mitigate drug smuggling, including border barriers. 

So, the Defense Department employed §8005 to move about $2.5 billion into its § 284 account, and then the Department transferred the $2.5 billion from the § 284 account to the Department of Homeland Security. Finally, the DHS used these funds to build various segments of a border wall. In so doing, DHS invoked § 102 of the Illegal Immigration Reform and Immigrant Responsibility Act, which waives applicable environmental laws. 

California and New Mexico (among others) sued, alleging that the Defense Department’s intra-agency shuffling of funds (under § 8005 of the Defense Appropriations Act) is ultra vires and unconstitutional. To establish standing, states claimed they were injured because the border wall threatened endangered species and otherwise undermined their environmental laws. 

The key question before CA9 in California v. Trump was whether the states could bring a cause of action under the APA. Although a split panel answered in the affirmative, the majority’s reasoning is plainly incorrect. 

In a nutshell, the panel conflated its §§ 702 and 704 analyses, and a lot of doctrine got lost in the resultant jumble. That is, the court merged both doctrinal concepts under the “cause of action” rubric, but then performed only a “zone of interest” test. As a result, the court did *not* discern whether it was reviewing a “final agency action.” 

If you consider the statutory scheme behind the wall funding, then the court’s mistake becomes obvious. As I explained above, the controversy emanated from a multi-step sequence: 

  • First the Defense Department shifted funds internally (§ 8005 of the Defense Appropriations Act);
  • Second, the Department transferred those funds to DHS (10 U.S.C. § 284); 
  • Finally, when announcing construction of various segments of the border wall, DHS waived applicable environmental statutes (under § 102 of the IIRIA). 

In California v. Trump, the states challenged the first step of the process—the Defense Department’s internal shuffling of appropriations under §8005. But the states’ environmental injuries flow from the final step in the process—the DHS Secretary’s exercise of discretionary authority to waive environmental statutes. 

The upshot is that §8005 fails to reflect “the consummation of the agency’s decision-making process, from which legal consequences will flow.” The states, therefore, are *not* challenging “final agency action,” so they lack recourse to the APA’s scope of review. The panel was just plain wrong to hold otherwise. 

On the one hand, the court’s stunted analysis might be blamed on the federal government, whose briefing focused on the “zone of interest” test. Notably, Judge Daniel Collins’s dissent does not correct his colleagues on “final agency action,” which suggests to me that the court was poorly informed. 

On the other hand, the Supreme Court had strongly advised CA9 to scrutinize the causes of action in a companion case on a parallel procedural track that brought the same claims. Given that the panel should’ve been on high alert, its mistakes are less excusable. 

. . . Outstanding Issues on Border Wall Controversy 

Just because plaintiffs-appellees in California v. Trump lack a cause of action under the APA, it doesn’t mean they’re out of luck. 

The states—and similarly situated parties—also asserted “nonstatutory” (i.e., common law) and constitutional causes of action (under the Appropriations Clause). Regarding the availability and scope of these mechanisms, there are many outstanding questions. 

In the companion case I mentioned above, Sierra Club v Trump, the same panel of judges split on how to answer these questions. A majority concluded that the Appropriations Clause provides a viable cause of action. And the majority further held that neither “nonstatutory” nor constitutional causes of action necessitate the “zone of interest” test. 

While I’m confident the panel’s APA jurisprudence would never survive review by the high court, these other causes of action are a different matter. As Justice Breyer observed in the Supreme Court’s grant of the government’s motion for an emergency stay, “This case raises novel and important questions about the ability of private parties to enforce Congress’ appropriations power.”  Stay tuned. 

If CA9 Grows Again, Reforms Are Needed 

In 1973, Congress established the Hruska Commission to take a look at federal appellate courts with an eye to reform. Among other recommendations, the Commission proposed a nine-judge maximum for circuit courts. Beyond this number, the Commission believed that courts incurred uneven circuit law. 

At the time, there were two circuits with benches deeper than nine judges: the ninth (13 judgeships) and the fifth (15 judgeships). For its part, CA5 welcomed recommendations to split the court, and Congress did so a few years later (into the present-day Fifth and Eleventh Circuits). 

Unlike CA5, the Ninth Circuit resisted the Commission’s conclusions. To this end, Chief Judge James Browning spearheaded procedural changes meant to lessen the odds that the courts’ size would lead to inconsistent jurisprudence. These reforms included monthly conferences and pre-decisional circulation of opinions. The idea was to head off the critics, and it worked. 

Back in 1975, CA9 had 13 judgeships. In the time since, population growth and the expanding U.S. Code have added evermore to the Ninth Circuit’s caseload. As a result, Congress repeatedly expanded the court, which now seats 29 active judges—more than three times the nine-judge maximum recommended by the Hruska Commission. 

Even with the additions, CA9 struggles to keep up. Its massive backlog accounts for nearly one-third of all pending federal appeals. That’s why the Judicial Conference last month recommended five new judgeships for CA9. If adopted, this proposal would bring CA9’s total to 34 judges—almost four times the maximum recommended by the Hruska Commission.  

Here, I’ll add my voice to the chorus of concern over the size of the Ninth Circuit. In the 18 months I’ve been reading every published opinion by the court, I’ve encountered many instances of seeming or outright inconsistencies. Most recently, I’ve been harping on the court’s “woefully uneven” motions panels jurisprudence. 

I’d prefer that CA9 be split into appellate courts that more closely resemble her sister circuits. To be honest, I doubt it’s even possible for the law of the circuit to be consistent in a nondiscretionary appellate court with the Ninth’s tremendous caseload—11,000 new appeals every year (not to mention the nation’s largest backlog). There are simply too many opinions for judges to possibly process, much less maintain the integrity of precedents.

But if, for whatever reason, Congress chooses to further grow CA9, then Chief Judge Sydney Thomas should follow the lead of his predecessor Judge Browning by advancing reforms to mitigate the possibility of incongruous law of the circuit. To this end, I’ve two ideas. 

First, the court should expand the time allotted for the circulation of pre-decisional opinion drafts. At present, judges are given 48 hours. I’d extend this as much as practically possible.   

Second, the court might consider creating a new role—a consistency officer—whose sole job is to monitor opinion drafts for conflicts with precedent. 

Nota Bene: This section (among others) was informed greatly by my conversations with Stephen L. Wasby, professor emeritus of political science, University at Albany-SUNY. Thanks to this blog, I’ve had the opportunity to become friends with Prof. Wasby, who is the dean of CA9 studies. His institutional knowledge is incredible, and it dwarfs what I know about the court. He brings this knowledge to bear in his excellent book, Borrowed Judges: Visitors in the U.S. Courts of Appeals, which should be required reading in Fed Courts/Fed Systems classes. If you haven’t already, please check it out. 

William Yeatman is a research fellow at the Cato Institute

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