The United States Court of Appeals for the Fifth Circuit on Monday upheld a district court’s preliminary injunction of implementation of a key aspect of the Administration’s immigration executive action. The court held that the Department of Homeland Security (DHS) likely violated the Administrative Procedure Act (APA) by attempting to provide “lawful presence” in the United States (and likely employment authorization) to a class of undocumented aliens because DHS failed to provide advance notice and opportunity for public comment on a substantive rule. The panel had no need to reach any broader issue of whether DHS could defer removal of aliens or whether any program violated the Constitution of the United States.
Program Litigation: Immigration Executive Action contains many parts. The only relevant part here is that DHS, through United States Citizenship and Immigration Services (USCIS), would create a program to grant a condition referred to as “lawful presence” in the United States to a class of aliens (some 4 to 5 million) otherwise undocumented and therefore not lawfully present in the United States. An applicant for that status could also apply for employment authorization (an EAD) that would make lawful their otherwise unlawful employment in the United States and make lawful their employers employment of them. The Secretary of Homeland Security created the program – Deferred Action for Parents of Americans and Lawful Permanent Residents program (DAPA) –by memorandum.
Texas and other States sued, making a number of claims, and the district court preliminarily enjoined the program on the ground that the States were likely to succeed on their claim that DAPA is subject to the APA’s procedural notice and comment requirements. The Administration sought a stay of the preliminary injunction and a Fifth Circuit motions panel denied the stay after determining that the appeal was unlikely to succeed on its merits.
Standing and Reviewability: The Department of Justice (DOJ) made much of whether the States had standing to sue – that irreducible minimum of injury that confers jurisdiction that often trips up administrative law cases because pleading standing requires precision. Applying the “special solicitude” toward States under Massachusetts v. EPA, the panel found that Texas had alleged specific injury from an increase in the number of drivers licenses that would follow from DAPA and the significant cost that Texas subsidized – and forcing Texas to choose between the cost and amending its law. Determining that one plaintiff has established standing, the court needed to proceed no further with that inquiry.
DOJ argued also that the INA precluded review, but the court dismissed that argument almost out of hand. Judicial review under the APA is not only favored, but also presumed, and the INA does not contain a discrete provision that bars judicial review in this instance or commits the decision to create DAPA to DHS’s discretion.
Preliminary Injunction Test: The panel reviewed its version of the standard three- or four-part test for a preliminary injunction: (1) likelihood of success on the merits, (2) irreparable harm to the movant, (3) a balance of the equities, and (4) the public interest, noting that elements 3 and 4 tend to merge when the government is the defendant. The key element, as with most litigation against the United States, is the likelihood of success on the merits. The court noted as well that its review of the application of this test was for an abuse of discretion by the district court – a normal and expected high bar to reversal.
Likelihood of Success on the Merits: Leaving aside the falderal not decided, the merits here focus on whether DAPA is a substantive rule requiring advance notice and an opportunity for public comment under the APA. A second issue, decided in the alternative, was whether DHS had statutory authority for the program at all.
The panel found that the challenged DAPA program was, indeed, a substantive rule – a binding statement of future effect that left little or no discretion in application, not an interpretative rule or statement of policy. The panel found that DAPA’s grant of lawful presence has distinct legal consequences, including the cost implications of Texas drivers’ licenses, and access to, among other things, the Social Security system and employment compensation. DOJ argued that DAPA was only a policy statement, exempt from notice and comment, but the court was unconvinced.
The government advances the notion that DAPA is exempt from notice and comment as a policy statement. We evaluate two criteria to distinguish policy statements from substantive rules: whether the rule (1) “impose[s] any rights and obligations” and (2) “genuinely leaves the agency and its decision-makers free to exercise discretion.” There is some overlap in the analysis of those prongs “because ‘[i]f a statement denies the decisionmaker discretion in the area of its coverage . . . then the statement is binding, and creates rights or obligations.’” “While mindful but suspicious of the agency’s own characterization, we . . . focus primarily on whether the rule has binding effect on agency discretion or severely restricts it.” “[A]n agency pronouncement will be considered binding as a practical matter if it either appears on its face to be binding, or is applied by the agency in a way that indicates it is binding.” [footnotes and citations omitted].
Not only does the court refresh its own precedent, it often relies here on the wealth of precedent from the District of Columbia Circuit.
DOJ asserted also that the program was exempt as a rule “of agency organization, procedure, or practice.” This argument also failed because “[T]he substantial impact test is the primary means by which [we] look beyond the label ‘procedural’ to determine whether a rule is of the type Congress thought appropriate for public participation.” The substantial impact here is substantive and the rule has little to do with procedure. The panel acknowledged that D.C. Circuit applies “a more intricate test for distinguishing between procedural and substantive rules.” The court found that the different tests made no difference in this case: “Applying those considerations to DAPA yields the same result as does our substantial-impact test.”
DOJ’s other “not-rule” arguments warranted rapid rejection.
Second, and in the alternative, the panel found that DHS lacked the authority to implement the program even if it followed the correct rulemaking process because DAPA was substantively unlawful under the APA. In short, the Immigration and Nationality Act (INA) established classification of aliens, and authorized and prohibited discrete benefits from those classifications – DAPA created a new classification not contemplated by the INA:
The interpretation … that the Secretary advances would allow him to grant lawful presence and work authorization to any illegal alien in the United States – an untenable position in light of the INA’s intricate system of immigration classifications and employment eligibility. Even with “special deference” to the Secretary, the INA flatly does not permit the reclassification of millions of illegal aliens as lawfully present and thereby make them newly eligible for a host of federal and state benefits, including work authorization. [footnotes omitted].
The other elements of preliminary injunction analysis received less attention as is often the case. Irreparable harm flowed from the unrecoverable benefits that the DAPA program would create. “The district court found that retracting those benefits would be ‘substantially difficult—if not impossible.’” The merged balancing of harms and public interest amounted to the States’ discrete harms against the United States general and “vague” harms.
Although the Fifth Circuit cites many decisions by the District of Columbia Circuit, the analysis is decidedly on the Fifth Circuit’s terms. Nonetheless, the same result would have been likely in the District of Columbia Circuit, even if the analytical steps were different.
SCOTUS Next: The Administration has already announced that it will, through the Solicitor General, petition the United States Supreme Court (SCOTUS) for a petition for certiorari to review the Fifth Circuit’s decision. If SCOTUS expeditiously grants review, the Court could possibly hear the case in April and decide the case by next July. If so, expect a major precedent on rulemaking or at least preliminary injunction, applicable well beyond the bounds of immigration law.