Texas v. U.S. Part I – Standing

November 10th, 2015

The 5th Circuit’s decision in Texas v. United States is over 130 pages, and I will attempt to blog about it in several parts. The first topic is the threshold issue–standing.

First, Judge Smith’s majority opinion adopted the state’s driver’s-license theory of standing. In a note, the court distinguished this case from Crane v. Johnson, a similar challenge brought by the state of Mississippi and Immigration and Customs Enforcement agents. There, plaintiffs did not raise the issue of an independent injury to the state, and it was waived. The analysis was guided by the Supreme Court’s decision in Massachusetts v. EPA, finding that states are entitled to “special solicitude.” The dissent by Judge King diminishes the impact of the “special solicitude” language, explaining that it is “only a single, isolated phrase” that “appears only once” in Justice Stevens’s majority opinion. Judge Smith replies that “In light of that enlargement on the “special solicitude” phrase, it is obvious that being a state greatly matters in the standing inquiry.” Here is the key analysis on Mass v . EPA:

Texas,by contrast,challenges DHS’s affirmative deci- sion to set guidelines for granting lawful presence to a broad class of illegal aliens. Because the states here challenge DHS’s decision to act, rather than its decision to remain inactive, a procedural right similar to that created by the Clean Air Act is not necessary to support standing.

As we will show, DAPA would have a major effect on the states’ fiscs, causing millions of dollars of losses in Texas alone, and at least in Texas, the causal chain is especially direct: DAPA would enable beneficiaries to apply for driver’s licenses, and many would do so, resulting in Texas’s injury.

Second, DAPA affects the states’ “quasi-sovereign” interests by imposing substantial pressure on them to change their laws, which provide for issuing driver’s licenses to some aliens and subsidizing those licenses.35

Judge Smith bolsters his analysis by citing to the Court’s recent decision in Arizona State Legislature (at the time, I noted how significant this was to Texas’s challenge, notwithstanding Justice Ginsburg’s faint protestations to the contrary).

The significant opinion in Arizona State Legislature v. Arizona Indepen- dent Redistricting Commission, 135 S. Ct. 2652 (2015), announced shortly before oral argument herein, reinforces that conclusion. The Court held that the Arizona Legislature had standing to sue in response to a ballot initiative that removed its redistricting authority and vested it instead in an indepen- dent commission. Id. at 2665–66. The Court emphasized that the legislature was “an institutional plaintiff asserting an institutional injury” to what it believed was its constitutional power to regulate elections. Id. at 2664. So too are the states asserting institutional injury to their lawmaking authority. The Court also cited Massachusetts v. EPA as opining that the state in that case was “entitled to special solicitude in our standing analysis.” Id. at 2664–65 n.10 (quoting Massachusetts v. EPA, 549 U.S. at 520).

The court rejects the government’s arguments that (1) there is “a presumption that a plaintiff lacks standing to challenge decisions to confer benefits on, or not to prosecute, a third party,” (2) there is a presumption “against justiciability in the immigration context,” and (3) standing should be more “rigorous” when the reaching the merits would force the court to decide if an action is unconstitutional. The court finds the precedents do not support the latter two, or alternatively, those cases only involve “general language about the government’s authority over immigration; without a specific discussion of standing, they are of limited relevance.” The court (as I will discuss in a later post) does not reach the constitutional claim. In short:

Therefore, the states are entitled to “special solicitude” in the standing inquiry. We stress that our decision is limited to these facts. In particular, the direct, substantial pressure directed at the states and the fact that they have surrendered some of their control over immigration to the federal government mean this case is sufficiently similar to Massachusetts v. EPA, but pressure to change state law may not be enough―by itself―in other situations.

The last sentence is a faint effort at crafting a limiting principle, but that task will likely fall to the Supreme Court.

Based on this analysis, the court finds that “at least one state,” Texas, has satisfied the standing inquiry.

At least one state—Texas—has satisfied the first standing requirement by demonstrating that it would incur significant costs in issuing driver’s licenses to DAPA beneficiaries. … If permitted to go into effect, DAPA would enable at least 500,000 illegal aliens in Texas55 to satisfy that requirement with proof of lawful presence56 or  employment authorization.57 Texas subsidizes its licenses and would lose a minimum of $130.89 on each one it issued to a DAPA beneficiary.58 Even a modest estimate would put the loss at “several million dollars.”

The court rejects the government’s (bizarre) argument that the benefits of having more lawfully present immigrants would help Texas’s economy, and be a net positive–thus negating the injury.

Even if the government is correct, that does not negate Texas’s injury, because we consider only those offsetting benefits that are of the same type and arise from the same transaction as the costs.59 “Once injury is shown, no attempt is made to ask whether the injury is outweighed by benefits the plain- tiff has enjoyed from the relationship with the defendant. Standing is recog- nized to complain that some particular aspect of the relationship is unlawful and has caused injury.”60 “Our standing analysis is not an accounting exercise . . . .”

This is an argument that appeals to a policy preference that immigrants help the economy–one I personally agree with–but it has no basis in standing law.

Next, the court finds that the injury is “fairly traceable” to DAPA (I discuss this element in this post).

Texas has satisfied the second standing requirement by establishing that its injury is “fairly traceable” to DAPA. It is undisputed that DAPA would enable beneficiaries to apply for driver’s licenses, and there is little doubt that many would do so because driving is a practical necessity in most of the state.

But what about the argument advanced by the United States that Texas could change its law, and thus avoid any injury. The court rejects this argument:

Although Texas could avoid financial loss by requiring applicants to pay the full costs of licenses, it could not avoid injury altogether. “[S]tates have a sovereign interest in ‘the power to create and enforce a legal code,’”62 and the possibility that a plaintiff could avoid injury by incurring other costs does not negate standing.63

In other words, federal action that forces a state to change its law is in of itself a constitutional injury. I made a similar point back in April:

Second, I think it would be a radical argument that a state should be required to change its laws in order to avoid an injury from an executive action (that is arguably itself unlawful). Legislation and the police power are the ultimate attribute of sovereignty, and states should and could not be compelled to act in order to prevent a collision with a President’s policies.

In response to an argument from the dissent, the court stresses that Texas’s injury was not “self-inflicted.” In other words, the law was not change in order to create an injury. Texas’s law pre-dated DAPA. In this sense, states aren’t able to game the system by passing laws for the sole purpose of creating an injury.

The fact that Texas sued in response to a significant change in the defen- dants’ policies shows that its injury is not self-inflicted. …

By way of contrast, there is no allegation that Texas passed its driver’s license law to manufacture standing. The legislature enacted the law one year before DACA and three years before DAPA was announced,66 and there is no hint that the state anticipated a change in immigration policy―much less a change as sweeping and dramatic as DAPA. Despite the dissent’s bold sugges- tion that Texas’s license-plate-cost injury “is entirely manufactured by Plain- tiffs for this case,” Dissent at 12, the injury is not self-inflicted.

I think this is an important limiting principle, and one I raised at a recently conference in response to a paper discussing state standing.

Similarly, the court notes that if the dissent’s rule was accurate, than any time a state law is preempted, rather than bringing suit, the state would simply have to just change their law. “The existence of that alternative does not mean they lack standing. ”

The court did not cite the Arizona DREAM Act Case, where the U.S. Government argued that it was unconstitutional for the states to change their laws to exclude lawfully present aliens from receiving driver’s licenses. The government has run away from this argument (unpersuasively in my opinion), but this was a stronger basis to rule.

With respect to whether the injury is “fairly traceable,” the court held only that a “casual link” is necessary–and here it is stronger than in Mass. v. EPA.

For Texas to incur injury, DAPA beneficiaries would have to apply for driver’s licenses as a consequence of DHS’s action, and it is apparent that many would do so. For Massachusetts’s injury to have occurred, individuals would have had to drive less fuel-efficient cars as a result of the EPA’s decision, and that would have had to contribute meaningfully to a rise in sea levels, causing the erosion of the state’s shoreline. See Massachusetts v. EPA, 549 U.S. at 523. There was some uncertainty about whether the EPA’s inaction was a substan- tial cause of the state’s harm, considering the many other emissions sources involved.67 But the Court held that Massachusetts had satisfied the causation requirement because the possibility that the effect of the EPA’s decision was minor did not negate standing, and the evidence showed that the effect was significant in any event. This case raises even less doubt about causation, so the result is the same. The matters in which the Supreme Court held that an injury was not fairly traceable to the challenged law reinforce this conclusion.  … DAPA beneficiaries have strong incentives to obtain driver’s licenses, and it is hardly speculative that many would do so if they became eligible.  …

Far from playing an insignificant role, DAPA would be the primary cause and likely the only one. Without the program, there would be little risk of a dramatic increase in the costs of the driver’s-license program. This case is far removed from those in which the Supreme Court has held an injury to be too incidental or attenuated. Texas’s injury is fairly traceable to DAPA.

The court quickly dispatches the “redressability” element of the standing inquiry:

Enjoining DAPA based on the procedural APA claim could prompt DHS to reconsider the program, which is all a plaintiff must show when asserting a procedural right. See id. at 518. And enjoining DAPA based on the substantive APA claim would prevent Texas’s injury altogether.

Finally, the court turns to the fact that Texas’s argument has “no principled limit.” So much of high-stakes constitutional law is always about limiting principles, isn’t it?

In the government’s view, if Texas can chal- lenge DAPA, it could also sue to block a grant of asylum to a single alien or any federal policy that adversely affects the state, such as an IRS revenue ruling that decreases a corporation’s federal taxable income and corresponding state franchise-tax liability.

The flaw in the government’s reasoning is that Massachusetts v. EPA entailed similar risks, but the Court still held that Massachusetts had stand- ing. Under that decision, Massachusetts conceivably could challenge the gov- ernment’s decision to buy a car with poor fuel efficiency because the vehicle could contribute to global warming. The state might be able to contest any federal action that prompts more travel. Or it potentially could challenge any change in federal policy that indirectly results in greenhouse-gas emissions, such as a trade-promotion program that leads to more shipping. One of the dissenting Justices in Massachusetts v. EPA criticized the decision on that ground,70 but the majority found those concerns unpersuasive, just as they are here.

Of course the dissenting Justices was the Chief, who wrote, “Every little bit helps, so Massachusetts can sue over any little bit.” The Fifth circuit offers several principles.

First, there must be a cause of action:

First, a state that has standing still must have a cause of action. Even the APA—potentially the most versatile tool available to an enterprising state— imposes a number of limitations.

I articulated a similar point in a post I wrote last April:

The mere fact that Texas suffered an injury through fixed costs does not provide a substantive cause of action. The cost of providing the driver’s license served as a concrete injury to get into court for purposes of standing. Once there is standing, the plaintiff still must plead *some* cause of action. What will those causes of action be? To the point I made in the previous paragraph, what would the cause of action be when a judge releases a defendant on supervised release? None.

Second, the zone of interest offers some prudential limitations:

A state must be defending concerns that are “arguably within the zone of interests to be protected or regulated by the stat- ute or constitutional guarantee in question.”72 It is unclear whether a state dissatisfied with an IRS revenue ruling would be defending such an interest.

Third, “judicial review is unavailable where the statute precludes it or the matter is committed to agency discretion. 5 U.S.C. § 701(a).” Thus a state could not challenge asylum determinations.

Fourth, “numerous policies that adversely affect states either are not rules at all or are exempt from the notice- and-comment requirements.”

Fifth, standing doctrine would preclude the sort of challenge to an asylum determination.

For example, it would be difficult to establish stand- ing to challenge a grant of asylum to a single alien based on the driver’s-license theory. The state must allege an injury that has already occurred or is “certainly impending”;73 it is easier to demonstrate that some DAPA benefici- aries would apply for licenses than it is to establish that a particular alien would. And causation could be a substantial obstacle. Although the district court’s calculation of Texas’s loss from DAPA was based largely on the need to hire employees, purchase equipment, and obtain office space,74 those steps would be unnecessary to license one additional person.

Sixth, the court reiterates the analysis based on the “special solicitude” for the states.

To be entitled to that presumption, a state likely must be exercising a procedural right created by Congress and protecting a “quasi-sovereign” interest. See Massachusetts v. EPA, 549 U.S. at 520. Those factors will seldom exist. For instance, a grant of asylum to a single alien would impose little pressure to change state law. Without “special solicitude,” it would be difficult for a state to establish standing, a heavy burden in many of the government’s hypotheticals.

Finally, the court address a “practical matter.”

Fourth, as a practical matter, it is pure speculation that a state would sue about matters such as an IRS revenue ruling. Though not dispositive of the issue, the absence of any indication that such lawsuits will occur suggests the government’s parade of horribles is unfounded,75 and its concerns about the possible future effects of Texas’s theory of standing do not alter our conclu- sion. The states have standing.

After addressing the Article III issues, the court quickly resolves the prudential concerns under the so-called “Zone of Interest” test. After explaining that this test is not “especially demanding,” and that the “benefit of any doubt goes to the plaintiff,” the court found that the test was satisfied.

The interests the states seek to protect fall within the zone of interests of the INA.80 “The pervasiveness of federal regulation does not diminish the importance of immigration policy to the States,” which “bear[] many of the con- sequences of unlawful immigration.” Arizona v. United States, 132 S. Ct.at 2500.

Contrary to the government’s assertion, Texas satisfies the zone-of- interests test not on account of a generalized grievance but instead as a result of the same injury that gives it Article III standing—Congress has explicitly allowed states to deny public benefits to illegal aliens. Relying on that guar- antee, Texas seeks to participate in notice and comment before the Secretary changes the immigration classification of millions of illegal aliens in a way that forces the state to the Hobson’s choice of spending millions of dollars to subsi- dize driver’s licenses or changing its statutes.

That is the end of the majority’s standing analysis. I will address the procedural and substantive APA claims in a subsequent post.