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City & County of San Francisco v. Trump

United States Court of Appeals, Ninth Circuit

August 1, 2018

City and County of San Francisco, Plaintiff-Appellee,
v.
Donald J. Trump, President of the United States; Jefferson B. Sessions III, Attorney General, Attorney General of the United States; Elaine C. Duke; United States of America, Defendants-Appellants. County of Santa Clara, Plaintiff-Appellee,
v.
Donald J. Trump, President of the United States; Jefferson B. Sessions III, Attorney General, Attorney General of the United States; Kirstjen Nielsen, Secretary of Homeland Security; Elaine C. Duke; Mick Mulvaney, Director, OMB; United States of America, Defendants-Appellants.

          Argued and Submitted April 11, 2018 San Francisco, California

          Appeal from the United States District Court for the Northern District of California D.C. Nos. 3:17-cv-00485-WHO, 3:17-cv-00574-WHO William Horsley Orrick, District Judge, Presiding

          Chad Readler (argued), Acting Assistant Attorney General; Alex G. Tse, Acting United States Attorney; Mark B. Stern, Daniel Tenny, and Brad Hinshelwood, Appellate Staff; Civil Division, United States Department of Justice, Washington, D.C.; for Defendants-Appellants.

          Christine Van Aken (argued), Yvonne R. Meré, Ronald P. Flynn, Jesse C. Smith, Neha Gupta, Matthew S. Lee, Aileen M. McGrath, Sara J. Eisenberg, Mollie M. Lee, Tara M. Steeley, and Dennis J. Herrera, City Attorney; Office of the City Attorney, San Francisco, California; for Plaintiff-Appellee City and County of San Francisco.

          Danielle L. Goldstein (argued), Adriana L. Benedict, Laura S. Trice, Julie Wilensky, Kavita Narayan, L. Javier Serrano, Greta S. Hansen, and James R. Williams, County Counsel; Office of the County Counsel, San Jose, California; Tejinder Singh, Sarah E. Harrington, and Kevin K. Russell, Goldstein & Russel P.C., Bethesda, Maryland; for Plaintiff-Appellee County of Santa Clara.

          Before: Sidney R. Thomas, Chief Judge, and Ferdinand F. Fernandez and Ronald M. Gould, Circuit Judges.

         SUMMARY[*]

         Separation of Powers/Executive Authority/Immigration

         The panel (1) affirmed the district court's grant of summary judgment in favor of the City and County of San Francisco and the County of Santa Clara in an action challenging Executive Order 13, 768, "Enhancing Public Safety in the Interior of the United States," which directed the withholding of federal grants to so-called sanctuary jurisdictions; (2) vacated a nationwide injunction; and (3) remanded.

         The Executive Order cross-references 8 U.S.C. § 1373, which prohibits government entities from themselves prohibiting the sharing of "information regarding the citizenship or immigration status, lawful or unlawful, of any individual." 8 U.S.C. § 1373(a). Section 9 of the Executive Order provides that the Attorney General and the Secretary of the Department of Homeland Security, "in their discretion and to the extent consistent with law, shall ensure that jurisdictions that willfully refuse to comply with 8 U.S.C. 1373 (sanctuary jurisdictions) are not eligible to receive Federal grants, except as deemed necessary for law enforcement purposes by the Attorney General or the Secretary."

         As a preliminary matter, the panel concluded that the Counties demonstrated standing to bring their action, and that the case was ripe for review.

         The panel held that, under the principle of Separation of Powers and in consideration of the Spending Clause, which vests exclusive power to Congress to impose conditions on federal grants, the Executive Branch may not refuse to disperse the federal grants in question without congressional authorization. Because Congress has not acted, the panel affirmed the district court's grant of summary judgment to the City and County of San Francisco and the County of Santa Clara. However, given the absence of specific findings underlying the nationwide application of the injunction, the panel vacated the nationwide injunction and remanded for reconsideration and further findings.

         Dissenting, Judge Fernandez concluded that the case is not ripe for review. Addressing the merits because the majority did so, Judge Fernandez also wrote that the district court's failure to accord the Executive Order a fair enough reading resulted in its abusing its discretion when it issued the injunction.

          OPINION

          THOMAS, Chief Judge.

         This appeal presents the question of whether, in the absence of congressional authorization, the Executive Branch may withhold all federal grants from so-called "sanctuary" cities and counties. We conclude that, under the principle of Separation of Powers and in consideration of the Spending Clause, which vests exclusive power to Congress to impose conditions on federal grants, the Executive Branch may not refuse to disperse the federal grants in question without congressional authorization. Because Congress has not acted, we affirm the district court's grant of summary judgment to the City and County of San Francisco and the County of Santa Clara (collectively, the "Counties"). However, given the absence of specific findings underlying the nationwide application of the injunction, we vacate the nationwide injunction and remand for reconsideration and further findings.

         I

         A

         The United States Constitution exclusively grants the power of the purse to Congress, not the President. U.S. Const. art. I, § 9, cl. 7 (Appropriations Clause)[1]; U.S. Const. art. I, § 8, cl. 1 (Spending Clause).[2] As Alexander Hamilton succinctly put it, Congress "commands the purse." The Federalist, No. 78. James Madison underscored the significance of that exclusive congressional power, stating, "[t]he power over the purse may [be] the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people." The Federalist, No. 58.

         Congress's power to spend is directly linked to its power to legislate. "Incident to [the spending] power, Congress may attach conditions on the receipt of federal funds, and has repeatedly employed the power 'to further broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives.'" South Dakota v. Dole, 483 U.S. 203, 206-07 (1987) (quoting Fullilove v. Klutznick, 448 U.S. 448, 474 (1980)).

         On the other hand, as the Supreme Court has observed, "[t]here is no provision in the Constitution that authorizes the President to enact, to amend, or to repeal statutes." Clinton v. City of New York, 524 U.S. 417, 438 (1998). Aside from the power of veto, the President is without authority to thwart congressional will by canceling appropriations passed by Congress. Simply put, "the President does not have unilateral authority to refuse to spend the funds." In re Aiken County, 725 F.3d 255, 261 n.1 (D.C. Cir. 2013). And, "the President may not decline to follow a statutory mandate or prohibition simply because of policy objections." Id. at 259.

         The Separation of Powers was an integral part of the Founders' design. The Constitution and its history evidence the "unmistakable expression of a determination that legislation by the national Congress be a step-by-step, deliberate and deliberative process." I.N.S. v. Chadha, 462 U.S. 919, 959 (1983). "The power to enact statutes may only 'be exercised in accord with a single, finely wrought and exhaustively considered, procedure.'" Clinton, 524 U.S. at 439-40 (quoting Chadha, 462 U.S. at 951). Indeed, even when Congress specifically authorized the President's action, the President's attempt to exercise authority through a line-item veto was deemed unconstitutional as antithetical to that "finely wrought" legislative process committed to Congress by the Constitution. Id. at 439. As Justice Kennedy has observed, if "the decision to spend [is] determined by the Executive alone, without adequate control by the citizen's Representatives in Congress, liberty is threatened." Id. at 451 (Kennedy, J., concurring).

         B

         With these Separation of Powers principles in mind, we turn to the question at hand. At issue in this appeal is Executive Order 13, 768, "Enhancing Public Safety in the Interior of the United States," which was signed by the President on January 25, 2017-five days after his inauguration. Exec. Order 13, 768, 82 Fed. Reg. 8799 (Jan. 25, 2017) (hereinafter "Executive Order" or "EO"). The Executive Order's primary concern is "sanctuary jurisdictions," which, in the President's view, "willfully violate Federal law in an attempt to shield aliens from removal from the United States." EO § 1. "The purpose of this order is to direct executive departments and agencies . . . to employ all lawful means to enforce the immigration laws of the United States." EO § 1.

         Most relevant for our consideration is § 9(a) of the Executive Order, which specifically addresses the federal government's potential recourses against sanctuary jurisdictions. In its entirety, § 9 reads:

It is the policy of the executive branch to ensure, to the fullest extent of the law, that a State, or a political subdivision of a State, shall comply with 8 U.S.C. 1373.
(a) In furtherance of this policy, the Attorney General and the Secretary [of the Department of Homeland Security ("DHS")], in their discretion and to the extent consistent with law, shall ensure that jurisdictions that willfully refuse to comply with 8 U.S.C. 1373 (sanctuary jurisdictions) are not eligible to receive Federal grants, except as deemed necessary for law enforcement purposes by the Attorney General or the Secretary. The Secretary has the authority to designate, in his discretion and to the extent consistent with law, a jurisdiction as a sanctuary jurisdiction. The Attorney General shall take appropriate enforcement action against any entity that violates 8 U.S.C. 1373, or which has in effect a statute, policy, or practice that prevents or hinders the enforcement of Federal law.
(b) To better inform the public regarding the public safety threats associated with sanctuary jurisdictions, the Secretary shall utilize the Declined Detainer Outcome Report or its equivalent and, on a weekly basis, make public a comprehensive list of criminal actions committed by aliens and any jurisdiction that ignored or otherwise failed to honor any detainers with respect to such aliens.
(c) The Director of the Office of Management and Budget is directed to obtain and provide relevant and responsive information on all Federal grant money that currently is received by any sanctuary jurisdiction.

         Below, under the heading "General Provisions," the Executive Order provides that it "shall be implemented consistent with applicable law and subject to the availability of appropriations." EO § 18(b). The Executive Order cross-references 8 U.S.C. § 1373, which prohibits government entities from themselves prohibiting the sharing of "information regarding the citizenship or immigration status, lawful or unlawful, of any individual." 8 U.S.C. § 1373(a).

         In sum, by its plain terms, the Executive Order directs the agencies of the Executive Branch to withhold funds appropriated by Congress in order to further the Administration's policy objective of punishing cities and counties that adopt so-called "sanctuary" policies.

         C

         For us, then, the question is whether the Executive Order violates the Separation of Powers, pursuant to which the Constitution committed the Spending power to Congress.

         The President's authority to act "must stem either from an act of Congress or from the Constitution itself." Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 585 (1952). Justice Jackson's Youngstown concurrence provides the operative test in this context:

When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter. Courts can sustain exclusive presidential control in such a case only by disabling the Congress from acting upon the subject. Presidential claim to a power at once so conclusive and preclusive must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system.

Youngstown, 343 U.S. at 637-38 (Jackson, J., concurring).

         In this instance, because Congress has the exclusive power to spend and has not delegated authority to the Executive to condition new grants on compliance with § 1373, the President's "power is at its lowest ebb." Id. at 637. And when it comes to spending, the President has none of "his own constitutional powers" to "rely" upon. Id.

         Rather, the President has a corresponding obligation-to "take Care that the Laws be faithfully executed." U.S. Const. art. II, § 3. Because Congress's legislative power is inextricable from its spending power, the President's duty to enforce the laws necessarily extends to appropriations. Moreover, the obligation is an affirmative one, meaning that failure to act may be an abdication of the President's constitutional role. As then-Assistant Attorney General William Rehnquist noted in 1969, "[w]ith respect to the suggestion that the President has a constitutional power to decline to spend appropriated funds, we must conclude that existence of such a broad power is supported by neither reason nor precedent." Office of Legal Counsel, Memorandum Opinion on Presidential Authority to Impound Funds Appropriated for Assistance to Federally Impacted Schools, at 8 (Dec. 1, 1969). And, even if the President's duty to execute appropriations laws was once unclear, Congress has affirmatively and authoritatively spoken. 2 U.S.C. §§ 681-688 (establishing congressional oversight when the Executive defers budget authority).[3]

         Here, the Administration has not even attempted to show that Congress authorized it to withdraw federal grant moneys from jurisdictions that do not agree with the current Administration's immigration strategies. Nor could it. In fact, Congress has frequently considered and thus far rejected legislation accomplishing the goals of the Executive Order.[4]The sheer amount of failed legislation on this issue demonstrates the importance and divisiveness of the policies in play, reinforcing the Constitution's "unmistakable expression of a determination that legislation by the national Congress be a step-by-step, deliberate and deliberative process." Chadha, 462 U.S. at 959. Not only has the Administration claimed for itself Congress's exclusive spending power, it has also attempted to coopt Congress's power to legislate.

         Because the Executive Order directs Executive Branch administrative agencies to withhold funding that Congress has not tied to compliance with § 1373, there is no reasonable argument that the President has not exceeded his authority. Absent congressional authorization, the Administration may not redistribute or withhold properly appropriated funds in order to effectuate its own policy goals. Because Congress did not authorize withholding of funds, the Executive Order violates the constitutional principle of the Separation of Powers. The district court properly entered summary judgment in favor of the Counties.[5]

         II

         The Administration argues that the Counties lack standing. Of course, our jurisdiction is limited to "Cases" and "Controversies." U.S. Const. art. III, § 2. "Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy . . . [that] limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016).

         Standing exists only where the plaintiff demonstrates "that it has suffered a concrete and particularized injury that is either actual or imminent, that the injury is fairly traceable to the defendant, and that it is likely that a favorable decision will redress that injury." Massachusetts v. EPA, 549 U.S. 497, 517 (2007).

         A

         A "loss of funds promised under federal law[ ]satisfies Article III's standing requirement." Organized Vill. of Kake v. U.S. Dep't of Agric., 795 F.3d 956, 965 (9th Cir. 2015). Both San Francisco and Santa Clara rely heavily on federal funding, much of which is distributed through the State of California. Approximately $1.2 billion of San Francisco's yearly budget of $9.6 billion comprises federal funds. Santa Clara received approximately $1.7 billion in federal and federally dependent funds in the 2015-2016 fiscal year, totaling about 35% of the County's total revenue.

         Both counties have in place policies intended to protect immigrant communities and to encourage community policing measures. San Francisco is a self-described "City and County of Refuge." S.F. Admin. Code § 12H.1. San Francisco prohibits city and county entities and employees from

us[ing] any City funds or resources to assist in the enforcement of Federal immigration law or to gather or disseminate information regarding release status of individuals or any other such [confidential, identifying information about an individual] unless such assistance is required by Federal or State statute, regulation, or court decision.

S.F. Admin. Code § 12H.2. Prior to July 2016, the San Francisco Administrative Code prohibited city employees from sharing information about immigration status, but the restriction was removed out of concern for its potential conflict with 8 U.S.C. § 1373.

         Since 2010, Santa Clara has barred its employees from using County resources to communicate with Immigrations and Customs Enforcement ("ICE") regarding any information collected in the course of providing critical services or benefits. Cty. of Santa Clara Bd. of Supervisors Resolution No. 2010-316, "Advancing Public Safety and Affirming the Separation Between County Services and the Enforcement of Federal Civil Immigration Law" (June 22, 2010). The County also prohibits employees from "initiat[ing] any inquiry or enforcement action based solely on the individual's actual or suspected immigration status, national origin, race, ethnicity, and/or inability to speak English" and from using County resources to pursue an "individual solely because of an actual or suspected civil violation of federal immigration law." Id.

         In sum, the Counties have policies in place that arguably would qualify for grant withdrawal under the Executive Order, with potentially devastating fiscal consequences. They have demonstrated a likely "loss of funds promised under federal law." Organized Vill. of Kake, 795 F.3d at 965.

         B

         The Administration argues that there is no "imminent" injury because the Executive Order may not be enforced. Massachusetts v. EPA, 549 U.S. at 517. We shall discuss the threat of enforcement later. However, the possibility of non-enforcement does not mean that the Counties lack standing.

         Virginia v. American Booksellers Association is illustrative. There, the Court was "not troubled" by the possibility that a law would not be enforced against the plaintiffs. 484 U.S. 383, 393 (1988). It was enough that, if the plaintiffs' "interpretation of the statute [was] correct," the plaintiffs would face serious repercussions in the absence of "significant and costly compliance measures." Id. at 392. There, as here, the parties disputed the scope of the challenged measure, with the plaintiffs anticipating its application to them and the defendants arguing for a narrower reading. Id. at 390. There, too, as is the case ...


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