In immigration opinion, 5th Circuit endorses states’ rights to sue U.S.

November 10, 2015

In a 135-page split opinion Monday night, the 5th U.S. Circuit Court of Appeals upheld an injunction barring the Obama administration from implementing a policy of deferring deportation actions against more than 4 million undocumented immigrants whose children are U.S. citizens or legal permanent residents of the U.S. The appellate majority, Judges Jerry Smith and Jennifer Elrod, ruled 26 states were likely to prevail in their claims that the Department of Homeland Security violated the Administrative Procedure Act when it instituted a new immigration policy by issuing a memo instead of launching the formal rulemaking process. The Justice Department said Tuesday it intends to ask the U.S. Supreme Court to review the 5th Circuit’s decision.

One of Justice’s primary arguments is sure to be that the appellate majority botched its analysis of whether the states have constitutional standing to challenge the administration’s policy. The majority, as I’ll explain, said Texas has standing to sue because the new immigration policy would have led more undocumented immigrants to obtain state-subsidized drivers’ licenses, costing Texas several million dollars. In dissent, Judge Carolyn King said that interpretation was way too expansive. “I have serious misgivings about any theory of standing that appears to allow limitless state intrusion into exclusively federal matters – effectively enabling the states, through the courts, to second-guess federal policy decisions,” she wrote.

The 5th Circuit, in other words, has stirred a constitutional controversy about states’ rights to sue the federal government into the debate over immigration policy, already one of the most divisive issues in the U.S. This litigation is scorching hot.

The 5th Circuit majority did ditch a novel theory of standing espoused by the trial judge who first heard the states’ case. U.S. District Judge Andrew Hanen of Brownsville, Texas, held last February that Texas and other states had standing to sue the Obama administration over its deferred deportation policy because (among other reasons) the federal government had abdicated its authority to enforce immigration laws. Here’s how Judge Hanen summarized what he called the “provocative and intellectually intriguing” abdication theory: “Due to this refusal to act in a realm where other governmental entities are barred from interfering, a state has standing to bring suit to protect itself and the interests of its citizens.”

In Monday’s opinion, the appeals court said it didn’t need to consider abdication because Texas met standing requirements through the more traditional route of showing a concrete and particularized injury. But Judge Smith, who wrote for the majority, also said states can be entitled to special consideration when it comes to their right to sue the federal government. Quoting from the Supreme Court’s 2007 opinion in Massachusetts v. Environmental Protection Agency, which allowed Massachusetts to sue the EPA for failing to regulate carbon emissions, Smith said states “are not normal litigants for the purposes of invoking federal jurisdiction” and deserve “special solicitude in our standing analysis.”

The Obama administration’s immigration policy, according to the 5th Circuit, implicated Texas’ “quasi-sovereign” interests. Texas subsidizes more than $100 of the cost of each driver’s license issued in the state. Undocumented immigrants cannot obtain drivers’ licenses in Texas, but, according to the state, the new Obama policy would made hundreds of thousands of immigrants eligible for licenses. Unless Texas revoked or amended its subsidy policy, it would have to pay millions of dollars for those additional licenses. And according to the 5th Circuit majority, that “major effect” on the state’s budget would impose “substantial pressure” on Texas to change its laws, thus interfering with its sovereign rights.

Plaintiffs in federal court do not have standing to sue over injuries they have inflicted on themselves, which raised the question of whether Texas is the victim of its own laws, not of the Obama immigration policy. The 5th Circuit majority looked at two Supreme Court decisions in cases brought by states. In the 1977 case Pennsylvania v. New Jersey, the Supreme Court said it did not have jurisdiction to hear suits by Pennsylvania and other states against neighboring states that had imposed non-resident taxes because the plaintiff states’ tax revenue losses came from their own policies of crediting residents for out-of-state taxes.

But in the 1992 case Wyoming v. Oklahoma, the Supreme Court allowed Wyoming to pursue a Commerce Clause challenge to an Oklahoma law mandating that state power plants use a minimum percentage of Oklahoma-mined coal. The justices said Wyoming’s lost revenue from taxes on coal mines was directly traceable to the Oklahoma law, not self-inflicted.

In the immigration case, the 5th Circuit majority said Texas’s extra cost of subsidizing drivers’ licenses was akin to Wyoming’s lost coal taxes, not to Pennsylvania’s tax credits. Like Wyoming, Texas sued only after another sovereign’s policy change directly affected its revenue, the opinion said. And like Wyoming, Texas had few ways to avoid the impact of someone else’s policy change without changing its own policy goals. “The fact that Texas had no  option means its injury is not self-inflicted,” the opinion said.

Significantly, the 5th Circuit majority rejected the Justice Department’s warnings that the Texas’ drivers’ license standing theory would empower states to sue the federal government whenever executive-branch policies affect state revenue. The Supreme Court already disregarded that argument in the Massachusetts case against the EPA, the appeals court said, and federal courts have the power to dismiss “policy disagreements masquerading as legal claims.” Suits like the state case against the administration’s immigration policy, the 5th Circuit said, will remain rare because states seldom exercise their federal procedural rights to protect their quasi-sovereign interests.

But Judge King’s dissent said the majority has it backward: just because states haven’t previously rushed to claim “special solicitude” to obtain constitutional standing doesn’t mean they won’t now. “The majority’s breathtaking expansion of state standing would inject the courts into far more federal-state disputes and review of the political branches than is now the case,” she wrote.

King said the majority opinion turned one mention of “special solicitude” for states in the Supreme Court’s Massachusetts case into a boundless opportunity for states to meddle with federal policy so long as they can show the policy’s impact on the state budget. “Such a theory of standing – based on the indirect economic effects of agency action – could theoretically bestow upon states standing to challenge any number of federal programs,” she wrote.

That’s a sobering thought, although states may have to get past the Supreme Court and Chief Justice John Roberts – a hawk on constitutional standing – in order to take advantage of the 5th Circuit’s broad interpretation. The court’s liberal wing backed Massachusetts’ right to sue when the issue was carbon emissions. Will justices on the left be as solicitous of Texas’ standing to sue over immigration?

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