State of Texas v. USA
2015 WL 6873190, 809 F.3d 134 (2015)
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Rule of Law:
An executive agency action that confers substantive benefits and new legal designations on a class of millions of individuals, without providing for genuine case-by-case discretion, constitutes a substantive rule requiring notice-and-comment rulemaking under the Administrative Procedure Act (APA). Such an action is also invalid if it is manifestly contrary to the detailed immigration scheme established by Congress in the Immigration and Nationality Act (INA).
Facts:
- In June 2012, the Department of Homeland Security (DHS) implemented the Deferred Action for Childhood Arrivals (DACA) program.
- In November 2014, DHS Secretary Jeh Johnson issued a memorandum creating the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program.
- DAPA applied to undocumented immigrants who were parents of U.S. citizens or lawful permanent residents and met certain residency and criminal history criteria.
- The DAPA memo stated that granting deferred action meant an individual was permitted to be 'lawfully present' in the United States for a renewable three-year period.
- This designation of 'lawful presence' made DAPA recipients eligible to apply for work authorization, Social Security numbers, and certain federal benefits like Social Security retirement and disability benefits.
- Under existing Texas law, individuals with documentation of lawful presence are eligible to receive state-subsidized driver's licenses.
- Texas calculated that it would incur a financial loss for each subsidized driver's license it issued to a DAPA recipient.
Procedural Posture:
- Twenty-six states, led by Texas, sued the United States in the U.S. District Court for the Southern District of Texas to enjoin the implementation of the DAPA program.
- The states alleged DAPA violated the procedural and substantive requirements of the Administrative Procedure Act (APA) and the Take Care Clause of the Constitution.
- The district court granted the states' motion for a preliminary injunction, halting the implementation of DAPA nationwide.
- The district court's injunction was based on its finding that the states were likely to succeed on their claim that DAPA was a substantive rule that required notice-and-comment rulemaking.
- The United States, as the defendant, appealed the district court's order granting the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit.
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Issue:
Does the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program violate the Administrative Procedure Act (APA) because it is a substantive rule that was not subjected to notice-and-comment rulemaking and because it exceeds the statutory authority granted to the Department of Homeland Security by the Immigration and Nationality Act (INA)?
Opinions:
Majority - Judge Smith
Yes, the DAPA program violates the Administrative Procedure Act (APA) both procedurally and substantively. First, Texas has standing to sue because DAPA would cause a direct and concrete financial injury by forcing the state to issue millions of dollars in subsidized driver's licenses. The states are also entitled to 'special solicitude' in the standing analysis because DAPA pressures them to change their own laws. Second, DAPA is a substantive rule that required notice-and-comment rulemaking because, despite its language, it does not genuinely leave agency officials free to exercise discretion, as evidenced by the near-automatic approval rates of the similar DACA program. Third, as an alternative holding, DAPA is substantively unlawful because it is 'manifestly contrary' to the intricate statutory scheme Congress established in the Immigration and Nationality Act (INA). Congress has specified the exclusive and narrow pathways for aliens to obtain lawful presence and work authorization, and the executive branch cannot unilaterally create a new classification for 4.3 million people, a decision of such vast economic and political significance that Congress did not delegate to an agency.
Dissenting - Judge King
No, the DAPA program does not violate the APA, and the case should be dismissed as non-justiciable. DAPA is a quintessential exercise of prosecutorial discretion, where the Department of Homeland Security (DHS) is simply prioritizing its limited enforcement resources, a decision that is presumptively unreviewable by courts. Any benefits that flow from DAPA, such as work authorization, are not conferred by the DAPA memo itself but by pre-existing, unchallenged federal regulations that tie those benefits to deferred action status. Furthermore, DAPA is a general statement of policy, not a substantive rule, because it explicitly provides for case-by-case discretion. The district court's finding that this discretionary language was mere 'pretext' was clearly erroneous, based on improper extrapolation from the different DACA program and a failure to hold an evidentiary hearing on conflicting evidence. The program is also a reasonable interpretation of the INA consistent with DHS's broad authority and decades of historical practice.
Analysis:
This decision significantly curtailed the executive branch's authority to implement broad immigration policies without explicit congressional approval, reinforcing the separation of powers. It established that a large-scale deferred action program conferring substantive legal benefits is not merely an exercise of prosecutorial discretion but a substantive rule subject to the APA's formal rulemaking requirements. The ruling also solidified the principle of state standing to challenge federal actions that impose direct and foreseeable financial costs on the states, paving the way for further litigation between states and the federal government over executive actions.
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