State of Texas v. USA
2015 WL 3386436, 2015 U.S. App. LEXIS 8657, 787 F.3d 733 (2015)
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Rule of Law:
A federal agency program that is not merely a statement of enforcement discretion but affirmatively confers substantive benefits and eligibility on a class of individuals, and which effectively binds agency decision-makers, is a substantive rule that must undergo the notice-and-comment process required by the Administrative Procedure Act (APA).
Facts:
- In 2012, the Department of Homeland Security (DHS) announced the Deferred Action for Childhood Arrivals (DACA) program, which deferred removal action for certain young people.
- In November 2014, DHS Secretary Jeh Johnson announced an expansion of DACA and a new, similar program called Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA).
- The DAPA memo directed U.S. Citizenship and Immigration Services (USCIS) to establish a process for granting deferred action to certain undocumented immigrants who met specific criteria, including having a U.S. citizen or lawful permanent resident child.
- Under DAPA, individuals granted deferred action are considered 'lawfully present' for a renewable three-year period.
- This designation of 'lawfully present' makes individuals eligible to apply for work authorization and to receive certain federal benefits (like Social Security and Medicare) and state benefits.
- Under Texas state law, individuals with documentation proving 'lawful presence' are eligible to receive a state-subsidized driver's license.
- An estimated 4.3 million people were eligible for DAPA nationwide, with at least 500,000 residing in Texas.
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 block the implementation of the DAPA program.
- The states alleged that DAPA violated the procedural and substantive requirements of the Administrative Procedure Act (APA) and the Take Care Clause of the U.S. Constitution.
- The district court found that Texas had standing to sue based on the financial injury it would incur from issuing subsidized driver's licenses to DAPA recipients.
- The district court granted the states' motion for a preliminary injunction, temporarily blocking the implementation of DAPA nationwide, after finding the states were likely to succeed on their claim that DAPA was a substantive rule that required notice-and-comment rulemaking under the APA.
- The United States government, the defendant, appealed the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit and filed a motion to stay the injunction pending the appeal.
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Issue:
Is the United States government likely to succeed on the merits of its appeal by showing that the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program is exempt from the notice-and-comment requirements of the Administrative Procedure Act?
Opinions:
Majority - Judge Smith
No, the government is not likely to succeed on the merits because the DAPA program is a substantive rule that requires notice-and-comment rulemaking under the APA. First, the court held that the states have standing to sue. Texas suffers a concrete financial injury because DAPA's grant of 'lawful presence' would force the state to issue subsidized driver's licenses, an injury to both its treasury and its sovereign interest in its legal code. Second, the court found the case is judicially reviewable. DAPA is more than a simple exercise of unreviewable prosecutorial discretion because it is not mere non-enforcement; it is the affirmative act of conferring 'lawful presence' and eligibility for benefits on a class of aliens, which provides a focus for judicial review. Finally, DAPA is a substantive rule requiring notice-and-comment. It is not a 'general statement of policy' because, based on the implementation of the similar DACA program with its nearly-automatic approval rates, the 'case-by-case' discretion is merely pretextual, making the rule binding in practice. It is also not a 'procedural' rule because it has a substantial impact on the states' substantive rights, nor does it fall under the public-benefits exception.
Dissenting - Judge Higginson
Yes, the government is likely to succeed on the merits because the DAPA program is a non-justiciable exercise of executive enforcement discretion and, alternatively, is a non-binding policy statement exempt from APA notice-and-comment requirements. The Supreme Court's decision in Heckler v. Chaney establishes that an agency's decision not to prosecute or enforce the law is generally committed to its absolute discretion and is not subject to judicial review. DAPA is an internal executive guideline that prioritizes enforcement resources, a classic exercise of this discretion. It does not grant legal 'status,' only revocable 'presence.' Alternatively, even if reviewable, the DAPA memo is a 'general statement of policy' exempt from notice-and-comment. The memo is replete with discretionary language, channels when the agency will not act, and does not impose any binding obligation on regulated parties. The district court's finding of pretext based on DACA's high approval rate was improper, as it failed to consider the self-selection bias of applicants and was made without a full evidentiary hearing.
Analysis:
This decision significantly constrained the executive branch's ability to implement large-scale immigration policies through internal memoranda without public input. The court's holding established that even if a program is framed as an exercise of 'prosecutorial discretion,' it can be deemed a reviewable, substantive rule if it confers new, affirmative benefits like 'lawful presence' and work eligibility. This ruling reinforced the importance of the APA's procedural requirements for major policy changes and emboldened states to use the courts to challenge federal executive actions that impose direct and indirect costs upon them, setting the stage for future separation-of-powers conflicts.
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