Statewide Bonding, Inc. v. U.S. Dep't of Homeland Sec.

• Decision Date: 10 November 2020
• Docket Number: No. 19-5178,C/w 19-5342, 19-5364,19-5178
• Citation: 980 F.3d 109
• Parties: STATEWIDE BONDING, INC., et al., Appellants v. UNITED STATES DEPARTMENT OF HOMELAND SECURITY, DHS, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

980 F.3d 109

STATEWIDE BONDING, INC., et al., Appellants

v.UNITED STATES DEPARTMENT OF HOMELAND SECURITY, DHS, et al., Appellees

No. 19-5178

C/w 19-5342, 19-5364

United States Court of Appeals, District of Columbia Circuit.

Argued September 16, 2020

Decided November 10, 2020

Dallas S. LePierre, pro hac vice, argued the cause for appellants. On the briefs was Mario Williams. John M. Shoreman, Washington, DC, entered an appearance.

Matthew J. Glover, Counsel to the Assistant Attorney General, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Abby C. Wright, Attorney, and Beth E. Cook, Associate Legal Advisor, U.S. Department of Homeland Security. Alan Burch and Rhonda L. Campbell, Assistant U.S. Attorneys, entered appearances.

Before: Henderson and Walker, Circuit Judges, and Ginsburg, Senior Circuit Judge.

Karen LeCraft Henderson, Circuit Judge:

In late 2018, the plaintiffs—two bail-bond companies, a corporation guaranteeing immigration applicants’ compliance with immigration bonds and that corporation's CEO (collectively, Statewide)—filed three separate lawsuits against the United States Department of Homeland Security (DHS) and other government entities.¹ They assert that certain aspects of DHS's current administration of the immigration-bond system violate the Administrative Procedure Act (APA) and Statewide's right to due process under the United States Constitution. See Statewide Bonding, Inc. v. DHS , No. 18-cv-2519, 2019 WL 2076762 (D.D.C. May 10, 2019) ( Statewide I ) (challenge to DHS's collection activities on bonds as to which Statewide has filed untimely appeals); Statewide Bonding, Inc. v. DHS , 422 F. Supp. 3d 42 (D.D.C. 2019) ( Statewide II ) (challenge to DHS's alleged policy or practice of determining bond breach following issuance of purportedly defective Notices To Appear (NTAs) and Notices to Produce Alien (NPAs)); Statewide Bonding, Inc. v. DHS , 422 F. Supp. 3d 35 (D.D.C. 2019) ( Statewide III ) (challenge to DHS's rejection of bond breach determination appeals as untimely when mailed before, but received after, appeal deadline). In three separate decisions, the district court dismissed all of Statewide's claims primarily because DHS has afforded Statewide constitutionally sufficient process and because the challenged DHS actions are consistent with the applicable regulations. We affirm all three district court dismissals in this consolidated appeal.

I. BACKGROUND

A. Statutes and Regulations

ICE, a DHS component, is responsible for overseeing immigration detention and for carrying out removal orders. See 8 U.S.C. §§ 1226, 1357. ICE may release certain immigrant applicants from detention while removal proceedings are ongoing. 8 C.F.R. § 236.1(c). In exercising this authority, ICE may require the posting of an immigration bond as a condition of release. See 8 U.S.C. § 1226(a)(2)(A) ; 8 C.F.R. § 236.1(c)(10). The dispute here focuses on DHS's administration of the immigration bond system.

Immigration bonds may be secured by a cash deposit. If an immigrant "cannot post the entire amount [of an immigration bond] on [his] own," he may "rely on a constellation of for-profit entities to obtain release." Statewide Bonding, Inc. v. DHS , No. 18-cv-2115, 2019 WL 2477407, at *1 (D.D.C. June 13, 2019). Bail-bond companies, like plaintiffs Statewide Bonding, Inc. and Big Marco Insurance and Bonding Services, LLC, partner with sureties (insurance companies certified by the United States Department of the Treasury) to enter into bond agreements with ICE. Statewide II , 422 F. Supp. 3d at 44 ; see also 8 C.F.R. § 103.6 (governing surety bonds). To enter into a bond agreement, a bail-bond company generally requires that the bond applicant provide collateral as security in the event he fails to appear. Statewide II , 422 F. Supp. 3d at 44. If the applicant does not have sufficient collateral on hand, he can contract with a third company, like plaintiff Nexus Services, Inc., to provide the necessary collateral. Id. at 44–45. Nexus then contracts with the bail-bond company to provide collateral and guarantee the applicant's appearance when required by ICE; in exchange, the applicant makes monthly payments to Nexus and agrees to GPS monitoring. Id. at 45.

Pursuant to DHS regulations, ICE may declare an immigration bond breached if there has been a "substantial violation of the stipulated conditions" of the bond. 8 C.F.R. § 103.6(e). When ICE declares a bond breached, it notifies the bond obligor(s) of the breach and the reasons therefor on a Form I-323 (Notice – Immigration Bond Breached). The obligor(s) may appeal the bond breach determination to the USCIS Administrative Appeals Office (AAO) within 33 days of service of the breach determination. Id. at §§ 103.3(a)(2)(i), 103.8(b). The 33-day appeal period starts when ICE places the bond breach notice in the mail. Id. at § 103.8(b); see also USCIS, AAO Practice Manual, § 3.7(c)(1) (rev. Mar. 11, 2019), https://www.uscis.gov/sites/default/files/document/aao-decisions/AAO_DHS_Precedent_Decision_Process_Print_Version.pdf [hereinafter AAO Practice Manual].

If an appeal is not timely filed, ICE's breach determination is final. See J.A. 152 (DHS Immigration Bond) ("A declaration of breach shall be administratively final if not timely appealed."); J.A. 179–80 (ICE Form I-323, Notice – Immigration Bond Breached) ("If no appeal is timely filed, the bond breach becomes an administratively final decision. After a final breach decision, ... ICE will issue an invoice for the face amount of a surety bond."). A final determination that a bond has been breached creates a claim in favor of the United States against the obligor(s) on the bond. 8 C.F.R. § 103.6(e).

An obligor that misses the appeal deadline may nevertheless be entitled to more limited review. Although DHS regulations require the rejection of "[a]n appeal which is not filed within the time allowed," 8 C.F.R. § 103.3(a)(2)(v)(B)(1), they allow a late-filed appeal to be treated as a motion to reopen or reconsider if the filing meets the requirements for either motion, id. at § 103.3(a)(2)(v)(B)(2). In such a case, "the appeal must be treated as a motion, and a decision must be made on the merits of the case." Id. Unlike with a timely appeal, however, "the filing of a motion to reopen or reconsider ... does not stay the execution of any decision in a case." Id. at § 103.5(a)(1)(iv); see infra Part II.A.

B. Facts and Procedure

Statewide filed three lawsuits against DHS, asserting that different aspects of DHS's administration of the immigration-bond system violate the APA and Statewide's right to due process under the United States Constitution. The district court dismissed Statewide I for failure to state a claim and lack of jurisdiction, Statewide II on DHS's motion for judgment on the pleadings and Statewide III for failure to state a claim.

In Statewide I , the plaintiffs sued DHS to prevent its collection on breached immigration bonds before the resolution of Statewide's pending untimely appeals. As to Statewide's APA claims, the district court concluded that ICE was not obligated to halt collection on breached bonds while Statewide's untimely appeals were pending because the collection activities were consistent with the agency's regulations. Statewide I , 2019 WL 2076762, at *2–3. Specifically, the district court found that, "even if Plaintiffs’ untimely appeals were deemed motions to reconsider, ‘[t]he filing of a motion to reopen or reconsider ... does not stay the execution of any decision in a case.’ " Id. at *3 (alterations in original) (quoting 8 C.F.R. § 103.5(a)(1)(iv) ). And because a final bond breach determination had been made as to the bonds at issue, DHS was permitted to continue collecting on those bonds. Id.

The district court also dismissed Statewide's due process claim, concluding that Statewide had been afforded adequate process under Mathews v. Eldridge , 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Id. Specifically, Statewide was "afforded an adequate ‘opportunity to be heard at a meaningful time and in a meaningful manner’ " because it "had an opportunity to file a timely appeal that would have stayed collection"; it simply did not do so. Id. (quoting Mathews , 424 U.S. at 333, 96 S.Ct. 893 ). And the district court dismissed Statewide's mandamus claim for lack of jurisdiction because DHS has no duty to halt the collection of breached bonds that Statewide untimely appealed. Id. at *4. Accordingly, the district court dismissed all of Statewide's claims in Statewide I .

In Statewide II , the plaintiffs sued DHS to prevent collection on breached immigration bonds because DHS provided allegedly defective NTAs and NPAs before issuing bond breach determinations. Statewide II , 422 F. Supp. 3d at 44–45. As to the due process claim, the district court concluded that Statewide had not established a "risk of an erroneous deprivation" of property under the Mathews test because of the "smorgasbord of procedural safeguards" afforded Statewide. Id. at 49 (citation omitted). Specifically, the district court found that DHS provides multiple means of contesting a final bond breach determination and that Statewide failed to suggest any "plausible alternative procedural safeguards." Id. The district court further concluded that Statewide's APA claims simply echoed the rejected due process arguments. Id. at 50. Accordingly, the district court granted DHS's motion for judgment on the pleadings in Statewide II .

In Statewide III , the plaintiffs sued DHS for rejecting appeals of bond breach determinations that Statewide alleges were timely filed. Statewide III , 422 F. Supp. 3d at 37–38. The parties dispute whether an appeal should be deemed submitted on the date it is mailed or on the date DHS receives it. Id. The district court concluded that DHS's reading of the regulations is "undoubtedly the correct one" because "[i]n the most unambiguous terms, § 103.2(a)(7)(i) states that a ...