Texas v. United States, No. 15-40238

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: JERRY E. SMITH, Circuit Judge
• Parties: STATE OF TEXAS; STATE OF ALABAMA; STATE OF GEORGIA; STATE OF IDAHO; STATE OF INDIANA; STATE OF KANSAS; STATE OF LOUISIANA; STATE OF MONTANA; STATE OF NEBRASKA; STATE OF SOUTH CAROLINA; STATE OF SOUTH DAKOTA; STATE OF UTAH; STATE OF WEST VIRGINIA; STATE OF WISCONSIN; PAUL R. LEPAGE, Governor, State of Maine; PATRICK L. MCCRORY, Governor, State of North Carolina; C. L. "BUTCH" OTTER, Governor, State of Idaho; PHIL BRYANT, Governor, State of Mississippi; STATE OF NORTH DAKOTA; STATE OF OHIO; STATE OF OKLAHOMA; STATE OF FLORIDA; STATE OF ARIZONA; STATE OF ARKANSAS; ATTORNEY GENERAL BILL SCHUETTE; STATE OF NEVADA; STATE OF TENNESSEE, Plaintiffs-Appellees, v. UNITED STATES OF AMERICA; JEH CHARLES JOHNSON, Secretary, Department of Homeland Security; R. GIL KERLIKOWSKE, Commissioner of U.S. Customs and Border Protection; RONALD D. VITIELLO, Deputy Chief of U.S. Border Patrol, U.S. Customs and Border Protection; SARAH R. SALDANA, Director of U.S. Immigration and Customs Enforcement; LEON RODRIGUEZ, Director of U.S. Citizenship and Immigration Services, Defendants-Appellants.
• Docket Number: No. 15-40238
• Decision Date: 26 May 2015

STATE OF TEXAS; STATE OF ALABAMA; STATE OF GEORGIA;
STATE OF IDAHO; STATE OF INDIANA; STATE OF KANSAS;
STATE OF LOUISIANA; STATE OF MONTANA; STATE OF NEBRASKA;
STATE OF SOUTH CAROLINA; STATE OF SOUTH DAKOTA;
STATE OF UTAH; STATE OF WEST VIRGINIA; STATE OF WISCONSIN;
PAUL R. LEPAGE, Governor, State of Maine;
PATRICK L. MCCRORY, Governor, State of North Carolina;
C. L. "BUTCH" OTTER, Governor, State of Idaho;
PHIL BRYANT, Governor, State of Mississippi;
STATE OF NORTH DAKOTA; STATE OF OHIO; STATE OF OKLAHOMA;
STATE OF FLORIDA; STATE OF ARIZONA; STATE OF ARKANSAS;
ATTORNEY GENERAL BILL SCHUETTE; STATE OF NEVADA;
STATE OF TENNESSEE, Plaintiffs-Appellees,
v.
UNITED STATES OF AMERICA;
JEH CHARLES JOHNSON, Secretary, Department of Homeland Security;
R. GIL KERLIKOWSKE, Commissioner of U.S. Customs and Border Protection;
RONALD D. VITIELLO, Deputy Chief of U.S. Border Patrol, U.S. Customs
and Border Protection; SARAH R. SALDANA,
Director of U.S. Immigration and
Customs Enforcement; LEON RODRIGUEZ, Director of U.S. Citizenship
and Immigration Services, Defendants-Appellants.

No. 15-40238

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

May 26, 2015

Appeal from the United States District Court for the Southern District of Texas

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Before SMITH, ELROD, and HIGGINSON, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Twenty-six states (the "states") are challenging the government's¹ Deferred Action for Parents of Americans and Lawful Permanent Residents program ("DAPA") as violative of the Administrative Procedure Act ("APA") and the Take Care Clause of the Constitution. The district court determined that the states are likely to succeed on their procedural APA claim, so it temporarily enjoined implementation of the program. Texas v. United States, Civ. No. B-14-254, 2015 WL 648579 (S.D. Tex. Feb. 16, 2015). The United States appealed the preliminary injunction and moved for a stay of the injunction pending resolution of the merits of that appeal. Because the government is unlikely to succeed on the merits of its appeal of the injunction, we deny the motion for stay and the request to narrow the scope of the injunction.

I.

In 2012, then-Department of Homeland Security ("DHS") Secretary Janet Napolitano announced the Deferred Action for Childhood Arrivals program ("DACA"), setting forth how officers should exercise "prosecutorial discretion" before enforcing "immigration laws against certain young people."² She instructed agency heads that five criteria "should be satisfied before an individual is considered for an exercise of prosecutorial discretion"³ but that

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"requests for relief . . . are to be decided on a case by case basis."⁴ "For individuals who are granted deferred action . . . [U.S. Citizenship and Immigration Services ("USCIS")] shall accept applications to determine whether these individuals qualify for work authorization," but the DACA Memo purported to "confer[] no substantive right, immigration status or pathway to citizenship."⁵ Of the at least 1.2 million persons who qualify for DACA, approximately 636,000 have been accepted through 2014.⁶

In November 2014, DHS Secretary Jeh Johnson instructed the same agencies to expand DACA in three areas.⁷ He also "direct[ed] USCIS to establish a process, similar to DACA," known as DAPA. He set forth six criteria "for exercising prosecutorial discretion through the use of deferred action, on a case-by-case basis."⁸ Although "[d]eferred action does not confer any form

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of legal status in this country, much less citizenship[,] it [does] mean[] that, for a specified period of time, an individual is permitted to be lawfully present in the United States."⁹

That designation makes aliens who were not otherwise qualified for most federal public benefits eligible for "social security retirement benefits, social security disability benefits, [and] health insurance under Part A of the Medicare program."¹⁰ Further, "[e]ach person who applies for deferred action pursuant to the [DAPA] criteria . . . shall also be eligible to apply for work authorization for the [renewable three-year] period of deferred action."¹¹ "An alien with work authorization may obtain a Social Security Number"; "accrue quarters of covered employment"; and "correct wage records to add prior covered employment within approximately three years of the year in which the wages were earned or in limited circumstances thereafter."¹² The district court

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determined that "DAPA recipients would be eligible for earned income tax credits once they received a Social Security number."¹³ Texas maintains that DAPA recipients become eligible for driver's licenses and unemployment benefits.¹⁴ Of the approximately 11.3 million illegal aliens¹⁵ in the United States, 4.3 million are eligible for DAPA. Texas, 2015 WL 648579, at *7 & n.11, *15.

The states sued to prevent implementation of the program. First, they claimed that DAPA is procedurally unlawful under the APA because it is a substantive rule that is required to undergo notice and comment, but DHS had

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not followed those procedures. See 5 U.S.C. § 553. Second, the states asserted that DAPA was substantively unlawful under the APA because DHS lacked the authority to implement the program even if it did follow the correct process. See 5 U.S.C. § 706(2)(A)-(C). Third, the states contended that DAPA violated the President's constitutional duty to "take Care that the Laws be faithfully executed." U.S. CONST. art. II, § 3.

The district court held that Texas had standing because it would be required to issue driver's licenses to DAPA beneficiaries, and the costs of doing so would constitute a cognizable injury. Texas, 2015 WL 648579, at *11-17. Alternatively, the court held that Texas had standing based on a theory it called "abdication standing," under which a state has standing if the government has exclusive authority over a particular policy area but declines to act. Id. at *28-34.¹⁶ The court entered the preliminary injunction after concluding that Texas had shown a substantial likelihood of success on its claim that DAPA's implementation would violate the APA's notice-and-comment requirements. Id. at *62. The court did not "address[] Plaintiffs' likelihood of success on their substantive APA claim or their constitutional claims under the Take Care Clause/separation of powers doctrine." Id. at *61. The government's motion for a stay pending appeal is based on its insistence that the states do not have standing or a right to judicial review under the APA and, alternatively, that DAPA is exempt from the notice-and-comment requirements. The government also urges that the injunction's nationwide scope is an abuse of discretion.¹⁷

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II.

"We consider four factors in deciding whether to grant a stay pending appeal: '(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.'"¹⁸ To succeed on the merits, the government must show that the district court abused its discretion by entering a preliminary injunction.¹⁹ A decision "grounded in erroneous legal principles is reviewed de novo," and findings of fact are reviewed for clear error.²⁰ "A stay 'is not a matter of right, even if irreparable injury might otherwise result to the appellant.'"²¹

III.

We begin by deciding whether the government has made a strong showing that it is likely to succeed on the merits of its claim that the states

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lack standing. It has not done so. We reach only the district court's first basis for standing—the driver's license rationale—because it is dispositive.²²

The states have the burden of establishing that at least one of them has Article III standing.²³ First, they must assert an injury that is "concrete, particularized, and actual or imminent."²⁴ "'[T]hreatened injury must be certainly impending to constitute injury in fact,' and . . . '[a]llegations of possible future injury' are not sufficient."²⁵ Second, the injury must be "fairly traceable to the challenged action." Clapper, 133 S. Ct. at 1147 (quoting Monsanto, 561 U.S. at

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149). The states may establish standing based on costs they incur as a reasonable reaction to a risk of harm only if that harm is certainly impending. See id. at 1151. Third, the injury must be "redressable by a favorable ruling." Id. at 1147 (quoting Monsanto, 561 U.S. at 149). "When a litigant is vested with a procedural right, that litigant has standing if there is some possibility that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant." Massachusetts, 549 U.S. at 518.

A.

The first requirement is likely satisfied by Texas's proof of the costs of issuing driver's licenses to DAPA beneficiaries. "An applicant who is not a citizen of the United States must present . . . documentation issued by the appropriate United States agency that authorizes the applicant to be in the United States before the applicant may be issued a driver's license." TEX. TRANSP. CODE § 521.142(a). Documentation confirming lawful presence pursuant to DAPA would qualify.²⁶ The district court found that Texas would lose at least $130.89 on each license it issues to a DAPA beneficiary,²⁷ and the United States does not dispute that calculation on appeal. It is well established

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that a financial loss generally constitutes an injury,²⁸ so Texas is likely to meet its burden.

The government attacks that conclusion on two grounds. First, it claims that Texas will be required neither to issue licenses nor to subsidize them. Texas responds that it will have to do so in light of Arizona DREAM Act Coalition v. Brewer, 757 F.3d 1053 (9th Cir. 2014), which held that DACA beneficiaries were likely to succeed on their equal-protection challenge to Arizona's policy of issuing...