U.S. House of Representatives v. Mnuchin

• Decision Date: 25 September 2020
• Docket Number: No. 19-5176,19-5176
• Citation: 976 F.3d 1
• Parties: UNITED STATES HOUSE OF REPRESENTATIVES, Appellant v. Steven T. MNUCHIN, in His Official Capacity as Secretary of The United States Department of the Treasury, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

976 F.3d 1

UNITED STATES HOUSE OF REPRESENTATIVES, Appellant

v.Steven T. MNUCHIN, in His Official Capacity as Secretary of The United States Department of the Treasury, et al., Appellees

No. 19-5176

United States Court of Appeals, District of Columbia Circuit.

Argued February 18, 2020

Reheard En Banc April 28, 2020

Remanded to Panel August 7, 2020

Decided September 25, 2020

Douglas N. Letter, General Counsel, U.S. House of Representatives, argued the cause for appellant. With him on the briefs were Todd B. Tatelman, Principal Deputy General Counsel, Megan Barbero and Josephine Morse, Deputy General Counsel, Adam A. Grogg and William E. Havemann, Associate General Counsel, Kristin A. Shapiro, Assistant General Counsel, and Carter G. Phillips, Virginia A. Seitz, Joseph R. Guerra, and Christopher A. Eiswerth.

Lawrence S. Robbins, Washington, D. Hunter Smith, and Megan Browder were on the brief for amici curiae Former General Counsels of the U.S. House of Representatives in support of appellants and reversal. Alan E. Untereiner entered an appearance.

Irvin B. Nathan, Robert N. Weiner, Andrew T. Tutt, Washington, and Samuel F. Callahan were on the brief for amici curiae Former Members of Congress in support of appellant.

Michael S. Raab, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Hashim M. Mooppan, Deputy Assistant Attorney General, and Mark R. Freeman and Courtney L. Dixon, Attorneys.

Lawrence J. Joseph, Washington, was on the brief for amicus curiae Rep. Andy Barr in support of appellees and affirmance.

Miles L. Terry, Benjamin P. Sisney, Jay Alan Sekulow, Washington, Andrew J. Ekonomou, and Jordan A. Sekulow were on the brief for amicus curiae The American Center for Law and Justice in support of appellees.

Before: Millett and Wilkins, Circuit Judges, and Sentelle, Senior Circuit Judge.

Sentelle, Senior Circuit Judge:

The United States House of Representatives brought this lawsuit alleging that the Departments of Defense, Homeland Security, the Treasury, and the Interior, and the Secretaries of those departments violated the Appropriations Clause of the Constitution as well as the Administrative Procedure Act when transferring funds appropriated for other uses to finance the construction of a physical barrier along the southern border of the United States, contravening congressionally approved appropriations. The District Court for the District of Columbia held that it had no jurisdiction because the House lacked standing to challenge the defendants’ actions as it did not allege a legally cognizable injury. We disagree as to the constitutional claims and therefore vacate and remand for further proceedings.

I.

A.

On review of a district court's dismissal for lack of jurisdiction, we make legal determinations de novo . See Williams v. Lew , 819 F.3d 466, 471 (D.C. Cir. 2016). As a result, we consider anew whether the House established that it has standing. Lujan v. Defs. of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In doing so, we " ‘accept as true all material allegations of the complaint,’ [and] draw[ ] all reasonable inferences from those allegations in plaintiffs’ favor." LaRoque v. Holder , 650 F.3d 777, 785 (D.C. Cir. 2011) (quoting Warth v. Seldin , 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ). Additionally, in assessing standing, we assume the House is correct on the merits of the underlying claims. Id. Applying that framework to the House's complaint, we assume the following facts:

After protracted disagreement and negotiation between President Trump and the House of Representatives over the President's request for appropriation to erect a physical barrier along the boundary between the United States and Mexico, Congress enacted a budget resolution which included an appropriation of $1.375 billion "for the construction of primary pedestrian fencing, including levee pedestrian fencing, in the Rio Grande Valley Sector." Pub. L. No. 116-6, § 230(a)(1), 133 Stat. 13, 28. The legislation also restricted construction in certain areas, id. § 231, 133 Stat. at 28, and limited the construction to "operationally effective designs deployed as of the date of the Consolidated Appropriations Act, 2017 ( Public Law 115–31 ), such as currently deployed steel bollard designs," id. § 230(b), 133 Stat. at 28.

The President signed the bill but announced that he planned to "us[e] his legal authority to take Executive action to secure additional resources" beyond the funding appropriated by Congress and signed into law by the President. J.A. 151. He identified three specific sources for the additional funds: the Treasury Forfeiture Fund, Department of Defense funds appropriated for the Support of Counterdrug Activities ( 10 U.S.C. § 284 ), and Department of Defense funds allocated for other construction projects ( 10 U.S.C. § 2808 ). The House's complaint contests only the latter two sources. Compl. at 39–45, U.S. House of Representatives v. Mnuchin , 379 F. Supp. 3d 8 (D.D.C. 2019) (ECF No. 1); Am. Compl. at 41–50, U.S. House , 379 F. Supp. 3d 8 (ECF No. 59). We note that the uncontested source did not supply sufficient funds to cover the allegedly unlawful expenditure, and therefore the presence of the uncontested funds does not moot the case.

B.

On April 5, 2019, the House filed this action seeking declaratory and injunctive relief from the transfers of funds carried out by the Departments of Defense, Homeland Security, the Treasury, and the Interior, and the Secretaries of those departments (defendants), alleging that the defendants’ actions violated the Appropriations Clause of the Constitution and the Administrative Procedure Act. Fundamentally, the House's position is that Congress authorized the defendants to spend $1.375 billion, and only $1.375 billion, for construction of a barrier, but the defendants are attempting to spend $8.1 billion. See Compl. ¶¶ 58–59. According to the complaint, the defendants’ "expenditure of unappropriated funds disregards the separation of powers and usurps Congress's exclusive authority under the Appropriations Clause to control federal funds." Id. ¶ 58.

Specifically, the complaint alleged that the defendants violated the Appropriations Clause of the Constitution, U.S. Const. art. I, § 9, cl. 7, by transferring additional funds to spend on construction, and that they cannot justify their violation of the appropriations law by relying on 10 U.S.C. § 284, on § 8005 of the Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, 2019, Pub. L. No. 115-245, 132 Stat. 2981, 2999 (DOD Appropriations Act), or on 10 U.S.C. § 2808, because those statutes do not authorize transfers of funds in these circumstances. Additionally, the House alleges that transfers of funds made pursuant to § 8005 of the DOD Appropriations Act violated the Administrative Procedure Act because they were not in accordance with law. The amended complaint, filed after the district court dismissed the first complaint, added allegations that the transfer of funds under § 9002 of the DOD Appropriations Act also violated the Administrative Procedure Act.

The first of the contested sources of additional funding is the Counterdrug Activities fund. Under 10 U.S.C. § 284, the Secretary of Defense "may provide support for the counterdrug activities or activities to counter transnational organized crime of any other department or agency." The DOD Appropriations Act provided $517.171 million for counterdrug activities. DOD Appropriations Act, Pub. L. No. 115-245, 132 Stat. 2981, 2997. When the House filed suit, it believed that most of the appropriated funds had already been used. Compl. ¶ 62. As a result, to draw from this fund for barrier construction, the Executive Branch would need to transfer "working capital funds of the Department of Defense or funds made available" in the DOD Appropriations Act "between such appropriations or funds or any subdivision thereof." 2019 DOD Appropriations Act § 8005; see also id. at § 9002. The statute allows such transfers if the transfers meet certain requirements. 2019 DOD Appropriations Act § 8005; see also id. at § 9002. The President made two transfers relying on §§ 8005 and 9002: On March 25, 2019, the President transferred $1 billion, J.A. 177–79, and on May 9, 2019, the President transferred an additional $1.5 billion, J.A. 226–34.

The second contested source of additional funding is the reallocation of funds under 10 U.S.C. § 2808. The President planned to reallocate $3.6 billion citing his authority under § 2808. J.A. 151. Section 2808(a) allows the Secretary of Defense to "undertake military construction projects" when the President declares a national emergency that "requires [the] use of the armed forces" and the construction projects are "necessary to support such use of the armed forces." On February 15, 2019, the President declared a national emergency, which Congress did not override. See Proclamation No. 9844, 84 Fed. Reg. 4949.

Shortly after filing the complaint, the House moved for a preliminary injunction, which the defendants opposed. The district court denied the motion, holding that the House lacked standing because it was not injured. Following the order dismissing the action, the House moved to amend its complaint to include a request for injunctive relief for the transfer of funds under § 9002 of the 2019 DOD Appropriations Act. On June 17, 2019, the district court permitted the amendment, held that the House lacked standing for the same reasons articulated in its original memorandum dismissing the suit, and entered final judgment. On June 18, the House filed a notice of appeal. See generally U.S. House , 379 F. Supp. 3d 8.

C.

Under Article III of the Constitution, federal courts are courts of limited jurisdiction. U.S. Const. art. III, § 2, cl. 1 ; see, e.g. , Chi. & Grand Trunk Ry. Co. v. Wellman , 143 U.S. 339,...