Votevets Action Fund v. U.S. Dep't of Veterans Affairs

• Decision Date: 30 March 2021
• Docket Number: No. 19-5337,19-5337
• Parties: VOTEVETS ACTION FUND, Appellant v. UNITED STATES DEPARTMENT OF VETERANS AFFAIRS and Denis McDonough, in His Official Capacity as Secretary of the United States Department of Veterans Affairs, Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

992 F.3d 1097

VOTEVETS ACTION FUND, Appellant

v.UNITED STATES DEPARTMENT OF VETERANS AFFAIRS and Denis McDonough, in His Official Capacity as Secretary of the United States Department of Veterans Affairs, Appellees

No. 19-5337

United States Court of Appeals, District of Columbia Circuit.

Argued November 9, 2020

Decided March 30, 2021

Karianne M. Jones argued the cause for appellant. With her on the briefs were Benjamin M. Seel and Sean A. Lev.

Daniel Winik, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief was Mark B. Stern, Attorney.

Before: Garland^* , Pillard and Wilkins, Circuit Judges.

Pillard, Circuit Judge:

VoteVets Action Fund (VoteVets), a nonprofit group that engages in public advocacy on behalf of veterans, claims the Federal Advisory Committee Act applies to an entity allegedly established by President Trump and the Department of Veterans Affairs to advise the Department. VoteVets dubs the entity the "Mar-a-Lago Council," after the Trump resort and club where it first convened. According to the amended complaint, although the Council operated for nearly two years and provided advice on various topics, the Department failed to comply with the Federal Advisory Committee Act's requirements.

The district court held that the Act did not apply to the so-called Mar-a-Lago Council and dismissed VoteVets’ complaint. Because we conclude that VoteVets plausibly alleges that the Council was a governmentally established or utilized advisory group within the meaning of the Act, we reverse.

BACKGROUND

A. The Federal Advisory Committee Act

Congress enacted the Federal Advisory Committee Act, Pub. L. No. 92-463, 86 Stat. 770 (1972) (codified as amended at 5 U.S.C. app. 2 §§ 1 - 16 ) (FACA or the Act), with the objective of "opening many advisory relationships to public scrutiny except in certain narrowly defined situations," Pub. Citizen v. Dep't of Justice , 491 U.S. 440, 463, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989). FACA's terms promote transparency, accountability, and open public participation in executive branch decisions and prevent informal advisory committees from exerting improper or one-sided influence. Specifically, the statute seeks to "ensure that [advisory committees’] creation, operation, and duration be subject to uniform standards and procedures; that Congress and the public remain apprised of their existence, activities, and cost; and that their work be exclusively advisory in nature." Id. at 446, 109 S.Ct. 2558 (citing 5 U.S.C. app. 2 § 2(b) ).

At the same time, "although its reach is extensive," FACA does not "cover every formal and informal consultation between the President or an Executive agency and a group rendering advice." Id. at 453, 109 S.Ct. 2558. Executive officials’ solicitation of views from independently formed and operated entities—such as nonprofit organizations, associations, or political parties—with relevant insight and experience does not, without more, implicate the Act. Id . at 452-53, 109 S.Ct. 2558. Nor does FACA apply to executive consultations on policy issues with ad hoc collections of private individuals who are not convened "to render advice or recommendations, as a group ." Ass'n of Am. Physicians & Surgeons, Inc. v. Clinton , 997 F.2d 898, 913 (D.C. Cir. 1993).

Where it applies, FACA requires, among other things, that each covered advisory committee publicly file its charter, 5 U.S.C. app. 2 § 9(c), that "[e]ach advisory committee meeting ... be open to the public" following public notice, that "[d]etailed minutes" of all such meetings be maintained, id. § 10(a)(1)-(2), (c), and that "the records, reports, transcripts, minutes, appendixes, working papers, drafts, studies, agenda, or other documents which were made available to or prepared for or by" the committee be made available to the public, id. § 10(b).

B. VoteVets’ Allegations

VoteVets filed this suit in August 2018, claiming that the Mar-a-Lago Council was an advisory committee created to advise the Department of Veterans Affairs (VA or Department), that President Trump selected its members, that the President utilized the Council to inform and guide decisions on important aspects of veterans’ care, and that over the course of the Council's work the Department and the Council did not comply with applicable requirements of FACA. Because we review the adequacy of the complaint as a matter of pleading, and not the truth of its allegations, the facts recited here are as plaintiff alleges them, with reasonable inferences drawn in the plaintiff's favor. We take no position on what might ultimately be proved.

On December 28, 2016, President-elect Donald Trump attended a meeting with healthcare executives at the Mar-a-Lago resort in Palm Beach, Florida. Three men, all of whom are members of the Mar-a-Lago Club, organized the meeting: Isaac "Ike" Perlmutter, CEO of Marvel Entertainment; Bruce Moskowitz, a medical doctor and founder of the Biomedical Research and Education Foundation; and Marc Sherman, managing director of the consulting firm Alvarez & Marsal. Am. Compl. ¶¶ 2, 30-31. None of those men had experience in the U.S. military or government. Id. ¶ 2. According to the President-elect's spokesman, Sean Spicer, the meeting involved "lots of brainstorming on how to improve and reform" the Department. Id. ¶ 36(a).

A few weeks later, in January 2017, the President-elect announced at a press conference that his incoming administration would be setting up a group "to help David [Shulkin]," the nominee for Secretary of Veterans Affairs, "straighten out the [Department]." Id. ¶ 28; Defs.’ Mot. Dismiss, Ex. B at 3-4, VoteVets Action Fund v. Dep't of Veterans Affairs , 414 F. Supp. 3d 61 (D.D.C. 2019) (No. 18-cv-01925), ECF No. 8-3 (news conference transcript). He added that Ike Perlmutter was "very, very involved" in that effort. Am. Compl. ¶ 36(b). After the press conference, a source said that "Perlmutter would ‘take on an informal, though "significant," advisory role in Trump's administration with respect to veterans’ affairs.’ " Id. VoteVets alleges that President Trump named Perlmutter "to lead the Council" and Moskowitz and Sherman to serve as members. Id. ¶ 29. No effort was made to ensure a balanced membership, nor to protect against inappropriate conflicts of interest.

The Mar-a-Lago Council reconvened on or around February 7, 2017, when Perlmutter, Moskowitz, and Sherman met with Shulkin. Id. ¶ 36(c); Appellant's Br. 7-8. After the meeting, Moskowitz sent an email to Shulkin with the subject line "Group meeting," explaining that the group did "not need to meet in person monthly" but could have in-person meetings "when necessary" and collaborate by phone calls at other times. Am. Compl. ¶ 36(d). Over the ensuing year and a half, Perlmutter, Moskowitz, and Sherman conducted more than twenty-five meetings, id. ¶ 3, and advised the Department on a range of projects including an initiative to curb veteran suicide, id. ¶ 45, development of a mobile application for VA patients to locate services and records, id. ¶¶ 46-60, development of a national medical device registry, id. ¶¶ 61-63, a $10 billion contract to modernize the VA's digital records system, id. ¶¶ 9, 64-67, evaluation of VA surgery programs, id. ¶ 70, a potential partnership to develop a tracking system for human tissue devices, id. ¶ 71, privatization of essential VA healthcare services, id. ¶¶ 68-69, and development of a new VA mental health initiative, id. ¶ 72. None of the Council's meetings was publicly announced in advance or open to the public, and no minutes were kept or documents made public. Id. ¶¶ 76-77, 79, 83-85.

C. Prior Proceedings

Defendants moved to dismiss for lack of standing and failure to state a claim. The district court held that VoteVets had standing, VoteVets Action Fund v. Dep't of Veterans Affairs , 414 F. Supp. 3d 61, 67-68 (D.D.C. 2019), but that it failed plausibly to allege (1) that the Council had "the structure required to be an advisory committee under FACA," id. at 70, and (2) that the Council was "established" or "utilized" by the federal government, id. at 68-73.

On the question of establishment, the court held that President-elect Trump's "off-the-cuff comments" at a press conference "hardly reflect the kind of formal, affirmative steps required to establish an advisory committee." Id. at 70. It also held that the facts "suggest[ed] that the three men—not President Trump or the Department—were the ones who took the initiative to organize themselves," which the district court held undercut any reasonable inference that the President selected the members. Id.

As for the "utilized" inquiry, the court acknowledged that VoteVets had plausibly alleged "that the alleged advisory committee exercised influence ... over the agency. " Id. at 72. But it held that "for FACA purposes, it is the amount of influence that the agency exercises over the advisory committee that matters." Id. The court reasoned that if the Department of Veterans Affairs was itself under the Council's control, then the Department could not have exerted enough influence on the Council to "utilize" the latter under FACA. Id.

VoteVets timely appeals, arguing that its allegations plausibly demonstrate that the Council had the form of an advisory committee and was established or utilized by the federal government, so subject to the Act.

ANALYSIS

As an initial matter, we agree with the district court that VoteVets has standing to sue. VoteVets claims an informational injury under FACA by pleading that the Council and VA failed to comply with the statute's disclosure and transparency requirements. Id. at 67-68 ; see also Byrd v. EPA. , 174 F.3d 239, 243 (D.C. Cir. 1999). And "[w]e assume, as we must at the pleading stage, that for purposes of standing the Council and its assorted subgroups are, as alleged, ‘advisory committees’ within the meaning of FACA § 3(2)." Judicial Watch, Inc. v. U.S. Dep't of Commerce , 583 F.3d 871, 873 (D.C....